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Title XLII, Chapter 732 of the Florida Statutes
governs intestate estates. Dying intestate means to pass without a will. A decedent’s estate may be entirely or partially intestate. An estate is entirely intestate if there is no will declaring how to vest any property belonging to the decedent. An estate is partially intestate if there is a will in place but leaves out some property – this is why it is important to keep your will up to date. Fl. Stat. sec. 732.101-.111 proscribes the ways the decedent’s property will vest to his or heirs after death.
If the decedent is survived by a spouse, the intestate share of the surviving spouse depends upon the presence of children, otherwise referred to as “descendants”. If the decedent had no surviving descendants, the surviving spouse gets the entire intestate estate. If the decedent did have surviving descendants which are also the lineal descendants of the surviving spouse, the surviving spouse gets the first $60,000 of the intestate estate, plus one-half of the balance of the intestate. If the decedent had surviving descendants who are not lineal descendants of the surviving spouse, the surviving spouse gets one-half the balance of the intestate estate.
To see more on how Florida deals with intestate succession including other surviving heirs, adopted persons or persons born out of wedlock see Title XLII, Estates and Trusts, Chapter 732, Probate Code: Intestate Succession and Wills, ss. 732.101-.111.
It is important to have a will covering all your property because if you die leaving an estate, do not have a will designating how you wish to divest your estate and are not survived by any person entitled to your estate, the estate will escheat to the state – meaning the state will get your property and eventually be sold.

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2010%20Tax%20Relief%20Act.jpg Prior to the 2010 Tax Relief Act, long-term capital gains and qualified dividends have been taxed at a maximum rate of 15%, with taxpayers in the 10 and 15% brackets having a zero person tax rate on this income. With the expiration of the Bush tax cuts, the long-term capital gains would return to a maximum rate of 20% and qualified dividends would vanish and be treated as income subject to a normal tax rate. The 2010 Tax Relief Act extends the 15% maximum tax rate for long-term capital gains and qualified dividends until the end of 2012. The lower capital gains rate will cost $25.9 billion and the lower qualified dividend tax rate will costs $27.3 billion to put in effect.
Due to the 2010 Tax Relief Act, the lower capital gains rate will cause fewer individuals to close deals or sell assets to lock in their rate. There will also be an extension of the 100% gain exclusion for the sale of qualified small business stock acquired at the original issuance between September 27, 2010 and January 1, 2012 and held for more than five years.

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2010%20Tax%20Relief%20Act.jpg The lowest individual income tax bracket of 10% would vanish after the scheduled expiration of the Bush tax cuts. Due to the 2010 Tax Relief Act, the individual tax rates will remain in effect at the current levels for 2011 and 2012. The final act that was passed includes an extension of the lower tax rates for all taxpayers, not just individuals making less than $200,000 or those couples making less than $250,000. The Joint Committee on Taxation estimates that the cost will total $89.3 billion. For the next two years, there is certainty for individual tax rates. However, the tax cuts will be on the agenda again shortly after the 2012 election.
One area of tax planning that has seen a spark of interest is the Roth IRA conversion. Due to the tax rate remaining the same for the next two years, a retirement plan participant has more options available.

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Unique%20Opportunity.jpg On December 17, 2010, President Obama signed the 2010 Tax Relief Act, extending the Bush-era tax cuts. With this new law in place, there is an once-in-a-lifetime planning opportunity that ends at the stroke of midnight on December 31st.
Generally, any transfers greater than $13,000 per year to generations younger than children are subject to the generation-skipping tax. The purpose of this tax is to prevent wealthy individuals from transferring assets to younger generations for the purpose of avoiding application of the estate tax at every generation. However, gifts made through December 31, 2010 will not be subject to the generation-skipping transfer tax due to the passage of the new law. Beginning January 1, 2011, this tax rate will increase to 35% and return to 55% in two years.

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2010%20Tax%20Relief%20Act.jpg A “compromise” package has been signed by President Obama. The estimation of the 10-year cost of the Act is to be about $858 billion with most of the provisions of the bill sunsetting at the end of 2012. This means there is fuel for the fire already for the 2012 Presidential election.
With the background information provided, we will be posting a closer look at key provisions of the 2010 Tax Relief Act as it pertains to your income taxes.

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Marriage may be complicated. Not being married is even more complicated.
Unmarried couples are not eligible for many of the same legal protections or advantages as married couples. However, the number of unmarried couples living together has jumped, leaving financial planners with the task to help these couples determine a fair way to share monthly expenses and, sometimes, big-ticket purchases. Also, the lack of legal structure in a breakup for unmarried couples leads those individuals to manage retirement-savings accounts differently.
Financial planning does not only involve the threat of a breakup, but tax and estate planning becomes more difficult for unmarried couples as well. An unmarried couple should make sure to work with a certified accountant and estate-planning attorney who understands the couple’s circumstances. Unmarried couples should also have proper asset titling, have health-care directives, document their wishes for their estates and draft wills.
“Unmarried couples shouldn’t underestimate the importance of documentation.”
To learn more about this article, visit The (Un) Marriage Penalty.

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Video%20Camera.jpgWhen you think of a will, most people of a certain age would probably picture a parchment scroll with old English lettering declaring the Last Will and Testament of the departed. And indeed, the will is a legal document with a long history, requiring only paper, writing instrument and witnesses to execute and become legally binding.
So does modern technology have a role to play in the creation of a 21st century will? Should you create a video will for your surviving heirs?
The answer is, it depends. A video will is when the testator – the person whose will it is – reads his or her will on camera. A video will provides the testator with a last forum for explaining their bequests, if such explanations may be necessary.
The main benefit of creating a video will is if the testator’s mental competence could potentially be called into question by heirs. In this way, a video will functions more as evidence of competence should that person’s “sound mind” be called into question in court.
However, you should be aware that a video will cannot replace an official paper copy, drafted by a knowledgeable attorney and signed by you and two witnesses. A video will alone is not sufficient to hold up in probate court.
If you are considering the incorporation of a video will into your estate plan for any reason, consult with your estate planning attorney before you proceed. It is important that your estate planning attorney is present for the taping of your video will, and that you consult with him or her beforehand as to the content of your video will.

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Prior to the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation act of 2010, all the talk was that if Congress did pass a bill to deal with the estate tax, that the personal representative would have the choice to choose between the no estate tax/carryover basis rules in place this year or use the 2009 estate tax rules ($3.5 million per estate with a 45% tax rate for everything above and a full step-up in basis).

However, Congress, as always, is unpredictable and passed a law which still gives the personal representative an election. The election is to have the estate be under this year’s estate tax rules (or lack thereof) or be treated under the 2011 rules. The 2011 rules allow a $5 million per person exemption with a 35% tax rate and a full step-up in basis. Further, the 2011 rules allow any unused exemption to be carried over to the surviving spouse to be used upon their death. This allows for more planning to be done upon the second spouse’s death and also gives some flexibility to planning for blended families.

To learn more about the new estate tax rules laid out in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation act of 2010, please contact our Jacksonville estate planning attorney to discuss how these new rules could benefit you and your family.

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The IRA Charitable Rollover was reenacted as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (H.R. 4853).

The bill allows someone, who falls within the rules, to make a charitable donation out of their IRA without it being included as part of their taxable income, plus it counts as their required minimum distribution for the year. For 2010, the charitable rollover may be elected through January 31, 2011. For the 2011 rollover, the election must be made between January 1, 2011 and December 31, 2011.

To qualify, you must be age 70 ½ or older. The rollover election must be made by the dates above. The rollover must come from a traditional IRA, not from a Roth IRA, 403(b), 401(k) or any other retirement plan and cannot exceed $100,000 per year. Any amount over $100,000 will be included in your taxable income.

Who would benefit from this charitable rollover? Those who do not itemize their deductions, those whose Social Security income is taxable or those who have estate subject to estate taxes are just a few classes of people who would benefit from a charitable rollover.

To learn more about the IRA charitable rollover, please consult our Jacksonville estate planning attorney at Wood, Atter & Wolf to see if you would benefit from the IRA charitable rollover.

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Last week, in the 11th hour, actually closer to midnight, Congress passed a tax extender bill for the President to sign. I will be blogging a lot over the next few weeks to give more details on the entire tax package as it introduces a few new concepts into the tax code, one of which is the portability of the unused estate tax exemption. So stay tuned….

If you have any questions in the meantime, please call our Jacksonville estate planning attorney to discuss how the recent tax bill will benefit you.