Summer is about to end.  Classes are about to start and stores are crowded with parents trying to get the best deals on school supplies.  Florida has many benefits, like inexpensive college tuition for in-state residents, warm weather all year round and access to theme parks, like Disney and Universal Studios.  However, there is also another benefit of living in Florida—the homestead protection provided by the Florida Constitution.

The overall purpose of the homestead exemption is to protect the family by protecting a family’s shelter from being attacked by creditors. In this regard, the Florida Constitution protects homesteads in three specific ways: (1) it provides a homestead with an exemption from taxes; (2) it protects homesteads from forced sale by creditors; and (3) it delineates the restrictions a homestead owner faces when attempting to alienate or devise the homestead property. Also, homestead prevents loved ones from having to go through the lengthy and expensive process of probate because the homestead is passed directly to the designated heir.

Be that as it may, homestead creates interesting circumstances with regards to probate. When a property owner dies, there are restrictions on how the property can be transferred to the family.

Who gets the property will often rely on who survives the decedent. If a spouse or minor child survives the owner of a homestead property, the homestead may not be devised.  If there is no minor child, the surviving spouse gets the property. However, the property owner may not give less than a fee simple interest to the surviving spouse.  If a spouse and lineal descendants survive the decedent, the surviving spouse takes a life estate in the homestead with a vested remainder to the lineal descendants in being at the time of the decedent’s death, per stirpes.

Ultimately, homestead laws trump any clauses in a will or trust.  If a spouse or lineal descendant survives a decedent, the descendant cannot devise the property to anyone in a will or trust.  Therefore, it is important to understand how homestead property could affect your overall estate plan.

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?

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?

What Digital Assets to Include in Your Estate Plan

The “digital asset” is a fairly new concept that has not been incorporated into estate planning until
recent years; therefore, many have failed to even take their digital presence into consideration when
planning their estates. As we discovered last week (See “The Benefits of Preserving Your Digital Legacy”), if you have a digital existence, it is in your best interest to incorporate such disposition with the rest of your
assets.

In determining what digital assets you should include in your estate plan, it is first important to understand
exactly what assets we are referring to. Digital assets include all online accounts (profiles) and digital files
that you own (see “Digital Asset Inventory,” below). As a starting point, it may be helpful to determine
and separate accounts in terms of their monetary and sentimental values, as you will likely want to plan for
the disposition of both types.

Monetary Digital Assets: You may want to leave specific instructions for the monetary accounts,
including the account information, and how you want the account to be closed or maintained. Because of
the safety concerns associated with such accounts, you should be cautious with how you record the
information. For example, you may not want to include all of the usernames and passwords onto one
document, as it could be detrimental if it falls into the wrong hands. Therefore, you may want to consider
putting usernames on a separate document than passwords, and can be stored at different locations or with
different family members. On that same note, there are many afterlife management companies that store all
of this information for you. This presents the same concern that all of the information could be exposed, in
the event that the security system is breached.

Sentimental Digital Assets: With sentimental accounts, your main concern will be minimizing the hassle
associated with loved one’s accessing your accounts. As explained in “The Social Networker’s Asset
Protection Guide” (above), each account has different user agreements, which will effect how you instruct
their disposition. Therefore, it is important to read the user agreements for each account, to ensure that your instructional provisions are consistent with what you have legally agreed to. Also, don’t forget to include those files that you have on your computer, phone, a zip drive, or on a “cloud.” Be certain to include these digital assets in your estate plan, as failure to do so can lead to problems arising from terms of service
agreements, privacy, and rights of beneficiaries.

Now that you have determined your digital assets, it is all about legacy, privacy, & security planning.
Go through each item on your list, and decide which type of planning it falls under. Additionally,
consider who you would want to appoint to take care of the management and distribution of your
digital assets. This will help your attorney draft the appropriate provisions that will preserve and
protect your digital afterlife.

Digital Asset Inventory

Q: What Digital Assets Do You Own?

Consider the following digital assets as a prompt in creating your own digital inventory:
▪ Email accounts
▪ Social networking accounts
o Facebook
o Instagram
o Twitter
o LinkedIn
▪ Blogs
o WordPress
o Blogger
▪ Domain names
o GoDaddy
▪ Online subscriptions
▪ Pictures and Videos
o Flickr
o Kodak Easyshare
o YouTube
▪ Virtual Businesses
o Ebay businesses/seller accounts
▪ Online payment accounts
o Bank Accounts
o Shopping accounts (Amazon, Ebay, Paypal)
o Bill accounts
▪ Computer Games – Avatars
o World of Warcraft
o Second Life
▪ Any personal files on a:
o Computer
o “Cloud” (online hard-drive)
o Zip drive
o Phone

What you need to know about “deceased -user policies”

Social networking is its own category of digital assets, as these accounts are more personal to the owner, and often leave behind a surviving legacy. Their value is rarely monetary, but rather sentimental to those the Networker has left behind. When planning ahead, the most important consideration for the Social Networker is the “deceased-user policies” that are agreed to upon creation of the account.

For example, Facebook allows a family member to “memorialize” the account, so that friends can continue to interact with the Facebook wall, in memory of the deceased. Certain access and features are limited to protect the account holder, and the account can be closed upon a formal request that meets certain criteria. Therefore, in your will, you can merely direct your personal representative to close or memorialize the account. This same memorialization can be made for LinkedIn accounts as well.

For Twitter, however, a family member can deactivate the account and receive an archive of the tweets by merely submitting basic information to twitter in a formal request. Therefore, the account holder may not be concerned with leaving provisions for such accounts, beyond an instruction that they merely be closed (or left open). There are some accounts, on the other hand, that will give family member’s access upon a court order. Keep this in mind for accounts that you specifically do or do not want others to have access to. If you do, then provide the username and password. Otherwise, you may want to include express language that prohibits access to these accounts. This will likely prevent a judge from ordering that your account be accessible to family members.

The Social Networker can start planning ahead today with the following steps: (1) make a list of your social networking accounts; (2) designate the accounts you want private verses those you would like passed on to loved ones; (3) read the user agreements for each account, or have an attorney do it for you (as these policies are often buried in legal language); (4) consult your estate planning attorney with your digital asset wishes, and incorporate them into your will &/or trust; (5) rest easy, your digital legacy is now protected!

The Benefits of Preserving Your Digital Legacy

Take a moment to consider the wide array of online profiles and accounts that are floating around cyber space; bearing your name, personal information, communications, blogs, stored files, and so on. What happens to our online identities when we are gone? Who will receive access to your email, blog, and social media accounts? In South Florida, social media & digital assets are all encompassing in our daily lives. Whether it is for work, school, home, or purely social purposes, our digital assets are incredibly valuable, & should be considered with the rest of our assets when planning our estates. By incorporating your digital assets into your estate plan; you can achieve the following benefits:

▪ Control over how your accounts are closed & preserved.

▪ Control over choosing someone you trust to be an online executor, & follow your wishes regarding the disposal or care of your digital assets.

▪ Privacy – preventing the wrong person from accessing your private information.

▪ Ensuring that your fiduciaries discover all the vital account information when the need arises

▪ Prevention of identity theft – if no one has knowledge or access to your accounts, there is a higher probability that identity theft will go unnoticed.

▪ Easy discovery of electronic bills and similar accounts, to avoid late fees & cancellations that will create losses for the estate.

▪ Preserving your story – allowing family members to access your blog, photos, and other digital assets that keep your memory and story alive.

While many may advise you to simply incorporate your digital asset wishes into your will, doing so can be problematic when it comes to privacy. When a will is admitted to probate, its contents become public record. Thus, any private digital asset information you place in your will, such as usernames and passwords, are exposed to the public. As an alternative, said information can be placed in a separate document that is referenced in the will; or better yet, placed into a trust. This way, your social media identity remains private, and you can receive all of the same benefits mentioned above.