Florida Estate Planning Lawyer Blog

February 27, 2008

What Does a Florida Life Insurance Trust (ILIT) Do?

A Florida Life Insurance Trust is an irrevocable trust that allows an individual to make the proceeds of a life insurance poliicy free from income taxes and estate taxes. Typical life insurance policies are income tax free, but many increase the value of one’s estate to the point that the federal and or state income taxes are due. By using an ilit one can avoid these taxation issues.

In 2008 the Federal tax exemption is $2,000,000. Lets take a client with 1.5M in assets and a 1M life insurance policy.

If they were to die in 2008 their estate would be valued at 2.5M and 500,000 would be subject to estate taxes. The current estate tax rate is 45% so this estate would have to pay a tax of $225,000.

February 27, 2008

North Dakota NFA Gun Trust Lawyer®

by David M. Goldman

North Dakota has joined the growing list of states in which we have a relationship with a lawyer who is familiar with the (NFA) National Firearms Act’s requirements relating to the formation of trusts to purchase Title II Firearms (sold by Class 3 SOT dealers). These include silencers, short barrel rifles, and machine guns.

If you are looking to create a North Dakota NFA Gun Trust, please Contact us and we can help make sure your trust deals with the many unique issues surrounding owning these firearms in a Revocable Trust.

If you live in North Dakota or another state and wish to create a NFA trust to protect your family and purchase NFA firearms (Title II) or Title I firearms Contact a NFA Gun Trust Lawyer® in your state.

February 27, 2008

My Bank Wants a Tax ID / EIN number for My Revocable Trust

by David M. Goldman

When creating a revocable trust you may be asked for a Employment ID number (EIN) or Tax ID to open the account or fill out the paperwork. Many banks do not understand the difference between a revocable and a irrevocable trust. Although irrevocable trusts require TAX ID or EIN’s revocable trusts do not require them.

When this happens to you, it may be difficult to get them to understand why they do not need this information. It is best to just fill out that section with your social security number – which is your Tax ID number.

If you have questions on a Florida Revocable Trust you should Contact a Florida Estate Planning Lawyer.

February 27, 2008

IRS Attacks of FLPs and FLLCs

by David M. Goldman

For a number of years the IRS has attacked FLPs and FLLCs on the basis that there is no valid business purpose for the entity.

Clients have argued that a key reason for using the LP form is so that capital can be concentrated or pooled and then invested for greater resulting returns. Credible evidence is cited to support the contention that money invested with a long term investment time-line and with a disciplined investment policy will yield greater returns than money invested in response to demands for quarterly or annual performance.

Many reported cases have problems because senior family members contribute assets to their LPs while keeping their current invested strategy. It is important for clients to know that the courts have repeatedly cited this lack of change in investment strategy as evidence that the creation of the LP was “only a change of title” or resulted in a “mere recycling of value.”

February 26, 2008

Out of State Durable Powers of Attorney and Validity in Florida

by David M. Goldman

A Power of Attorney is generally valid when you travel because a Power of Attorney valid in another state will be valid in Florida. That being said there has been a problem with out of state Power of Attorney being properly recognized in Florida. As a result Florida passed laws that when complied with allow the agent to recover fees associated with the enforcement of a Power of Attorney which is in substantial compliance with the statute.

What does that mean for you? There is no reason why someone should not accept an out of state Power of Attorney, but no recourse when they do not.

Generally when moving to Florida, we recommend that our clients execute new Durable Power of Attorney Documents when possible. When this is not possible clients can check with their local banks to see if they will accept them. This should be done prior to transferring money to the financial institution. We have seen cases where banks accept the transfer and creation of accounts and then do not accept the agent’s authority later.

February 26, 2008

Florida Guardianship Powers Expire at Death of Ward

by David M. Goldman

In Florida, the powers granted by a Florida Guardianship expire when the ward dies. Often people try to use their powers granted by a Florida Guardianship to control aspects of the after death process. The guardian is without any powers granted by the guardianship once the ward dies.

If you are having problems with a Florida Guardianship or Florida Guardian Contact a Florida Estate Planning Lawyer.

February 24, 2008

Florida Hospice Refusal to Allow Visitation

by David M. Goldman

Recently we have notice that Hospice organizations are refusing to allow people to visit relatives or friends while under the care of Hospice.

In these cases, the people were turned away because someone with a Power of Attorney was able to state that the person was not wanted.

It is important to remember that a Power of Attorney or Durable Power of Attorney give an agent the right to act in certain circumstances. In Florida, a Power of Attorney does not give someone the right to make decisions regarding where they are located, who they can visit, or who they can talk to.

February 22, 2008

Interstate Transfer of Title II (NFA) Firearms

by David M. Goldman

Often I receive inquiries from individuals looking to create a NFA Gun Trust to purchase Title I Firearms. Several times these individuals are looking to keep these Firearms in their vehicle, motor home, or boat. Individuals, Trusts, Corporations, and LLC’s must get permission to transport these items interstate.

The NFA has an Application to Transport Interstate or to Temporarily Export Certain national Firearms Act (NFA) Firearms.

A written request and prior authorization from ATF to transport interstate or in foreign commerce any destructive device, machinegun, short-barreled rifle, or short-barreled shotgun is required under the provisions of Section 922 (a)(4), Title 18, U.S.C., and Section 478.28, Title 27 CFR, a letter of request, in duplicate, containing all information required on this form, may be submitted in lieu of the form.

February 22, 2008

Terry Schiavo judge handles divorce cases

by David M. Goldman

Florida judge who presided over the Terri Schiavo case until her death, has a new assignment. He no longer judges Florida Guardianship cases. He judges divorce cases.

The Judges transfer from Florida Probate and Florida Guardianship court to family court should allow Judge Greer who is now 65 to serve the next three years in obscurity before his retirement.

Judge Greer is nationally famous and has 20 honors displayed in his chambers. The largest is the 2005 President’s Award of Merit from the Florida Bar, “for your unswerving commitment to the rule of law, the independence of the judiciary and the fundamentals of American democracy.”

February 21, 2008

What is a Taxable Gift?

by David M. Goldman

In 1984 the Supreme Court in Dickman v. Commissioner, defined a taxable gift by using an analogy. The Court used the income tax definition of “all income from whatever source derived” to describe how a taxable gift should be defined.
Section 2501(a)(1) of the Internal Revenue Code imposes a tax upon “the transfer of property by gift.” Section 2511(a) provides that such tax shall apply whether “the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible.” In Dickman, the Court decided that an interest free loan was a gift.
Would a family vacation, or providing a party for a wedding be viewed as a taxable gift? This may depend on whether the person paying for the activity is in attendance of the event.