By: Phillip B. Rarick, Esq., Miami Trust Attorney
I am pleased to announce that we have published on our web site a quick and easy explanation of living trusts. Click here: Understanding Living Trusts. Note: A PowerPoint presentation will appear in your lower task bar; click the presentation.
Every person should have a living trust, regardless of whether you have $10,000 or $900,000.
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.
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.
The time from to open and close a Florida probate estate depends on the type of administration – and of course upon the attorney. If the attorney is not experienced in Florida probate or does not concentrate in this field, expect the probate to take much longer and cost more.
A. Summary Administration: The Fast Track
The fastest Florida probate procedure is Summary Administration, but it may only be used if (a) the value of the decedent’s entire estate subject to administration in this state, exclusive of exempt property, does not exceed $75,000; or (b) the decedent has been dead for more than two years, regardless of the size of the estate. F.S. 735.201(2). For more information about Summary Administration, see our Florida Probate Quick Reference Guide
By Phillip B. Rarick, Esq., Miami Probate Attorney
I. Executive Summary
Attorney’s fees and personal representative’s (“PR”) fees make up most of the costs for Florida Probate. The biggest cost are usually attorney fees. Florida probate attorney fees depend on whether the proceeding is Summary Administration – usually the quickest and least expensive – or Formal Administration. Many factors will enter into the fees, including whether the probate is contested, is subject to estate and other taxes, involves the sale of real estate, and requires advice regarding homestead. The second biggest cost are usually PR fees. However, since PR fees have a similar presumptive statutory schedule as attorney fees, they can equal or exceed attorney’s fees.
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.
Florida Trust & Probate Attorneys Blog
