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Estate Taxes, Filial Responsibility, Adult Adoption and Celebrity Disinheritance Top Wills & Estate Planning Blogs in April 2013

Wed, 22 May 2013 01:13:38 +0000

The future of federal estate taxes, a filial responsibility case out of Pennsylvania, a voided adult adoption out of Florida, and disinheritance by hairdresser Vidal Sassoon topped the most read Wills and Estate Planning Blogs in April 2013:

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Married Couples' Alert - Is Your Florida Homestead Owned by Your Revocable Living Trust?

Tue, 21 May 2013 01:14:43 +0000

As my overview of Florida homestead laws reveals, Florida has unique and very strict laws with regard to who you can leave your primary homestead residence to after you die. This is particularly troublesome for nonresident, married couples who title their second residence located in Florida into the name(s) of their revocable living trust(s) and then eventually decide to become Florida residents and apply for the Florida homestead exemption. Typically, the revocable living trusts of these couples will contain estate tax planning by creating AB trusts or ABC trusts after the first spouse dies. And therein lies the problem - Florida law states that if you are married and survived by a spouse at the time of your death, then the spouse must receive the homestead residence outright and without any strings attached, otherwise the spouse will take a life estate and the children of the deceased spouse will receive the remainder. What's so bad about this? If the surviving spouse wants to sell or mortgage the homestead (including a mortgage refinance), then he or she will need permission from the children to do so. This could present a problem, particularly in a second or later marriage where the children are the deceased spouse's children. In addition, for his or her remaining lifetime the surviving spouse will be stuck footing the bill for all of the ordinary upkeep on the house, all of the real estate taxes, all of the insurance and all condo or homeowner association fees. And even if this becomes costly in the future, the surviving spouse can't force a sale or refinance of the mortgage - instead the spouse and the children must all agree to a sale or refinance.

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Condo Owner Alert - Do You Need to Notify Your Condo Association That Your Revocable Living Trust Owns Your Condo?

Mon, 20 May 2013 01:55:22 +0000

If your estate plan includes a revocable living trust, then after your trust is in place you will need to "fund" your trust with your assets. What does it mean to "fund" a trust? It means that you will need to take a look at each and every asset you own with your estate planning attorney and determine (1) if the asset should be a part of your trust and, if so, then (2) how to get the asset into the name of your trust. Why do you need to do this? Because assets that are transferred into the name of a revocable living trust during your lifetime will avoid probate after you die, which is one of the reasons revocable living trusts have become so popular.

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Michael Jackson's Estate Takes More Hits

Wed, 15 May 2013 01:05:47 +0000

With the Michael Jackson/AEG Live wrongful death lawsuit as a backdrop, the controversy surrounding the King of Pop and his family continues. Last week choreographer Wade Robson, who was a voluntary defense witness at Michael Jackson's child molestation trial in 2005 where he testified that he had never been abused by Jackson, filed a claim against MJ's estate in which he now alleges that he was in fact molested by the singer. While the court documents have been sealed for now and it is unknown at this time how much the famed choreographer is asking from the estate, MJ's estate attorneys have denounced the claim. In a statement to TMZ, estate attorney Howard Weitzman stated: "Mr. Robson's claim is outrageous and pathetic. This is a young man who has testified at least twice under oath over the past 20 years and said in numerous interviews that Michael Jackson never did anything inappropriate to him or with him. Now, nearly four years after Michael has passed, this sad and less than credible claim has been made. We are confident that the court will see this for what it is."

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House Votes to Repeal North Carolina Estate Tax

Tue, 14 May 2013 00:10:36 +0000

Will another state death tax disappear retroactively in 2013? Quite possibly. Last Wednesday the North Carolina House of Representatives voted 82 - 37 in favor of repealing the state estate tax retroactively to January 1, 2013. The bill has now been referred to the North Carolina Senate where it will be reviewed by the Finance Committee. This comes on the heels of Indiana's retroactive repeal of its state inheritance tax: It's Official - Indiana's Inheritance Tax Has Been Repealed, Retroactively.

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Moving to Avoid Estate Taxes and Income Taxes? Absolutely Says One Maryland Couple

Mon, 13 May 2013 00:05:30 +0000

OK, here I go again, writing about a topic that irks me every time I read an article or a study which concludes that people don't move to reduce their tax bill. As an estate planning attorney who practiced in Maryland from 1995 to 2004 (by the way, Maryland has a state income tax, estate tax, and inheritance tax) and moved to Florida in 2004 (by the way, Florida has none of those state taxes), I am here to tell you that people do move to avoid state income taxes and death taxes. At least once a week (sometimes more), attorneys from my firm work with clients who have made the decision to give up their Connecticut, Illinois, Maryland, New Jersey, New York, etc. (fill in the name of the state that has an income tax and/or a death tax) residency to become a Florida resident. Why? Taxes, that's why.

Don't believe me? Then read this opinion piece from The Baltimore Sun titled "Farewell, my Maryland, farewell to taxes, farewell to extreme liberalism," which I have reproduced here:

"It is with a heavy heart that after living here for 40 years, my husband and I must bid Maryland farewell. We can no longer afford to support fiscal and social programs with which we do not agree.

We moved here in 1973, bought a home we could afford, sent our children to Maryland public schools, worked for Maryland companies, paid our share of property and income taxes, and lived within our means. And now that we have retired, the state of Maryland feels it is entitled to increase the tax burden on our hard-earned retirement income.

After researching the issue, we found that Florida has no state income tax and no state estate tax. We recently purchased a home in Florida, and in May we will establish Florida residency.

We are not alone. Florida real estate brokers told us that the exodus from Maryland is astonishing. The last legislative session that increased taxes, went soft on illegal immigration and hardened criminals, and stepped on the Constitution's Second Amendment was the catalyst we needed to move.

That Gov. Martin O'Malley thought it was his most productive session ever was ample proof that we do not align with his vision for our once beloved state.

The real tragedy of our departure is not only the income the state will lose because we are no longer obliged to pay state income tax, but Maryland also loses the hundreds of volunteer hours I devote to my church, Towson University and Mercy Hospital. Florida will now be the beneficiary of my money and my free labor.

So good-bye, Maryland, I will miss you. But if your policies ever change from being the mismanaged "Freeloader State" back to the well-managed "Free State" I may return.

Constance Kihm, Parkton"

Welcome to Florida, Mrs. Kihm.

It's Official - Indiana's Inheritance Tax Has Been Repealed, Retroactively

Thu, 09 May 2013 00:05:38 +0000

It's now official, yesterday Indiana Governor Mike Pence signed a two year budget bill into law. Under the provisions of the bill, Indiana's inheritance tax is repealed effective for deaths occurring on or after January 1, 2013. Estates of decedents who died between January 1, 2013 and May 8, 2013 that already paid their Indiana inheritance tax bill will be looking for a full refund in the mail.

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Family Wrongfully Collected Pension of NFL Player Who Died in 1994

Wed, 08 May 2013 01:25:42 +0000

This story amazed me when I read it - how could the NFL let this happen? John Helwig, who played defense for four seasons with the NFL's Chicago Bears, died on December 2, 1994, and apparently his widow, Ruth Helwig, was not entitled to continue to receive any portion of his NFL pension. Nonetheless, Mrs. Helwig managed to collect her deceased husband's NFL pension checks until her death 13 years later in 2007. But that's not the end of the story - John Helwig's daughter, Constance Helwig-Langlois of Detroit, continued to collect her father's pension checks for several years after her mother's death. All of this came to an abrupt halt in 2011 when the NFL finally figured it all out. Last Wednesday Ms. Helwig-Langlois, who had admitted that she had forged her father's signature on the pension checks, was charged with fraud. The erroneous pension payments totaled about $200,000 over the 17 years since Mr. Helwig's death.

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Long Term Health Care Costs - America's Top 10 Cheapest States

Tue, 07 May 2013 01:01:44 +0000

Last week I reported on the 2013 Cost of Long Term Care Survey conducted by Genworth, which, not surprisingly, indicates that the cost of long term health care in the United States will only continue to rise. And with the federal Commission on Long-Term Care (COLTC for short) off to a bumpy start - members of COLTC haven't even selected a chairman or vice chairman yet and are basically at a loss as to what to do first, let alone next, even though all of the members of the commission were finally selected over a month and a half ago - Marlene Y. Satter has put together a list of the 2013 "Top 10 Cheapest States for Long-Term Care Costs" for AdvisorOne based on the information contained in Genworth's survey. Ms. Satter averaged the costs for the categories of adult day care, licensed home care, assisted living and nursing home private rooms to come up with her list.

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Planning for the State Estate Tax Gap - Do You Need an ABC Trust?

Mon, 06 May 2013 01:10:33 +0000

Admittedly, so far the advent of portability of the federal estate tax exemption has led a handful of clients to undo their AB Trust estate tax planning, and I anticipate this trend to continue in the future. Nonetheless, these clients live in Florida, where there is no state estate tax, and they don't plan to move away any time soon. But in a majority of the states that still collect a state estate tax, there is a significant gap between the federal estate tax exemption, which sits at $5,250,000 in 2013, and the state estate tax exemption. And, at least to date, none of the states that collect a state estate tax have introduced legislation to make their state estate tax exemption portable between married couples, so estate tax planning in states that collect a state estate tax still remains critical.

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