With our favorite season almost coming to an end, it’s important to educate ourselves on estate taxes. Of course death is not our favorite topic to discuss nor is it something that we want to think about when receiving our tax return, however planning for the future is never a bad idea.

Benjamin Franklin once said, “In this world nothing can be certain, except death and taxes.”  This quote draws on the actual inevitability of death to highlight the difficulty in avoiding tax burdens. But, if you plan ahead and use the proper resources, estate taxes will not be too much of a burden.

Estate tax is known to be a tax on your right to transfer property after death. This tax consists of an accounting of everything you may own or have certain interests in at your date of death. The fair market value of these items are used which then becomes your gross estate. Once your gross estate is accounted for, certain deductions such as: mortgages and other debts, estate administration expenses, property that passes to surviving spouses, and qualified charities are allowed in arriving at your taxable estate.  After the net amount is calculated, the value of lifetime taxable gifts is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Being that I just bombarded you with estate tax lingo and probably lost you after I said the word “death”, let’s talk about how to reduce estate taxes.

Setting up a QTIP trust, and no I don’t mean a piece of cotton, and a Bypass Trust can postpone the payment of taxes until both spouses in a marriage have died. If you die first but want to determine who receives the trust property after your spouse dies, you may want to consider setting up a Qualified Terminable Interest Property trust, or as we like to call it, a QTIP trust. This trust allows you to put property into the trust however, YOU, not your spouse, can specify who receives the remaining property in the trust after your spouse dies. A QTIP trust enables you to designate what happens to the leftovers of the trust instead of leaving it to the option of your spouse.  This may be a great option if you’re on your second marriage. Let’s say that you and your current spouse are both on your second marriage and each have children of your own from the first marriage. To put it nicely, you aren’t too fond of your spouse’s children and the word “freeloaders” comes to mind when their names come up in conversation. But, your spouse of course thinks of them as angels. In this situation, do you really want your spouse to decide what happens with any leftovers from your estate upon his or her death? I’m not thinking so.

Another option would be setting up a Bypass trust, also known as a “B” trust.  This trust shelters property from estate taxes and “bypasses” the property from your spouse to someone else, such as your child or children. But, guess what? Your spouse can still benefit from the trust.  Even though the trust is for the sole benefit of your child, your spouse, while living, can still benefit from the trust assets. Being that your spouse never actually takes possession of the property, he or she is never considered to be the property owner. This means that he or she never has to include the property in his or her estate.

So, as Franklin once said, death and taxes are inevitable but here at WFP law we can ensure you that we can help reduce the burden of estate taxes. It’s a wild world and if you don’t prepare your trusts properly, the IRS may not honor them. So, the real question is; are you protected? Come in today for a free consultation!

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.

In Florida, a person who owns and resides on real property and makes it his or her permanent residence is eligible to receive a homestead exemption up to $50,000.

In order to qualify your Florida homestead, you and your home must meet three criteria:

• You must have legal or beneficial title to the home on January 1 of the current year.
• You must reside at the home as your permanent residence.
• You must apply for the homestead exemption in person at the property appraiser’s office in the county where your home is located between January 1 and March 1 of the year in which you are seeking the homestead exemption.

While in many other states, a persons homestead is not protected from creditors and can be lost to claims for Medicaid reimbursement, this is not the case in Florida. Some of the multiple benefits of the homestead exemption are protection from creditors, reduction of property taxes and protection to the surviving spouse or minor child.

Less well understood are the homestead protections from the claims of creditors and the restrictions on transfers of homestead property at death. WFP Law can help explain these Florida homestead concepts at a free consultation.

Michael D. Wild is a Florida attorney specializing in the areas of estate planning, asset protection and probate administration. To learn more about estate planning, please contact the South Florida law firm of WFP Law at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation. It’s a Wild world. Are you protected?

What’s mine is mine and what’s yours is mine… Not always true.

Probate is the legal process used in Florida by which property and assets are transferred to the heirs or intended beneficiaries of the deceased person. The concept of probate does not exist in French law, property and assets pass automatically upon death to the heirs. Whatever your Last Will and Testament might say, it can be overturned by your protected heirs. In the majority of cases these will be your children. So you cannot cut your children out of your Will under French law.

Under American law anyone making a Will has “testamentary freedom” which means that you can choose whoever you want to inherit your property and assets and in whatever proportions as long as this is set out in a valid Will.

Another important fact is that in France the inheritance tax is paid by each beneficiary on the shares that they receive whereas in Florida there is no inheritance tax for amounts below $5.43 million per person.

Michael D. Wild is a Florida attorney specializing in the areas of estate planning, asset protection and probate administration. To learn more about probate administration, please contact the South Florida law firm of WFP Law at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation. It’s a Wild world. Are you protected?

As if the bar exam isn’t stressful enough for test takers, hopeful future lawyers across the country found themselves unable to upload their first day exams after the ExamSoft servers were apparently unable to handle the massive traffic. While the issue appears to be on its way to resolution, test takers were still subjected to a tremendous amount of stress before the second part of the test. ExamSoft had years to prepare for this level of traffic and yet the system was not ready and many students suffered unnecessary stress. This situation mirrors what your loved ones will go through if you do not have a proper estate plan in place at your death, especially if your estate has to go through probate.

Probate is the mandatory process in Florida of validating a will (if there is one) and distributing the assets to the beneficiaries. This process usually lasts at least six months and can take substantially longer depending on the size of the estate or complexity of the assets. While the probate is going on, the estate assets are frozen while they are marshaled and prepared for distribution. Creditors are also paid off out of the estate before distribution. During this time, the presumed beneficiaries do not have access to the estate property. This can lead to financial hardship and liquidity issues for the surviving family members. Furthermore, probating an estate is costly, which continues to decrease the inheritance the beneficiaries will receive.

Whether you die with a will or not, you will still have to probate your estate if your probatable estate exceeds $75,000 (Florida’s probate limit.) A will alone is not a sufficient device for avoiding probate. The benefit of having a will is that you can decide who gets what from your estate, and you can also name a guardian, but a will does not avoid probate. To effectively avoid probate, a trust based estate plan should be used. A trust based plan avoids probate by transferring ownership from you as an individual to your living trust. You will be able to use all your assets in the exact same way, but when you die, your estate will pass to your beneficiaries without going through probate. In addition to the benefit of avoiding probate, a trust based plan also gives you as grantor increased control over who gets the assets down the road and creditor protection for your beneficiaries.

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.

It’s a Wild world. Are you protected? SM

Take a look at how family is often presented in the media. What do we see? It’s a husband, a wife, two or three kids, and probably a pet. The grandparents, still happily married after all that time, stop by for Thanksgiving dinner, pie under their arms. Sounds like something right out of a Publix commercial. If Flintstones and the Jetsons are any indication, this family set-up has been around since the age of cavemen and will be the norm long into the future. Estate planning for such a family dynamic is quite straightforward. But is this family really the norm? With a national divorce rate hovering around 50%, probably not. In actuality, you probably don’t have the “perfect” family set-up of yesteryear’s media; instead, you need estate planning for your modern family. Since we all differences between our family structure, let’s look at some examples from everyone’s favorite Modern Family: the Pritchetts.

            What would happen if Jay were to somehow die without an estate plan? Well, first, let’s first assume that the family has all moved from California to Florida between the seasons and is now domiciled here at the time of Jay’s death. If he has no will, not even one executed in California (Florida would recognize a validly executed out-of-state will), then the Florida intestacy statutes control how the estate assets are distributed. Since Jay would leave behind a surviving spouse and two kids from a previous marriage, his wife Gloria would receive half of the estate. The other half would go to Jay’s descendants in equal shares. How this remaining half of the estate would be divided depends on whether Jay adopted Gloria’s son from a previous marriage, Manny. If Manny has been legally adopted, then he is Jay’s child by law and can inherit. Otherwise, he would receive nothing. Assuming that Jay did adopt Manny, then Mitchell, Claire, Manny, and baby Joe would each receive an eighth of the estate. Intestate succession in Florida is “per stirpes” which means each decedent receives an equal share. How many children a descendant has does not affect the share he or she will receive. This means that if Claire passed away before Jay, her three kids would each receive an equal share of the eight she would have inherited. Mitchell’s daughter would receive his full eighth share.

            But as we all know, Jay isn’t the type of person to let something as important as estate planning pass him by. Rather, Jay likely had an estate plan in place years ago, and has updated it with every major life event since (his remarriage, his son’s adoption of a child, his son’s marriage, and the birth of his new son). Jay, who built his company from the ground up, would likely want to protect and control his assets for as long as he could. Therefore, he would likely use a trust based plan for his estate distribution. A trust based plan would give him multiple advantages over a basic will. First, Jay would want to leave a great deal of money to his wife Gloria. However, Gloria is already on her 2^nd marriage and is much younger than Jay and will not stay single for long. If she were to get remarried, a large portion of Jay’s assets could end up with her new husband. A trust fund would prevent anyone other than her and later her children from getting the money. Trust funds would also be the best way to give money to both of his minor sons. Jay could name the trustee of his choice to manage the assets until an age where each son is ready to become their own trustee, such as 25 or 30. Trusts would also allow Jay to give money to his two grown children, Claire and Mitchell, while protecting it from their respective spouses, who Jay is not the biggest fans of.

            Claire and Phil, both successful businesspeople, likely have an estate plan in place as well to protect their three children. With two minor children, the couple would be smart to have guardian designations in their estate plan. The two of them would also likely follow Jay’s lead and have a trust based plan. Haillie has yet to show the necessary maturity to manage her own funds and her judgment with men could be described as questionable. Putting her inheritance in a trust fund and setting an age at which she would have full control over it will help to protect the funds while she becomes responsible enough. The same logic applies to their youngest son, Luke. While middle child Alex has demonstrated responsibility and maturity throughout her teen years, she is still a minor and would need a trustee to manage the funds until she becomes an adult. Phil and Claire could require that the children never get to control their own funds, putting a corporate trustee or even their lawyer uncle Mitchell in charge of distributing the funds. The use of trusts funds allows for maximum inheritance protection, but from outside creditors and from the beneficiaries themselves.

            And what of Cameron and Mitchell’s estate planning? As a same-sex couple, estate planning is especially important. The couple was legally married in California, but Florida does not yet recognize same-sex marriage. Therefore, while the couple can receive federal benefits as a married couple, they do not receive any under state law and will not be viewed as married for state intestacy laws. Cam and Mitchell should follow in what is becoming a family tradition and use a trust based plan, though the reasoning is different for this couple. Wills must be probated in court before estate property can be distributed and are public documents. A trust is private; the court is not involved. Cam and Mitchell would be smart to avoid the risk of having their will in front of a conservative judge. Cam and Mitchell should use what is colloquially referred to as “I love you” trusts, where the decedent leaves everything to the surviving spouse, and down to their daughter Lilly. The trusts mirror each other, maximizing the ease of administration and assuring maximum protection for the beneficiaries. Cam and Mitchell’s estate plan should also name a guardian for Lilly, a minor, in the event that they both pass before she is an adult.

            These are just a few of the many situations that can occur with today’s modern families, but it shows just how intricate estate planning can be. Just within this one family, three different approaches were used. Even though each family ended up in a trust based plan, each plan is different, personalized. And that is what you deserve. Don’t find yourself with an estate planning attorney who only cares about taxes, or one who will just cut and paste your name in a form he’s already used countless times.

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.

It’s a Wild world. Are you protected? SM