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July 2019

How can I set up a Qualified Income Trust (QIT)?

By Asset Protection Planning, Medicaid PlanningNo Comments

A Qualified Income Trust (QIT), also known as a “Miller Trust,” is typically set up by individuals seeking Medicaid skilled nursing home care or Medicaid diversion with monthly gross income exceeding $2,250 (as of 2018). Each month, one must deposit the portion of the gross income over the income gap into the QIT to meet the income limit. If one’s monthly income exceeds $2,250, that person would not meet the Medicaid income test, and their Medicaid application would be denied.

Any deposits of income into this type of Trust will not be counted as an asset for the Medicaid applicant. However, the funds in the QIT can only be used to pay for medical expenses for the Medicaid recipient.

An irrevocable QIT can only be drafted by a licensed Florida attorney (beware of fraudulent Medicaid planners). An improperly created/funded QIT may result in potential Medicaid disqualification. If you are interested in Medicaid planning, which may involve setting up a QIT, the experienced elder law and estate attorneys of Bach, Jacobs & Byrne, P.A. are here to assist you. Call us at (941) 906-1231 to set up a consultation.

July 25, 2019
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What are the powers of a guardian of the person?

By GuardianshipNo Comments

As guardian of the ward, an individual assumes only those rights which have been delegated to him/her by the court. These rights vary based on the particular case, but there are nonetheless overarching guidelines to be applied to all guardians. For instance, no guardian may act against the best interests of the ward, and all guardians must file annual guardianship reports with the court, unless waived by the court for good cause.

A guardian who is appointed with authority over a ward’s person is in charge of organizing medical, mental, rehabilitative, and person care for the ward, in addition to serving as the advocate for the ward in all decision-making processes regarding this care. The guardian must, to the best of his/her ability, discover and consider the expressed desires of the ward and also allow the ward to maintain contact with family members and friends (unless the guardian finds that the upholding of these relationships would cause harm to the ward). Ultimately, this guardian acts as the chief decision-maker on behalf of the ward, and he/she must consistently evaluate the needs and interests of the ward so as to best represent them.

The attorneys at Bach, Jacobs & Byrne, P.A. represent both guardians of the property and person in both plenary and limited guardianship proceedings.

July 25, 2019
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What can I do if Trust funds are not being properly distributed?

By Estate PlanningNo Comments

It is the fiduciary duty of the trustee to manage the assets of the Trust in compliance with the terms of the Trust and the Florida Trust Code and to act in the best interests of the beneficiaries. The trustee also has a duty of care, which requires him or her to manage the assets of the Trust as a prudent person would. This provides the trustee with broad but defined discretionary powers.

Unless the Trust document says otherwise, a trustee generally cannot be removed over small or petty disagreements. Rather, to be removed, he/she must have violated the terms of the Trust, violated the Florida Trust Code, or failed to perform the fiduciary duties of the role. Or, pursuant to the Florida Trust Code, a substantially detrimental lack of cooperation between trustee and beneficiary or a significant change in circumstances could convince the court to remove the trustee.

Attorney Sean Byrne is an experienced and dedicated trust and estate litigation attorney who can represent you in your case, whether you are the trustee or the beneficiary. If you want to remove a trustee, or if you are a trustee who wants to contest your proposed removal, call Bach, Jacobs & Byrne, P.A. at (941) 906-1231 to schedule a consultation.

July 23, 2019
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How can I minimize estate taxes?

By Estate Planning, Tax LawNo Comments

Florida does not collect state estate and inheritance taxes, but there are federal estate taxes to which one might be subject. In 2018, the federal estate tax exemption is $11.2 million per individual. There are several ways one can plan their estate so as to avoid estate taxes. One of the first steps would be to schedule an appointment with the tax law and trust & estate attorneys of Bach, Jacobs & Byrne, P.A. to review and update your estate plan based on current tax law. Call us today at (941) 906-1231 to set up a consultation.

July 19, 2019
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Pros and Cons of Naming a Trust as Your IRA’s Primary Beneficiary

By Estate Planning, Tax LawNo Comments

The reasons that a person might name a Trust as the beneficiary of his/her Individual Retirement Accounts (IRA) assets are many, but it is sometimes done in cases where the grantor has a minor child or spendthrift child. The Trust can keep the assets secure until the grantor’s child is prepared to handle the money as a beneficiary. Other pros of naming the trust as IRA beneficiary are that doing so can avoid the need for guardianship of the assets, if applicable.

Some of the disadvantages of naming a Trust as IRA beneficiary center around the immense tax consequences which can result from improper designation and if the Trust is not drafted in such a way that it avoids adverse tax treatment. For instance, to preserve tax deferral options, the Trust should qualify for “look through treatment” as a “conduit Trust,” wherein the life expectancy of the oldest Trust beneficiary is used for distribution purposes. In this manner, the tax benefits of IRA assets can be drawn out for as long as possible. If the right steps are not taken, however, significant tax losses can result.

It is important to have a thorough and well-crafted estate plan, but it is also important to have a well-thought-out backup plan for your estate, especially if one wants a different distribution of assets based on whether or not their spouse survives them and to avoid the negative tax consequences of having IRA proceeds distributed to an improperly drafted Trust. The elder law and trust & estate attorneys of Bach, Jacobs & Byrne, P.A. can assist you with the creation, revision, and review of your Trust(s) and estate plan documents and advise you about obtaining more favorable tax treatment of “qualified plan” accounts, such as 401(K)s and IRAs. Call us at (941) 906-1231 to set up an appointment.

 

July 15, 2019
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What is a pass-through entity?

By Estate Planning, Tax LawNo Comments

A pass-through entity is a business the profits of which “pass through” to the business owner and are federally taxed at his/her individual rate. Pass-through entities can be both S corporations and limited liability companies. Electing pass-through tax treatment may avoid the double-taxation which might result otherwise, depending on one’s particular situation.

If you are interested in discussing business and estate planning, including electing to have your business designated as a pass-through entity, or if you would like to review your portfolio of assets to determine the best tax plan, attorney Fred Jacobs is a Florida Board Certified Tax Law attorney who can advise you with your case. Call (941) 906-1231 to set up a consultation.

July 11, 2019
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What happens to my assets in foreign countries when I die?

By Elder Law, Estate Planning, ProbateNo Comments

The probate procedures in every country are unique, and different inheritance laws can clash. Usually, when an individual dies leaving assets in multiple countries, it is necessary to obtain a Grant of Probate or similar document in each of the countries where assets remain. A probate attorney from the foreign country is often consulted in tandem with a domestic probate attorney, too – this can help streamline the probate process and ensure that the probates in each country do not undermine each other.

To plan for an estate that will likely have foreign assets, a foreign codicil to a domestic Will may be drafted, as well. This is a document which acts as a supplement to an original Will which accounts for the immovable assets (i.e. real property) remaining in a foreign country. Or, one may look into drafting a formal Will in the foreign country, being careful to specify which assets the new Will is addressing and to reference the original domestic Will. Whether one uses a foreign codicil or drafts a separate foreign Will, it is important to acknowledge the foreign assets so as to avoid leaving them subject to intestacy rules.

For advice and guidance in creating your Will(s) and planning for your estate, especially if you own foreign assets, contact the highly-trained and dedicated attorneys of Bach, Jacobs & Byrne, P.A. Call us at (941) 906-1231 to set up a consultation.

July 9, 2019
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What is summary administration in Florida?

By Estate Planning, ProbateNo Comments

Summary administration is a form of probate which is generally less time-intensive and less expensive than a full probate. Pursuant to the Florida Probate Code, the following conditions must be met for an estate to qualify for summary administration:

  • The gross value of the probate estate does not exceed $75,000, or
  • The decedent has been dead less than two years

If the Will does not include a direct instruction to conduct a formal probate, a petition with the court may be filed requesting summary administration, if either of the two factors above apply to the situation. This petition can be filed by any beneficiary of the Will or any individual nominated to serve as personal representative in the Will, and it must be signed or joined in by the surviving spouse (if any). If the court accepts the petition, it may order the assets to be immediately distributed to the designated beneficiaries, presuming all creditors have been paid or will be paid.

For guidance through the probate process and for assistance drafting a petition for summary administration, contact the elder law and trust & estate attorneys of Bach, Jacobs & Byrne, P.A. at (941) 906-1231.

July 5, 2019
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Does Florida honor foreign Wills?

By Elder Law, Estate Planning, ProbateNo Comments

Yes, but with conditions. The Florida Probate Code states: “Any Will, other than a holographic or nuncupative Will, executed by a nonresident of Florida, either before or after this law takes effect, is valid as a Will in this state if valid under the laws of the state or country where the Will was executed.”

A holographic Will is one handwritten by the testator and not witnessed, whereas a nuncupative Will is one relayed orally by the testator to another person but never put in writing. Neither type of Will is valid in Florida, even if the state where it was executed permits such documents. Note that a handwritten Will that is witnessed is still valid under Florida law. Other than these exceptions, Florida generally recognizes any Will which was valid in the jurisdiction where it was created.

Even if an out-of-state Will is legally valid under Florida law, it may benefit the testator to update it so that it will reflect Florida law, which has many advantages for estates and trusts. To check whether your Will is valid in Florida probate court, or to revise and update your Will to reflect current Florida law, the elder law and estate attorneys of Bach, Jacobs & Byrne, P.A. are here to help. Call us at (941) 906-1231 to set up an appointment.

July 1, 2019
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