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Estate Planning

How much can I give away as a gift without having to pay gift taxes?

By Estate Planning, Tax Law

Question: How much can I give away as a gift without having to pay gift taxes?

Answer: For gifts made in 2013 and 2014, the gift tax annual exclusion is $14,000. This means that anyone can gift up to $14,000 to another person in these years without using any of their lifetime exclusion for estate, generation skipping and gift taxes. Married couples can gift up to $28,000 to any person in 2013 and 2014.

You only have to begin paying gift taxes after you have transferred more than the lifetime exclusion amount, which is $5,340,000 for 2014.  However, you will have to file a gift tax return on any gifts to a specific individual in excess of $14,000 ($28,000 for married couples), even if you do not actually owe any gift taxes.

Attorney Fred Jacobs is Florida Board Certified in Tax Law.  Call Bach & Jacobs at (941) 906-1231 to schedule an appointment with Fred if you have questions about how the gift and estate tax laws affect you and your family.

February 27, 2014
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How do I benefit from setting up a QIT or Qualified Income Trust for Florida Medicaid – and what is it?

By Estate Planning, Medicaid Planning

Question: How do I benefit from setting up a QIT or Qualified Income Trust for Florida Medicaid – and what is it?

Answer: A Qualified Income Trust is commonly called a QIT or a Miller Trust.  It is necessary under Florida Medicaid law when the Medicaid applicant for skilled nursing home care or Medicaid diversion has gross monthly income of $2,163 or greater. (2014 figures).

When set up properly, this irrevocable trust enables a person to deposit income into a trust account each month.  The money in the QIT account will not be counted as an asset for Medicaid or Long Term Care Benefits eligibility.  However all monies deposited into the QIT can only be used to pay for the applicant’s medical expenses, care costs and spousal or other court ordered support.  The goal of the QIT is to secure all of the income for medical necessities and spousal support and to provide a Medicaid lien on the account upon the passing of the applicant.

Only an attorney is licensed to draft an irrevocable QIT.  Once established the trustee needs to be advised as to how to set up and correctly fund the account.  If the QIT account is not correctly funded, the applicant will be either denied or disqualified from receiving Medicaid.  These accounts are monitored by the Florida Department of Children and Families and the trustee must produce all bank statements, proof of gross income and receipts for all disbursements.  Be careful to save all records.

Upon the death of the Medicaid applicant, Medicaid has a lien on all assets remaining in the QIT and the trustee is responsible to satisfy this lien and to provide documentation.  This is another time that professional assistance is recommended.

For this reason, it is often recommended that board certified elder law attorney is consulted. It is also worth noting that this type of trust is irrevocable which means it cannot be cancelled and any funds remaining in the account at the time of your death are paid to the State up to the value of benefits paid out to you.

Please call us at (941) 906-1231 to schedule an appointment for assistance with Medicaid planning.

February 11, 2014
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What are the tax rules on giving away gifts during your lifetime?

By Estate Planning, Tax Law

Question: I want to give gifts to my family. What are the tax rules on giving away gifts during your lifetime?

Answer: You are free to give away gifts forming part of your estate while you are alive without incurring any federal gift tax or estate tax but there are limits to be aware of which do change from time to time.

For 2014, the limit has been raised to $5.34 million which means that you can gift this amount away during your lifetime without owing this tax. Annually, you are entitled to gift up to $14000 in cash or other assets to as many recipients as you would like which is the annual exclusion amount.

In addition, other gifts which are not subject to tax include:

• Schooling fees, if paid directly to the school

• Medical expenses also if paid directly to the treatment provider

• Gifts to your spouse (if your spouse is a U.S. citizen)

• Gifts to a political organization for its use

• Gifts to certain charities

It is worth noting that the current federal gift/estate tax rate is 40% and that if a gift is subject to taxation then it is the person who makes the gift, not the person receiving the gift, who has to pay the tax due.

For more in depth advice specific to your family’s situation, please contact us and we will be happy to set up an initial consultation with one of our highly experienced tax attorneys.

February 5, 2014
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Federal Income Tax Incentives Conservation Easements Changing in 2014

By Elder Law, Estate Planning, Land Conservation Easements, Tax Law

Question:     Are the federal income tax incentives for donating conservation easements going to change in 2014?

Answer:    The “enhanced conservation easement incentive,” which applied to conservation easements donated in 2013, raised the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%.  It also allowed qualified farmers and ranchers to deduct up to 100% of their AGI, and increased the number of years over which a donor can take deductions from 6 years to 16 years.  Policy makers at the federal level had given conservation easement donors this tax benefit to encourage them to conserve land.   Because Congress did not renew the enhanced conservation easement incentive prior to the end of the year, it expired on Dec. 31, 2013.  Unless Congress acts, the tax deduction for a donation of a qualified conservation contribution will be the same rates as other charitable gifts. Attorney Sean Byrne of Bach & Jacobs has represented parties in multimillion dollar conservation land transactions and can advise you of your options regarding conservation easement donations.

January 7, 2014
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Can a Guardian Initiate a Probate Proceeding When the Ward Dies?

By Elder Law, Estate Planning, Guardianship, Probate

Question:     I was the guardian for a ward who has recently died.  Can I petition to open a probate proceeding and be appointed personal representative also?

Answer:    Usually, the named personal representative in the decedent’s will is the one who initiates the probate proceeding.  The guardian, who typically will have all of the deceased’s personal records, would normally notify all the family members and the personal representative designee upon the ward’s death.  However, sometimes the decedent dies intestate (without a will) or the designated personal representative is unable to serve.  The guardian is considered an “interested person” under the Florida Probate Code for the purposes of commencing probate proceedings and can open the probate.  The guardian may be required to commence the probate proceedings to transfer the guardianship assets to the probate estate.  However, there could be some cases where the guardian’s appointment as personal representative of the ward’s estate is inappropriate.  For example, if a conflict of interest existed between the ward and the guardian prior to the death of the ward, then the court may be inclined to appoint a guardian ad litem, an administrator ad litem, or a different personal representative all together.  If you are the guardian for a recently deceased ward or want to petition to be appointed the personal representative for a deceased ward, contact Bach & Jacobs to schedule an appointment with one of our attorneys.

December 26, 2013
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Home for the Holidays: Talking with your Personal Representative About Your Estate Plan

By Estate Planning, Probate

Question:     Should I let the person I have designated as my personal representative know about my estate plan?

Answer:    Your personal representative—referred to as an executor in some states—is the person responsible for carrying out the provisions of your will.  That person could be a reliable family member, but can also be a trust officer, attorney, or even a trusted friend.  It is often advisable to at least let the individual or entity know that you have chosen them and confirm they are willing to serve in that role.  You should know that there are eligibility requirements for personal representatives under Florida law.  For example, those who have a felony conviction, as well as non-Florida residents who are not related to the deceased, cannot qualify as a personal representative.  Whether you walk that person through the details of your will is a personal decision—you certainly have the right to keep it private.  Although, it can sometimes be helpful to at least discuss some practical matters relating to your estate, such as who to contact upon your passing, how to pay for basic expenses like funeral costs and taxes, and what your funeral and burial wishes are.  The paperwork a family and personal representative may have to deal with regarding a deceased loved one’s estate plan can be overwhelming if they do not know who to go to for help.  The attorneys at Bach & Jacobs can advise you about the eligibility of your preferred personal representative.  Call Bach & Jacobs, P.A. to schedule an appointment to review your estate plan.

December 17, 2013
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Is an Attorney Required for Probate Administration in Florida?

By Elder Law, Estate Planning, Probate

Question:  If I am the personal representative for an estate in Florida, am I required to have an attorney for the probate administration in the Florida circuit court?

Answer:    Florida law requires an attorney in a formal probate proceeding except in the rare case where the personal representative is the sole interested person. However, Florida probate procedures are complicated and most non-lawyers will have a challenging time trying to proceed without an attorney.   Just determining who fits the statutory definition of “interested person” requires an understanding of the Florida Probate Code and the Florida Rules of Probate, which apply to even the most basic estate administration.  If you have been named the personal representative in the will of someone recently deceased and you would like assistance with the administration of the estate, contact Bach & Jacobs to meet with one of our attorneys.

December 6, 2013
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Where Can I Research the Florida Probate Law?

By Elder Law, Estate Planning, Probate

Question:     Where can I find trusted, general information on the probate process in Florida?

Answer:    One obvious source of information on probate law topics in Florida is on the Bach & Jacobs, P.A. website where you can view frequently asked questions relating to probate and the administration of estates.  Another source for a general overview of basic probate concepts is the Probate in Florida Pamphlet, available for free viewing at the The Florida Bar website. If you would like advice or assistance specific to your probate matter, contact Bach & Jacobs at (941) 906-1231 to schedule an appointment with one of our attorneys.

December 3, 2013
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Home for the Holidays: Talking With Your Family About Your Estate Plan

By Estate Planning

Question:     How do I talk to my family about my estate plan?  We’ll all be together this year for the holidays and I thought now would be a good time.

Answer:    Talking to your family and beneficiaries may be one of the most important parts of managing your estate before you die.  Whether to let them know about the content of your will and the distribution plan for your assets is up to you.  Open communication may help allay anxieties and allow for an honest conversation.   If you are comfortable with full disclosure, some clients allow their children or close family members to read their will or even hand out copies for them to keep.   You may want to keep the extent of your estate private, but simply let them know that you’ve taken the steps to plan for this inevitability.  It is helpful to let your family know who your estate planning attorney is so they know where to find your documents.  We recommend you review your existing estate plan whenever there is a major change in your life, such as illness, death of a family member, major financial changes and disability of a family member.  But the conversation can be emotionally charged and it is understandable that some people because of family dynamics would prefer to avoid it during their lifetime.  The New York Times published an article earlier this year about how to broach the topic of estate plans with a parent, which can be found by clicking here.

November 29, 2013
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Can Lawyers Be Beneficiaries of a Client’s Estate in Florida?

By Elder Law, Estate Planning, Probate

Question:  I was appointed personal representative of an estate and I saw in the will that the lawyer who drafted it wrote himself in as a beneficiary of the estate.  That seems inappropriate.  Is that ethical?

Answer:    Unless the attorney is related to the deceased client, Florida law prohibits such a gift.  The Florida Legislature passed a law that became effective October 1, 2013 that voids a gift to a lawyer, or certain persons related to or affiliated with the lawyer if the lawyer prepared the instrument making the gift or solicited the gift.  An exception is made for the lawyer or recipient of the gift who is related to the client.  If you are the personal representative of an estate and would like assistance with the administration of the estate, contact Bach & Jacobs to have your estate planning documents reviewed by our attorneys.

November 26, 2013
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