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Archive for December, 2010


Thursday, December 30th, 2010 by

         As a Jacksonville, Florida Estate Planning Attorney, I work regularly with life insurance agents as part of the estate planning team.  Life insurance is helpful in many estate planning situations.  Some examples are:

          1.  A family with young children.  Life insurance can replace the income if a parent dies prematurely in order to help raise the children and put them through college.

          2.  Blended families.  What if a husband is in a second marriage with a new child, and also has grown children from a prior marriage?  Life insurance provides a means for him to leave funds to his older children at death while still providing for his new wife and child. 

          3.  Business owners.  Most business owners know that a buy-sell agreement is an important planning tool to make sure that there is a smooth transition if one of the owners retires or dies.  However, this buy-sell agreement may not work if there is not sufficient cash available to pay off the owner’s family.  Life insurance helps provide the cash that makes a buy-sell agreement work. 

          4.  Payment of estate taxes.  Many times, estates are not liquid or there is property that everyone wishes to keep in the family.  Life insurance provides a means to pay estate taxes without having to sell family property.  When combined with gift giving strategies, such as creating an irrevocable life insurance trust, life insurance can provide leverage so that you may use pennies on the dollar to transfer assets to your family without estate taxes. 

          You may have heard that life insurance is tax-free.  Life insurance benefits only are free from income tax.  However, they will be subject to estate taxes at your death.  We are available to discuss specific estate tax planning strategies that can keep life insurance out of your estate. 

          If you are considering your estate planning, you may wish to also have an older life insurance policy reviewed.  Your insurance agent or financial advisor may be able to help you obtain a better policy now.  People are living longer than they were 20 or 30 years ago, so you may be able to obtain a greater death benefit at a lower premium because life insurance generally is less expensive than it was many years ago.  These are just some examples of how we utilize life insurance as Jacksonville, Florida Estate Planning Attorneys.



Wednesday, December 29th, 2010 by

          As a Jacksonville, Florida Probate Attorney, I understand the probate process and why many people seek to avoid it.  Probate is the legal process used when the court has to get involved to help transfer assets after someone has died.  There are several legal rules and procedures set up to make sure that the transfers are done properly and that the family is aware of what is being done. 

          There are three major reasons why people wish to avoid probate:  First, probate is a relatively slow process.  Because of the need to involve the court clerks and judicial officers, finalizing an estate naturally would be more time consuming than if it were done privately.  Petitions must be filed with the court, notice given to creditors and family members, inventory lists developed and an accounting of income and expenses given.  So, between the more cumbersome court procedures and the necessity of dealing with the court’s calendar, it typically takes many months to finalize an estate. 

          Second, probate is more expensive than if assets are transferred privately.  There are several court fees involved in the probate process, including paying an attorney to assist the personal representative in completing all of the additional tasks required by the court process.  Filing fees, fees for publishing notices to creditors and fees for providing accountings to the court and the rest of the family all combine to make transferring assets through the probate process relatively expensive.

          Third, probate is a public process.  If there is a will, it is required to be filed with the court.  The will and all of the probate court documents are public records.  Anyone could go to the courthouse or maybe just look online to learn about your assets and who would be receiving them.  A nosy neighbor just might want to know how much you were worth at death and to whom you owned debts.  People who prey on the vulnerable frequently review probate documents in order to try to obtain assets at a bargain basement price.  In contrast, trust administration can be completely private.

          My conclusion, as a Jacksonville, Florida Probate Attorney, is that compared with trust administration, the Florida probate process is slower, more expensive, and public.  There are several estate planning methods to avoid probate.  Attending our “Truth About Estate Planning Workshop” will provide you with information on how you can plan to avoid probate.

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Tuesday, December 28th, 2010 by

  As a Jacksonville, Florida Probate Lawyer, I have been involved in a probate dispute among six siblings.  This probate litigation is located in Duval County, Florida.  A mother died and left her estate to be divided among her six children. The tangible personal property was to be divided equally among the six children.  However, the mother specifically stated that one of the children could continue to live in her home, but that the living arrangements would be subject to an agreement among all of her children.  This has made for quite a probate dispute.  

The children have been involved in probate litigation, because the mother did not specify what furniture and household items stayed with the house.  The children are arguing about who gets the dining room table, living room couch, whether the dishes and toaster remain with the house, etc.  One of the children has been appointed personal representative.  That child has been accused of breach of fiduciary duty and other misdeeds by the other siblings.  The probate litigation is ongoing and creating unnecessary expense which is reducing the size of the probate estate.  This is just another horror story I have seen as a Jacksonville, Florida Probate Lawyer.

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Monday, December 27th, 2010 by

As a Jacksonville, Florida Probate Attorney, I recently was involved in a Duval County, Florida probate case where a mother of 9 children died without leaving a will.  The mother owned two homes at the time of her death.  Under Florida’s law of intestate succession, each child would be entitled to obtain a 1/9 interest in each property.  Because one of the properties was her homestead, the interests in the homestead descended on the date of death.  One of the children is in jail and another is a drug addict.

The lack of the mother’s estate planning led to a volatile dispute between the heirs.  One of the less responsible family members moved into the house and promptly trashed it.  Because the siblings cannot even communicate, much less agree, and the dispute between heirs continues, Duval County, Florida has two additional blighted parcels of real estate in its midst.  This is just another horror story I have seen as a Jacksonville, Florida, Probate Attorney.

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Thursday, December 23rd, 2010 by

     As a Jacksonville, Florida Probate Lawyer, I see many examples of how poor planning results in increased probate costs.  Recently, a client had to open a St. Johns County, Florida probate case so that the decedent’s 1% interest in a parcel of New York real property could be transferred.  Even though we utilized the least costly probate procedure known as “summary administration,” the probate costs still were three (3) times greater than the value of the property being transferred to the probate estate. 

     Ordinarily, it would not have been cost effective to open a St. Johns County probate case at all, but because the real estate was owned by a total of 14 relatives, family pressures were brought to bear to make sure that everyone was able to agree and participate in the sale of the property.  So, just obtaining this small inheritance for a St. Augustine, Florida, resident, resulted in major probate expense that could have been avoided if family members had better communicated their estate planning concerns.  Large families particularly must develop a better plan to dispose of real property than to leave small percentages of ownership to multiple siblings, nieces and nephews.  This is just one of the horror stories we see frequently as a Jacksonville, Florida Probate Lawyer.

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Thursday, December 9th, 2010 by

            By now you probably all have heard about the “deal” reached between the President and Republican Congressional Leaders concerning taxes, including the estate tax.  No language on the estate or gift tax actually appeared in the document released by the White House, but it has been widely reported that it includes an estate tax provision for 2011 and 2012 that has a top rate of 35% and an exemption of $5 million per individual.  This agreement appears to draw on the Lincoln-Kyl estate tax proposal introduced earlier in the Senate, which also proposed to top 35% rate and $5 million exemption, but further details are unavailable.  It is also unclear how or if the estates of those who died in 2010 would be affected by this agreement. 

            So, if this tentative agreement passes both Houses of Congress before the end of this year, the estate tax will return in 2011 with a $5 million personal exemption and a tax rate of 35%.  Many congressional Democrats oppose the proposal, so passage remains uncertain.  If the agreement does not pass prior to December 31, 2010, then the estate tax will return with a $1 million personal exemption and a 55% tax rate. 

            If the Bill passes, many of you undoubtedly will breathe a sigh of relief and feel that there is less urgency to either prepare or update your estate plan.  However, this deal will affect only people dying in the calendar years 2011 and 2012.  The next Congress then will have to strike another deal or the estate tax likely will default back to the $1 million exemption and 55% tax rate on January 1, 2013.  As this newsletter is written, much uncertainty remains over the passage of this Bill.  Stay tuned.

            How can this chaos be managed?  We have a process in place that relieves our clients of worry about any curve ball Congress may throw at us.  Our annual maintenance program is a key part of this process.  We keep our clients informed and keep their estate plans updated to stay in tune with whatever legislation comes our way.  In an unending period of uncertainty, this planning process provides true peace of mind.


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