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Frequently Asked Questions
 When should I review my Estate Plan?
You should review your estate plan when:
- You have children
- Your children grow up
- Death or Divorce
- Remarraige
- Your circumstances change
- Your assets increase or decrease
- You want to make changes
- The law changes
- Whenever you feel like it !!!!!!!!!
What is probate?
Probate is the court supervised legal process that includes determining the validity of your will, gathering your assets, paying your debts, taxes, and the expenses of will administration, and then distributing the remaining assets to those persons entitled to them. Any asset held in your name alone at the time of your death is subject to Probate. The costs of Probate can equal 3% or more of your estate's value. These costs can be reduced through proper Planning.
Why do I need a Will?
A will is a document that allows you to designate where you want your property to go after your death. If you do not have a Will, the State of Florida will designate who gets your property and you will be giving up valuable rights.
WITHOUT A WILL YOU UP GIVE UP THE RIGHT TO:
- APPOINT YOUR PERSONAL REPRESENTATIVE
- NAME GUARDIANS FOR YOUR MINOR CHILDREN
- CREATE A TRUST FOR YOUR BENEFICIARIES
- DISINHERIT A CHILD
- SPECIFY HOW TAXES AND EXPENSES WILL BE PAID
What are the benefits of a Revocable Trust?
A Revocable Trust is a document that you create during your lifetime and fund with assets. If you fund your Trust while you are living you will have the following advantages:
- Your estate should avoid Probate
- Your assets will remain provate and not subject to PUBLIC SCRUTINY
- You select who you want to manage your assets in the event of your disability or death
- In the event of your disability, assets placed in the Trust are not subject to Court control
- You set the terms ounder which your beneficiaries will receive your assets after your death
- You get to select who you want to manage your assets
- You will decrease the legal costs of administering your estate
What is the Kiddie Tax?
Well, the "Tax Cost" of educating your children and grandchildren has gone up. The 2007 Small Business Tax Act extends the application of the "Kiddie Tax" to all children 19 or younger and to students under age 24. This is effective for tax years beginning after May 25, 2007. In order to avoid the reach of the widened tax net most parents and students who file their tax returns on the Calendar year basis who are above the age of 18, will have until December 31, 2007, to sell investment accounts at the child's or students capital gains rate and avoid their parents tax rates.
The old law let children 18 and younger file their own tax returns and pay at lower tax rates, but the new law raises the kiddie-tax age limit to 24(for full time students) and subjects a child's unearned income over a certain threshold to the parents' higher tax rate.
The Kiddie tax applies to Custodial Accounts and most savings vehicles available to all parents who wish to save for their child's education. These savings will now be taxed at the Parent's rate.
Children, Second Marriage and Estate Planning
In a second marriage, planning is required to make sure your new wife and "old" children receive and/ or share in your assets after your death.
If, you leave everything to your "new" wife, your assets are now her property and she can dispose of those assets as she wishes. Your children could get nothing. With proper planning by use of a Trust, your "new wife" gets use of the assets while alive and your "old" children get the assets when she dies as you stated in your trust document.
If, I can assist you in drafting this type of Trust, please contact my office for assistance.
Divorce and Revised Estate Planning
In the event you are SOON TO BE DIVORCED OR ARE DIVORCED, you need to revise your wills, living wills, power of attorney and all other estate planning documents you have. If you do not have an estate plan you need one.
Once you are divorced, if you have no estate estate plan and die owning assets in your name, Florida law will govern who gets the assets and who controls the assets. Your wishes will not bind the Court in any fashion. At the very least, a Will will dispose of your assets as you rather than a Court wishes. Also, if you die during the pendency of your Divorce and have no estate plan all of your assets go to your soon to be ex spouse. AN ESTATE PLAN WILL ADDRESS THESE CONCERNS.
There are many other issues too numerous to discuss here that impact you if you are contemplating a divorce, in the process of obtaining a divorce or are divorced. The bottom line is you should consult a Lawyer and plan for your "Single" future.
How do I divide my retirement plan after a divorce
After a divorce a Court may order you to transfer all or part of your retirement plan(s) to your former spouse. If you transfer assets held in a retirement plan (except for an IRA) without a Court Order to your former spouse, you will be subject to an income tax and possible tax penalties. This Court Order allowing a transfer of assets without an immediate income tax, etc. is known as a "Qualified Domestic Relations Order("QDRO"). For a QDRO to be valid it must meet certain federally established criteria. We can help you and your Divorce lawyer prepare a QDRO that will meet these criteria.
Employee or Independent Contractor?
When you hire a new worker, it is important that you properly classify them as either an employee or independent contractor. If you misclassify a worker's status, this will have major implications for the Employer's taxes as well as the Workers'. If you classify a worker as an Employee, the Employer will be liable for payment of FICA, FUTA and State Unemployment taxes. In addition, the worker will be eligible to participate in any retirement or health benefit plans maintained by the Employer. If you classify the worker as an independent contractor , they are not eligible for any benefit plans maintained by the Employer and the Employer need not pay and FICA or FUTA taxes on the worker's behalf. The worker is responsible for the payment of self employment and other taxes. An employer can incur large tax and other liabilities if a worker is incorrectly classified. It is important that you consult with a tax professional before classifying a worker as an independent contractor.
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