Florida Estate Planning Lawyer Blog

May 12, 2015

General Duties of a Trustee

The duties of a trustee vary depending on the laws of the state in which the trust is situated and the extent of the trustee’s powers provided for in the trust agreement. In some cases where there are conflicts between the terms of the trust and the state laws, the duty or obligation can vary depending on what the state law permits. In some cases, the terms of the trust will prevail and in others, the default law cannot be modified by the terms of the trust. When you become a trustee of a trust, it is recommended that you sit down with a trust attorney to review the terms of the trust as well as how state law may impact the written terms of the trust.

In addition, the type of trust can change your obligations and the role of a trustee in dealing with beneficiaries. Below is a list of some of the typical duties that are contained in trust agreements and the laws of many states:

Fiduciary Duty. A trustee has a fiduciary duty to the beneficiaries of the trust, This includes both the current beneficiaries and any remainder beneficiary’s name in the trust. A fiduciary duty is a very high standard to do what is in the best interest of the beneficiary. This is not necessarily what the beneficiary asks for or what you want.

The Trust’s Terms. It is important to read the terms of the trust carefully and understand your duties and how state laws may impose additional provisions or remove or modify the terms of the trust. The trust is a flow chart of what actions you must take and when. Some states, like Florida, reduce the statute of limitations when certain disclosures are made. This can reduce the potential liability of a trustee to the beneficiaries. Continue reading

April 15, 2015

Powers of Attorney and Gifting Provisions

by David M. Goldman

With the current estate tax exception of $5.43 Million for an individual and $10.86 Milliion for a married couple, some estate planners have begun to question whether gifting provisions in a Durable Power of Attorney pose more risk than reward. While it is true, that these provisions can be abused by individuals, there are several situations when estate taxes is not the primary concern and removing gifting provisions could pose a substantial risk to the individuals.

In Florida, individuals must initial next to any gifting provision for them to be valid under current law. Generally there are those provisions which permit the amount under the annual gift tax exemption (currently $14,000 a year per person) and those which permit larger gifting. While many estate planners may not see a need for these anymore, elder law attorneys use them all the time to protect the assets from loss due to the need for nursing home coverage for the individual or their spouse. So while it may be true that less than 0.2% (2 in 1000) people are actually subject to estate taxes, many more will need long term care. Without these important gifting provisions, individuals could end up being bankrupt or leaving little or no money for their surviving spouse to live on.

In addition, there is no guarantee that the estate tax exemption will continue to increase or remain the same. Congress could change the numbers in the future and without gifting provisions, your family may not be able to decrease the amount of your estate that would be subject to estate taxes.

March 23, 2015

Funding Your Revocable or Irrevocable Trust

by David M. Goldman

In Florida, a trust is not valid until funded. Many trusts need to be funded prior to your death to be used in the way intended. Often, individuals create trusts and forget to fund them during their life and do not receive the benefits that their trusts were designed for. There are 4 major ways to fund a trust.

Purchase items in the name of the trust. New property or items can be purchased in the name of the trust. When you purchase a new item or asset, the sale can be made out to the trust. Anyone can purchase these items, it need not be the creator or settlor of the trust.
Assign items to the trust. Generally, when a trust is created, many items can be transferred to the trust by the use of an assignment of personal property. This document will transfer personal property which does not require a deed or title to the trust. This is good for personal property like clothing, jewelry, and other minor issues. One needs to be careful not to assign firearms to your trust unless it is a gun trust as many traditional trusts do not properly deal with firearms issues properly and can cause legal and criminal issues for those who survive you. If you sign an assignment of personal property, you should exclude firearms unless the firearms are being assigned to a gun trust.

March 17, 2015

Nevis LLC and Asset Protection gone wrong? Is your Foreign Trust at Risk also?

by David M. Goldman

Last month the United States District court in Orlando found that the membership interest in a Nevis LLC was subject to Florida jurisdiction. The court also found that Florida law, not Nevis law, applies to the creditor’s application for a charging lien because the situs of the asset determines what laws are applicable to issues related to the charging lien.

This rationale would seem to apply to Foreign trusts as well as Foreign LLCs. It appears that a Corporation or LLC where there were actual certificates for the membership interests that were not located within the state of Florida may have a different result.

The court rejected the claim that jurisdiction was in Nevis. They stated that unlike with a corporation, a membership interest “accompanies the person of the owner.” and as a result is subject to Florida jurisdiction if the owner of the certificate is subject to the jurisdiction. With some foreign LLCs a single member can have charging order protection, but under this court’s ruling, a single member foreign LLC would not receive charging order protection as only a multi-member LLC has charging order protection as an exclusive remedy.

March 6, 2015

Florida Asset Protection: What is an IPUG™ Trust? How does an IPUG™ Trust work?

by David M. Goldman

Asset protection was previously out of reach for most Americans. Thanks to a new trust called the IPUG™ Trust, Asset Protection is affordable for the average family. In the past many families created trusts to avoid estate tax, but with the recent increases in the Federal estate tax exemptions, many use trusts to manage assets, avoid probate, and protect assets from creditors.

The iPug™ Trust not only provides advantageous tax benefits, but it also provides asset protection, while retaining Grantor control,” explains David J. Zumpano, CPA, ESQ., President and Founder of MPS and creator of the iPug™ Trust. “iPug™ Planning will apply to 99.5% of Americans.”

February 23, 2015

Facebook Account, Digital Assets and Estate Planning, what Happens when I die?

by David M. Goldman

Estate Planning for Digital Assets is becoming a more important part of our estate planning. While most online accounts simply expire when you die, Facebook has recently incorporated some changes to your account so you can specify what happens when you die.

Until recently, loved ones of the deceased only had two choices:

Keep the wall public so everyone could continue to post messages and thoughts on the wall, or
Request to have the page “memorialized,” which meant the profile was no longer searchable or visible to those who were not already friends of the individual.

What Facebook did not allow to happen was for someone to manage the profile of the deceased owner without having the password. That just changed with the Facebook Legacy Contact feature. A Facebook user can now choose a “legacy contact.” The Legacy Contact can manage your account or delete the account after you pass away.

Facebook’s Updated Options and Release Stated:

January 22, 2015

2015 Gift Tax: Can I Give My Kids $14,000 a Year?

by David M. Goldman

The amount you can give anyone without having to file a gift tax return in 2015 remains the same as 2014 at $14,000.

Remember that you can give your children, their spouses, your grandkids $14,000 each. In addition, if you are married, your spouse can also gift $14,000 to each person.

Generally, families use gifting to reduce the size of their estate do not need Medicaid long-term care coverage, but if you or your spouse need care and you have gifted money in the past, it may affect your ability to obtain coverage.

December 11, 2014

Why Not to Name Kids as a Beneficiary of your IRA

by David M. Goldman

If you have been told, don’t worry about your IRA it is protected because Florida has statutory protections for IRAs, you may have misunderstood or been mislead. While Florida does have statutory protection for inherited IRA’s, this protection only applies if your beneficiaries are residents of Florida at the time of your death.

Why take a chance with naming individuals as a beneficiary of your IRA. A properly designed trust should be the beneficiary of your IRA to protect the proceeds from the creditors of your beneficiaries at the time of your death.

In June of this year, the US Supreme Court in Clark V Rameker stated that children or other “non-spouse” individuals who inherit are at risk of loss to their creditors. This was not a close call, it was a 9-0 decision and clarifies that an inherited IRA is not protected from the creditors of its owners.

November 17, 2014

Estate Planning and Florida Homestead Protections

by David M. Goldman

In Florida, the primary residence is often protected by the Florida constitutional homestead protections.

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. The only creditors that can make a claim against the home are those that do something with the home. These may include a roofer or the bank which financed the home.

If you or a spouse needs nursing home case, selling the home can place that asset or the money received from the sale at risk to creditors as well as Medicaid eligibility. There are several methods of avoiding probate on your homestead. Choosing the right method is not an easy decision without knowing your facts and circumstances.

November 12, 2014

What is the iPug™ Trust Your Family’s New Best Friend

by David M. Goldman

We often get asked about the iPug™ Trust and how it can be so different than a traditional revocable trust or a standard irrevocable trust. The iPug™ takes the best parts of an irrevocable trust and mixes them with the best parts of a revocable trust to create a new type of irrevocable trust where you are in control and can make changes to the beneficiaries and management of the trust just like you can with a revocable trust.

Why Do People Love iPug™?

Because iPug™ Protects You and Your Family From:

Lawsuits
Nursing Homes
Those that want to take away what you worked hard for.
Children’s indiscretions, their spouses and divorce.