Estate Planning and Tax Lawyer Blog

Bills aimed at helping Americans save more for retirement by automatically deducting three percent of their wages and depositing it in an IRA were recently introduced in Congress by New Mexico Senator Jeff Bingaman and Massachusetts Congressman Richard Neal.

The Automatic IRA Act would require employers with 10 or more employees to participate if they do not already offer a 401 (k) or other retirement savings plan to employees. According to reports on the legislation, employees would not be required to participate but would have to opt out of the program. The default account would be a Roth IRA, but employees could choose to contribute instead to a traditional IRA. The employer would be allowed to choose a provider for all employees, or allow each employee to choose his or her own IRA provider.

The default investment for the Automatic IRA will be a new type of Treasury Retirement Bond specially created for use with the Automatic IRA, the R-Bond. Individuals can override this choice at any time.

If passed, the Automatic IRA Act would provide employers with a $250 tax credit for each of the first two years of operation to offset implementation administrative costs. Employers that are exempt from the Act include businesses in operation less than two years, government and church employers.

Continue reading " Automatic IRA Act Seeks to Boost Retirement Savings " »

There have been recent discussions and rumors that Congress will retroactively impose an estate tax in 2010. The windfall inheritances and distributions among the wealthy are just a few reasons why Congress would go back and enforce an estate tax.

But the constitutionality of this action will surely be litigated upon. Also, there are new capital gain exemptions, up to $1.3 million from the carryover basis rule and $3 million for spouses who inherit.

This "carryover basis" rule says that in determining gains you use what you paid for an asset as your cost basis rather than the market value of the asset at the time of the grantor's death.

This treatment will result in higher capital gains (assuming the asset appreciates in value) and higher income taxes. But applying the exemptions should ease some of this burden.

Continue reading " Estate Tax Retroactively Applied? " »

Everyone approaching retirement age has likely asked themselves, “If I could retire anywhere I wanted, where would I go?” This often leads to visions of grand beach homes or ski chalets, but realistically, what are the factors that will likely determine where you will live when you retire?

Money. It’s one thing to live a life of luxury and quite another to pay for it. Where you may want to live and where you can afford to live may be two different things.

Work. Are you going to fully retire, or “semi” retire? Studies show that many Boomers will both need and want to work at least part-time during their retirement, so will need to live where there are jobs available for their skill sets.

Budget. How good are you at living on a budget? And how different will that budget likely be if you move to a new place? The cost of living in a small town in Kansas is a lot different than a Florida beach resort community. Income and real estate taxes can vary greatly from state to state.

Healthcare. Access to quality healthcare should be part of your decision-making process when it comes to choosing a place to retire, especially if you currently have any health problems that dictate proximity to specialists or a hospital.

If you need to know more than you do right now about retirement planning, contact a Florida estate planning attorney.

While you may already be mentally and emotionally ready to retire, how can you tell if you are financially ready?

Guaranteed source of income. Are you already fully vested in your 401(k) or pension? Have you reached the age when you can begin making withdrawals? Before you can retire, you need to have a guaranteed source of income that is predictable.

Liquidity. Do you have a ready source of cash to take care of all your expenses as soon as you retire? If you need to sell stock or other assets to produce income for living expenses, you are probably not ready to retire.

Distribution strategy. Do you have a retirement distribution strategy in place that will provide you with enough income every year to cover your bills? If your retirement investments are still experiencing wide fluctuations, now is probably not the best time to retire.

Health insurance. If you are planning to retire before the age of 65, are you able to afford health insurance until Medicare kicks in?

Contingency planning. Have you done contingency planning so that some unforeseen circumstance like a major health problem doesn’t derail your retirement plan? Some experts suggest doing a “best case” and “worst case” retirement budget to determine if you would be able to survive a large complication.

Gut check. The longer you work, the better off you will be in retirement. Working longer gives you more time to save and less time to spend. However, if continuing to work is harming you emotionally or physically, the trade-off might not be worth it.

A Florida estate planning attorney can also help you determine the best time for you to retire by explaining all the options available to you.

If you are the parent of an 18-year-old who may be off to college shortly, you should be aware that not only is your child leaving, but they are also taking many of your prior legal rights with them.

Once your child turns 18, he or she is considered an adult in the eyes of the law, and you are no longer able to access medical, bank or school records without permission. For your own peace of mind, here are some things you can do to ensure you have the right to access these records, especially in case of emergency:

1. Have your child sign a Health Insurance Portability and Accountability Act (HIPAA) form and make sure each of you has a hard copy. Make an electronic file as well in case you need to email it.

2. Make sure you are listed as the In Case of Emergency (ICE) contact on your chlid’s cell phone.

3. If your of-age child is incapacitated, who will make healthcare decisions for him or her? Discuss options with your estate planning attorney, who may recommend a health care power of attorney designation or health care directive.

4. Check out DocuBank.com, which stores all your child’s emergency medical information and directives online for immediate access by medical personnel anywhere in the world. Your child carries a card (similar to an insurance card) that lists allergies, conditions and emergency contact information.

Continue reading " Legal Planning for the College-Bound " »

The will of Yankees owner George Steinbrenner, made public a few weeks ago by the New York Post, provides insight into how estate planning tools were utilized to minimize the impact of estate taxes on Steinbrenner’s estimated $1.1 billion estate.

Of course, none of us knows when or plans to die in a year where there are currently no estate taxes. But contingency planning for the “what ifs” is what ensures as many as your assets as possible pass on to your beneficiaries.

Steinbrenner’s will placed an undisclosed amount of his assets into a trust for his widow, Joan. It also provided his attorney and trustee with the power to decide exactly when that trust will pay federal estate taxes – either this year, or after Mrs. Steinbrenner dies.

The trustee has nine months in which to make that decision, and another six months on top of that to make the move permanent. The decision likely rides on whether or not the estate tax is enacted retroactively for 2010. If 2010 goes down in history as the year of no estate tax, then Steinbrenner’s estate wins big – to the tune of around $500 million. If the estate tax is enacted retroactively, the trustee may elect to defer payment until Mrs. Steinbrenner goes, at which time there may be a more favorable rate.

The benefit for now is time – to see how things play out in Congress and to have some breathing room to make the right decision for the Steinbrenner heirs. That is what savvy estate planning is all about.

For the first time in history, a comprehensive database of wills has been made available online at Ancestry.co.uk, the British version of the genealogical website Ancestry.com.

The National Probate Calendar is a summary of all the wills in England and Wales from 1861 to 1941 and provides information on over six million estates, including the name of the deceased, when and where they died, the name of their executor and, in many cases, details on specific bequests.

What has captured the most attention is, of course, the notable names who passed on during that time period, and the value of their estates. For example:

Karl Marx carried his anti-capitalism beliefs to the grave, leaving an estate worth only $390 ($36,000 today).

Charles Dickens died with an estate worth $125,000 ($11 million today).

Charles Darwin left his heirs in good shape, with an estate of $230,000 ($20 million today).

Arthur Conan Doyle, the creator of Sherlock Holmes, died in 1931 with almost $100,000 (about $4.7 million today).

Over 18,000 people in The National Probate Calendar died in the U.S., and the database contains the wills of several well-known American family members, including John Astor and Benjamin Guggenheim, who perished on the Titanic.

You can leave your own place in history – and make things a lot easier on your family – if you have a will. For more information about creating a will, contact our Jacksonville estate planning law firm.

Every parent has at one time or another expressed amazement by how quickly children seen to grow. One day you are helping them tie their tiny shoes and the next day you are tripping over their size 12 Air Jordans.

And just as you make sure that once they outgrow their clothing they have new clothes that fit, so should you ensure that your estate planning fits them as they mature.

When children are young, there are estate planning instruments to protect them should something happen to you: guardianships to ensure that minor children and their assets are protected, life insurance and trusts to provide for their care and so on.

As your children reach their teens, it may be important for you to set up education trusts, and as they reach their 20s you will likely need to add asset protection plans to keep their inheritance safe from divorce, creditors or other risks.

And as your family grows, you should revisit your estate plans with an estate planning attorney to be sure each child or new family member is represented as you wish in your will and other financial documentation.

Having children means having a plan for their future; keeping your estate plan up to date will ensure you’ve planned for that future, and not for the past.

Identifying the individuals who will carry out your wishes once you are gone or disabled is an important part of estate planning.  There are several different roles to fill, including:

Executor – this is the person who takes charge of all your assets and ensures they are distributed in accordance with your wishes as spelled out in your will.  Some people choose a responsible family member to fill this role, while others may prefer a professional.

Guardian – this is the person who is designated to care for your minor children in case you and your spouse die before they come of legal age.  While this is usually a family member, careful consideration needs to be given to a guardian’s financial and emotional capabilities as well as their willingness to care for your chlld(ren).  Sometimes, two guardians are appointed – one to look after the children and one to manage the children’s financial assets.

Durable Power of Attorney – this is the person who would make financial decisions for you if you become disabled or otherwise unable to manage your financial affairs.

Power of Attorney for Healthcare – this is the person who would make healthcare decisions for you if you are unable to make them for yourself.

If you need help with ensuring your wishes are respected after you’re gone, contact our Jacksonville Florida estate planning law firm.

If you die in Florida without a will (the terminology is “dying intestate”), all your assets will be divided among your immediate family (spouse and children).

If you are married without any children, your entire estate will go to your spouse.

If you are married with at least one child, the first $60,000 of your estate (above and beyond any homestead entitlements) plus 50 percent of the remainder of your estate will go to your spouse.   The rest will be divided among your children.

If you have no spouse or children, your assets will pass to your parents.  If your parents are no longer living, your estate will go to your siblings.

If you have no family whatsoever, your assets will go to the state.

Anyone who is over the age of 18 and of sound mind can execute a valid will, which must be in writing and signed in front of witnesses who are not named in the will as a beneficiary.

However, to ensure that your wishes are carried out as you intend them, you should consult with a Florida estate planning attorney, who can help you prepare a will as well as advise you about the many estate planning tools available to help you protect your assets and your heirs.

If you need more information on a Family Limited Partnership or other asset protection vehicles, contact our Jacksonville Florida estate planning law firm.

If your phone contact list includes both a pediatrician and a gerontologist, welcome to the sandwich generation, that growing demographic segment of the population who are taking care of their parents and their kids at the same time.

Besides healthcare, many of us are also taking on more responsibility for helping older parents manage their finances.  If you are currently tasked with that responsibility – or will be at some point – here are some things to put on your checklist:

Prescription drug coverage. Is the Medicare drug program your parents chose a year or two ago still the right one for them?  Most seniors find the plethora of choices confusing, so defer making any changes they might need.  Mark Nov. 15 on your calendar, which is the start date for Medicare’s open enrollment program (it ends on Dec. 31).  Visit www.medicare.gov and use the online prescription drug plan finder to find the best plan for them.

Retirement account distributions. If you have parents over the age of 70 ½, they must take the required minimum distributions from their qualified retirement accounts by the end of each year.  If they don’t, whatever is left over on Dec. 31 is subject to a 50 percent penalty.  You can set up automatic deductions to solve this problem as well.

Estate planning.  If they have not done so already, your parents need to visit with an estate planning attorney.  Estate planning laws change constantly, so even if they do have an estate plan in place but haven’t updated it in awhile, they need to do so.

For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.

Of all the milestones that parents experience, the birth (or adoption) of their children and becoming empty nesters are two of the most memorable. It just so happens that these are also two life-changing moments when estate planning should be high on your to-do list.

The one shared experience of good parents is that as soon as children enter our lives, our own desires and needs are no longer of paramount importance. In fact, we see many new parents who are justifiably concerned about planning for the future of their children, especially if something happens and the parents will no longer be around to care for their children.

The needs of children are very different when they are young than when they reach adulthood, and parents’ estate plans should reflect this. When children are young, estate planning should focus on guardianship and asset protection issues. Once they reach adulthood and leave home, your estate plan will most likely reflect your own need to prepare for retirement and health care management issues.

Your estate plan should always reflect your priorities at each stage of your life. Since these change, updating your estate plan should be one of those priorities each time you reach a milestone.

If you need more information about estate planning for every stage of life, contact our Jacksonville Florida estate planning law firm.

For most people, their personal financial information is just that: personal. Older parents with wealth were usually brought up believing it is wrong to discuss money with their children, no matter how old those children might be.

But by keeping your estate plan a “secret,” you may be doing unintentional harm to your heirs, especially if your plans will come as a big surprise to them.

Whether they admit it or not, most children think that your money will eventually become their money. With the recent economic upheaval we have experienced, probably more adult children than ever are counting on their parents’ wealth to be a major portion of their retirement savings.

In addition, your children may assume – rightly or wrongly – that your assets will be divided equally among them. If that is not to be the case, you may be unintentionally creating a permanent rift in their relationship with each other by not telling them in advance why you have made the distribution choices you have made.

Sharing your estate plan with your heirs may not be an easy thing to do, but it is something that responsible parents should consider. While some parents may have a very good reason to keep their plans unknown until they pass, open communication is usually one of the best ways to ensure your final wishes are respected and that a tight lid is kept on that potential can of worms.

Continue reading " Sharing Your Estate Plan With Your Heirs " »

According to the Kauffman Index of Entrepreneurial Activity, new business start-ups reached a 14-year high in 2009 – which is not surprising considering high unemployment rates across the U.S. The Index found that over 550,000 new firms were started every month in 2009 – but how many will succeed?

Of course, in business –as in life – there are no guarantees. According to the U.S. Small Business Association, about half of small businesses fail within the first five years. And while there is no way to eliminate every risk associated with starting up a new business venture, you can improve your chances of success by careful advance planning and getting good advice from professionals who help people start new businesses every day.

Studies have shown that entrepreneurs who engage in business planning early in the company development process are much more likely to create a successful venture. While having a carefully researched and well thought out business plan is essential, careful business planning can also mean seeking the advice of an estate planning and business tax attorney for the development of:

• Articles of Incorporation


• Bylaws


• Partnership Agreements


• Operating Agreements

If you are thinking of starting your own business, one of your first steps should be to seek legal advice from our Jacksonville attorney about the structure of your business – sole proprietorship, partnership, corporation or LLC (Limited Liability Company) – including the tax implications for different ownership structures, protecting your personal assets from business liabilities and more.

Here are some of the top things you may not know about estate planning but should:

1. It is always important to have an estate plan in place. – Estate plans ensure that your goals are met, for your family and financially, after your death.

2. Elements of an Estate Plan. – An estate plan can have several elements: a will, assignment of power of attorney, and a living will or health care proxy (medical power of attorney). For some people, a trust might also make sense. When drafting your estate plan, it is important to be mindful of both the governing state and federal laws – this is why it is important to seek legal representation when drafting your estate plan.

3. A Good Starting Point: Take Inventory of Your Assets – Typical assets include your investments, retirement savings, insurance policies, and real estate or business interests. There are 3 important questions to ask yourself regarding your assets: (1) Whom do you want to inherit your assets?; (2) In the event you are ever incapacitated, whom do you want to handle your finances? (3) If you are unable to make medical decisions, whom would you like to medical decisions on your behalf?

4. Everybody needs a will. – A will states how your assets will be distributed after your death. It is also the best place to name the guardians of your children. Dying intestate, without a will, can be very costly and leaves you no say in how your assets will be distributed. If you have a trust, you still might need a will to handle any holdings outside of your trust.

5. Trusts are not just for the wealthy. – Trusts are legal mechanisms that allow you to put conditions on how and when your assets will be distributed after your death. Trusts also reduce estate and gift taxes as well as let you avoid the probate court, which administers wills.

6. Discuss your estate plans with your heirs. – Verbalizing your intentions will avoid confusion later.

7. The federal tax exemption changes regularly. – The federal tax exemption is the amount of your estate you leave to your heirs that avoids federal taxation. In 2009 the estate tax exemption was $3.5 million. However, it was phased out completely in 2010 and unless Congress passes a new law it will decrease to $1 million in 2011.

8. You may leave an unlimited amount to your spouse tax-free. However, this is not always the best tactic. – By leaving everything to your spouse, you increase your surviving spouse’s taxable estate. That means your children may pay more taxes if your spouse leaves them money.

9. Two simple ways to give gifts tax-free and reduce your estate. – You may give $13,000 per year to an individual (or $26,000 if you are married and giving the gift with your spouse). You may also pay an unlimited amount of educational or medical bills so long as you are paying the institution directly.

10. There are ways to give charitable gifts even after your death. – If you donate to a charitable gift fun or community foundation, your investment grows tax-free. You can also select the charities which are given before and after your death.

Having a will is a very critical element of your life. Contact an Estate Planning Attorney to obtain legal representation and protect your interests after your death.

Although the names are almost the same, there is quite a difference between a Will and a Living Will.

Basically, a Will is the written expression of your wishes for the disposition of your assets following your death. It ensures that the assets you have are distributed to the people you want to have them after you die. If you die without a Will, the court will make those decisions for you.

A Will usually contains the following elements:

• List of beneficiaries
• List of alternate beneficiaries, in case a primary beneficiary predeceases you
• Named executor of your estate as well as an alternate in case the primary executor is unable or unwilling to act
• Named guardian of any minor children, as well as an alternate
• Bequest assignments to beneficiaries
• Instructions on when and/or how minor children can inherit
• Requests for burial or cremation

A Living Will is separate from your Will and provides health care directives in case you have a terminal condition where your death is imminent or you are unable to make your wishes known. Your Living Will lets family and medical professionals know if you do not wish to have treatment that artificially prolongs your life (or if you do), and should be made a part of your medical record.

Both a Will and a Living Will should be part of your comprehensive estate plan; a Florida estate planning attorney can help you in drafting these important documents.

Thinking about death is never easy. However, refusing to plan for your death and create a will or trust, will only leave your heirs a costly mess to figure out. According to a survey by Lawyers.com only 65% of Amercians do not have a will. Having a simple will can avoid numerous expenses. For example, if you die intestate, without a will, the state will appoint a conservator and possibly lawyers to determine who will inherit your assets - a simple will can avoid these costs, leaving more to your family and loved ones. It is also crucial to keep your will up to date - this should be done every 5 years or after any major life event. Here are some important documents that should be looked at:

1. The beneficiary designation form. - This form determines who will inherit your insurance and retirement policies. These are called contract assets as opposed to financial assets. This form can also override a will.

2. Health care proxies and guardianship. - These are two high priority documents because they address the issue of incapacitation and who will care for your children after your death.

3. Balance sheet. - Do not waste your efforts on making it impossible for your family to find the documents you prepared. Draw up a balance sheet that lists the basic information about your assets. It may also be useful to file a letter of intent. Although the letter has no legal standing, it can provide some guidance to your heirs.

If you would like to read more on this topic see Guide Your Heirs Now, Avoid Confusion Later.

Wills, trusts, power of attorneys, health care proxies, etc. are all legal documents that are highly relevant to how your estate will be handled after your death. Contact an Estate Planning Attorney to provide guidance on your drafting and to help avoid confusion to your heirs after your death.

Summer is the time many families gather for reunions, reminding us of the tangible items that make memories: great-grandmother’s silver service, mom’s china, childhood ornaments collected over the years…. all of it contributes to family traditions and memories that make a life.

When doing your estate planning, you should consider the materials things your heirs may treasure in addition to the financial assets they will inherit. Too often, parents or grandparents may be unaware of the value their descendants place on tangible assets and neglect to provide instruction on how they should be dispersed. This has led to many a family dispute, which can easily be avoided with some forethought and planning.

First, you may wish to consider giving these items to their designated recipients before your death. This ensures your wishes are carried out, and gives you the pleasure of seeing your heirs enjoy and benefit from your gifts. If you prefer to designate specific recipients for your tangible assets, you should:

• Identify the items and the intended recipients;

• Write your wishes down and share them with your family members or the executor of your estate;

• Include your wishes in written form in your Will or other estate planning documents.

A qualified Florida estate planning attorney can further advise you of all your options as part of a comprehensive estate plan.

Real estate has historically been considered as a valuable and worthwhile investment. And despite the devastation the Florida housing market has suffered in the past few years, many people still have substantial equity in their real estate investments. In fact, in many cases, real property assets constitute a major portion of their estate. If you own property in addition to your primary residence, does your estate plan sufficiently protect it for your heirs?

In our litigious society, it is imperative that proper steps be taken to protect real estate assets. In addition to having the proper amount of insurance coverage, most income producing real estate and even raw land should be placed in limited liability companies (“LLCs”) in order to preserve and protect the other assets in your estate from claims that may not be covered by insurance.

This is particularly necessary if the property is owned jointly with another investor or in a partnership -- because sometimes the problems of joint owners or partners can endanger your own investment in the property. Contact a Florida estate planning attorney who can advise you on the proper steps to take to protect and conserve your real property assets.

Estate plans are just like any other plans we make in business or in life: they change. Here are some things to remember to ensure your estate plan is always relevant:

• Update your estate plan with each life-changing event – divorce, birth, death, remarriage, change in economic condition, etc.

• Make sure your trustees and/or executors know where all your documents are, or all that work – and your wishes – can be ignored.

• Don’t do it yourself. Adding a “wish list” or other new provisos only leaves the door open for interpretation after you’re gone – and it could be the exact opposite of what you intended. If you have something to add, speak with your estate planning attorney and make it official.

• If you have a trust, you need to be sure that all new assets you acquire after the formation of that trust are owned in the name of the trust.

• Don’t assume that because members of your family “get along great” right now that this will always be the case. The only sure way to avoid a family fight over an estate is to have a detailed estate plan in place.

For more information about Florida estate planning, contact our Jacksonville estate planning law firm.