Category Archives: Estate Planning Taxation

The Secure Act was signed into law on December 20, 2019, by President Donald Trump.  This new law ends the availability for beneficiaries of inherited IRAs to stretch the tax-deferred and/or tax-free growth of the assets within it over the beneficiaries’ life-time.

Under the new law, non-spouse beneficiaries will have to withdraw all the funds in the inherited IRA within 10 years from the death of the account holder.  It applies to IRAs inherited after December 31, 2019.  

An exception to the new 10-year rule is for disabled and minor children. 

The new Secure Act could significantly alter your estate planning goals.  The Law Office of Debra G. Simms is holding free seminars to discuss how the new law might affect you.  Contact us to reserve a seat.

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 Blog topics may or may not be updated and entries may be out-of-date at the time you view them.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 ESSENTIALS

In Florida, an estate planning attorney can help with the completion of four very important documents that are necessary such as a: 

  • last will and testament with or without guardianship depending on a scenario where there are minor children, 
  • an advanced healthcare directive,
  • durable power of attorney, and
  • living will

  A Last Will and Testament is important for the purposes of explaining where and how an individual would like their assets divided, debts resolved and who will be the Personal Representative of the Estate.

An Advance Healthcare Directive is the document that details the type of care you want administered in the event you become disabled and cannot speak for yourself. In Florida this essential documentation is sometimes called a medical directive or advance directive.

A Durable Power of Attorney designates another person to conduct business on your behalf when you cannot. In the event of disability all other powers of attorney become ineffective except for this one document; the durability of this document allows it to survive disability and is fundamental to estate planning.

A Living Will is a declaration regarding your choices of medical care if you are in an end-stage condition, persistent vegetative state, or terminal condition, AND where there is no medical probability of recovery.

The Law Office of Debra G. Simms can be of assistance in the preparation of estate planning documents. The initial 30 minute consultation is free.

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.

HAVE YOU REVIEWED YOUR ESTATE PLAN IN LIGHT OF RECENT CHANGES IN THE ESTATE TAX LAWS?

If you have not looked at your will, trust, and powers of attorney recently, now is the time to do so. Estate planning documents need to be updated as the laws change and as your family and financial circumstances change.

There have been significant changes with respect to the federal estate tax laws in the recently enacted “Tax Cuts and Jobs Act,” signed on December 22, 2017.  These changes mean your current estate planning documents may no longer accomplish your intended goals.

For those who feel they will never be affected by the estate tax in light of the new increase in the exemption amount, there are still many reasons you may need to update your documents.

If you answer “yes” to any of the following questions, then your estate plan should be reviewed:

  • Did you change your state of principal residence?
  • Did you marry or divorce?
  • Did your spouse pass away or become incapacitated?
  • Did you have or adopt any children?
  • Did any of your beneficiaries marry, divorce, have children, pass away or become incapacitated, or have financial problems?
  • Did any of your designated fiduciaries/representatives pass away or become unfit to serve in their designated roles?
  • Did you retire?
  • Did your financial situation change?

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

We have had a federal tax on inheritances (the so-called “death tax”) since the Civil War. The modern estate tax has been on the books since 1916, but in 2016 the estate tax brought in only $18 billion, or less than 1% of U.S. tax revenue.  Even so, this relatively minor tax became a major battleground during last year’s tax debate.

Many Republicans wanted a permanent repeal of the “death tax,” saying it amounts to double taxation and unfair burden on family-owned businesses and farms.  Others say the erosion of the “death tax” is a giveaway to the richest Americans at a time of increasing wealth disparity.  Many of those in favor of the death tax see it as the best solution to reduce the trillion dollar national debt that threatens the financial security of future generations.  After all, the reasoning goes, the baby boomers will be leaving an unprecedented amount of wealth to their children, why not ask those same lucky souls to pay down the debt?

New Tax Bill:

The tax bill that President Donald Trump signed into law doubled the amount of wealth that escapes the 40 percent estate tax. Starting in 2018, the new law exempts about $11 million for individuals and $22 million for couples (the exact amount depends on the inflation adjustment), but only until 2026, when the thresholds will revert back.

So, will the new tax bill affect your estate plan?  Unless you are worth more $11 million ($22 million for a married couple), it will not.

But, for those of you who have older estate plans, created when the tax exemption was much lower, say prior to 2010, you probably want to consider updates to and simplification of your plans.

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

One of the most important aspects of my job as a Financial Representative is helping my clients and their families gain financial security in a tax efficient manner.  With the return of the Estate Tax looming in 2011 it is more important than ever for people to address their estate planning needs.

The 2011 Budget calls for a $1 million exemption level and a top rate of 55% on taxable estates.  One important tool I recommend to all my clients as a means to counteract this tax in your estate planning is through Permanent Life Insurance.

Permanent Life Insurance can be an important estate planning tool.  As long as insurability requirements are met and premiums are made, life insurance creates an estate –possibly a sizeable estate-not limited by the insured’s net worth or the nature or value of other assets.  With few exceptions, the life insurance provided liquidity is not subject to income tax for the beneficiary.  Moreover, with proper estate planning, the value of the life insurance is not subject to estate, inheritance, or gift taxes.  Thus, there are tax incentives for including life insurance in your estate plan. 

Contact the law offices of Debra G. Simms, P.A. for an estate planning consultation.  Call our toll free number at:
 1-877-447-4667.
Debra G. Simms
Are you concerned about keeping your home outside of probate when you pass away?  If you are like most people, you don’t like the idea of tying up your property in legal limbo for months before your beneficiaries can take possession of or sell your home.
A Lady Bird Deed conveys the property to your beneficiaries but you have the right to remain in your home for the rest of your life.  You can also sell the home at any time without having to notify or obtain the consent of your beneficiaries.
A Lady Bird Deed also has other benefits:  it is far less costly to set up than a Trust; it can protect your home from creditors, and it allows you to keep all the benfits of Florida Homestead protection.
Call me to discuss whether a Ladybird Deed is right for you and your loved ones.
Debra G. Simms
There may never be a better time to give your money away.
For those of you who are fortunate to have large estates, gifting now is an important estate planning tool due to the pending expiration of a favorable estate and gifting environment, the low interest rate environment, and the abundance of undervalued assets.

Without Congressional action by year’s end, the Bush Tax Cuts will expire or “sunset.  Currently, many folks take advantage of their ability to make tax-free annual gifts of $13,000 per person per recipient, in addition to unlimited direct gifts for medical and educational expenses. And the 2012 federal applicable exemption amount for life time gifts and gifts made at death is $5,120,000. If the Tax Cuts expire, the exemption will go back to the former $1 million lifetime cap on gifts. This five-fold increase in the exemption was a major “gift” to those families wealthy enough to take advantage of such government largess.

Making lifetime gifts is a simple and effective estate tax minimization strategy. Giving assets at no gift tax cost will allow both the current principle and its appreciation to forever escape the Federal estate tax. And taking that concept one step further, smart estate planning will leverage those gifts, while allowing for some control. By using various types of trusts, LLC’s, asset sales, insurance, promissory notes and other planning tools, lifetime gifting can be dramatically increased. Think of this the same way you think of prefunding college expenses for children and grandchildren; what I am talking about is prefunding one’s inheritance with any remaining taxable estate directed towards charity, directly or through foundations.

Planning for large gifts should be carefully reviewed in the context of income tax considerations, portfolio investment, cash flow, and many other considerations. Now is the time to meet with your financial planner and estate attorney. This is an election year and none of us can predict what the winds of political Washington will bring next.

Debra G. Simms

Estate Tax Rules

The federal estate tax is scheduled to return with a vengeance on Jan. 1, 2011, imposing a tax of up to 55% on estates valued at more than $1 million.

A $1 million exemption would affect a lot of families who do not consider themselves “wealthy”. “If you have a home, an IRA or 401(k) retirement account, life insurance and some other savings you can get to $1 million pretty easily.

The roots of the estate tax disarray date back to 2001, when Congress voted to gradually raise the estate tax exemption while cutting income tax rates. The phase-out ended in repeal of the tax in 2010. But like the Bush administration’s income tax cuts, the reduction in the estate tax is scheduled to expire at the end of this year.

Historically, wealthy individuals have used a variety of strategies to mitigate estate taxes, including giving away a large portion of their wealth while they’re still alive.  But this strategy isn’t practical for families who have most of their wealth tied up in their primary residences and retirement savings.

Estate taxes can be minimized with the use estate planning devices such as marital trusts and for unmarried individuals, irrevocable life insurance trusts.

Contact our office today to discuss your estate planning options to help you minimize the impact of the new tax law.

Debra G. Simms
To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

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:
817 E. 7th Ave
New Smyrna Beach FL, 32169
Local: 386.256.4882
Toll Free: 877.447.4667