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VanNess & VanNess, P.A.
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Protection offered by IRA trusts

Florida residents who are creating an estate plan may want to consider an IRA trust for their retirement account. These types of trust have become more popular since 2014 when the Supreme Court ruled that inherited IRAs were not protected from creditors. However, there may other reasons to use an IRA trust as well. It can also prevent beneficiaries from irresponsibly spending money that they come into suddenly. Although rules differ for workplace retirement plans, an IRA trust can also be the beneficiary on those plans. Beneficiary designations on retirement accounts should be current since these override other instructions.

With a conduit trust, the distributions go from the IRA into the trust and then to the beneficiary. With an accumulation trust, the distributions go from the IRA into the trust, but they are held there instead of being distributed to the beneficiary. This might be the option chosen by someone who is concerned about a beneficiary spending money irresponsibly.

Tips for creating an estate plan

An estate plan is important for all Florida adults even if they do not have a large amount of assets. It can be important to family and loved ones who will be saved the stress of dealing with these details. An estate plan can also be used to help reduce family conflict. These may be over a particular piece of property, or they might be long-standing resentments around family dynamics. An estate planner may be able to assist a client in anticipating those conflicts and putting provisions in the estate plan that address them.

Good communication can be a part of reducing conflict that may occur after a person's death. If a person is not comfortable communicating directly with family members about aspects of the estate plan or family conflicts, there are other options. A legal or financial professional may explain how the estate is set up, or a person can create trusts that will protect assets. Regularly updating the estate plan is also important. Assets and family dynamics may change, and there will also be changes such as births and deaths.

Same-sex partner estate planning

While it benefits all Florida couples to have an estate plan prepared, there are a few reasons it is especially important for same-sex couples. For example, same-sex partners might need powers of attorney in addition to wills so that a partner can act on one's behalf if necessary.

Ramifications still exist from some states not allowing gay marriage until the 2015 Supreme Court decision. Before 2015, some states did allow same-sex marriages. Of those that legally wed during this time, some moved to other states that did not allow gay marriage and then broke up. Not all couples dissolved their marriages as the states some couples lived in at the time did not recognize those marriages. This is a problem now as assets are traditionally passed to a spouse if one dies. As some states converted civil unions and domestic partnerships into marriages automatically after the 2015 court decision, some people could be legally married to a former partner without realizing it.

IIHS study looks at driver fatality data

Florida motorists may be able to identify some safer vehicles by looking at a study by the Insurance Institute for Highway Safety that examined driver fatality rates in different types of vehicles. The IIHS looked at data for vehicle models from 2011 to 2015 and found that the average driver fatality rate in all vehicles per million vehicle registrations was 30. At 39 fatalities per million, passenger cars had the highest death rates for drivers. Pickups, SUVs and minivans were all safer with rates of of 26, 21 and 19 respectively.

The study did not examine passenger fatalities, and in order to be included, a vehicle needed 100,000 registered vehicle years. Therefore, the results are an imperfect snapshot of vehicle safety. According to the vice-president of research at IIHS, the best way to assess safety from the results is to look at vehicles that had a high sample size and a low fatality rate.

How to make use of a Letter of Final Wishes

Florida residents may have a will as part of their estate plan. However, it may be necessary to include other documents, including a Letter of Final Wishes, with a plan. This letter may be the best place to include information that has no place in or is inappropriate to put into the will itself. For instance, it may include information as to where the estate holder wants to be buried or who should be notified of that person's passing.

It may even be possible to provide an outline of an obituary or tell loved ones which songs to play at a funeral. This letter may also be the ideal place to let family members know what to do with social media accounts or provide passwords to accounts that may need to be accessed after passing on. For those who aren't able to have conversations with loved ones about how a will is structured prior to passing, an LFW may provide an opportunity to do so.

Study looks at car crashes involving children

Florida residents might like to know how their state fares when it comes to children's safety during automobile accidents. In general, fatalities involving children below the age of 15 were most common in the South and least common in the Northeast. Common causes of fatalities were unused or improperly used restraints. Florida had one of the lowest percentages of child deaths with 12 percent.

Around 16 percent of children involved in fatal motor vehicle accidents died, which was a total of 2,885 children. The study reviewed crash trends for 2010-2014 and was conducted by the University of Texas Southwestern Medical Center and Harvard University. More than 18,000 children were involved in fatal accidents during the period studied. The study is the first of its kind and aims to account for differences in regulations and geography.

Creating a spendthrift trust

Florida residents who are creating an estate plan may be concerned about leaving money to an adult child or another loved one who they believe may be financially irresponsible. One possible solution for this is a spendthrift thrust. This type of trust might also protect assets from third party creditors. For example, if a beneficiary files for bankruptcy, the money in a spendthrift trust may not be accessible to creditors unless it is distributed within 180 days after the bankruptcy filing.

A spendthrift trust might also protect a beneficiary's assets in case of a divorce although this is not always the case, and the assets could be used to pay child support or alimony. Furthermore, an effort to shield assets in a spendthrift trust or in a bankruptcy case could cause problems. An attorney may be able to review some of the best practices around creating a spendthrift trust to ensure that it works as it should.

The advantages of including trusts in estate plans

When Florida residents put an estate plan in place, they are often primarily concerned with ensuring that their assets will be passed to their heirs in accordance with their wishes. While this can be accomplished by drafting a last will and testament, adding trusts to an estate plan provides people with a number of important advantages. Trusts allow estates to avoid the time consuming and public probate process, they can prevent heirs from losing assets to their creditors and they can also reduce the amount of estate tax that must be paid.

An estate is unable to pay its bills or manage its assets while it is waiting for a probate court to approve the will, but assets placed into a trust are available immediately because they are owned by the trust. Placing assets in trusts rather than transferring them to beneficiaries also prevents creditors from filing claims and gives people more control over how their estates are administered. Assets can be made available only when heirs have graduated college or overcome substance abuse problems, or people can give their beneficiaries control over their inheritances by naming them as trustees.

How an estate tax repeal might change an estate plan

Some Florida residents might wonder how they should change their estate plan if the federal estate tax is repealed. People with large estates who anticipate having to pay some estate tax have most likely designed their plan with this in mind. Reviewing the documents and considering how removing the estate tax would change them means that a person can be ready to make those changes quickly and efficiently if the law changes.

With the estate tax exemption for 2017 at $5.49 million and twice that for married couples, the aim is usually to get the value of the estate below that exemption amount or as close to it as possible. To accomplish this, a person might fund a multi-generation trust with the maximum allowance for the generation-skipping tax exemption. Another strategy is to create a marital trust.

Florida teens killed in traffic accident

A fatal traffic accident in Citrus County left two teens dead and one injured on April 28. The one-vehicle accident happened at night after the driver made several erratic lane changes.

According to the Florida Highway Patrol, the 18-year-old female driver lost control of the vehicle as she was headed north on US-19, close to North Champion Point. As a result, the vehicle went off the highway, hitting a traffic sign and then crashing against a tree.

VanNess & VanNess, P.A.