8/9/2019 Update on Estate Tax and FDIC Rules

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This month Id like tobring you up to dateon breaking develop-ments that may impact

on the health of yourestate planning andyour life planning.

First, in an effort tocalm consumer jittersover the banking in-dustry, the current lev-el of FDIC insurance$250,000 per depositor,per FDIC insured insti-

tution, per account ownership cate-goryhas been made permanent.(The figure had been scheduled torevert back to $100,000 in 2014). Soif for example, you have a CD at anFDIC participating bank, it will be in-sured for the full amount providedit does not exceed $250,000.

However, if your funds are titled

in the name of a revocable trust, fig-uring out how much is FDIC-insuredrequires a bit more calcula-tion. For these funds, the$250,000 coverage is perbeneficiary on a propor-t ionate basis . Heres anexample: Lets assume youhave $1,250,000 in a revo-cable trust at Bank A, and there are5 beneficiaries of your trust. If eachbeneficiary is designated to receivean equal share ($250,000), then thefull 1,250,000 in your trust is pro-tected. But if one beneficiary gets50% of your assets ($625,000), thatleaves $375,000 of his share unpro-tected ($625,000 - $250,000). FDICprotection would thus cover only

$ 8 7 5, 0 0 0 o f y o u r t r u s t a s s e t s($1,250,000 - $375,000) at that insti-tution. In summary, each of your ben-eficiaries is insured up to $250,000.

The above rules also apply toPayable on Death and In TrustFor accounts.

Second, I want to bring you up todate on the status of the federalestate tax. Its widely believed thatCongress will be taking up the issueas early as this month. It certainlyseems l ike the tax wi l l make a

comeback in 2011. Thecrux of the issue is, atwhat level and in whatform will it return? If

Congress permits thefederal estate tax ex-emption to revert to thepre-2001 level of $1M, alot of middle class folksare going to get caughtup in the estate tax net,even with battered port-folios and reduced homevalues. If as a result your

once non-taxable estate becomestaxable, youll need to revisit yourplan to make sure you make full useof the tax deduction and can pass asmuch money to your heirs as legallypossible.

As you can see, the law, the econ-omy and a host of other factors canimpact on your estate plan. Thats

why I recommend that my clientscome in for a review every three

years, or sooner if there have beenchanges in their own circumstances.For the very latest news at any time,you can always check out my FloridaElder Law and Estate Planning Blogat www.karplaw.blogspot.com

,orthenews section of The Karp Law Firmwebsite, www.karplaw.com

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Joseph S. Karp is a nationally certi-

fied and Florida Bar-certified elder lawattorney (C.E.L.A.) specializing in thepractice of Trusts, Estates and Elder Law.

His offices are located at 2500Quantum Lakes Drive, Boynton Beach(561) 752-4550; 2875 PGA Blvd., PalmBeach Gardens (561) 625-1100 ; and1100 SW St. Lucie W. Blvd., PortSt. Lucie (772) 343-8411.

Toll-free from anywhere: 800-893-9911. E-mail: KLF@Karplaw.com or

website www.karplaw.com.Read The Florida Elder Law and

Estate Planning Blog atwww.karplaw.blogspot.com.

Joseph S. Karp,C.E.L.A.

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Listen to Joe Karp and Anita Finley on

Saturday, September 25 from 7:00-7:30 AM

on WSBR 740AM and on the

Internet at www.wsbrradio.com.

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