Despite the recent tumultuous times, the use of cryptocurrencies such as Bitcoin, Ethereum, and others are still prevalent in today’s digitized age. While these digital assets offer numerous benefits, including decentralization and security, they also present unique challenges when it comes to estate planning. In this blog post, we will explore the importance of incorporating cryptocurrency into your estate plan and provide practical tips to safeguard your digital assets for future generations.
If you hold Power of Attorney for a loved one and a Trust is involved, don’t expect to be making the same decisions regarding certain assets as the Trustee (and vice versa). Be aware of your specific responsibilities in the event of the loved one’s incapacity or death. Here are some key differences:
“HEMS” stands for “health, education, maintenance, and support” and is commonly referred to as an “ascertainable standard”. If there is a HEMS provision in a Trust, the money distributed can only be used for specific needs of the beneficiary related to health, education, living expenses, or other needs or support that a Trustee can ascertain. Some examples include health insurance, surgery, exercise equipment, prescriptions, tuition, career training, rent, mortgage payments, home repairs, taxes, legal fees, vacations, or other reasonable comforts.
Beneficiary designations for your financial assets are helpful in that assets can be transferred quickly to your heirs without waiting for probate of the Estate (and assuming you do not have a Trust). Although this can be a good option, don’t overuse it or use it blindly. Consider these risks before assuming your assets are protected:
An estate tax return (Form 706) must be filed if the gross estate of a decedent, increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death. The filing threshold for 2022 is $12,060,000. The threshold is adjusted for inflation and increases each year. An estate tax return also must be filed if the estate elects to transfer any deceased spousal unused exclusion (DSUE) amount to a surviving spouse, regardless of the size of the gross estate or amount of adjusted taxable gifts. The election to transfer a DSUE amount to a surviving spouse is known as the “portability” election.
Florida law provides restrictions on who can serve as personal representative (i.e. executor of an estate) when that person is not domiciled in or resident of Florida. A common question we receive when drafting a will for a client is whether the client’s step-sibling (or other step-relative) can serve as personal representative even though the step-sibling (or other step-relative) is not a resident of Florida.
Many people believe that if they die without a will, the state (or government) gets their property. While this is possible, it is very unlikely to occur. So, what happens to your property if you die without a will?
When a person dies without a will, they die intestate (whereas dying with a will is called testate). The Florida Statutes, under Part I of Chapter 732, titled Intestate Succession, presents a hierarchy of classes of people who are to inherit your “intestate estate” if you do not have a will. That hierarchy is as follows:
Posted in Asset Protection,Probate & Trust Administration,Tax Law & IRS Defense,Wills, Trusts & Estate Planning
Many people worry about filing or paying taxes to IRS or the federal government at death. The truth of the matter is that very few need to be concerned. According to IRS data, just 0.15% of decedents needed to file an estate tax return (Form 706) in 2019, and only 0.07% will pay any estate tax. That’s lower than the historical 1% to 2% share. Note there are some states that also have an estate or inheritance tax. Florida is not one of those states.