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?

Over 70 percent of all Americans have no estate planning documents whatsoever. Of the 30 percent that do, most have only basic documents like a Last Will and Testament, with no regard to probate avoidance, estate tax reduction or asset protection. Of those people that do incorporate a Revocable Living Trust into their foundational estate plan, over 90 percent will leave the trust underfunded or unfunded at death, causing the unnecessary loss of assets and unnecessary delay of distribution. Some basic estate planning upkeep could alleviate all of these concerns.

Your estate plan should be reviewed with an attorney at least once every 3 to 5 years. I review my clients’ estate plans each year to determine if any changes need to be made due to a change in tax law (as happened in 2010), legal drafting requirements (as happened in 2005) or the Probate Code (as happens most years). However, the more pressing changes almost always occur on the personal side of the equation.

Over the course of every 5 year period, most families will see a birth, a death, a marriage or a divorce and this event could cause the need for an amendment to the estate plans of the individual members of that family. Additionally, the beneficiaries might be at different ages or competency levels and the Trustees, Personal Representatives and Guardians might be in different stages in life, areas of the country or financial levels than they were when you originally drafted your plan, which would cause the immediate need to revise and choose new role players.

Another consideration is the age of your attorney. Your estate planning attorney needs to be able to walk your children or other beneficiaries through the administration process. Is your attorney still alive? Is he still practicing? Will he still be practicing when you die? Does he practice in the state in which you currently live?

Any estate planning attorney should give you a free consultation for the review of your estate plan. An ounce of prevention is worth a pound of cure. A simple review and possible amendment to your estate plan today will save your family large amounts of money and time after you are gone. 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?

May is a month that often makes us think about birth and renewal.  April showers bring May flowers and Mother’s Day reminds us about nurturing, springtime and babies being born.  However, with Mother’s Day behind us, we can once again focus on death.

 WERE YOU BORN?

If you answered yes, I can discern two other facts.  First, you either have a mother now or had a mother at one time in the past.  Second, you will die.

There are only two certainties in life…

Death and reality shows about hoarding.  I bet you thought I was going to say Death and Taxes but the truth is that estate taxes can be eliminated with some basic foundational estate planning techniques.  A Bypass Trust can double a married couple’s estate tax exemption amount and life insurance owned by an Irrevocable Life Insurance Trust can take care of the rest, in most situations.  There are also ways to use Investment Trusts, Qualified Personal Residence Trusts, gifting and planned giving techniques for exceptionally high estates.  Fortunately for my wife, the Probate Code says nothing about how to reduce the amount of reality shows about hoarding. 

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?

With the automatic portability in 2011 and 2012, many estate planning attorneys have turned away from using Bypass Trusts for married couples.  The Bypass Trust allows for the surviving spouse to utilize the full estate tax exemption amount of the deceased spouse when distributing assets after the death of the surviving spouse.  Basically, it allows you to double the amount you can pass to your children tax-free.  Automatic portability also allows this but the portability is something brand new and may not survive past 2012, when it is currently due to expire.  If that alone isn’t enough reason to continue utilizing the Bypass Trust, it should also be pointed out that the use of automatic portability requires the filing of an estate tax return.  Even if the surviving spouse doesn’t need to pay any estate tax to the Federal Government, the cost of filing the return might still be very significant.  The non-use of the Bypass Trust is not only irresponsible but also bordering on legal malpractice.

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?

Tonight we celebrate the first night of Passover.  For those that are unfamiliar with the story of Passover, it commemorates the time when Moses led an exodus of the Jewish people out of Egypt in search of a country with a lower estate tax and more generous inheritance laws.  Lucky for Floridians alive in the year 2011, we have no inheritance tax, no state estate tax and the ability to draft living trusts to protect our family from the Federal estate tax.  

We can also use trusts to avoid probate, provide for a special-needs child and control the use of your assets  for many many years after your death.  There are dozens of reasons why a living trust might benefit your family and one of the most popular reasons is saving your family some dough.  Unfortunately for my fellow Jewish people, dough is something that we wont be enjoying over the next 8 days, at least not the leavened kind.

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?

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?