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.

Top 5 Reasons To Not Plan Your Estate

An unofficial tripute to David Letterman's top 10 lists, and my feeble attempt at humor.

Top 5 Reasons To Not Plan Your Estate

1. 3% of everything I own sounds like a fair fee to pay a lawyer.
2. I really want my family to understand the intricacies of probate law.
3. Rather than have one lawyer plan my estate, I'd rather have two lawyers fight over it. 
4. Surely the state of Florida knows what's best for my family.
5. What do I care, I'll be dead.

Bart Scovill, PLC, wills, trust and probate attorney, because we know you really do care.

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

If you would like to discuss this, or any other legal issues, please contact this office for a free conference.