Loaning Money To Your Children Suddenly Wise Investment

Posted by on Dec 28, 2009 in asset protection, estate planning, Legal News |

As I have posted before, current federal law taxes estates exceeding $3.5 million for an individual or $7 million for a married couple at as much as 45 percent.  Any gift to an individual of more than $13,000 in any given year may also be taxed as much as 45 percent with the exception of a $1 million lifetime exclusion per donor.  For any individual concerned about these tax consequences, intra-family loans can be used for estate planning purposes, since any realized gains will be treated as free of all estate and gift taxes.

During our priliminary consultation with all of our estate planning clients, our firm will determine if our client is subject to the estate tax and if they can use intra-family loans to reduce the value of their estates.  The appreciation of any investment made with the loan accrues outside of our client’s estate, as long as it is above the IRS rate.  Rates for intra-family loans have declined as much as 53 percent since 2008.  Since the interest rates are low and most asset values -such as stocks and real estate- are depressed, there is a much greater possibility that any investments purchased with an intra-family loan in 2010 will appreciate more than the loan’s cost.

The rate for a three year intra-family loan made in January 2010 is currently 0.57 percent.  The rate is 2.45 percent for a loan of three years to nine years and 4.11 percent for a loan of nine years or more.  These rates compare favorably with an average rate of 10.55 percent for a personal bank loan and 12.51 percent for a credit-union loan.

Parents can loan their children money to buy a business and the children can repay the loan using profits from the firm.  Any future appreciation or income derived from the business beyond the loan amount are then considered part of the children’s estate and the parents’ estate remains protected.  Moreover, any amount above the 1.65 interest rate will pass to the children free of all estate and gift taxes. 

Family members should be aware the loans must be repaid in full with interest at the rate specified by the IRS. If the borrower doesn’t repay, it may be considered a gift subject to the gift tax.

For more on ways to protect your family from future estate tax issues, please contact Wild Felice & Pardo, P.A. at 954-944-2855 or via email at

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Christmas Is A Time For Giving

Posted by on Dec 22, 2009 in asset protection, estate planning, Legal News |

With the holiday season upon us, it is important that we not lose sight of the fact that charity begins at home.  While serving food at a soup kitchen or donating toys to a hospital are noble ventures that should definitely be continued, neither of those acts of charity will provide you with the same kind of tax savings and asset protection that you will receive from opening a charitable remainder trust. 

A charitable remainder trust (“CRT”) can be established during the lifetime of the donor of the trust or upon his death.  If the CRT is established during the lifetime of the donor, it will give the donor an income tax deduction each year the trust exists.  In addition to the income tax deduction, the CRT itself is a tax exempt entity which means that it is a great place to store real estate or securities owned for longer than one year.  The CRT will not recognize income resulting from the sale of long-term capital gain property contributed to the CRT by the donor.

A CRT is an example of an extremely viable way to minimize or avoid the imposition of federal income taxes and reduce future estate taxes simultaneously.  As with all estate planning tools, the CRT has some minor disadvantages, but those disadvantages are insignificant when compared to the potential income and estate tax savings that they may provide.

For more information on charitable remainder trusts, or to learn about how you can protect your assets and provide for your family for generations to come, please contact Wild Felice & Pardo, P.A. at 954-944-2855 or via email at

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Foreclosure Filings Continue To Increase In South Florida

Posted by on Dec 21, 2009 in asset protection, foreclosure defense, Legal News, Real Estate |

For those of you that thought the worst of the foreclosure storm was over, I have some bad news for you.  Over 7,000 foreclosure actions were filed by banks in the month of November against properties in the counties of Miami-Dade, Broward, and Palm Beach.  This South Florida region is witnessing an average of 233 filings per day.  These numbers represent a fifteen 15 percent increase over the 6,085 filings in November 2008 and a 76 percent increase over the 3,986 actions submitted in November 2007. 

While the media has shifted its focus from the mortgage foreclosure crisis to the healthcare reform debate, the real estate problem in South Florida has not gotten any better.  In fact, it has gotten worse.  South Florida is currently on pace for over 100,000 foreclosure filings in 2009.  By comparison, in 2008 the banks filed 75,000 foreclosure actions and in 2007 there were only 33,000 foreclosure filings by lending institutions.

Common sense would suggest a slowdown in filings due to the sudden willingness of lenders to permit short sales or loan modifications, but the loss mitigation efforts are not being completed in time to prevent the foreclosure auction from occurring and more and more homeowners are finding themselves evicted with their belongings resting by the curb.  It is your responsibility to slow down the foreclosure process long enough for any of these techniques to be used to save your home and your credit.  It is your responsibility to hire a foreclosure defense attorney to protect you.  

On a county-by-county basis, last month Broward County had the highest number of foreclosure filings with 3,305, up nine percent from 3,031 filings during the same time period a year ago.  Palm Beach County had the second highest number of foreclosure filings with 1,890 in November, up 24 percent from 1,526 filings in the same month in 2008.  Miami-Dade County was third with 1,808 foreclosure filings in November, up 18 percent from 1,528 filings in November 2008.

If you have missed a mortgage payment, or are worried that you might be forced to miss one in the near future, please contact our South Florida foreclosure defense attorneys for a free consultation at 954-944-2855 or via email at

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Divided Families Should Still Spread Holiday Cheer

Posted by on Dec 15, 2009 in Family Law, Legal News |

 The four F’s of the holiday season are food, football, fun, and family.  Unfortunately for those in the middle of a divorce, that last F often leads to a few more unexpected ones.  Make it a point this holiday season not to allow divorce, child custody or time sharing arrangements to ruin the season for you and your family.  The holidays should remain festive for all families, even if the family has been split by divorce.  As long as both parents work together, the child custody or time sharing arrangement stipulated to in the divorce can remain flexible enough to provide quality time with the children for both parents and all holidays.
 The key is for the parents to plan the schedule well in advance.  While always keeping the best interests of the children in the forefront, parents should plan their holiday festivities as best as they can around their time-sharing schedule.  One good idea is to split the day. If the families celebrate multiple holidays, and the holidays fall on separate days, this might not be necessary.  However, if both parents traditionally celebrate Christmas day, you should consider splitting the day in half, with one parent getting Christmas morning and the other getting the evening, or one could take Christmas Eve and the other gets Christmas Day.  Next year, the parents can switch and the plans can alternate between even and odd years.  The same should be applied for New Years Eve and Day.

Since it is important for children to remain close with extended family, both parents should be flexible enough with the schedule as to accommodate visiting out-of-town family. If one parent’s extended family has flown in for the holidays, the other parent can agree to relax time-sharing. While grandparents have no inherent rights regarding time-sharing, if they are in town, families can coordinate with one another regarding holiday time-sharing.

It’s also important to discuss any travel plans each parent might want to set during the children’s Winter break.  It’s also alright for one parent to make travel plans without the children providing that the other parent understands that they will be caring for the children during that time, or other arrangements are made and agreed upon.

If the relationship between you and your ex-spouse is strong enough, you can even choose to celebrate the holidays with one another and the children.  This would be ideal for the children as they will be able to observe or maintain traditions important to them.  Try not to ruin the holidays for them with unnecessary shuffling back and forth or tension between parties. Be flexible and try to have fun.  Keep the F’s to food, football, fun, and family and save the other F’s for another time and place.




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Eight Basic Asset Protection Techniques

Posted by on Dec 14, 2009 in asset protection, corporate formation, estate planning, Family Law, foreclosure defense, Legal News, Real Estate |

As with any other transaction of importance, it is always recommended that you seek the advice and care of an attorney when creating and implementing your estate plan but either out of laziness or financial inability, many Floridians are still failing to plan for the protection of their assets.  If you should fail to retain an estate planning attorney to work with you on your asset protection plan, at least follow the eight steps below and assure that your family isn’t left with nothing but a large pile of debt.  As the old adage goes, if you fail to plan, you are in actuality planning to fail.

Step 1 – Sign a financial power of attorney.

Step 2 – Designate a health care surrogate.

Step 3 – Calculate your net worth.

Step 4 – Review your beneficiaries.

Step 5 – Write a will, or update the one you have.

Step 6 – Plan for state estate taxes.

Step 7 – Title your assets correctly.

Step 8 – Donate, donate, donate.

While these eight steps will provide you with basic protection, for a true and complete asset protection plan, please contact your estate planning attorney and work together to create a plan for your future and the financial future of your family for generations to come.

Until January 1, 2010, our law firm will provide a complimentary will to any person who schedules a free consultation to discuss their asset protection plan.  Contact Wild Felice & Pardo, P.A. at 954-944-2855 or via email at

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