1	Estate Planning Probate, Trust & Guardianship Law Committee of the Martin County Bar Association Thomas H. Thurlow III Thurlow & Thurlow, P.A. http://thurlowpa.com
2	Today’s Topics Estate Planning Documents Federal Estate Tax Update Protected Homestead vs. Homestead Exemption Homestead Exemption Portability Questions and Answers
3	Typical Estate Planning Documents Last Will and Testament Revocable Trust Durable Power of Attorney Declaration Naming Preneed Guardian Designation of Health Care Surrogate Living Will
4	Federal Estate Tax
5	Permanent Repeal or Increased Exemptions? House has passed repeal bills in past three Congresses 110^th Congress: Repeal 7 House bills 4 Senate bills Retain but Modify 4 House bills 1 Senate bill Cost to repeal: $58 Billion in Fiscal Year 2012
6	Protected Homestead vs. Homestead Tax Exemption The Legal Chameleon? “To the intending alienor it is frequently a pitfall, and to many a testator or trustor it is the fatal rock upon which he is lured by the sirens of full and free choice in leaving his property. To the general practitioner, however, it is more often than not a chameleon, which changes color to accord with the background against which he is viewed.” Harold B. Crosby and George John Miller, 2 Fla. L. Rev. 12 (1949)
7	Protected Homestead Article X, Section 4, Florida Constitution Protection from Creditors Exemption from forced sale Shall inure to the spouse or “heirs” of the owner Limits on devise Shall not be subject to devise if: Survived by a spouse, or Minor Child (except may be devised to spouse if no minor child) Limits on alienation May alienate, if joined by spouse §733.608 F.S. - Not subject to probate Warburton case – could not be sold to satisfy general bequests
8	Homestead Assessments & Tax Exemption Article VII, Section 4, Florida Constitution “Save our homes cap” Save our homes “portability” ^New! Includes school district levies Article VII, Section 6, Florida Constitution Exempt from taxation up to $25,000 And for value from $50,000 to $75,000 ^New! Except school district levies
9	Save Our Homes Portability Amendment 1 Effective January 29, 2008 Applies retroactively to 2008 assessments Passed with 64% vote statewide Martin County 70.39%
10	Save Our Homes Portability Allows transfer of “save our homes benefit” to new property New Homestead as of 1/1/2008: IF “the person” received homestead exemption on prior homestead on 1/1/2007 Prior homestead sold or abandoned New Homestead as of 1/1/2009 and thereafter: IF applicant received homestead exemption as of January 1 of either of the immediately preceding two years Limits Upsizing à Full benefit up to $500,000 Downsizing à Proportional Benefit up to $500,000
11	What is My SOH Benefit?
12	Do I Qualify for Portability? Property #2 qualifies for portability in 2008 Must apply by March 1, 2008 – oops! Extended to April 1 for portability in Martin County as long as homestead was already filed. File form DR-501T (released January 29, 2008)
13	Do I Qualify for Portability? Property #2 qualifies for portability in 2009
14	Save Our Homes Portability 1 à 2 split? Q: What if homestead is jointly owned and owners establish two separate homesteads? A: Portability = SOH/# owners Not % of ownership Limited to $500,000 cap total (not individually)
15	Save Our Homes Portability 1 à 2 split? Q: What if one of the owners continues exemption on the first homestead? A: Not eligible for portability
16	Save Our Homes Portability 2 à 1 combine? Q: What if two people who previously owned separate homesteads join in establishing a new homestead? A: Highest difference of the new homesteaders may be transferred. Proportional if downsizing Subject to $500,000 limit
17	Save Our Homes Portability Joint à 1 Gotcha Q: What if homestead is jointly owned by two owners and owners establish a new homestead but only one owner holds title to the new homestead? A: Only eligible for transfer of one owner’s SOH benefit (50%). ½ Proportional if downsizing Subject to ½ $500,000 limit ($250,000)
18	Save Our Homes Portability Spouse à Spouse - Gotcha Q: What if homestead is owned by one spouse and owners (or surviving spouse) establish a new homestead in the other spouse’s name? A: Does not qualify for portability
19	Questions & Answers Copy of presentation and links available at http://thurlowpa.com “Tools & Info” menu
20	Extra Slides
21	Planning for Estate Taxes (oversimplified)
22	Planning for Estate Taxes (oversimplified)
23	Common Pitfalls Asset Problems Under funded Credit Shelter Trusts Unnecessary Credit Shelter Trusts Homestead Warburton case Pay on Death Accounts / Joint Accounts IRAs payable to trust (when not necessary) Beneficiary Designations don't mirror trust or will (esp. predeceased child) Life Estate Deeds State Death Tax on out-of-state property Document Problems – Wills Self Proving Affidavits Personal Representative Qualification Tax Apportionment Clause