Archive for Trusts
“THE PLAYERS” OF ESTATE PLANNING
The beginning of May always brings national attention to the Jacksonville area when the Players Championship comes to town. For one week each year, the Players is the hot ticket in town and for good reason; the tournament, which is part of the PGA tour, brings international golf superstars to town and raises millions of dollars for local charities. As Jacksonville estate planning attorneys, we find two different meanings in the words “the players”: we are reminded of all the positive energy that flows through the city at the time of the tournament, but also think about the players of estate planning.
Your estate planning “players” are the people you choose to protect your assets during your lifetime and distribute or manage them after your death. This would include the trustee(s) of your trust, the executor(s) of your will, and anyone to whom you have given a durable power of attorney. Other important players are those individuals to whom you have granted access your health care information or the power to make health care decisions for you, such as your designated health care surrogate.
The players you choose for your estate plan should be people that you trust completely and who know you well enough to make the decisions you would have made. They must also be willing and able to perform their duties. If it has been more than a couple years since you designated your estate planning players, you should review them to ensure that your choices are still appropriate and relevant today.
Will Your Facebook Profile Be Part of Your Estate?
If you are savvy enough to be online reading this blog, you most likely have a Facebook profile. Also, you are probably wondering what on earth Facebook has to do with probate. In most states, the answer to that question is still “nothing,” but that is no longer the case in Oklahoma.
In 2010, Oklahoma legislators passed a law that gives executors (called Personal Representatives in Florida) control over accounts on social media sites like Facebook and Twitter that were registered to the decedent. The idea is that the executor will be able to access, clean up or even shut down each account, according to his or her own judgment or instructions left behind by the account owner, if any.
It is easy to see the logic behind Oklahoma’s social media law; for many people, Facebook has become a virtual scrapbook full of photos, notes from friends, and family trees. It makes sense that the loved ones left behind would want to access and preserve these memories. It is equally clear that the creator of such a detailed profile might have an opinion as to who should access their personal information after their death.
The idea of social media profiles as estate assets is beginning to catch on in other states as well; Nebraska is already developing a law similar to Oklahoma’s and Oregon may be close behind. In states without such laws, your digital accounts and passwords should definitely be included in your overall estate planning.
If you have concerns about securing your virtual assets or any other aspect of estate planning, please feel free to contact us.
PLANNING OPPORTUNITY ENDS IN 2012!
No, we are not referring to the Mayan calendar-end of the world hysteria! Instead, we are referring to the end of the “Tax Relief Unemployment Insurance Reauthorization Job Creation Act”, which dies on December 31, 2012. That law provides unprecedented gift tax, estate tax, and generation-skipping transfer tax exemption amounts of $5,000,000 per person. (Indexed for inflation so that it is $5,120,000 this year.) If Congress fails to act to extend this law, then these $5,000,000 exemption amounts will all be reduced to $1,000,000 by automatic operation of law on January 1, 2013. Will Congress act? Who knows?
We do now know President Obama’s proposed law to modify estate and gift tax provisions. He is proposing that the gift tax exemption be returned to a maximum amount of $1,000,000 and that the estate and GSTT be reduced to $3,500,000 and that the top tax rate on those estates be increased from 35% to 45%. Considering all available information, as careful planners, we believe that this unique window of opportunity for gifting likely will close on December 31, 2012.
One of the reasons this gifting opportunity is so important is that by gifting assets now, you not only remove their present value from your estate, but you also remove all future appreciation of those assets. By removing appreciating assets from your estate now, the impact of that gift can be doubled, tripled or more over time. This is why we are encouraging anyone who may potentially benefit from this unique planning opportunity to run, don’t walk, to an estate planning attorney of your choice. If that choice should be Cramer Law Center, we are ready and standing by to help explain your options.
Common Estate Planning Myths and Superstitions
In honor of today’s holiday, Groundhog Day, we wanted to share some common myths and superstitions about estate planning. Most Americans know the story of Groundhog Day: if a groundhog comes out of its burrow this morning and sees its shadow, it will retreat back into the burrow and six more weeks of winter weather will follow. On the other hand, if the groundhog does not see its shadow and remains aboveground, winter will soon end.
Most of us recognize that the ability of a groundhog to accurately forecast the weather is just a myth. (The reality is that groundhogs get it right only 39% of the time.) However, many people still believe in the following estate planning myths and superstitions (or at least use them as an excuse not to plan):
#1: You are more likely to die once you complete your estate planning. This is simply absurd; generally, the only people who die shortly after executing an estate plan are people who waited ALMOST too late to plan in the first place.
#2: Estate planning is only for the wealthy. When you hear the word “estate,” do you think of a palatial mansion or fine jewels? The truth is that if you own a home, a car, a bank account, life insurance, etc., then you have an “estate”.
#3: Estate planning only matters after death. A big part of the estate planning we do at our firm is planning for possible future disability. Wouldn’t you like to leave directions for how you want to be treated if you become incapacitated as well as for who gets your stuff when you’re gone? What about requests for who will care for you and/or your children?
Please feel free to post comments on our Facebook or Twitter or make an appointment if you have individual questions or concerns.
Cramer Law Center offers full estate planning services including wills, trusts, durable powers of attorney, health care surrogate designations, living wills, designations of preneed guardian, and more.
PLANNING AS AN UNMARRIED INDIVIDUAL
Many people think that there is no need to make an estate plan until or unless they get married. However, our firm recently handled a case that illustrates why buying into this planning myth can be very stressful and expensive for your loved ones.
Our client, we’ll call him “Bill”, was an unmarried man in his forties with a long-term girlfriend but no children. His only living relatives were siblings. Bill went into a coma after having an unexpected allergic reaction that caused him to have multiple cardiac arrests. He was put on life support and given next to no chance of recovery.
Bill did not have any planning documents in place. He had no will and, more importantly, he had not executed any document granting decision-making authority to a loved one in the event of his incapacity. Since Bill had no parents, children, or spouse, there was no one who had legal authority to take care of his property or to decide whether he should remain on life support.
Bill’s siblings had no recourse but to seek a guardianship over their brother. This expensive process led to stress and family strife over what Bill would have wanted to happen to him in this situation. Bill’s girlfriend, the person most likely to know what Bill wanted, was not even involved. Ultimately, Bill died before a full guardianship could be put in place.
Every person, especially unmarried individuals, should consider executing the following basic planning documents to help their loved ones avoid the “Bill” situation:
Designation of Health Care Surrogate (Health Care Power of Attorney)
Living Will
Durable Power of Attorney
Last Will and Testament
We are here to explain these planning tools and to guide you through the estate planning process, so that your family will not suffer the needless expense and stress that Bill’s family endured.
IRS Gift Tax Audits: Yet Another Reason to Avoid “Do It Yourself” Estate Planning
We have posted in the past about the potential consequences of failing to file a gift tax return with the Internal Revenue Service after doing some do-it-yourself estate planning. (See our February 11, 2010 post titled “Help Yourself to the Big House: Why Would You Risk Going to Jail Rather than Talk with a Lawyer?”).
We feel the need to address this subject again in light of a new IRS gift tax compliance initiative. The IRS is now using land records from state and local governments to identify individuals for gift tax audits. Specifically, the IRS is looking for real property transactions with little or no money exchanged, targeting a common do-it-yourself estate planning practice.
Many individuals choose to transfer real property to their loved ones by adding them to the deed rather than by executing an estate plan. However, this do-it-yourself estate planning move can have serious consequences for the transferor of the property. Adding an adult to a real estate deed constitutes a present gift of that real estate, or at least part of it. This means that a gift tax return must be filed with the IRS after the transfer takes place and that a gift tax may be due.
Although the gift tax lifetime exemption is currently $5,000,000, making it unlikely that you would owe any gift tax, the consequences for failing to file a gift tax return include criminal penalties as well. A conviction for failure to file a gift tax return can result in a fine of up to $25,000 and up to one year in prison.
Because the IRS has been and will likely continue to step up its investigation into and enforcement of the gift tax, it is more important than ever to get professional help with your estate planning to avoid a do-it-yourself disaster.
HOLIDAY GREETINGS AND ANNOUNCEMENT
All of us at Cramer Law Center wish you a most enjoyable holiday season. We are so grateful for your support which has made this a year of steady growth for our practice.
As part of that growth, Cramer Law Center is pleased to announce that we have hired Amelia Hough Henderson as an associate attorney. A double-Gator, Amelia earned her undergraduate degree in Business Administration and her Juris Doctorate with honors from the University of Florida. While in law school, she served as Chief Executive Articles Editor of the Journal of Law and Public Policy. Prior to joining us, Amelia gained experience working with probate and guardianship staff attorneys for the Eighth Judicial Circuit in Gainesville. The next time you are in the office, please take a moment to meet Amelia.
We wish everyone a healthy and prosperous New Year! Please note: our office will be closed on December 23, 26 and 30, 2011 and January 2, 2012.
THE IMPORTANCE OF THE PRE-ARRANGED FUNERAL
The single most important benefit of estate planning is peace of mind. We often focus on the legal documents necessary for us to create an estate plan that provides such peace of mind. However, I recently had a personal experience that reminded me of the importance of one of the more practical aspects of planning.
My mother passed away a few weeks ago. Although my siblings and I had a general idea of what the funeral arrangements would be, no plans had been finalized. This lack of planning created a chaotic situation when I arrived to visit my mother in hospice care. I was immediately and less than delicately informed by the hospice caseworker that I had to make my mother’s funeral arrangements straight away. So before I could focus my attention on my mother in her final hours, I had to phone different funeral homes until I found the one I needed.
Making last-minute funeral arrangements for my mother added more stress to a situation that was already emotionally taxing. Especially after my experience, I highly recommend taking care of funeral arrangements in advance to avoid creating greater stress for your loved ones at such a difficult time.
ELDER ABUSE: SEVEN WARNING SIGNS
Many of us have elderly parents or grandparents who may be susceptible to abuse. Here are some warning signs to consider:
(1) Deliberate isolation of an older adult which results in the caregiver having total control.
(2) Sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possessions.
(3) Power of Attorney given or recent changes of Will when the person is incapable of making such decision.
(4) Sudden changes in bank accounts or banking practice, including unexplained withdrawals of large sums of money by a person accompanying the elder.
(5) Abrupt changes in Real Estate Deeds or other Financial Documents.
(6) Missing personal belongings such as art, silverware or jewelry.
(7) Placement in nursing home or residential care facility which is not commensurate with alleged size of estate.
An excellent way to protect against potential abuse is to have strong estate planning documents in place and open communication about the elder’s wishes and the contents of those documents with close family members. If you have a concern about a family member or close friend, call us for a confidential consultation.
OCTOBER IS NATIONAL DISABILITY EMPLOYMENT AWARENESS MONTH AND NATIONAL DOWN SYNDROME AWARENESS MONTH!
This month we honor two groups of “special” Americans. National Disability Employment Awareness Month celebrates the many accomplishments of employees with disabilities. This effort to educate the American public about issues related to disability and employment began in 1945 when Congress enacted a law declaring the first week in October as National Employ the Physically Handicapped Week. In 1988, Congress expanded the week to a month and changed the name to National Disability Employment Awareness Month.
October is also National Down Syndrome Awareness month. Created in 1981 to raise awareness about the abilities of people with Down syndrome, the celebration is highlighted by the Buddy Walk®, which was established in 1995 by the National Down Syndrome Society (NDSS). Today, the Buddy Walk program is supported nationally by NDSS and organized at the local level by parent support groups, schools and other organizations and individuals. Last year alone, more than 285,000 people participated in a Buddy Walk and the walks raised over $11.2 million to benefit individuals with Down syndrome. To find a Buddy Walk near you, visit www.buddywalk.org.
At Cramer Law Center, P.L., we think this is an ideal time to discuss the importance of Special Needs Planning. If your family includes a special needs child or adult, we hope your plan includes provisions for your loved one’s care when you are no longer able to provide it. If you do not have a special needs plan in place, we hope you will make an appointment with us at your earliest convenience to learn how we can use a wide range of tools, including a Special Needs Trust, to protect your loved one’s financial and emotional future.
