The Lindsay Law Firm

Identifying Your Beneficiaries

2012-02-08T10:04:00.003-05:00

Take the time to confirm the correct name of your beneficiaries.

A recent case demonstrates the difficulties that may arise when beneficiaries are not correctly identified. The decedent left a Will that included a gift for a particular charity. Unfortunately, the name of the charity identified in the Will did not match any known charitable organization. (Perhaps the individual who made the Will had a nickname for the charity in mind.)

The court was asked to name another charity, with similar purposes, to receive the required distribution. Instead, the court ruled that the charitable gift failed, and that the lapsed gift would pass to the heirs of the decedent. This part of the decision was reversed by an appellate court, with instruction that the court take evidence whether another charitable organization should receive the distribution.

It is not difficult to imagine the many hours of attorney time involved in arguing the issues in this case at trial and on appeal, plus the court time and client time in attending various hearings and meetings. All of which adds up to significant costs (paid by the estate, thereby reducing the assets available for distribution to the designated beneficiaries). These costs could have been easily avoided if the decedent had taken a minute to run an Internet search, or make a phone call, and confirm the name of the organization. It is worth the effort!

Understanding Your Estate Planning

2012-02-01T09:30:00.003-05:00

Be careful to read and think about your estate planning documents!

I visited with a couple recently who described to me what they understood their estate plan to be. As we reviewed the terms in the documents, we discovered that their understanding of their estate plan was not consistent with what the documents said in substantial respects.

A recent Florida case raises a similar issue. A wife died and her heirs sought to recover her interest in her surviving husband's trust. Although the terms of the trust clearly said that she (and her heirs) would not receive anything if she predeceased her husband, her heirs argued that she became entitled to a share of the trust when it was first created, because she was his wife and a potential heir of the trust. Not so.

Under the trust instrument in question, as is generally the case, heirs are determined upon the death of the individual who created the document. That an individual is a possible heir is irrelevant if they do not survive to inherit. Survival is essentially a condition to receiving the inheritance.

These two examples demonstrate the wisdom of carefully reading your estate planning documents. Certainly there may be 'legalese' and terminology that you do not use everyday. Just as certainly, you may forget a large portion of this terminology days or weeks after you read the documents. Nonetheless, be sure that the basic terms of the documents (who will act on your behalf, who will receive your property and when) are consistent with your intent.

Objecting to the Personal Representative

2012-01-25T09:18:00.002-05:00

It is possible to object to the appointment of a Personal Representative, but the rules must be followed.

The person who manages a probate estate in Florida is referred to as the 'Personal Representative' (in many states, the term 'executor' is used). This person has legal authority to administer the estate in accordance with law.

After the court appoints a Personal Representative, the Personal Representative is required to send a Notice of Administration to each of the heirs of the estate (among other people). This Notice lets everyone know that the probate estate has been opened, the identity of the Personal Representative, and other information.

Florida law provides that anyone seeking to object to the qualifications of the Personal Representative must file a formal objection with the probate court. The objection must be filed within three months after the objecting person receives the Notice of Administration. As one recent case emphasized, if you don't get your objection filed within that time frame, you are forever barred from objecting to the appointment of the Personal Representative.

If you do file an objection, you need to explain to the judge why the Personal Representative should not be allowed to serve. For example, the person appointed as Personal Representative may be ineligible to serve because they are not a Florida resident or family member of the decedent. Another reason would be if the decedent had a Will nominating another person to serve.

Once the objection is filed, the judge may conduct a hearing with the appointed Personal Representative and the objecting party. The judge may choose to overrule your objection and retain the Personal Representative, or the judge may sustain your objection and remove the Personal Representative.

Post-Nups

2012-01-11T10:34:00.002-05:00

You've heard of a 'Pre-Nup', but how about a 'Post-Nup'?

As you likely know, a pre-nuptial agreement is an agreement between an engaged couple setting forth their understanding of various property matters. In the event of a divorce or death, these agreements are given great weight by courts.

In a similar way, it is possible to execute a post-nuptial agreement between a couple that is already married. In other words, the fact that you are married does not mean you have forever waived the right to have such an agreement!

A common issue addressed in pre-nuptial and post-nuptial agreements is the waiver of spousal rights. As an example, under Florida law, a spouse may not disinherit another spouse as to the married couple's home. However, this rule is subject to the exception that a spouse may waive this protection in writing.

A recent case considered what verbiage was required for a valid waiver. In the case, a wife signed a post-nup including a waiver of 'all rights'. The court held this waiver was legally sufficient, and that the wife could not inherit anything from her deceased husband's probate estate.

Sweating the Details

2011-11-02T10:22:00.002-04:00

Two recent Florida court cases point up the value of clearly stating your intentions when drafting your will, as well as considering 'what if' scenarios.

In the first, the Testator (person making the Will) wrote a Will that left personal items to her sister, with the instruction that her brother would inherit if her sister predeceased her. When she made the Will, the personal items were all that she had. Then her sister died, leaving her real property and cash. The Testator, however, did not change her Will to address who would receive the real property and cash upon her death. When she died, her nieces petitioned the court to be named partial heirs of the real property and cash under intestacy law, because her Will did not address who would receive anything other than the personal items. Her brother objected and said she should get everything because she was the only heir named in the Will. After the court battle, and the subsequent appeal, the courts sided with the brother. The simple solution would have been a one-page Codicil to the Will, clearly stating what the Testator wanted to have happen (which presumably is still unknown).

In the second, the Testator included a line in his Will that he would forgive at his death a debt that someone owed to him. Turns out, his estate was insolvent, meaning there wasn't enough money in the estate to pay the creditors of his estate. Florida law says you can't forgive a debt in your estate to the extent that you are insolvent, because the debt would otherwise be an asset available to creditors of the estate. Here, the 'what if' scenario turned out to be reality. The Testator could have forgiven the debt before he died, but not in his estate.

Getting Married

2011-10-26T10:05:00.002-04:00

Marriage plans focus on venue, food, clothes, people - almost anything and everything other than estate planning. Here are two reasons to think about estate planning in the middle of all of the excitement.

In a first marriage, estate planning may head off difficult moments that could arise if either or both parties unexpectedly died shortly after the marriage. Florida law provides the legal answers, but hard feelings may still result (if, for example, the family of the wealthier spouse argued the couple wasn't together very long). A proper estate plan gives the couple the opportunity to make their wishes and feelings known. The estate plan will also help with designating who makes decisions if one of the parties becomes incapacitated.

In a second or later marriage, estate planning can help protect the interests of children from the first marriage. Although a prenuptial agreement is generally the best tool for these issues, some matters can be addressed through the estate plan. Also, powers of attorney can designate who will make decisions if a party becomes incapacitated.

Under Florida law, once you are married your spouse becomes entitled to 30% of your estate. It is possible to sign a waiver of this 30% interest; otherwise, you cannot entirely disinherit your spouse (you can always leave your spouse more than 30%). Similarly, your spouse has first priority to serve as your Personal Representative (executor). Again, this can be waived.

'It Depends'

2011-10-12T09:33:00.004-04:00

Homestead court decisions teach us why the law is not always certain.

Ever ask your lawyer a question, only to hear 'it depends'? Does it make you wonder why you are paying your lawyer?

Today I rise to the defense of lawyers everywhere with two current examples in the area of homestead law that help explain why uncertainties exist in the law.

In February of this year, the state appellate court sitting in Miami ruled that a husband waived his homestead protections simply by signing a deed conveying his interest in homestead property to his wife. Then, in May, the same court abruptly withdrew the decision. Where does that leave the law today? If you were a lawyer advising your client, how would you answer the client's question as to whether signing a deed constituted a waiver of homestead rights? Answer: 'It depends'

Here's another one, the Florida constitution provides some creditor protection for your homestead. Is your homestead still protected if you transfer the homestead into your revocable trust? Several courts have now ruled on this issue in a variety of circumstances - some of the courts said 'yes' and some 'no'. Where does that leave the law today? If you were a lawyer, how would you answer the question whether your client would lose their creditor protection if they transferred their homestead into their trust? Answer: 'It depends'

Hopefully, the foregoing will help illustrate that some issues, even when simple to understand, may not have a simple answer.

Revoking a Durable Power of Attorney

2011-10-05T11:35:00.006-04:00

When circumstances change, it's good to know you can revoke your power of attorney.

Creating a power of attorney is no small thing. The Principal (who creates the power of attorney) grants to the Agent (the family member or friend) a broad scope of authority to act on behalf of the Principal. While there are some things that the Agent is not allowed to do (such as vote for the Principal), in general the Agent steps into the shoes of the Principal.

As scary as powers of attorney are generally, a Durable Power of Attorney (DPOA) goes a step further. Whereas most powers of attorney automatically terminate if the Principal becomes mentally incapacitated, a DPOA does not (that's why it's called 'durable').

Nonetheless, life throws curve balls at us sometimes and we may want to change our estate planning documents. Under Florida law, it is possible to revoke even a DPOA, so long as the statutory formalities are followed.

First, you must think about who has copies of the DPOA. If you just put the document in your safe and didn't give a copy to anyone, revoking the DPOA is relatively easy to do. If you made copies for your Agent and sent copies to your bank, title company, etc., the process is considerably more complicated.

Second, you sign an instrument revoking the DPOA. This is either a new DPOA expressly referring to and revoking the earlier DPOA or a separate instrument solely intended to revoke the DPOA.

Third, you send a Notice of Revocation to everyone who has a copy of the earlier DPOA. As you might expect, there are detailed requirements for this process.

These steps can be cumbersome but it is important to follow them closely. If your DPOA is not legally revoked, the actions of your Agent under your DPOA may be valid and you would be bound by those actions. On the other hand, if you correctly revoke your DPOA, your Agent may be liable for actions taken without authority.

Estate Tax Planning

2011-09-28T14:48:00.002-04:00

There are ways to legally reduce the tax bill on large estates.

99.5% or more of the population is exempt from paying the federal estate tax under current law. Nonetheless, that still leaves thousands of people looking for relief. The IRS has approved many strategies to reduce the burden of estate taxes. These include:

1) Irrevocable Life Insurance Trust (ILIT): An ILIT can be used to remove life insurance from your taxable estate. In addition, an ILIT can be used to hold a new life insurance policy that you acquire to pay your estate taxes. For example, if you expect to pay $1 million in estate taxes, you can purchase a $1 million life insurance policy. The policy would be held in an ILIT so that the $1 million proceeds are not included in your taxable estate.

2) Qualified Personal Residence Trust (QPRT): A QPRT is used to remove the value of your home from your taxable estate. A deed is filed to transfer ownership of your home into the QPRT. After 10 years or so (whatever term you decide), the ownership of your home passes to your kids or other heirs. Upon your death, your home is not included in your taxable estate. Yes, you can still live in your home, sell your home and move somewhere else, and take many other actions associated with home ownership.

3) Grantor Retained Annuity Trust (GRAT): A GRAT is used to freeze the tax value of assets. If you have $1 million in a brokerage account, you would expect (maybe hope) that the value of the account would continue to grow in the future. By transferring that account into a GRAT, you would protect the future growth of the account from estate taxes. GRATs have other uses, also, that are beyond the scope of this article.

There are other common techniques to reduce estate taxes. Of course, as it may be said for every entry in this blog, there are numerous details and considerations to be taken into account for particular individuals. What works well for you may not work well for your neighbor!

A Word on Marriage

2011-09-21T09:18:00.002-04:00

Having spoken on divorce a few weeks ago, here are some thoughts on marriage.

Most of my clients desire to implement an estate plan that provides for all of the couple's property to pass to the surviving spouse, then to the kids on the death of the surviving spouse. There are many variations on this theme, such as requiring the kids to reach a certain age to receive their inheritance, but the big picture concept is (understandably) the norm.

On the other hand, an individual may with to leave his or her spouse as little as possible. For example, the couple may be a second marriage and they may feel their primary concern is for the kids of their first marriage. Whatever the reason, it is possible to completely disinherit your spouse under Florida law, but only with your spouse's consent.

So, what happens if Husband executes a Will that provides for all of his property to pass to his kids on his death, with absolutely (and expressly) nothing passing to his Wife? Presuming the Wife has not consented to this arrangement (see below), the Wife would be able to petition a judge to set aside the terms of the Will and order that the Wife receive 30% of the Husband's estate.

By statute in the State of Florida, once you are married (including a second or later marriage), your spouse obtains the right to 30% of your 'elective estate', a statutory term that includes most things the average person owns. The Wife may have other interests in the estate also (such as the right to serve as the Personal Representative, or executor, of the estate, the right to receive certain items of personal property and the right to receive a cash allowance from the estate).

A married couple may choose to waive any or all of these rights, but both spouses must sign the document and there are legal formalities to follow. Nonetheless, if correctly executed, such a waiver/agreement would result in a legally-enforceable document pursuant to which each spouse has given up their rights to inherit from the other spouse, including the 30%, the personal property, the cash allowance, etc.

Note that the foregoing does not address any issues under divorce law, which may require alimony or other payments to a spouse on divorce. Here again, these rights may be waived with an appropriate agreement.

Execution Requirements

2011-09-14T16:27:00.002-04:00

Your estate plan may have no legal effect if it is not properly executed.

'Execution requirements', from a legal standpoint, refer to the legal standards for signing documents. The standards are defined by statute in the State of Florida.

For example, your Will must be signed by you and by two witnesses. Questions sometimes arise whether you must sign the Will on every page, whether a signature on the front page is sufficient, whether witnesses must be adults, whether people named in the Will can be witnesses, whether a certain color of ink is required, etc. All of these issues are addressed by Florida law.

In addition, it is common to have a 'self proof affidavit' attached to the Will. This document allows a court to admit the Will to probate without seeking the testimony of the witnesses to the Will. The self proof affidavit must be notarized.

A revocable trust has a different set of execution requirements. If the trust provides for the distribution of trust assets after your death (and most trusts do), then the execution requirements applicable to a Will also apply to the trust. If the trust does not address these issues, then the requirements are less strict.

Powers of attorney require two witnesses and must be notarized. Health care directives require two witnesses but not a notary. Again, questions about the qualifications for witnesses on these documents are addressed by statute.

The point is that each of these documents has different legal requirements. Failing to satisfy the requirements may mean that your document has no legal effect and state statutes would determine who makes decisions regarding your property, who receives your estate, etc.

Probate Assets

2011-09-07T09:57:00.002-04:00

Understanding how to title assets to avoid probate can save you money.

Real estate, personal property, bank accounts and other assets owned by an individual who dies in the State of Florida may become subject to probate administration. Probate is the judicially-supervised process of transferring title to the decedent's assets to his heirs, satisfying creditors and enforcing the terms of the decedent's last will and testament.

One of the questions that arises after a loved one dies is whether probate is required. As a general rule, probate will be required if the decedent owned assets in his own name at the time of his death. On the other hand, it is possible to title assets in such a way that the decedent enjoys the benefit of the assets during his lifetime, but no probate administration is required on his death.

For example, it is common nowadays to hold assets in a trust arrangement. When properly structured, trust assets will not be required to pass through probate administration. It is also common to designate beneficiaries to receive an asset upon the death of the owner, such as with an IRA or even real estate. As you might imagine, the details are critical. More than one attorney (myself included) has opened probate to clear title to an asset that was incorrectly titled.

Bonus question: Does having a Will mean that your assets will avoid probate? No. The Will just tells the probate court what you want done with your probate estate. To avoid probate, you will need another strategy. This is a common misconception!

A Word on Divorce

2011-08-31T11:12:00.002-04:00

Divorce = Death, at least from an estate planning perspective.

The question comes up from time to time whether you need to modify your Will, Trust or other estate planning documents in the event of a divorce. Generally speaking, it is a good idea to do so. Legally speaking, it may not be required.

From a general perspective, it is a good idea for your estate planning documents to be as easy to understand and implement as possible. Although estate planners usually draft documents to address contingencies (such as who will receive my property if the first person I name predeceases me), estate planners also prefer to have no confusion or disagreements in the process of administering an estate.

From a legal perspective, Florida law provides that your ex-spouse is deemed to have predeceased you on the date of your divorce for purposes of interpreting your Will. This addresses the typical scenario where Husband and Wife are divorced but one or both of them fails to change their Will. In this typical case, neither the Husband nor the Wife will inherit under the Will of the ex-spouse.

Then again, Florida law also allows you to make an exception from the general rule. This happens occasionally, where a client wants to provide for an ex-spouse. Doing so is possible, but it must be addressed expressly. Further, the presumption that an ex-spouse predeceases you may not apply in documents other than your Will. Also, many clients simply don't want to have any mention of an ex-spouse in their estate planning documents (or anywhere else)!

Bottom line: it is always best for your documents to say exactly what you intend. When your circumstances change, it is a good idea to have your documents reviewed to be sure your intent will be achieved.

Hiring an Attorney

2011-08-17T10:15:00.003-04:00

A short checklist of things to consider when hiring an attorney.

A family member in another state needed to hire an attorney this week. He asked me to weigh in on some of the things the attorney had said. The following are some of the issues that arose in that experience:

First, get an 'engagement letter' (aka 'retainer agreement'). This is your contract with the attorney. It should set forth what services the attorney will provide, what fees you will pay and perhaps other terms. The fees should be clearly spelled out in the agreement and, obviously, should be consistent with what you expect. The agreement should also say whether you are required to deposit a retainer with the attorney and, if so, how the retainer will be used.

Regarding fees, some attorneys want to be paid by the hour (where the fee they receive is based on their hourly rate and the number of hours they work), some by a flat fee (where you know going in how much the fee will be), and some will take a contingency fee (where the amount they receive depends on the outcome of the case). Whatever the fee arrangement may be, make sure it is clearly stated in the agreement. Also make sure you understand what 'out of pocket' costs you will be responsible to pay (such as courier charges, court fees, faxes, etc. - some attorneys still require you to pay 10 cents per page for copies!).

Second, make sure you are comfortable with the attorney. Some attorneys enjoy an excellent reputation, some are highly educated, some have practiced for many years and others do not have any of these qualifications. You will consider these issues when you decide which attorney to hire, but don't forget to think about whether you get along with the attorney. Depending on the reason you are hiring the attorney, you may be spending many hours working together. At the very least, you will rely on the attorney for advice and, accordingly, will need to feel that you are able to speak openly with the attorney and understand the attorney's counsel. These are easy issues to overlook, but they can absolutely make the difference. There are plenty of attorneys out there, so shop around until you are comfortable.

Third, think about whether you are the right person to hire this attorney. This may sound funny, but sometimes we try to help other people and end up getting in the way. For example, if an attorney is needed to help John with a particular matter, then John should hire the attorney - not Dave. If John needs help paying for the attorney, he may be able to borrow from Dave or work out other arrangements that don't put Dave in the middle of the attorney-client relationship. The attorney should also be on the lookout for these issues, but no one is perfect.

Giving some attention to the details up front can help avoid headaches down the road if things end up going sour.

Holographic Wills

2011-08-10T10:57:00.002-04:00

A 22nd century term for a very old idea.

A 'holographic' will is simply a will that you write yourself by hand. You may ask, 'why is a self-written will referred to as a 'holograph'? Well, I'll tell you: I don't know. (Apologies to Tevya.) I would guess 'holo' means 'self written' and 'graph' means 'document', but maybe one of my regular readers will research this issue and let us know.

In many states, a holographic will is admissible without witnesses, notary or other verification. Florida is not one of those states. In Florida, every will must be witnessed by two legally competent witnesses. Accordingly, if you choose to write your will by hand (and Florida law permits you to do so), just remember that you still need to sign the will and you still need two witnesses.

Of course, there are other requirements for a will to be valid. For example, your witnesses must be present with you when the will is signed. You would be surprised by the court cases that result from these requirements: For example, is a will valid if the witnesses are in the next room when the testator signed the will, etc.

Incidentally, many attorneys (myself included) also use a 'Self Proof Affidavit'. This document is generally attached to the end of the will, after the testator's signature and the witnesses' signatures. The purpose of the affidavit is to attest that the witnesses and the testator satisfied certain execution requirements, such as being present when the will was signed. Correctly done, the affidavit may avoid having to call your witnesses into court to testify to these matters after you die. As its name implies, the affidavit must be notarized.

The simple approach, of course, is to involve an attorney to be sure that all of these requirements are satisfied. There is plenty of misinformation and rumor about these issues, so you want to be certain your wishes will actually be enforced. If your will is not correctly executed, it will be disregarded and you may be deemed to be intestate.

Beneficiary Arrangements

2011-08-03T09:40:00.002-04:00

Beneficiary arrangements are an inexpensive way to avoid probate, but they do have limitations.

You may be familiar with POD (Payable on Death), TOD (Transfer on Death) and similar arrangements with financial institutions. This arrangement is a direction to the bank to pay the amounts held in your bank account to a designated beneficiary.

The way it works is as follows: First, you visit your bank and request to add a POD arrangement to your checking account. The bank will ask you who the POD beneficiary will be. You might, for example, name a child. The bank will prepare the necessary paperwork for your signature - and that's it.

The result is that your child would effectively become the sole heir to your bank account. The child would not have any right to access the funds in the account during your lifetime (which may be a good or a bad thing), nor would your account be at risk to a creditor of your child (as might happen if your child is a co-owner on your account). Rather, your child will receive all of the remaining balance of the account upon your death and no probate administration is required.

POD arrangements are great, so long as you are not trying to accomplish more than just designating a simple beneficiary. For example, if you want your child to receive the money in the account, but you want him to be a certain age first, or you want him to receive the money in installments over a period of months or years, you would likely need a trust agreement and not a POD arrangement.

Note also that, if your POD beneficiary predeceases you, the funds in the account would then become subject to probate. A trust agreement is, again, one way to protect against this possibility.

Summertime planning

2011-07-06T16:17:00.002-04:00

Take advantage of your lazy hours this summer to catch up on estate planning.

Here in Southwest Florida, summertime means free time for lots of folks. The snowbirds have flown up north and it's easier to get tee times and restaurant reservations.

This free time is an excellent time to dust off your estate planning documents and check whether they still make sense. As I've indicated before, planning techniques that were the norm just a few years ago may not achieve the result you want today because of changes in the law.

For example, if your Will or Trust includes terms such as 'Marital Trust', 'Family Trust', 'Bypass Trust' or 'Credit Shelter Trust', the trust was likely written with a view towards reducing estate taxes. With today's $5 million exemption amount and spousal portability of unused exemption, more than 99% of the population will not pay estate taxes. In this environment, the terms of those old trusts may actually be a problem. More than one attorney (myself included) has had the uncomfortable task of advising a widow that she was largely disinherited because of the terms of the trust she and her husband created, notwithstanding the couple's desire that 'everything goes to the surviving spouse, then the kids'.

Take a few minutes this summer to speak with your attorney about your estate plan. You'll be glad you did when the summer is over!

Updating Your Estate Plan

2011-03-02T15:05:00.002-05:00

Many changes in life don't require updates to your estate plan.

A well-drafted estate plan in Florida includes a Last Will and Testament, a Durable Power of Attorney and a Health Care Advance Directive. Many people also require a Revocable Living Trust.

The question is which (if any) of these documents need to be updated on a regular basis or in the event of changes in your family?

The good news is that many of the regular events in life may not require changes to your documents, so long as the documents were correctly prepared in the first place. In addition, there is no requirement to re-do or update your documents every year or even every decade, so long as the relevant laws have not changed and your objectives have not changed.

For example, a marriage or divorce, birth or death, graduation from school, retirement and many other of the 'normal' events of life may not require you to change your documents. A reference to your daughter, Jane Doe, may not be a problem if Jane Doe becomes Jane Smith.

When you experience these changes in life, ask your lawyer to look over the documents to be sure the documents were drafted to cover these events. Many lawyers will provide this initial consultation for free. Oftentimes, after this review you will be pleased to hear that your documents are just fine the way they are.

Don't Wait

2011-02-16T09:05:00.003-05:00

Yet another true story illustrating the importance of acting now.

I was contacted on Monday by an individual wanting to prepare a power of attorney to name his significant other to make medical and financial decisions for him. He had put it off for a long time, but recognized his health was deteriorating and wanted to get the paperwork in place. Because he was physically unable to leave his home, I agreed to visit him at his home to sign the documents.

On Tuesday, I emailed the draft documents to him. (Estate planners don't often have urgent situations, but when we do we push other things aside and move quickly!) I asked him to look over the documents, let me know if there were any typos or other issues he wanted to address, and call me to arrange a time to sign the documents.

On Tuesday afternoon, I received the call from his significant other. He was in hospice and no longer had mental capacity to make decisions (or sign documents). Accordingly, the documents became moot.

At this point, the significant other will not be able to make medical and financial decisions for him unless she petitions with the Florida courts to be named as his legal guardian. In other words, what was once a fairly simple (and inexpensive) matter of signing documents had become a rather involved guardianship proceeding.

The lesson here is obvious: Even though there is a temptation to put estate planning on the back burner, you don't know what the future brings. Don't Wait.

Homestead and Joint Ownership

2011-02-02T12:14:00.003-05:00

A recent case emphasizes how objectives may be frustrated if not carefully planned.

Mom and Son own a home together (not recommended for many reasons, but that's what happened). The deed reflected that Mom and Son owned the home as 'joint tenants with rights of survivorship'. Son lived in the home.

Son died, leaving children. The children claimed a life estate in the home under Florida's homestead laws. Mom objected, saying that she should own the home outright because of her joint ownership interest under the deed. Who's right?

According to the Court, Mom wins. The property was not even considered to be homestead property (for probate purposes) because of how title was taken on the deed. When Son died, his interest in the property automatically terminated and Mom became the sole owner of the property. The children were not entitled to any interest in the property.

Bottom line: Do not depend on rumors and 'I think so' when you plan your estate. Depending on Son's objectives, his children could have inherited an interest in the estate and/or Mom could have received a portion of the property. While it is likely here that Son expected Mom to die first, planning for contingencies makes all the difference!

Estate Tax Exemption Portability

2011-01-12T10:16:00.002-05:00

The new tax laws include a hidden benefit!

As readers are aware, the new tax laws provide for a $5 million exemption from estate and gift taxes. So, here's a question:

Suppose Husband passes away on February 1, 2011, leaving a $3 million estate to his Wife. The entire estate would be covered by Husband's $5 million exemption, so Husband's estate would not owe any estate taxes.

Suppose Wife passes away on August 1, 2011, leaving a $6 million estate to their children. After using Wife's $5 million exemption, there would still be $1 million 'exposed' to estate taxes (which would be $350,000 in taxes!).

The new tax law addresses this issue with 'estate tax exemption portability'. This means the amount of Husband's unused exemption may be transferred to Wife to be used in her estate. In our example, Husband used $3 million of his $5 million exemption, leaving $2 million of exemption. This $2 million of available exemption may be transferred to Wife's estate. As a result, the $1 million 'exposed' in Wife's estate would be covered and no taxes would be owed on either Husband or Wife's death.

To transfer the unused exemption from Husband to Wife, the personal representative (executor) of Husband's estate will need to file a form with the IRS. Once done, the unused exemption is available for Wife.

Federal Law Changes the Estate Tax Rules

2010-12-17T14:29:00.003-05:00

Congress and the President have enacted new laws on estate taxes.

Congress yesterday passed new legislation including changes to the federal estate tax laws. As a result, on January 1, 2011 the federal estate tax will return with a maximum tax rate of 35% on estates over $5 million. The new law also includes a provision that allows a surviving spouse to benefit from any exemption not used by the other spouse. (For example, if Husband dies leaving a $3 million estate and Wife dies a few years later leaving a $6 million estate, neither estate would be taxable.)

What is the result of all of this for you? Two immediate thoughts:

First, if your estate plan includes the common A-B planning, you should consider revising the plan. (To determine whether your plan has this technique, read the distribution provisions after the first spouse to die. If you see terms such as 'Marital Trust', 'Marital Gift', 'Family Trust', 'Credit Shelter Trust' or similar references, it's a good bet that you have the A-B plan.) This A-B plan may result in the disinheritance of the surviving spouse, so it's a good idea to have the planning reviewed.

Second, with the exception of 2010 (when the estate tax was repealed for one year), the new estate tax rules mean that fewer folks will be subject to the estate tax than has been the case for many years. As a result, fewer people will require more sophisticated planning (such as Grantor Retained Annuity Trusts, Irrevocable Life Insurance Trusts, family limited partnerships and similar techniques). This is great news for taxpayers who would otherwise be required to give up significant control over the assets in an effort to reduce their tax exposure.

Personal Representatives

2010-12-15T10:58:00.003-05:00

In most states, it's 'executor', but in Florida, we say 'Personal Representative'.

A state court of appeals in Florida recently ruled on an issue relating to the choice of Personal Representative. The decedent never made a Will, so the question before the court was 'who decides what individual or entity would serve as Personal Representative?'. The decedent's sole heirs were his two children. They agreed on a Personal Representative, but their choice was challenged. The court held that the two children, as the sole heirs of the estate, were entitled to choose the Personal Representative, so long as the person they chose was otherwise qualified.

This holding is not very surprising. Nonetheless, the case does serve as a reminder to consider the individuals you name to make decisions for you. (These choices also arise with you consider someone to make medical and financial decisions for you when you are not able to make those decisions yourself.)

Under Florida law, a probate court will not appoint a Personal Representative who does not satisfy certain statutory qualifications. One example is that, under Florida law, a Personal Representative must be a Florida resident or a close relative of the deceased.

This issue arises with some frequency when folks move down to Florida in retirement. They may have a Will from up north that names their best friend as executor. This nomination will be ignored by the Florida probate court. If the Will then names a successor to serve, the successor may be named (if qualified). If there is no qualified successor, any interested person may petition the court to be named as Personal Representative. That's likely not what the decedent wanted!

Tax Deals in the Ninth Inning

2010-12-08T14:04:00.002-05:00

Politicians are discussing last minute deals to alter next year's estate and gift tax laws.

As of this writing, the President has announced a tax deal that, if signed into law, would include a federal estate tax with a maximum tax rate of 35% and a $5 million exemption amount. This deal represents a compromise between having no estate tax (which is the case this year) and an estate tax of 55% after a $1 million exemption amount (which is scheduled to occur on January 1 under current law).

Whether the deal passes is uncertain at this point. Some politicians have expressed dissatisfaction with the terms of the deal and there is always the possibility that proposed laws are changed during the legislative process.

What to do in the midst of such uncertainty? Estate planners have long been close companions with uncertainty, thanks to the abundance of tax law changes over the past decade. From this experience, we have adopted the Golden Rule of Estate Planning: 'Plan for today and make changes as needed tomorrow'.

Planning for today means making decisions based on the laws today, not on what they might be tomorrow. The law today provides for a 55% estate tax as of January 1, 2011. Accordingly, the golden rule suggests you arrange your affairs now so as to minimize the impact of this potential tax. If the law changes later, you can change your estate plan according to the terms of the new law (whatever they might be!).

Estate Tax Planning Strategies

2010-11-17T09:22:00.003-05:00

Now is the time to implement strategies to reduce your estate tax exposure.

Readers of this blog are well aware of the upcoming changes in federal law. While the federal estate tax was repealed for 2010, the tax returns on January 1, 2011. This means that the IRS will collect a 55% tax (60% on estates over $10 million), less a $1 million 'exemption', on the estates of all persons who die on or after January 1, 2011.

This tax will have a widespread impact. Consider a couple owning a home, with an IRA/401k and life insurance. These are not liquid assets, but they are included in the couple's taxable estate. Accordingly, the estate tax rules will treat many people as being rich and taxable who do not think of themselves as particularly wealthy. (One of the criticisms against the estate tax is that it penalizes 'savers' and rewards 'consumers'.)

One common mistake is to just 'give away' real estate or other assets to remove them from your estate (such as a quit claim deed to your son). The federal gift tax will apply to such gifts; in addition, there may be liability and other issues raised by such gifts. So, how to address the estate tax issue if Congress and the President do not agree on changes to the law by December 31?

Here are some common approaches to reducing estate tax exposure (each of which has been approved by the IRS):

1. Irrevocable Life Insurance Trust: This trust is used to remove the death benefit of your life insurance policies from your taxable estate.

2. Qualified Personal Residence Trust: This trust is used to remove the value of your home from your taxable estate, although with gift tax consequences.

3. Grantor Retained Annuity Trust: This trust is used to remove the value of one or more investment accounts and similar assets from your taxable estate, although with gift tax consequences.

Each of these strategies has pros and cons and there are details to address. For example, each of these strategies requires you to give up control over the asset placed in trust. Nonetheless, it is possible to make a significant dent in your taxable estate by planning ahead.

Why You Want a Lawyer for Even a 'Simple' Will

2010-11-10T17:22:00.002-05:00

A recent case shows why it's a good idea to hire a lawyer, even if everything appears simple and straightforward.

A Florida Court of Appeals today issued a ruling reversing a trial court decision construing a will. The decedent left a will providing for his house to go to his brother and his brother-in-law (50/50). The will also said if either the brother or the brother-in-law did not survive to receive their share of the house, then their share would go to their spouse.

As it happened, the brother did not survive - in addition, the brother's spouse did not survive. The children of the brother claimed that they should get the share that the brother was entitled to receive. The brother-in-law claimed he should get the brother's share - and thus the entire house. (Stop at this point and think what you would do if you were the judge.)

The trial court sided with the children of the brother and awarded them half of the house. The brother-in-law appealed and won the entire house. The appellate court ruled that the children were not legally entitled to any share in the house.

It's obviously not possible to know what the decedent would have wanted to happen in this situation. Still, it would have been simple enough to have specified in the Will exactly what was desired. This sort of specificity would have saved family contention, as well as litigation time and expense (more than two years passed from the death of the decedent to this decision!).

Planning for Incapacity

2010-11-03T11:07:00.002-04:00

You can make decisions now to control what happens when you can't make decisions later.

It is an unfortunate reality that many people will experience an event of incapacity (such as Alzheimer's, accident trauma or just advancing age). One consequence of incapacity is the loss of legal control over your medical and financial decisions. That means someone else will decide where you will live, how your money is spent, what medical treatment you receive, etc.

Happily, the law allows us to plan today for these events. 'Estate planning' is often thought of as addressing what happens when we die, but your complete estate plan should also include documents that identify who has the ability to make decisions for you if you become incapacitated. The typical documents include:

First, a Durable Power of Attorney. This document names your 'Attorney-in-Fact', who is authorized to make financial decisions for you.

Second, a Health Care Advance Directive. This document names your 'Surrogate', who is authorized to make medical decisions for you.

Third, a Living Will. This document sets forth your wishes regarding certain end-of-life decisions.

Without these documents, courts (and lawyers) will need to get involved to appoint a Guardian to make these decisions for you. The expenses of the guardianship (court fees, attorney fees, guardian fees, etc.) will be paid from your assets. Unless you recover from your event of incapacity, you will likely have a Guardian throughout your lifetime.

As with other areas of estate planning, failing to act is a bad idea.

Your Taxable Estate

2010-10-27T09:57:00.002-04:00

You may be surprised to learn what is included in your taxable estate.

Your 'taxable estate' is created upon your death. Simply put, it is a snapshot of all of your assets (real property, bank accounts, your personal items, etc.). The IRS uses the value of your taxable estate to determine what taxes may be imposed on your estate.

There are, however, some items included in your taxable estate that you may not expect. In particular, there are some assets that are not available to you during your lifetime but which are nonetheless taxed.

For example, if you purchase life insurance, the proceeds payable on your death are included in your estate. This is surprising to many clients because they generally do not consider the policy proceeds to be an asset of theirs. Furthermore, in the case of a term life insurance policy, there is no cash surrender value that you can access during your lifetime. Nonetheless, the proceeds from the life insurance are included in your taxable estate.

For example, suppose the net value of your home, bank accounts and IRA is $200,000. Your taxable estate would be $200,000, which is below the $1 million exemption amount effective January 1, 2011. But, if you purchase a term life insurance policy that pays $1 million to your children upon your death, your taxable estate would increase to $1.2 million and you would be subject to estate taxes. (Under current federal law, this situation would require your estate to pay the IRS $110,000 if you died on January 1, 2011.)

There are steps you can take to reduce your taxable estate (and, as a result, the amount of taxes that will be imposed on your estate). If nothing is done, however, the full value of the proceeds will be included in your taxable estate. This would be an unpleasant surprise for your heirs.

Choosing Fiduciaries

2010-10-21T14:07:00.003-04:00

For some folks, choosing the people to make the decisions is the hardest part.

Proper estate planning includes your designation of persons to make medical and financial decisions for you if you become unable to make those decisions (because of mental incapacity). In addition, in your estate plan you will designate the persons who will oversee the management of your estate after you are gone; these persons will ensure that the beneficiaries you name receive their inheritance on time.

Accordingly, it is important to carefully consider whom to name in these roles (these persons are commonly referred to as 'fiduciaries'). You want to be certain that the fiduciaries you name are persons you trust without hesitation; after all, you will be giving these people a lot of control over you and your estate. The fiduciaries will be called on to interact with your family in various capacities down the road.

For these reasons, the first consideration is to exclude anyone whom you do not trust from your list of potential fiduciaries. The persons you designate may be able to hire the help they need (to interact with courts, prepare tax returns, etc.), but if they are not trustworthy you should not name them.

Many clients name family members as fiduciaries and this often works well. Some clients, however, do not have close relationships with family members or for other reasons do not wish to name family. For these individuals, a long-time trusted friend may be the solution. For others, a financial institution may be the right choice to serve as fiduciary. There are pros and cons to these decisions that should be considered before the documents are signed.

One bit of helpful information is that you generally can change your mind later. Should your circumstances change down the road, or should the circumstance change of a fiduciary you have selected, you may remove a fiduciary or add a new fiduciary, so long as your documents permit changes and you are still mentally alert.

Choosing not to create a document is not a good choice. When the time comes, a court will need to get involved (and lawyers) to appoint a fiduciary. This means you will have forfeited your right to name the fiduciary and there will be more hassle and expense (payable from your estate!).

Title Issues

2010-10-11T14:49:00.003-04:00

Title issues are not terribly exciting, but they can make all the difference!

'Title issues' have to do with who owns your home, car or other assets. You can find the answers by looking at the deed, car title, account statement or other evidence. These issues frequently make people squirm when opening a new bank account or buying a home; there is often a moment of uncertainty how to 'name' the account.

For instance, suppose you were opening a new checking account. You might set up the account with just your name on it. Alternatively, you could add your spouse (or another person) as a co-owner. If you have more than one name on the account, you could indicate that the account is held by the two of you as 'tenants in common', 'joint tenants with rights of survivorship' or even 'tenants by the entirety'.

Each of these choices have consequences under tax, probate and asset protection laws. Just the few words you list in the title of the account may determine whether you are liable for tax on the account, whether the account will be subject to probate administration upon your death and whether the account could be seized by your creditors (if you are sued for an auto accident, unpaid debt or other issue).

The moment's uncertainty that you feel may be a signal to you to seek help in making these decisions. Rather than making a decision without fully understanding the legal implications, you may wish to slow down the process and ask a few questions. You may find there are ways to achieve your goals that could save you on taxes or help protect your assets from creditors.

501(c)(3) Organizations

2010-10-04T10:35:00.003-04:00

Setting up a 501(c)(3) organization may be a great idea for you!

A '501(c)(3) organization' is the name commonly given to a corporation that has been recognized by the IRS as exempt from federal income taxes. This means that when these charities receive donations from the general public, the donor receives a tax deduction and the organization does not pay income tax on the donation. Thank you IRS!

The reason 501(c)(3) organizations are given this tax favored treatment is because the organizations are dedicated to charitable purposes (indeed, the IRS closely scrutinizes tax-exempt organizations to confirm they are correctly organized and operated). For example, a charity may raise funds to fund cancer research, scholarships for kids going to college from a particular city, and many other purposes.

You may ask why this is important to you. The answer is that you may have charitable aspirations of your own. If so, setting up your own 501(c)(3) organization could be a way to fulfill these aspirations and even involve your family in the effort. In addition, you could receive some terrific tax benefits. Even if you have no intent to seek donations from the general public, you could have your own charity dedicated to a charitable purpose that you select and still receive many tax benefits.

As mentioned, donations to a tax-exempt entity are deductible (and the entity itself does not pay income taxes on the donations). Plus, amounts left to the entity in your Will or Trust are deductible from federal estate taxes (which will begin again in just a few months!). Plus, the donations to the entity are also deductible from the federal gift tax. In other words, you can save a lot of taxes, advance a cause that you believe in, give your family members a temporary or permanent role in the effort and feel the intangible benefits during your lifetime. Not a bad deal!

Short Term Seller Financing

2010-09-23T10:58:00.003-04:00

Tough time selling your home? This may help!

Two clients in recent weeks have discussed selling their homes using short-term seller financing. Essentially, this means they sell their homes for the negotiated purchase price, but, rather than receiving the entire purchase price up front, they take back a short term (one or two year) mortgage on the property with a balloon payment at the end of the term. During the one or two year term before the balloon payment is due, the seller receives interest payments from the buyer.

This approach can help if you are having a difficult time finding a buyer for your home or if you want to sell your home to a particular person (a friend, perhaps), but this person is facing delays in getting approved for a mortgage.

For example, Seller wants to sell his $150,000 home to Buyer. Buyer agrees to the purchase price and they sign the paperwork. At closing, Seller transfers title (ownership) of the property to Buyer and Buyer signs a promissory note and mortgage agreeing to pay Seller the $150,000 plus interest. After closing, Buyer makes monthly interest payments to Seller (income to Seller) for two years, at the end of which period Buyer pays Seller the $150,000 purchase price. The two-year period gives Buyer time to secure a mortgage from a bank or obtain other means to cover the purchase price.

You may ask, what if Buyer fails to make the interest payments or cannot get a mortgage? Seller could then negotiate new terms or choose to foreclose on the property like any other mortgage holder. Yes, foreclosure is a pain and Seller would prefer to avoid it (so Seller will need to investigate Buyer and have a degree of confidence in Buyer's ability to pay); but, at least Seller has a remedy.

Other benefits from this arrangement: Seller has additional income (from the interest payments), Buyer owns the property and can get homestead property tax benefits and creditor protection, Seller no longer has to maintain the property or deal with any association issues, the transaction closes more quickly, etc.

There are obviously details to address to make this approach work, such as tax issues, homestead considerations, title issues, etc. Nonetheless, this approach could enable a Buyer to get into a property, and a Seller to get out from under a property, that otherwise might not have happened.

Single-Member LLCs

2010-09-13T14:38:00.009-04:00

A recent Florida Supreme Court decision may affect you.

Single-member LLCs (SMLLCs) have been a popular business structure for many years. A SMLLC is simply a limited liability company with only one owner (member). They are flexible, relatively easy to operate and (until recently) provided a layer of creditor protection that even corporations did not offer.

In simple terms, if you were personally sued (for a traffic accident or some other personal matter) then, under the former law, your SMLLC assets were protected from your personal creditor. Rather than being able to foreclose on your SMLLC assets, the creditor's sole remedy was to receive any dividends that you otherwise would have received from the SMLLC. (There are tax and other interesting issues that arose in this context, but they are too detailed for this discussion.)

This June, the Florida Supreme Court considered the various creditor issues surrounding SMLLCs and determined that the creditor of an SMLLC owner may be able to foreclose on the SMLLC. This means that the creditor would be able to take all of the assets of the business (subject to exceptions such as secured obligations).

The bottom line now? If you are the sole owner of a Florida LLC, you may wish to take extra precautions to defend against the possible loss of your business to pay a personal creditor of yours. Note that there is more than one approach to respond to this ruling. Further, this is a tricky legal area because of the laws relating to creditor rights. For these reasons, you would be well served to contact a lawyer to assist you in these matters.

Estate Tax Planning - The Time Has Arrived!

2010-09-07T11:19:00.003-04:00

It's September 2010 and Congress has not acted; now is the time to consider 2011.

This blog has previously considered the uncertainty surrounding the federal estate tax laws. The bottom line is that there has been no federal estate tax (death tax) imposed during 2010. In 2011, however, this tax will return at a 55% tax rate (or even more for larger estates) on all assets valued in excess of $1 million.

$1 million sounds like a lot to some people. By the time you start adding everything that is included, however, many folks are surprised to find themselves 'rich' by IRS standards. Add up the value of your home, your IRA and 401k account balances, other bank accounts, personal property and (this is the kicker) the death benefit of your life insurance policies, and you may find that you too are rich!

For this reason, it is important now to take steps to plan for 2011. Throughout this year, there has been the possibility that Congress and the President would agree on changes to the tax laws to reduce the number of people hit by the federal estate tax. With the year winding down, it appears that such changes may not happen.

Nonetheless, you should be aware that there are ways to legally arrange your affairs to save a great deal of money on taxes. For example, if Mr. and Mrs. Smith were to die on January 1, 2011 owning a $400,000 home, $300,000 in their IRA and $500,000 in life insurance, their heirs would be required to write a check to the IRS for $110,000! (Note that the Smiths may not have viewed themselves as particularly wealthy, as most of their taxable estate was illiquid.) With simple planning, it is possible for the Smiths to avoid any estate taxes at all.

To repeat, we have enjoyed during 2010 a time in which estate tax issues were off of the table. That time is drawing to a close. Now is the time to plan for 2011.

Medicaid

2010-08-30T14:35:00.002-04:00

You may be able to become eligible for Medicaid nursing home benefits!

You may have heard that many people are not eligible for Medicaid institutional care (nursing home) benefits because their income or their net worth is excessive. The law generally provides that you will not be eligible for these benefits if your monthly income exceeds $2,022 or if you have assets worth more than $2,000 in value (with certain exceptions and deductions). If you do not meet these financial requirements, you will be denied Medicaid benefits (and will often be forced to pay the nursing home costs yourself). Nonetheless, it is often possible to rearrange your affairs to qualify for Medicaid.

As an example, if your monthly income (from Social Security benefits, pension income and other items) exceeds $2,022, you could take advantage of a Medicaid Qualified Income Trust. These trusts allow you to divert a portion of your income directly to your nursing home, thereby qualifying you for benefits.

Similarly, if your total assets exceed $2,000 in value (which is often the case), you may be able to use a trust to become eligible for benefits. It may also be possible to reinvest your assets in ways that are Medicaid preferred.

Please call me with questions about how you can become eligible for Medicaid nursing home benefits. These efforts can often save you many thousands of dollars!

Plan for Today

2010-04-15T10:21:00.007-04:00

As my readers know, the federal estate tax was repealed for 2010. The question now is how to plan your estate today?

For the past several years, the federal estate tax has been in flux. The estate tax exemption amount has steadily increased while the tax rate has declined. Throughout these changes, my counsel to my clients has consistently been to 'plan for today and make changes as you may need tomorrow'.

This is still good advice today. As I've spoken with clients this year, I have suggested that they opt for estate plans that provide for the distribution of their estates after their death (outside of probate court) and that designate family members or others to make medical and financial decisions for them when they are not able to do so themselves. Once these objectives are achieved, my suggestion is to wait and see what changes tomorrow may bring to the federal estate tax.

The reason is that we are still in a period of flux: Under current federal law, the estate tax repeal will end on January 1, 2011 and the estate tax will be reinstated with a tax rate of 55% (plus 5% more for larger estates) and an exemption amount of $1 million. Having said that, Congress is expected to act this year to modify the federal estate tax. While it may be difficult to guess what changes they will make, it is most likely that Congress will make some changes. Accordingly, waiting until later this year to address estate tax issues is good counsel.

The bottom line: Yes, you need an estate plan in 2010 to ensure there will be folks there to make medical and financial decisions for you when you cannot and to provide for the distribution of your assets outside of probate to your chosen heirs. When it comes to estate taxes, however, the best course of action now is 'plan for today and make changes as you may need tomorrow'.

Estate Tax Repeal?

2010-01-13T09:57:00.002-05:00

Happy New Year (!) and welcome to your new estate tax-free world, sort of.

According to the federal law passed in 2001, the federal estate tax was repealed in its entirety on January 1, 2010. This means, simply, that Bill Gates could have passed away on January 2 leaving his multi-billion dollar estate to anyone, without paying a dime of estate tax. At least probably.

The problem is that Congress and the President have indicated their desire to avoid the estate tax repeal somehow. It is possible that a law is passed this year to retroactively extend the provisions of the law in effect in 2009 through 2010 (and perhaps beyond). In other words, they could pass a law during 2010 to provide that estate tax repeal never happened. (If this happened, we would probably see lawsuits by beneficiaries of estates that would have been tax free.)

Even if Congress does not change the law for 2010, we still have 2011 to deal with. Under federal law today, the estate tax will return on January 1, 2011 with a $1 million exemption amount and a 55% maximum rate (with an additional tax available for certain higher net worth individuals). This much lower exemption rate will catch many more people, making estate taxes an even bigger headache.

Two related issues: First, the income tax step-up basis rule is repealed for 2010. Under prior law, a beneficiary's basis in inherited property was the fair market value of the property on the date of the decedent's death; now, the beneficiary will receive the basis of the decedent (known as carry-over basis). For example, suppose Grandpa died in 2010 leaving you his house, for which he paid $60,000 but which is now worth $100,000. Under the 2009 law, you could have sold the home immediately without paying any income tax, because your basis in the home would have been $100,000. Under the 2010 law, you will have a $40,000 taxable gain. (As always, there are exceptions (such as for smaller estates) and other complications.)

Second, the federal gift tax was not repealed, although the maximum rate was dropped to 35%.

Bottom line: We may have more doubts than certainty. The big question is likely how (and when) to plan for 2011.

New Federal Programs to Help Homeowners

2009-05-11T10:10:00.003-04:00

Homeowners may be able to reduce mortgage payments as a result of recent federal programs.

Last October, President Bush announced the ‘Hope for Homeowners’ program. This was followed in February by two ‘Making Home Affordable’ programs announced by President Obama. A brief overview of these programs follows.

Hope for Homeowners: The intent of this program is to require lenders to refinance certain mortgages at a reduced principal balance. Although the guidelines are still being fine tuned, the lender is generally required to accept a payoff of your existing mortgage for an amount equal to 90% of the current fair market value of your home. Excess mortgage debt is forgiven. You are then liable for a new mortgage for the 90% amount, which mortgage will be a fixed interest, 30-40 year loan. The fine print: To be eligible for this program, the mortgage balance of your home cannot exceed $550,440. Borrowers in bankruptcy are eligible. Also, you must agree to share a portion of the equity in your home with the FHA (so, if you sell the home, the FHA gets a portion of the profits). Plus, there are closing costs and limitations on additional debt against the home.

Making Home Affordable I (Refinance). The first MHA program is to assist homeowners refinance their mortgages to take advantage of today’s more favorable interest rates and payment terms, without regard to whether they have any equity in their homes. To qualify for this program, you must be current on your mortgage. In addition, the balance of your first mortgage must be less than 105% of the fair market value of your home. This last requirement is a major hurdle for many homeowners.

Making Home Affordable II (Modification). The intent of this program is to enable the government to pay financial incentives to mortgage lenders to modify mortgage terms. Here again, the details of this program are still changing, but in general terms you apply with your mortgage lender to modify your mortgage. The lender can reduce your interest rate (to a minimum of 2%), extend your payment terms (to no more than 40 years), defer repayment of a portion of your principal to the end of the term (a balloon payment) and even forgive a portion of your principal - all to the extent necessary to decrease your mortgage payment (including taxes, insurance and association dues) to no more than 31% of your gross monthly income.

The fine print: If your aggregate debt-to-income with all other debts exceeds 55%, you will be required to obtain HUD counseling. Prior to modifying the mortgage, the lender puts you on a three-month trial to see if you are able to satisfy the reduced terms and, if successful, will then extend the terms for five years. After the five years, your interest rate is subject to increase (no more than 1% per year) to the rate cap set forth in your modification agreement (which is not greater than your original fully-capped mortgage rate). Over the five-year period, the government will make payments on your behalf to your lender to help reduce the principal balance of your loan (up to $5,000 in the aggregate). To qualify for this program, your first mortgage must be no more than $729,750 and your mortgage payment (including taxes, insurance and association dues) must be more than 31% of your gross monthly income.

As you might guess, these programs are intended to help people stay in their homes. The programs don't help with second homes or investment properties.

As a final caveat, remember that the foregoing is just a broad brush overview. There are many details and a fair amount of complexity in the programs.

Good Fences Make Good Neighbors

2009-05-04T13:15:00.007-04:00

A well-constructed contract doesn't just protect you, it may also help keep your friendship intact.

I was speaking with a close friend the other day who described how the lack of a contract with his business partner nearly cost him a good friend. Fortunately, he was able to have a heart-to-heart conversation and the two partners agreed to put their understandings in writing.

On the other hand, I have seen too many times where friends or family members go into business together on nothing more than a handshake, only to find later that their expectations were dramatically different. These cases often lead to a loss of love in a family or between friends. (I don't believe I've ever spoken with partners at the outset of their partnership who didn't think they would get along and everything would work out. It would be a truly rare situation where anyone would enter into a partnership with any other expectations.)

Business attorneys aren't often trained as relationship counselors (I certainly am not) and they don't advertise to help keep people together. Still, a well-written contract gives the individuals involved a clear understanding of what is expected and may thereby nip issues in the bud that otherwise could be costly. In addition, the process of discussing the issues involved may help you learn sooner (rather than later) about fundamental disagreements.

The bottom line: In addition to protecting yourself legally, you may be able to avoid some personal heartache by having your business relationships reduced to a contract. The few dollars you spend for the well-written contract may pay dividends down the road in savings from litigation fees avoided.

The Federal Gift Tax

2008-12-12T09:43:00.005-05:00

The past few weeks the federal gift tax has become an issue in a variety of contexts. The basic principle behind the gift tax is straightforward enough, although people are often surprised to hear about it.

Federal law requires the payment of a tax on the value of all lifetime gifts, subject to various exemptions and deductions. That's a loaded statement, so let's break it down and look at it.

The federal law involved is a statute. That means that Congress may change the law with the 'stroke of the legislative pen'. This has happened numerous times in the past and many observers expect it to happen again as soon as next summer.

The federal gift tax rate is currently 45% - that's right, nearly half the value of the gift. So, setting aside deductions and exemptions for the moment (discussed below), if I make a gift to my friend Jimmy of $100,000, I would then pay the IRS $45,000 for the privilege of making the gift. The entire transaction would cost me $145,000!

By the way, the donor (that's the person who makes the gift) pays the tax. The donee (the recipient of the gift) does not pay the gift tax - nor is the donee obligated to pay income tax on the gift. 'Tis better to receive, in this case!

The tax is payable on the value of the gift. With a cash gift, there's not much to worry about. If the gift is real estate, a business interest or your prize stamp collection, there is often a great deal of discussion regarding value. Added to this are a variety of valuation discounts the IRS permits under certain circumstances (such as making a gift of a small amount of stock in a corporation, where the recipient will not be in control).

Which brings us to exemptions and deductions. Like the income tax, the gift tax laws allow us to reduce the amounts otherwise payable on the tax. There are many exemptions and deductions, but the primary ones are these:

First, there is an unlimited marital deduction. So, you can give your spouse a billion dollars without owing a dime to Uncle Sam. Nice for Bill Gates.

Second, there is a charitable deduction, for certain gifts to charities. There's a lot more to say about this than will fit in one blog.

Third, there is the annual exclusion. This permits anyone to give up to $12,000 a year to any (and every) person on the planet. So, I can give my son, my uncle, my friend, my irrevocable trust, my worst enemy and that guy I don't know at all $12,000 each every year, all without paying any tax to IRS or even telling the IRS I did it. That $12,000 amount adjusts every few years (many people still remember it as a $10,000 exclusion) and it is scheduled to increase to $13,000 on January 1, 2009.

Finally, there is the lifetime exemption. This permits me to make up to $1 million in gifts during my lifetime without paying any tax. So, if I make some gifts that don't fall under any of the other deductions, I can still rely on this exemption. That's $1 million total (all my gifts over my lifetime) - not per person and not per year. In order to use this exemption, you must file a Form 709 with the IRS to let them know.

Ok, let's see if you've been paying attention. Say I want to file a quit-claim deed naming my Child as co-owner of my real Property (to avoid probate, perhaps). The Property is worth $500,000 (we'll presume there's no mortgage for this example.) What would be the result?

Well, naming my Child on the deed is a gift to my Child of half of the value of the Property. The IRS would value the gift at $250,000 (half the value of the Property), unless I could argue the property values were down, etc. - thereby requiring an appraisal. The only deductions/exemptions available are the annual exclusion and the lifetime exemption. Subtract $12,000 from the value of the gift and you have $238,000. That would be the portion of my lifetime exemption I would use to avoid paying gift tax. (Or, I could save the exemption and pay the tax, although the reasons for doing that are beyond the scope of this blog.) See, easy!

By the way, the gift tax issue is only one reason I don't recommend naming your child on the deed to your property. Liability is another reason (and there are others). Usually, there are better ways to achieve the objectives behind naming your child on the deed.

One last thought: this discussion is about the federal gift tax. Many states impose state gift taxes in addition to the federal gift tax. So, you should check with your state taxing authority on these issues. (Florida, happily, does not impose a state gift tax. One more great reason to move to Florida!)

Not Worth the Paper It's Written On

2008-11-18T15:16:00.003-05:00

A handshake is good for an introduction, but it's a lousy way to do business.

Your average lawyer will shudder in horror if you mention the idea of a verbal agreement. The reason is simple: A verbal agreement may save you some hassle and expense up front, but if trouble brews (and it usually does!), you will repay those savings (both the hassle and the expense) many times over.

The well-written contract doesn't just set forth the terms of the deal; it will also address contingencies that may arise as the business moves forward. What if one of the parties dies? What if the business fails? What if the business succeeds beyond expectations? What if one of the parties wants to retire or sell their interest?

The well-written contract is built upon the fundamental question 'what if?' The contract must achieve the purpose intended under the anticipated situation, but it must also 'work' if things don't go quite the way either party expected. This is the reason lawyers will think of situations that may arise and consider the outcome of the situation under the contract. Experienced lawyers will have an idea of the type of situations that may arise, but will still discuss with their clients the possible contingencies to get a better idea what purposes the contract may serve.

When discussing contingencies with a client, I often discover that they had not yet thought about these issues. The resulting discussion and enhancements to the contract can bring the client a sense of satisfaction that the i's have been dotted.

So, what do you do when the other side to your deal says "you don't need a lawyer; my word is my bond"? I think you have two choices: Either try to explain the benefits to both sides of a well-written contract or run for the hills.

Demand Letters

2008-11-11T10:29:00.003-05:00

A 'demand letter' may be an inexpensive way to resolve a matter or it may just be another stepping stone on the way to litigation.

Clients frequently approach me to write demand letters for them. In a typical scenario, the client has a contract with another person and the other person has failed to live up to their part of the bargain. The client may not want to jump directly into the world of litigation (which is understandable), so a demand letter may help.

A demand letter is essentially a letter from an attorney that makes a demand on someone to do something. The letter sets forth the facts of the case, the particular complaint (how the contract was violated) and the legal principles involved. Although any client can write a letter to another person making such a demand, the involvement of the attorney can make a difference - showing the other person that the client is serious about the matter and willing to involve the attorney to resolve the matter.

In the breach of contract example, I might write a letter to the other person who defaulted under the contract and demand, on behalf of the client, that the other person pay the client a specific sum. The letter may instead demand the other person to take a particular action, as required by the contract or as suggested by the client as a means for a settlement. The client provides the direction, letting me know what demand they want me to make on their behalf.

My preferred approach is to prepare a draft letter and give it to the client to review. This gives the client the opportunity to correct factual mistakes and confirm that they want the letter to be sent. Once the letter is finalized, I sign it and send it certified mail (and, often, facsimile as well). I usually include a deadline in the demand letter by which the other person must act.

In my experience, demand letters 'work' more than half of the time - but they are certainly not universally effective. Some people will receive a demand letter and will respond quickly to avoid further legal process. On the other hand, some people will ignore a demand letter entirely and wait for the lawsuit to be filed. It's not always easy to tell which type of person you are dealing with (and people will surprise you!).

Obviously, the demand letter approach holds the most benefit when the other person is willing to negotiate a settlement and avoid litigation. Such a settlement greatly reduces the costs, time involvement and hassles of the parties. This can be a real win-win for all involved.

Future Changes in Federal Tax Laws

2008-11-06T16:14:00.011-05:00

As has been discussed before in this blog, federal law imposes a 'death tax' on the estates of decedents, generally referred to as the federal estate tax. In addition, the IRS collects a federal gift tax, which is imposed on gifts made during a person's lifetime.

Happily, there are a variety of exemptions and deductions to reduce these taxes; as a result, most people never pay any estate or gift tax at all. For example, there is an unlimited marital deduction from both taxes, so that gifts between spouses are not taxed. Charitable gifts are also generally deductible.

The federal estate tax also allows for a $2 million exemption from the tax. This means I can leave up to $2 million in my estate to anyone without an estate tax obligation. (Coupled with the unlimited marital deduction, I could leave $100 million to my wife and $2 million to my children and no estate tax would be payable!)

The federal gift tax allows for a $12,000 annual exclusion. This allows me to give $12,000 this year to everyone in Naples, Florida without paying any federal gift tax. In addition, each of us has a $1 million gift tax exemption. So, if I give my daughter a home worth $500,000, I don't have to pay any federal gift taxes on that gift.

Please note: The $1 exemption is cumulative during your lifetime, not per person per year like the $12,000 annual exclusion. Also, the IRS requires a report be filed to notify the IRS when we use a portion of our gift tax exemption amount.

That's the situation today. What does the future hold?

The federal estate tax exemption amount will increase to $3.5 million on January 1, 2009, in accordance with the laws on the books today. Even better, the entire federal estate tax is scheduled to be repealed on January 1, 2010. Don't get too excited, however; the repeal is for only one year. On January 1, 2011, the estate tax is scheduled to return with a much-reduced $1,000,000 exemption amount. The gift tax exemption amount is frozen at $1 million for the foreseeable future.

These future changes are by no means certain. Congress can (and often does) change the exemption amounts with the proverbial stroke of a pen. So what will happen?

President-Elect Barack Obama campaigned on a promise to hold the estate tax exemption amount at $3.5 million. It appears that Obama will enjoy solid majorities in both houses of Congress for at least two years. Accordingly, he should have little difficulty in keeping his promise (particularly given that Republicans would certainly not push for a lower exemption amount). Of course, this begs the question whether he will want to keep this promise.

It is likely that Congress will act in this area some time during 2009 because Democrats are reportedly not happy with the idea of a complete repeal of the estate tax in 2010. So, you can expect to hear debate on tax issues in general, and estate and gift tax exemption amounts in particular, next year.

The Best of Both Worlds

2008-11-04T15:33:00.002-05:00

A question I receive with some frequency is whether to form a new company as an LLC or an S corporation.

I like this question for two reasons: First, it shows people have already done some homework. They understand some of the basic issues to be addressed when setting up a new company. Second, it allows me to give them a really fun answer.

The answer? Do both!

Here's the reason: The term 'LLC' (or 'limited liability company') is a STATE law designation given to the type of entity formed. Same with 'corporation' or 'limited partnership'. On the other hand, the term 'S corporation' is a FEDERAL tax term given to an entity that has been recognized by the IRS for a particular type of tax treatment.

So, form the new company as an LLC, then file the necessary paperwork (IRS Form 2553) to obtain IRS recognition that your LLC is to be taxed for federal income taxes as an S corporation. This treatment may not be the best approach for every new business, but it does make a lot of sense for many new businesses.

Fun answer, huh?

Updating Old Documents

2008-10-02T19:05:00.003-04:00

Ok, here are the Top Three Reasons clients give for wanting to update their current (dare I say 'old') estate planning documents:

1. You moved. As I've written before in this blog, Florida courts will generally enforce out-of-state documents so long as they were correctly executed in the former state. Nonetheless, the laws of each state differ. For example, Michigan law may allow your best friend to be your executor, but Florida courts won't allow it if your friend isn't a Florida resident.

2. You've decided to change ... something. You've decided on a different executor, you want to divide your estate differently among your beneficiaries, you want to change the person who makes medical and financial decisions for you when you are unable to do so, or .... something. These changes are generally not a problem (so long as your 'old' documents are revocable), although the changes need to be correctly evidenced with proper documents.

3. The law changed. This one isn't even your fault. Tax laws, privacy laws, inheritance laws and other laws do change from time to time and may necessitate changes to your documents. For example, the federal estate tax exemption amount is scheduled to increase from $2 million to $3.5 million on January 1, 2009. On one hand, this means decedents are able to shelter additional amounts from the IRS. On the other hand, the additional exemption amount may substantially decrease the amounts distributable to your spouse upon your death if your trust was drafted with typical 'A-B' trust provisions (also referred to as marital and family trusts).

Remember, your estate planning documents don't have an inherent expiration date. So, pick a day each year - your anniversary, birthday, January 1, whatever you'll remember - and think about your estate plan. Should take about a minute and most years you won't be able to think of anything to change. This little exercise will help keep your estate plan fresh.

Business Succession Planning

2008-10-01T21:43:00.004-04:00

I met with a client today to discuss business succession planning. This area of the law is of particular interest to small business owners, who want to be certain their designated 'heir' will be legally entitled to own and run the business after the owner passes away.

For example, the owner may want a child or sibling to receive all of the owner's stock, thereby receiving the right to own and run the business. Alternatively, the owner may want to divide ownership and control of the business among several family members, perhaps with some family members having greater day-to-day control and others receiving larger distributions of the net profits of the business. As may be apparent, there is a wide variety of planning possible.

While thinking about business succession planning, owners often consider 'key man' life insurance policies, which can provide liquidity to help the business cover debts on the death of the owner. Life insurance can also be used to fund a 'buy-sell' agreement, which would enable a surviving business partner to purchase the stock owned by a deceased partner; this allows the deceased partner's family to receive cash equal to the value of the partner's stock, while the surviving partner retains ownership and control of the business.

Finally, probate and taxes should also be considered. A properly-prepared business succession plan will help the owner sleep a little more soundly.

Revocable and Irrevocable Trusts

2008-09-29T19:25:00.005-04:00

Trusts can be divided into two worlds: revocable and irrevocable.

A revocable trusts is typically drafted so that the creator of the trust may change the trust in later years. For example, the creator of the trust may change who will manage the trust once she is unable to do so or who will receive the assets of the trust after she dies.

Irrevocable trusts, on the other hand, are generally considered to be 'locked up' once they are created. In very general terms, changes to the trust may not be possible at all.

Most of my clients have trusts and most of these trusts are revocable. The obvious reason for the preference for revocable trusts is control. With revocable trusts, clients retain the ability to make changes as their circumstances change - with irrevocable trusts, this is generally not the case.

With this in mind, the question may be asked: Why would anyone ever use an irrevocable trust? The answer is that irrevocable trusts can help reduce estate tax exposure, shelter assets from future creditors and achieve certain other client objectives. As a general rule, however, most people simply don't need irrevocable trusts.

I've taken some care to use the term 'generally' throughout this post. This is because it is possible to draft an irrevocable trust so as to give some flexibility for changes down the road. In doing so, however, much care must be given in drafting the trust or the purpose of the trust (estate tax reduction, creditor protection, etc.) may be lost. In addition, Florida law does allow judges (and certain other individuals) to make changes to irrevocable trusts.

Nonetheless, because of the time, expense and uncertainty involved in seeking to amend an irrevocable trust, it is best to consider irrevocable trusts as beyond amendment when planning. Accordingly, think carefully prior to signing an irrevocable trust.

Domicile

2008-09-24T21:02:00.005-04:00

'Domicile' and 'residence' issues answer the question of where an individual lives. For most people, these questions are easy to answer; but, if an individual spends a great deal of time in more than one state, the lines become less obvious.

Recently, a client who spends time in New York and Florida asked for help in solidifying his Florida domicile. Clients often want to establish Florida domicile to:

(1) Avoid state income taxes in their 'old' state (Florida has no state income tax on individuals).

(2) Avoid state death taxes in their 'old' state (Florida also has no state death tax).

(3) Obtain Florida property tax benefits that are available only to Florida residents.

Domicile issues are also important in determining whether Florida probate law governs the administration of a decedent's estate.

Unfortunately, there is no single step to definitively establish Florida domicile for all purposes. Rather, Florida courts review a list of relevant factors, such as (i) what domicile is indicated on the individual's Last Will and Testament, (ii) where the individual owns real property, and (iii) where the individual's car is registered. Depending on whether the court is reviewing domicile for tax, probate or other purposes, there may be as many as 10 or 20 such factors.

Accordingly, domicile decisions typically boil down to whether the various factors point more towards Florida domicile or domicile in another state. Complicating the process is the fact that each state has their own rules for determining domicile, which may or may not yield the same result as the Florida tests.

Especially for our 'snowbird' friends here in Florida, domicile issues must be considered in an individual's overall estate and tax plan. Otherwise, you (or your heirs) may be in for a surprise.

What Is Probate

2008-09-23T22:19:00.003-04:00

"Probate" is the court-supervised process of judicially acknowledging a decedent's will (if any), identifying all of the 'probate assets' of the decedent, identifying all of the creditors of the decedent and distributing the probate assets in accordance with law.

This process generally requires around nine months in Lee and Collier Counties (southwest Florida), although the process may be much quicker if the value of the probate assets is less than $75,000 or the decedent has been dead for at least two years; then again, the process may be much longer if the decedent has IRS issues (e.g., estate tax issues, as discussed in a prior blog).

The expenses of probate include:
Attorney fees - up to 3% of the estate
Personal Representative (executor) fees - up to 3% of the estate
Court filing fees - about $300
Newspaper costs to file notice to creditors - about $400
Miscellaneous costs, depending on the particulars of the estate

As an example, suppose I die owning a CD worth $10,000 and my Will says my wife gets everything. My wife could walk into the bank with my death certificate and my Will and the bank would tell her to go to probate court. They would simply refuse to release the CD to her without an order from a probate judge telling them to release it, despite the fact that she is my sole heir under my Will and she has proof that I have died.

Because of the hassle and expense involved, many clients endeavor to avoid probate. This is possible for many clients, through the use of trusts, joint accounts, payable on death arrangements and other devices. Each of these devices has its pros and cons, so it is always good to go over your situation to be sure you are not trading one problem for another problem.

Estate Taxes

2008-09-19T23:23:00.002-04:00

The federal estate tax currently imposes a 45% tax rate on a decedent's estate. For this purpose, your "taxable estate" consists of more assets than you might think. For example, just because a joint bank account may avoid probate administration does not mean the IRS won't be able to tax the decedent's share.

Fortunately, federal law also provides for two very big reductions from the estate tax burden:

First, the estate tax marital deduction. Federal law allows you to deduct from the estate tax calculation the value of all assets that you leave to your spouse. In the previous sentence, "all assets" means just that - the estate tax marital deduction is unlimited. Good news for Bill Gates, who can leave billions to his wife tax free. (Don't get too excited, the IRS is patient and they know they can tax his wife's estate when she dies.)

Second, the unified credit. Federal law allows you an exemption of up to $2 million, no matter who receives your estate. So, if the aggregate value of all of your assets (don't forget your home equity, IRAs, 401(k)s and the death benefit on your life insurance) is less than $2 million, you won't owe any estate tax. Even better, that amount is scheduled to increase to $3.5 million on January 1, 2009.

For married couples with a combined net worth over $2 million, there are ways to reduce your estate tax exposure. And, yes, the IRS has sanctioned them!

The Big Four

2008-09-17T19:42:00.009-04:00

I offer a free initial consultation for clients to go over their financial and family issues affecting their estate planning. In this meeting, I make sure to talk about The Big Four estate planning issues:

1. Incapacity Planning: A Durable Power of Attorney and a Health Care Advance Directive are basic documents for all clients. These documents answer the question: "Who will make medical and financial decisions for me if I can't make them myself?"

2. Distributions: Your Last Will and Testament (and Revocable Living Trust, if you have one) answer the question of who will receive your estate - and when. Many clients want to hold back distributions so that their children (or others) receive their inheritance over time, rather than all at once.

3. Probate: In the State of Florida, probate administration is required to clear title to assets that were owned in the deceased's name at the time of death. In other words, if I die holding a CD in my name, the bank won't pay the CD to my wife - even if she is my sole heir - until the probate judge orders the distribution to happen. I'll discuss more about probate in another post, but as a general rule most clients try to avoid it.

4. Taxes: First the good news: the State of Florida does not impose a death tax. Now the bad news: the federal government is not so kind. The federal estate tax is currently imposed at a 45% flat rate, with a $2 million exemption amount. Again, I'll talk about taxes more in a later post.

Those are the Big Four. If you don't know the answers to those questions in your case, it's time to call.

Choosing Your Executor

2008-09-17T19:42:00.005-04:00

A client asked whether her friend in Michigan could serve as her executor ('Personal Representative,' as we say in Florida). Unfortunately, the answer is no.

This is a question that I receive with some frequency, given the number of retirees and others who move to Florida. The answer is not simply a caution in preparing your will; it's also a good reason to visit a Florida estate planning attorney to review your current will from your old home state.

Florida law provides that your executor ('Personal Representative') must be a Florida resident or a close family member (such as a parent, child or sibling). Any other individual (such as your best friend up north) is not eligible to serve as your Florida executor and will not be appointed as your executor by the probate court.

But we'd love to have them visit. Florida loves tourists!

Parents Take Note

2008-09-16T22:27:00.003-04:00

Under Florida law, a child is no longer a minor upon their 18th birthday. That means the parent's natural guardianship rights are terminated on that day.

As a result, you may find yourself asking a judge to appoint you as your child's guardian if you want to make medical or financial decisions for your 18-year old.

This expensive hassle can be avoided by having your child sign a Durable Power of Attorney and a Health Care Advance Directive giving you the authority to take care of your child's medical and financial decisions. Your child may not own any property, but medical decisions are always a possibility.

How's that for a great birthday gift for your 18-year old!

Welcome to The Lindsay Law Firm Blog !!

2008-09-16T11:40:00.000-04:00

This is the first entry of The Lindsay Law Firm blog. The purpose of this blog is to share with the public issues of general interest as they arise in the Firm's day-to-day practice.

The Lindsay Law Firm practices in Estate Planning and Business Law, as further described in the other areas of the Firm's website (www.TheLindsayLawFirm.com).

Because the issues discussed in the blog are for general use, the subjects addressed will focus on the 'big picture' perspectives. As a result, you should generally presume that exceptions and details exist to the general discussions in the blog. Further, the application of principles to any one person's particular situation will vary. Bottom line: please do not rely on the discussions in this blog as representing the final and definitive word for you.

If you are interested in the issues addressed, the Firm would be happy to answer any questions you may have. But, no attorney-client relationship is formed or intended by the information conveyed in this blog.

The Firm's hope is that the information in this blog will help you organize your thoughts, consider new issues and approaches and generally learn more about Estate Planning and Business Law!