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Melbourne Florida Estate Planning Law Blog

The importance of a business estate plan

While putting a business estate plan into place can provide entrepreneurs in Florida and around the country with peace of mind, there are also a number of tangible benefits that can be reaped from addressing succession issues in a timely manner. A business estate plan can help avoid costly disruptions following the death of a principal and provide managers with a strategy for future growth. For example, drafting a buy-sell agreement could prevent bitter disputes erupting between heirs and partners and keep unqualified or unsuitable individuals away from important decisions.

Buy-sell agreements are especially important when businesses have multiple owners. These agreements provide clear instructions for how business assets are to be treated following the death of a principal, and they may allow other owners to automatically acquire the deceased principal's share of the company. A business estate plan can also reduce exposure to estate taxes. Placing business assets in a grantor retained annuity trust allows entrepreneurs to maintain their income streams while transferring ownership of their businesses to their heirs. This arrangement also prevents any appreciation in equity or value being subject to estate tax.

Umarried Florida couples need estate plans

Estate planning is important for everyone but especially so in the absence of children, who are natural heirs when a parent passes. For singles or couples without children, the absence of a plan can lead to unintended consequences and protracted litigation. A famous case is the estate of the musician Prince, who died without a will and whose estate is the subject of ongoing litigation that may last years.

Individuals who utilize estate planning determine the manner in which assets are distributed and account for contingencies. For example, when a husband dies, assets generally go to his wife, but if she dies without children, the assets could go to her next spouse or extended family. Estate planning is a tool to plan for the passing of assets or managing incapacitation from injury or illness. Thinking about things ahead of time saves loved ones from stress and prevents dissipation of estate assets through taxes, legal fees and court costs.

Talking to adult children about estate planning

Florida parents should talk to their adult children about their estate plan. This can help their children understand the plan and can also help parents make sure they clear up any misunderstandings about the assets. In some case, this can mean significant savings for beneficiaries.

For example, beneficiaries might not understand the tax ramifications of inheriting an IRA. A stretch option allows them to take only the minimum distribution, but some may want to take a lump sum. However, this can lead to paying 40 percent or more of the account in taxes and penalties. Children should also know that they cannot roll over an IRA into their own accounts without incurring a large tax bill. An IRA custodian may be able to administer the inherited IRA and manage the required minimum distribution.

Tips for updating an estate plan

Since Congress passed a new tax law in December, Florida residents might want to review their estate plans. The estate tax exemption for couples has doubled to $22 million, so people who previously created estate plans with an aim of avoiding taxes may no longer need those provisions. However, there are other reasons that people of all income levels should review their estate plans regularly.

An estate plan has two main functions. One is to distribute assets after death, but the other is to make plans in case an estate holder becomes incapacitated. This means a person needs powers of attorney that appoint others to make financial and medical decisions in certain circumstances. An estate holder should also review beneficiary designations to ensure that the people chosen to receive assets from retirement accounts, life insurance policies and other accounts have not changed.

Ways you may lose VA benefits

Adjusting back to civilian life is difficult enough under normal circumstances. Adding disability to the equation can make it even more challenging. Fortunately, you can receive financial benefits as a disabled veteran, whether old or young, to make things easier. 

Do you wonder how long your benefits will last and what can cause them to stop? General information is as follows, but for answers specific to your case, speak to a VA-accredited attorney.

Executive order aims to minimize suicide among veterans

By order of President Donald Trump, three government agencies must come up with a plan to improve conditions for military veterans who are facing difficulties adjusting to civilian life. On the second Tuesday of the year, the President ordered Homeland Security, the Department of Defense and Veterans Affairs to coordinate the formulation of a new strategy aimed to reduce the high rates of suicides among veterans from Florida and around the country who are returning from the protracted armed conflicts in Iraq and Afghanistan, which in recent years have expanded to Syria and parts of the African region.

Compared to active duty members, veterans who have left the service are three times more likely to suffer from anguish and emotional turmoil often caused by post-traumatic stress disorder, high anxiety and debilitating depression; these are factors that increase the potential for suicidal thoughts. A troubling report from 2014 indicates that 20 veterans committed suicide on a daily basis during that year, and this is something that the current VA Secretary wants to address immediately.

Reasons to include art in an estate plan

Florida residents who collect art generally do so because they enjoy it. They may also do so because they hope or expect that their collection will increase in value over time. In most cases, they plan on buying a piece and holding it until their death. However, art collectors may not necessarily account for their holdings when creating an estate plan.

One way to handle an art collection is to transfer ownership while alive to a corporate entity. This may remove the need for probate while also answering questions about who owns the art after the collector dies. In many cases, collectors are unsure who to give their collection to after they pass, which may increase the odds for conflicts among family members. It may also be worthwhile to donate art to a museum or similar entity after the original owner passes away.

Mistakes to avoid with trusts in estate planning

You might be in the midst of reviewing your estate plans when you arrive at the conclusion that you need to add a few trusts. Trusts are very useful planning tools that can help you to protect your estate and loved ones’ inheritances. But they are not ideal for every situation or person. 

Take a few moments to review some mistakes to avoid with trusts to prevent issues with your estate plans and end-of-life wishes. 

Decluttering finances and estate planning

When planning for retirement in Florida, many people decide it is time to create an estate plan. Estate plans do not have to be messy and complicated. Just as taking the clutter out of a room can make it easier to access and enjoy, decluttering one's finances can make estate planning simpler and easier.

Consolidating bank accounts and setting up automatic drafts for bills can make managing and tracking funds much easier. An important fact to keep in mind is that FDIC insurance is limited to $250,000 per depositor at each institution. Selling individual stocks and investing in a professionally managed mutual fund can help simplify investments.

Medicaid planning can be important for couples needing care

For people in Florida, preparing for future medical expenses can be a major concern. This is especially true when someone needs to take advantage of the long-term care provisions of Medicaid when dealing with serious disabilities or a need for memory care or other residential facilities. Spouses in particular may be concerned about the way Medicaid's rules about assets relate to their future planning.

For a single person who needs to access Medicaid, including its nursing home coverage, they must have no greater than $2,000 in assets. Married couples are treated somewhat differently, and transfers of assets between spouses do not affect Medicaid's assessment of a couple's wealth. Some assets are excluded from the assessment, including the primary home if one spouse is able to live in it, one car and term life insurance that does not have cash value during life. All other assets are countable for Medicaid purposes, and the healthy spouse can retain up to approximately $121,000 of remaining assets.

Consult Our Florida Lawyer for Veterans Aid & Attendance

Feel free to contact us and schedule an initial consultation where we can review your circumstances in an intimate setting and discuss how our Brevard County Elder lawyer can help you. Simply call Amy B. Van Fossen, P.A., locally at 321-426-1848 or toll free at 800-495-9153. We look forward to meeting you.

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