Benjamin Franklin said there were only two things certain in life: death and taxes. He was absolutely right. But he forgot one more important thing…probate! It is of vital importance that survivors of a deceased person understand what probate means, the procedures involved, and the legal ramifications of their decisions, which is why everyone should take the time to sit down with a South Florida Probate Attorney.

Probate is the legal process employed by probate courts in identifying the assets of a decedent, paying off any existing debts, and distributing assets to the beneficiaries of an estate. This process is triggered by presenting the decedent’s death certificate. Although there is no set time frame for the entire probate process, survivors of a decedent can generally expect the process to last at least 6 months. However, depending on the complexity of the estate, it can take many years before probate is resolved. One can also expect to be in the frequent presence of a judge, attorneys, the executor of the deceased’s will, health care providers, the IRS if any taxes such as estate or income are owed, and credit card companies if there are any outstanding debts. This can seem like a daunting process no one wants to be a part of.

There is hope. This situation can become less painful by choosing a law firm you can trust to help you navigate through this complicated process in an efficient and simplified manner.  An attorney will ensure your will is properly written and executed and help you establish a trust that fits your needs. You will receive guidance on gifting and property transfers that will save your family a headache by the possibility of almost avoiding probate altogether.

For more information on successful Florida estate planning and probate, please contact the South Florida law firmof Wild Felice & Pardo, 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?

The homestead protection that the Florida Constitution provides is among one of the many benefits of living here.  Homestead’s main objective is to protect the family home.  However, homestead creates unique situations when it comes to probate. When a homestead property owner dies there are restrictions on how the property can be transferred to the family regardless of what a will says. Specifically, these restrictions come into play when the decedent has a spouse or minor children.

Who gets the property will depend on who survives the decedent. If the decedent leaves a spouse but no minor children, the spouse gets the property. If a decedent leaves a spouse and a minor child, the spouse gets a life estate in the property, with the property going to the minor child upon the spouse’s death. In the case that the decedent leaves a spouse and only adult children, the spouse also gets only a life estate. However, in this case the decedent may choose to leave the remainder interest to the children or the spouse.

The most important thing to remember is that the homestead laws override any clause in your will. Therefore, if the decedent is survived by a spouse or a minor lineal descendant, the decedent is not free to give the property to just anyone in a will. This makes it crucial to understand the effects homestead property will have on your overall estate plan.

For more information on successful Florida estate planning and probate, please contact the South Florida law firm of Wild Felice & Pardo, 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 are a myriad of estate planning tools that can help protect your real estate assets. Warm weather states like Florida are a mecca for second homes and investment properties. Unfortunately, these occasional homes become part of a person’s taxable estate when they die.    The Qualified Personal Residential Trust (QPRT) is a unique estate planning tool that provides a solution for this concern. A QPRT is an estate planning technique which is provided for under US Treasury Regulation Section 25.2702-5(c)(2). The regulation allows for the creation of a QPRT for a primary residence and a secondary residence.

The concept behind the QPRT is less confusing than its name implies.  Simply put, the QPRT operates as follows:

• An individual transfers the title of a property to the trust (QPRT).
• The individual sets up a pre-determined amount of time to continue living in the residence.
• The owner of the home (who is now called the grantor) pays the expenses associated with the residence such as homeowners’ association fees, taxes, and expenses; however he does not pay rent.
• When the pre-determined time is over, if the grantor is still alive, he may remain in the home and pay his children rent which should reflect an amount that would be paid in a similar situation.
• If the grantor dies, the home will pass to the children either without estate taxes or with significantly reduced estate taxes based upon the appreciated value of the home.

Due to the complex tax code we all endure, it is important to discuss this option with both a trust attorney and CPA. Specifically, there is a gift tax exemption ceiling which could affect the amount of estate tax that will ultimately have to be paid by the children. However, even if the house appreciates significantly, the children will benefit from a substantially lower estate tax than they would have paid if they inherited the property through traditional means like a will. This discount occurs because the taxable value of the house is lowered due to the grantor living in the house. Therefore, this unique tool should always be considered when considering your estate plan if you happen to own a second home.

For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Pardo, 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?

Wish you could go back in time to last Friday and pick VCU to upset Kansas?  How about going back a full month and picking UConn to win the whole thing?  Well, until Peabody is able to come over and set the Wayback Machine, we are not able to go back in time and correct our mistakes.  Losing in your March Madness Bracket Tournament is nothing in comparison to the mistakes I see every day in poorly drafted, poorly executed, and poorly funded estate plans.  

Top 10 Estate Planning Mistakes

1. Leaving the Living Trust Unfunded: A living trust is merely a vehicle that allows you to pass your assets outside of probate.  However, if there are no assets in the trust, nothing has been accomplished.  You can buy the most expensive safe at the store but it wont protect your valuables unless you put the valuables into the safe. 
2. Putting Your Children’s Names on Your Deed: These property will be subject to capital gains taxes when the beneficiary attempts to sell it.
3. Leaving Assets Outright to Beneficiaries: Assets that are left outright to heirs and beneficiaries are exposed to creditors, predators and divorcing spouses. 
4. Not Having a Living Will:  A living will gives guidelines for your physician to follow in the event you are in a terminal, end-stage, and persistent vegetative state. 
5. Owning Life Insurance in Your Name: Many people are not aware that the death benefit of an insurance policy, owned by the insured is included in their taxable estate. 
6. Not Communicating with Trustees and Beneficiaries:  It is important to let the people who are named in your estate plan know what role you are asking them to play. 
7. Not Knowing Where All the Assets Are: A scattered estate plan by a secretive decedent may cause some assets to be left uncollected, undistributed and even lost.
8. Not Updating Your Estate Plan:  It is imperative that your estate plan is reviewed on an annual basis to avoid unintended results. 
9. Drafting Your Own Estate Plan:  There are so many moving parts with a trust-based estate plan that attempting to do it yourself is the equivalent of trying to take your own appendix out.  There are legal requirements in drafting, executing, funding, and updating.  If you miss any of them, it could invalidate your entire plan.  An estate planning attorney doesn’t sell you documents, they provide the service that goes into making sure that those documents are correct.
10. Thinking That You Have Plenty Of Time To Get To It:  No one has a crystal ball and tomorrow is not promised to any of us.  I have clients that have hired me to draft their estate plan and then they died prior to being able to sign it or fund it.  There are other people who die too young to even sit with the attorney.  Estate planning is necessary for everyone and you should sit with your attorney as soon in life as possible.

Failing to visit your estate planning attorney to get a comprehensive estate plan in place could lead to your family’s financial bracket being completely busted.  For more information on successful Florida estate planning and probate techniques, please contact the South Florida law firm of Wild Felice & Pardo, 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?

A difference between a corporation and an LLC is that a creditor of an owner may directly levy on the debtor/shareholder’s stock in a corporation and thus take all the rights that compose the stock share, such as voting rights, right to elect directors, etc. By contrast, a creditor of an LLC is usually limited to a lien against the debtor/member’s economic right to distributions only until the judgment is paid, but the creditor usually takes no other of the debtor/member’s rights in the LLC. (This is often referred to as a “charging order lien” from the form of the relief usually specified in the RULPA/RULLCA).

Keep in mind that one can have an “S-LLC” by the simple expedient of checking the box for the LLC to be taxed as a corporation instead of a partnership, and then making the S-election for the LLC.

Although the ruling in the Olmstead case subjected single-member LLC assets to liability tied to its single member, this may be held to be a bad ruling in the future. It certainly goes against the purpose and spirit of the LLC laws. In any event, this potential adverse result may be easily avoided by interjecting a second member in any Florida LLC until the law is further clarified. Another significant problem with an S Corp is that they are, by far, the worst structure for advanced planning purposes. The limitations imposed on financial planning and estate planning and the limitations against international shareholders are major impediments to using S corps, particularly in an increasingly more complicated estate and tax environment and a world that is quickly globalizing.

Too many attorneys and CPAs don’t seem to know that you can make the S election for the LLC; in general I much prefer the LLC for estate planning and asset protection purposes (although the single-member issues can be a concern if their are not two viable members to include in the LLC). While S corporations still have some effective uses, their use in the future as business entities will be far more limited, and LLCs will continue to be the vehicle of choice for privately-held and family businesses.

There may be no area of law as controversial as asset protection. However, the crash of the US economy has garnered an increase in interest by many clients in utilizing this area of law for their benefit. Asset protection is complex and often scary but it is a legitimate area of law that incorporates many other areas of law, including bankruptcy, tax, corporate law, contracts, creditor-debtor rights, insurance law and estate planning. Any attorney practicing in the area of asset protection must understand how these areas of law work together and have a comprehensive understanding of Florida’s Fraudulent Transfer Act.

I am certain that most attorneys could share compelling stories about their clients who might have benefited from such preparation. Many of these stories are not of wealthy clients trying to evade paying taxes or legitimate creditors; they are stories of hard-working families who, because of an accident or unforeseen circumstances, lost everything.

Although Florida attorneys cannot offer Florida Asset Protection Trusts to their clients, there are numerous other asset protection techniques which can be utilized to help limit liability exposure for clients. Some techniques include: the use of LLCs or limited partnerships, titling assets as tenancy by the entirety, enhancing retirement benefits, engaging in life insurance planning, the use of certain out of state business entities, purchasing educational plans, and the use of prenuptial or post nuptial agreements.

Whether you offer your clients asset protection planning or not, attorneys all have a duty as advisers to educate ourselves in this growing area of law. Some advocates of asset protection planning suggest that attorneys who practice in certain areas and do not advise their clients in asset protection techniques may be exposing themselves to malpractice claims in the future.