Life Estate Florida Probate

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Life Estate Florida Probate Powered By Docstoc
					This program is presented for educational purposes only. It does not constitute legal advice. Always consult an attorney for legal advice.
The information contained in this presentation is intended for
                 educational purposes only.

                       Don Gonzalez
                 A Professional Association
                      Weston Florida
                  DonGonzalez@aol.com
                  Dgonzalez_US_Attorney
        Course Objectives
• Know the key steps to take when death
  occurs

• Understand the difference between Probate
  and Taxable Estates

• Know the strategies to advise to reduce
  probate and tax consequences
Only Two Guarantees in life
Immediate things to do after death

                    Request at least ten death
                    certificates
                    Burial, Cremation, Donation
                    of Body decision if not part
                    of a Living Will.
                    Locate the decedent Will
                    Prepare inventory of assets
                    Locate insurance policies
                    Notify social security
                    CONTACT YOUR ATTORNEY
               On the Web at:
          CIIIS.DonGonzalezPA.US

               By Email at:
           DonGonzalez@aol.com

               By Skype at:
          DGonzalez_US_Attorney

WESTON OFFICE
1820 N. Corporate Lakes Blvd.
Suite 201
Weston, Florida 33326
Tel 954-598-0660
             Two different Estates
                                    Property owned at Death


Probate Estate-
Those assets which will pass to beneficiaries thru a
court supervised proceeding which will
I)    Authenticate will or not?
II)   Establish personal representative
III) Provide for payments of debts and taxes
IV) Heirs are identified
V)     Property in probate estate is distributed       Taxable Estate-
      I)     will or
      II)    no will

                                                       The portion of your estate that is
                                                       subject to Federal or Estate Taxes
 Probate Estates
  1.With will-
     testate
2.Without will-
    intestate
Probate Administrations
Type is based on the amount of assets
        Full Administration-For all Larger
        Estates
         Requires Publication
         Notice to creditors (90 day claim
         period)
         File Inventory of Assets
         Requires Payment of all debts
        and taxes
         Requires accounting to the judge
         Requires approval from the judge
         to close estate.
      Non-Probate Assets
 Estate in the Entireties
 Joint Tenants with Right of Survivorship
 Survivorship bank Accounts
 Life Insurance Proceeds
 Wages and travel Expenses du the decedent
 Homestead
    Spouse Life Estate
    Remainder to Lineal Decendants
Taxable Estate-
   Uncle Sam takes his cut

                 1. Probate Estate is property of
                 decedent that is subject to
                 administration


                 2. Gross Estate for IRS is all
                 property in which the decedent had
                 an interest at the time of the
                 decedent's death (IRC 2033)
Computing the Estate Tax
        Liability
             Calculation:

                The Gross Estate   minus (-)

                Allowable Deductions
                   minus (-)

                Unified Credit
                   equals (=) …
 What is included in Gross estate and its value?

1. All property included in GE is valued at FMV
on date of Death or alternative valuation date.

2. Alternative valuation date- All or nothing 6
months after date of death

3. Properties included in GE
   I. 2033 Property in which the decedent had
an interest
  II. 2035 Gift Taxes on property given away
within three years of death
 III. 2036 Property that the decedent
transferred
What is included in Gross estate and its value?

2037 Property that the decedent transferred during
life but for which the decedent has a too large
reversionary interest

2038 Property that the decedent transferred during
life but over which the decedent held the power to
alter, amend, revoke or terminate an interest

2039 Annuities

2040 Jointly owned properties

2041 Property over the which the decedent
possessed a general power of appointment

2042 Life insurance on the decedents life

2044 QTIP trust which a marital deduction was
claimed by spouse
 Estate Tax Deductions
Current Estate Tax Deductions

2053 Funeral and administration expenses and debts(mortgages, funeral expenses, taxes,
commissions, attorney fees, appraisers, etc.

2054 Casualty and theft losses

2055 Charitable Contributions

2056 Marital deduction
    1. Unlimited amount
    2. Must be US citizen
    3. Must be included in estate of decedent
    4 Q-TIP's
Unified Credit
DOD    Amount of Credit          Exemption of Equivalent

2005    $555,800                $1,500,000
2006    $780,800                $2,000,000
2007    $780,800                $2,000,000
2008    $780,800                $2,000,000
2009   $1,455,800               $3,500,000

        Taxes due nine months after date of death “In Cash”.
Strategies to reduce Probate and Tax
Consequences

Re-Title assets
 Strategies to reduce Probate and Tax
 Consequences

Gift Splitting

If you or your spouse makes a gift to a third party,
the gift can be considered as made one-half by you
and one-half by your spouse. This is known as gift
splitting.

 Both of you must consent (agree) to split the gift.
If you do, you each can take the annual exclusion for
your part of the gift.

 In 2009, gift splitting allows married couples to
give up to $26,000 to a person without making a
taxable gift.

 If you split a gift you made, you must file a gift tax
return to show that you and your spouse agree to
use gift splitting
Maximum use of Marital Deduction and Unified Credit




     Marital                      Family
      Trust                        Trust
  Strategies to reduce Probate and Tax
  Consequences

   Qualified Personal Residency Trust (QPRT)

Residence trusts are used to transfer   A personal residence is one of the following:
a grantor’s residence out of the
grantor’s estate at a low gift          • The principal residence of the grantor
tax value.
                                        • One other residence of the grantor
Once the trust is funded with the
grantor’s residence, the residence      • An undivided fractional interest in either.
and any future appreciation of the
residence is excluded from grantor’s
estate.
Strategies to reduce Probate and Tax
Consequences

Non-Qualified Personal Residency Trust (N-QPRT)
Strategies to reduce Probate and Tax
Consequences

   Create a Revocable Trust

This type of agreement provides
flexibility and income to the living
grantor; he or she is able to adjust the
provisions of the trust and earn income,
all the while knowing that the estate will
be transferred upon death.
     Strategies to reduce Probate and Tax
                 Consequences

  Create an Irrevocable trust
A trust which cannot be changed or
canceled once it is set up without the
consent of the beneficiary. contributions
cannot be taken out of the trust by the
grantor. Irrevocable trusts offer tax
advantages that revocable trusts don't,
for example by enabling a person to give
money and assets away even before
he/she dies. opposite of revocable trust.
Strategies to reduce Probate and Tax Consequences


Create a Family Limited Partnership
A type of partnership designed to
centralize family business or investment
accounts. An FLP is different from a
conventional trust, as family members
actually own a share in a business. Shares
can be gifted to family members over
years, thus taking advantage of gift tax
exemptions on an annual basis.
Strategies to reduce Probate and Tax
Consequences

Create a Q-TIP Trust
A QTIP trust is a marital deduction trust that limits the surviving spouse's access to and control of the trust
property. QTIP, or Qualified Terminable Interest Property, is property "qualified" by your executor to take
advantage of the federal and state estate tax marital deduction(s).

A QTIP trust may be appropriate if you or your spouse has serious concerns about the following:

 A surviving spouse remarrying and then benefiting the new spouse.
 A surviving spouse benefiting someone other than your children.
 A surviving spouse's creditors attaching the trust property.
 A surviving spouse who is unsophisticated or vulnerable.
Strategies to reduce Probate and Tax
Consequences

Create a Q-DOT trust for foreign wife
Qualified Domestic Interest Trust
is a type of US trust which allows
non-US citizens to inherit from
their US-citizen spouses, without
being immediately obligated
for estate taxes, by appointing a
US-citizen trustee
.
1. Name three things to do immediately at death.
2. Name two advantages of having a will.
3. If there is no Will and you are married with children, how will your estate
   be distributed?
4. What is the $ amount that separates probate administrations? Your clients
   purchases a hotel. They want to eventually gift it to their children. What is
   the best estate entity to use to Title the property?
5. How much $ can you gift to an individual without paying a “gift tax”?
6. What is a Q-TIP?
7. When must estate taxes be paid?
8. What tactic can be implemented to create liquidity for taxes?
9. What must the spouse of a decedent be in order to receive unlimited
   marital deductions?




                        Quiz
                                     On the Web at:
                                www.DonGonzalezPA.us
                                CIIIS.DonGonzalezPA.US
                                    By Email at:
                                DonGonzalez@aol.com

                                     By Skype at:
                                DGonzalez_US_Attorney
     WESTON OFFICE
1820 N. Corporate Lakes Blvd.
          Suite 201
   Weston, Florida 33326
     Tel 954-598-0660

				
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