April 2007 Archives

April 19, 2007

Florida Personal Representative

A Florida Personal Representative - The individual or individuals (or institution) named in a will or appointed by the Probate Court who is responsible for gathering a decedent's assets, paying debts, taxes, and expenses, selling assets of the estate, if necessary, and distributing the remaining property and money according to the terms of the will (or the intestate laws of the state of residence). The personal representative must preserve and protect the estate assets and unless an accounting is waived account to the estate beneficiaries for estate income and expenses. The personal representative must file a federal and state estate tax return, if required, and must also file final state and federal income tax returns for the decedent, and, if necessary, federal and state income tax returns for the estate.

April 15, 2007

Florida Pet Trust Changes

In Florida estate planning a person can leave money in trust for the care of an animal. As of July 1, 2007 Florida Statute 736.0408 replaced the previous statute 737.116 which was effective from April 23, 2002 until June 30 2007.

The new Florida Statute states:

(1) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates on the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, on the death of the last surviving animal.

(2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.

(3) Property of a trust authorized by this section may be applied only to the intended use of the property, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise as part of the settlor's estate.

Jacksonville Florida, Duval, Clay, St. Johns County AttorneyUnder Florida law it would be difficult to leave $12 Million Dollars to a dog as was recently done in New York. If this was done, and a beneficiary under the will were to challenge the court would take the excess and return it to the estate. The decedents estate would determine what was done with the excess money. In addition once the animal died, the remainder of assets from the pet trust would be returned to the estate also.

Although most pet trusts are not as excessive as Leona Helmsley's, a pet trust is a good idea. Often it is difficult to find someone who wants to take care of the pet, the probate process can be a long process, and when it is complete will the remainder beneficiaries really want the family pet. Its far better to find someone who wants to take care of the family pet, and provide funds so that it is not a burden on the family to do so.

Rarely do we see pet trusts for dogs, it is far more common to see pet trusts for expensive birds, turtles, monkeys and other animals that can live 50 or 70 years beyond that of their owners. If you want to make sure that your pet does not get caught up in the probate process which can take more than 9 months to complete, or you have an animal that is sure to live longer than you will, a Florida Pet Trust may be the solution for you. Please visit a Florida Estate Planning Lawyer to help with your needs.

April 10, 2007

Florida Probate Tax Checklist

In a Florida Probate case there are many tax issues that need to be considered. Below is a list of the things that should be done immediately.

1) Shortly after the decedent's death, someone should contact the decedent's CPA to get general information regarding the status of the decedent's income and gift tax returns.

    a) Obtain copies of income tax returns for the last 3 years.
    b) Obtain copies of all filed gift tax returns.
    c) Consider having the PR sign an IRS power of attorney (Form 2848 and 2848 Instructions) which is submitted to the IRS. This will allow the Florida Probate Attorney to talk with the IRS and obtain information regarding the status of the decedent's federal income taxes and returns. This form can be faxed to the IRS at 866-860-4259

2) the Estimated estate tax liability if any needs to be dealt with immediately. Raise cash for estimated estate tax, debts, and administration expenses.

3)File Form 56 for

a) Decedent's income tax.
b) Decedent's Estate, Generation-skipping and gift taxes

4) Consider whether it is necessary to file extensions for decedent's prior year gift and income tax returns. NOTE an extension does not extend the due date for tax remittance.

5) Retirement plan (IRA) minimum distribution for the year of death. IRC 401(a)(9) and 408(a)(6).

6) If PR is not going to take a PR fee, file a Waiver of Commission in court probate file. See. Rev. Rul. 66-167

April 7, 2007

PR can be Liable for Taxes

Before accepting the duties and responsibilities of being a PR in a Florida Probate Case or any probate case, the PR should be aware that they can be personally liable for the taxes, penalties and interest that are from the decedent.

According to 31 U.S. C. 3713b:

A representative of a person or an estate paying any part of a "debt" of the person or estate before paying a claim of the U.S. government is personally liable to the extent of the payment for unpaid claims of the U.S. Government.

The PR should also know that a claim of the us Government must be paid first when the assets in the estate of a deceased debtor are not enough to pay all of the debts of the debtor. In other words the IRS has a Claim priority

April 2, 2007

Florida Guardianship: Incapacity Proceedings

The process of finding someone legally incapacitated begins with the filing of a petition to determine incapacity. In Jacksonville and other areas in Florida the petition can be filed by any adult person. The subject of the petition to determine incapacity is known as the Alleged Incapacitated Person.

As soon as the petition to determine incapacity if filed, the court appoints an examining committee and a Florida Guardianship Attorney to represent the Alleged Incapacitated person (AIP).

The Florida Attorney who is appointed to represent the AIP is not a guardian ad litem. Florida Statutes, Section 744.102(1) defines the duties of an attorney for an AIP. Such an attorney represents the AIP ans shall represent the expressed wishes of the AIP to the extent it is consistent with the rules regulating The Florida Bar. This means that they Florida Guardianship Attorney who is appointed to represent an AIP must represent the AIP like in any adversary proceedings. After all, the purpose of these proceedings is to determine whether or not important rights should be taken away from the AIP. A ward under a plenary guardianship has less rights than a convicted Felon in Florida.