We are pleased to announce that partners Stuart R. Morris and Gregory S. Bloshinsky have been named members of Florida Trend magazine's 2008 Legal Elite. This annual edition of Florida Trend's Legal Elite names the top 1,170 lawyers who have earned the trust and confidence of their peers - those who know their work the best. This year's Legal Elite is a prestigious roster representing 1.9% of the approximately 61,500 active Florida Bar members who practice in Florida.

In addition, Stuart Morris was included in the Super Lawyers South Florida 2008 edition. The selections for Super Lawyers are made by Law & Politics. Each year, Law & Politics undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by Law & Politics' attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check. Only 5 percent of the total lawyers in the state are selected for inclusion in Super Lawyers.

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With bank failures looming and the increased scrutiny of banking practices due to the mortgage loan crises, it is time to review the rules for Federal Deposit Insurance Corporation (FDIC) coverage. First, the rule is fairly straightforward that for a single account owner the maximum FDIC coverage amount is $100,000. But if the account owner is a revocable trust with multiple beneficiaries, the rules are anything but simple. Please feel free to contact us if you have any questions concerning your FDIC account coverage, but read on for examples that apply in many instances.

The best way to approach the FDIC coverage calculation is by way of example.

Facts:

James Smith opens a deposit account linked to his formal revocable trust titled "The James Smith Revocable Trust, dated June 9, 2003." The trust indicates that he is the sole settlor (or grantor) of the trust and he and his wife, Mary Smith, are the trustees. The trust identifies his son, Joe, and daughter, Margaret, as the co-beneficiaries. Each beneficiary will receive 50% of the trust assets when the owner dies. Everyone named in the trust is living. The trust also provides that his son must graduate from college to receive his bequest. James Smith has no other deposits at this bank.

Step by Step Analysis:

1. Who are the owners of the trust?
   James Smith is the sole owner named in the trust agreement. (Mary Smith is a trustee and not an owner or beneficiary, her designation as trustee is irrelevant in calculating FDIC deposit insurance coverage for this deposit.)
2. Who are the primary beneficiaries upon the death of the owner?
   There are two beneficiaries named in the trust agreement, Margaret and Joe, the owner's children.
3. Are the primary beneficiaries qualifying or non-qualifying beneficiaries?
   A son and daughter are both qualifying beneficiaries as to the owner of the account. Please note an individual must be related to the owner to be a qualifying beneficiary.
4. Is everyone named in the trust now living?
   Both owners and beneficiaries are now living.
5. What is the dollar amount or percentage interest the owner has allocated to each primary beneficiary?
   Each of the co-beneficiaries (son and daughter) is to receive 50% of the deposit upon the owner's death. Because this is a revocable trust, the condition requiring the son to graduate from college to receive his beneficiary interest will not affect the insurance coverage.
6. Is the trust properly identified in the bank's records?The deposit account title: "The James Smith Revocable Trust, dated June 9, 2003" meets the FDIC regulatory requirement.

Starting in 2008, IRA owners who direct that all or a portion of their Individual Retirement Account be given to charity once again have to report the withdrawal as income and deduct the donation as a charitable contribution. As a result, the deduction may be limited by the adjusted gross income cap on charitable contributions and the itemized deduction phase out. It has been reported that Congress is likely to eliminate this potential roadblock for 2008 tax returns.

Looking ahead, starting in 2010, individuals with more than $100,000 of modified adjusted gross income are free to switch a traditional IRA to a Roth IRA. For conversions in 2010, taxpayers can spread the tax due over two years. Half the tax will be due in 2011, and the remaining half will be payable in 2012.

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This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client.