Estate Planning empowers Florida residents to make their own decisions and choices about their future and the future of their loved ones. The following are a few of the most common reasons people decide to create an estate plan. 

Avoiding probate is easily one of the most common reasons people seek out the guidance of an experienced Estate Planning Attorney. Any individual who has ever had to deal with the stress, strain and cost of probate knows that they want to avoid it at all costs. Probate is perceived as the painful process which takes place after someone’s death. It usually involves proving to the court that a deceased person’s Last Will & Testament is valid, or worse still-without a Last Will, identifying heirs or beneficiaries or family members, itemizing and cataloging the deceased individual’s property, appraising that property, assigning, and paying debts and taxes and distributing the remaining property. As can be seen, it can be an involved and expensive process with a number of variables and opportunities for issues, conflicts, and family infighting. Typically, this process involves lawyers and court fees that are paid for by the subject estate, which wastes money and resources that could otherwise go to the individual’s heirs, beneficiaries or loved ones. While many of the problems with this process may seem obvious, many others can be found in the countless stories regarding the probate process. That is why the best practice is always consulting an experienced attorney that can assist in avoiding these issues before they ever become a factor. 

One tool that many estate planning lawyers use to avoid probate is a Trust. Unlike a Last Will, a Trust allows a person to transfer property to their heirs without having to go through probate and can provide tax benefits. 

The very real prospect of losing a sizable portion of a deceased’s hard-earned estate to state and federal taxes is always a great incentive for seeking estate planning advice. Using their attorney, married couples can reduce or even eliminate many estate taxes altogether by using tools like AB trusts or ABC trusts, among others. An individual can also reduce the burden of inheritance tax on their children or grandchildren quite significantly if they seek proper legal advice in advance. 

In Florida, one can also avoid probate by placing designated beneficiaries on applicable accounts and using a Lady Bird deed on real property.

Many residents have heard stories of the unpleasant family infighting that can occur in the aftermath of a loved one’s death. Aside from wasting time and money, failure to make a comprehensive estate plan can create chaos for one’s family and can often lead to major rifts and damaged relationships. Making fundamental decisions such as who will be in charge(an authorized Agent under a Power of Atty to act on their behalf) if a person becomes mentally or physically incapacitated while alive, and/or who gets what, when they will get it and how they will get it(before or after death) can be crucial in avoiding family disputes and costly probate court proceedings. 

Estate planning is much more than just deciding who to leave one’s assets, it is also about looking after one’s loved ones when the parent or spouse, etc. are no longer alive. There are generally two main reasons a person may want to protect their beneficiaries. First, the applicable beneficiary may be a minor, in which case state law (and recommended practice) requires a guardian be appointed to oversee the minor’s needs and finances until they become of legal age. However, as can be suspected, adult beneficiaries may need protection as well, which brings up the second major reason people may want to consult an estate planning attorney. In some instances, a Florida resident may want to protect their adult beneficiary from bad decisions, outside influences, creditors, or even their spouse. One can insolate their beneficiary’s inheritance from an overbearing spouse or a partner who might squander their inheritance or possibly take it in a divorce. 

In recent years, asset protection has become one of the most popular and important bases people consult an estate planning attorney. Once they become aware or suspect that a lawsuit or divorce is on the horizon, it may be too late to put a plan in place which can provide protection. With the appropriate estate plan, one can create a sound financial plan which can protect assets during one’s lifetime and thereafter.

While situations and wishes are different or vary, it is critical to consult an experienced estate planning attorney who will listen to one’s needs and can create a customized plan that puts them, and their loved ones in the best position possible for the future. 

The foregoing is a very brief and general overview of the benefits of having an estate plan done in Florida.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Even though pre-paid legal services have been around nearly 50 years, legal insurance and/or legal services plans are growing as well as their consumer or member base and provide access to attorneys for legal assistance, including drafting and reviewing documents and consultation or representation in court for many common legal matters. It is also called group legal or pre-paid legal. This type of plan or insurance is most often included as part of a workplace benefits package. Employees can choose to opt for a legal services plan or legal insurance for which they will pay a set monthly premium or yearly fee and have access to experienced attorneys.

Employment of lawyers is projected to grow about 9-10 percent from today to 2031, about as fast as the average for all occupations. There is still a high demand for lawyers in the United States. Demand for legal work is expected to continue as individuals, businesses, and all levels of government require legal services in many areas according to the U.S. Bureau of Labor Statistics.

Reasonable access to adequate and affordable legal services like health care has become a necessity of life.

Still, the majority of Americans do not have access to affordable legal services. When the World Justice Project measured the accessibility and affordability of civil justice in 113 countries around the world in 2017, the United States tied for 94^th place with Cameroon, Uganda, and Zambia. This rating measured whether “ordinary people” could resolve their grievances affordably in the U.S. justice system. This measure showed how widespread the problem is regarding affordable legal services. Contrary to popular belief, it is not just low-income people who cannot afford or have access to legal services but rather includes an estimated 60 percent of the legal needs of middle-income people that are not being met.

Legal insurance and legal service plans are a solution that many employers are using to provide their employees access to legal services for a reasonable price.

These legal insurance or services plans connect people with attorneys who can offer a wide range of legal services, from telephone advice to court representation. These plans use a network of attorneys who have agreed to provide services as part of their contract with the organization selling the plan or insurance to its members. There is always a free initial consultation and later, when retaining the attorney, there are typically no bills or there is a set discounted fee provided the plan member or prospective client who uses a network or panel attorney. 

Legal insurance often covers a wide variety of legal issues, covering nearly everything except workplace matters or business matters. A legal plan or legal insurance will likely come in handy during most situations where legal issues arise.

Historically, Americans have come to think of the legal system as a highly undesirable and expensive final option, and something to be used only when all other viable solutions have been exhausted. One American Bar Foundation study found that only 24 percent of people with civil justice problems used an attorney. According to the Social Science Research Network-these were people dealing with “troubles that emerge at the intersection of civil law and everyday adversity, involving work, finances, insurance, pensions, wages, benefits, shelter, and the care of young children and dependent adults, among other core matters.”  In other words, they were dealing with everyday legal matters that could almost always benefit from an attorney’s guidance, yet attorneys were not hired nor even consulted. Another study found that manypeople are going online and trying to manage these issues alone instead of working with a professional. This is a major concern for several reasons, including that it means people are not getting the best legal outcomes, and when people represent themselves, it slows down the process of the already struggling courts and justice system.

Cost is another significant factor that prevents consumers from working with attorneys. Many working-class Americans believe they cannot afford or may lose money even if they win by retaining an attorney.

Legal insurance and legal services plans remove many of the barriers between attorneys and potential clients. Since the legal plans are aware that consumers are looking online for legal information, they provide online resources that educate legal plan members on the importance of working with an attorney. They guide them through the process of connecting with an attorney so that they become more comfortable using attorneys for a wide variety of legal issues. The foregoing promotes the use of attorney services without increasing the burden on attorneys to be more accessible to clients.

Finally, the most important aspect is that legal plans help overcome financial barriers by standardizing the cost for individuals. For a monthly or yearly premium, the members get access to network or plan attorneys when they require legal assistance.

Attorneys also benefit from more people having legal insurance or legal services plans since the consuming public are more likely to use an attorney’s services instead of trying to resolve an issue on their own.

With employees getting the legal support that they require; employers have found they are more productive and less stressed. In turn, this situation improves the employer’s bottom line and helps them recruit and retain the type of high-caliber workforce they desire.

The impact of affordable legal services extends beyond the corporate world, it affects all areas of a community.

The satisfaction of legal services and legal insurance plan members with employers who offer said benefit and attorneys who participate in the network is outstanding. However, the reason the use of these plans is NOT widespread is since many are not aware of what legal insurance or legal services plans are or that they even exist.

If more residents of Florida or even of the U.S. become aware that legal insurance and/or legal services plans are an option for them, and more attorneys realize the benefits and join legal plan networks, perhaps in the future the nation will see its ratings for access to affordable civil justice rise from the bottom of the list to the top, near countries like Germany, Denmark and the Netherlands, which are countries that offer, support and promote access to legal services.

Even if an individual or family do not anticipate any legal problems or the need for an attorney, ensuring that one has some legal protection should the need arise is invaluable. Further, it is worth noting that not every legal issue involves a conflict, often it proves beneficial to have a lawyer on one’s side to guide them through complex documents or agreements.

If an employer offers legal insurance or legal services plan as part of their employee benefits package, it could end up saving a substantial amount of money and anxiety.

The foregoing is a very brief and general overview of the benefits of having a legal services or legal insurance plan in Florida.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Establishing a business entity for any type of business endeavor can be a positive move in that it provides liability protection, allows for the expensing of debts and better accounting for the same. For business owners, it is often beneficial to form an entity for some or all of the following reasons: Liability Protection, Tax Savings/tax deductions, Credibility, Formality, Perpetual Duration, Control Over the Transfer of Ownership, which also allows the raising of capital by the selling shares of the subject company, and/or Confidentiality.

Florida and Delaware are two of the best options where one can incorporate their business. These states have business, tax, and privacy laws that are beneficial for business.

As for liability protection, the law allows entrepreneurs to form corporations, LLCs as well as other legal entities as a shield against personal liability. Individual owners and officers or members are considered separate from their corporations or LLCs. When a corporate or business debt is owed, creditors can pursue the company but not the individuals operating the said company. Unless the corporate form is abused, misused or monies are comingled, owners and operators of said entity are personally protected. However, when business formalities are not followed then creditors can pierce the corporate veil and go after the subject individuals under the alter ego doctrine. Examples of the foregoing include, but are not limited to, commingling corporate and personal funds, disposing of corporate formalities, diverting corporate assets for personal use, etc., can open up a business entity to potential alter ego claims and thereby hold the owners and operators to personal liability.

Further, different entities cannot be held jointly and severally liable for a breach of contract case merely because the two have the same officers, members, owners or the same physical address or email or telephone.

For the most part, unless an individual is an actual party to a contract that individual may not sue or be sued for breach of said contract, particularly when that non-party has at most received only an incidental benefit from the subject contract. For instance, a parent company which is not a party to the said contract can be held liable for its subsidiary’s breach of the contract only when it can be shown or proven to be an alter ego of the parent and was in place merely to mislead the parent’s creditors. Business impropriety should not be presumed by the mere fact that the two entities share a physical address or office or an officer, director, or member.

The foregoing is a very brief and general overview of the benefits of forming a business entity in Florida.                                                                                                       

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Most Florida residents do not know that Medicaid for the elderly is merely a type of loan to pay for their long-term care needs and is not a gift or grant. The basic point is that if a Florida resident is on Medicaid, any remaining assets the decedent owned upon their death is subject to a lien by the state of Florida. This is commonly known as the Medicaid pay-back or reimbursement provisions, and many residents are unaware of this provision in the law.

Florida Medicaid does have a pay-back provision, similar to other states. During one’s lifetime, if they receive Medicaid benefits, and pass away after the age of 55, the State of Florida is a creditor in their estate. The state has a claim in the amount of funds expended to the deceased party’s benefit during their lifetime, which can definitely be a great deal of money if the subject individual spends time in long-term care. HOWEVER, this situation may not generally be much of an issue in most situations.

First, if the Medicaid applicant was single, he or she was only allowed to have less than $2,000 in countable assets in order to be on Medicaid. This scenario means that the applicant likely has nothing for Medicaid to make a claim against upon the applicant’s death. A single applicant, who is already impoverished, generally has nothing for the state of Florida to take.

Further, even if the decedent owned a homestead real property or primary residence, this property is not subject to creditor’s claims (including the state of Florida) in most circumstances.    There are exceptions to this rule though, such as:

• The decedent’s property lost its homestead status before death (possibly by renting the home, as an example);
• Not all homestead properties are equal. If the property is a co-operative share, such as in a mobile home park, this does not get statutory protection for Florida homestead purposes; and/or
• The decedent’s Last Will & Testament called for the sale of the decedent’s home.

Consequently, the Medicaid lien is not an issue in most circumstances. Therefore, where would a Medicaid lien take place?  There are a few circumstances where the lien could/would be applicable:

• The decedent sold their home and went off of Medicaid before death (i.e., the applicant went on private pay);
• The decedent received an inheritance, either before they died or after, which could then be subject to the lien;
• The decedent did not disclose or discover all known assets as part of the application process and the assets had to be probated upon death; and/or
• The decedent’s spouse died first and left money to the Medicaid applicant, who then passes away.

One major point to be made is that proper estate planning can avoid any potential Medicaid lien. That result is one reason to see an experienced estate planning attorney in order to ensure the family creates a good estate plan with the necessary documents to help avoid probate as well as creditor problems upon the family member’s death.

Accordingly, the Medicaid lien is not a worry for most Medicaid applicants if they either have nothing or very little at death or have created a good estate plan. This situation also merits good asset protection planning which can protect assets during one’s lifetime and at their death.

The foregoing is just a general and brief overview of the subject of Florida Medicaid’s lien & its pay-back or reimbursement in the state of Florida.

If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Beneficiary Designations as well as a Lady Brid Deed takes precedence or priority over a Last Will & Testament as well as a Trust, which means that if one gets divorced and remarries, but does not update their beneficiaries on accounts, a former spouse may be the legal heir to those accounts if you named them the beneficiary while married. Trusts control the trust estate, the assets that are placed within their ownership and titled in the trust name. They do not overlap and therefore cannot supersedeother designations.

A Last Will or living trust do NOT override the beneficiary designations for life insurance policies, retirement accounts and other types of investment or bank accounts. This includes accounts, such as life insurance policies, annuities, IRAs, other tax-favored retirement accounts and employer-sponsored benefit plans. The person(s) named on the most-recent beneficiary form will get the money automatically if one dies, regardless of what the Last Will or living trust document might state.

Deeds such as a Lady Bird with its Remaindermen (i.e., like designated beneficiaries but for real property) or ownership by the Entirety as a married couple and/or joint tenants with right of survivorship, the surviving spouse will automatically get sole ownership of the property when the other spouse dies and/or the property automatically goes to the surviving joint tenant or Remainderman.  The major advantage of these types of ownership is that they avoid probate.

Most beneficiary designations will require one to provide a person’s full legal name and their relationship (i.e., spouse, child, mother, etc.). Some beneficiary designations also include information like mailing address, email, phone number, date of birth and Social Security number.

An estate plan in Florida can include several documents, many of which may require beneficiaries, like any trusts, a person may have set up or intended to set up, non-probate assets like 401(k), IRA accounts, life insurance policies, and pensions. Assets from these accounts will go to the beneficiaries upon the owner’s death. It is important, therefore, to make sure one chooses their beneficiaries carefully. 

A beneficiary designation involves naming the person who will directly receive an asset in the event of the death of its owner. Again, assets which allow for beneficiary designations include insurance policies, retirement accounts such as 401(k) plans, annuities, and other financial accounts. Trusts also need beneficiary designations. An individual can also choose beneficiaries in their Last Will and Testament. 

It must be noted that beneficiaries are different from heirs. Beneficiaries are chosen while heirs are those who inherit the property of a person who dies intestate, or without a Last Will, usually next of kin as governed by state law.

The designation process ensures the named beneficiary directly receives the asset, rather than it passing to the owner’s estate and going through probate, which may involve significant time and expense.

Beneficiary designations are unique to each asset and may be managed by the entity that holds the subject asset.  An example would be a life insurance policy whereby the company that holds the policy will likely provide a beneficiary designation form during the enrollment process. In the said form, the applicant would specify which individuals (i.e., beneficiaries) should benefit from the subject policy in the case of death.

When a person dies, the instructions in their Last Will & Testament only distributes assets included their “probate estate” or in their name alone.  Assets with beneficiary designations get excluded from the probate estate.  To avoid a conflict, it is crucial to ensure that the language in one’s Last Will correlates with and/or considers their beneficiary designations.  It merits to perform a regular review and update of the Last Will as well as beneficiary forms as needed since, typically, a beneficiary designation overrides a Last Will.

Common categories of beneficiaries in Florida include eligible designated beneficiaries, designated beneficiaries, non-living beneficiaries, and contingent beneficiaries. Different eligibility rules may apply to various categories of beneficiaries. 

Eligible designated beneficiaries include:

• Spouses;
• Children under 18 years of age;
• Individuals with a disability;
• Chronically ill individuals; or
• Individuals within 10 years of age of the deceased.

Eligible designated beneficiaries have additional rights to designated beneficiaries. 

A designated beneficiary is any living person who does not fall into the above categories. This may include a friend or extended family members, such as elderly parents or a sibling. 

Another type of beneficiary is a non-living beneficiary, such as a charity, trust, or estate. 

A contingent beneficiary is a “backup” beneficiary to whom receives the asset in the event the primary beneficiary is unable. 

When choosing a beneficiary, the following are key factors to keep in mind.

A beneficiary typically must be over 18 years of age. If an individual wants to gift an asset to a minor upon death, one may need to set up a minor’s trust and name the trust as the beneficiary, if appropriate; otherwise, a legal guardianship will be needed. 

Financial dependents are a good starting point when considering who to designate as a beneficiary. These may include a spouse, children, or other extended family members.

A beneficiary generally must have an insurable interest in the insured person. The foregoing means there must be a legitimate financial interest between the two, such as in the case of dependent children or a spouse. 

Some life insurance policies or pension funds set rules for naming a beneficiary. Make sure to be aware of these before making decisions and seek legal and financial advice about the options. 

Depending on the document and the terms of the contract, some beneficiaries may be irrevocable. The preceding means one cannot revoke said beneficiary’s rights unless they agree to it. At first glance, one may wonder why they even would want to designate beneficiaries as irrevocable, but there are benefits. An estate planning attorney can explain the reasons and situations where irrevocable beneficiary designations may be most appropriate as well as the reverse.

In Florida, the best way to avoid most potential issues when it comes to a beneficiary designation is to speak with a lawyer to ensure the selected designation is valid. 

Some common challenges that may arise when designating a beneficiary are as follows.

When choosing a beneficiary, it is possible to set either a fixed dollar amount or percentage the subject beneficiary will receive. However, a fixed dollar amount can cause issues if the value of the asset is insufficient (or if it increases in value, leaving a portion of the asset to probate). To avoid this, assign a percentage value instead. 

Failing to name a contingent or alternate beneficiary may result in an asset needlessly going through probate. To avoid this, identify a contingent beneficiary who will receive the asset in the event the primary beneficiary cannot accept it, such as when the primary has predeceased. 

The identity of a named beneficiary may not be clear, such as when several people in the family share the same or similar name. Names may also change as a result of marriage or divorce. Always confirm the correct legal name of the intended designated beneficiary and ensure that the applicable document is updated to reflect any name changes. 

Designating “all my children” can create challenges. For example, if a child beneficiary dies before their parent, it may be unclear as to how their portion should be distributed. It may be distributed among the surviving children, or instead, pass to their offspring or descendants. To avoid this issue, one should be specific when naming a beneficiary.

The foregoing is just a general and brief overview of the subject of beneficiary designations and the like versus other estate planning instruments in the state of Florida. If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

There are merely a few states in this nation which can levy taxes on inherited property. These taxes are sometimes affectionately called death taxes. For beneficiaries or heirs inheriting property in the state of Florida, they will be happy to know that Florida does not have a separate income tax for inherited property. Inherited money is also untaxed at the state level since Florida does not have an income tax system. However, all property is not treated the same when it is inherited.

The following are several tax situations that inheritors of Florida assets should be aware.

While Florida does not levy an income tax on inherited property, the Federal government does. However, the federal inheritance tax only applies to estates over $12.92 million in 2023, and it is double for married couples. The tax is levied against the estate, so heirs will not be on the hook for these death taxes. HOWEVER, in 2025 the amount will be reduced to $5.49 million (adjusted for inflation), unless the law is changed. The gross estate includes Trust assets, assets held in the decedent’s name, jointly held property, accounts designating a beneficiary, life insurance, annuities, among others.

If one inherits a retirement account from a loved one, they would not have taxes levied on the transfer of the account, but taxes may be charged when one tries to withdraw funds from the account. What taxes are imposed will depend on the type of retirement account. An attorney can help ensure understanding of the tax ramifications associated with said inherited property.

If one inherits property that generates revenue, like a piece of rental property for instance, they could owe taxes on the income gained or generated from owning the transferred property. Consequently, if one inherited a multi-family building with tenants and they paid rent during the probate period, one could owe taxes on funds which were collected during the said interim period.

In Florida, there are no separated property taxes, but beneficiaries will owe federal taxes if the inherited property is sold after transfer. The heir should only owe taxes on the gains (capital gains) of the property, or if it increased in value from the point of transfer (date of death) until the point of sale.  The foregoing is called stepped-up basis. Stepped-up basis refers to a tax policy which looks at the market value of assets at the time when the person inherits the asset or real property (i.e., the deceased’s date of death) instead of the value when the prior deceased owner purchased the said assets or real property. If the asset is later sold, the higher new cost basis would be subtracted from the sale price to calculate capital gains tax liability, if any.

The foregoing is just a general overview of the subject of whether Florida Beneficiaries or Heirs may or may not pay taxes on inheritances.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.