10. No Estate Plan at All. This is the most common mistake people make and perhaps the most costly. Statistically, more than 60% of Americans do not have even the most basic estate planning documents such as Revocable Trusts, Pour-Over Last Will and Testaments, Durable Powers of Attorney, Designations of Health Care Surrogate and Living Wills. And with no basic estate planning, the IRS may well, albeit unintentionally, become one of the beneficiaries of your estate.

9. No Incapacity Planning for Yourself and/or Your Minor Children. If you do not plan for your incapacity, a judge will ultimately do the planning for you through a highly intrusive court established guardianship. The same issues arise if you have failed to plan for who will care for your minor children if you predecease them. Once a guardianship is established and the courts are involved in your personal affairs, your private information could become public record. In addition, the court’s involvement requires that your family spend more time and money trying to resolve the issues than would otherwise be required, with no guarantee of an outcome that you would have wanted.

8. No Life Insurance Planning. One of the biggest misconceptions regarding estate planning is that life insurance benefits are tax-free. While this is generally true from an income tax perspective, it is most definitely not true for estate tax purposes. Without proper planning, the death benefit on a life insurance policy that you own is 100% includible in your gross estate at your death.

7. No Multi-State Planning. If you own real property outside of Florida and you are a Florida resident, through proper planning, you can avoid a probate proceeding in the other state. Additionally, through more advanced planning, you can also minimize, or even eliminate, the state tax implications in the other state.

6. No Lifetime Gifting Plan. The annual gift tax exclusion (currently $12,000 per person) is probably the most under-utilized of all estate planning techniques. Remember that not only are you taking out of your estate the annual exclusion amount itself, but also the future appreciation from those assets. In the end, this could noticeably lower your estate taxes.

House Bill 209 repeals the annual intangible personal property tax effective January 1, 2007. Importantly, Governor Bush has not yet signed this legislation; however, the Clerk’s Office for the House of Representatives has indicated to our office that he is expected to sign it within the next few weeks. Note that even under the new law, all annual intangible personal property taxes imposed for calendar years 2006 and prior years remain due.

What does this mean to you?

It means that those trusts that you created to avoid the tax, sometimes referred to as FLINT Trusts, are no longer necessary. If you have one of these trusts, or if you are unsure if you have one, please call us at (561) 750-3850 or send an email to us so we can advise you on how to proceed.

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Question:

Dear Ms. Dickinson,

I'm very concerned that if my daughter gets divorced one day, the wealth I will have left to her will end up going to her then ex-husband. Is there anything I can do to prevent this dreadful possibility from becoming a reality?

Answer:

Morris Law Group has created a new type of trust to benefit our clients’ beneficiaries called the Generation Spanning Trust™. Intricately designed and highly complicated, this trust allows individuals to set aside up to $2 million, or $4 million for a married couple, during their lifetime or upon death in a trust for the benefit of their descendents. The trust will avoid estate taxes for 360 years in the State of Florida and be protected from the beneficiaries’ spouses in the event of a divorce, as well as from general creditors. It also allows the individual establishing the trust to designate the beneficiary trustee of the trust and to determine the level of control the beneficiary should have over the funds.

So you can rest at ease! If you’d like more information, email us at Info@Law-Morris.com.

Best Regards,

Tasha Dickinson, Esq.