Estate Planning

Transfer of Florida Homestead to a Revocable Trust: Assessing The Risks and Benefits

Published on: April 16, 2013 | by Rarick & Bowden Gold

By Phillip B. Rarick, Esq. and Ashley Fernald

In Florida there is frequently the difficult issue of whether to transfer homestead to a revocable living trust. The client wants to avoid probate and therefore generally wants to transfer the homestead to the trust. However, since the Bosonetto case in 2001, there has been uncertainty as to whether homestead transferred to a revocable trust jeopardizes it’s protection from creditors under Florida’s renowned homestead law.

In Bosonetto, an elderly woman who was about to have a final judgment of more than $100,000 held against her, used most of her invested money to purchase a Florida home. In re Bosonetto, 271 B.R. 403 (Bankr. M.D. Fla. 2001). This was homestead property, but was held in a revocable trust. The Plaintiff argued that trusts cannot claim homestead property as exempt. The court noted that the exemption from forced sale under the Florida Constitution was only applicable to property held by a natural person. The court concluded that because the property was held by the trust, “and because a trust is not a natural person, Defendant Bosonetto may not claim the Florida property is covered by the homestead exemption.” Id. at 407.

After the Fiscal Cliff: Three Take Away Points For Estate & Gift Tax Planning

Published on: January 3, 2013 | by Rarick & Bowden Gold

By Miami Trust Attorneys Phillip B. Rarick, Esq. and Jay R. Beskin, Esq.

We averted one Fiscal Cliff. How does the new “Taxpayer Relief Act” passed by the Senate on New Year’s Eve impact estate and gift taxes for the American family? Here are three key points:

1. Estate and Gift Tax rates are increased to 40%

Standby Florida Elective Share Trusts

Published on: October 6, 2012 | by Rarick & Bowden Gold

By Miami Probate Attorney Phillip B. Rarick, Esq.

Florida’s elective share statute allows attorneys to draft standby Florida elective share trusts. (For a summary of Florida’s elective share see our post: Florida’s Sweeping Elective Share.) As of April 23, 2002, trusts that create property interests contingent upon an election being made are now qualified to fund the spouse’s elective share interests. The requirements for such a trust are set forth at F.S. §732.2025(2) and include: (1) surviving spouse must be entitled to use of the property for life or have all of the income payable as least annually; (2) the surviving spouse has the right to make the trust productive of income or convert it within a reasonable time; and no person other than the spouse has the power to distribute income or principal to anyone other than the spouse.

Rarick, Beskin & Garcia Vega has been trusted by numerous law firms and many families during the past 18 years for probate, estate planning, trust and asset protection cases. To schedule an appointment, call (305) 556-5209 or email info@raricklaw.com.

Asset Protection in Florida: Five Common Mistakes – Five Tested Solutions

Published on: September 16, 2012 | by Rarick & Bowden Gold

By Miami Asset Protection Attorney Phillip B. Rarick, Esq.

In our litigious society anyone can become a target of a plaintiff seeking to get a money judgment against you personally. In today’s real estate market, where it is usually impossible to negotiate with the lender, deficiency judgments are a major concern. You may have excellent car or property insurance, but a good personal injury attorney will typically seek to go beyond the insurance limits and name you as a defendant if the damages are substantial. Owning assets that are exposed is an invitation to a lawsuit.

Thanks to the Internet, it is now easy for a creditor to find every piece of real estate that you own. In fact, if you own real estate for commercial or investment purposes, you might as well publish your property holdings on the front page of the Miami Herald because it now takes minutes to find what property you own on the Internet.

Federal Gift Tax Update: The Window May Close Soon

Published on: September 2, 2012 | by Rarick & Bowden Gold

By Miami Trust Attorneys Phillip B. Rarick, Esq. and Jay R. Beskin, Esq.

I. The Opportunity – And The Problem.

The Opportunity: Gifts to family members and others are free of the U.S. gift tax if under the exemption. Specifically, U.S. Citizens in 2012 can give away assets worth $5,120,000 ($10,240,000 per couple) without having to pay any federal estate tax or gift tax.

What Is A Special Needs Trust – And Why It Is So Important

Published on: August 4, 2012 | by Rarick & Bowden Gold

By Miami Trust Attorney Phillip B. Rarick, Eq.

Is there someone in your family who has or may have special needs? Does someone in your family currently receive, or potentially in the future will be receiving, government benefits for their medical or other needs? If so, it is important that you know the benefits of a Special Needs Trust.

The Special Needs Trust allows an individual to continue to receive governmental assistance when they either inherit assets or when they receive assets through litigation or other unexpected sources. Basically, a special needs trust is a discretionary trust designed to preserve governmental benefits for a disabled or aged beneficiary. Distributions from the special needs trust are designed to supplement the beneficiary’s public benefits, not supplant them. There are a two different types of special needs trusts: (1) a third party special needs trust, and (2) a self-settled special needs trust.

What is the Current Estate Tax or “Death Tax”?

Published on: August 4, 2012 | by Rarick & Bowden Gold

Answer by Miami Trust Attorney Phillip B. Rarick, Esq.

The estate tax exemption for 2012 is $5.12 million; estates above $5.12 million are taxed at the rate of 35%. Unfortunately, absent congressional action, the estate tax exemption will fall back to $1 million per person with a top rate at 55% on January 1, 2013. While many commentator’s do not think this will occur, this is the current law and will remain so if Congress continues to be mired in a deadlock (and many commentators believe this deadlock will continue for years). The good news is that 2012 is an excellent year to make gifts in a tax efficient way as the lifetime exemption for gifts is also $5 million.

Important Planning Note: Estate tax law is fluid and difficult to predict. The estate tax is a moving target. These realities make it essential that you establish and maintain a relationship with an estate planning attorney who will keep you advised of the latest changes in the law.

Dying Without a Will in Florida: Who Gets What?

Published on: July 28, 2012 | by Rarick & Bowden Gold

Answer by Phillip B. Rarick, Miami Probate Attorney

Everyone has a will, whether you know it or not. If you fail to plan for this certainty, the state of Florida has a will for you: it is called intestate succession.

A common question we get from relatives of family members who die without a will is who gets what. The answer depends on Florida’s laws of intestate succession. Here are the most common situations:

Beware of Florida Single Member LLC’s: Seven Ways to Avoid this Sand Trap

Published on: July 25, 2012 | by Rarick & Bowden Gold

By: Phillip B. Rarick, J.D., and Jay R. Beskin, J.D.

Miami Asset Protection Attorneys

Background Summary:

Living Trusts Do Not Protect Your Assets; So What Does?

Published on: March 3, 2012 | by Rarick & Bowden Gold

Now may be an excellent time to attack a common misunderstanding about living revocable trusts: These trusts do not protect your assets if you are sued. If you can be sued, your revocable trust can be sued.

Some people believe that the living trust is like a “pink pill” solution: it solves everything. While the living trust is a powerful legal instrument that virtually every person should have because, among other benefits, it minimizes or prevents the intervention of a court into your personal or financial affairs, it does not solve all legal problems.

Specifically, the living revocable trust is not an asset protection entity. If you have any concern that you might be sued due to a foreclosure or some other matter, I would advise you to schedule an asset protection consultation with this firm. There are many options to consider.