Buying a second home can provide you with a place to relax, unwind, and escape from it all. It can also provide you with substantial savings if you take advantage of these tax benefits of buying a second home.

Mortgage Interest

Mortgage interest paid on up to $1.1 million in debt on your first and second homes is fully deductible. Typically, this rule only applies if you treat your second home as a home and not a rental property. But some mortgage interest may still be deductible if you occasionally rent out your second home. To benefit from this deduction, you must use the property for 14 days or more than 10% of the number of days you rent it out a year, whichever is longer.

Tax-Free Profit

You can take up to $500,000 in profit from the sale of a home tax-free if it is your primary residence and you meet the two-year ownership and use requirement. Typically, you do not get the same tax benefit from the sale of a second home. But people have taken advantage of this rule by converting their second home to their primary residence before the sale, thus reaping the tax-free profit.

But in 2009, Congress added a few more restrictions to limit the amount of tax-free profit you can take from a second home. Now, a portion of the profit from the sale of a second home is taxable. The portion is determined by the ratio of the amount of time after 2008 you treated the residence as a second home or rental property and the amount of time you owned it.

Buying a second home can offer many benefits. But to maximize the value of your investment, work with a lawyer to make sure you are not overlooking any potential legal, insurance, financial, or tax problems or opportunities. You must meet other requirements—such as living in the home for two years before you sell it—to take advantage of some of these tax benefits. A Personal Family Lawyer® can help you ensure you meet the requirements, so you can reap all the benefits of owning a second home. Schedule online.

A last will and testament is the most commonly thought of document when it comes to an estate plan. But, really, it’s a very small part of an integrated plan that ensures your family stays out of Court and out of conflict when something happens to you. Maybe you’ve thought to yourself, “can I write my own will?” Sure, you may save money up front, and you won’t be around to see the results of your actions, but the probability of you properly crafting the correct documents is small.  Do you like to gamble?That’s what you’re doing if you write your own will; or trust.  Wait, do you know the difference?

Don’t think you can just write your own Will and that will help your family. Instead, consider the reality that trying to do so could actually create far more trouble for them down the road. They need you to get professional support from someone who can help you look at what you own, who you love, what would happen to you, what you own, and everyone you love, if and when something happens to you.

Death is unavoidable. And incapacity may happen before that. Facing these matters head-on leads you (and your loved ones) to having the best life possible. Otherwise, it’s the people you love who get stuck with everything you weren’t willing to take care of now.

Unfortunately, if you go it alone, you may miss important facets of what happens in the event of your incapacity or death. For example, you may think that a Will is sufficient, when what you really need is a trust to keep your family out of Court.

Or, you may think your kids are adequately protected because you have a Will, but you may really need a full Kids Protection Plan® and without it your kids could end up in the care of strangers, even if just temporarily. Before you do anything, get educated and empowered to do what’s right.

The right plan for you begins with knowing what you have. Then, being clear on what is necessary to keep your family out of court and conflict and keep your assets out of the State Department of Unclaimed Property. If you are ready to write your Will, that’s great. And, come see us first.

The biggest mistake you can make is not facing the reality of death, the second biggest mistake is facing it alone. If you need help getting started, consult with a Personal Family Lawyer®. We’ll help you through the process so you can make sure your loved ones are protected and your wishes are honored. Schedule online today.

As the baby boomer generation ages—and downsizes—more and more adult children will be tasked with going through their loved one’s belongings to decide what to do with everything. As more and more people downsize after retirement, china sets, furniture, heirlooms, and other belongings are often left behind and unwanted. Have you ever wondered how to handle a surplus of stuff when a loved one ages?

Traditionally, these items have been passed down to the next generation. But today, the next  generation has different needs, tastes, and wants. As a result, there is a surplus of “stuff” baby boomers don’t need or have room for, and their adult children don’t want. Maybe that includes you.

This is an all too common problem with a few helpful solutions.

The thought of tossing a lifetime of belongings in the trash is more than many can bear, which explains the advent of the senior move management industry. Today, there are a plethora of professionals who can help your loved one go through each item to decide what should be kept, what should be given away, and what should go to charity or donated.

The cost of this professional service can be up to $5,000 for a large estate, but it eases the burden on the adult children and ensures the loved one’s wishes are listened to and honored.

Bear in mind, as the baby boomer generation ages, charities and nonprofits that typically accept used furniture and other belongings are faced with the burden of too much stuff. The dated styles baby boomers preferred during their prime don’t fit the tastes and needs of today’s generation. The current generation views belongings like furniture and dishes as functional and more disposable, better suited to their urban, fast-paced lives where minimalism and portability are more prized than sentimentality and tradition.

Another way to decrease the time and effort it takes to dispose of all your belongings is to be very clear about what you consider to be heirlooms and valuable items by indicating in your will, or in a separate writing ancillary to your will, exactly what’s important to you and what isn’t.

Most importantly, talk to your children or other heirs to see what they want and don’t want. And to make sure they know what’s important to you, and what isn’t. The more you can communicate about this now with your loved one’s, the better.

You may be surprised to discover that most family fights that break up families aren’t over money at all, but over the personal property of mom and dad that the kids fight over because there was not clear instructions.

As more baby boomers age and non-profits turn away dated donations,  the need for thoughtful estate planning is greater than ever. A comprehensive estate plan can ensure your belongings either go to those who will cherish them or to charities that will benefit from them.

Schedule our appointment today.

Planning for natural disasters is more than just stocking up on canned food and water. In a natural disaster, food and water will keep you alive, but how will you rebuild your life if your home and community are devastated? Learn how families can plan for natural disasters with some simple tips that will help you get back on your feet should disaster strike.

Make sure you have enough insurance. Basic homeowner’s insurance typically won’t cover damage caused by natural disasters like floods or earthquakes. You might need to purchase additional insurance to cover these types of events. If you’d like an objective review of the types and amounts of insurance you have, contact us, we can help.

Keep a thorough inventory of what you own. Having up to date information on your personal belongings—especially valuables—will make getting them replaced using your insurance claim easier. Pictures of your belongings stored in the cloud is one great way to handle this in advance of any natural disasters.

Create a financial plan. Natural disasters can be financially disastrous as well. You may not be able to return to work and could face the expense of repairing—or rebuilding—your home.

Plan well to ensure you can meet your expenses and make a financial recovery. Account for your insurance deductibles, which can be 10-20% of the total damages and have six month’s salary in savings to cover any gaps in your ability to earn an income.

Protect important information by making digital and hard copies. Put a copy in a fireproof/waterproof safe and give copies to friends or family that reside outside of your area for safekeeping.

It’s also a good idea to work with us. A Personal Family Lawyer® has unique tools that can safeguard your information to make recovering from a natural disaster easier even when you’ve lost everything.

Follow standard safety recommendations. Keep enough non-perishable food and water for your family for 3-5 days. Consider investing in a generator. Build a first-aid kit, and learn CPR as a family.

Keep a comprehensive emergency kit with contact information, survival tools, and a change of clothes for your family members. Designate a meeting place all family members can get to in case your home is wiped out. And talk with your family about what to do in different scenarios.

Families who have someone watching out for them can recover more quickly from natural disasters. Working with us can ensure you have someone waiting to assist you when you face tragedy. A Personal Family Lawyer® can help you with the legal, financial, and insurance issues you face after a natural disaster and help you properly account for losses on your tax return. Schedule online today.

If you have pets, you probably want to make sure they are well-taken care of, if anything happens to you. Unfortunately, wishing for their good fortune isn’t enough. Too many animals are abandoned when their owners die and face rehoming, life in an animal shelter, or worse. Tip: create a pet trust.

To make sure your furry friend is taken care of when you become incapacitated or upon your death, you can leave assets for their care and custody. The best way to leave your faithful companion assets is to set up a pet trust.

Create A Pet Trust

With a pet trust, you can create certain rules for how the trust’s funds can be used. You can name a trustee—the person who will control and manage the funds—and a caregiver for your pet. By having a trustee manage the funds, you can be ensured the caregiver will only benefit from them if they are used according to the rules of the trust.

Another way people leave money and instructions for the care of their pets is with a will. But wills cannot ensure the funds are used in the way you want them to be, nor do they ensure the caregiver will care for your pet. A person who is left a pet in a will can turn around and leave the pet at a shelter and pocket the money left to them for their own use instead.

Leaving your pet assets is easy with a pet trust. But trust creation can be complicated, and working with a lawyer to develop the terms of the trust is highly recommended.

If you are ready to create a pet trust, start by sitting down with us. As your Personal Family Lawyer®, we can walk you step by step through creating a pet trust and other legal resources to ensure your loved ones are taken care of. Our Personal Family Lawyers® offer Estate Plan Strategy Sessions that help you protect and preserve your wealth for future generations. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what matters most to you, and what your wishes are when you die. Schedule online.

Self-made millionaires are not uncommon in the dotcom era, but their fortunes pale in comparison to those of the ten richest families in America. These families weren’t overnight successes, but their fortunes have stood the test of time and are the result of strong family ties and very smart estate planning.

The Ten Richest Families in America and Their Rise To Riches

1. Walton ($130 Billion)

One of the richest families in the U.S. and the world, the Walton family enterprise is now in its third generation.

2. Koch ($82 Billion)

Despite contentious litigation over business interests between Koch’s four sons, the company still stands as the second largest privately owned company in the U.S.

3. Mars ($78 Billion)

The Mars family lobbied for the elimination of the estate tax, a key move considering the fortunes that can be nearly cut in half by the 40% estate tax.

4. Cargill-MacMillan ($49 Billion)

This family has 14 billionaires on the family tree.

5. Cox ($41 Billion)

Although the family got its start in media, diversification has helped the Cox family grow its fortune over the years.

6. S.C. Johnson ($30 Billion)

In its fifth generation of family ownership, this multinational brand is now a household name.

7. Pritzker ($29 Billion)

The Pritzker family is well known for its use of trusts to avoid taxes before it became common practice. Good planning pays off.

8. Johnson ($28.5 Billion)

The Johnson family holds a 49% ownership of this mutual fund company, with the founder’s granddaughter now at the helm as CEO.

9. Hearst ($28 Billion)

What started as a newspaper company passed from father to son in 1887 grew into the media conglomerate we know today.

10. Duncan ($21.5 Billion)

The Duncan family turned a $10,000 investment in 1968 into its current net worth of $21.5 billion. Not bad for a family enterprise.

6. S.C. Johnson ($30 Billion)

In its fifth generation of family ownership, this multinational brand is now a household name.

These families can help put your own financial trajectory in perspective. Are you on the right track? Are you making the most of your money? Significant wealth isn’t out of reach for even the humblest of beginnings; it just takes good planning.

If you’re ready to create a wealth plan for your family, start by sitting down with us. As your Personal Family Lawyer®, we can help you plan for your family. Our Estate Plan Strategy Session guides you to protect and preserve what matters most. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what’s most important to you, and what you can do to make the most of your money.

The Pitfalls of DIY Wills: Lessons Learned from a Florida Probate Case

DIY wills are becoming more prevalent as legal services can now be accessed easily online. For better or worse, more and more people are turning to online services to meet their legal needs, maybe even you.

Here’s what you need to know before you decide to create your own will, using an online service, or even a cheap lawyer for that matter.

While these online companies are making legal services more accessible, they’re also doing their customers a disservice, as evidenced in the recent case of In re: Estate of Aldrich heard in a Florida appeals court.

Ms. Aldrich created her will using a downloaded template from E-Z Legal Forms without the advice and guidance of an estate lawyer. It appears that she wished to leave specific assets to her sister, and then to her brother, if her sister died before her. Her sister did die, after which Ms. Aldrich did not properly update her will.

The assets named in the will went to Ms. Aldrich’s brother, but the template she used did not include a residuary clause, which establishes where unnamed assets should go. There was no way for Ms. Aldrich to know that this was missing from the Will because she was not a lawyer, nor was she truly educated about such matters. Most people are not, nor should they be. As a result and without a residuary clause, the unnamed assets Ms. Aldrich acquired after the creation of the will passed under Florida’s intestacy laws and into the hands of her nieces, children of another pre-deceased sibling, instead of to her brother, as she seemed to have wanted.

This, of course, after a long, expensive and unnecessary court battle between the nieces and Ms. Aldrich’s brother.

Services like E-Z Legal Forms do not provide personal legal advice or ongoing legal support. Had Ms. Aldrich worked with an estate lawyer to craft—and then update—her planning, she would have left her brother an inheritance of love, rather than a nightmare of time, money and heartache.

This is an important lesson to learn because people too often create their will without having a lawyer review it and then forget to update it as loved ones pass on and new assets are acquired. In the end, their wishes aren’t honored because they weren’t clearly defined, leaving the matter in the hands of the probate court.

If you’re ready to develop a sound estate plan that will leave a legacy of true love, start by sitting down with one of us. As your Personal Family Lawyer®, we can help you with your legal planning needs. Our Estate Plan Strategy Session guides you to protect and preserve what matters most. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what’s most important to you, and what you can do to ensure your family is taken care of.

Setting up a trust fund for your children can ensure that the money you are leaving behind for them is taken care for them, in the way that you want. But your efforts in completing this important, yet somber task can be ruined by making one of these common mistakes.

Leaving Assets Outright to Kids

One of the worst things you can do is to do nothing, which means that whatever you are leaving behind will go to your children outright, unprotected and directly to them when they turn 18. But, worse than that, it means that a Court will decide who handles the assets for them (and whoever is named as their guardian) before they turn 18. And, it’s very likely that those assets will not be used in the way you want. On top of that, if a professional Trustee is appointed, the costs of handling the assets could drain what’s left for your kids, quickly.

Not Carefully Choosing a Trustee

Even parents who do the right thing and set up a trust to hold what’s being left behind for their kids sometimes do not think carefully enough about who the Trustee should be taking care of the assets. Do you want one trustee or a co-trustee who can ensure the funds are well managed? Choosing more than one can provide some accountability for how the funds are used.

Not Properly Protecting Assets Left In Trust

Another mistake parents make when setting up a trust is distributing the assets out of the trust direct to their children at specific ages or stages, instead of holding those assets in a flexible lifetime trust that will protect their kids’ inheritance from future divorces, creditors or accidental lawsuits.

Unfortunately, most lawyers do not understand how to use trusts to establish this kind of vital protection for the inheritance you are leaving behind. And they may even suggest to you that it’s not necessary, if you have a smaller estate. I believe that even when you are leaving behind a small amount of assets, protecting those assets and teaching your children how to grow them (instead of squander them) can be the seed of a huge turning point for many generations to come. It would be my honor to share more about this with you during a Estate Plan Strategy Session.

Neglecting To Fix Beneficiary Designations

Lastly, make sure your insurance policies are directed to your trust and not directly to your children. This is a huge mistake we repeatedly see. Naming minors or even young adults as the beneficiaries of insurance and retirement accounts is a sure-fire way to ensure they are not used in the way you want and unnecessarily get stuck in a court process, which you can easily avoid.

A trust can both provide for and protect your children after your death, as well as ensure you are cared for the way you want in the event of your incapacity. If you’re ready to set up an effective plan for your family’s well-being and care, start by sitting down with us.  As your Personal Family Lawyer®, we’ll help you protect, preserve and enhance what matters most. Schedule online.

When you come into a cash surplus from a company bonus, a tax refund, an inheritance or something similar, you might find yourself having to decide what to do with the money you receive. So, what do you do when you’re faced with this difficult question: What to do with surplus cash: pay down debt, spend or invest?

Did you know that most people who win the lottery lose their winnings within 5 years? In fact, 70% end up bankrupt.

Why would that be? Well, it’s because they don’t know how to answer the question asked here regarding what to do with surplus cash. As a result, they make their investment and spending and gifting choices on their own with no guidance at all, and are surprised to discover how quickly millions can disappear.

So, let’s start there. Depending on the amount of your cash surplus, consider consulting with one or more trusted advisors on what to do with the extra money. We often act as objective counsel for our clients, so feel free to call to discuss options.

If it’s not a large sum, but you still want to make sure you are doing the right thing with the extra cash, consider these factors:

1. If you have debt that is higher interest than what you could earn with a fairly straight-forward investment, paying off your debt could be the highest leverage use of your funds.  Be sure to be tracking each of your debts on a credit tracking worksheet so you can see at a glance whether to allocate extra cash to pay down debt OR if you should keep that money in play because the cost of your interest is low relative to what you can be earning with other investments.
2. If you have a business that has additional capacity, and you know how to drive more sales with additional investments, you may want to put the money back into your business and ramp up revenue. Be careful though that you are not driving more sales without the capacity to deliver OR that you are not putting money into marketing when you don’t know how to convert your leads into buyers. If that’s the case, you may want to invest in developing sales systems in your business, which always pay off once you get it right. If you do have a business, you may want to inquire with us about an Estate Plan Strategy Session, if we have not looked at your business together yet.
3. If you don’t have debt, and you don’t have a business, you may want to consider investing in a business that you can run on the side (if you have extra time) as an additional source of revenue, diversifying your income and reliance on a job controlled by someone else. Side hustles are a great way to use your downtime to create more income for your family.
4. If you’re out of debt, don’t have a business, and don’t need a side hustle, consider maxing out your retirement account. And looking into turning your retirement account into a self-directed account, so you can use the funds in your retirement account to invest in things like real estate, or cryptocurrency, and use your extra cash + some of your time to start to get interested in the best ways to activate your retirement account rather than just having it invested in an ETF that you are totally disconnected from.

Finally, if you’ve got all that handled, consider a trip with your family of origin or your chosen family that will build and strengthen family bonds. Before you go, be sure to come in and meet with us for an Estate Plan Strategy Session to ensure all of your ducks are in a row, in case anything happens while away.

If you are ready to plan for your future wealth, start by sitting down with us. As your Personal Family Lawyer®, we can walk you step by step through creating a legal plan that will help you make great decisions during life by looking at what happens in the event of your death. Schedule online.