Florida Estate Planning

The two main objectives of estate planning are

• To secure to the property owner during his or her lifetime the maximum benefit and use of the property; and
• To allow the property owner to transfer that property to the surviving family members or other designated beneficiaries with minimal loss from taxes and property transfer costs.

Consequently, estate planning is concerned primarily with

• Minimizing or eliminating federal and state income, estate, gift and inheritance taxes;
• Reducing or eliminating probate and other property transfer costs; and
• Preserving and protecting the property owner's net worth to benefit the property owner during his or her lifetime and that individual's beneficiaries after his or her death.

A skilled estate planner can take into account the unique objectives of his individual clients and create a sensible wealth accumulation and property transfer plan which is consistent with those objectives.

A comprehensive estate plan should effectively

• Avoid the need for guardianship during one's lifetime;
• Avoid the need for probate administration after one's death;
• Plan for the uncertainties of changing estate and generation-skipping transfer tax law and reduce the potential estate-tax burden for an individual's beneficiaries.

The documents every individual needs, regardless of wealth, are as follows:

• Last Will & Testament
• Durable Power of Attorney
• Health Care Surrogate
• Living Will (optional)
• Revocable ("Living") Trust

For others, additional documents are recommended, for example

• Irrevocable Life Insurance Trusts
• Family Limited Partnerships
• Limited Liability Companies
• Buy-Sell Agreements
• Pre-Marital Agreements

Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001

Since Congress passed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001, there has been a great deal of confusion about the nature and extent of the tax relief afforded and how it impacts a person's estate planning decisions. In that analysis, it is important to stress the following frequently misunderstood point. The estate tax has not been repealed and it may not ever be repealed. The law presently states that the estate tax will be repealed only for one year, after which it will be reinstated permanently if both houses of Congress do not affirmatively pass legislation to repeal it permanently;

The estate, gift, and generation-skipping transfer tax (GST) exemptions have been substantially increased;

• For most clients whose estates exceed the applicable exclusion amount ($1.5 million in 2004 and 2005, $2 million in 2006, 2007, and 2008, and $3.5 million in 2009), further revisions may be required even after the revisions being made now, depending on what steps Congress takes;
• Certain issues cannot be addressed with any certainty, because the ultimate state of the law is unknown;

Good estate planning involves more than tax planning, and good estate planning is and will remain important, even if the estate tax is permanently repealed, in order to

• assure the correct disposition of the client's assets;
• assure that a client's assets are not left outright to spouses or children who are not capable of competently managing those assets;
• assure appropriate management of the client's assets in case of disability;
• avoid unnecessary administration expenses by avoiding probate and guardianship;
• maximize the federal and state benefits available to the client and potential beneficiaries, particularly in case of disability and old age;
• limit the claims of creditors (including former spouses) of a beneficiary;
• assure proper succession to the ownership of a closely held business.

Estate planning is more than just planning for the avoidance or reduction of estate, gift and GST taxes, it is also the clear mapping out of the distribution and management of one's wealth for generations to come.

Do You Have Questions? Use the Quick Contact Form below to send your question today.