Florida Trust & Probate Attorneys Blog

What Is An Irrevocable Life Insurance Trust (ILIT)?

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

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

The most common purpose of the Irrevocable Life Insurance Trust (“ILIT”) is to help preserve the full value of the policy by protecting the insurance proceeds from the U.S. federal estate tax – currently at a 40% rate.

The ILIT is the owner and beneficiary of life insurance policies, usually on the lives of the donor and the donor’s spouse. Since the trust, and not the donor, owns the policy, the insurance proceeds will not be included in the donor’s federal gross estate. ILITs allow clients to replace the value of estate assets given to charitable entities. They are also beneficial for clients who wish to increase the value of assets left for their heirs at reduced tax costs. Life Insurance Trusts are generally structured so that the initial gift and subsequent gifts to the trust qualify for the annual gift tax deduction.

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.

How To Avoid Probate?

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

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

The best way to avoid probate is to have a basic estate plan that includes a living revocable trust as your master set of instructions to make sure you give what you have, the way you want, and when you want.

When you set up a Living Trust, you transfer assets from your individual name to the name of your Trust, which you control. Technically, you no longer own anything, so there is nothing for the courts to administer when you die or if you become incapacitated. The concept is very simple, but this is what keeps you and your family out of the courts — even if you own assets in other states.

What’s Bad About Probate?

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

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

It can be expensive. According to a study by the American Association of Retired Persons (AARP), attorney fees for probate are usually three percent or more of the estate’s gross value. Florida presumptive statutory probate fees for attorneys (F.S. 733.6171) are approximately:

Estate Florida Probate Fee
	$100,000	$3,750
	$250,000	$7,500
	$500,000	$15,000
	$750,000	$22,500
	$1,000,000	$25,000
	$2,000,000	$50,000

These fees are not the total cost of probate: they do not include the Personal Representative’s fee, which are often paid to a family member or waived. If not waived, the Personal Representative’s fees can be up to 3% of the total probate estate.

Probate takes time – usually 9 months to 2 years. During this time, your assets will be frozen
(unless you wish to incur the expense of a bond) so an accurate inventory can be taken, and
nothing can be distributed or sold without the court and/or personal representative’s approval.

Loss of Privacy. Probate is a public process. An “interested party” can find out details about your estate, including who the heirs are, what they will receive, their addresses, etc. This information is sometimes used as “business” leads by solicitors.

Loss of Control and Intervention of the Courts in your Family Affairs. The probate judge— not you or your family—has supervision over how your Will is interpreted, how much probate will cost, how long it will take, and what information is made public. Families are accustomed to handling their affairs privately and independently. Suddenly, losing that control to a legal process and having to pay for it can be frustrating.

Wills Cannot Plan for Disability. This is the most serious, yet least understood limitation of Wills. Disability is the lack of capacity to manage your own affairs. Think about this for a few moments. If you can’t handle your affairs because of mental or physical incapacity – for example, if you have a stroke or a heart attack, develop Alzheimer’s Disease, or are injured in an auto accident—who will conduct business for you? Sooner or later, your signature will probably be required for something—to withdraw savings, sell/ refinance assets to pay your expenses, etc. Unless you have legally given another person the legal authority to sign for you, you will not be able to transfer these assets without the intervention of the probate court.

For information about how to avoid probate click here: How To Avoid Probate?

For more information about Florida Probate click here: Florida Probate Quick Reference Guide.

Disclaimer

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney that is experienced in Florida estate planning law. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

What Is Probate?

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

Answer by Miami Probate Attorney Phillip B. Rarick Esq.

Probate is the legal process through which the court makes sure that, when you die, your Will is legally valid, your debts are paid and your assets are distributed according to your Will and Florida law. It is a bureaucratic, costly, and time consuming procedure to transfer title from your name to your beneficiaries.

For more information about Florida Probate click here: Florida Probate Quick Reference Guide.

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:

Florida Legal Resources

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

I am pleased to announce a valuable new feature on our web site that I trust you will find helpful. We want to share with you all the Florida local and state legal resources that we routinely use in our probate, corporate, guardianship, and estate planning practices.

Resources is a virtual law library of Florida and Federal law, as well as helpful local county data bases. Here are some examples:

Florida Probate Statutes

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.