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Marc J. Soss
Florida Estate Planning, Probate, Business & Corporate Law Attorney
Florida Estate Planning, Probate, Business & Corporate Law Attorney
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Many people are not maximizing the benefits of an Individual Retirement Account (IRA). Here are common mistakes that lead to an underutilized IRA:
1. Not contributing the max amount allowed, which changes as the account holder ages.
2. Not having an IRA for a non-working spouse of an employed spouse.
3. Withdrawing IRA funds to pay other expenses, like a mortgage or car payment, which incurs penalties.
4. Not updating the beneficiary designation after a major life event, such as marriage, divorce, or birth of child.
5. Creating a taxable event by naming a trust as the beneficiary for the IRA - use a see through Trust instead.
6. Failing to utilize the "stretch provisions."
7. Not taking the required minimum distribution starting at age 70.5.

Individuals receiving Social Security payments now have a means to access a replacement SSA-1099 online at
Social Security receives 1.7 million requests each year for replacement forms. About 62.5 million tax-related forms are mailed out by Social Security. These include 1099s and the SSA-1042S for non-citizens living outside of the United States. The new online option can save a few steps and avoid the need to visit or call a Social Security office for a replacement 1099. Individuals can also call 800-772-1213, but it will take about 7-10 business days to receive a replacement in the mail.

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The recent 4th DCA court ruling in Minassian v. Rachins may make the use of a Trust protector a standard feature in all Florida trusts. In Minassian, the authority to resolve an ambiguity in a trust instrument was shifted from the courts to the trust protector. In reaching its decision, the 4th DCA found that: (i) trust protectors are authorized by Florida law; (ii) the powers granted to the trust protector in this case were authorized by Florida law; and (iii) the settlor’s intent to use a trust protector (instead of our courts) to resolve this dispute works under Florida law.


While it is not unusual for states to claim that they are the best place to live or have the best beaches. However, states are now promoting themselves that they're also great places to die. In 2015, four states will increase the amount that's exempt from state estate taxes, reducing or eliminating the tax that heirs will owe. On January 1, Tennessee's estate tax exemption will jump to $5 million from $2 million, Maryland's exemption will increase to $1.5 million from $1 million, and Minnesota's exemption will rise to $1.4 million from $1.2 million. On April 1, 2015, New York's estate tax exemption will increase to $3.125 million from $2.062 million. All still well below the federal estate tax exemption amount.

In 2016, Tennessee's estate tax will disappear, Maryland and New York will increase their exemption thresholds every year until 2019 (when they'll match the federal exemption amount) and Minnesota's exemption will rise in $200,000 annual increments until it reaches $2 million in 2018. These changes are important because taxes are one of the most common reasons, besides the weather, retirees relocate to another state.
Currently, 14 states and Washington, D.C., have state exemption amounts below the federal threshold, with maximum tax rates ranging from 12% to 19%. New Jersey's estate tax threshold is just $675,000, which could affect heirs of relatively modest estates. Seven states have an inheritance tax, with maximum rates ranging from 9.5% to 18%. Unlike an estate tax, which is levied on an estate before it's distributed, an inheritance tax is typically paid by the beneficiaries. Maryland and New Jersey have both estate and inheritance taxes.

One of the biggest reasons people live in Florida is because it has NO estate tax (only the federal applies). If you already have a comprehensive estate plan, make sure it's regularly updated to reflect revisions in your state's law. More changes are likely as states try to make their jurisdictions more attractive to retiring baby boomers. For example, legislation has been introduced in New Jersey to phase out the state's estate tax over a five-year period.
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