Video Summary

Should a parent place their child on a deed, in order to avoid probate?

I get this question asked me probably once a week, or once every two weeks. And the answer is, I do not recommend that you place a child on your deed. Particularly if it’s the deed to your home, since your home is homestead, and that has particular status. By having the property as your homestead, it’s not considered as an asset, if you need to qualify for Medicaid purposes.

You don’t want to have conveyed that, ’cause there could be some issue of whether or not you transferred the property without full and fair consideration, as far as Medicaid’s concerned. Also, if you add a child’s name to your homestead property, they will not get what they call a step up in basis or an increase in the basis, as far as the property, whenever you pass away. And they may have to pay, and they sell the property, well, then, their basis is what you paid for it, particularly if you owned it for some time.

Also, if you sell the property during your lifetime, and you’ve added a child’s name to it, you can exempt up to $250,000.00 of gain, if you’ve lived in your home two out of the past five years. Whereas, the child who is on there hasn’t lived there, so they may have to pay taxes. So, that’s another reason not to do it.

Also, if it’s your home, and as homestead, if your child would have some kind of credit problems, or domestic problems, they’re half owner of your property. And if Capital One comes and sues them under their credit card, and they get a judgment, it may attach to a half interest in your home. And we wouldn’t want that to be a you be a co-owner with Capital One, as far as your home is concerned. That’s a little bit of a reach, but anyway, they could levy on the child’s one-half interest on the house.

What I’ve found very effectively to use, rather than adding a child to the title to your property, is to execute an enhanced life estate deed. And many people have heard of this as a nicknamed a “ladybird deed,” which basically leaves the property and the person’s name, the parent’s name, during their lifetime. So that they can sell the property, do whatever they want to with the property, and the child doesn’t have to have any interest in the property during their lifetime. And if the parent still owns the property at the time of their death, well, then, it’ll automatically pass to their child, and all the child needs to do is file a death certificate.

So if you would like to avoid probate, and have your property pass to a child, or your children, give me a call at 727-847-2288. Thank you.

Video Summary

How can I protect my home for my children and their inheritance if I have creditors?  Well, under our Florida constitution, your home is protected from creditors.  It’s called homestead and that’s a different part of our Florida constitution than when you file for homestead exemption, but you have to be a Florida resident and your residence must be less than a half an acre if inside the city limits and less than 160 acres outside a municipality.

And if you’re a resident of Florida and you pass away, then the property will pass to your children unless direct it to be sold under your will, or you can leave it to your children and your creditors will not have a claim against it even if they have a judgment against you, it will not attach to your homestead property.  The word that’s used in the Florida constitution is this exemption from for sale of your creditors of your home in nours or passes through to your children.  So your home is protected from creditors during your lifetime so that you don’t have to worry about credit card companies coming in and getting a judgment and taking your home and neither do your children if you even have judgments.

There is an exception, of course, in the event that the federal government has a lien, a tax lien, or a judgment against you, they can take your home and you cannot protect it from the claims of the United States of America.  But your home is protected if you go through a bankruptcy, you can exempt out your homestead property and reaffirm your mortgage debt and preserve it; or if it’s paid for, you may even be able to keep it out of bankruptcy and be protected from the claims of creditors, and then whenever you pass away, it’s not subject to any judgment you have against you when it passes through to your children.  You do have to leave it to your children or their heirs or grandchildren in order for them to get this exemption from the claims of creditors.

If you have any other questions about your homestead property and your creditors, give me a call at (727) 847-2288.

Video Summary

How do you avoid probate and also have asset protection?  Well, the easiest way to do that is if you’re a married couple.  Of course I don’t know – you’ve gotta be a couple I guess if you’re married.  But in any event, as a husband and wife, if you hold assets as a husband and wife or the term tenancy by the entireties and you should hold all your bank accounts and all your assets as husband and wife except automobiles.  And that way if something would happen to either of you, then the property would automatically pass to the survivor.  And so you’ve avoided probate by holding your assets in your names, as husband and wife.  The asset protection comes in so that if either one of your are sued, and they get a judgment against one spouse, it will not attach to assets that are held in the name of husband and wife or as tenancy by the entireties.

I suggested that you not have automobiles in your joint names as husband and wife since an automobile is considered a dangerous instrumentality so that if it’s involved in an automobile accident they can sue both the owner and the driver.  So whatever spouse is driving a particular automobile, they need to have it titled in their name as the primary vehicle so that if they are involved and they don’t have enough insurance coverage and they do get a judgment against one spouse that was not attached to the assets that are owned as tenancy by the entireties and also motor vehicles can be transferred without a probate proceeding whenever the first spouse passes away.

I gave you a quick overview as far as husband and wife property.  If you’d like some more information if you’re single as to what to do about asset protection and avoiding probate, well give me a call or if you have any questions as a husband and wife give me a call and we can do some estate planning for you at 727-847-2288.  Thank you.

Video Summary

Hi!  I’m Chip Waller. The question is, do I have to pay inheritance tax on any money that I receive from an estate?

The answer is no. Estate taxes are paid by the estate, so you may be paying them indirectly because it may reduce the amount of the monies that you received as a result of paying an estate tax.

I am not aware, although cannot say conclusively, as to having no inheritance tax in any state. But in Florida there is no inheritance tax and, also, there are no estate taxes. So as far as I know that, well, in fact, there are no inheritance taxes if you live here in Florida that you have to pay.

So if you have any more questions about taxes and estates, well, give me a call at 727-847-2288.

Thank you!

Video Summary

Hi!  I’m Chip Waller.  How much are estate taxes in Florida?

Well, you’re looking at Santa here, there are no estate taxes in the State of Florida so you can leave an unlimited amount to whoever you like and there are no estate taxes.

How about the Federal government? Well, the recent tax law provides that you can leave up to over $5,000,000.00 and there are no estate taxes that are due to the Federal government.

If you are married you can leave an unlimited amount to your spouse.  And between the two of you, you can leave upwards to $10,000,000.00 jointly. That takes some – a little bit of planning.  But, unfortunately, for me, I haven’t happened to have too many clients that have over $5,000,000.00 or even have the $5,000,000.00 to worry about the estate taxes.

Now, if you own real estate outside the State of Florida there may be estate taxes that are owed to another state where the decedent owned real estate, such as North Carolina, New York or whatever other state other than Florida.

But the good news is, Florida does not have an estate tax.

So, if you have some questions about an estate or want to do some estate planning, or have an estate to be administered, give me a call at 727-847-2288.

Thank you!