According to Bloomberg News, when Romney engages in estate planning, it’s all about leaving assets for heirs while dodging gift and estate tax. With his strategic “I Dig It” trust, his beneficiaries get a triple benefit. This type of trust known as the “intentionally defective grantor trust” is used by many high net-worth individuals to give potentially unlimited amounts to children while avoiding tax in three ways. First, multimillionaires assign a low value to assets they transfer to the trust. Second, when the trust sells assets at a handsome profit, a relatively low capital gains tax is paid. Finally, by paying these taxes, a settlor can reduce the pile of wealth leaving heirs potentially free of gift and estate taxes.

The Republican presidential candidate set up this type of trust for his children and grandchildren back in the mid-90’s known as the Ann and Mitt Romney 1995 Family Trust. It received shares in the Internet advertising firm DoubleClick, Inc eight months before the company went public. The trust sold them less than a year after its IPO. The trust’s sale made it possible to save hundreds of thousands of dollars in estate and gift taxes. By 1999, the trust reaped a 1,000 percent return on the sale of these shares. If he had given the cash outright, he could have owed a gift tax at a rate as high as 55 percent. This technique entails contributing assets before they appreciate or are difficult to value, and then claim the gift tax obligation as low or non-existent since the appraised value is low or zero. Because Romney’s shares were already in the trust before the sale, no gift or estate tax would be imposed on the cash.

Romney increased his family’s fortune by moving $100 million worth of assets into this trust. The trust’s value is not accounted for in the $250 million that his campaign cites as Romney’s net worth. Also, it is reported that his income tax rate in 2011 was about 14 percent.

The Obama administration anticipates closing this loophole. Romney has vowed as president to cut the gift tax rate and repeal the federal estate tax altogether, referring to this as the “Death Tax.” The Romney campaign stated that this tax “creates a series of perverse incentives that encourages the most complicated and convoluted tax-avoidance schemes at tremendous cost to all involved.”

Clearly, Romney is not digging all these gift and estate taxes. Are you?

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?

There may be some serious changes occurring just around the corner that we need to be wary of. The first thing to pop into your mind is probably the 2012 U.S. presidential elections. But what you should also be thinking about is the fact that the current estate and gift tax is set to expire by the end of this year. The current exemption is at a favorable $5.12 million per person, and twice that for a couple. Any amount over this magic number is taxed at a top tax rate of 35%.

However, there may be pending legislation and proposals to drop the exemption to $1 million with a top tax rate of 55%. Because this is an election year, the party platforms covering the transfer tax regime will be relevant to what Congress might do over the next few years. Congressional action is more likely to relate to the amount exempted from transfer tax and the tax rate structure.

It would be wise to act now given the unfavorable situation we may all be faced with. Embrace this opportunity while you still can and contact your South Florida estate planning attorney now. You need to arm yourself with the necessary estate planning tools to protect your legacy and more importantly, protect your family.

Speaking of the 2012 presidential elections, click on this link to hear one of history’s favorite presidents talk about estate planning and asset protection!

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?

Most people would probably be ecstatic to learn they inherited a $65 million Robert Rauschenberg bald eagle sculpture. However, the excitement can easily deaden when there’s an additional surprise attached- an astronomical $29 million tax bill!

That’s what happened to Nina Sundell and Antonio Homem, the children of Illeana Sonnabend, a prominent New York art dealer who left her children the majestic “Canyon” masterpiece. The 20th century artwork was initially valued at zero because it cannot be legally sold. Federal law prohibits the sale of a live or in this case, a stuffed bald eagle. Mrs. Sonnabend and the creator of “Canyon” managed to bypass this restriction, but the heirs are not so lucky. The IRS has appraised it at $65 million and slapped on an extra $11.7 million in penalties for the allegedly inaccurate appraisal.

The heirs have already paid over a staggering $471 million in federal and state estate taxes for the billion-dollar art collection. Approximately $600 million worth of art has already been sold to pay the taxes owed. However, the heirs are drowning in a financial mess because they cannot afford the taxes on the sculpture.

Such a nightmare could have been avoided by planning ahead.

In South Florida, proper estate planning and the utilization of appropriate measures in wealth transfer can protect assets and reduce estate taxes. We can’t avoid the tight grip of the IRS, but we can reduce the burden of exorbitant taxes with a little smart planning from your South Florida estate planning attorney. Make a smart, bold move and contact your attorney today.

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?

Let’s hope it would more likely parallel a movie titled “The Fall of the Estate Tax”.

In this nonexistent film, a legendary Caped Crusader would instead use his intellect and detective skills in fighting high taxes for economic welfare.

Since we live in reality, the best way to reduce Federal estate tax is to keep abreast of new legislation and take advantage of every given opportunity.

Think of tax-free gifting as the bat-mobile in achieving this goal, especially for large estates. The annual exclusion gifts for 2012 are set at $13,000 per person, per recipient. The federal applicable lifetime exemption for transfers has increased to $5.12 million per person, which is the highest exemption thus far. There are also
gift and estate tax charitable deductions and also marital deductions to strongly consider. Maximizing all these incentives is smart planning. Over the long run, you can transfer significant sums of money out of your estate along with any appreciation, thereby reducing the tax.

Did you know that Forbes magazine listed Batman, aka Bruce Wayne, as the 9th richest fictional character with an estimated fortune of $5.8 billion? BusinessWeek named him as one of the ten most intelligent American superheroes. You can bet Gotham’s finest would be spending hours in his Batcave strategically gifting assets from his estate plan.

However, lucky for the rest of us, we have our highly qualified South Florida Estate Planning Attorney.

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?

World famous painter Thomas Kinkade, knew how to capture an admiring fan base through his use of saturated pastel colors and idyllic, peaceful gardens, stone cottages, and lighthouses. After all, about 1 in every American home showcases a copy of his artwork.

However, this “Painter of Light” precipitated a dark, legal dispute over his multimillion-dollar estate following his death early April of this year. The legal battle is between Kinkade’s wife Nanette, of thirty years and his mistress, Amy Pinto-Walsh of 18 months. So who gets his legacy?

Ms. Walsh was with the painter in Monte Sereno, California on the night of his death when he overdosed on alcohol and Valium at the age of 54. Nanette was in the middle of divorce proceedings that had not been finalized. A joint estate plan with his wife has been set up with no mention of Amy. Yet, the paramour has produced two recent, handwritten documents claiming Kinkade had written leaving her his mansion and $10 million to establish a museum for his original artwork.

The problem is that both documents, although signed, are scrawled and barely legible. Apparently, the signatures on his marriage separation papers are much clearer. Needless to say, the wills are now heavily contested. A hearing is set for July 2 in probate court for review.

California recognizes such non-attested holographic wills so Ms. Walsh may have a shot.

However, Florida does not. Florida law requires certain formalities in order for a will to be considered valid. For example, the testator must sign the will at the end, or have a proxy sign on his behalf and in the presence of two witnesses. In addition, the testator must have the intent and be of testamentary capacity at the time the will is executed.

Florida would not recognize the holographic wills allegedly written by Kinkade because it does not adhere to the required formalities. Wills that are recognized can also be challenged on several grounds. In Florida’s probate courts, the validity of a will, under this Kinkade scenerio, could be contested on grounds of forgery, lack of sound mind, duress or undue influence.

Don’t make the same mistake like Thomas Kinkade by painting an ugly, legal mess for your heirs and beneficiaries.

Instead, draft your Florida Last Will and Testament with the artistic precision of a careful painter’s brush strokes by consulting your South Florida estate planning attorney today.

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?

In the words of Penn State’s late football coach Joe Paterno:

“Success without honor is an unseasoned dish; it will satisfy your hunger, but it won’t taste good.”

Paterno’s family have discovered yet another unsavory situation. Their unsuccessful attempt at sealing his will from public view has left them with a bitter aftertaste. They have finally realized that a will, regardless of celebrity status, is a document that must be submitted for probate and consequently, becomes public record.

If they wanted to satisfy their palate for privacy, the assets should have been transferred to a living trust or revocable trust. In South Florida, trust formation eliminates the need for probate and does not become public record. The decedent’s net worth and the identity of beneficiaries remain protected from snooping, unwelcome eyes.

However, transferring assets into a trust does not necessary mean you should not have a will in place. What if you unintentionally left out an asset? Do you have minor children? Drafting a proper will ensures all your assets are accounted for and that a guardian is appointed to care for your children in the event you pass away.

Now that Joe’s 1997 will and 2012 codicil are available for our entertainment, apparently there is nothing particularly special or scandalous surrounding its contents.

But what does raise a brow or two is why his family thought they could hide the document from Nittany Lions or the rest of the world.

If you have family, friends or even a charitable intent, the absence of an estate plan is inexcusable. For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.

It’s a Wild world. Are you protected?