Effective October 1, 2013, F.S. 732.806, went into effect and codified existing ethics Rule 4-1.8(c) as part of the Florida Probate Code. The Florida Statute makes a violation of the ethics rule an automatic basis for voiding any part of a Last Will and Testament, Revocable Trust or other written instrument making an improper client gift to the drafting lawyer or a person related to the lawyer. However, the restrictions on gifts under the new statute do not impact: (i) Gifts to a lawyer or other person if the lawyer or other person is related to the person making the gift; (ii) A written instrument appointing a lawyer, or other person related to the lawyer, as a fiduciary; or (iii) Title to property acquired for value from a person who receives the property in violation of the restrictions on gifts.
It is hopeful this new Florida Statute will prevent the abuses of the past.
A recent announcement by the Social Security actuaries that the Social Security Retirement Trust Fund will run out of money in 2034 has once again given rise to a round of concerned citizens asking: Will Social Security be there for me?
The answer to the question depends on what "be there" means.
Will the benefits be there at their current levels of purchasing power? Not necessarily. Will there be some benefits for workers who will retire in the future? Almost certainly. Should I alter my decision about when to claim Social Security benefits based on the actuaries' announcement? No.
Forecasting what will happen to Social Security is a bit different from forecasting other elements of workers retirement plans, since, unlike 401(k)s and private pensions, the Social Security Trust Fund doesn't invest in the stock market. (I have argued in another article that this is a good thing.) Uncertainty about the future of Social Security benefits is largely a political question. Balancing the system to guarantee full benefits beyond 2034 will require a reduction in benefits or an increase in taxes.
In the worst case scenario, assuming Congress makes no changes, the trust fund will be exhausted in the early 2030s. At that point only, the only remaining revenue source will be the contributions of those then working. Under these circumstances the system will be unable to pay more than 75% of the promised benefits. Social Security will "be there,” but the benefits, while higher in face value because of the inflation protection built into the system, won't be able to purchase the same goods and services that benefits do today.
This worst case scenario need not occur. The pain of either of these actions is lessened if they are implemented over a long period. Even in this politically charged environment, it is not beyond the realm of possibility that Congress will make adjustments to rebalance the system, as it did in the 1980s on the recommendation of the Greenspan Commission. At that point changes were made in anticipation of the baby boomer retirements that are now hitting the system.
Even if the worst case does occur, would it be prudent to adjust the timing and circumstances under which Social Security retirements benefits are claimed? Here the answer is a clear "no".
The Social Security Claiming Guide, which is published by the Center for Retirement Planning at Boston College, makes the following statement after evaluating the most widely discussed proposals for rebalancing the system: "None of these proposals give you more if you claim early. If you are affected, you'll get less no matter when you claim."
This is followed by the statement: "Nearly all proposals to fix Social Security would also protect those age 55 and older," a notion supported by Paul Ryan, who has recommended radical changes to Medicare, but no change in Social Security for people over 55. The one exception is the Obama proposal to use a different measure of the cost-of-living to adjust benefits to inflation. As Retirement Mentor Jason Fichtner has pointed out, this would decrease benefits by a small amount. At present, the House has rejected this idea, although it may be part of future budget negotiations.
Since Social Security doesn't suffer from the uncertainty of stock market fluctuations, Social Security is still the strongest component of most financial plans for retirement. The future, by its nature, is uncertain. At this point there is no reason to alter a well thought out strategy for claiming Social Security benefits.
I place my bet that Social Security will be there for me at a substantial percentage of current purchasing power long before I would have confidence in my 401(k) or my private pension.
Reprinted article from the NY Times on July 4, 2013.
The new law clarifies the statute and provides that a property owner who rents out their homestead for more than thirty (30) days per year for two consecutive years will lose the homestead exemption tax benefits on that property.
The increase in the Federal Estate Tax Exemption ($5,125,000 in 2013) and matching Federal Gift Tax Exemption have made the “kiddie tax” a radar issue for many families. The kiddie tax was enacted to prevent individuals from avoiding federal and state income taxes by shifting investment assets into their children’s names. Once the transfer is completed, the child becomes the legal owner of the asset(s) and its income and gains are taxed at his or her lower income tax rates (typically 10% or 15% for ordinary income from interest and short-term capital gains and 5% or less for long-term capital gains and dividends). That's a significant difference from the income tax rates that high-bracket parents pay (as high as 39% plus on ordinary income and 15% on long-term gains and dividends).
In 2013, “children under age 20 and full time students living with the parents will pay income taxes at the parents highest marginal tax rate on all unearned income above $2,000.” But there are methods of avoiding the kiddie tax or at least minimizing it. The following is a non-exclusive list of methods to avoid the kiddie tax and ensure that the unearned income the child receives does not exceed $2,000: (i) limit gifts to assets that are non-interest bearing or that pay no dividends; (ii) create a 529 savings account (if the assets are used for qualified educational expenses, all gains and income are tax-deferred and then tax-free); (iii) U.S. savings bonds and tax-deferred annuities; and (iv) interests in wholly owned entities. Regardless of the method selected, individuals should always be aware of the risk of transferring assets to children and strongly consider the use of a trust to control the flow of money.
An unexpectedly huge
collection of inheritance taxes in Connecticut, along with a spike in income tax revenue, helped turn a budget deficit into a surplus. The simple reason, "a lot of wealthy people died this year,'' said Connecticut officials. The state's inheritance and gift taxes have been combined into
one category since 2005, and this year's total is more than double the level of
seven years ago. The numbers also increased because wealthy individuals made
huge transfers of wealth as gifts in December in order to avoid the higher
federal gift tax rate that increased to 40 percent, up from 35 percent, on Jan.
Recently, Consumer Reports did a survey about the common financial mistakes people make. Below are the seven most common pitfalls.
Every Sarasota, Bradenton and Lakewood Ranch resident should act to ensure they are not adversely impacted by one of these pitfalls.
On May 7, 2013, Delaware became the eleventh state in the nation to legalize same-sex marriage. While the state had an existing civil unions law, the new measure allows gay and lesbian couples to legally marry. Rhode Island, Iowa, New York, Vermont, New Hampshire, Massachusetts, Connecticut, Maine, Maryland, Washington and the District of Columbia all allow same-sex marriage.
The Rhode Island legislation states that religious institutions may set their own rules regarding who is eligible to marry within the faith and specifies that no religious leader is obligated to officiate at any marriage ceremony and no religious group is required to provide facilities or services related to a same-sex marriage.
Under the new law, civil unions will no longer be available to same-sex couples as of Aug. 1, though the state would continue to recognize existing
Delaware could be the next state to approve same-sex marriage. Legislation legalizing same-sex marriage has narrowly passed the Delaware House and now awaits a vote in the state Senate.