Don’t Let Your Assets Be Frozen This Winter

Posted by on Dec 4, 2017 in asset protection, estate planning |

Winter weather is fast approaching (if not here already), and with it comes snow, sleet, and ice. But not in the lovely, sunny South Florida! While we’re lucky enough to not be iced over, your assets can still be frozen. Follow these tips to avoid having your assets frozen this winter.

How Assets Freeze

First things first: what are frozen assets?

Frozen assets are owned assets that cannot be bought or sold in any way because of a debt that still requires repayment. Until the debts are paid or satisfied, the asset’s owner cannot do anything with the asset.

To understand how to circumvent frozen assets, it’s important to know how the process occurs. One way your assets can be frozen is in probate court. Probate, as those keeping up with these articles know, is the court that you want to avoid at all costs. If you die without an estate plan (which we’ll get to in a moment), your assets will end up in probate court to be distributed.

The probate court also has to verify your will, if you have one. This process can take a long time, even more so if someone decides to contest your will. During the verification process, your assets are frozen. Even for time periods of up to several years, they can be frozen.

If that wasn’t bad enough, once the court verifies your will, they will then distribute your debts along with the assets. This has the potential to cause your family hardship if they not only have to go through probate, but shoulder your debts at the end of the ordeal.

Staying Out of the Cold

To avoid sending your assets to the Age of Winter, an estate plan is key. Estate planning is the process by which you arrange for the management and distribution of your estate after your death or if you are incapacitated. Through estate planning, you can minimize taxes and ensure that your family will stay out of probate court and your assets left unfrozen.

This important step ensures that a person’s wishes are upheld and their decisions, if they are unable to make them, are left to someone who they trust. It may be tempting to set aside the thought of estate planning for now—after all, not many people see their death as imminent—but that is not a wise choice. No matter how large or small, you do have an estate, and setting up arrangements for worst-case-scenarios is vital to your family’s financial health.

Don’t let your assets be frozen this winter. Set up an estate planning consultation today.

 

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Real Monsters: Taxes, Creditors, and the Government

Posted by on Oct 9, 2017 in asset protection, estate planning |

When you leave the theater after seeing the latest scary movie, you can rest assured that none of those monsters actually exist in real life (or at least, we hope not). However, taxes, creditors, and the government do exist, and they will make your life a real nightmare if you don’t take the proper steps to avoid them. If you don’t want your loved ones to have to go through a horror movie of their own, you will need to make an estate plan.

In this article, we will discuss what taxes, creditors, and the government do with your property if you pass on without an estate plan.

But First, what is an Estate Plan?

After reading the above section, you may be wondering what an estate plan is. An estate plan is a set of documents and legal tools that aid in the distribution of a person’s assets and property during their life (when they are ill) and after their death. An estate plan usually contains three main documents, though there may be others. These three documents are a living will, power of attorney for healthcare, and a power of attorney for financial matters. These three will help you manage your healthcare when you are sick, your finances when you are incapacitated, and your property and assets after you die.

Some people choose not to plan their estate because they feel like it is too much work or unnecessary. They couldn’t be more wrong. Failure to plan your estate will result in probate court, which be a million times more work for your family, who is already grieving after your death (for more information on probate court, see our article: The Terrifying Truth About Probate Court).

What Do the “Real Monsters” Do?

Let’s say you don’t take our advice and, like every horror movie victim ever, make the wrong decision to not plan your estate. There are three boogeymen who are going to get you: taxes, creditors, and the government.

  • Taxes. You can reduce taxes when you plan your estate. There are many different tax deductions and financial maneuvers you can engage in that will make the tax burden on your loved ones far less heavy. If you die without an estate plan, however, probate will take over and they will not care how many taxes your family is stuck with (and it will likely be a lot).
  • Creditors. Creditors take over collection of your debt. If you die without an estate plan, your case will go to probate court. The main goal of probate court is to pay off creditors. Your family will get nothing, and your creditors will get everything. If you want to creditor-proof your estate, avoid probate.
  • The government. If you die without an estate plan and don’t have decedents, beneficiaries, and other individuals listed, there is a good chance that the government will get at least some of your property.

Hopefully, this article has given you some insight into who the real monsters are and where they are hiding. The clown in It may have been lurking in the sewers, but taxes, creditors, and the government are hiding in probate court.

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The Benefits of Holding Rental Property in an LLC

Posted by on Aug 4, 2017 in asset protection, Limited Liability Company |

It is that time of year in which people are just realizing that their leases are expiring and are searching for a new place with the best rate, location, and amenities available.  This means for you, rental property owners, that your doors are about to be flooded with people looking for the best deal they can find.  However, before you accept any new leases, it is very important to make sure that all your assets are protected.

Asset protection is simply risk management planning that tries to prevent a lawsuit before it happens.  A comprehensive asset protection plan will be structured with the thought in mind that someday the plan may be laid out in front of a judge or a creditor who wants to attack the plan.  Even though there is no perfect strategy that will protect all of your assets all the time, there are ways, as a rental property owner, you can protect yourself from future liability, like creating your business as a limited liability company (LLC).

An LLC limits personal vulnerability to potential lawsuits related to the property. For example, if a lessee has a party and someone happens to get hurt, it would prevent the victim from going after your personal assets.

Also, as the owner of the rental property, you can enjoy the benefits of pass-through taxation. Since the IRS classifies a real estate holding company with one owner as they would a sole proprietorship.  The LLC is disregarded for federal tax purposes and income and capital gains from the LLC pass through directly to you.  Therefore, you are able to avoid double taxation, while still enjoying the protections offered by the LLC.  However, if you happen to have several owners, you not only get the benefit of pass-through taxation, but you also enjoy more flexibility than either a corporation or a partnership because you can have owners or third-party managers manage your rental property.

Essentially, as a property owner, it is important to protect yourself from future lawsuits and potential creditors.  Therefore, by setting up your business as an LLC, not only do you avoid personal liability, but you also get some extra tax benefits.

For more information on Estate Planning, Asset Protection, and Probate administration visit our website at www.wfplaw.com

It’s A Wild World. Are Your Protected?

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The Future Awaits…Are You Protected?

Posted by on May 24, 2017 in asset protection, estate planning, Probate, Special Needs Trust, tax, Trusts, Wills |

It’s that time of year: graduation season. Four years of hard work have finally paid off. This is the time that seniors have anxiously awaited for, and dreaded, to come. It is time for seniors to grab their cap and gowns and wave goodbye to all the crazy parties, all-nighters at the library and three am pizza runs.Although this is such a big transition for students, this is also a big change for parents who’s student loans may be kicking in or may have a student moving back home in order to figure our his or her next steps.
 
Whatever your situation may be, it may be a good time to take a second look at your estate plan to make sure everything is in order. A properly executed estate plan will allow you to control what happens to your assets in case anything were to happen.  By executing some necessary documents, you can remain assured that everything you worked so hard for is left in the right hands. Some important documents to consider are:
 
Revocable living trust: this trust will act as a roadmap for your loved ones, in case you were to fall ill or pass away. These trusts will help your loved ones avoid probate, which can save them money from getting to avoid going to court and fighting over what was left.
 
Pour over will: upon your death, this will leaves any property not transferred to your trust before your death to your trust. This trust functions as a safety net to insure that your trustees as ultimately manage property owned in your individual name rather than in the name of your trust provided in your revocable living trust.
 
Irrevocable trust: this trust may not be changed or revoked when made. The purpose of this trust is to produce certain tax or asset protection results.
 
Last will and testament: this trust communicates a person’s final wishes in regards to possessions and dependents. This trust instructs the court what to do with all assets in case anything was to happen. However, unlike in the revocable living trust, your loved ones still have to go through probate proceedings, which can be costly.
 
Durable power of attorney: in case you are not able to handle specific health, legal and financial responsibilities yourself, nominate someone, like a trusted friend or relative to handle it.
 
Living will: gives you some control, in case you are to become ill. This document allows you to express your wishes to doctors in case you become incapacitated.
 
For more information on Estate Planning, Asset Protection, and Probate administration visit our website at www.wfplaw.com
 
It’s A Wild World. Are Your Protected?
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TAX DAY BE DAMNED: GIVE OR IT SHALL BE TAKEN

Posted by on Apr 19, 2017 in asset protection, estate planning, tax |

billing, bureaucracy, cop

TAX DAY BE DAMNED: GIVE OR IT SHALL BE TAKEN

Tax day just passed and you may have made a commitment that you will make better tax decisions for 2016; just like you promised for 2015. The time has come to introduce this resolution to your inner humanitarian, as you can make donations to a good cause, while reducing your tax liability. This year, be sure to find an organization that is qualified by the IRS, so you can make an itemized deduction on your tax return. Use the following tips to ensure that you can receive a deduction for your charitable donation.

1. Itemized Deduction: First of all, you cannot make a qualified charitable deduction under the “standard deduction,” as they can only be reported through itemized deductions.

2. Determine whether your donation is qualified for a deduction: To receive a deduction for your donation, it must be made to a “qualified organization.” The “Exempt Organizations Select Check” is an online tool provided by the IRS to help you determine whether your donation was made to a qualified organization. If you don’t want to do the research, you can always count on larger charitable organizations like Red Cross.

3. Keep a record: When you make a charitable donation to a qualified organization, you must maintain a record in the form of a bank record or a written communication from the qualified organization containing name of the organization, the date and amount of the contribution. If your contribution has a value of $250 or more, you must get a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash, a description of any property contributed, and whether your received a benefit in return (if so, it must include the estimated value of the benefit received).

4. Submit a Form 8283: If your charitable donation deductions exceed $500, you must submit a Form 8283 with your return. It’s a Wild World, are you protected?

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Keep Calm and Prepare for April Fools. 

Posted by on Mar 27, 2017 in asset protection, estate planning, Probate, Special Needs Trust, tax, Trusts, Wills |

April Fools is one week away and for some this means it’s time to brace yourself.  Maybe you have children that scheme all year or perhaps you are married to the ultimate prankster – whatever your situation may be, it’s time to prepare for a possible heart attack and get your estate plan in place today.

A properly executed estate plan will allow you to remain in control, to some degree, either during times of incapacity or even after you’re long gone.  By executing some important documents, you can rest easy knowing who will raise your children, how your children’s inheritance will be managed and where everything will be going.  Some important documents to consider include:

  • Revocable Living Trust – Whatever assets held in trust will avoid probate, saving your loved ones the money and hassle.  The trust will also direct the trustee to manage and distribute your assets according to your terms.
  • Last Will & Testament –  Nominate your Personal Representative, choose a Guardian for any minor child, and add any burial or cremation requests.
  • Durable Power of Attorney – Nominate an individual to make financial decisions on your behalf or qualify you for public benefits, should you not be able to do so yourself.
  • Living Will – Advanced directive or “pull the plug” document.  Allows your healthcare surrogate to give the doctor the “ok” to pull the plug if you are being kept alive by artificial means.
  • Designation of Healthcare Surrogate & HIPAA Release – Designate the individual of your choosing to make important healthcare decisions on your behalf, in the event you cannot do so yourself.

Don’t just prepare for the anticipated pranks coming next week – prepare for your future and family today!  Call (954) 944-2855 for your free consultation.

For more information on Estate Planning, Asset Protection, and Probate Administration visit our website at www.wfplaw.com.

It’s A Wild World. Are You Protected?

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