Estate Planning and Tax Lawyer Blog

The prevalence of blended families has led to an increase in the number of wills that are contested each year in Florida probate courts, especially since Florida law does not recognize a no-contest clause in a will as anything more than a statement of intent.

A Florida will can be contested if:

The testator – the person making the will – lacked testamentary capacity at the time the will was made. A testator must understand what his or her assets are, and know the people who will be receiving them. A Florida will may be voided if it has been made by someone who is mentally incompetent or who has had his or her capacity impaired by dementia, illness or medication.

Undue influence was involved. This can occur when a testator is coerced through improper pressure or threat to execute or revise a will, usually to the benefit of the person or persons bringing the pressure to bear. This usually happens when an elderly testator is ill or suffers a decline in mental capacity, which causes them to be unduly influenced by the purpose of another.

It was executed improperly. A valid will must be signed by the testator and witnessed by two other people, and cannot be executed by fraud or under duress.

For more information on contesting a Florida will, contact our Jacksonville estate planning law firm.

8. Dependents. Will you still be caring for aging parents in your retirement, or helping children who are not yet financially on their feet? If so, you will need to figure these expenses into your retirement plan. In addition, an estate planning attorney can advise you about the establishment of tax-saving trusts that may help you meet these needs.

9. Your estate plan. As 2010 has so aptly demonstrated, estate tax laws change and so engaging an estate planning attorney to assist you with keep your estate plan up to date and in line with your wishes is an important part of the retirement planning process. Creating a will, setting up advanced directives for healthcare and/or financial matters, establishing trusts to benefit heirs (or even pets!) while avoiding estate taxes can all be handled by an estate planning attorney.

10. Your retirement budget. Most of us would not embark upon an important journey without a road map, and a retirement budget is an essential road map for meeting your retirement goals. Consulting with your estate planning attorney and/or a financial planner to establish a budget that aligns with your retirement income and how you want to live in retirement will go a long way to ensuring a more healthy, stress-free retirement.

For more information on successful retirement planning, contact our Jacksonville Florida estate planning law firm.10 Things You Need to Know Before Retiring – Part 3 of 3

4. Plan for staying healthy. Baby boomers are changing the face of retirement, making it a more active and engaging time of life than ever before. Most of us know that for a retirement to be enjoyable, you need to stay healthy so planning for a healthy and fit lifestyle throughout retirement should be a goal as well.

5. Insurance needs. Unplanned – and uncovered – insurance expenses can totally derail your retirement plan, so you need to examine all your policies – homeowners’, auto, life, health, etc. – to be sure they dovetail with your retirement plans. If you plan to retire before you qualify for Medicare at age 65, you will need to have an individual health insurance policy in place and finding an affordable alternative can be difficult and, at the very least, take time. Plan for your insurance needs in retirement well in advance.

6. Know what Medicare covers. Visit www.medicare.gov to learn about Medicare benefits, what your monthly premium will be and any extra coverage you may need for the things that Medicare does not cover.

7. Social Security benefits. Visit www.ssa.gov/retire2/ to access the Social Security Retirement Planner. This tool will walk you through several scenarios so you can make an informed decision about the best time to apply for benefits. The longer you wait to apply, the larger monthly check you will receive, so it may be to your benefit to wait a few years to receive the maximum payout.

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

With unemployment in Florida still in the double digits, some older workers who have lost their jobs during the economic crisis may be thinking more about retirement rather than finding a new job. Even those still too young to exit the workforce should think about retirement now – not just doing it, but planning for it.

The fact is, most Americans have no idea when or even if they can retire. In this three-part post, we’ll look at what you should be thinking about when it comes to planning your retirement:

1. How much money you will need to live on in retirement. In general, most experts agree that you should plan on using 70-80 percent of your current annual income for living expenses when you retire. To others, this figure seems high. The right answer is hardly the same for everyone, and depends on when and where you retire, what you plan to do in retirement, and other variables. Consulting an estate planning attorney to develop a comprehensive estate plan will enable you to come up with the figure that fits for you.

2. Sources of income. Once you figure out how much income you will need in retirement, you will need to identify the sources of that income – i.e., Social Security, IRAs, 401(k)s, pension plans, annuities, and so on.

3. Retirement quality of life goals. Most of us look forward to retirement as a time to enrich our lives, whether it is through spending more time with a spouse or other family, traveling, pursuing a sports passion, engaging in new hobbies and more. Write down all your personal goals for your retirement so you can be sure the funds are there to finance them.

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

Abigail Disney, a great niece of Walt Disney, is speaking out on estate taxes. And believe it or not, she is all for it!

Estate taxes only affect 1% of American estates. They are reserved for the extremely wealthy class of Americans and those that inherit from these lucrative estates.

Ms. Disney has been to other countries where estate taxes are not enforced. She explains that these governments suffer extreme financial hardship and are not able to provide the common necessities to its citizens that we as Americans take for granted.

Although the estate tax is currently not in effect, she hopes Congress will reconsider and impose the tax as soon as possible. To check out more from this article, visit Mickey Mouse, the Estate Tax and Me.

Continue reading "Disney Heir Favors Estate Taxes" »

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.