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As we settle into the new year, there’s still a great deal of uncertainty about changes to estate planning and asset protection strategies in 2011. For most of last year we fully expected 2011 to see the return of the fifty five percent estate tax on all assets in excess of a million dollars. Toward the end of 2010, President Obama gave in to Republican demands of a reprieve on this exorbitantly high death tax and agreed to reduce the estate tax for 2011 and 2012 to 35 percent, with a $5 million exemption amount.

Anyone fortunate enough to die in the next twenty four or so months has nothing to worry about. For those planning on living beyond the next two years, uncertainty remains. As of today, the estate tax rate for 2013 will revert to 55 percent, with only a $1 million exemption amount.

This uncertainty is why we are recommending to our South Florida estate planning clients to set up Irrevocable Life Insurance Trusts for all policies in excess of a quarter million dollars, along with BYpass trusts for all marital estates greater than two million dollars. As the estate laws change, we will continue to update you so that you may better serve your clients and protect yourself and your family.

The world of asset protection was turned upside down as well in 2010. On June 24, 2010, the Florida Supreme Court issued its long-awaited legal opinionin the case of Shaun Olmstead, et al., v.The Federal Trade Commission and raised the question regarding whether Florida limited liability companies (LLCs) will continue to have charging order protection. A charging order is a legal remedy that a creditor of a member in an LLC can receive from a court that instructs the entity to give the creditor any distributions that would otherwise be paid to the partner or member from the entity. Generally, a creditor who receives a charging order with respect to a member’s interest in the entity does not have any authority to mandate distributions from the entity or to participate in the management and affairs of the entity, nor are they able to access the assets of the company.

A charging order is governed by the laws of the State, and in many states, a charging order is the sole remedy for a creditor with respect to a debtor’s LLC membership. However, the Olmstead ruling allowed the creditor to “pierce the corporate veil†of the LLC and access the l assets of the LLC. While the LLC at issue in Olmstead was a single-member LLC, many attorneys are anxious about the slippery slope that could allow the piercing of multiple-member LLC’s too. It is definitely something that we will keep an eye on in the coming months.

In South Florida, for more information and a free Estate Planning and Asset Protection consultation, contact the Fort Lauderdale Law Firm of Wild Felice and Pardo at 954-944-2855, or email us at info@wfplaw.com. Let us protect what and who you value most.

Article Source: Estate Planning and Asset Protection News for 2011