Estate Planning

Most people are aware that probate should be avoided if at all possible. It is an expensive, time-consuming process that exposes your family’s private matters to public scrutiny via the judicial system. It sounds simple enough to just gift your property to your children while you are still alive, so it is not subject to probate upon your death, or to preserve the asset in the event of significant end-of-life medical expenses.

This strategy may offer some potential benefits, but those benefits are far outweighed by the risks. And with other probate-avoidance tools available, such as living trusts, it makes sense to view the risks and benefits of transferring title to your property through a very critical lens.

Potential Advantages:

• Property titled in the names of your heirs, or with your heirs as joint tenants, is not subject to probate upon your death.
• If you do not need nursing home care for the first 60 months after the transfer, but later do need such care, the property in question will not be considered for Medicaid eligibility purposes.
• If you are named on the property’s title at the time of your death, creditors cannot make a claim against the property to satisfy the debt.
• Your heirs may agree to pay a portion, or all, of the property’s expenses, including taxes, insurance and maintenance.

Potential Disadvantages:

• It may jeopardize your ability to obtain nursing home care. If you need such care within 60 months of transferring the property, you can be penalized for the gift and may not be eligible for Medicaid for a period of months or years, or will have to find another source to cover the expenses.
• You lose sole control over your property. Once you are no longer the legal owner, you must get approval from your children in order to sell or refinance the property.
• If your child files for bankruptcy, or gets divorced, your child’s creditors or former spouse can obtain a legal ownership interest in the property.
• If you outlive your child, the property may be transferred to your child’s heirs.
• Potential negative tax consequences: If property is transferred to your child and is later sold, capital gains tax may be due, as your child will not be able to take advantage of the IRS’s primary residence exclusion. You may also lose property tax exemptions. Finally, when the child ultimately sells the property, he or she may pay a higher capital gains tax than if the property was inherited, since inherited property enjoys a stepped-up tax basis as of the date of death.

There is no one-size-fits-all approach to estate planning. Transferring ownership of your property to your children while you are still alive may be appropriate for your situation. However, for most this strategy is not recommended due to the significant risks. If your goal is to avoid probate, maximize tax benefits and provide for the seamless transfer of your property upon your death, a living trust is likely a far better option.

The Tampa Tribune has published an editorial article entitled “Editorial: Confronting Alzheimer's Horrors” (June 26, 2014). Provided below is a summary of the article from TBO.com.

Alzheimer’s Horrors

Gov. Rick Scott and state lawmakers launched an Alzheimer’s research program with $3 million available for research this year, however this represents just a fraction of what is needed to combat a disease that robs individuals of their memory and one that creates enormous hardships and expenses for family members.

Statistics show that one in 40 Floridians suffers from Alzheimer’s, the state currently holds 10% of the U.S total of 5.4 million individuals suffering from this disease. The number of Alzheimer cases in Florida is expected to grow 40% by the year 2025.

The cost in the state of Florida for dementia is estimated to be more than $15 billion. A study last year found that the cost range for dementia was from $157 billion to $215 billion a year, which is more than the costs of cancer or heart disease.

David Morgan, CEO of USF Health Byrd Alzheimer’s Institute in Tampa says “Alzheimer’s research is an investment that will save us from the growing astronomical costs of this disease on Florida’s families and the state’s economy.”

To read the full article go to "Editorial: Confronting Alzheimer's Horrors" from The Tampa Tribune.  

Danielle and Andy Mayoras (Forbes.com) have published an article entitled “Five Estate Planning Lessons From The Paul Walker Estate” (Feb 10, 2014). Provided below is a summary of the article from Forbes.com:

Five Estate Planning Lessons From The Paul Walker Estate

Recently, Paul Walker's father filed to open the estate, which included Paul Walker's Last Will and Testament.

The probate filing revealed that Paul Walker’s assets totaled about 25 million dollars. The filing also showed that Walker had a revocable living trust in which he named his daughter the sole beneficiary of that trust. Unlike wills that are public documents, Trusts are private documents, thus no one but the designated ones according to the Trust will know what the Trust language states.

Lesson #1: Paul Walker placed His Trust In A Trust.

Depending on your circumstances, having a trust is one of the best Estate Planning tools for a lot of people, having a will is only a portion of the planning. Paul Walker’s will transferred all of his assets into a trust he created. This allows the probate process to be much quicker and simpler.

Lesson #2: Trusts Must Be Funded During Life.

When you fund your trust during your lifetime all the assets you put into your Trust will automatically be private once you pass away, meaning that nothing should be left to pass through the will. The reason we do know that Walker had a will, trust, and 25 million in assets is because he didn't fully fund his trust. 

Lesson #3: No One Should Wait Until They Are Old To Do Estate Planning.

Paul Walker’s will was signed in August of 2001, when he was only 28 years old. Far too many adults in this country wait until “someday” to prepare even a basic will.  No one should ever procrastinate with estate planning!  Walker certainly didn’t plan to die in a car accident.

To continue reading the Five lessons head over to read the full article by clicking the link: "Five Estate Planning Lessons From The Paul Walker Estate" By Danielle and Andy Mayoras (Forbes.com).  

The bond between a grandparent and grandchild is a very special one based on respect, trust and unconditional love. When preparing one’s estate plan, it’s not at all uncommon to find grandparents who want to leave much or all of their fortune to their grandchildren. With college tuition costs on the rise, many seniors are looking to ways to help their grandchildren with these costs long before they pass away. Fortunately, there are ways to “gift” an education with minimal consequences for your estate and your loved ones.

The options for your financial support of your heirs’ education may vary depending upon the age of the grandchild and how close they are to actually entering college. If your grandchild is still quite young, one of the best methods to save for college may be to make a gift into a 529 college savings plan. This type of plan was approved by the IRS in Section 529 of the Internal Revenue Code. It functions much like an IRA in that the appreciation of the investments grows tax deferred within the 529 account. In fact, it is likely to be "tax free" if the money is eventually used to pay for the college expenses. Another possible bonus is that you may get a tax deduction or tax credit on your state income tax return for making such an investment. You should consult your own tax advisor and your state's rules and restrictions.

If your granddaughter or grandson is already in college, the best way to cover their expenses would be to make a payment directly to the college or university that your grandchild attends. Such a "gift" would not be subject to the annual gift tax exemption limits of $14,000 which would otherwise apply if you gave the money directly to the grandchild. Thus, as long as the gift is for education expenses such as tuition, and if the payment is made directly to the college or university, the annual gift tax limits will not apply.

As with all financial gifts, it’s important to consult with your estate planning attorney who can help you look at the big picture and identify strategies which will best serve your loved ones now and well into the future.

If you’ve been named a beneficiary in a loved one’s estate plan, you’ve likely wondered how long it will take to receive your share of the inheritance after his or her passing.  Unfortunately, there’s no hard or and fast rule that allows an estate planning attorney to answer this question. The length of time it takes to distribute assets in an estate can vary widely depending upon the particular situation.

Some of the factors that will be involved in determining how long it takes to fully administer an estate include whether the estate must be probated with the court, whether assets are difficult to value, whether the decedent had an ownership interest in real estate located in a state other than the state they resided in, whether your state has a state estate (or inheritance) tax, whether the estate must file a federal estate tax return, whether there are a number of creditors that must be dealt with, and of course, whether there are any disputes about the will or trust and if there may be disagreements among the beneficiaries about how things are being handled by the executor or trustee.

Before the distribution of assets to beneficiaries, the executor and trustee must also make certain to identify any creditors because they have an obligation to pay any legally enforceable debts of the decedent with those assets. If there must be a court filed probate action there may be certain waiting periods, or creditor periods, prescribed by state law that may delay things as well and which are out of the control of the executor of the estate.

In some cases, the executor or trustee may make a partial distribution to the beneficiaries during the pending administration but still hold back sufficient assets to cover any income or estate taxes and other administrative fees. That way the beneficiaries can get some benefit but the executor is assured there are assets still in his or her control to pay those final taxes and expenses. Then, once those are fully paid, a final distribution can be made. It is not unusual for the entire process to take 9 months to 18 months (sometime more) to fully complete.

If you’ve been named a beneficiary and are dealing with a trustee or executor who is not properly handling the estate and you have yet to receive your inheritance, you should contact a qualified estate planning attorney for knowledgeable legal counsel.

Week 4: Free Power of Attorney and Declaration of Preneed Guardian¹

The first 4 active duty and/or reserved military members who contact the LegalJourney Law Firm using the "Contact the Firm" option on www.legaljourney.com will receive a free Florida Power of Attorney and a free Florida Declaration of Preneed Guardian.

The LegalJourney Law Firm’s Week 4 offer includes: an interview with an attorney, a customized power of attorney, a customized declaration of preneed guardian and notarization² of your documents.

To find out additional details, please contact the LegalJourney Law Firm PLLC

¹This offer is available until close of business May 30, 2013.

²Notarization is only available to residents of the Tampa Bay Area

Week 3: Free Online Will Based Estate Plan Package¹

The LegalJourney Law Firm is providing a free “Online Will Based Estate Plan Package” for the first 2 active duty and/or reserved military members who sign up for a new client account via the online legal services link at www.legaljourney.com. 

To set up a free online account:

1.     Go to www.legaljourney.com;

2.     Select “Click Here For Online Legal Services”;

3.     Select “Register for a New Online Legal Services Account today!"

Create a user account and you will be notified within 24 hours if you will be a recipient of todays offer.

The LegalJourney Law Firm’s Online Will based Estate Plan Package includes: a Will, a Living Will, Health Care Power of Attorney, HIPPA Authorization and Durable Power of Attorney.

To find out additional details, please contact the LegalJourney Law Firm PLLC

¹This offer is available until close of business May 23, 2014.

Day 4: Free Online Will Based Estate Plan Package¹

The LegalJourney Law Firm is providing a free “Online Will Based Estate Plan Package” for the first 2 mother's who sign up for a new client account via the online legal services link at www.legaljourney.com. 

To set up a free online account:

1.     Go to www.legaljourney.com;

2.     Select “Click Here For Online Legal Services”;

3.     Select “Register for a New Online Legal Services Account today!"

Create a user account and you will be notified within 24 hours if you will be a recipient of todays offer.

The LegalJourney Law Firm’s Online Will based Estate Plan Package includes: a Will, a Living Will, Health Care Power of Attorney, HIPPA Authorization and Durable Power of Attorney.

To find out additional details, please contact the LegalJourney Law Firm PLLC

¹This offer is available until close of business May 15, 2014.

John F. Wasik (NYTimes.com) has recently published an article entitled, Lifting From Others the Burden of Your Own Death (May 14, 2014). Provided below is a short summary of the article from NYTimes.com:

Lifting From Others the Burden of Your Own Death

Although death planning can be emotionally vexing, it is essential for families and survivors.

Death planning will not only allow you to plan a dignified, meaningful and even splashy exit, but will provide guidance for those attending to your last moments and beyond.

FUNERAL CONSUMERS ALLIANCE provides advice on funeral planning and costs, and monitors industry trends.

Because critical care procedures and some drugs can damage organs, "Only about 3 percent of deaths would be suitable for lung or liver or heart donation after being on life support in a hospital," said Lisa Carlson, former executive director of the nonprofit Funeral Consumers Alliance and co-author with Joshua Slocum of "Final Rights: Reclaiming the American Way of Death".

Many states allow in-home funerals, although eight states require the involvement of funeral directors.

Do you want specific music played or pictures displayed? Are there past events or accomplishments you want your survivors to remember? Most important, Ms. Carlson noted, is to discuss with your family what you don't want in your final moments and beyond.

"If I'm totally dependent upon someone else," Ms. Carlson said, "My sense of self will evaporate. My time is up at that point. I will be looking forward to the other side - and coming back." Although death planning may be one of the most difficult things you will do, it is one final act of self-determination.

For more information on this topic, continue reading the article "Lifting From Others the Burden of Your Own Death" by John F. Wasik (NYTimes.com). 

Day 3: Free Online Will¹

The LegalJourney Law Firm will provide a free “Online Will” for the first 4 mother's who sign up for a new online client account via the online legal services link on www.legaljourney.com.

To set up a free online account:

1.     Go to www.legaljourney.com;

2.     Select “Click Here For Online Legal Services”;

3.     Select “Register for a New Online Legal Services Account today!"

Create a user account and you will be notified within 24 hours if you will be a recipient of todays offer.

Every mother who connects with the LegalJourney Law Firm PLLC via the LegalJourney Blog, LinkedIn, Twitter, and/or Facebook during the month of May will receive 10% off any online legal service.

¹This offer is available until close of business May 14, 2014.

Week 2: Free Online Power of Attorney¹

The LegalJourney Law Firm will provide a free “Online Power of Attorney” for the first 4 active duty and/or reserved military members who sign up for a new online client account via the online legal services link on www.legaljourney.com.

To set up a free online account:

1.     Go to www.legaljourney.com;

2.     Select “Click Here For Online Legal Services”;

3.     Select “Register for a New Online Legal Services Account today!"

Create a user account and you will be notified within 24 hours if you will be a recipient of todays offer.

Florida Statute Section 709.2101 through 709.2402 (effective date October 1, 2011): Although still effective, everyone with a Power of Attorney (POA) created prior to October 1, 2011 should discuss his or her options with a knowledgeable estate-planning attorney. Issues have arisen in the past with financial institutions not accepting POAs or requiring their specific form to be signed. However, for POAs created under the new Statute, per section 709.2120, F.S., a third person is required to accept or reject a POA within a reasonable time and is not allowed to require an additional or a different POA for authority granted in the present POA. If the third person rejects a POA under the new Statute, they could be held liable for damages and attorney fees.

¹This offer is available until close of business May 16, 2014.