Tag: estate-planning
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The Complete Advisor: One Attorney’s Case for Ancillary Practices
Summary: A legal firm and attorney were being sued for negligence in a car accident case. The plaintiff claimed that the lawyer didn’t file the necessary paperwork on time, resulting in a lost settlement. The court ruled in favor of the plaintiff and awarded them a large sum of money. When people come to a…
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Estate Planning During Turbulent Times
Low interest rates and market downturns can create opportunities to transfer wealth to the next generation without paying taxes. This can be done through techniques like giving gifts, making loans within the family, or setting up trusts. The IRS sets minimum interest rates for these transactions, which can affect how much wealth can be transferred…
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Profits Interest Converting Compensation to Capital Gains and Other Planning Ideas
Profits interest, also called carried interest, gives a person the right to receive a percentage of profits from a partnership without having to put in any money. Some hedge fund managers have received huge amounts of money through profits interest and paid lower taxes on it. This article explains how profits interest is taxed and…
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Qualifying Trust Transfers for Split-gift Treatment
Section 2513 of the tax code allows a married couple to split gifts, meaning they can both take advantage of tax exclusions and exemptions for gifts made by one spouse. This can help minimize gift tax liability and maximize the amount that can be gifted to others. It can get complicated when the non-gifting spouse…
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The Testamentary Charitable Lead Annuity Trust Revisited
A testamentary charitable lead annuity trust is a great way for wealthy clients to give to charity and still provide for their family. It pays money to charity for a certain period of time, and then the remaining assets go to the family. The estate gets a tax deduction for the money given to charity.…
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Documentary Stamp Tax: The Legislature Strikes Back
For a long time, people in Florida have been arguing about whether a tax should apply when someone sells a piece of land to a company they own. In 2005, the Florida Supreme Court said no, but then in 2009 the state changed the law to make it apply in some cases. This caused problems…
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Section 2053 Final Regulations: Continued Uncertainty?
The Treasury Department issued new regulations for deducting expenses and debts when someone dies. The rules say that you can only deduct these expenses if they have been actually paid. If you owe money to someone, you have to pay it before filing the tax return. There are a few exceptions to this rule, like…
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Asset Location: Why Attorneys Should Bridge the Perceived Investment Gap
Hayley, a widow, is meeting with her attorney to get advice on her estate planning. The attorney suggests that she should fund her revocable trust with her $2.5 million investment account and keep her IRA, other assets, and her home in her individual name. The attorney also recommends that she review her beneficiary designation for…
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Creditor’s Rights Under Private Annuities and Grantor-retained Annuity Trusts in Florida
This article talks about whether annuity contracts are protected from creditors in Florida. The authors argue that even private annuity contracts should be protected under the law, based on their analysis of the statute and previous court decisions. They believe that if the legislature didn’t specifically exclude private annuities from the law, then they should…
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Roth IRA Conversions: Benefits and Planning Opportunities
The main point is that contributing to a Roth IRA allows your money to grow tax-free, unlike a traditional IRA where you have to pay taxes when you take the money out. Converting to a Roth IRA can be a good idea for some people because it means you won’t have to pay taxes on…
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So You Left Your Trust at Home When You Moved to Florida
Florida is a popular place for retirees because of the warm weather and tax benefits. Many people who move to Florida from other states may have irrevocable trusts that need to be reviewed. These trusts may have outdated rules and may need to be changed. This article talks about how it may be possible to…
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Considerations When Combining Crummey Powers with Total Discretionary Trusts
Total discretionary inter vivos trusts have many benefits, like taking care of multiple generations’ needs and protecting those who can’t handle money or have addictions. Adding Crummey powers to these trusts can have consequences for gift tax, but it can still save taxes for other beneficiaries. It might be helpful when the settlor is worried…
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Things That May Surprise You About Florida’s Principal and Income Act and Related Accounting Law, Part I
Mom’s will gives Son a piece of rental real estate and gives the rest of the estate to Daughter. The will doesn’t say who gets the money from the rental property or who pays for its expenses. After Mom dies, the estate gets $12,000 in rent and pays $2,000 in property taxes. It also has…
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Should I Stay or Should I Go? Tax Considerations in U.S. Expatriation
When U.S. citizens decide to give up their citizenship (expatriate), they may still have to pay taxes even after they leave. This is especially true for certain “covered expatriates.” These tax rules can be complex and may cause problems for people who want to leave the country. It’s important for people thinking about expatriating to…
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Estate Planning for Same-sex Partners
Back in the days of old TV shows like Leave it to Beaver, The Donna Reed Show, and Father Knows Best, people only saw romantic relationships between a man and a woman. But now, things have changed a lot and many people accept and support gay and lesbian couples. However, the laws about leaving property…
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Estate Planning with Portability in Mind, Part II
The planner needs to know about a tax rule that could affect estate planning, and it’s better to plan for potential tax benefits in the first place, rather than hoping to fix it later with a different tax rule. This column is from the Tax Section, and it’s about the important principles of duty and…
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Estate Planning with Portability in Mind, Part I
Before 2011, if someone died without using all of their estate and gift tax exemption, it was lost forever. In 2010, a law called the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act was passed, allowing for “portability” – the ability for a surviving spouse to use their deceased spouse’s unused exemption amount. This…
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Estate Planning: The Clock is Ticking Use it or Lose it Before 2013
In 2010, President Obama signed a law that changed the estate, gift, and generation-skipping transfer (GST) tax rates and exemptions. These changes will end in 2012, and if new laws aren’t passed, the old tax rates and exemptions will come back in 2013. This means that people should consider using the new tax laws to…
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Disappearing and Reappearing Value on a Two-way Street: The Reverse Chenoweth Situation
In the Bongard case, the court said that the estate may be able to get a tax deduction for a gift the person who passed away made to their spouse, even though the gift was pulled back into the estate for tax purposes. In the Lauder case, the court allowed a tax deduction for the…
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Pre-immigration Tax and Estate Planning: Utilization of Code Section 121 Exclusion
If a foreign person is moving to the U.S., they should consider the tax benefits of selling their foreign home before they move. They may be able to exclude up to $250,000 (or $500,000 if married) of the profit from the sale of their home from U.S. taxes. This applies even if the home is…
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Navigating the Minefield of Settlements: A Primer on Tax Issues for the Probate and Trust Litigator
In tough economic times, there are more disputes over wills and trusts. This is because more people know their rights and the legal documents are more complex. As a result, lawyers who handle these cases are seeing more business. I’ve helped these lawyers with tax issues in these cases. This article is meant to help…
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Five Tax Traps for Resident Noncitizens (and Their Attorneys!)
More and more people from different countries are moving to Florida for better opportunities. But when they become residents in the U.S., they have to be careful about taxes. They might have to pay taxes on their income and assets from their home country, which can be a surprise. They also have to follow specific…
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New §736.0505(3) Assures Tax/Asset Protection of Inter Vivos QTIP Trusts
Bob and Judy, a married couple, have a lot of money and want to make sure their kids get as much of it as possible when they die. They have $13.5 million, $3.5 million of which is their house and $10 million is in a joint bank account. Their accountant suggests that they put $5…
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A Primer on Private Placement Life Insurance
PPLI is a type of life insurance that can help with income tax and estate planning. It’s like regular life insurance, but with more investment options and lower costs. It’s a good option for people who want to save on taxes and have more investment flexibility. However, there are certain rules and requirements that need…