Tag: estate-planning
-
IRA Accounts and Possible Stretch Reduction
In 1974, Congress created IRAs to help people save for retirement without having to pay immediate taxes on their contributions and investment gains. This is known as a traditional IRA. You can get a tax deduction for the money you put into your IRA, but only until you turn 70 and a half. You can…
-
Pre-Immigration Planning with the Foreign Trust: The Intersection of Income and Estate Tax
If someone from another country puts money into a trust in their home country and the trust makes money, the U.S. only taxes the money from the U.S. The trust can also be set up to benefit people in the U.S., but they only pay taxes on the money they get from the trust. If…
-
Foreign Grantor Trust Planning: A Flexible Planning Structure for U.S. Income Tax
Tax specialists help families with members in multiple countries set up special trusts to avoid certain U.S. taxes and keep tax advantages. This can be really useful for families where a parent is not from the U.S. and has kids and grandkids who are. The trust helps the family save money on taxes and deal…
-
Designing Trust Systems for Florida Residents: Planning Strategies, Things You Should Know, and Traps for the Unwary
Trusts are commonly used for estate and financial planning. They help avoid probate and protect assets. There are different types of trusts and it’s important to understand the implications before funding one. For unmarried individuals, a revocable trust is often used to avoid probate and maintain control over assets. However, in some cases, it may…
-
Internal Revenue Code §1202 and You: Analyzing Exclusion of Gain on Sales of Small Business Stock
Section 1202 of the Internal Revenue Code allows small businesses to exclude some or all of the gain from stock sales. Small businesses can plan for this benefit when considering selling their business. Tax professionals can help determine if a business qualifies for the gain exclusion. The article focuses on businesses that do consulting, as…
-
Domestic Asset Protection TrustsA Viable Estate and Wealth Preservation Alternative
People are starting to use domestic asset protection trusts more to avoid taxes and protect their assets from creditors. These trusts comply with specific laws in Delaware, Nevada, Alaska, or Rhode Island. They stop creditors from taking money from the trust if the person who made it did it for their own benefit. Richard Nenno,…
-
Post-death Confidentiality of Estate Planning Communications Between Attorney and Client
So basically, when a client talks to their lawyer, everything they say is supposed to be kept private. This is called the lawyer-client confidentiality rule. It means the lawyer can’t tell anyone else what the client said, unless the client says it’s okay. This rule is different from the lawyer-client privilege, which is a rule…
-
Intestacy in the Context of Estate Planning in Florida: When to Apply the Intestacy Rules and How to Avoid them
In short, a law firm and their lawyer are being sued for not properly representing their client in a case. The client claims that the lawyer didn’t try hard enough and made mistakes. The lawsuit is seeking money for the client’s losses and damages. If someone dies without a will in Florida, their property will…
-
Waiting for Estate Tax Repeal: What Do You Tell Your Clients in the Meantime?
The 1988 film “The Boost” is about a guy who loses everything when his business is affected by a change in tax laws. The repeal of the estate tax in 2001 could also affect lawyers who help people with their estate planning, but it’s not clear what will happen yet. Planning techniques that made sense…
-
Reforming Florida’s Elective Share Law: Is the Cure Worse Than the Disease?
The surviving spouse of a Florida resident who passes away has the right to a percentage of the deceased person’s assets, called the elective share. This is meant to make sure the surviving spouse has enough to live on and also recognizes their contributions to the marriage. However, there have been problems with the current…
-
Multiple Representation in Estate Planning: Beyond Advisory Opinion 95-4, Part 2
An article discusses how a legal decision called Advisory Opinion 95-4 affects how attorneys work with married couples in estate planning. It talks about how attorneys and clients can decide on the specific responsibilities of the attorney in the engagement arrangement. Some attorneys may want the option to keep some information confidential from one spouse,…
-
Revocable Inter Vivos Grantor Trusts
Some people are saying that you can set up your own trust instead of using a lawyer, but I disagree. A really smart estate planning expert, Rohan Kelley, has said it’s okay for simple estates, but I think it’s still risky. Trusts and wills are two different things, and using a do-it-yourself trustee instead of…
-
Domicile Planning: Don’t Take it for Granted
Domicile planning is an important but often overlooked aspect of legal and financial planning. Domicile is basically where a person considers their permanent home. It’s important to ask the right questions at the right time to help clients plan for their domicile and avoid problems in the future. This can help them and their families…
-
Disclaimer Statute May Permit Judgment Debtors to Deliver Money to Friends or Family With Nothing to Creditors, But Not Always in Florida
Yes, there may be a way for a judgment debtor in Florida to prevent a judgment creditor’s lien from attaching to inherited assets, but it depends on the debtor’s financial situation. The debtor may be able to use a legal process called a disclaimer to avoid the creditor’s claim, but only if the debtor is…
-
Not All Bonds Are Created Equal: Distinguishing a Common Law Bond From a Statutory Bond
In Florida, the construction industry is booming, but there are also a lot of legal disputes. One common cause of these disputes is poorly written documents, like contracts and bonds. There are two main types of bonds for construction projects: statutory bonds, which are required by law for public projects, and common law bonds, which…
-
Understanding the Testamentary Effects of Community Property Rules
Due to a lot of people moving to Florida, the state has community property rules that are important in legal decisions. In 1992, the Florida probate laws were changed to include a version of the Uniform Disposition of Community Property Rights at Death Act. This act affects what happens to a person’s property after they…
-
Minimizing a Personal Representative’s Personal Liability to Pay Taxes, Part II
In Part II of the article, the authors give advice to a personal representative (PR) on how to minimize personal liability for federal and state tax obligations. They recommend filing tax returns for the years before the decedentâs death, gathering and reviewing the decedentâs tax and financial information, and filing necessary forms with the IRS…
-
Minimizing a Personal Representative’s Personal Liability to Pay Taxes, Part I
As a personal representative of a Florida probate estate, you have to file tax returns and pay taxes for the deceased person and their estate. If you don’t do this, you could be personally responsible for the unpaid taxes, penalties, and interest to the IRS and the Florida Department of Revenue, even years after the…
-
Drafting Trusts That Include Broad Invasion Powers
Sometimes a client might want to include a broad standard in their trust that allows the beneficiary to access the trust funds for more than just basic needs like health and education. However, there are certain restrictions on when and how this standard can be used. Marital trusts and independent trustees can still allow for…
-
Unraveling the Mysteries of the Florida Exemptions for Life Insurance and Annuity Contracts, Part Two
This is the second part of an article about exemptions for life insurance and annuity contracts in Florida. It discusses whether the exemption for annuity contracts applies to deferred annuities, traditional estate planning arrangements, and the application of the fraudulent conversion rule. The law says that the money from an annuity contract is protected from…
-
Unraveling the Mysteries of the Florida Exemptions for Life Insurance and Annuity Contracts, Part 1
Florida has laws that protect residents’ assets, like their primary residence, life insurance, annuities, retirement accounts, and education savings accounts. In this two-part article, we’ll look at the rules for protecting life insurance and annuities in Florida. Part one focuses on how life insurance is protected after the insured person passes away, how the policy…
-
Challenging Inter Vivos Transfers Procured by Undue Influence: Factors to Consider
Florida has a lot of people who take advantage of elderly people. When someone is coerced into giving away their stuff, it might be seen as undue influence and could be reversed. The courts have guidelines for challenging a contested will, but it’s not as clear for gifts given while the person is still alive.…
-
The Impact of Unlicensed Contractor Activities
If you’re working in construction, you need to have a license from the Florida Department of Business and Professional Regulation. This is important because without a license, any contracts or legal rights you have might not be enforceable. This means that if you want to change your business structure or merge with another company, you…
-
What Every Attorney Needs to Know About Estate Planning
When people get married, they need to update their estate plans. This includes things like beneficiary designations on retirement accounts and life insurance. If someone dies without updating their estate plan after getting married, their spouse may be entitled to a certain amount of their estate, even if it doesn’t match what the deceased wanted.…