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Charitable donations build legacy and deliver tax advantages

Multiple factors could motivate a Florida resident to include charitable donations in their estate plans. In addition to offering substantial tax savings, giving can support social progress. An estate owner might even create a philanthropic plan that forms a legacy across generations. To achieve the desired outcome, one needs to consider both their personal goals and the missions and capabilities of the recipients.

People typically support organizations with missions close to their hearts. A final donation at the end of life could memorialize a person's longstanding passion for a specific cause or institution. Although gifts often take the form of cash, assets such as valuable art or real estate could also be given to charitable institutions. However, not all organizations can accept non-liquid donations.

Who is the best successor for your business?

Owning and running a business is no small feat. Chances are your business is your life so you might not want to think about the day you retire and have to leave your business in someone else’s hands. However, business succession planning is an important part of running a business and it requires a lot of thought. Having a solid business succession plan can help your business thrive and succeed in the future.

Perhaps one of the most important parts of a business succession plan is choosing a successor. Picking the person who will take care of your company in the future is a big decision. Here are three things to think about when choosing the right person to take over your business.

Estate planning with a timeshare

Florida is a popular area for timeshare resorts. A timeshare is a piece of property where the owners can vacation for a set period of time during the year in exchange for annual fees. Since the ownership can last in perpetuity, many owners want to make sure that their heirs are not stuck paying the fees for unwanted timeshares.

For heirs who are interested in inheriting a timeshare, a trust is one option to consider. Many people choose to use a trust as an estate planning strategy to allow for flexibility, especially if there may be a disagreement between heirs about what to do with the timeshare after the owner's death.

Drafting proper wills

Florida residents should make sure that the estate plan they have in place is properly prepared. This entails including a will that is properly drafted with all of the information needed to satisfy any questions or concerns family members may have.

It is important to choose the right person to be an executor. Many people tend to select executors based on personal relationships and family hierarchy. However, the role should be fulfilled by someone who is trustworthy and able to fulfill the duties of the role.

Unrecorded deeds in an estate plan

When people in Florida think about how to plan for the future, some may consider the use of unrecorded deeds in order to transfer property. For example, parents may give their child the deed to their home and agree to not have it recorded until the parents pass away. There is no time limit that prevents a deed being recorded, even years after it was issued. However, while this technique was used in the past as a way to transfer property and make an estate plan, there are modern options that can help people plan their estates without the uncertainties introduced by unrecorded deeds.

First, as deeds are paper documents, they are always at risk of being misplaced, damaged or even discarded. If the deed was not recorded, there is no longer any proof of the original document's existence, and the danger can be significant if the deed is expected to go unrecorded for decades. In addition, because title does not change until the deed is actually recorded, the grantor retains ownership and can sell or mortgage the property in that time. This may make it difficult for the recipient to later obtain a clear title.

Surviving spouses and estate planning

Handling estate planning issues may be the least concern of grieving widows or widowers. However, there are certain steps they have to take as soon as possible. Surviving spouses should review and update existing legal documents to ensure that they will be protected during their lifetime and to address what will occur after they die.

For powers of attorney that named the decedent, surviving spouses should designate someone they trust. They will also have to determine when the power of attorney can be used, such as whether it can be used only when they are incapacitated or at any time. If a power of attorney form is not properly updated and a surviving spouse loses the ability to sign documents, it will be necessary for the courts to become involved, which can be an expensive and lengthy process.

Careful planning can help prevent estate disputes

Estate disputes can create a tense, divisive probate process after the death of a loved one in Florida. Making common estate planning mistakes can lead to difficulty or even failure to execute a person’s wishes. It’s important to devote the time and effort toward maintaining a comprehensive, up to date estate plan to help lessen the likelihood of disputes down the line.

It’s unlikely that an estate can prepare for every potential dispute, but careful, thoughtful planning can ensure your estate should be able to withstand the most common challenges. Consider past errors and constructive tips in creating and maintaining an estate plan.

Balancing charity and family in an estate plan

When creating an estate plan, Florida residents should think about how much an asset is worth after accounting for taxes. Doing so may result in the government getting less and loved ones getting more of an estate's money. It can also help determine how assets are allocated or how they are distributed after a person passes. Let's say that a parent wanted to leave money for charity.

It may be possible to make a donation to the charity and leave another asset such as a retirement account to an adult child. However, it may be better to make the charitable donation from the 401k or IRA funds themselves. For instance, it could be a better decision to make a $100,000 donation from a $1 million IRA as opposed to making a donation and leaving the entire balance to a beneficiary.

The importance of estate planning for small business owners

If an individual in Florida does not have a will, decisions about how assets are distributed will be made by the court. In some instances, the results are pretty much in line with what a recently departed loved one may have wanted. But this isn't always the case. Heirs sometimes end up in long, drawn-out legal battles that can take an emotional and financial toll on everyone involved. For small business owners, not having a will can be especially problematic.

Should a small business owner fail to cross estate planning off their to-do list before passing, all assets and property related to their business will end up in probate. This may result in a loss of income for family members, or the business may cease to operate altogether, especially if legal fees eat away at profits. Even if it's mutually agreed that the business should be sold, it could take a year or more for relevant parties to get the proceeds.

Estate planning errors of Prince and Aretha Franklin

Florida fans of the musician Prince may be aware that he died without a will and that this had led to issues in settling his estate. Aretha Franklin also died without creating an estate plan despite the fact that she has four children and one of them has special needs.

In both cases, because of the size of their estates, a hefty amount will be taken out for taxes. Furthermore, their estates must pass through probate, which is a public process. Celebrities and other prominent people often prefer an estate plan that allows them some privacy. Not having an estate plan can have serious consequences even for people who are not rich or well-known. Despite this, 42 percent of baby boomers and nearly two-thirds of Generation Xers do not have a will. Most say they simply did not get around to it. One of Franklin's attorneys says that he urged her to make an estate plan, but she did not follow through.

Kramer A. Litvak, P.A.
226 East Government Street
Pensacola, FL 32502

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Phone: 850-308-1677
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