AFTER THE DEATH OF A SPOUSE

After a spouse has died, it can seem impossible to focus on the details, let alone make important decisions.  Here is a list of what should not be delayed:

  • Connect with attorneys, accountants, and financial advisors
  • Secure your finances – most importantly find out what assets are immediately available to you
  • File paperwork to claim insurance proceeds and retirement funds
  • Locate the Will and/or Trust

Later on, focus on:

  • Estate administration- are there are tax returns to file?  Is a probate needed?
  • Analyze assets and cash flow needs – take a closer look at the full picture of assets available presently and in the future.  Have you inherited IRA’s?  Should a new investment adviser be consulted? 
  • Do you need to update your own estate plan?  Have you updated your beneficiary designations on your IRA’s and life insurance?

As you move from short to long-term considerations, take the time you need to make these important decisions and create your own team of investment and legal advisors.

Call the Law Offices of Debra G. Simms at 386.256.4882 to learn more.

This blog post is not case-specific and is provided only for educational purposes and is not intended to provide specific legal advice. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

What actually is your estate?

An estate is your net worth on your date of death.

It includes all property that you own or control such as bank accounts, real estate, life insurance policies, stocks, and personal property like artwork, jewelry, and vehicles.

And, an estate also includes your debts, such as car loans, mortgages, and credit card debt.

What is an Estate Plan and Why is it so Important to have one?

No one likes to think about death, but, it is important to be prepared when the time comes so that your loved ones have a clear understanding of your final wishes.

Estate planning is making a plan in advance that provides details of how you want things handled when you pass.

So, basically an estate plan is a set of written instructions that describes how and to whom you want your property to be distributed after you die.

An estate plan may also provide other details such as funeral arrangements and care for pets when you have passed. 

Complete estate plans should also include health care instructions if you should become ill or disabled before you pass. You should also direct who can make financial and legal decisions for you if you become ill or disabled.

Call the Law Offices of Debra G. Simms at 386.256.4882 to learn more.

This blog post is not case-specific and is provided only for educational purposes and is not intended to provide specific legal advice. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

Estate Planning and the New Tax Act

Many of my clients have been asking me if they need to re-evaluate their estate plans in response to the changes in the tax law, the “Tax Cuts and Jobs Act of 2017”.

The Tax Act addresses personal, business, and estate tax planning taxes.  Here is some specific information that concerns estates.

The Estate Tax:

The federal estate tax is a 40% tax imposed on an individual’s assets which are transferred upon death.  The United States has had a version of the estate tax since 1916.  This tax applies to the gross estate – ALL of a decedent’s assets, no matter the character or value, passing upon death to beneficiaries, trusts, heirs, and non-charitable entities.  This would even include life insurance proceeds, not something individuals usually think of as part of their estate.

The new Tax Act significantly changes the tax exemption amounts for those who die after December 31, 2017.  The estate tax exemption has increased to an inflation-adjusted amount of $10 million per individual or $20 million for married couples. For tax year 2018, the IRS has calculated this to be $11.18 million and $22.36 million, respectively.  The Tax Act has effectively doubled the amount of assets that an individual can transfer free from federal tax upon death.

Responding to the Tax Act:

Many individuals who have estate plans drafted in prior years (in the year 2001, for example, the exemption amount was only $675,000) have formula clauses in their Wills and Revocable Trusts.  Such formulas were used to control what goes where at the time of death to maximize the exemption amount.  A typical formula says what amount goes to the spouse, and what amount goes to the children or grandchildren.  Upon death, this directive is usually irrevocable.

If you have a formula clause in your documents, it is time for a review to determine if this formula will achieve your goals.  It is quite possible, that given the current tax environment, a formula clause could give your spouse far less than you intend.

Questions? The Law Office of Debra Simms is here to help. Call us today 386.256.4882

This blog post is not case-specific and is provided only for educational purposes and is not intended to provide specific legal advice. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

The 2017 Tax Season is now over, but it’s never too early to start your end-of-year planning to save taxes in the coming year.

Did you know that you can use your required minimum distributions from a traditional IRA to make a charitable gift?  Donors over the age of 70 ½ can instruct their IRA administrator to transfer up to $100,000 a year to a qualified not-for-profit organization.

The value of these gifts will not be counted as part of your adjusted gross income, so you will not pay income taxes on the amount distributed.  However, these gifts will not qualify for charitable contribution income tax deductions.

But, don’t make the mistake of withdrawing the money first and then making the donation to the charity.  Contact your IRA administrator what steps you need to take because the procedures vary from firm to firm.

Questions? The Law Office of Debra Simms is here to help. Call us today 386.256.4882

This blog post is not case-specific and is provided only for educational purposes and is not intended to provide specific legal advice. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

After a lifetime of hard work, many people have a large portion of their wealth tied up in their IRA’s. But, they might not think it wise to leave such a large sum of money to certain heirs or beneficiaries. Most money managers tell their clients that they can only name individuals on their IRA beneficiary forms. Is this true?

No. You can leave your IRA assets to a beneficiary in trust. But, here’s the catch…it must be a Retirement Benefits Trust which contains specific language that satisfies the IRS because these assets have not yet been taxed.

If properly drafted, a Retirement Benefits Trust can preserve your assets for your beneficiary and the tax deferral treatment will not be lost.

I recommend the use of a Retirement Benefits Trust in a variety of circumstances such as:

• You have remarried and want your new spouse to have the use of your IRA income, but not control over the principal
• You have minor children or your children are not responsible with money
• You have a beneficiary who is in the middle of a lawsuit or in the middle of a divorce and subject to alimony
• You have a beneficiary with Special Needs

There might be other circumstances where it is not appropriate to leave your Retirement Benefits outright to a beneficiary. The use of a Retirement Benefits Trust can preserve these assets and the tax benefits for your loved ones.

Questions? The Law Office of Debra Simms is here to help. Call us today 386.256.4882

This blog post is not case-specific and is provided only for educational purposes and is not intended to provide specific legal advice. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

Contact Us

Port Orange Office:
Prestige Executive Center
823 Dunlawton Ave. Unit C
Port Orange, FL 32129
Local: 386.256.4882
Toll Free: 877.447.4667
New Smyrna Beach Office:
629 N. Dixie HWY
New Smyrna Beach, FL 32168
Local: 386.256.4882
Toll Free: 877.447.4667