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

WHAT HAPPENS TO YOUR DEBT AT DEATH?

♠ Posted by Marc J. Soss in ,,,,,,
Everyone reads about the huge transfer of wealth occurring from one generation to the next, however, it is estimated that 73% of decedents have outstanding debt at their death. According to Credit.com, the decedents carried an average total balance of $61,554, including mortgage debt, and $12,875, without. Approximately 68% had credit card balances, 37% was mortgage debt, 25% had auto loans (25%), 12% had personal loans, and 6% had student loans. Fortunately, the “[d]ebt belongs to the deceased person or that person’s estate.” Only if the decedents estate has sufficient assets to cover their debts will their creditors be paid. Family members are not personally responsible for the unpaid debt. It is important to discuss with your probate attorney what assets will be exempt from creditor claims upon a decedent’s death.
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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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FEDERAL ELDER ABUSE AND PREVENTION ACT ON THE HORIZON

♠ Posted by Marc J. Soss in ,,,,,,,
The Elder Abuse and Prevention Act has a high chance of becoming law this year. The legislation has received substantial support among elderly advocacy groups because of its promise to make the world a safer place for seniors. Additionally, the Act will increase penalties for marketing fraud schemes targeting seniors and expand data collection of elder abuse to help create more reliable statistics highlighting the prevalence of this problem. The Act is also aiming to enlist the Justice Department to become a greater protector of seniors.
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MASSACHUSETTS ESTATE AND PROBATE TAX TRAP AVOIDANCE

♠ Posted by Marc J. Soss in ,,,,
Since 2001, the Massachusetts Department of Revenue ("DOR") has taken the position that Massachusetts resident who die owning real estate or tangible personal property in states which do not impose a state estate tax (New Hampshire, Florida, etc...)the Massachusetts estate tax is applied to the total net value (including the assets in other states). In effect, if another jurisdiction charges an estate tax on real estate or tangible items located within its borders, Massachusetts allows a credit for the tax paid to the other jurisdiction. If no tax is charged, Massachusetts collected the tax attributable to that value as part of the total tax computed. However, a recent Massachusetts probate court held for the first time that a taxpayer who died with property in such a jurisdiction was able to exclude such property from their taxable estate, thus decreasing the tax significantly. While this decision was made by a state trial court, and not on the appellate level, the reasoning was based on solid U.S. Supreme Court precedent. The DOR does not seem likely to challenge the court’s reasoning. The U.S. Supreme Court previously ruled on this issue and found that such taxing schemes were in violation of the Due Process clause of the U.S. Constitution, because the person owning the land or tangibles in the other state derived no benefit from the laws of the state imposing the tax. Such benefits are held to be the basis of the state’s power to tax.
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