Estate Planning: Will or Intestate Succession

This post is intended to give a brief explanation of the use of a Will in transferring property at death. Use this post in conjunction with my posts on the Enhanced Life Estate Deed, the Revocable Transfer On Death Deed, Life Insurance Proceeds, Beneficiary Deed and the Lady Bird Deed.

What Is A Will?
A Will is a document you can execute which transfers property to your beneficiaries when you die. A Will may be revoked or revised at any time up until the moment you die. It does not grant any beneficiary a right to your property until you die. The downside is that your beneficiaries are usually required to wait a period of time after your death before they can apply for ownership of your property.

Probate Administration
Probate Administration is a process whereby a personal representative is designated to administer your estate. You may (and probably should) designate a personal representative in your Will. It would be wise to designate multiple back up personal representatives should the person you originally designate be unable or unwilling to perform.

Probate administration requires the determination of your heirs or devisees as well as the settlement of your debts and taxes. The process involves court oversight for resolution of disputes. All proceedings are a matter of public record and, therefore, may be subject to public scrutiny. The process usually takes at least six (6) months after the decedent’s death and the cost is usually based on the value of the estate involved.

Small Estate Proceedings
If your estate is of relatively small value, it may pass by Will without probate administration. The gross value is usually placed at less than $100,000 to be eligible for small estate proceedings. Real property beneficiaries are usually required to wait a period of time before they can use this procedure (usually around six (6) months) to give other potential claimants or creditors time to file a claim against the property.

There are a number of requisites that must be met before a Will can be valid. Each state has different requisites. If your will is not executed with the requisite formalities your state will most likely not recognize the Will and it will then become subject to intestate succession. Be sure to contact an Estate Planning attorney when preparing your Will.


A Shout-Out To My Niece, Jessica

I apologize to those of you who were hoping for a law related post, but family ALWAYS takes precedence.

Yesterday my sister called me and invited me out to one of the local high schools to watch my niece, Jessica, compete in the countywide sixth grade girls cross-country race. I didn't know they even had a race like that for sixth graders, but I have since discovered that it is a very big deal in Tallahassee. Shows how much of an athlete I was in middle school.

I shuffled around some of my hearings this morning and headed to the high school. When I arrived you would have thought there was a Florida State/Miami game going on. Well, maybe not that big, but there were a lot of people in attendance. Most of the girls were tall and lanky and all decked out in running gear (timing watches, arm bands, etc.).

Jessica, on the other hand, does not fit the tall and lanky mold. No timing watch or arm band either. She is small to middle sized for her age, pony tailed and always smiling. I would imagine that those who saw Jess line up beside the 140 or so other girls would not have given her much of a chance against them. Those who don't know Jessica, anyway.

But those of us who do know Jess knew exactly what to expect. Her heart is bigger than her height and her mind incredibly determined. She has always been that way.

When the girls were lined up to begin the race I noticed that she would not only be racing against the sixth graders, but all middle school grades (sixth through eighth). She began the race in the back half of the pack. By the time she made it around the first lap of the track and headed out of the fence for the cross country portion she had moved to eighth overall.

My sister, brother-in-law and I climbed to the top of the bleachers to get a better look at the runners as they circled the high school campus. We were able to catch brief glimpses of Jessica before she disappeared around the main building. It appeared that at the midway point she had moved into fifth place. As the runners came back into sight one tall eighth grader was well out in front (this girl eventually won). Then another girl, then another girl, then Jessica in fourth place.

As the girls came down the hill and neared the entrance to the track several of the older girls were able to overtake Jess. By the time she entered the gate and ran back onto the track she was in eighth place. Good. But Jess wasn't satisfied.

With about twenty yards left she trailed the seventh place girl by about fifteen feet. I watched her eyes and saw in them the same look of determination I have seen many times before. She began to speed up. With about ten yards left she made up 10 feet on the girl. Jessica was now about five feet behind. Her pace quickened even more and by the time Jess crossed the finish line she had overtaken the girl and beat her by about a yard.

As it turns out, Jessica came in seventh overall and first among the sixth graders. This may just be uncle-ly pride, but it would not surprise me to see Jess competing in an Olympic sport during the next decade or so. GO JESS!!!


Transfer on Death Deed to Avoid Probate

Transfer on Death Deed.  Thinking about updating your Will? You may consider removing real estate (to avoid probate) by executing a Revocable Transfer on Death Deed (TOD) instead. Often simpler to create than a Trust, a Transfer on Death Deed is similar to the Enhanced Life Estate Deed and is valid in Missouri, Kansas, Ohio, Arizona, New Mexico, Nevada, Colorado, Arkansas or Wisconsin.


Get A Tax Attorney Involved

Do you cringe when I mention the date April 15? If you don't its probably because you are one of the millions of Americans who give the government an interest free loan during the course of each year and then anxiously await repayment (that's what a tax refund is). But whether you owe taxes or receive a refund each year you may want to consult a tax attorney way before the taxes become due.

Most people don't think about consulting a tax attorney until they are faced with a negative IRS audit. Although this is certainly one of the biggest incentives to consult a tax attorney there are other reasons as well. For example, do you know what a 1031 like/kind exchange is? The IRS will allow you to "exchange" one piece of investment property for another, tax free.

1031 (Like/Kind) Exchange
Suppose I have a job as a traveling nurse and I am currently working in Nevada and own a beach house in California. One day I decide to relocate to a New York travel nurse job and I have to move with it. Living in Nevada allows me to stay in my California beach house every weekend. Moving to New York will make using the beach house nearly impossible. If I sell the beach house in the usual manner and buy a mountain house in New York I will be required to pay taxes on the sale (probably long term capital gains). However, the IRS allows me to "exchange" the beach house in California tax free for a mountain home in New York provided certain legal criteria are met. The sale of the California beach house would be performed in the usual manner but the proceeds from the sale would go into a special holding account until you found the mountain house you wanted to "exchange" for. A tax attorney will be able to advise you on the best method for setting up the exchange and update you on any changes to the law.

Estate Planning
Another reason to consult a tax attorney is for Estate Planning. The terms Will, Trust, Power of Attorney, Beneficiary, Life Insurance, Health Care, Enhanced Life Estate Deed and Lady Bird Deed should be somewhat familiar terms. A tax attorney can show you how to best structure your estate to minimize your current estate taxes and allow you to pass your estate onto your heirs with the least amount of tax burden.

Tax Law Constantly Changes
Remember, tax laws are constantly changing; so what may be the law in 2006 may not be the law in 2007. If you don't believe me, ask yourself why "do-it-yourself" tax companies like Turbo Tax and other online business and tax companies are able to make money selling new versions each year. A friend of mine selling nursing scrubs recently discovered the value of a tax attorney who was able to explain to her a complex tax issue that her CPA was not able to explain. Tax attorneys monitor changes to the laws and can advise you if a change affects your tax structure.

For more tax related information, you may also want to read an article about maintaining a Permanent Tax Home.


Rest In Peace Crocodile Hunter

One of our blog family's favorite television personalities, Steve Irwin a/k/a the Crocodile Hunter, was killed when a stingray stuck him in the chest with its barbed tail and pierced his heart. The Crocodile Hunter's zeal for the outdoors and wildlife has been an inspiration to our family and we will never forget him. Crikey! we will miss you Steve.




What is a Grand Jury?

Before I went to law school I used to wonder what made a Grand Jury, well, Grand. Was it bigger than a regular jury? Were the people who served on it smarter than regular jurors? Was a Grand Jury assigned to handle "Grand" cases while regular juries were stuck deciding the chump change stuff?

Officer Shoots Drug Junkie
I know this is an odd subheading given the first paragraph of this post, but let me explain. On Tuesday, I went down to the Leon County Circuit Courthouse for a hearing in the judge's chambers. Most days at Circuit are quiet. A couple of people in the hallway waiting to see a judge; a few lawyers talking about golf, what they did that weekend, etc. But not this Tuesday.

On Tuesday the third floor hallway (a wide hallway used to enter three courtrooms and six judge's chambers) was elbow to elbow with camera crews, news reporters, police officers and attorneys. As I tried to make my way past the throng I overheard a number of people discussing a police shooting and whether the police officer would be indicted for an “excessive force shooting.” I had read about the shooting in the paper.

It seems some three to four weeks prior, several police officers were called to the scene of a car wreck. One car had run a red light and hit another car. After the police arrived at the scene, the owner of one of the vehicles became unruly (the newspaper said without provocation). The owner pulled something about six inches long out of his car and began to charge one of the officers. It was dark. The officer thought it was a knife and put three bullets into the man’s chest. If memory serves, the object turned out to be a wrench. It was ultimately determined that the man was high on cocaine, marijuana and alcohol. No DUI lawyer in the Nation could have helped him.

As an aside, it also turns out that the man had stolen a gas card from one of my clients and run up a bill. I filed suit against the man and he had just been served with the papers shortly before the incident happened. I doubt the lawsuit led to the man’s drug induced state but you never know.

Back to the Grand Jury
That leads me to the reason the third floor hallway was so crowded. Everyone was waiting to find out whether the Grand Jury would indict the officer.

In Florida, a person can be indicted for a crime in one of two ways. The State Attorney can simply fill out the indictment papers himself or he can empanel a Grand Jury, present evidence and let the Grand Jury decide whether an indictment is appropriate. The former is most often used when the State Attorney wants to take credit for the indictment. The latter is usually chosen in high profile cases where the State Attorney does not want to take the blame for indicting.

Using a Grand Jury, the State Attorney can avoid being the bad guy in a case like the one above. If the Grand Jury indicts, the State Attorney can say “it wasn’t me, it was the Grand Jury.” If the Grand Jury doesn’t indict, the State Attorney can say “see, there wasn’t even enough evidence to convince a Grand Jury.” Hearsay evidence is admissible as well as other evidence that could not be admitted at trial. That is because a Grand Jury does not determine guilt or innocence. Only whether there is enough evidence that someone may have committed a crime.
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