Probate is the legal process of administering a deceased person’s estate, ensuring that their assets are distributed to heirs and any debts are paid. In Florida, the probate process can vary depending on the size and complexity of the estate, but understanding the steps involved can help you navigate it more smoothly.
When Is Probate Required in Florida?
Probate is generally required in Florida if the deceased person owned assets in their name alone. However, some assets, such as those held in a living trust or with named beneficiaries (like life insurance policies or retirement accounts), may avoid probate.
Types of Probate in Florida
Florida offers two types of probate processes:
- Formal Administration: This is the standard probate process for estates valued at over $75,000 or when there are multiple complexities, such as creditor claims or disputes among beneficiaries.
- Summary Administration: This is a simplified probate process for estates valued at $75,000 or less, or when the person has been dead for more than two years. It is faster and less costly but only available for qualifying estates.
Steps in the Florida Probate Process
- Filing a Petition: The probate process begins when the executor (also known as the personal representative in Florida) files a petition with the probate court in the county where the deceased person resided.
- Validating the Will: If the deceased had a will, the court will review it to ensure it complies with Florida law. This may involve confirming that the will was properly signed and witnessed.
- Appointing the Personal Representative: Once the will is validated, the court will officially appoint the personal representative, who will be responsible for managing the estate, paying debts, and distributing assets.
- Identifying and Notifying Creditors: The personal representative must notify any potential creditors of the probate process and give them an opportunity to file claims against the estate.
- Paying Debts and Taxes: Before distributing assets to beneficiaries, the personal representative must pay any outstanding debts, taxes, and expenses related to administering the estate.
- Distributing Assets: Once all debts and taxes have been settled, the personal representative can distribute the remaining assets according to the terms of the will or Florida’s intestacy laws if there is no will.
How to Avoid Probate in Florida
Probate can be time-consuming and costly, so many people in Florida look for ways to avoid it. Some common strategies include:
- Creating a Revocable Living Trust: Assets held in a trust do not go through probate, which can help streamline the estate administration process.
- Joint Ownership: Property owned jointly with rights of survivorship automatically passes to the surviving owner and bypasses probate.
- Beneficiary Designations: Assets like life insurance, retirement accounts, and payable-on-death (POD) bank accounts can bypass probate if you designate a beneficiary.
Do You Need a Probate Attorney?
Navigating the probate process in Florida can be complicated, especially if the estate is large or there are disputes among heirs. A Florida probate attorney can help ensure that the process is handled correctly and efficiently, minimizing delays and protecting your interests.
Understanding the probate process and working with a knowledgeable attorney can make the legal administration of a loved one’s estate smoother and less stressful for everyone involved.
https://scovills.com/?p=2084
Monday, December 16, 2024
Tuesday, December 10, 2024
What Happened?
When music icon Prince passed away unexpectedly in 2016, he left behind a legacy of hits, cultural impact, and an estate worth an estimated $156 million. However, he did not leave behind a will. The absence of clear instructions for the distribution of his estate led to a prolonged legal struggle involving family members, lawyers, and even the IRS.
Initially, the battle for Prince's estate was fought among his six siblings, who were identified as the rightful heirs under Minnesota law. The lack of a will not only delayed the distribution of assets but also led to significant legal fees, administrative costs, and tax liabilities that substantially diminished the estate’s value over time. The probate case was further complicated by disputes over how Prince’s music catalog and intellectual property should be managed and monetized.
By 2021, five years after Prince's death, a partial settlement had been reached, with the estate being split between a music company and his heirs. However, the final settlement was not completed until 2022, highlighting how estate disputes can drag on for years without clear planning.
What Went Wrong?
- No Will: Prince’s failure to draft a will meant that the distribution of his assets was left to state law, leading to confusion and conflicts among potential heirs.
- Complex Assets: His estate included various assets like intellectual property rights, real estate, and unreleased music. Without instructions, it was unclear how to value and manage these assets.
- Significant Tax Implications: Without any tax-planning strategies in place, Prince’s estate faced substantial federal and state estate taxes, further reducing its overall value.
- Multiple Claims: Various individuals and entities tried to claim a stake in the estate, which prolonged legal proceedings and increased costs.
How It Could Have Been Prevented
- Drafting a Will: Prince could have significantly reduced confusion by having a legally binding will that outlined his intentions for asset distribution, including specific plans for his music rights.
- Establishing Trusts: Trusts could have been used to manage his complex assets, particularly his music catalog and intellectual property. Trusts would have kept these assets private and allowed for more efficient distribution.
- Engaging in Estate Tax Planning: Strategies like gifting assets during his lifetime, charitable donations, or setting up irrevocable trusts could have reduced the tax burden on his estate.
- Regularly Reviewing Estate Plans: Prince could have updated his estate plan regularly to account for changes in his assets, relationships, and financial standing.
Lessons for Your Estate Planning
Prince’s case is a powerful example of the complications that arise when estate planning is overlooked, especially for individuals with complex assets. To avoid a similar fate, consider:
- Drafting a clear, legally valid will.
- Utilizing trusts for asset protection, privacy, and efficient distribution.
- Implementing estate tax planning strategies to maximize value for heirs.
- Regularly reviewing and updating estate plans to reflect life changes and asset growth.
With these steps in place, you can protect your legacy and ensure your wishes are honored without unnecessary legal battles. https://scovills.com/?p=2079
When music icon Prince passed away unexpectedly in 2016, he left behind a legacy of hits, cultural impact, and an estate worth an estimated $156 million. However, he did not leave behind a will. The absence of clear instructions for the distribution of his estate led to a prolonged legal struggle involving family members, lawyers, and even the IRS.
Initially, the battle for Prince's estate was fought among his six siblings, who were identified as the rightful heirs under Minnesota law. The lack of a will not only delayed the distribution of assets but also led to significant legal fees, administrative costs, and tax liabilities that substantially diminished the estate’s value over time. The probate case was further complicated by disputes over how Prince’s music catalog and intellectual property should be managed and monetized.
By 2021, five years after Prince's death, a partial settlement had been reached, with the estate being split between a music company and his heirs. However, the final settlement was not completed until 2022, highlighting how estate disputes can drag on for years without clear planning.
What Went Wrong?
- No Will: Prince’s failure to draft a will meant that the distribution of his assets was left to state law, leading to confusion and conflicts among potential heirs.
- Complex Assets: His estate included various assets like intellectual property rights, real estate, and unreleased music. Without instructions, it was unclear how to value and manage these assets.
- Significant Tax Implications: Without any tax-planning strategies in place, Prince’s estate faced substantial federal and state estate taxes, further reducing its overall value.
- Multiple Claims: Various individuals and entities tried to claim a stake in the estate, which prolonged legal proceedings and increased costs.
How It Could Have Been Prevented
- Drafting a Will: Prince could have significantly reduced confusion by having a legally binding will that outlined his intentions for asset distribution, including specific plans for his music rights.
- Establishing Trusts: Trusts could have been used to manage his complex assets, particularly his music catalog and intellectual property. Trusts would have kept these assets private and allowed for more efficient distribution.
- Engaging in Estate Tax Planning: Strategies like gifting assets during his lifetime, charitable donations, or setting up irrevocable trusts could have reduced the tax burden on his estate.
- Regularly Reviewing Estate Plans: Prince could have updated his estate plan regularly to account for changes in his assets, relationships, and financial standing.
Lessons for Your Estate Planning
Prince’s case is a powerful example of the complications that arise when estate planning is overlooked, especially for individuals with complex assets. To avoid a similar fate, consider:
- Drafting a clear, legally valid will.
- Utilizing trusts for asset protection, privacy, and efficient distribution.
- Implementing estate tax planning strategies to maximize value for heirs.
- Regularly reviewing and updating estate plans to reflect life changes and asset growth.
With these steps in place, you can protect your legacy and ensure your wishes are honored without unnecessary legal battles. https://scovills.com/?p=2079
Monday, December 02, 2024
As 2025 approaches, Florida’s estate planning landscape may be subject to important legal changes. While no updates have been finalized yet, several potential adjustments could impact how Floridians manage their assets and plan for the future. In this article, we'll explore possible changes to estate planning law in Florida that could arise in 2025 and what they might mean for residents.
1. Federal Estate and Gift Tax Exemption Adjustments
- Background: The federal estate tax exemption has remained high for the past several years, currently set at $12.92 million per individual. However, it's set to significantly decrease in 2026, reverting to pre-2018 levels (approximately $5-6 million).
- Potential 2025 Change: Federal lawmakers may consider adjustments in 2025, either accelerating or smoothing the reduction to avoid a sudden drop. This could involve setting a new, permanent exemption amount lower than the current level.
- Impact on Floridians: High-net-worth individuals should be prepared for the possibility of a lower exemption, which could increase estate tax liabilities. Advanced estate planning strategies—like gifting, trusts, or charitable donations—might be necessary to mitigate future tax impacts.
2. Digital Estate Planning Provisions
- Background: With digital assets becoming an integral part of personal estates, laws have begun to address how these assets should be managed after death.
- Potential 2025 Change: Florida lawmakers may introduce expanded legislation to better define the management and transfer of digital assets. This could include clearer guidelines for fiduciaries on accessing digital wallets, social media accounts, and digital records.
- Impact on Floridians: Floridians who own significant digital assets, including cryptocurrency, should ensure their estate plan addresses these assets specifically. It may become increasingly important to include detailed instructions for fiduciaries and ensure legal compliance with new regulations.
3. Further Refinement of Remote Online Notarization (RON)
- Background: Remote Online Notarization (RON) has been a major focus in Florida’s estate planning laws, enabling documents to be notarized online.
- Potential 2025 Change: Lawmakers could implement tighter security measures, such as enhanced identity verification, or introduce additional rules for remote witnesses to prevent fraud or undue influence during online estate planning.
- Impact on Floridians: While RON has made estate planning more accessible, these refinements could slow down the process. Floridians utilizing RON should ensure their technology is compliant with any new security standards and be prepared for potential additional steps.
4. Potential Changes to Medicaid Planning Rules
- Background: Medicaid plays a critical role in long-term care planning for many Floridians, with certain rules governing asset protection and qualification.
- Potential 2025 Change: Federal and state legislators may introduce stricter requirements for qualifying for Medicaid, particularly for those transferring assets or using irrevocable trusts as part of their planning.
- Impact on Floridians: Stricter Medicaid qualification rules could limit options for asset protection in long-term care planning. It may become essential to start planning earlier, consider additional strategies (e.g., asset conversion or spend-down planning), and review irrevocable trusts to ensure compliance with potential new regulations.
5. Updates to Durable Power of Attorney Requirements
- Background: Durable powers of attorney (DPOA) play a crucial role in Florida estate planning, allowing designated individuals to make financial and legal decisions if the principal becomes incapacitated.
- Potential 2025 Change: Florida may introduce stricter standards for DPOA execution, including additional witness requirements or mandated language that more clearly outlines the agent’s responsibilities.
- Impact on Floridians: If new DPOA requirements are implemented, individuals may need to re-execute existing documents to ensure they remain legally valid. This could also require revisiting powers of attorney to confirm agents understand the broader scope of their duties.
6. Increased Protections Against Elder Abuse in Estate Planning
- Background: Florida has been focused on increasing protections against elder abuse, particularly in the context of estate planning and fiduciary appointments.
- Potential 2025 Change: The state could introduce new measures that enhance the monitoring of fiduciaries and require more frequent reporting to prevent elder exploitation. This might include additional education for fiduciaries or greater oversight from third parties, like banks or financial advisors.
- Impact on Floridians: These changes could provide greater peace of mind for elderly individuals and their families but may also increase administrative responsibilities for fiduciaries. Those serving as agents under powers of attorney, trustees, or personal representatives should be prepared for enhanced compliance requirements.
7. Changes to Homestead Protections and Property Transfers
- Background: Florida’s homestead laws offer strong protections against creditors and provide tax advantages for primary residences.
- Potential 2025 Change: Florida could adjust homestead protection laws to better address changing economic conditions, including modifications to transfer rules, creditor protection limits, or exemptions for specific debts.
- Impact on Floridians: Homeowners may need to revisit how homestead properties are titled and understand potential impacts on asset protection strategies. If new rules are enacted, updating deeds or reviewing trusts that hold homestead properties could become necessary.
How to Prepare for Potential Changes in 2025
While it’s impossible to predict all the changes that 2025 may bring, Floridians can take proactive steps to protect their estate plans:
- Review Your Estate Plan Annually: An annual review allows you to catch any legal changes early and adjust your documents accordingly.
- Consult with an Estate Planning Attorney: Working with a Florida-based attorney who stays informed of legal developments is key to ensuring compliance and maximizing protection.
- Incorporate Digital Asset Planning: Make sure digital assets are accounted for in your estate plan and that fiduciaries have the necessary access and instructions.
- Plan for Tax Changes Now: Use gifting strategies, charitable contributions, and advanced trust planning to anticipate potential changes in federal estate tax rules.
- Prepare for Medicaid Changes: If you’re planning for long-term care, consider starting earlier and discussing different strategies to qualify for Medicaid under potentially stricter rules.
- Update Key Documents: If stricter requirements for DPOAs or other documents are enacted, promptly update your documents to maintain their effectiveness.
Final Thoughts
Potential changes to estate planning laws in 2025 could significantly impact Florida residents. Proactive planning is essential to ensure that your estate plan remains compliant, effective, and aligned with your goals. By staying informed and consulting with an estate planning attorney, you can adapt your strategies to minimize risks and maximize protection.
Stay tuned for further updates as new legislation develops, and be sure to consult with a professional to understand how these changes might affect your specific circumstances. https://scovills.com/?p=2073
1. Federal Estate and Gift Tax Exemption Adjustments
- Background: The federal estate tax exemption has remained high for the past several years, currently set at $12.92 million per individual. However, it's set to significantly decrease in 2026, reverting to pre-2018 levels (approximately $5-6 million).
- Potential 2025 Change: Federal lawmakers may consider adjustments in 2025, either accelerating or smoothing the reduction to avoid a sudden drop. This could involve setting a new, permanent exemption amount lower than the current level.
- Impact on Floridians: High-net-worth individuals should be prepared for the possibility of a lower exemption, which could increase estate tax liabilities. Advanced estate planning strategies—like gifting, trusts, or charitable donations—might be necessary to mitigate future tax impacts.
2. Digital Estate Planning Provisions
- Background: With digital assets becoming an integral part of personal estates, laws have begun to address how these assets should be managed after death.
- Potential 2025 Change: Florida lawmakers may introduce expanded legislation to better define the management and transfer of digital assets. This could include clearer guidelines for fiduciaries on accessing digital wallets, social media accounts, and digital records.
- Impact on Floridians: Floridians who own significant digital assets, including cryptocurrency, should ensure their estate plan addresses these assets specifically. It may become increasingly important to include detailed instructions for fiduciaries and ensure legal compliance with new regulations.
3. Further Refinement of Remote Online Notarization (RON)
- Background: Remote Online Notarization (RON) has been a major focus in Florida’s estate planning laws, enabling documents to be notarized online.
- Potential 2025 Change: Lawmakers could implement tighter security measures, such as enhanced identity verification, or introduce additional rules for remote witnesses to prevent fraud or undue influence during online estate planning.
- Impact on Floridians: While RON has made estate planning more accessible, these refinements could slow down the process. Floridians utilizing RON should ensure their technology is compliant with any new security standards and be prepared for potential additional steps.
4. Potential Changes to Medicaid Planning Rules
- Background: Medicaid plays a critical role in long-term care planning for many Floridians, with certain rules governing asset protection and qualification.
- Potential 2025 Change: Federal and state legislators may introduce stricter requirements for qualifying for Medicaid, particularly for those transferring assets or using irrevocable trusts as part of their planning.
- Impact on Floridians: Stricter Medicaid qualification rules could limit options for asset protection in long-term care planning. It may become essential to start planning earlier, consider additional strategies (e.g., asset conversion or spend-down planning), and review irrevocable trusts to ensure compliance with potential new regulations.
5. Updates to Durable Power of Attorney Requirements
- Background: Durable powers of attorney (DPOA) play a crucial role in Florida estate planning, allowing designated individuals to make financial and legal decisions if the principal becomes incapacitated.
- Potential 2025 Change: Florida may introduce stricter standards for DPOA execution, including additional witness requirements or mandated language that more clearly outlines the agent’s responsibilities.
- Impact on Floridians: If new DPOA requirements are implemented, individuals may need to re-execute existing documents to ensure they remain legally valid. This could also require revisiting powers of attorney to confirm agents understand the broader scope of their duties.
6. Increased Protections Against Elder Abuse in Estate Planning
- Background: Florida has been focused on increasing protections against elder abuse, particularly in the context of estate planning and fiduciary appointments.
- Potential 2025 Change: The state could introduce new measures that enhance the monitoring of fiduciaries and require more frequent reporting to prevent elder exploitation. This might include additional education for fiduciaries or greater oversight from third parties, like banks or financial advisors.
- Impact on Floridians: These changes could provide greater peace of mind for elderly individuals and their families but may also increase administrative responsibilities for fiduciaries. Those serving as agents under powers of attorney, trustees, or personal representatives should be prepared for enhanced compliance requirements.
7. Changes to Homestead Protections and Property Transfers
- Background: Florida’s homestead laws offer strong protections against creditors and provide tax advantages for primary residences.
- Potential 2025 Change: Florida could adjust homestead protection laws to better address changing economic conditions, including modifications to transfer rules, creditor protection limits, or exemptions for specific debts.
- Impact on Floridians: Homeowners may need to revisit how homestead properties are titled and understand potential impacts on asset protection strategies. If new rules are enacted, updating deeds or reviewing trusts that hold homestead properties could become necessary.
How to Prepare for Potential Changes in 2025
While it’s impossible to predict all the changes that 2025 may bring, Floridians can take proactive steps to protect their estate plans:
- Review Your Estate Plan Annually: An annual review allows you to catch any legal changes early and adjust your documents accordingly.
- Consult with an Estate Planning Attorney: Working with a Florida-based attorney who stays informed of legal developments is key to ensuring compliance and maximizing protection.
- Incorporate Digital Asset Planning: Make sure digital assets are accounted for in your estate plan and that fiduciaries have the necessary access and instructions.
- Plan for Tax Changes Now: Use gifting strategies, charitable contributions, and advanced trust planning to anticipate potential changes in federal estate tax rules.
- Prepare for Medicaid Changes: If you’re planning for long-term care, consider starting earlier and discussing different strategies to qualify for Medicaid under potentially stricter rules.
- Update Key Documents: If stricter requirements for DPOAs or other documents are enacted, promptly update your documents to maintain their effectiveness.
Final Thoughts
Potential changes to estate planning laws in 2025 could significantly impact Florida residents. Proactive planning is essential to ensure that your estate plan remains compliant, effective, and aligned with your goals. By staying informed and consulting with an estate planning attorney, you can adapt your strategies to minimize risks and maximize protection.
Stay tuned for further updates as new legislation develops, and be sure to consult with a professional to understand how these changes might affect your specific circumstances. https://scovills.com/?p=2073
Friday, November 29, 2024
Monday, November 25, 2024
Estate planning laws are always evolving, and Florida is no exception. The state has recently introduced several updates that can have a significant impact on how Floridians manage and protect their estates. Staying informed is crucial for ensuring that your estate plan remains effective and compliant. In this article, we’ll cover the most recent changes to estate planning laws in Florida and how they might affect your estate planning strategies.
1. Digital Assets and Estate Planning
- Background: Digital assets have become a major consideration in estate planning, ranging from cryptocurrency to digital records, photos, and social media accounts.
- Recent Update: Florida recently revised its laws to include broader definitions and handling of digital assets. The updated provisions clarify how personal representatives (executors) and trustees can access and manage digital assets.
- Key Implications: If your estate plan includes digital assets—especially high-value ones like Bitcoin or other cryptocurrencies—it's vital to ensure your will, trust, or power of attorney explicitly addresses them. This will help your fiduciaries access and distribute these assets efficiently.
2. Remote Online Notarization (RON) and Estate Planning Documents
- Background: In 2020, Florida became one of the early adopters of remote online notarization, allowing estate planning documents to be notarized online. This became critical during the COVID-19 pandemic and has remained relevant since then.
- Recent Update: The state has introduced new regulations that further streamline and expand the use of RON, making it even more accessible for residents. Notaries are now required to complete specific training on handling RON for estate planning documents.
- Key Implications: For clients seeking convenience or who are unable to meet in person, RON provides a flexible and secure option for executing wills, trusts, and other essential documents. This change is particularly helpful for elderly clients or those with mobility issues.
3. Increased Homestead Exemption for Surviving Spouses
- Background: Florida’s homestead exemption protects the value of a Florida resident's primary home from creditors, reducing the taxable value and securing the property for the family.
- Recent Update: The updated homestead exemption rules now offer increased benefits for surviving spouses, extending the protection period after the death of the homeowner. This change aims to provide more time for surviving spouses to adjust to financial changes and prevent foreclosure or forced sales.
- Key Implications: For married couples, this change reinforces the importance of including the homestead in the estate plan. Ensuring clear titles and beneficiary designations can maximize this exemption for surviving spouses.
4. Changes to Irrevocable Trust Rules
- Background: Irrevocable trusts have long been a popular estate planning tool for asset protection, Medicaid planning, and minimizing estate taxes.
- Recent Update: Florida recently adopted new rules regarding the modification of irrevocable trusts. Beneficiaries now have expanded rights to modify or terminate irrevocable trusts in specific situations, even without the grantor's approval.
- Key Implications: This increased flexibility can be beneficial if the original terms of the trust become outdated or if the trust’s purpose is no longer relevant. Trustees and beneficiaries should regularly review irrevocable trusts to consider whether modifications would be advantageous.
5. Estate and Gift Tax Changes
- Background: While Florida does not impose a state-level estate tax, federal estate and gift tax thresholds still impact residents with significant assets.
- Recent Update: In 2024, the federal estate tax exemption is set at $12.92 million per individual, down from the prior year due to inflation adjustments. Any assets above this threshold may be subject to estate tax. The gift tax exemption remains at $17,000 per individual.
- Key Implications: Floridians with large estates should review their strategies, especially if the exemption decreases further in 2026 as currently scheduled. Utilizing gifts, charitable giving, and trust strategies may help reduce the taxable estate.
6. Enhanced Protections for Vulnerable Adults
- Background: Florida has always prioritized protections for vulnerable adults, particularly regarding financial exploitation.
- Recent Update: The state’s laws have been tightened to prevent the abuse or exploitation of the elderly and incapacitated adults during estate planning processes. For instance, there are stricter requirements for fiduciaries, with additional screening and reporting obligations.
- Key Implications: When creating or updating an estate plan for a vulnerable adult, extra precautions should be taken to ensure compliance with these new rules. Proper documentation and transparency in fiduciary appointments are crucial to avoid legal challenges.
How to Keep Your Estate Plan Current
With these recent updates, it’s more important than ever to review your estate plan regularly. Here are some practical steps to ensure your estate plan aligns with current Florida laws:
- Conduct an Annual Review: Set a yearly reminder to review your estate plan. Check for changes in personal circumstances (e.g., marriages, divorces, births, or deaths) that might necessitate updates.
- Consult with an Estate Planning Attorney: Working with an experienced Florida estate planning attorney can help you navigate these updates effectively. An attorney can ensure that your documents comply with the latest legal requirements and offer strategic advice based on new laws.
- Address Digital Assets: Include detailed instructions on accessing and managing your digital assets, including passwords, cryptocurrency keys, and online accounts.
- Consider Trust Modifications: If you have an irrevocable trust, evaluate whether recent law changes make it possible or advantageous to modify the terms.
- Plan for Federal Tax Changes: If your estate is close to the federal exemption threshold, explore strategies like gifting, charitable trusts, or other advanced planning techniques to minimize future tax liabilities.
Final Thoughts
Florida's recent updates to estate planning laws reflect a commitment to adaptability, digital inclusivity, and increased protections for residents. Whether you’re updating an existing plan or creating a new one, understanding these changes can help you make informed decisions to safeguard your estate.
For personalized advice, consult with a qualified estate planning attorney who stays up-to-date with Florida’s evolving legal landscape. https://scovills.com/?p=2070
1. Digital Assets and Estate Planning
- Background: Digital assets have become a major consideration in estate planning, ranging from cryptocurrency to digital records, photos, and social media accounts.
- Recent Update: Florida recently revised its laws to include broader definitions and handling of digital assets. The updated provisions clarify how personal representatives (executors) and trustees can access and manage digital assets.
- Key Implications: If your estate plan includes digital assets—especially high-value ones like Bitcoin or other cryptocurrencies—it's vital to ensure your will, trust, or power of attorney explicitly addresses them. This will help your fiduciaries access and distribute these assets efficiently.
2. Remote Online Notarization (RON) and Estate Planning Documents
- Background: In 2020, Florida became one of the early adopters of remote online notarization, allowing estate planning documents to be notarized online. This became critical during the COVID-19 pandemic and has remained relevant since then.
- Recent Update: The state has introduced new regulations that further streamline and expand the use of RON, making it even more accessible for residents. Notaries are now required to complete specific training on handling RON for estate planning documents.
- Key Implications: For clients seeking convenience or who are unable to meet in person, RON provides a flexible and secure option for executing wills, trusts, and other essential documents. This change is particularly helpful for elderly clients or those with mobility issues.
3. Increased Homestead Exemption for Surviving Spouses
- Background: Florida’s homestead exemption protects the value of a Florida resident's primary home from creditors, reducing the taxable value and securing the property for the family.
- Recent Update: The updated homestead exemption rules now offer increased benefits for surviving spouses, extending the protection period after the death of the homeowner. This change aims to provide more time for surviving spouses to adjust to financial changes and prevent foreclosure or forced sales.
- Key Implications: For married couples, this change reinforces the importance of including the homestead in the estate plan. Ensuring clear titles and beneficiary designations can maximize this exemption for surviving spouses.
4. Changes to Irrevocable Trust Rules
- Background: Irrevocable trusts have long been a popular estate planning tool for asset protection, Medicaid planning, and minimizing estate taxes.
- Recent Update: Florida recently adopted new rules regarding the modification of irrevocable trusts. Beneficiaries now have expanded rights to modify or terminate irrevocable trusts in specific situations, even without the grantor's approval.
- Key Implications: This increased flexibility can be beneficial if the original terms of the trust become outdated or if the trust’s purpose is no longer relevant. Trustees and beneficiaries should regularly review irrevocable trusts to consider whether modifications would be advantageous.
5. Estate and Gift Tax Changes
- Background: While Florida does not impose a state-level estate tax, federal estate and gift tax thresholds still impact residents with significant assets.
- Recent Update: In 2024, the federal estate tax exemption is set at $12.92 million per individual, down from the prior year due to inflation adjustments. Any assets above this threshold may be subject to estate tax. The gift tax exemption remains at $17,000 per individual.
- Key Implications: Floridians with large estates should review their strategies, especially if the exemption decreases further in 2026 as currently scheduled. Utilizing gifts, charitable giving, and trust strategies may help reduce the taxable estate.
6. Enhanced Protections for Vulnerable Adults
- Background: Florida has always prioritized protections for vulnerable adults, particularly regarding financial exploitation.
- Recent Update: The state’s laws have been tightened to prevent the abuse or exploitation of the elderly and incapacitated adults during estate planning processes. For instance, there are stricter requirements for fiduciaries, with additional screening and reporting obligations.
- Key Implications: When creating or updating an estate plan for a vulnerable adult, extra precautions should be taken to ensure compliance with these new rules. Proper documentation and transparency in fiduciary appointments are crucial to avoid legal challenges.
How to Keep Your Estate Plan Current
With these recent updates, it’s more important than ever to review your estate plan regularly. Here are some practical steps to ensure your estate plan aligns with current Florida laws:
- Conduct an Annual Review: Set a yearly reminder to review your estate plan. Check for changes in personal circumstances (e.g., marriages, divorces, births, or deaths) that might necessitate updates.
- Consult with an Estate Planning Attorney: Working with an experienced Florida estate planning attorney can help you navigate these updates effectively. An attorney can ensure that your documents comply with the latest legal requirements and offer strategic advice based on new laws.
- Address Digital Assets: Include detailed instructions on accessing and managing your digital assets, including passwords, cryptocurrency keys, and online accounts.
- Consider Trust Modifications: If you have an irrevocable trust, evaluate whether recent law changes make it possible or advantageous to modify the terms.
- Plan for Federal Tax Changes: If your estate is close to the federal exemption threshold, explore strategies like gifting, charitable trusts, or other advanced planning techniques to minimize future tax liabilities.
Final Thoughts
Florida's recent updates to estate planning laws reflect a commitment to adaptability, digital inclusivity, and increased protections for residents. Whether you’re updating an existing plan or creating a new one, understanding these changes can help you make informed decisions to safeguard your estate.
For personalized advice, consult with a qualified estate planning attorney who stays up-to-date with Florida’s evolving legal landscape. https://scovills.com/?p=2070
Tuesday, November 19, 2024
When it comes to estate planning, choosing the right person to serve as your executor, or "personal representative" as it is called in Florida, is crucial. The personal representative is responsible for administering your estate after your death, ensuring your wishes are carried out and the probate process is handled correctly. However, this role comes with significant responsibilities and potential challenges.
Key Responsibilities of a Personal Representative in Florida
- Filing the Will with the Court: The personal representative must file the deceased’s will with the probate court in the county where the deceased resided. This begins the probate process and allows the court to validate the will.
- Notifying Creditors and Heirs: The personal representative is required to notify all known creditors of the estate and publish a notice in the local newspaper to alert any unknown creditors. They must also notify the beneficiaries named in the will.
- Managing Estate Assets: The personal representative must take control of the deceased’s assets and manage them throughout the probate process. This includes securing property, managing investments, and ensuring that assets are not misused or lost during probate.
- Paying Debts and Taxes: Before distributing assets to beneficiaries, the personal representative must pay any outstanding debts, taxes, and expenses of the estate. In Florida, this may include filing a final income tax return and addressing any federal estate tax obligations if the estate exceeds the exemption limit.
- Distributing Assets to Beneficiaries: Once debts and taxes are settled, the personal representative distributes the remaining assets to the beneficiaries according to the terms of the will. This may involve selling property or transferring titles to heirs.
- Closing the Estate: After all assets have been distributed, the personal representative must file a final accounting with the court and request the estate’s closure. This formally ends the probate process.
Challenges Faced by Personal Representatives in Florida
- Time Commitment: Serving as a personal representative in Florida can be time-consuming, especially if the estate is large or complex. The process of gathering assets, paying debts, and dealing with the probate court can take several months or even years in some cases.
- Legal Obligations: Personal representatives in Florida are fiduciaries, meaning they have a legal duty to act in the best interests of the estate and its beneficiaries. Failing to do so can lead to legal disputes or personal liability. This is why it’s essential to choose a trustworthy and capable individual for the role.
- Family Disputes: In some cases, the personal representative may face challenges from family members or beneficiaries who disagree with the terms of the will or the way the estate is being administered. These disputes can lead to costly and time-consuming litigation.
- Complex Assets: If the estate includes complex assets such as businesses, real estate holdings, or investments, the personal representative may need to hire professionals like accountants, appraisers, or financial advisors to properly manage and distribute these assets.
Choosing the Right Personal Representative in Florida
When selecting a personal representative, it’s important to choose someone who is not only trustworthy but also organized and capable of handling the various responsibilities involved. You may also want to consider appointing a backup personal representative in case your first choice is unable or unwilling to serve when the time comes.
Additionally, many people in Florida choose to appoint a professional, such as an attorney or a financial institution, to serve as personal representative, especially if the estate is particularly large or complex.
Working with an experienced Florida estate planning attorney can help you make the right choice and ensure that your personal representative understands their responsibilities. The right person in this role can make a significant difference in how smoothly the probate process proceeds and how well your wishes are carried out.
Need help selecting a personal representative? Schedule a consultation to secure the future of your estate.
Links:
• Florida Probate Process Overview (Florida Courts)
• IRS Guide to Filing a Final Tax Return for Decedent (IRS)
• Florida Statutes on Personal Representatives (Florida Legislature) https://scovills.com/?p=2053
Thursday, November 14, 2024
Tuesday, November 12, 2024
As digital assets like Bitcoin become increasingly popular, ensuring they are included in your estate plan is crucial. Unlike traditional assets, digital assets can be difficult to manage after death without a clear plan in place. In Florida, where estate laws are unique, understanding how to include Bitcoin in your estate plan can safeguard your digital wealth for your heirs.
Why Is Bitcoin Different?
Bitcoin and other cryptocurrencies differ from traditional assets due to their decentralized nature and the way they are stored. Unlike bank accounts or stock portfolios, Bitcoin is often held in digital wallets secured by private keys. These private keys are the gateway to accessing your digital assets, and without them, your Bitcoin could be lost forever.
Risks of Not Incorporating Bitcoin into Your Estate Plan
Failing to incorporate Bitcoin into your estate plan can result in significant risks, including:
- Loss of Wealth: Without proper planning, your Bitcoin could be inaccessible to your heirs, resulting in a total loss of this asset.
- Complex Probate Process: Florida's probate process can be lengthy, especially when dealing with digital assets. Without a clear strategy, the process could become even more cumbersome for your loved ones.
- Legal Issues: Because cryptocurrencies are relatively new, they are not explicitly addressed in all state laws, leading to potential legal challenges for beneficiaries.
How to Incorporate Bitcoin into Your Florida Estate Plan
To ensure your Bitcoin is passed on smoothly, follow these steps when creating or updating your estate plan:
1. Inventory Your Digital Assets
- Create a detailed list of your digital assets, including the amount of Bitcoin you own and where it is stored. Specify whether it is kept in a hardware wallet, software wallet, or an exchange.
- Make a record of the public and private keys and backup phrases. However, be cautious about how this information is stored, as it is sensitive.
2. Use a Digital Asset Trust
- A digital asset trust is an effective way to manage Bitcoin. In Florida, trusts can be used to hold and manage assets, including digital assets like Bitcoin.
- Naming a trustee with knowledge of handling digital assets can ensure the safe transfer of your Bitcoin to your heirs.
3. Include Bitcoin in Your Will
- Your will should clearly state how you want your Bitcoin to be distributed. However, including sensitive information like private keys in your will is not recommended since wills become public record during probate.
4. Designate a Beneficiary on Your Exchange Account
- If your Bitcoin is held in an exchange that allows beneficiary designations, make sure to name one. This designation can expedite the transfer process after death.
5. Appoint a Knowledgeable Executor
- The executor of your estate should be familiar with handling digital assets or have access to professional assistance. Given the technical nature of Bitcoin, this is a critical step to ensure proper management.
6. Use Secure Storage Methods
- For security reasons, do not store private keys and backup phrases in easy-to-access locations. Use a secure vault or encrypted digital storage.
Working with an Estate Planning Attorney in Florida
Given the complexities surrounding Bitcoin and Florida’s estate laws, working with an experienced estate planning attorney is essential. An attorney can ensure that your estate plan is up-to-date, legally sound, and compliant with state laws.
The Future of Bitcoin in Estate Planning
As cryptocurrencies gain broader acceptance, estate planning will likely evolve to accommodate these digital assets more explicitly. Keeping your estate plan updated with the latest legal strategies is essential to protecting your Bitcoin and other digital assets.
Conclusion
Incorporating Bitcoin into your Florida estate plan is vital to ensure your digital wealth is passed on smoothly to your heirs. By taking proactive steps—like creating a digital asset trust, updating your will, and appointing a knowledgeable executor—you can minimize legal complications and preserve the value of your Bitcoin for future generations.
If you own Bitcoin and want to ensure it is protected after your passing, consult an estate planning attorney in Florida who understands digital assets. Contact us today to get started on updating your estate plan.
Protect Your Bitcoin and Digital Assets with a Comprehensive Estate Plan
Don’t let your digital wealth fall through the cracks. If you own Bitcoin or other digital assets, ensure they’re safely passed on to your heirs with a well-crafted estate plan tailored to Florida laws. Our experienced estate planning attorneys understand the complexities of managing digital assets.
Contact us today to schedule a consultation and secure your digital legacy.
Additional information:
1. General Information about Digital Assets in Estate Planning:
• Investopedia’s article on Estate Planning for Digital Assets
2. Understanding Cryptocurrency Custody:
• CoinDesk’s guide on Cryptocurrency Wallets and Private Keys
3. Florida Trust Law:
• Florida Bar’s page on Trusts in Florida
4. IRS Treatment of Cryptocurrency:
• IRS webpage on Virtual Currencies https://scovills.com/?p=2067
Why Is Bitcoin Different?
Bitcoin and other cryptocurrencies differ from traditional assets due to their decentralized nature and the way they are stored. Unlike bank accounts or stock portfolios, Bitcoin is often held in digital wallets secured by private keys. These private keys are the gateway to accessing your digital assets, and without them, your Bitcoin could be lost forever.
Risks of Not Incorporating Bitcoin into Your Estate Plan
Failing to incorporate Bitcoin into your estate plan can result in significant risks, including:
- Loss of Wealth: Without proper planning, your Bitcoin could be inaccessible to your heirs, resulting in a total loss of this asset.
- Complex Probate Process: Florida's probate process can be lengthy, especially when dealing with digital assets. Without a clear strategy, the process could become even more cumbersome for your loved ones.
- Legal Issues: Because cryptocurrencies are relatively new, they are not explicitly addressed in all state laws, leading to potential legal challenges for beneficiaries.
How to Incorporate Bitcoin into Your Florida Estate Plan
To ensure your Bitcoin is passed on smoothly, follow these steps when creating or updating your estate plan:
1. Inventory Your Digital Assets
- Create a detailed list of your digital assets, including the amount of Bitcoin you own and where it is stored. Specify whether it is kept in a hardware wallet, software wallet, or an exchange.
- Make a record of the public and private keys and backup phrases. However, be cautious about how this information is stored, as it is sensitive.
2. Use a Digital Asset Trust
- A digital asset trust is an effective way to manage Bitcoin. In Florida, trusts can be used to hold and manage assets, including digital assets like Bitcoin.
- Naming a trustee with knowledge of handling digital assets can ensure the safe transfer of your Bitcoin to your heirs.
3. Include Bitcoin in Your Will
- Your will should clearly state how you want your Bitcoin to be distributed. However, including sensitive information like private keys in your will is not recommended since wills become public record during probate.
4. Designate a Beneficiary on Your Exchange Account
- If your Bitcoin is held in an exchange that allows beneficiary designations, make sure to name one. This designation can expedite the transfer process after death.
5. Appoint a Knowledgeable Executor
- The executor of your estate should be familiar with handling digital assets or have access to professional assistance. Given the technical nature of Bitcoin, this is a critical step to ensure proper management.
6. Use Secure Storage Methods
- For security reasons, do not store private keys and backup phrases in easy-to-access locations. Use a secure vault or encrypted digital storage.
Working with an Estate Planning Attorney in Florida
Given the complexities surrounding Bitcoin and Florida’s estate laws, working with an experienced estate planning attorney is essential. An attorney can ensure that your estate plan is up-to-date, legally sound, and compliant with state laws.
The Future of Bitcoin in Estate Planning
As cryptocurrencies gain broader acceptance, estate planning will likely evolve to accommodate these digital assets more explicitly. Keeping your estate plan updated with the latest legal strategies is essential to protecting your Bitcoin and other digital assets.
Conclusion
Incorporating Bitcoin into your Florida estate plan is vital to ensure your digital wealth is passed on smoothly to your heirs. By taking proactive steps—like creating a digital asset trust, updating your will, and appointing a knowledgeable executor—you can minimize legal complications and preserve the value of your Bitcoin for future generations.
If you own Bitcoin and want to ensure it is protected after your passing, consult an estate planning attorney in Florida who understands digital assets. Contact us today to get started on updating your estate plan.
Protect Your Bitcoin and Digital Assets with a Comprehensive Estate Plan
Don’t let your digital wealth fall through the cracks. If you own Bitcoin or other digital assets, ensure they’re safely passed on to your heirs with a well-crafted estate plan tailored to Florida laws. Our experienced estate planning attorneys understand the complexities of managing digital assets.
Contact us today to schedule a consultation and secure your digital legacy.
Additional information:
1. General Information about Digital Assets in Estate Planning:
• Investopedia’s article on Estate Planning for Digital Assets
2. Understanding Cryptocurrency Custody:
• CoinDesk’s guide on Cryptocurrency Wallets and Private Keys
3. Florida Trust Law:
• Florida Bar’s page on Trusts in Florida
4. IRS Treatment of Cryptocurrency:
• IRS webpage on Virtual Currencies https://scovills.com/?p=2067
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
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
As a wills and trusts attorney, I feel a strong obligation to keep my conversations lite. The topics of my practice are such that the conversations are necessarily serious, so I often try to counteract that with humor and banality. However, sometimes we are faced with reality in such a way that it is evident that the inevitable must be addressed.
My daughter and I were making an early afternoon shopping trip to Wal-Mart this past Saturday. As we were waiting at a red light we witnessed a pick up truck make an illegal left turn directly into the path of an oncoming dune buggy. Right in front of us we witnessed a T-bone collision with virtually no warning and therefore virtually no braking. The dune buggy slammed into the side of the pick up truck knocking it onto its side with the top of the pick up truck sliding uncomfortably close to my daughters door. I jumped out of the passenger side door and had my daughter pull her car off to the side of the road. Miraculously the two men in the dune buggy appeared unhurt, but there was a strong smell of gasoline and the pick up driver was trapped in his vehicle. After checking on all drivers and passengers, it was apparent that by some miracle no one was seriously injured.
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
But as a veteran, I also have a great deal for which to be thankful. As a 17 year old recruit, the Army paid me very well. It taught me discipline, organization, and leadership. I experienced, camaraderie that few who have never served in something like the military will ever experience. I got to see a great deal of the world, and in Europe, I even met my bride. In addition to all of these other benefits, the US Army paid for a great deal of my education. So on a day in which we honor our veterans, please accept the gratitude of this veteran for all this country has done for me.
Saturday, January 19, 2013
Congress Makes 5 Million Dollar Estate Tax Exemption Permanent
Congress worked through the Holidays to avert the looming fiscal cliff. The result was the American Taxpayer Relief Act ("ATRA" for short).
The impact on Estate & Gift Taxes was a permanent increase in the lifetime exemption to 5 million dollars. Furthermore, the exemption is indexed for inflation, so the effective exemption for 2013 is 5.25 million.
In addition to the increase in the exemption, the top tax rate is set at 40% as opposed to 55% under the old laws.
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.
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
As Yogi Berra once said, "it's déjà vu all over again." Just like the end of 2010, the tax relief act is due to sunset at the end of this year. What is known as the "fiscal cliff." This will mean a drop in the estate tax exemption for U.S. Citizens and Residents from 5 million dollars to 1 million dollars. Keep in mind, that includes all assets in the estate including life insurance. Suddenly many more Americans will have taxable estates at a 55% tax rate.
Furthermore, part of the tax relief act included portability. Portability allows a surviving spouse to use the unused credit of a deceased spouse. Portability solved a problem for married couples that attorneys solved previously with AB Trusts. This too will disappear at the stroke of midnight December 31st unless the legislature addresses this in the next month and a half.
So where does that leave the average American? Well, as attorneys often advise, it is ok to hope for the best, but it is prudent to plan for the worst. If you have, or think you have, an estate in excess of 1 million dollars; meet with your estate planning attorney to determine the best course of action.
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
The Florida Statutes regarding Powers of Attorney were amended as of October of last year. While Powers of Attorney executed prior to this change remain in effect, there is a concern about the manner in which financial institutions will continue to honor older Powers of Attorney.
By law third parties are required to accept these older Powers of Attorney, but they are also allowed to take up to four business days to make that decision. There have already been instances of reluctance in accepting the older Powers of Attorney.
One of the most significant changes to the new laws is the requirement that powers be stated explicitly. The prior laws allowed more general statements of the powers granted. It is this requirement that is believed to be the reason financial institutions will take more time in deciding to honor older Powers of Attorney.
Additional changes to the Power of Attorney Laws:
• Unless provided otherwise, photocopies may be accepted in place of originals
• 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
• 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
If you would like to discuss this, or any other legal issues, please contact this office for a free conference.
Tuesday, July 06, 2010
Gift Tax Alive In 2010
The estate tax may have been repealed in 2010, but the gift tax is still in full effect. The gift tax works in conjunction with the estate tax to limit wealth transfer between non-spouses. To understand how that affects you, let’s review how the gift tax works.
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.
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
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?
As with most legal questions, the answer is maybe. Life insurance does pass income tax free, but it is still subject to estate tax. “But the estate tax has been repealed,” you say. That’s true, but only for 2010. The tax relief act that repealed the estate tax sunsets at the end of 2010, and the estate tax comes back at its pre-relief act rates. This means that without legislative action, beginning in 2011, only one million will pass tax free. Every dollar after that will be subject to the estate tax up to 55%. Keep in mind, the one million dollar exemption applies to all assets, not just insurance. Throw in your house, retirement funds, businesses, vehicles, investment accounts and life insurance; and it adds up quickly.“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
In 2002 Florida enacted a provision that trusts could be created for the care of a pet. It has since been amended with the adoption of the Unified Trust Code, but remains in force. Prior to the enactment of this statute, pets could only be left to someone like any other property, but no assets could be set aside for their care. The best you could do is leave the pet to someone together with some money to take care of it, but there was no way to ensure this is what actually happened.
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.
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
May 1st is the deadline to file annual reports with the Florida Department of State for Florida Companies. Late filings incur a late fee of $400, and continued failure to file can result in administrative dissolution of your company. If you have any questions regarding renewing your company, please contact us.
Contact Us...
Contact Us...
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?
For most property, the state in which you reside has jurisdiction over that property, and it will be administered according to the laws of that state. However, real property falls under the laws of the state in which it is located. This means that real property must be administered in the state in which it resides in an ancillary administration. So, if an individual owns any real property outside of their state of residence, there will need to be a probate administration in the state of residence and all states where real property was owned. Probate administration can be expensive and time consuming. Multiple probates are worse. This situation can be avoided by changing how the property is owned.
If you own out of state real property, you should contact your attorney to discuss ways of avoiding multiple administrations.
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 Is Just Around the Corner
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.
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)
In this Audio Program 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.
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.
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