FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG

The Florida Estate Planning and Probate Law Blog is focused on recent federal and state case law and planning ideas.

Showing posts with label Sarasota attorney. Show all posts
Showing posts with label Sarasota attorney. Show all posts

FLORIDA HOMESTEAD EXEMPTION INCREASE ON THE BALLOT IN 2018

♠ Posted by Marc J. Soss in ,,,,,
In 2018, Florida voters will have the opportunity to vote on a constitutional amendment to raise the Florida homestead exemption from $50,000 to $75,000, on homes worth $100,000 or more. If 60% of voters approve, the new rate will take effect January 1, 2019. The Florida homestead exemption reduces the value of a Florida residents home for property tax assessment purposes. The proposed amendment would save Florida state residents about $644 million with the average homeowner receiving an annual savings of $170. Florida municipalities and counties are concerned about the decreased revenues impact on critical services (fire department, library, police, etc...).
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TIPS TO AVOID A CHALLENGE TO YOUR ESTATE PLAN AT DEATH

♠ Posted by Marc J. Soss in ,,,,,,,,,
Although a challenge to a Last Will and Testament (“Will”) or Revocable Trust (“Trust”) (an inheritance dispute) are a sad reality there is no guarantee that even with proper planning a contest may be avoided. Will and Trust contests are typically the result of a disgruntled family member or friend challenging the validity of the documents. The have a higher probability of occurring in in blended families, when a child is disinherited or when the children are not treated equally. The following are some proactive steps that can be taken: • Create your estate plan early in life and update it regularly. Many inheritance disputes result from estate planning documents being signed shortly before the death of the testator. • Keep copies of your old estate planning documents. Your old estate planning documents may be reinstated or serve as evidence of your intent if a newer document is successfully challenged after your death. It makes it difficult for Nephew John to challenge your estate planning documents when all your prior documents also excluded him as a beneficiary. • Explain a disinheritance or inequity in distributions. Make sure your estate planning documents include specific language as to why an individual who might be expecting an inheritance is not receiving one, or why your estate will not be equally divided between your children (prior gifts to one child). • Establish your competence with regular medical visits and notes. Have disinterested individuals witness the executed of your estate planning documents to diminish the ability of a challenge of undue influence. • Discussing the general contents of your estate plan with your family. If nephew John knows years in advance that he will not be a beneficiary, it may decrease his motivation to challenge your estate plan.
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DOES YOUR FORMER STATE OF RESIDENCE STILL BELIEVE YOU ARE A RESIDENT?

♠ Posted by Marc J. Soss in ,,,,,,,
The term “Snowbird” refers to an individual who spends their winters in one of the sunshine states (Florida, Arizona, etc..) and their summers in one of the cooler weather states (Northeast, Northwest, etc..). Most Snowbirds claim one of the sunshine states, without or a limited state income tax, as their permanent residence. Problems can arise for a Snowbird when their former state of residence still deems them to be a resident of that state and subject to its states taxing authority. For example, a New York resident is subject to both state and federal income taxes on all income earned. In contrast, a Florida resident is only subject to New York income taxes on income derived from “New York sources” (rental income, etc.). When challenged, a former New York state resident will be forced to show by “clear and convincing evidence” that they intended to moving to Florida or another one of the sunshine states permanently and not just a rouse to avoid their former state of residences income tax burden. While “intent” can be a very subjective test, states with income taxes and estate taxes use written audit guidelines to help them determine a taxpayer intent (where is your permanent place of abode). They will examine and look at where you spend more than one hundred eighty-three days a year, business involvement, family connections, your driver’s license registration, where you are registered to vote, where you maintain your family heirlooms, works of art, books, antiques, family photo albums and receive your mail. It is important, to avoid this dilemma, that if you intend to make Florida your permanent residence you: (i) obtain the homestead exemption on your Florida residence; (ii) register to vote in Florida (even if you are renting a home or condominium); (iii) register your vehicles in Florida; (iv) update your estate planning documents to reflect Florida as your state of residency; and (v) affiliate with a Florida house of worship (church, temple, mosque, etc..).
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ESTATE PLANNING DOCUMENTS - DONT LET YOUR CHILDREN LEAVE HOME WITHOUT THEIRS IN PLACE

♠ Posted by Marc J. Soss in ,,,,,,
Becoming an empty nester and watching your child(ren) leave the home (for school or a job) can be difficult emotionally. Reality is that when a child reaches the age of 18 they are a legal adult, even though they may still depend on you for financial and emotional support. Most parents are surprised to learn that once a child turns age 18 they are not legally permitted to make financial or medical decisions on their behalf, or even be notified if their child is in the hospital emergency room. To avoid this from happening, it is important to have your child(ren) create their own estate planning documents (Power of Attorney, Health Care Surrogate and Living Will). Estate planning documents are not just for the older generation. These documents will provide authority and allow a parent or family member to step in, when a child needs financial or medical assistance and the child is unable to make such decisions for themselves. Alternatively, a parent will have to commence a guardianship proceeding to obtain legal authority to assist the child. Having your child(ren) execute these documents once they reach age 18 and before they leave home will provide you with piece of mind.
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REASONS FOR LEAVING AN INHERITANCE IN TRUST

♠ Posted by Marc J. Soss in ,,,,,,,,
It is not uncommon today for a parent to leave a beneficiary’s inheritance in a trust for their benefit instead of an outright gift of the funds at death. Factors which must be considered are: (i) the size of the inheritance; (ii) financial savvy and sophistication of the anticipated beneficiary; (iii) high divorce rate; and (iv) desire to protect the beneficiary from themselves. To protect the beneficiary, the following provision may be included into a trust instrument: Creditor Protection: The establishment of an irrevocable trust for a beneficiary upon the parent’s death. To the extent that distributions from the trust are solely discretionary (the trustee does not have to distribute anything to the beneficiary) the assets in the trust will not be attackable by the beneficiary’s creditors. Divorce: While the termination of a beneficiary’s marriage can’t ever be anticipated, a parent can help protect the inheritance being left to them by having it held in an irrevocable trust for their benefit. This will ensure the inheritance is not commingled with the beneficiary’s spouse’s assets and will be treated as their separate and non-marital property (potentially exempt for purposes of spousal support or alimony. Similar to a creditor protection provision, the trust can make all distributions to the beneficiary discretionary. The trust can also include a provision allowing the trustee to terminate the trust and distribute the trust assets to the beneficiary if they believe their marriage is stable or any other legal reason. Estate Tax Savings: A trust can include language to prevent inherited assets from being included in a beneficiary’s estate for estate tax purposes. Despite the federal estate tax exemption being $5,450,000.00 per individual, no crystal ball can tell us what the future holds.
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NEW 2016 CONNECTICUT POWER OF ATTORNEY LAW

♠ Posted by Marc J. Soss in ,,,,,,


 Effective October 1, 2016, the new Connecticut law governing “Powers of Attorney” (written designations of authority) will go into effect (a major update to the 1965 law. The new law, known as the Connecticut Uniform Power of Attorney Act imposes new obligations on banks to whom POA’s are presented by requiring them to either accept a notarized POA or request additional documentation within seven (7) business days. Once the documentation is presented, if the bank requests it from the agent, it will have five (5) days to either accept the POA or reject it (based upon suspected abuse or the bank’s knowledge that the POA has been revoked). In those cases, the bank continues to be free to refuse to accept the POA, without sanction or liability. Alternatively, if the bank refuses to accept the POA without sufficient cause, the attorney-in-fact can obtain a court order mandating acceptance of the POA and potentially recover reasonable attorney’s fees and costs from the bank.



The new law also provides that (i) the commencement of a divorce or separation proceeding will automatically revoke the POA designation of a spouse; (ii) the POA remains effective during incapacity without any additional language; (iii) existing POA’s remain valid; and (iv) the new law’s presumptions, such as revocation of a former spouse’s designation as attorney-in-fact and durability, will apply to prior POA’s. In addition, the new law creates a second, long statutory form that includes estate planning powers, allowing gift giving and other powers.
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HOW YOU CAN PREPARE FOR YOUR ESTATE PLANNING MEETING

♠ Posted by Marc J. Soss in ,,,,,,,



While meeting with an estate planning attorney may not be on your bucket list of items to accomplish during your lifetime or among your New Year’s resolutions, it is not something that you should put off until you are on your death bed. Many individuals are intimidated by the prospect of planning their estate, however, in most cases it is much easier if you come prepared.



A typical Florida estate plan consists of the following important documents: Last Will and Testament; Revocable Trust (for many individuals); Power of Attorney; Health Care Surrogate; Living Will; and Pre-Need Guardian Declaration. The Revocable Trust (if one is created), Power of Attorney, Health Care Surrogate, Living Will, and Pre-Need Guardian Declaration are all designed to operate during your lifetime and provide guidance in how your personal and financial affairs are handled during your lifetime.  In contrast, the Revocable Trust and Last Will and Testament control how your property is distributed after your death.



When you meet with your estate planning attorney, they will guide you through the various choices and planning options available to you, so that your legal documents reflect your intentions. In order to make your time with your attorney most productive, the following is a list of things that you should discuss and prepare in advance of the meeting:



Create a list of your assets and liabilities. This list should include the value of your home (including mortgage), bank accounts, investment accounts, business interests, personal belongings with value (e.g., artwork or jewelry), insurance policies on your life and retirement accounts. For each asset on the list, include an estimate of its value or current balance, as well as whether you own the asset in your individual name or in joint name with another person, such as your spouse or children. This information will assist your attorney in guiding you through the planning process.



Agents During your Lifetime



Health Care Surrogate: Who will make medical decisions for you if you become incapacitated. The individual you name to serve as your health care surrogate will be empowered to make health care decisions for you, if you are unable to do so. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Power-of-Attorney: Who will take care of your financial affairs if you become incapacitated. The individual you name to serve as your power of attorney will act as your agent with regard to your financial matters during your lifetime. The power of attorney will become effective immediately after you sign it. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Living Will: End of Life Decisions. The individual you name to serve as your surrogate will act as your agent with regard to your financial matters during your lifetime. The power of attorney will become effective immediately after you sign it. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Administration Upon Your Death



Who has the ability and skill to serve as your Personal Representative(s). The individual or professional entity that you select to serve as the Personal Representative of your probate estate will be charged with settling your estate following your death.  Their duties will include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the remaining estate assets to your beneficiaries. With married couples, each spouse typically names the other to serve as their personal representative.  The next consideration is who or what entity will serve as their successor, if they fail to survive you or are unable to serve. You may name more than one individual to serve in this role, but under Florida law they must either be a family member or resident of the state. Most importantly, it is important that the selected individual(s) or entity are trustworthy.



Who has the ability and skill to serve as your Trustee(s). The individual or professional entity that you select to serve as the trustee of your Trust, upon your death or inability to serve, will be responsible to manage your financial affairs, while you are alive, and settling your financial affairs following your death.  Similar to a Personal Representative, their duties will include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the remaining estate assets to your beneficiaries. With married couples, both spouse’s typically serve as the trustees, while they are capable. The next consideration is who or what entity will serve as their successor, if they fail to survive or are unable to serve. You may name more than one individual to serve in this role, without any restrictions of family membership or resident of the state. Most importantly, it is important that the selected individual(s) or entity are trustworthy.



Items of Personal Property and to whom they should pass upon your death.  Create a written document which states how you would like to dispose of your personal items (wedding ring, jewelry, automobile(s), baseball card collection, etc.) at your death, even if you do not believe they have any monetary value. Without a separate written statement, your personal items will pass to a surviving spouse or be divided equally among your children or beneficiaries. The itemized list can potentially avoid family disputes over items with sentimental but no monetary value.



Plan for Distribution of your Estate. How, to whom and in what amounts you want your remaining estate assets distributed is the next important decision you will need to consider. Your assets can be distributed to any individual (family member, friend, acquaintance, etc.) or charity you may select. The assets can be distributed outright or over an extended time period (they reach a certain age, until the beneficiary needs or wants funds, etc.). There is no wrong decision as you are free to distribute your assets as you choose.
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THE IMPORTANCE OF A LAST WILL & TESTAMENT

♠ Posted by Marc J. Soss in ,,,,,,,


SARASOTA, Fla. -- It's something that experts say you don't want to have running away from you. If you pass away without a will in the state of Florida, the state statutes would decide where your assets go. "Everyone should have a will, because what it does, it shows the court and all the beneficiaries how you want your assets to pass," said Marc Soss, a Sarasota attorney. According to estate planning attorneys, around two-thirds of people don't have a living will. Many folks we talked with at Bayfront Park on Thursday are in the same boat. "At this point we do not have a will and it's something we do need to take care of," said Shannon Ashburn. "We just haven't gotten around to it yet." "I have had a will and it was up to date," said Donna Wilson, "but I divorced and that's null and void now, so I need a new one but you know you put that kind of thing off." It's a little bit of smoother ride for Joe Giannetti. Several years ago he had an attorney put together his will. "We have two children, they're both married and we have grandchildren," said Giannetti. "I feel we're in great shape if something should happen." Attorneys say the will process is typically quick and easy with costs running as low as $100 for an attorney to do it. "Creating a will is actually a very simple process," said Soss. "In most cases, a simple will can take less than 15 minutes." Following the death of Prince, because it's reported he had no will, a bank has officially been appointed to handle his assets said to be worth hundreds of millions of dollars. Marc Soss says this a lesson everyone can learn from. "Whether you have minimal assets or multi-millions of dollars people fail to plan for the important things in life," said Soss.


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FIDUCIARY ACCESS LAW IN FLORIDA

♠ Posted by Marc J. Soss in ,,,,,


On March 10, 2016, Governor Scott signed in law the “Fiduciary Access Law.”  Effective July 1, 2016, the law allows custodians to turn over "data, text, images, videos, sounds, codes, computer programs, software, databases" and other files. Under the law, Internet service providers and other custodians can grant access to fiduciaries who submit written requests with certified death certificates, letters of administration and other documents that show proof of power of attorney. They can request usernames, addresses and other unique subscriber information to identify accounts or ask for a court order to show the fiduciary requires disclosure to administer the estate.

The new law allows account holders to designate authorized users and specify what content they can access. It also permits custodians, like telecom companies that store files, to share that content with fiduciaries or guardians. Many internet companies already have these policies in place. 
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DO NOT FORGET TO COLLECT YOUR SOCIAL SECURITY SURVIVOR BENEFITS

♠ Posted by Marc J. Soss in ,,,,,,,,

There are few upsides (maybe relief from pain and suffering) to the death of a spouse. In order to ease the burden, the U.S. government offers a few Social Security survivor benefits.



Survivor Benefits: The main benefit for a surviving spouse is that they may be able to receive Social Security payments if their deceased spouse met the requirements to qualify for Social Security retirement benefits. If both spouses are collecting Social Security benefits, the surviving spouse will only receive the larger benefit. 



Others eligible for benefits include: spouse of the deceased, aged 60 or older; spouse of the deceased, aged 50 or older, if disabled; spouse of the deceased at any age, if he or she is caring for the deceased's child who is younger than 16 or disabled; an unmarried child of the deceased who is younger than 18, or younger than 20 if still a full-time student in elementary or secondary school or 18 or older and with a disability that began before age 22; a stepchild, grandchild, step-grandchild, or adopted child under certain circumstances; parents aged 62 or older, who were dependent on the deceased for at least half of their support; and a surviving divorced spouse, under certain circumstances.





Death Benefit:  In addition to the benefits described above, a surviving spouse may be eligible for a one-time payment of $255.  Eligibility for the benefit requires the surviving spouse to have been living with the deceased spouse, at their date of death, or, if living apart, to have been receiving benefits based on the deceased spouse's Social Security record.







How to Claim Social Security Survivor Benefits: In order to claim Social Security survivor benefits you must inform the agency of the death of your spouse. Typically, the funeral home will notify the Social Security Administration with regard to the deceased.  In order to contact the Social Security Administration you must either visit your local Social Security office or speak with the agency on the phone (at 800-772-1213). hen speaking with them it is important to also inquire about: (i) survivor benefits; (ii) retirement benefits; and (iii) eligibility for the one-time $255 lump-sum benefit.
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CHARITABLE PLANNING WITH YOUR RETIREMENT ACCOUNT

♠ Posted by Marc J. Soss in ,,,,,,


 
 
For the past several years, Congress has employed a last minute temporary rule that allowed IRA owners to exclude their required minimum distributions (RMDs), from their adjusted gross income, by making a direct contribution of the funds to a qualified charitable organization. However, this last minute action made planning difficult for taxpayers. Finally, in December 2015, the Qualified Charitable Deduction (“QCD”) provision became a permanent part of the U.S. Tax Code.  This allows taxpayers to comfortably utilize the provision and establish long-term planning strategies around it moving forward.
 

Eligibility and Advantages:

Any IRA owner or beneficiary who is at least 70.5 years old, no exceptions, can use the QCD rule to donate their required minimum distribution or up to $100,000 per year to charity and exempt the funds from taxation. All contributions and earnings inside the IRA are QCD eligible but are classified as a nondeductible contribution. Taxpayers may not utilize a joint gifting strategy for the purpose of QCDs. 

The biggest benefit of utilizing the QCD provision is the ability for a taxpayer to lower their adjusted gross income, since the gifted funds do not count as taxable income to them. This can allow a taxpayer to stay in a lower income tax bracket, reduce or eliminate the taxation of Social Security or other income and remain eligible for deductions and credits that might be lost if the taxpayer had to declare the RMD amount as income. Another advantage is the taxpayer will not have to itemize deductions in order to qualify for this deduction (since the exclusion applies to adjusted gross income and not taxable income).

Rules

In order for the donation to qualify under the QCD rules it must be made directly to the charity. The IRA owner or beneficiary can personally receive the check and deliver it to the charity, but they cannot deposit the funds and then make out a check to the charity. The recipient charity must also be a qualified 501(c)3 organization and a charitable gift annuity will not qualify. The charitable donation amount must be substantiated by the charity with a written receipt.
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ROTH IRA ADDITIONAL PLANNING OPTIONS

♠ Posted by Marc J. Soss in ,,,,,

Most individuals view a Roth IRA as a great way to save more for the future using after tax dollars. While the funds deposited into a Roth IRA are subject to income tax, they grow tax-free and are not subject to tax, even the growth, when withdrawn (assuming certain requirements are met).  However, a Roth IRA has other advantages that most individuals do not know about or utilize:

Saving for College:

A Roth IRA can be utilized to pay college expenses without the contributed funds being subject to any income tax or early withdrawal penalty. Unfortunately, while account earnings on contributions can be withdrawn penalty free, they still may be subject income taxation. 

In contrast, a 529Saving Plan will allow you to save a larger amount for college expenses but are not as flexible when it comes to investing and utilizing the funds. While contributed funds will grow tax-free, the account earnings will be subject to income tax upon withdrawal and subject to a 10% penalty if not utilized for college expenses.

Saving for a Home

A Roth IRA can be utilized to save for a down payment on the purchase of a home. To qualify, the purchasers must be first-time home buyer (someone who hasn't owned an interest in a home within the past two years) and had their Roth IRA set up for five years. Subject to those restrictions, they can withdraw up to $10,000 to buy, build, or rebuild a home without paying the 10% early withdrawal penalty or worrying whether your withdrawing contributions or earnings. The exemption may also be utilized to assist children or grandchildren purchase their first home.

Savings Option:

While the opportunity to contribute to a traditional IRA stops the year you turn 70.5 years old, contributions can be made to a Roth IRA as long as you live. If you're over 50 years old, you can contribute up to $6,500 per year as long as your income is below annual limits.

 Sarasota and Manatee County residents can contact me directly to learn more.
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POTENTIAL PITFALLS OF PAY-ON-DEATH ACCOUNTS

♠ Posted by Marc J. Soss in ,,,,,,

It is not uncommon to hear an individual refer to a “Pay-On-Death” (“POD”) account as a poor individual’s version of a Will. The reason being is that upon the death of the account owner the account assets pass directly to the payee without going through probate. However, a 401k, IRA's, annuities and life insurance policies also falls into this category. Upon your death, the beneficiary designation on these accounts will determine to whom the account assets pass.  

In a recent case, an attorney prepared a Last Will and Testament (“Will”) for a client who wanted their substantial assets to be equally divided between her two sons.  The bulk of her assets were held in two brokerage accounts.  She named her oldest son as both the Personal Representative of her estate and as the “pay-on-death” beneficiary of the brokerage accounts. Upon her death, the oldest son took the position that it was his mother’s intention that he receive one-hundred percent of the brokerage accounts and that he and his brother would only split the assets passing under the Will.  The other son threatened to file a lawsuit and ultimately settled for an amount substantially less than his intended one-half share. Even if the woman had specifically bequeathed her accounts under her Will, the beneficiary designation would override the bequest and the account assets would pass to the designated beneficiary.

When should you utilize a POD?

The best use of a POD account is only when an individual wants a certain account to go to only one certain individual.  For example, an individual wants to leave their entire account or estate to their only child. Naming them as the pay-on-death account beneficiary will pass the assets directly to them and avoid the probate process. This same logic applies to 401k, IRA's, annuities and life insurance policies as well.

Review Beneficiary Designations Often:


To avoid unintended results, it is important to review beneficiary designations as a part of the estate planning process. A well intentioned estate plan can be foiled by a forgotten beneficiary designation.
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PREPARING FOR YOUR ESTATE PLANNING MEETING

♠ Posted by Marc J. Soss in ,,,,,,,
Many individuals become overwhelmed with the decisions that they need to make when preparing or updating their estate planning documents. The purpose of this list is to help you analytically consider all the questions and issues that must be addressed, provide you with time to reflect on them and work your way through what will be discussed at your meeting with your estate planning attorney. The goal is to achieve your planned result.

1. Create A List Of Your Assets And Liabilities. Knowing what you own can make the estate planning process a lot simpler. Your asset list should include your house (and mortgage), bank accounts, investment accounts, business interests, personal belongings with value (e.g., artwork or jewelry), insurance policies on your life and retirement accounts. For each asset on the list, include an estimate of its value or current balance, as well as whether you own the asset in your individual name or in joint name with another person, such as your spouse. It is equally important to make a list of your debts and legal obligations (mortgage on home, lines of credit, business loans that you have personally guaranteed, etc..

2. Decide Which, If Any, Personal Belongings You Want To Leave To A Specific Person. You should consider what you own and to whom you want it to pass upon your death. The value of the item should not be a consideration as it may have great sentimental value to the recipient. Most couples provide that all of their household furnishings, jewelry, collections, etc., pass to the surviving spouse, when the first spouse dies, and then everything will be divided equally among their children when both of them are gone. If there is a concern that your children or heirs may fight over items which have nothing more than sentimental value you should consider empowering an independent individual to be the ultimate decision maker.

3. Who Should Be The Personal Representative(s). A Personal Representative is the individual or entity appointed to administer your estate at death.  Their duties include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the assets as directed by your estate plan. People typically name their spouse and then child(ren) to serve as the personal representative of their estate. Florida law only requires that the individual named be (i) a state resident; or (ii) family member.  You can also name more than one person to serve as your Personal Representative.

4. Outright Distributions or Creation of Trusts For Your Children And Grandchildren. Since it is your hard earned money, at your death you can decide how and to whom you want it distributed.  You can elect to have it all distributed to your surviving spouse and then child(ren) or held in trust for their benefit and distributed to future generations. Other options include dividing the trust property into equal/unequal shares, with each share held in trust for a child or grandchild until they reach a specified age (e.g., 1/3 at age 30, 1/3 at 35, and the balance at 40), or their entire lifetime (Florida allows a trust to exist for 360 years after the creators death) or attain certain accomplishments (college or post-graduate degree). Two benefits of holding an inheritance in trust is that (i) the property can be insulated from the claims of that beneficiary’s creditors, including a divorcing spouse; and (ii) it can prevent rapid depletion of the funds by a youthful recipient. 

5. Who Should Be The Trustee(s). As with the appointment of a Personal Representative, the individual or entity that select as the trustee of your trust, following your death, can be a family members, friend and/or professional.  The trustee will be responsible for managing the assets and making sound distribution decisions, so there will be adequate resources to meet your spouse’s and/or your children’s needs after you are gone. Unlike a Personal Representative, there is no restriction on who you can select to serve as a trustee.

6. Who Should Make Medical Decisions For You If You Are Incapacitated. Your health care surrogate is appointed as your agent to make health care decisions for you. Make sure the individual(s) selected are capable of performing their responsibilities on your behalf. There is no restriction on who you can select to make these decisions on your behalf.

7. Who Should Take Care Of Your Financial Affairs If You Are Unable.  Your power of attorney appoints the individual(s) to act as your agent with regard to financial matters during your lifetime. In Florida, a power of attorney is in effect immediately after execution, even if you are not incapacitated. There is no restriction on who you can select to make these decisions on your behalf.
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FLORIDA CLOSER TO GUARDIANSHIP REFORM

♠ Posted by Marc J. Soss in ,,,,,,,
 
Guardianship reform has been an issue growing in prominence due to the many abuses found in systems across the nation. Florida is in the process the guardianship reform movement and a step in the right direction as the state Senate is set to have a final vote on a bill that would create a team to oversee the state guardianship system. Scandals have rocked Florida in recent years including one case where a judge was appointing his wife who would then initiate lawsuits on behalf of the ward which family members saw as unnecessary and intended as a vehicle to increase the fees paid to the supposed protector. However, this is not the first attempt at reformation after a bill was passed in recent years which supposedly ended judicial favoritism towards specific Florida guardians although advocacy groups argue that it did little to deter judges. Let us hope this new bill does the trick since guardianship abuse undermines public confidence in the legal system and harms the most vulnerable members of our society.
 
A link to the bill can be found at:
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2015 YEAR END TAX PLANNING CONSIDERATIONS

♠ Posted by Marc J. Soss in ,,,,,,
2015 Year-End Planning Moves:

·  Realize losses on stock while substantially preserving your investment position. There are several ways this can be done. For example, you can sell the original holding, then buy back the same securities at least 31 days later.
·  Postpone income until 2016 and accelerate deductions into 2015 to lower your 2015 tax bill. This strategy may enable you to claim larger deductions, credits, and other tax breaks for 2015 that are phased out over varying levels of adjusted gross income (AGI). These include child tax credits, higher education tax credits, and deductions for student loan interest. Postponing income also is desirable for those taxpayers who anticipate being in a lower tax bracket next year due to changed financial circumstances.
· Consider converting traditional-IRA money invested in beaten-down stocks (or mutual funds) into a Roth IRA if eligible to do so. Keep in mind, however, that such a conversion will increase your AGI for 2015.
·  If you converted assets in a traditional IRA to a Roth IRA earlier in the year and the assets in the Roth IRA account declined in value, you could wind up paying a higher tax than is necessary if you leave things as is. You can back out of the transaction by recharacterizing the conversion, transferring the converted amount (plus earnings, or minus losses) from the Roth IRA back to a traditional IRA via a trustee-to-trustee transfer.
·  Use a credit card to pay deductible expenses before the end of the year. This will increase your 2015 deductions, even if you don’t pay the bill until 2016.
·  If you expect to owe state and federal income taxes when you file your return next year, ask your employer to increase withholding of state and federal taxes (or pay estimated tax payments of state and federal taxes) before year-end to pull the deduction of those taxes into 2015 if you won’t be subject to the alternative minimum tax (AMT) in 2015.
·  Estimate the effect of any year-end planning moves on the AMT for 2015, keeping in mind that many tax breaks allowed for purposes of calculating regular taxes are disallowed for AMT purposes. These include the deduction for state property taxes on your residence, state income taxes, miscellaneous itemized deductions, and personal exemption deductions. Other deductions, such as for medical expenses of a taxpayer who is at least age 65 or whose spouse is at least 65 as of the close of the tax year, are calculated in a more restrictive way for AMT purposes than for regular tax purposes. If you are subject to the AMT for 2015, or suspect you might be, these types of deductions should not be accelerated.
· You may be able to save taxes by applying a bunching strategy to “miscellaneous” itemized deductions, medical expenses, and other itemized deductions.
· Take required minimum distributions (RMDs) from your IRA or 401(k) plan (or other employer-sponsored retirement plan). RMDs from IRAs must begin by April 1 of the year following the year you reach age 70- 1/2. That start date also applies to company plans, but non-5% company owners who continue working may defer RMDs until April 1 following the year they retire. Failure to take a required withdrawal can result in a penalty of 50% of the amount of the RMD not withdrawn. If you turned age 70- 1/2 in 2015, you can delay the first required distribution to 2016, but if you do, you will have to take a double distribution in 2016, the amount required for 2015 plus the amount required for 2016. Think twice before delaying 2015 distributions to 2016, as bunching income into 2016 might push you into a higher tax bracket or have a detrimental impact on various income tax deductions that are reduced at higher income levels. However, it could be beneficial to take both distributions in 2016 if you will be in a substantially lower bracket that year.
· Increase the amount you set aside for next year in your employer’s health flexible spending account (FSA) if you set aside too little for this year.
·  Make gifts sheltered by the annual gift tax exclusion before the end of the year and thereby save gift and estate taxes. The exclusion applies to gifts of up to $14,000 made in 2015 to each of an unlimited number of individuals. You can’t carry over unused exclusions from one year to the next.

Tax Factors for Consideration:

Higher-income earners have unique concerns to address when mapping out year-end plans. They must be wary of the 3.8% surtax on certain unearned income and the additional 0.9% Medicare (hospital insurance, or HI) tax. The latter tax applies to individuals for whom the sum of their wages received with respect to employment and their self-employment income is in excess of an unindexed threshold amount ($250,000 for joint filers, $125,000 for married couples filing separately, and $200,000 in any other case).  The surtax is 3.8% of the lesser of: (1) net investment income (NII), or (2) the excess of modified adjusted gross income (MAGI) over an unindexed threshold amount ($250,000 for joint filers or surviving spouses, $125,000 for a married individual filing a separate return, and $200,000 in any other case). As year-end nears, a taxpayer’s approach to minimizing or eliminating the 3.8% surtax will depend on estimated MAGI and NII for the year. Some taxpayers should consider ways to minimize (e.g., through deferral) additional NII for the balance of the year; others should try to see if they can reduce MAGI other than NII, and still other individuals will need to consider ways to minimize both NII and other types of MAGI.

The 0.9% additional Medicare tax also may require year-end actions. Employers must withhold the additional Medicare tax from wages in excess of $200,000 regardless of filing status or other income. Self-employed persons must take it into account in figuring estimated tax. There could be situations where an employee may need to have more withheld toward the end of the year to cover the tax. For example, if an individual earns $200,000 from one employer during the first half of the year and a like amount from another employer during the balance of the year, he would owe the additional Medicare tax, but there would be no withholding by either employer for the additional Medicare tax since wages from each employer don’t exceed $200,000. Also, in determining whether they may need to make adjustments to avoid a penalty for underpayment of estimated tax, individuals also should be mindful that the additional Medicare tax may be overwithheld. This could occur, for example, where only one of two married spouses works and reaches the threshold for the employer to withhold, but the couple’s combined income won’t be high enough to actually cause the tax to be owed.

Tax Breaks Not Extended, as of Yet:

Some of these tax breaks ultimately may be retroactively reinstated and extended, as they were last year, but Congress may not decide the fate of these tax breaks until the very end of 2015 (or later). These breaks include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line-deduction for qualified higher education expenses; tax-free IRA distributions for charitable purposes by those age 70- 1/2 or older; and the exclusion for up to $2 million of mortgage debt forgiveness on a principal residence.
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FLORIDA GUARDIAN DENIED FEE FROM MEDICAID RECIPIENT'S ASSETS

♠ Posted by Marc J. Soss in ,,,,,,,,,
On November 25, 2015, the Second District Court of Appeals, in the case of Lutheran Services Florida, Inc. v. Department of Children and Families (Fl. Ct. App., 2nd Dist., No. 2D13-5840, Nov. 25, 2015) held that the guardian of a Medicaid recipient may not deduct a guardianship fee from the recipient's income because the fee is not medically necessary. The case originated from a court order which authorized a professional guardian to deduct a monthly sum from an indigent and incapacitated individuals income and patient responsibility amount. The professional guardian then petitioned the Department of Children and Families (DCF) to deduct the monthly guardianship fee on their behalf, which they denied to do. DCF took the position that the fee could not be deducted from a Medicaid recipient's income because it is not "medically necessary" under state law. A hearing officer upheld the determination, noting that state law defines medically necessary as services provided in accordance with generally accepted standards of medical practice and reviewed by a physician. The 2nd DCA affirmed the decision on appeal.
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SELECTING THE RIGHT TRUSTEE FOR YOUR TRUST

♠ Posted by Marc J. Soss in ,,,,,,,
Upon creation of a Revocable or Irrevocable Trust (a legal arrangement through which a trustee holds legal title to property for another person), you will need to appoint an individual or trust company to serve as its trustee (person or entity in charge). With a Revocable Trust, that individual is typically the creator of the Trust. With an Irrevocable Trust, this can be either an individual or individual (but not the creator). Regardless of the type of Trust created, it is important to appoint an individual or institution to serve if the named individual or institution is unable to continuing serving for the Trust. Selection of the right trustee can be crucial to making sure the intent of the Trust is fulfilled and your goals accomplished. Their responsibilities include making proper investments, paying bills, keeping accounts, and preparing tax returns. The main consideration when selecting a trustee is whether they are trustworthy and can manage the assets in the beneficiary's best interest. Regardless of whom may be selected, it is important to revaluate the selection every few years to ensure they are the right individual or entity for the job and still capable of fulfilling their obligations to the beneficiaries. The right individual or institution today may not be right tomorrow.
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EVIDENCE REQUIRED TO DETERMINE POSSESSION OF PROPERTY DURING FLORIDA PROBATE PROCEEDINGS

♠ Posted by Marc J. Soss in ,,,,,
 
 
During the Florida probate administration the personal representative may take possession of all of the decedent’s property.  Fla. Stat. § 733.607(1).  However, this provision of the Probate Code also provides that such property can be left with the person presumptively entitled to it.  As a result, it is very common for disputes to arise as to (i) whether property is, in fact, the decedent’s property; and (ii) whether someone other than the personal representative has a right to possession of the property during administration.
 
Florida’s Fourth District Court of Appeals recently addressed this issue in Delbrouck v. Eberling, et al., __ So.3d __ (Fla. 4th DCA 2015). In Delbrouck, an estate beneficiary and the personal representative argued over the right to possess certain real property in the decedent’s name while estate administration was pending.  The personal representative filed a motion seeking surrender of the assets in question because the assets were titled in the decedent’s name.  The beneficiary countered by moving for authorization to occupy the properties, arguing that the Probate Code provides for a person presumptively entitled to possession of property to retain possession (Fla. Stat. § 733.607(1)). 
 
On appeal, the Fourth District reversed, holding that where a claim of possession is made on property titled in the decedent’s name, the determination as to who is entitled to temporary possession during probate requires an evidentiary hearing.  The appellate court reasoned that if “ownership of an asset can be contested during probate, it cannot be the case that a personal representative’s assertion of the right to possession can never be challenged.”
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WHERE ELDER LAW AND ESTATE PLANNING MEET

♠ Posted by Marc J. Soss in ,,,,,,,,

 
Florida Estate planning does not only involve the preparation of a Will, Trust, or Power of Attorney, but also takes into consideration retirement issues. For the ordinary individual, both the means-tested and non-means-tested government benefit programs (Security Security, Medicare and Medicaid) are an important retirement consideration.
 
As a result, individuals must consider whether they should dispose of their assets, prior to death, through pre-need planning in order to qualify for means-tested government programs (Medicaid – which may pay for the cost of long term nursing home care). However, in order to qualify for these programs, the programs will consider the transfers of assets in the 60 months prior to the benefits application, with limited exceptions (irrevocable college saving plans, and the "two-year caretaker rule”). Veteran benefits and health care may also be available for eligible individuals and their surviving family. 
 
In addition, a means-tested government benefit recipient who receives an inheritance or is the beneficiary of a life insurance policy, may have their government benefits terminate as a result of the windfall. As a result, more sophisticated estate planning techniques may be utilized to ensure the beneficiary does not lose their eligibility for government benefits and can still receive the benefit of the bequest.
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