As you begin planning how to leave what you have to those you love, it makes sense to want to increase what you currently have.  A good financial planner can guide you down the right path but you need to do as much due diligence when hiring a person to grow your estate as much as you do in hiring an attorney to plan it.  Financial planners are poorly regulated, poorly credentialed, and your remedies against a crooked one are few.  Our firm works with a number of very reputable financial advisors and we can recommend two or three that we feel might fit your needs, but you should still take the time to interview each of them yourself and choose the one that feels right for you.

• Find out how long the planner’s been practicing. Better yet, ask them if they’ve passed the CFP (Certified Financial Planner) exam — that’s an exam that only 56,000 planners have passed out of the 650,000 folks out there who say they are financial planners.
• Notice if they are trying to give you advice or trying to sell you products. Stay away from those who are primarily selling products — the odds are that they’re steering you toward products that get them maximum compensation rather than those that will meet your needs best.
• Ask them if they are preparing your financial plan or hire outside consultants to do so.
• Find out how they are compensated. Are they fee-only or commission-based? It’s not that one is necessarily better than another, but it’s important to understand how they are being paid and to make sure that they will act in your, not their, best interests.
• Check with the SEC to see if they have received any complaints about the planner.

For more information on growing and protecting your assets, please contact the law firm of Wild Felice & Pardo, P.A. for a free consultation.  You can reach us by phone at 954-944-2855 or via email at info@wfplaw.com.

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 info@wfplaw.com.

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 info@wfplaw.com.

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 info@wfplaw.com.

Currently Florida does not collect a state estate tax, though things were different prior to January 1, 2005, when Florida, like many other states, collected a separate state estate tax in addition to the Federal estate tax, called a “pick up tax.”  The pick up tax was equal to a portion of the overall federal estate tax bill.  The federal estate tax is scheduled to completely disappear in 2010, but then the provisions of the Economic Growth and Tax Relief Reconciliation Act will sunset and the estate tax, along with the pick up tax, will come back on January 1, 2011.  In 2011, there is a chance that your estate could be doubly taxed.  

The year 2010 will be an “uncapped” year in that the EGTRRA will no longer offer protection to those individuals with a net worth of under $1 million.  With more families being exposed to the estate tax, it is imperative that you sit down with your estate planning attorney and talk about drafting some combination of a will and trusts as soon as possible.

From now until January 7, 2010, Wild Felice & Pardo, P.A. is offering to draft your will for FREE.  Just make an appointment by calling 954-944-2855 or emailing info@wfplaw.com.  There is never any cost for the consultation and one of our estate planning attorneys will go over your risks, assets, and liabilities and then draft your will for FREE.  There are no strings attached but this offer cannot be combined with any other offer and only one free will to be prepared per household.