King & Wood, P.A.

What is San Diego Doing to Combat Elder Abuse?

“District Attorney Summer Stephan announced an outreach campaign designed to increase awareness of financial elder abuse and remind employees of San Diego-area financial institutions of their duties as legally mandated reporters of such crimes.”

Finance professionals who serve senior citizens “are some of our best eyes and ears for spotting and preventing the exploitation of older and dependent adults,” District Attorney Summer Stephan said during a news conference at the San Diego Hall of Justice.

Fox 5 San Diego’s recent article, “County battles financial elder abuse with new campaign,” says that under California law, employees of financial institutions, including all banks and credit unions, are required to report suspected elder and dependent adult financial abuse.

This applies whether they have direct contact with a potential victim or even just witness an incident they suspect may be financial abuse.

“Employees in financial institutions can make a real difference in the lives of some of the most vulnerable in our community to help protect them from losing their life savings,” Stephan commented.

The new program, launched in conjunction with Financial Elder Abuse Awareness Month, gives finance workers examples of warning signs to watch out for and details on how to report any suspected abuse of the elderly.

The training materials include a video featuring industry representatives from the Credit Union League and Western Bankers Association, as well as Marlene Ruiz, a longtime local bank employee who helped prevent a financial elder-abuse crime.

When Ruiz saw that one of her older clients was the victim of an obvious scam, she intervened. As a result, she was able to prevent the victim from having thousands of dollars stolen from his bank account. In honor of those actions, the District Attorney’s Office named Ruiz one of its “Citizen of Courage” in 2018.

An estimated $36.5 billion is lost every year in the U.S. from elder financial exploitation. Last year, U.S. banks reported nearly 25,000 suspected cases of elder financial abuse to the Treasury Department. That’s more than double the amount of five years earlier.

In fiscal 2017-18, San Diego County Adult Protective Services fielded 4,563 referrals about financial-abuse allegations. Nearly 15% of those reports came from financial institutions, according to Stephan’s office.

Reference: Fox 5 San Diego (June 18, 2019) “County battles financial elder abuse with new campaign”

How Has the New Tax Reform Affected Charitable Giving?

“After years of strong growth, total charitable giving rose just 0.7% in 2018, according to a new report on philanthropy by Giving USA. When adjusted for inflation, total giving declined 1.7%.”

People typically don’t donate to charity because of tax benefits, but without it they’re likely to give less.

CNBC’s recent article, “Charitable contributions take a hit following tax reform,” reports that 2018 was the first time the effect of the new tax law could be gauged. The law eliminated or significantly reduced the benefits of charitable giving for many would-be donors.

In total, individuals, bequests, foundations and corporations donated roughly $430 billion to U.S. charities in 2018, according to Giving USA. However, while the giving by individuals dropped, contributions from foundations and corporations went up.

Even though the deduction for donations was unchanged in the Tax Cuts and Jobs Act, individuals still are required to itemize to claim it. That is now a much higher bar, because of the nearly doubled standard deduction.

Under the new tax reform legislation, total itemized deductions must be more than $12,000, which is the new standard deduction. That is an increase from the past $6,350 standard deduction for single people. Married couples need deductions exceeding $24,000, which is an increase from $12,700.

Because of this change, there will be fewer people who itemize their individual tax returns. The result is that many people won’t enjoy the tax benefits of their charitable contributions.

One analysis from the Tax Policy Center showed that the number of itemizers fell from to about 19 million under the new tax law. That’s’ a decrease of more than half, from about 46 million. At the same time, lower tax rates also reduced the marginal benefit of giving, the Tax Policy Center said.

Tax reform probably impacted the middle households that used to itemize the hardest, one tax analyst remarked. As a result, lower-income families reduced giving, a change that could be an issue for non-profits in the long term. The greater the revenue is concentrated in only a few sources, the greater the risk for these charities.

Another study from the Fundraising Effectiveness Project revealed that there was a nearly 3% increase in large gifts, defined as $1,000 or more in 2018. However, modest gifts between $250 and $999 dropped by 4%; and gifts under $250 decreased by more than 4%. In addition, the total number of donors declined.

Reference: CNBC (June 18, 2019) “Charitable contributions take a hit following tax reform”

Is Estate Planning Really Such a Big Deal?

“Your obligations to your family or loved ones do not stop, even if you have already passed on. If your family, especially your children, are still heavily dependent on you, you can still provide for them through proper estate planning, even if you are no longer present.”

Delaying your estate planning is never a good idea, says The South Florida Reporter, in the new article entitled “Why Estate Planning Is So Important.” That’s because life can be full of unexpected moments and before you know it, it’s too late. Estate planning is for everyone, regardless of financial status, and especially if they have a family that is very dependent on them.

Estate planning is designed to protect your family from complications concerning your assets when you die. Many people believe that they don’t require estate planning. However, that’s not true. Estate planning is a way of making sure that all your assets will be properly taken care of by your family, if you’re no longer able to make your decisions due to incapacity or death.

Without estate planning, a court will name a person—usually a stranger—to handle your assets and finances when you die. This makes the probate process lengthy and stressful. To protect your assets after you die, you need to have an estate plan in advance. You also need to address possible state and federal taxes. Your estate plan is a way to decrease your tax burdens.

With a proper estate plan, your final wishes for your assets will be set out in a legal document. With a will or trust, all of your assets will be distributed to your beneficiaries, according to your final wishes.

This will also save your family from having to deal with the distribution of your assets, which can become very complicated without a will. There can also be family fights from the process of distributing assets without a will.

 It is also important to remember that if you do create an estate plan, you’ll need to update it every once in a while—especially if there’s a significant event that happened in your life, like a birth, a death, or a move. Your estate plan should be ever-changing, since your assets and your life can also change.

It’s vital that you work with an experienced estate planning attorney, who can help you draft the legal documents that will make certain your family is taken care of after you pass away.

Reference: South Florida Reporter (June 12, 2019) “Why Estate Planning Is So Important”

Celebrating Our Law Firm’s Fifteenth Anniversary!

King & Wood, P.A. was founded on July 16, 2004.  Today we celebrate our fifteenth anniversary.

We are thankful for the many families and businesses who have allowed us to serve them through the years.

We are thankful for our wonderful staff, whose professionalism and good humor allow us the many benefits of a positive work environment.

We are thankful for the many lawyers, accountants, bankers, financial advisers, real estate brokers, and other professionals who continue to refer their own friends, family, and clients to us for help in our areas of law practice.

Our current roster of lawyers and staff, in the order in which they joined our firm, is as follows:  Kimberly L. King (2004) • Edward W. Wood (2005) • Shelby Augustyniak (2007) (Closings Coordinator) • Elizabeth J. Maykut (2010) • Nicholas Perkins (2015) (Administrative Assistant) • Kathy Arrant (2015) (Elder Law Coordinator) • Jill Comstock (2018) (Probate Coordinator) • Olivia Surdel (2018) (Administrative Assistant) • Gregory Raymaker (2019) (Runner) • Megan Hance (2019) (Closing Specialist) • Caroline Palmer (2019) (Estate Planning Coordinator) • Annalise R. Kapusta (2019) (Associate).

We are also thankful for the alumni of our firm, whose valuable contributions continue to resonate.

The law firm of King & Wood, P.A. represents clients throughout North Florida from offices located in Tallahassee, Florida’s capital.  Our core practice areas are elder law (including Medicaid planning), business law, real property law, real estate closings, estate planning (including wills, trusts, and powers of attorney), probate, guardianship, and related litigation.  We have diverse law practice experience that enables us to provide also a broad range of services within related areas of the law.

Is My Irrevocable Trust Revocable?

“Irrevocable trusts appear, by definition, to be unchangeable and inflexible. But are they?”

Irrevocable trusts aren’t as irrevocable as their name implies, according to Barron’s recent article, “Are Irrevocable Trusts True to Their Name?” The article says that, for both new and existing trusts, there are ways to build in flexibility to make changes to a grantor’s wishes, if terms are no longer appropriate or desirable for beneficiaries.

However, there are strict rules that apply. These rules vary between states. One of the main reasons for an irrevocable trust, is to remove assets from an estate for estate tax purposes. If the rules aren’t followed carefully, a trust can be rendered unlawful. If that happens, the assets may be returned to the grantor’s estate and estate taxes may apply.

If you want to be certain that beneficiaries have some discretion in the future if circumstances change, grantors should build flexibility into the trust when it’s established. This can be accomplished by giving a power of appointment to beneficiaries. However, if the beneficiaries are looking to change the terms or the structure of an existing trust, the trust must be modified, according to state law.

Most states allow trusts to be decanted. When you decant a trust, you pour its terms into a new trust, and leave out the parts that are no longer wanted. Just like decanting a bottle of wine, it’s like the sediment left in the wine bottle.

In a state that doesn’t permit decanting, a trustee can ask a judge to allow it. You should be careful with decanting, because you don’t want to do anything that would adversely affect the original tax attributes of the trust.

The power of appointment in a trust or the ability to decant can’t be given to the person who set up the trust. Thus, grantors can’t have a “re-do” or rescind the terms. It’s only trustees and the beneficiaries that can do that.

If you and your attorney create a trust with a lot of flexibility for the trustee, you may want to appoint an institutional trustee from a bank, trust, or other financial services company.

They can be either the sole trustee or serve as co-trustees with a personal, non-institutional trustee, like a family member. This can help to eliminate future conflicts.

Reference: Barron’s (June 18, 2019) “Are Irrevocable Trusts True to Their Name?”

How Will Changes in the Law Impact my Estate Plan?

“If you haven’t looked at your will or estate plan lately, now is a good time to do so.”

Wealth Advisor recently published an article—“Tune-Up Your Estate Plan in Light of Changing Conditions”—that asks if your estate plan is still appropriate, in light of several changes in the law.

The federal estate tax gift and estate tax exemption amount is now $11.4 million, indexed for inflation, which is an all-time high. A married couple can transfer twice that amount to children or others, or $22.8 million, without any federal gift and estate tax. The federal exemption amount is also now “portable” between spouses. It means that the first spouse to die, can transfer any unused exemption to the surviving spouse, without the need of a “credit shelter trust.”

Note that the enhanced federal exemption amount is scheduled to “sunset” in 2026, returning back down to $5.6 million (indexed for inflation).

As far as state law changes, the New York estate tax exemption amount is $5.74 million. However, that exemption isn’t portable. The estate tax exemption is also phased out, if your taxable estate is 5% more than that amount. For a New York taxable estate of about $6 million, there’s no exemption and the New York estate tax is about $500,000. The New York estate tax on a $10 million taxable estate is more than $1 million. Since New York has no gift tax, lifetime gifts don’t decrease the estate tax exemption for state tax purposes. However, gifts made within three years of death, would be clawed back under a pending bill.

In New Jersey, they’ve repealed the estate tax but kept the inheritance tax. Connecticut raised its estate and gift tax exemption amount. In the state of Illinois, the estate tax exemption amount is only $4 million and isn’t portable. This makes flexibility in your estate plan very desirable. For residents in the Land of Lincoln (that’s Illinois), the estate tax savings are less dramatic, since the exemption is smaller than in New York, but the potential savings through proper planning are still major.

Another consideration to note includes the fact that surrogate’s courts and probate courts—which have always moved at a snail’s pace—have become even slower.

Some of these changes may impact your current estate plan. You may want to take advantage of the enhanced federal exemption amount, before it goes away.

Talk to an experienced estate planning attorney to see how you can shelter your savings from a state estate tax, if you are married and live in a state with an estate tax like New York, Connecticut, or Illinois. This could save you a lot of money that you can then pass on to your heirs.

Reference: The Wealth Advisor (June 17, 2019) “Tune-Up Your Estate Plan in Light of Changing Conditions”

Do I Have the Best Retirement Plan?

“Lifestyle choices, cash reserves, tax planning, estate planning, insurance, education funding and planning for life after work (retirement) are all important considerations for any comprehensive financial plan.”

As you put together a plan that combines all your financial priorities to help you to pursue your goals, it’s vital to be certain that the plan you are implementing is appropriate and customized to your needs.

nj.com reports in the article “Retirement plans that might not pan-out” that, unfortunately, many people start plans that are based on strategies, scenarios and assumptions that may prove unreliable and unsustainable. That can mean bad results. So as you start to plan, exercise caution if you’re considering the strategies below.

Working forever. Frequently people think they’ll never have enough money to retire. This drives people to look at extending their working years as a possible answer. This can make sense for some, but in many cases, people assume that they’ll “never stop working” and use this as the solution for their financial planning concerns.

Remember, we’re all living longer than ever before, and you may experience health issues, ageism and skills obsolescence that can restrict the length of your career and or the earning potential during this phase of your life. There’s just no way to tell how long your health will let you work on either a full or part-time basis. Too often, people make assumptions about how long they have to work without ever creating a real financial plan.

Assumptions on life expectancy. Some seniors use a shortened life expectancy assumption to make retirement seem more feasible. However, that’s another assumption that’s based on something out of your control. Life expectancies are also being extended, not shortening. Be sure to consider the impact of longer life expectancies on the sustainability of your plan. Have you saved enough to have enough money at age 90 or 95?

Downsizing. Your home is usually one of the bigger investments a person makes, so downsizing or “rightsizing” your home is often seen as a way to reduce costs and improve the quality of retirement. Swapping a larger, more expensive home for a smaller one may be a great way to reduce costs, especially if you can use the equity proceeds towards a mortgage on your next purchase.

However, reducing the size of your home may not certainly decrease expenses, as much as you might think. That’s because real estate tax reductions may be offset by things like new homeowner’s association fees. There’s also paying off debts, realtor fees, moving expenses and costs associated with the next home that can leave little gain.

When you’re financial planning, apply realistic strategies and assumptions that will help you pursue your goals.

Reference: nj.com (June 14, 2019) “Retirement plans that might not pan-out”

How Will the Secure Act Changes IRAs and RMDs?

“The legislation may shake up the rules for IRA contributions and required minimum distributions and upend many retirees’ estate plans.”

The House has passed what could be a landmark retirement law that will impact workers, retirees and heirs. Some of the most important provisions will modify existing retirement plans.

Kiplinger’s recent article, “Secure Act Calls for Changes to IRAs, RMDs,” reports that IRA owners should understand some of the key provisions of the bipartisan Setting Every Community Up for Retirement Enhancement Act of 2019. This bill passed the House in a 417-3 vote and is now in the Senate’s hands.

The three changes that are discussed below will go into effect after December 31, 2019, provided the House bill is enacted as written

The Age Cap Repeal. The Secure Act gets rid of the age cap for traditional IRA contributions, which is now at 70½. This would let older workers save some of their earned income in a traditional IRA, just as they can now in a Roth IRA. For those 50 and older in 2019, the maximum contribution is $7,000. An older worker who has enough income to cover the total IRA contributions, could also contribute to a spousal IRA for a retired spouse.

An Increase in the RMD Age. The House bill increases the starting age for required minimum distributions (RMDs) from retirement accounts to 72, from 70½. That’s a win for older workers and retirees, who don’t need to tap their retirement accounts to cover expenses. Because the change would be effective after December 31, 2019, people who turn 70½ in 2020 would be the first to benefit. IRA owners currently taking RMDs wouldn’t be impacted.

The Loss of the “Stretch IRA.” Although the Act may benefit some retirement account owners, it’s not so nice to non-spouse heirs. The bill would get rid of heirs’ ability to stretch out RMDs from inherited retirement accounts over the non-spouse heirs’ own life expectancies. This currently allows more of the money to grow tax-deferred and lessens the heirs’ income tax bill. However, the Act would require inherited assets to be withdrawn within 10 years. Beneficiaries of larger accounts could have much bigger IRA withdrawals, as well as larger tax liabilities, than they’d anticipated.

This change will require some additional estate planning for many IRA owners. Heirs will need to review their tax-planning strategies, if they receive a windfall. Repealing the age cap on contributions and raising the age for RMDs could be beneficial to some, but retirees would have to weigh that with accumulating too much in an IRA. The loss of the stretch could make Roth accounts more attractive, because heirs can withdraw Roth money tax free.

Reference: Kiplinger (June 14, 2019) “Secure Act Calls for Changes to IRAs, RMDs”

When Am I Told If I’m a Beneficiary of a Will?

“Wills must go to probate court to prove their validity. Beneficiaries of a will must be notified no later than three months after the will is accepted for probate.”

When someone dies, the distribution of their assets is hopefully determined by a clear and legally binding will. If not, the assets come under control of the state, and a probate court will decide how best to distribute them.

An Investopedia article from last month asks, “When Are Beneficiaries of a Will Notified?” The article explains that in situations where the assets are structured to avoid probate (like setting up joint tenancy or making an assets payable upon death), there are no specific notification requirements.

Since probated wills are public record, when there are assets subject to probate and the will is filed with the probate court, anyone who thinks he or she may be a beneficiary is entitled to look at the will at the courthouse.

Probate is the legal process of proving that a will is valid and is administered by a probate judge. The court examines the will and directs the executor to gather the deceased’s assets and distribute them to the heirs, according to the instructions in the will.

Once the probate court says the will is valid, all beneficiaries are required to be notified within three months (in many states), but notification typically will happen a lot sooner.

Many county courthouses have a department called “Register of Wills,” where probated wills may be viewed.

It is important to understand that probate isn’t required in all circumstances. If the decedent has assets below a certain threshold (determined by the specific state), probate may not be necessary.

Reference: Investopedia (June 18, 2019) “When Are Beneficiaries of a Will Notified?”

Will Kylie Jenner Have Travis Scott Sign a Prenup?

“Kylie Jenner is ready to be a bride, for a potential shotgun wedding, that is!”

Sources say that makeup mogul Kylie Jenner is ready to marry 28-year-old boyfriend rapper Travis Scott. She wouldn’t care, if they elope for their wedding.

Radar reports, in the story “I Do! Kylie Jenner & Travis Scott To Wed In Low-Key Summer Wedding,” that those who follow the young couple also know that 21-year-old Kylie and Travis’ relationship has had some rocky days, after his alleged cheating scandal.

“It burns away at Kylie that they had [their daughter] Stormi out of wedlock, but at the time their relationship was shaky and then things got pushed onto the back burner, because they couldn’t figure out a prenup agreement that suits them both,” a source told Radar.

“Kylie got anonymous messages from a woman claiming to be Travis’ side piece,” a source told Radar. “The woman had no proof, but Kylie flipped out.”

Scott denied the affair and professed his love for Kylie during a show at Madison Square Garden in New York a few days later. Kylie reportedly placed some strict rules in their relationship, and they’ve patched things up.

With everything, Kylie is hoping she and her fiancé can exchange vows by summer. In fact, she’s even gotten some inspiration from one of the Jonas brothers.

“She loves what Sophie Turner and Joe Jonas just did and is brainstorming something similar,” the source said about Kylie’s wedding plans. “This won’t be a family-planned event though, as Kylie sees herself above the whole KUWTK [Keeping Up with the Kardashians] circus these days.”

Kylie wants to leave the family-based reality show.

“Kylie thinks KUWTK has run its course,” an informant shared. “She is just so busy with Kylie Cosmetics that she doesn’t have time to deal with the long hours it takes to film.”

One would think that with her estimated $900 million fortune, she’ll ask Scott to sign a prenup. A prenuptial agreement (or “prenup”) is a written contract drafted for a couple before they get married. The agreement will usually detail the property each person owns (and any debts). It also stipulates what each person's property rights will be after the marriage.

Prenups should be written by an attorney, so talk to a legal professional with any questions.

Reference: Radar (May 28, 2019) “I Do! Kylie Jenner & Travis Scott To Wed In Low-Key Summer Wedding”