5 Essential Revocable Trust Facts You Need to Know

If you are considering a revocable trust, also called a “revocable living trust,” you should speak with an attorney to discuss your options. Deciding between a revocable vs irrevocable trust is crucial.

In this report of revocable trusts, we will discuss these 5 essential facts you need to know:

  1. A revocable trust can reduce or eliminate probate expenses and time
  2. Not all assets belong in a revocable trust
  3. You have FDIC protection
  4. Property in a revocable trust is still subject to taxes
  5. Revocable trusts provide increased privacy

The reason a revocable trust is also called a “living trust” is that the grantor still has full control over the trust throughout his or her lifetime. Income earned on any property in the trust passes to the grantor. Beneficiaries of the trust do not have to receive any property or income until after the grantor’s death.

What makes this trust revocable is that it may be cancelled or changed at any time by the grantor. A “successor trustee” is named to take over the trust if the grantor becomes incapacitated. Once the grantor dies, all revocable trusts automatically convert to irrevocable trusts. The successor trustee you designate will then distribute any assets and property to your beneficiaries, or the trustee will manage and maintain it as per your directions.

The 5 Revocable Trust Facts Explained

The more you know about making a revocable trust, the easier it will be to arrange your estate as you desire. Here is what you need to know about setting up a revocable trust:

  1. A revocable trust can reduce or eliminate probate expenses and time
    Revocable trusts are required to list at least one beneficiary, negating the need for probate. When comparing the fees charged by a trustee to those of an executor of a will requiring probate, you will typically find monetary savings. There is also no probate time delay or hassle when dealing with a revocable trust.
  1. Not all assets belong in a revocable trust
    Any account or asset you have that lists a beneficiary, such as insurance policies and retirement accounts, does not require inclusion in a revocable trust since it will not be subject to probate.
  1. You have FDIC protection
    Unlike traditional bank accounts that provide up to $250,000 in FDIC protection, each beneficiary of a revocable trust receives that insurance.
  1. Property in a revocable trust is still subject to taxes
    If you have any intangible assets, they will be taxed after the grantor’s death in the state of residence of the decedent. Real and tangible property are different. They are taxed by the state they are located in.
  1. Revocable trusts provide increased privacy
    An added benefit of the revocable trust is privacy as it is not subject to public record like a will. Except in cases of litigation to contest the estate, the trust does not go through the court system.

Are There Any Disadvantages to Having a Revocable Trust?

While there is a monetary saving by eliminating probate after the grantor’s death, there are additional costs to set up a revocable trust. Any assets not included in the trust should be gifted through a will.

The grantor of the revocable trust does not receive any tax advantages. Nor is property placed in the trust safe from seizure or liens by the grantor creditors.

Any assets placed into the trust must be retitled in the name of the trust and no longer in the individual.

Before setting up any trust accounts, speak with Coral Springs attorneys Brodzki Jacobs & Brook to discuss your options. We are here to provide answers to your estate planning questions. Contact us at (954) 344-7737.

Abandon Green Card: What to Know Before You Act

Although you may currently have permanent residence in the US, you may want to think again before traveling outside the country. The state of current immigration policies has many people concerned. The last thing you want is to abandon green card unknowingly or without intention.

If you are a lawful permanent resident who leaves the country for longer than one year, your green card will no longer be valid for reentry. Even trips lasting 180 days or more may lead to green card abandonment. You can certainly expect more extensive questioning upon returning to the US regarding the nature of your foreign travel.

While you may not plan to abandon green card just by engaging in travel, you could be subject to questions about your US residency when you return. Plan accordingly in advance so that you are prepared for what could occur.

What Is a Reentry Permit and Do I Need One?

A US permanent resident can apply for a reentry permit before leaving the US to negate the fear they will have to abandon green card upon return. The application for the reentry permit demonstrates your intent to return to the US. You will also have the ability to explain why you are leaving the country.

The reentry permit is beneficial to avoid abandonment of your green card if any of these situations apply:

  • You expect to be away from the US for at least 180 days.
  • A green card will no longer be valid if you are out of the US for more than one year. Apply for a reentry permit if your expected time away is more than one but less than two years.
  • A Customs and Border Protection (CBP) officer issues a verbal warning or made a notation on your passport during a previous entry into the country.

Plan on filing Form I-131, the Application for Travel Document, three months ahead of your estimated travel plans. A biometrics appointment will be scheduled a few weeks after you file the form.

Warning – getting a reentry permit does not guarantee reentry. You may still be required by CBP to prove the purpose of your trip was as declared on your form.

What Should I Know about Form I-407?

The I-407 Form allows a legal permanent resident to abandon green card, giving up US residency. You should consider filing Form I-407 if you plan to move to another country but wish to return to visit the US in the future.

Once you abandon green card, you can reapply for a new permanent green card at a future time if you decide to move back to the US.

You can get I-407 abandonment forms from your home country consulate or the US embassy website. Expect an interview to discuss the consequences of filing for abandonment of your green card.

I-407 green card abandonment forms for minors require signatures of consent from each parent, legal guardian, or custodian.

For additional information about abandoning a green card, please contact Coral Springs attorneys Brodzki Jacobs & Brook to discuss your options. We are here to provide answers to your questions. Contact us at (954) 344-7737.

DACA Supreme Court Decision Upholds Immigration Program at This Time

The fate of nearly 700,000 young people who came to this country as immigrant children have been protected for now by the US Supreme Court. The DACA Supreme Court decision handed a significant defeat to the Trump administration. The decision put a hold on the request to end special protection granted to the “Dreamers.”

The decision by the justices to reject the administration’s request to uphold the president’s power to end the protection allows these immigrants to remain in the US at least through the end of this year.

The DACA Supreme Court decision allows individuals covered by the Deferred Action for Childhood Arrivals program to continue working and living in the US. Immigrants with DACA permits expiring this year can apply for a two-year extension.

What Caused the US Supreme Court to Take this Action for DACA?

The president’s announcement last September to end the DACA program came with a March 5th deadline. Congress was ordered to resolve this immigration status by that date. In January, San Francisco US District Judge William Alsup ordered the government to keep the program running until legal challenges could be resolved. A New York district judge followed suit.

The DACA Supreme Court decision results from the Justice Department seeking to overturn the district court actions. The Supreme Court chose to allow the appeal process to continue. However, once the appeals court rules, the government can once again petition the Supreme Court.

What Does the DACA Supreme Court Decision Mean for the Long-Term?

Unfortunately, while the DACA Supreme Court decision is good news, there is also a downside. Since no definitive action by Congress has been taken, immigrants have no idea what the future will hold. Long-term stability still awaits action by lawmakers.

The appeals process could last well into 2019. DACA discussions will likely be tabled in Congress until the summer session at the earliest. Part of the current problem is the desire of the administration to lump DACA in with improved border security including the building of a wall.

The DACA Supreme Court decision means that the appeals court will hear challenges to ending the program. Alsup stated ending the program would be harmful, and lead to loss of tax revenue and economic disruptions.

Please contact Coral Springs attorneys Brodzki Jacobs & Brook for further information by calling (954) 344-7737.

Florida Homestead Exemption: Protection During Bankruptcy

Having a Florida homestead exemption can protect you from losing your home during a Chapter 7 bankruptcy.

Article X, Section 4 of the Florida Constitution provides protection and legal benefits to Florida residents as follows:

  • Homestead property outside of a municipality – one hundred sixty acres of contiguous land and any improvements
  • Contiguous property with multiple lots with separate tax numbers and legal descriptions are included
  • Florida homestead property within a municipality – one-half acre of contiguous land limited to the owner’s or owner’s family residence

What is a homestead?

Your homestead property is your owned place of residence and may include any of the following:

  • Single family home
  • Condominium
  • Mobile home
  • Manufactured home
  • Co-op apartments

What is a Florida Homestead Exemption and Why Is It Important?

Florida homestead law grants unlimited homestead protection against judgment creditors separate from length of residency in the state.

One note on this – co-ownership where one co-owner does not reside on the property can jeopardize the Florida homestead exemption. In some cases, judgment creditors of the co-owner, who do not reside on the property can force the sale of the property at auction.

How Do You Qualify for a Florida Homestead Exemption During Bankruptcy?

To qualify for Florida homestead exemption protection during bankruptcy, the debtor must be a permanent Florida resident. Additionally, homestead qualification requires the property to be the debtor’s primary place of residence.

For the Florida homestead exemption to apply to the debtor’s unlimited interest in the primary property, residency of the debtor requires 40 months or longer in the state. If the debtor has not resided in Florida for 40 months, there is a $160,375 homestead exemption cap.

Homestead exemptions do not extend to property purchased for a future residence until occupied. Investment property and second homes also do not qualify for a Homestead creditor protection.

Bankruptcy exemptions do not extend to properties titled to corporations, partnerships, irrevocable trusts, or limited liability companies.

The homestead exemption does extend to property placed in a living trust so long as it is the primary residence of the debtor.

If the debtor does not claim homestead exemption benefits, the debtor will be entitled to the wild card exemption. An amount of $4,000 may be applied to any property of the debtor.

For additional information on bankruptcy and Florida homestead exemption, please contact Coral Springs attorneys Brodzki Jacobs & Brook at (954) 344-7737.

Collaborative Divorce in Florida – Will the Process Work for You?

More couples in Florida are turning to collaborative divorce to lower their expenses during the dissolution of a marriage.

What is a collaborative divorce, and will it work for you?

In a collaborative divorce, both parties work with their family law attorneys and neutral facilitators and financial professionals to negotiate an acceptable outcome and settlement. The process works when both spouses agree that an amicable divorce is the best option for them.

This type of divorce process utilizes negotiation and collaboration rather than litigation. Adversarial strategies are put aside, seeking the use of alternative divorce resolution to settle their issues. The goal – an outcome agreeable and fair to both parties.

Of course, the process takes place entirely in the privacy of the offices of the professionals and avoids lengthy and cost-prohibitive court proceedings. Through collaborative settlement meetings, the parties can discuss their concerns, rights, obligations, and desires.

What Issues can a Collaborative Divorce Address and Settle?

The collaborative process makes it possible to get a divorce without court interference on the following issues:

  • Child support
  • Child custody (timesharing)
  • Alimony
  • Financial obligations
  • Asset valuation
  • Equitable Distribution (division of property)
  • Relocation

By working together with neutral facilitators, a financial professional, and two collaboratively trained attorneys, the parties can come to an equitable settlement. The process is non-adversarial and helps both individuals work toward a common goal. The collaborative divorce process can also address issues in creative ways that judges cannot.

What Are the Benefits of Turning to a Collaborative Divorce?

Getting divorced is never easy. You are facing more than just the end of your marriage; you are also embarking on a new way of life. The longer a couple has been married, the harder the process may be. Property, children, assets, and everyday household items require division. This can be an extremely stressful time. The collaborative divorce seeks to minimize the stress in the following ways:

  • Reducing divorce expenses by eliminating depositions, court hearings, and the need for potential expert testimonies.
  • Speeding up the process by eliminating the need for litigation, resulting in a fast divorce rather than a long, drawn-out
  • Providing the highest level of confidentiality and convenience.
  • Fostering a better sense of cooperation and goodwill as the parties maintain an open mind. The benefits of the collaborative divorce extend to any children and other family members as overall stress is also reduced.

Are There Any Negative Aspects of a Collaborative Divorce?

A collaborative divorce is not for everyone. One of the most significant concerns is what happens if the process does not work and the spouses cannot agree on all the issues.

While close to 90% of all collaborative divorces result in a complete resolution, there is always the possibility that the process will break down for some reason. As part of the collaborative divorce process, the attorneys, as well as the spouses, sign a written agreement that requires the attorneys to withdraw from representing their clients if traditional litigation becomes necessary.

Each party must then hire a new divorce attorney to litigate the case. Some individuals who want to ensure that their chosen attorney completes the process if the settlement breaks down may opt not to go the route of the collaborative divorce.

Are you searching for divorce help to end your marriage? If so, Coral Springs attorneys Brodzki Jacobs & Brook are here for you. Contact us at (954) 344-7737 to schedule a consultation.

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