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%
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.
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.
Answer by Miami Trust Attorney Phillip B. Rarick, Esq.
Below is a summary of the basic obligations of a successor trustee of a trust.
Note: Trust administration requires strict compliance with the trust terms and often analysis of complex tax requirements. If you are a successor trustee, we can help. It is important that you follow the advice of an experienced Trust Administration Attorney to avoid or reduce estate taxes or income taxes and to protect yourself against personal liability.
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.
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.
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.
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:
By: Phillip B. Rarick, J.D., and Jay R. Beskin, J.D.
Miami Asset Protection Attorneys
Background Summary:
A common over-sight of persons moving to Florida is failing to take their trust. They may have packed their trust and taken it with them, but the trust situs remains in their original state. This is usually a mistake.
The fact that a client has moved to Florida will not generally mean that the law governing the trust has moved here as well even if the client is the settlor, beneficiary, or trustee of the original trust. Clients moving to Florida are well advised to have all their trusts reviewed by a Florida attorney regarding such issues as:
Florida Trust & Probate Attorneys Blog
