14 May

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Simultaneous Death Provisions: The Law in the “DMV”

In many estate plans, it is quite common for a husband to leave everything to his wife and kids. And, vice versa, a wife routinely decides to leave everything to her husband and kids. But what happens if both the husband and wife die simultaneously? Under the common law, if there was any evidence that one of the deceased individuals survived the other, even by a few seconds, then the estates would be distributed in that order. This led to many bitter inheritance battles in court. So, to address this problem, the Uniform Simultaneous Death Act was passed and applies to the “DMV” (i.e. District of Columbia, Maryland, and Virginia). The Act establishes that if two people die within 120 hours of one another, and there’s no will that expressly addresses this situation, each person is considered to have predeceased the other. This means an individual’s estate will pass down to...

09 May

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More Info on Obtaining a Commercial Real Estate License for Asset Protection

Posted by KarenLewis

in Bobby's Blog

Here is the second installment of an article series from Howard Stross, a fellow member of the National Network of Estate Planning Attorneys. Essential Elements of a Commercial Real Estate Lease: Part 2 by Howard Stross of the Stross Law Firm What Does Florida Do That No Other State Does With a Commercial Real Estate Lease? (Hint: It deals with sales tax.) Florida is the only State in the U. S. that imposes sales tax on rent paid by a tenant to its landlord in a commercial real estate lease. And, it’s not just on the base rent. With few exceptions, anything paid or reimbursed to the landlord by tenant is rent to calculate the sales tax that must be paid. The limited exceptions include utility charges paid by tenant as part of common area maintenance (CAM) if the landlord pays sales tax on its purchase of the utilities. Lease termination payments are exempt...

27 April

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Costs and Benefits of Establishing a Self-Directed IRA

Posted by KarenLewis

in Bobby's Blog

I published an earlier article discussing an increasingly popular alternative investment structure: the “self-directed” IRA. The self-direct IRA seems to be growing in popularity for many reasons. First and foremost, many investors are seeking diversification. They may not be inclined to put all of their retirement funds into traditional investment structures. Plus, it is important to keep in mind that you don’t have to give up your other investments to establish a self-directed IRA. It is perfectly fine to only use a portion of your retirement assets to fund a self-directed IRA. This is a good idea and one that I endorse. No one should put all of their assets in a single type of retirement account. Along with diversification, some investors prefer putting their assets into tangible assets like real estate, precious metals, loans, and so forth. Investor also appreciate the fact that, with interest rates at historic lows, there...

26 April

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Dying Without a Will in Maryland, Virginia or D.C. – Understanding the Differences in the DMV

Posted by KarenLewis

in Bobby's Blog

There is an area known as the “DMV”, which is a nifty acronym for the District of Columbia, Maryland, and Virginia. People who reside in the DMV routinely travel between these states on a regular basis (D.C. isn’t technically a state, but for the purposes of this blog, we’ll just call it a state). Just because these states are neighbors, does not mean that they share the same laws when it comes to passing assets on to your loved ones if you die without a will. If you suddenly pass away and do not have a valid will, you have died “intestate”. Each state has laws on the books that establish an orderly process for what to do with your estate in this situation. Here are the relevant provisions for residents of the DMV region: DISTRICT OF COLUMBIA D.C.'s intestacy law will pass your assets to your closest relatives. A court will...

25 April

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Alternative Investment Option to Consider – The “Self-Directed” IRA

Posted by KarenLewis

in Bobby's Blog

Many Americans invest retirement funds into publicly-traded assets such as stocks, bonds, mutual funds and so forth. This isn’t a surprise since the large investment institutions encourage people to invest in these types of assets and don’t do much advertising about unconventional ways in which you can use your retirement funds. You may not realize that the laws governing IRAs (i.e. Independent Retirement Accounts) allows virtually unlimited investment flexibility. This is where "self-directed IRAs" come in. Using “self-directed” IRAs has become extremely popular in recent years. The purpose of these self-directed accounts is allowing an investor to invest some (or all) of an IRAs assets into “alternative” investments, which means pretty much anything other than stock market-based investments. Some alternative investments include real estate, loans, tax liens, and privately-held companies. But keep in mind that there are restrictions with self-directed IRAs. For example, you cannot engage in self-dealing. Therefore, if you invest...

10 March

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Reverse Mortgages Becoming Popular Financial Planning Tool, But Can Impact Your Ability to Qualify for Medicaid

Posted by KarenLewis

in Bobby's Blog

Reverse mortgages have quickly become a popular financial planning tool and there are many benefits associated with this type of mortgage. However, there are some potential drawbacks you should be aware of when it comes to qualifying for Medicaid benefits. This isn’t meant to dissuade you from considering a reverse mortgage, just advice to help you in how to best arrange the method in which you obtain the equity from a reverse mortgage. Here’s how a reverse mortgage works – you take out a reverse mortgage loan and have the option of receiving the home equity through: (1) a line of credit, (2) a lump sum, (3) monthly payments, or (4) a combination of these options, according to allrmc.com. You don’t have to pay the lender back, as long as you live in the house, according to agingcare.com. If the mortgage is for a married couple,...

08 March

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Why the 645 Election for Trusts has Become Important under ATRA 2012

Posted by KarenLewis

in Bobby's Blog

Trusts are an attractive estate planning option because they provide an asset management vehicle during your lifetime and can provide more flexibility in terms of who receives your assets, and how they receive those assets. Another benefit is something called a "Section 645 election." Congress created an opportunity for trustees of a funded revocable trust to utilize certain tax advantages under section 645. When the executor (if there is one), or trustee, of your estate make a Section 645 election, the trust is treated, for income tax purposes, as part of the decedent's estate for all tax years of the estate ending after the decedent's date of death and before the "applicable date." So let’s say, for example, X is a beneficiary of a trust for which a Section 645 election has been made. The trust and the decedent’s estate have a taxable year of December 1, 2012 through...

06 February

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Reading Between the Lines: Why a Professional Estate Plan is Far Superior to a Cookie Cutter Online Will

Posted by KarenLewis

in Bobby's Blog

Web sites like Legal Zoom, Total Legal, and others offer inexpensive, pre-formatted wills designed for people to simply plug in a few names, some items, and, presto chango, you have a will. Many people purchase these “cookie cutter” documents under the mistaken belief that this type of will is going to protect and properly disburse their assets to loved ones. Unfortunately, that often isn’t the case. Let me preface this by stating that I fully appreciate the value of the services offered by Legal zoom and other pre-made document web sites. For many people, the prospect of creating a will, or an in-depth estate plan, is intimidating. These pre-made documents provide guidance and can assist someone who is starting from scratch with their estate plan and/or who does not have many assets but wants to be sure whatever they have goes to their loved ones. But here is where these...

28 October

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Social Security Survivor Benefits in a Divorce Situation

Posted by KarenLewis

in Bobby's Blog

In a divorce situation where one spouse dies, there could potentially be 2 survivor benefits paid. It is important to designate who you want to manage the money for your minor children if you do not want your ex-spouse to be that person.Where there a...

14 October

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Inherited IRA Required Minimum Distribution Rules

Posted by KarenLewis

in Bobby's Blog

Given that most people these days own an IRA, I often receive questions about these IRAs work after the death of the IRA owner. Here are some basic rules:1) If you inherit an IRA from your spouse then you have a lot more options then if you didn'...