Whether you live in Jacksonville Florida or anywhere in the United States, you should find this guide helpful in educating yourself on what the various estate planning documents are used for.
This Guide is downloadable in its entirety; or it can be viewed online by chapters, all in PDF format, which include:
Ch. 1: Getting Started
One of the most common questions I get is “What is the difference between a Durable Power of Attorney and a Guardianship?”
Richard Shea an attorney in Connecticut who publishes the Connecticut Estate Planning & Elder Law Blog has a good description of each and the differences in an article titled Power of Attorney v Conservatorship.
He summarizes the differences by stating:
A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. If you do not have a power or attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Conservatorship. A court proceeding is not only costly, but the person appointed as your Conservator may not be the person whom you would have chosen yourself. And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or Medicaid planning that could be done on behalf of the principal.
Many Florida residents include language in their Florida estate planning documents which leave either a fixed sum or a percentage of their estate to one or more charities.
The most common gift is an outright bequest of property to a named charity from a Florida Will or Florida Revocable Trust. The gifts can be any type of property and often consultation with a tax adviser as to which property to leave can produce additional tax savings. Analysis of the size of the estate, and the cost basis of various assets can make significant differences.
In addition, careful attention needs to be made to the selection of the asset and how it is described in the documents. Contingencies can be made for a change in assets if the person wants to make a gift even if that asset does not exist.
This week the Supreme court decided to review a Washington D.C. Court decision that struck down a 31 year ban on pistols.
Many believe that the argument and decision by the Supreme Court will be based upon the widely contested interpretation of the 2nd amendment. Over the past few decades many have argued that the 2nd amendment of the United States Constitution was meant to only apply to states rights to arm their militia. The NRA, pro gun organizations, and many American have insisted that the 2nd amendment clearly applies to the individual rights of United States citizens.
Generally many communities have been imposing tighter restrictions on the rights of their state residents to own and possess guns of all types. The primary concern seems to be based around Title II Firearms (sold by Class 3 SOT dealers) which include silencers, short barrel rifles, and automatic weapons. Some states have restrictions on the ownership and possession of these devices in addition to the federal restrictions that are in place. Other states like Florida have no additional state restrictions at this time.
Professor Gerry W. Beyer author of the Wills, Trusts, & Estates Professors Blog, as reported on a mistake in estate planning where a Another Self-Help Estate Plan Gone Awry. In this case a man decided not to consult with anestate planning lawyer. He transferred the family home to his stepchildren son and $150,000 of securities to his son.
The house was highly appreciated and as such was a poor asset to select to use as a lifetime gift. Because it was transferred during life, the children had to use the father’s basis instead of the price of the home at the death of the father. This resulted in over $80,000 in capital gains liability.
In addition the house, because it was transferred within 3 years of death, was still included in the father’s estate value and did not reduce his estate taxes.
Professor Gerry W. Beyer author of the Wills, Trusts, & Estates Professors Blog, as reported on a mistake in estate planning where a “Do it Yourself” Estate Plan Backfires. In this case a mother who did not hire her own estate planning lawyer made a number a big mistake that ended up causing problems withe Medicaid eligibility.
The mother, a widow, was worth 500K. Her home is worth 400K and has 4 children. After her daughter and son-in-law declared bankruptcy and moved in with her, they suggest buying her home. Unfortunately the home was not transfered at fair market value, and the mother made part of the purchase a gift. Mom ended up not having assets to split between the children like she had intended, and if she needs to qualify for medicaid within 5 years she will be disqualified.
Some other examples of Do it your self wills and bad news are covered in my articles listed below
Do it Yourself Wills? More bad news and Do it Yourself Wills? a Good Idea or Not?
Tax breaks on dividends and capital gains for college-age dependents will end on January 1. In the meantime, families can still take maximum advantage of the current law.
A significant source of tax savings for American families will disappear on January 1, 2008. That’s when changes Congress made to the tax code in 2007 go into effect, increasing the tax rate on unearned income college-age taxpayers receive from their parents. Simply put, Congress is cracking down on parents who transfer such assets as stocks, bonds and mutual funds to children to take advantage of lower income tax rates.
As a result, the Small Business and Work Opportunities Act of 2007 extends the higher tax rate to children 18 years old and to full-time students ages 19 to 23. For 2008, the unearned income of children that exceeds $1,800 will be taxed at their parents’ usually higher marginal income tax rate-making it more difficult to shift assets to children to, say, meet college costs. (The $1,800 limit adjusts annually for inflation. The limit is $1,700 for 2007.)
A Florida Enhanced Life Estate Deed (sometimes called “The Lady-Bird Deed”) is a tool used by Florida Estate Planning Attorneys, Florida Elder Law Attorneys, and other by Florida Lawyers to preserve the homestead for the benefit of the family. Upon the death of the homeowner’s the property will pass to the people designated without the need for a costly probate process.
Why Use an Enhanced Life Estate Deed?
The Enhanced Life Estate Deed provides a mechanism to bypass the probate process and thus the creditors. Under this document, the husband and/or wife retain a Life Estate Interest under which he or she retains the right to live on the property for their life. Unlike a Life estate, the husband and/or wife retain the right to sell, mortgage, convey, gift, or cancel the remainder interest at any time during their life. If there is any property interest upon the last to die of the husband and/or wife, the remainder will pass in fee simple to the designated individuals named in the deed.
Many people who have reached the age of retirement split their time between Florida and another state. Since we are at the prime time of year for this to be happening I thought it appropriate as a Florida Estate Planning Lawyer to write about some of the issues of Estate Planning lawyers from these states to make sure that any recent changes in the states laws are included in the will or revocable trusts that are in place or being prepared
Do you have to work with a Florida Estate Planning Lawyer to make sure your estate plan works in Florida and or a different state than where it was created? In most cases I find that the answer is no. Although competent drafting can establish the site of the trust as the state where it was created it can also establish another state when there are advantages. Most Florida Estate Planning Lawyer focus on one state and are not able to accurately determine what is the best state to use. This means that even if there are judicial proceedings in Florida, the court can interpret the revocable trust according to the chosen state in the trust.
An effective estate plan for dual residency is a challenge and an opportunity. Multi-state Estate Planning Documents reviewed to see if they can be enhanced please contact a Florida Estate Planning Lawyer.
Mitchell Port a California lawyer posted a link to an article on the California Tax Attorney Blog about an article on the State Bar Website which provides information on estate planning. Although this is a California bar website, many of the same issues and considerations are important to Florida residents interested in Florida Estate Planning. Much of the information is also found on The Florida Estate Planning Lawyer Blog which primarily deals with Florida issues.
1. What Is Estate Planning?
2. What Is Involved in Estate Planning?
3. Who Needs Estate Planning ?
