Tuesday, November 05, 2024
How to Avoid Common Estate Planning Mistakes in Florida
Creating an estate plan is one of the most important things you can do to protect your assets and provide for your loved ones. However, many people make mistakes that can lead to unintended consequences, especially in Florida, where state-specific laws must be considered. Here are some common estate planning mistakes and how to avoid them.
1. Not Having an Estate Plan at All
One of the most common mistakes is simply not having an estate plan. Without a will or trust, Florida’s intestacy laws will determine how your assets are distributed, which may not align with your wishes. To avoid this, create a comprehensive estate plan that includes a will, and consider adding a trust to streamline the process.
2. Failing to Update Your Estate Plan
Many people create an estate plan and then forget about it. However, major life events such as marriage, divorce, the birth of a child, or the death of a loved one can significantly impact your estate plan. In Florida, it’s essential to review and update your estate plan regularly to reflect changes in your family, assets, or the law.
3. Overlooking Beneficiary Designations
Some assets, such as life insurance policies, retirement accounts, and payable-on-death (POD) bank accounts, pass directly to beneficiaries outside of your will or trust. Failing to update beneficiary designations can result in assets going to unintended recipients. Make sure your beneficiary designations are current and consistent with your overall estate plan.
4. Not Planning for Incapacity
In addition to planning for what happens after your death, it’s important to plan for the possibility of incapacity. Without proper documents, such as a durable power of attorney and a health care surrogate designation, the court may appoint a guardian to make decisions on your behalf. In Florida, you can avoid this by naming trusted individuals in advance to manage your finances and make health care decisions if you are unable to do so.
5. Not Considering Tax Implications
While Florida does not have a state estate tax or inheritance tax, your estate may still be subject to federal estate taxes if it exceeds the federal exemption limit. Failing to consider these tax implications can reduce the amount of your estate that passes to your heirs. An experienced estate planning attorney can help you minimize taxes through strategies like gifting, charitable donations, and creating trusts.
How to Avoid These Mistakes
The best way to avoid these common estate planning mistakes is to work with an experienced Florida estate planning attorney. An attorney can help you create a plan that is tailored to your specific needs, keep your documents up to date, and ensure that your estate plan complies with Florida law. By addressing these potential pitfalls early, you can protect your assets and ensure that your wishes are carried out.
Don’t let common estate planning mistakes jeopardize your assets or your loved ones’ future. Whether you need to create a new plan or update an existing one, our experienced Florida estate planning attorneys are here to help. Contact Bart Scovill, PLC today for a personalized consultation and ensure your estate plan reflects your current wishes and complies with Florida law.
Schedule Your Consultation Now! Call 941-365-2253 or Use our Contact Form Here.
Useful Links:
1. Florida Bar – Consumer Pamphlet: Do You Have a Will?
• Link: https://www.floridabar.org/public/consumer/pamphlet024/
2. IRS – Estate and Gift Taxes Overview
• Link: https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes
3. Florida Department of State – Guardianship Information
• Link: https://dos.myflorida.com/sunbiz/manage-business/efile/guardianships/
4. Florida Department of Revenue – Estate Tax Information
• Link: https://floridarevenue.com/ https://scovills.com/?p=2054
Tuesday, October 29, 2024
The Infamous Battle Over Howard Hughes’ Estate
What Happened?
Howard Hughes, the eccentric billionaire and aviation mogul, passed away in 1976, leaving behind an estate estimated at over $2 billion. Despite his immense wealth, Hughes failed to leave a valid, clear will. What followed was one of the longest, most complicated probate cases in American history, lasting over 30 years.
Without a definitive will, more than 400 alleged heirs surfaced, each claiming a stake in the fortune. This included distant relatives, business associates, and even strangers who produced dubious handwritten documents claiming to be Hughes' last wishes. The most famous of these was the so-called "Mormon Will," a handwritten document that purportedly left significant portions of the estate to various charities, employees, and even a gas station owner in Nevada. Ultimately, it was declared a forgery, but not before years of litigation ensued. The estate was finally divided among 22 of Hughes’ cousins in 1983, though disputes over portions of the estate continued for decades.
What Went Wrong?
- No Valid Will: Hughes' failure to leave a clear, legally recognized will led to a lengthy probate process and endless claims from distant relatives and opportunists.
- Lack of Trusts: Hughes did not set up any trusts to protect his assets, which left his estate vulnerable to public scrutiny, family disputes, and excessive taxation.
- No Designated Executor: The absence of a designated executor led to confusion about who would manage the estate and distribute assets. This fueled infighting among potential heirs.
- Poor Planning Despite Wealth: Despite having the resources to hire the best estate planners and attorneys, Hughes neglected to address basic estate planning measures.
How It Could Have Been Prevented
- Drafting a Clear, Legally Binding Will: The most straightforward solution would have been a clear, well-drafted will, outlining his wishes for asset distribution. A valid will could have prevented many of the frivolous claims.
- Establishing Trusts: Hughes could have set up living trusts to manage and distribute his assets. Trusts not only ensure that assets are distributed according to the deceased’s wishes but also keep the estate private and out of probate court.
- Designating a Competent Executor: Appointing a trusted individual or institution as the executor of his estate would have streamlined the administration process and prevented confusion among potential heirs.
- Ongoing Estate Reviews: Regularly reviewing and updating estate plans, especially given Hughes' complex financial situation and changing health, could have minimized legal battles and ensured a smoother transition of assets.
Lessons for Your Estate Planning
Howard Hughes' story serves as a cautionary tale about the risks of neglecting estate planning. To avoid similar chaos, it's crucial to:
- Have a clear, updated will.
- Use trusts to protect assets and ensure privacy.
- Designate a reliable executor or trustee.
- Regularly review and update your estate plan.
By taking these proactive steps, you can prevent the type of prolonged disputes that plagued Howard Hughes' estate and ensure that your wishes are honored efficiently.
Don’t let your legacy be defined by confusion and legal battles. Take control of your estate planning today to ensure that your wishes are honored and your loved ones are protected. Contact our experienced estate planning team to create a clear, legally binding plan that meets your unique needs. Schedule a consultation now to start safeguarding your assets and your family’s future.
Citations:
History.com, Howard Hughes Biography: https://www.history.com/topics/business/howard-hughes
Investopedia, Most Famous Inheritance Disputes: https://www.investopedia.com/articles/personal-finance/111715/most-famous-inheritance-disputes.asp https://scovills.com/?p=2064
Monday, October 02, 2023
Navigating Probate in Sarasota: Why You Need a Probate Attorney
Introduction
Probate is a legal process that can be emotionally and financially challenging, especially during a time of grief and loss. If you find yourself in a situation where you need to navigate the complexities of probate in Sarasota, it’s crucial to seek the guidance of a skilled probate attorney. This article will discuss the importance of hiring a probate attorney in Sarasota and how they can help you through this often intricate legal process.
Understanding Probate in Sarasota
Probate is the legal process of administering a deceased person’s estate, which involves the distribution of their assets and settling their debts. The process can be fairly complex, and it typically involves the following steps:
Filing the Will: If the deceased person had a will, it must be filed with the Sarasota County Probate Court. If there is no will, the estate is considered “intestate,” and the court will follow state laws to distribute assets.
Appointment of Personal Representative: The court will appoint a personal representative or executor to manage the estate. This individual is responsible for inventorying assets, paying debts, and distributing property to beneficiaries.
Notifying Creditors and Settling Debts: Creditors must be notified of the probate process, allowing them to make claims against the estate. The personal representative is responsible for paying valid debts from the estate’s assets.
Asset Valuation: The value of the assets in the estate must be determined. This includes real estate, personal property, bank accounts, and investments.
Asset Distribution: Once debts are settled and assets are valued, the remaining property is distributed to beneficiaries as specified in the will or according to Florida’s intestate succession laws.
Why You Need a Probate Attorney in Sarasota
Legal Proficiency: Probate law can be complex, and navigating it without legal guidance can lead to costly mistakes. A skilled probate attorney in Sarasota has a deep understanding of Florida probate laws and can guide you through the process efficiently.
Personalized Guidance: Every probate case is unique, and a skilled attorney can provide personalized guidance tailored to your specific situation. They can help you understand your rights, responsibilities, and options.
Reduced Stress: Dealing with the loss of a loved one is already emotionally challenging. Hiring a probate attorney can ease the burden of handling the legal complexities, allowing you to focus on grieving and healing.
Efficient Resolution: Probate attorneys have experience in expediting the probate process. They can help minimize delays, ensure deadlines are met, and prevent disputes among beneficiaries.
Avoiding Costly Errors: Errors in probate can lead to legal disputes, which can be financially draining. A probate attorney can help you avoid costly mistakes that may lead to litigation.
Conflict Resolution: If disputes arise among beneficiaries or creditors, a probate attorney can mediate and resolve conflicts amicably.
Conclusion
Probate can be a challenging and intricate process, but with the assistance of a skilled probate attorney in Sarasota, you can navigate it with confidence and peace of mind. Whether you are the executor of a will or a beneficiary, having a legal guide by your side can make all the difference in ensuring a smooth and efficient probate process. If you’re facing probate in Sarasota, don’t hesitate to seek the assistance of a dedicated probate attorney who can help you through this often daunting journey.
If you have any questions or would like additional information regarding this article contact us, write us at Firm@Scovills.com or call us at 941-365-2253.
Wednesday, November 16, 2022
No Contest Clauses in Florida
A No Contest Clause, or In Terrorem Clause, is a provision often used in Wills & Trusts stating that if a beneficiary disputes any part of the Will or Trust during probate or other administration, their share shall be reduced or removed.
While in theory it sound like a perfectly reasonable way of preventing disputes; “if that no good son of mine causes problems, he’s out.” It can also be used to allow a predator to scare the proper beneficiaries from challenging more recent changes.
Lets say a predator befriends an elderly parent, and convinces that parent that they’ve been a better family member over the last few months then those no good kids of hers. That predator could convince the parent to leave a token sum to her kids and if they challenge the gift to Mom or Dad’s new best friend, they won’t receive anything.
For this reason, No Contest Clauses are not valid in Florida. They can still be used to try and scare beneficiaries from challenging the estate documents, but they are not enforceable. Therefore, for better or worse, any estate planning document can be challenged in Florida.
Monday, November 18, 2013
What Happens To My Will When I Get Married
Our latest video explains what happens to your will when you get married.
Wednesday, November 13, 2013
The Immediacy of Life
Despite the somewhat innocuous conclusion to this event, it does bring me to mind how unpredictable life is. Despite perpetually preaching to my clients to keep their estate plans up to date, I too sometimes become complacent about this necessity. It is not necessary to be ever mindful of the status of your estate plan, but it is important to review it periodically. Witnessing this event has spurred me to review my own estate plan, and if you have not reviewed yours in the memorable past, I urge you to do the same. As my father is fond of saying "tomorrow is promised to no one."
Monday, November 11, 2013
Gratitude of a Veteran
Saturday, January 19, 2013
Congress Makes 5 Million Dollar Estate Tax Exemption Permanent
Finally, portability was made a permanent part of the law as well. Portability is the ability of a surviving spouse to have use of the unused portion of the first spouse's exemption. This effectively gives married couples a 10 million dollar exemption. Please keep in mind, to preserve this exemption, an estate tax return must be filed upon the death of the first spouse, and subsequent remarriage can have an effect on the use of this credit.
Thursday, November 15, 2012
Estate Tax Exemption To Drop To 1 Mil At End Of Year
Thursday, October 04, 2012
Top 5 Reasons To Not Plan Your Estate
Top 5 Reasons To Not Plan Your Estate
- 3% of everything I own sounds like a fair fee to pay a lawyer.
- I really want my family to understand the intricacies of probate law.
- Rather than have one lawyer plan my estate, I'd rather have two lawyers fight over it.
- Surely the state of Florida knows what's best for my family.
- What do I care, I'll be dead.
Wednesday, July 11, 2012
New Law for Florida Powers of Attorney
• Powers may be granted to change estate planning documents (“Superpowers”)
• Unless provided otherwise, co-agents may act independently of each other
• Qualified agents are entitled to compensation
• Duties of an agent have been specifically enumerated
Tuesday, July 06, 2010
Gift Tax Alive In 2010
With certain exceptions, everyone has an annual exclusion in how much they can gift. In 2009 & 2010 the exclusion is $13,000 per person/per year. That means that any gift under this amount does not need to be reported. However, if the gift is property, instead of cash, and could possibly be valued close to the exclusion amount, filing a gift tax return is good practice to ensure the valuation of the property can not be challenged at a later date.
So what happens if you give a gift in excess of your annual exclusion? Exceeding your annual exclusion does not necessarily mean that you will have to pay gift taxes. [By the way, gift taxes are paid by the donor, not the recipient.] If you exceed your annual exclusion, you will need to file a gift tax return, but as long as you haven’t exceeded your lifetime gift allowance ($1 million) and you are willing to use part of your unified credit (death tax exclusion), there will be no taxes due.
So what constitutes a gift? Most gifts are fairly obvious, but there are some that are less obvious, and this is where most people get into trouble. Seemingly simple actions like adding a child to a house deed or investment account can result in a taxable gift. Also transferring an asset for less than fair market value or forgiving a loan can be a taxable gift. Basically, any time there is going to be a transfer in an ownership interest with someone other than a U.S. Citizen spouse, you should double check it with your attorney or accountant.
Is this all there is to the gift tax? Not by a long shot. But this should be enough information to know when you should consult with your legal and tax advisors.
Monday, June 07, 2010
How to Double Your Estate Tax Exemption in 2011
In 2011, the Estate Tax is due to return with a 1 million dollar exemption (unified credit) and top tax rate of 55%. Without planning, this exemption is the same for both individuals and married couples. The following illustration explains how.
Married couples have an unlimited marital deduction to pass assets between each other1. Although useful during their lifetime, if their joint estate exceeds the unified credit, this could result in unnecessary estate taxes being paid upon the second spouse's death. The following illustration explains how:
- Couple A and B have a joint estate of 2 million dollars
- Spouse A dies and spouse B inherits Spouse A's half of the estate or 1 million dollars
- Spouse B dies and only the first 1 million dollars is protected2 by spouse B's exclusion leaving 1 million dollars subject to the estate tax
- Assuming the maximum tax rate of 55%, the amount due in taxes is $550,000
Under this scenario, the first spouse's estate tax exemption of 1 million dollars was wasted. So how can this be avoided?
The Marital Trust, sometimes called an A/B Trust, is used for a married couple that has a potentially taxable estate. The trust is designed to ensure the unified credit of the first spouse to die is not wasted. It effectively doubles the unified credit of married couples. Using the previous situation, the following illustration explains how the Marital Trust works:
- Couple A and B enter into a Marital Trust
- Spouse A dies and Spouse B's half of the joint assets are retained by Spouse B and Spouse A's half is placed into a Marital Trust or Credit Shelter Trust
- Spouse B retains access to the Marital Trust subject to certain broad limitations imposed by I.R.S. Rules
- Because of these limitations, Spouse B is not deemed to own Spouse A's share thus using Spouse A's credit and ensuring it is not included in Spouse B's estate
- When Spouse B dies their 1 million dollars pass under their exemption while Spouse A's share has passed outside of Spouse B's estate
- All 2 million dollars pass to the beneficiaries of A & B free from tax thus saving up to $550,0002
This strategy only works up to double the amount of the unified credit. For additional amounts, or if you do not wish to use this strategy, you will need additional tax saving strategies.
1Receiving spouse must be a U.S. Citizen
2Assuming a Unified Credit of 1 million dollars
Thursday, May 06, 2010
Does Life Insurance Really Pass Tax Free?
“Is there anything that can be done about it”? Of course, otherwise why bother talking about it. With proper planning, you can be sure that every dollar of your life insurance passes tax free to your loved ones. This can free up your exemption to ensure other assets pass tax free as well. The estate tax has been described as the only voluntary tax in America. You choose to pay it by not planning ahead.
Monday, March 29, 2010
Estate Planning For Your Pet
Even with this statute, a trust is needed. A trust allows for a continuing gift for the life of the pet to ensure there are funds available to take care of the pet.
Monday, March 15, 2010
Company Renewal Deadline
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Friday, February 26, 2010
Traditional vs. Roth IRA: Should I Convert?
To be honest, we don't know. We're not financial planners. What we do know is that this is a very good year to take a look at conversion.
Beginning in 2010, income restrictions for those considering converting to a Roth IRA have been removed. This means that many people that were not eligible to convert, now have this option. If you were not eligible in the past due to your income, your advisor may not have proposed conversion for this reason.
Also for 2010, the deferred tax of the Traditional IRA that must be paid upon conversion to a Roth IRA can be spread over a two year period. Once again, this reduces the expense of conversion based on the time value of money and must also be factored in to your decision.
If you have an IRA and a financial advisor, we recommend you speak with them about the relative benefit of converting some or all of your IRA to a Roth IRA. If you have an IRA and don't have a financial advisor, contact us and we can help you find the right advisor to assist with this decision. Most will perform this analysis for free.
Monday, February 01, 2010
What Happens to Out of State Property When Someone Dies?
If you own out of state real property, you should contact your attorney to discuss ways of avoiding multiple administrations.
Tuesday, February 19, 2008
Don’t Let Your Life Insurance Be Taxed
2011 seems like a long way away. Heck, 2008 isn't even two months old. But if you're looking at it from an estate tax point of view, 2011 is just around the corner. Failure to plan ahead could result in more of your money going to the government instead of your family.
First, let's look at the current state of the estate tax. This year, everyone has a two million dollar estate tax exemption. This means every individual can pass up to two million dollars to their heirs free from tax. Next year that exemption goes up to three and a half million, and in 2010, there is no estate tax. Sounds great, but in 2011, under current law, the exemption drops down to one million dollars. In 2011, a lot of people that have nothing to worry about over the next three years will suddenly have a taxable estate. So why worry about that now? Because of the three year look-back period used by the IRS.
Of all the assets in an individual’s estate, life insurance is probably the easiest to remove. Life insurance proceeds are not subject to income tax, but they are subject to estate tax if they were owned by the deceased at the time of death. So, by transferring the ownership of the life insurance it is possible to eliminate the proceeds from the estate and reduce the estate tax. However, if this is done within three years of death, the IRS can pull it back into the estate and the death benefits will be taxed as part of the estate. Few people buy life insurance with the intent of giving almost half to the government.
Therefore, if you have an estate that does or likely will exceed one million dollars in 2011, it’s not too early to begin thinking about adjusting your assets to ensure more goes to your heirs, and less goes to the government. Please be aware, transferring ownership of life insurance can create a lot of unintended consequences. Be sure to consult with your financial advisors before making any transfers.
If you have any questions or would like additional information regarding this article please write us at Firm@Scovills.com or call us at 941-365-2252.
Monday, July 10, 2006
Differences Between Business Entities
Special guest Tom Pellegrino, of Eaton, Honick, Pellegrino & McFarland, P.A., discusses the differences between commonly used business entities.
Mr. Pellegrino is a Certified Public Accountant and can be reached at 941-365-1172 or Tom@ehpepa.com.
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Watch the Video
Monday, June 26, 2006
Issues to Consider When Considering Divorce
In this video special guest Terry McCormick discusses issues you should consider when considering a divorce.
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Watch the Video
Issues to Consider When Considering Divorce (Audio)
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Monday, June 19, 2006
Limited Liability Companies
This video discusses Limited Liability Companies, their characteristics and uses.
To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Limited Liability Companies (Audio)
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Monday, June 12, 2006
Guardianship Avoidance (Audio).
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Guardianship Avoidance.
This video discusses the proper methods to avoid guardianship in the event of temporary or permanent incapacity.
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Wednesday, June 07, 2006
Estate Planning for Parents of Minor Children (Audio).
To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Naming a Guardian for Your Children (Audio).
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Monday, June 05, 2006
Naming a Guardian For Your Children
This video discusses the reasons to designate a guardian for your children and the proper methods to ensure your designation is effective. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.
To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.
Tuesday, May 30, 2006
Estate Planning for Parents of Minor Children.
This video explains the issues that should be considered by parents of minor children. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.
To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.