Florida Estate Planning Lawyer Blog

Mark Jakubik of the Pennsylvania Estate Planning Lawyer Blog posted an article Reasons to Prepare a “Living Trust” where he has compiled a good list of reasons. They are:

* Avoiding probate. Since the property is no longer in your name as an individual, but is now in your name as trustee, there is no reason to go through probate. This is a savings of 5%-10% of your gross estate. An additional benefit is that it will only take weeks instead of years to transfer your property to your heirs.

* The trust will remain private. Unlike a will, which has to be filed as a public record in the probate court, the trust remains a private document even after your death.

* With certain provision in the trust, you can completely avoid or reduce estate taxes. This can mean savings of literally thousands of dollars.

As Baby boomers retire and move to Florida or other states, one of the jobs of an Estate Planning Lawyer is to review the Beneficiaries on IRA and other types of accounts. Denice Glerach a lawyer in Naperville wrote an article discussing this problem and suggesting some solutions for IRA’s suggesting that most people do not realize that the money in a traditional IRA account or employee benefit accounts are subject to income taxes by the recipient as well as estate taxes upon the death of the IRA owner.

Several options are mentioned Leaving the IRA to a charity – Should eliminate the income tax and estate tax.

Leaving the account to a trust to defer income tax and protect it from creditors.

Randall Armour of the Santa Clarita Valley Signal wrote an article discussing Trust Mills and gives some advice on how to spot a trust mill and several problems associated with them.

1. Trust mills often prepare documents after the client has filled out a simple check-the-box-type questionnaire. Little or no counseling or advice is given to the client and the client may meet with a “paralegal,” CPA or financial adviser, but not with an attorney.

2. The cost of the documents is a good indicator of whether or not you are dealing with a trust mill. Trust mills usually charge from $300 to $700 for their documents. Just remember, you get what you pay for — in this case, not very much!

3. Trust mills often provide documents for limited purposes such as avoiding probate or estate taxes.

The Supreme Court upheld the limits on income tax deductions for a trustsor estate. The Court ruled against the Knight family (they created Pepperidge Farm).

The Court said trusts ordinarily may not deduct the full cost of investment advice on their income tax returns. These expenses are only deductible when they exceed 2 percent of adjusted gross income of the entity. These are the same as with individuals.

The case dealt with a small dispute and involved the Trusts income tax return.