December 2007 Archives

December 30, 2007

IRA Rollover and Estate Planning: Why you might not qualify?

Starting January 1, 2008 every non-spouse designated beneficiary will have the option to rollover an inherited IRA and stretch distributions. To take advantage of this opportunity your Florida estate plan must be setup correctly to qualify for this rollover opportunity. You are not entitled to a rollover, you must prove you meet the technical legal requirements. Let’s take a look at why your family would not qualify for the new IRA rollover opportunity.

The IRS has very specific rules for how a trust can qualify as a see through trust and treated as a designated beneficiary. The top level bullet point requirements are:


The trust must be valid under state law;
The trust must be irrevocable or become irrevocable when the IRA owner dies;
The trust beneficiaries must be identifiable from the trust instrument;
Proper documentation must be provided to the IRA custodian.

Seems simple enough right? Remember, this is the IRS we are dealing with and they take income tax deferral very seriously because they think they are losing money. They have regulations on top of regulations on top of Private Letter Rulings and court decisions defining each one of those bullets in extensive detail. There is enough material to write a book on those four issues, and people have. I can’t get into detail on all of them here because it would take forever.

The most common issue is the requirement that beneficiaries be identifiable from the trust document. Often trust documents do not contain adequate language to comply with the IRS rule. Make sure you have the proper language to qualify for rollover treatment.

Rollover treatment is a privilege, not a right. Your family will not qualify for rollover treatment if you do not follow the rules in your estate plan. Make sure you and your Florida Estate Planning lawyer or attorney understands the requirements and that your estate plan doesn’t fall apart on this critical issue.

December 29, 2007

Nursing Home Admission Agreements...Read the Fine Print!

Jacksonville Nursing Home Agreement Fine PrintIn Jacksonville Florida there are many Nursing homes. Some of them have very long agreements and some are very complex. You should review them carefully and make sure you look out for liberal guidelines regarding when a resident can be evicted, very restrictive visiting hours for family members, and requiring that a family member accept financial responsibility for the resident. These types of requirements may violate federal law; specifically, the Nursing Home Reform Act of 1987. This law is summarized by AARP

Other concerns I have touched on are the ability for someone with a durable power of attorney in Florida to bind the resident or heirs to using binding arbitration in future claims. You may want to have specific language in the durable power of attorney which prohibits the signing or agreement of a mandatory arbitration agreement on your behalf. You have the right to a trial by jury in the United States and may not want your agent acting under a Durable Power of Attorney to Waive your rights.

It is generally a good idea to have an Florida Elder Law Lawyer or Florida Estate Planning Lawyer review a nursing home agreement.

December 27, 2007

Florida Powers of Attorney (Part 7 FINANCIAL MANAGEMENT AND THE LIABILITY OF AN ATTORNEY-IN-FACT)

What is "fiduciary responsibility?"
An attorney-in-fact is a fiduciary and as such has a duty to invest and manage the assets of the principal as a prudent investor. This standard requires the attorney-in-fact to exercise reasonable care and caution in managing the assets of the principal. The attorney-in-fact must apply this standard to the overall investments and not to one specific asset. If an attorney-in-fact possesses special financial skills or expertise, he or she has an obligation to use those skills. The attorney-in-fact should keep careful records. Everything the attorney-in- fact does for the principal should be written down, and the attorney-in-fact should keep all receipts and copies of all correspondence, and consider logging phone calls so if the attorney-in-fact is questioned, records are available.

This is the last part on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 26, 2007

Florida Powers of Attorney (Part 6 TERMINATION OF THE POWER OF ATTORNEY)

When does the attorney-in-fact's authority under a Durable Power of Attorney terminate?
The authority of the attorney-in-fact of a Durable Power of Attorney automatically ends when one of three things happens: (1) the principal dies; (2) the principal revokes the Power of Attorney, or (3) when a court determines that the principal is totally or partially incapacitated and does not specifically provide that the Power of Attorney is to remain in force. In any of these three instances, the Durable Power of Attorney is terminated. If, after having knowledge of any of these events, a person continues to act as attorney-in-fact, he or she is acting without authority. The power to make health care decisions, however, is not terminated when a court determines that the principal is totally or partially incapacitated unless the court specifically terminates this power.

What is the procedure for a principal to revoke a Power of Attorney?
Written notice must be served on the attorney-in-fact and any other party who might rely on the power. The notice must be served either by any form of mail that requires a signed receipt or by certain approved methods of personal delivery. Special rules exist for serving notice of revocation on banks and other financial institutions. Consult with your lawyer to be sure proper procedures are followed.

When does a general Power of Attorney terminate?
In addition to the three events detailed above, a general (non-durable) Power of Attorney terminates when the principal becomes incapacitated. If the principal of a non-durable power of attorney is believed to be incapacitated, then the attorney-in-fact should consult with his or her lawyer before exercising any further powers on behalf of the principal.

Court proceedings were filed to appoint a guardian for the principal or to determine whether the principal is incapacitated. How does this affect the Power of Attorney?
If a court proceeding to determine the principal's incapacity has been filed or if someone is seeking to appoint a guardian for the principal, the Durable Power of Attorney is automatically suspended and an attorney-in-fact must not continue to act. The power to make health care decisions, however, is not suspended unless the court specifically suspends this power.

Authority as attorney-in-fact has been suspended because guardianship proceedings are pending for the principal. Now there is an emergency but there is no guardian and no attorney-in-fact to do something. What now?

The attorney-in-fact may ask the court for special permission to take care of the emergency even though the Power of Attorney remains otherwise suspended. Contact your lawyer.

This is the sixth part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 25, 2007

Florida Powers of Attorney (Part 5 HEALTH CARE AND THE POWER OF ATTORNEY)

What is the relationship between a Declaration of Living Will and Power of Attorney?
A declaration of living will specifies a person's wishes as to the provision or termination of medical procedures when the person is diagnosed with a terminal condition, has an end-stage condition, or is in a persistent vegetative state. A living will and a health care surrogate designation are termed "health care advance directives" because they are made in advance of incapacity and need. If a person is unable to understand or unable to communicate with a doctor, a living will is a legally enforceable method of making sure the person's wishes are honored. Whether or not a person has a living will, a person's attorney-in-fact may make health care decisions if the Durable Power of Attorney specifically gives this right.

What is a Health Care Surrogate Designation and how does it differ from a Power of Attorney?
A Health Care Surrogate Designation is a document in which the principal designates someone else to make health care decisions if the principal is unable to make those decisions. Unlike a Power of Attorney, a health care surrogate decision-maker has no authority to act until such time as the attending physician has determined the principal lacks the capacity to make informed health care decisions. (In instances where the attending physician has a question as to whether the principal lacks capacity, a second physician must agree with the attending physician's conclusion that the principal lacks the capacity to make medical decisions before a surrogate decision-maker's authority is commenced.) Many medical providers prefer a designation of health care surrogate for health care decisions because the document is limited to health care.

This is the fifth part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 24, 2007

Florida Trust Code and Creditors Rights

There have been many revisions to Florida's Trust Code and I have touched on some of them on this blog in the past.

There have been major changes to creditors rights. Creditors cannot compel distributions from or attach or otherwise reach a beneficiary's interest in a third party discretionary trust whether or not:

1) The trust has a spendthrift provision;
2) The discretion is subject to a standard; or
3) The trustee has abused the discretion.
This clarifies many issues with Florida Trusts.

If you have questions about creditors rights and the New Florida Trust Code please contact a Florida Estate Planning Lawyer to discuss your concerns with.

December 24, 2007

Florida Powers of Attorney (Part 4 RELATIONSHIP OF POWER OF ATTORNEY TO OTHER LEGAL INSTRUMENTS)

RELATIONSHIP OF POWER OF ATTORNEY TO OTHER LEGAL INSTRUMENTS
What is the difference between an attorney-in-fact and an executor or personal representative?
An executor, termed a "personal representative" in Florida, is the person who takes care of another's estate after that person dies. An attorney-in-fact may only take care of the principal's affairs while the principal is alive. A personal representative may be named in a person's Will and is appointed by the court to administer the estate.

What is the difference between a "trustee" and an "attorney-in- fact?"
Like a power of attorney, a trust may authorize an individual to act for the maker of the trust during the maker's lifetime. Like an attorney-in-fact, the trustee may manage the financial affairs of the maker of the trust. A trustee only has power over an asset that is owned by the trust. In contrast, an attorney-in-fact may have authority over all of the principal's assets (except trust assets). Another important distinction is that a trustee may continue acting for the maker of the trust after the maker of the trust dies. In contrast, the Power of Attorney expires upon the death of the principal.

What if the principal has a "guardian" appointed by the court?
If no less restrictive appropriate alternative is available, then a guardian may be appointed by the court for a person who no longer can care for his or her person or property. A person who has a guardian appointed by the court may not be able to lawfully execute a Power of Attorney. If an attorney-in-fact discovers that a guardian has been appointed prior to the date the principal signed the Power of Attorney, the attorney-in-fact should advise his or her lawyer. If a guardianship court proceeding is begun after the Durable Power of Attorney was signed by the principal, the authority of the attorney-in-fact is automatically suspended until the petition is dismisssed, withdrawn or otherwise acted upon. The law requires that an attorney-in-fact receive notice of the guardianship proceeding. If a guardian is appointed, the Power of Attorney is no longer effective unless the court allows certain powers to continue. The power to make health care decisions, however, is not suspended unless the court specifically suspends this power. If the attorney-in-fact learns that guardianship or incapacity proceedings have been initiated, he or she should consult with a lawyer.

May a Power of Attorney avoid the need for guardianship?
Yes. If the alleged incapacitated person executed a valid Durable Power of Attorney prior to his or her incapacity, it may not be necessary for the court to appoint a guardian since the attorney-in-fact already has the authority to act for the principal. As long as the attorney-in-fact has all necessary powers, it may not be necessary to file guardianship proceedings and, even when filed, guardianship may be averted by showing the court that a Durable Power of Attorney exists and that it is appropriate to allow the attorney-in-fact to act on the principal's behalf.

This is the fourth part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 23, 2007

Florida Powers of Attorney (Part 3 USING THE POWER OF ATTORNEY)

When is a Durable Power of Attorney effective?
The Durable Power of Attorney is effective as soon as the principal signs it unless the document specifies that it is conditioned on the principal's lack of capacity to manage property in which case appropriate affidavits are required in accordance with Florida law.

Must the principal deliver the Power of Attorney to the attorney- in-fact right after signing or may the principal wait until such time as the services of the attorney-in-fact are needed?
No. The principal may hold the Power of Attorney document until such time as help is needed and then give it to the attorney-in- fact. Because third parties will not honor the attorney-in-fact's authority unless the attorney-in-fact provides the Power of Attorney document, the use of the Power of Attorney may effectively be delayed.

Often, the lawyer may fulfill this important role. For example, the principal may leave the Power of Attorney with the lawyer who prepared it, asking the lawyer to deliver it to the attorney-in- fact under certain specific conditions. Since the lawyer may not know if and when the principal is incapacitated, the principal should let the attorney-in-fact know that the lawyer has retained the signed document and will deliver it as directed.

How does the attorney-in-fact initiate decision-making authority under the Power of Attorney?
The attorney-in-fact should review the Power of Attorney document carefully to determine what authority the principal granted. After being certain that the Power of Attorney gives the attorney-in-fact the authority to act, the Power of Attorney (or a copy) should be taken to the third party (the bank or other institution, or person with whom you need to deal). Some third parties may ask the attorney-in-fact to sign a document stating that the attorney-in-fact is acting properly. (The attorney-in- fact may wish to consult with a lawyer prior to signing such a document.) The third party should accept the Power of Attorney and allow the attorney-in-fact to act for the principal. An attorney-in-fact should always make it clear that the attorney-in-fact is signing documents on behalf of the principal.

How should the attorney-in-fact sign when acting as an attorney-in-fact?
The attorney-in-fact will always want to add after his or her signature that the document is being signed "as attorney-in-fact for" the Principal. If the attorney-in-fact only signs his or her own name, he or she may be held personally accountable for whatever was signed. As long as the signature clearly conveys that the document is being signed in a representative capacity and not personally, the attorney-in-fact is protected. Though lengthy, it is, therefore, best to sign as follows:

Howard Rourk, as attorney-in-fact for Ellsworth Toohey.

In this example, Howard Rourk is the attorney-in-fact, and Ellsworth Toohey is the principal.

What if the third party will not accept the Power of Attorney?
If the Power of Attorney was lawfully executed and it has not been revoked, suspended or terminated, third parties may be forced to honor the document. Due to changes in the law, Durable Powers of Attorney executed on or after October 1, 1995, have more clout. An older document may be enforced as well. Under some circumstances, if the third party's refusal to honor the Durable Power of Attorney causes damage, the third party may be liable for those damages and even attorney's fees and court costs. Even mere delay may cause damage and this too may be actionable. It is reasonable, however, for the third party to have the time to consult with a lawyer about the Power of Attorney. Banks will often send the Power of Attorney to their legal department for approval. Delay for more than a short period may be unreasonable. Upon refusal or unreasonable delay, consult an attorney.

Continue reading "Florida Powers of Attorney (Part 3 USING THE POWER OF ATTORNEY)" »

December 23, 2007

Florida Estate Planning and Common Misconceptions

Here are some of the more common rationalizations for not creating a Florida will, and the facts that quickly dispel those "myths."

Myth: "My estate is so small that a Florida will or estate planning is not needed."

Think again. Few people are have so little value as to not require estate planning. Did you add the value of your home, car, furniture, jewelry, savings account, retirement accounts, life insurance, and investments. Even if some items do not hold monetary value, they could have sentimental value. Failing to indicate who receives these items will can cause disagreements between family members that can last forever.

Myth: "When I die, my spouse will get all of my assets."

If you and your spouse own assets jointly, at death your share of the assets will automatically go to the surviving spouse. If you have separate assets, you have to look at the states statutes to figure out who gets them. Also what will happen when your surviving spouse dies? What will your children receive? What if your children are not your husbands children? Does your spouse know how to manage the family wealth? If your spouse remarries, some or all of your spouse's assets may wind up in the hands of his/her new spouse or the new spouses children and not your children.

Myth: "I don't want my final wishes to be set in stone. I'll create a will later in my life."

A will is an extremely flexible document whose terms can be changed as often as needed. In fact, any estate planning lawyer will tell you that a Florida will should be re-examined periodically to make sure it is up to date. A Florida will should receive a checkup whenever there is a substantial change in your life. Remember, the terms of a will only become effective at death.

Making a will is not expensive or difficult, but it is a legal document and must be properly prepared. It is usually best to contact an Florida Estate Planning Lawyer or Attorney who will be able to help with the precise wording to make sure your wishes are clear and that they are carried out exactly as you wish. Although it is not advisable, there are software options for the creation of wills, you may read about some of the problems that have occurred because individuals used preprinted wills or software created wills.

There is nothing wrong with putting your house in order today as tomorrow may be too late.

December 22, 2007

Florida Powers of Attorney (Part 2 POWERS AND DUTIES OF AN ATTORNEY-IN-FACT)

What activities are permitted by an attorney-in-fact?
An attorney-in-fact may perform only those acts specified in the Power of Attorney. If an attorney-in-fact is unsure whether he or she is authorized to do a particular act, the attorney-in-fact should consult the lawyer who prepared the document or other legal counsel.

May an attorney-in-fact sell the principal's home?
Yes. If the Power of Attorney authorizes the sale of the principal's homestead, the attorney-in-fact may sell it. If the principal is married, however, the attorney-in-fact must obtain the authorization of the spouse.

What may an attorney-in-fact not do on behalf of a principal?
There are a few actions that an attorney-in-fact is prohibited from doing even if the Power of Attorney states that the action is authorized. An attorney-in-fact, unless also a licensed member of The Florida Bar, may not practice law in Florida. An attorney-in-fact may not sign a document stating that the principal has knowledge of certain facts. For example, if the principal was a witness to a car accident, the attorney-in-fact may not sign an affidavit stating what the principal saw or heard. An attorney-in-fact may not vote in a public election on behalf of the principal. An attorney-in-fact may not create or revoke a Will or Codicil for the principal. If the principal was under contract to perform a personal service (i.e., to paint a portrait or provide care services), the attorney-in-fact is not authorized to do these things in the place of the principal. Likewise, if someone had appointed the principal to be Trustee of a Trust or if the Court appointed the principal to be a guardian or conservator, the attorney-in-fact may not take over these responsibilities based solely on the authority of a Power of Attorney.

What are the responsibilities of an attorney-in-fact?
While the Power of Attorney gives the attorney-in-fact authority to act on behalf of the principal, an attorney-in-fact is not obligated to serve. An attorney-in-fact may have a moral or other obligation to take on the responsibilities associated with the Power of Attorney, but the Power of Attorney does not create an obligation to assume the duties. However, once an attorney-in-fact takes on a responsibility, he or she has a duty to act prudently. (See Financial Management and the Liability of an Attorney-in-fact).

Is there a certain code of conduct for attorneys-in-fact?
Yes. Attorneys-in-fact must meet a certain standard of care when performing their duties. An attorney-in-fact is looked upon as a "fiduciary" under the law. A fiduciary relationship is one of trust. If the attorney-in-fact violates this trust, the law may punish the attorney-in-fact both civilly (by ordering the payment of restitution and punishment money) and criminally (probation or jail). The standard of care that applies to attorneys-in-fact is discussed under Financial Management and the Liability of an Attorney-in-fact.

This is the second part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 22, 2007

Trust Mills (seminars) pay $7.2 Million in Settlement

Next time you attend a Living trust seminar in Jacksonville Florida or where ever you live, you may want to think twice. This week Family First Advanced Estate Planning, and insurance company, and a life insurance company who targeted low cost estate planning to seniors settled with the Attorney General of California.
An article on Kristen Howe's Blog states:

I caution everyone to remember the old saying "If something looks too good to be true it probably is." If someone is offering to write a revocable trust and a will for you for free or for just a few hundred dollars, you have to ask yourself why. The two big lessons to be learned from this case are:
1. Do not let anyone who is not an attorney write an estate plan for you. There are just too many complexities in this area of the law to trust it to someone who is not educated.
2. Do not take investment advice from anyone who sells any kind of investment product. Period. It doesn't matter what it is, life insurance, annuities, mutual funds.
If they make their living selling it they cannot possibly give you objective investment advice about it. If you believe you have been victimized by Family First, another trust mill or by annuity fraud, you should report the crime to the local district attorney or the Department of Insurance. You may also file a complaint with the Attorney General.

Although this problem did not involved lawyers the general ideal of seminars where you are told that everyone can benefit from a Florida Living trust have problems also. You should only consider a Florida living trust if you meet with a Florida Estate Planning Lawyer and determine that your finances and needs require and justify a living trust.

December 22, 2007

7 Ways to Disinherit your Heirs - Jacksonville Florida Estate Planning Lawyer

More about Anna Nicole's will
According to Jay MacDonald , You can accidentally disinherit your heirs,

Here are the 7 ways to disinherit your kids which Mr. MacDonald discusses:

1. Failure to update a will
2. Faulty will
3. Stepparent succession
4. Ademption
5. Misunderstanding survivorship
6. Mirror-image grant
7. Failure to prepare a will

Although children have no legal right to inheritance throughout most of the United States, many states do provide protection against accidental disinheritance. Because she was born after the execution of Anna Nicole's will, Dannielynn will likely be considered a pretermitted child that was accidentally disinherited, and thus will likely inherit the bulk of Anna Nicole's estate.

if you have a will you should review it, if not you should create one. For help with your will see a Jacksonville Estate Planning Lawyer.

December 21, 2007

Florida Powers of Attorney (Part 1 About The Power of Attorney

ABOUT THE POWER OF ATTORNEY
What is a Power of Attorney?

A Power of Attorney is a legal document delegating authority from one person to another. In the document, the maker of the Power of Attorney grants the right to act on the maker's behalf. What authority is granted depends on the specific language of the Power of Attorney. A person giving a Power of Attorney may make it very broad or may limit it to certain specific acts.

What are some uses of a Power of Attorney?
A Power of Attorney may be used to give another the right to sell a car, home or other property. A Power of Attorney might be used to allow another to sign a contract, make health care decisions, handle financial transactions, or sign legal documents for the maker of the Power of Attorney. A Power of Attorney may give others the right to do almost any legal act that the maker of the Power of Attorney could do.

Where may a person obtain a Power of Attorney?
A power of attorney is an important and powerful legal document. It should be drawn by a lawyer to meet the person's specific circumstances. Pre-printed forms are often a disaster and may fail to provide the protection desired.

What is a "principal?"
The "principal" is the maker of the Power of Attorney - the person who is delegating authority to another.

What is an "attorney-in-fact?"
The "attorney-in-fact" is the recipient of the Power of Attorney - the party who is given the power to act on behalf of the principal. An "attorney-in-fact" is sometimes referred to as an "agent," but not all "agents" are "attorneys-in-fact." The term "attorney-in-fact" does not mean the person is a lawyer.

What is a "third party?"
As used in this pamphlet, a "third party" is a person or institution with whom the attorney-in-fact has dealings on behalf of the principal. Examples include a bank, a doctor, the buyer of property that the attorney-in-fact is selling for the principal, a broker, or anyone else with whom the attorney-in- fact must deal on behalf of the principal.

What is a "Limited Power of Attorney?"
A "Limited Power of Attorney" gives the attorney-in-fact authority to conduct a specific act. For example, a person might use a Limited Power of Attorney to sell a home in another state by delegating authority to another person to handle the transaction locally through a "limited power of attorney." Such a Power could be "limited" to selling the home or to other specified acts.

What is a "General Power of Attorney?"
A "general" Power of Attorney typically gives the attorney-in- fact very broad powers to perform any legal act on behalf of the principal. Often a list of the types of activities the attorney- in-fact is authorized to perform is included in the document.

What is a "Durable Power of Attorney?"
Limited and general Powers of Attorney terminate if and when the principal becomes incapacitated. Because many people would like Powers of Attorney that may continue to be used upon their incapacity, Florida law provides for a (special) power known as a "Durable Power of Attorney." A Durable Power of Attorney remains effective even if a person becomes incapacitated; however, there are certain exceptions specified in Florida law when a Durable Power of Attorney may not be used for an incapacitated principal. A Durable Power of Attorney must contain special wording that provides the power survives the incapacity of the principal. Most Powers of Attorney granted today are durable.

Must a person be competent to sign a Power of Attorney?
Yes. The principal must understand what he or she is signing at the time the document is signed. The principal must understand the effect of a Power of Attorney, to whom he or she is giving the Power of Attorney, and what property may be affected by the Power of Attorney.

Who may serve as an attorney-in-fact?
Any competent person 18 years of age or older may serve as an attorney-in-fact. Attorneys-in-fact should be chosen for reliability and trustworthiness. Certain financial institutions and not-for-profit corporations may also serve.

This is the first part of a seven part article on Florida Powers of Attorney Click to review the others . If you need help with a Florida Power of Attorney contact a Jacksonville Florida Estate Planning Lawyer.

December 21, 2007

Florida and other States: Single Member LLC's - 2 EIN's required by IRS if there are employees

A recent update to the IRS website could affect you if your Jacksonville Florida Business is a Limited Liability Company.

Important information for Single Member Limited Liability Companies (LLC) who have or will have employees within the next 12 months:

IRS regulations require a single member limited liability company that is (1) owned by one individual and (2) has or will have employees within the next 12 months to have two EINs. One EIN is assigned to the individual owner (as a sole proprietor) and one is assigned to the LLC. If you do not already have an EIN as a sole proprietor, you cannot use the online EIN application to apply for the LLC EIN. Please call the Business and Specialty Tax Line at (800) 829-4933 between 7:00 a.m. and 10:00 p.m. local time and an assistor will take your information and assign you the two required EINs. We are sorry for the inconvenience.

APPLY FOR AN EIN ONLINE NOW

December 21, 2007

Waiving Your Homestead Protection: Florida Supreme Court Speaks

While credit is tight and many Jacksonville consumers are facing foreclosure on their homes, and attempts to collect old credit card debts, companies have been trying to use waiver of you homestead to collect debts. For over 100 years Jacksonville residents and those living in Florida have had been able to protect their home from claims of creditors. Arguably the home is one of the most valuable assets a Florida resident has. Recently there has been concern over the ability of a homeowner to waive their right to protection. The Florida courts have allowed people to waive many of their constitutionally protected rights, but up to now a waiver of ones Florida homestead protection was invalid except in the case of a valid pre or post nuptial agreement. This case represented the most recent attempt to allow waiver of ones constitutionally protected homestead protection.

In a case involving the Florida Constitution's exemption which protects homeowners' residences from forced sale, the Supreme Court of Florida reaffirms that, while the exemption can be waived in a mortgage, it cannot be waived in an unsecured agreement. The court rejects claims that it should recede from its precedent based on a constitutional amendment, a purported national trend approving such waivers, and recent holdings that other constitutional rights can be waived.
To review the case and the extensive analysis the Florida Supreme Court took read Chames v. Demayo

If you are having problems with collection agents trying to collect debts, credit card debts, or other types of debts, contact a Florida Business Lawyer, or Jacksonville Consumer Debt Lawyer.

For more information on Jacksonville or Florida Foreclosure Defense See the Florida Foreclosure Defense Lawyers Blog.

December 20, 2007

Reducing Estate Taxes with a Family Limited Parnerships in Florida


Stephanie Loomis-Price has recently published her articles entitled Family Limited Partnerships.

In her article, Stephanie offers a detailed outline of the Family Limited Partnership – from consideration of the FLP as an appropriate estate planning tool, through the formation of the partnership, concluding with the administration of the partnership and tax compliance issues.


Family Limited Partnerships are used in Florida Estate Planning when the assets are in excess of the death tax exemption. If you have a large net worth and require structure to help reduce the 45% estate tax rate, you should contact a Florida Estate Planning Lawyer to discuss a Family Limited Partnership.

December 19, 2007

Baby Boomers cause rise in Estate Planning

Grandparents-on-beach.jpg
The Wills, Trusts, & Estates Professors Blog has an summary of an article by RDA Legal Communique that Estate Planning and Estate Administration are two of the hot areas of law. Many Florida Resident have not properly planned for their families or the plans they have are out of date.

If you need Estate Planning In Florida, contact a Florida Estate Planning Lawyer to find out what your benefits may be from a properly prepared Estate Plan.

December 18, 2007

How to Contest a Florida Will

will.jpgIf you feel that something is wrong with a Florida will because you are left out or your distribution doesn't seem fair, is there anything you can do?

If you believe a Florida will is not valid, you may be able to contest it. Proving a Florida will is invalid is a difficult process but not impossible. You must have some right to property to contest a Florida Will. You can not contest a will for someone when there is no indication that you would be a beneficiary.

Often wills contain no contest clauses voiding a persons interest if they contest the terms of the will. In Florida will contest provisions are invalid and ignored. If there was no will and you would inherited or become a beneficiary of their estate than you may have standing to contest the Florida Will.

Assuming you have standing to contest the will, the will can be contested only in certain circumstances; there must be evidence that something is wrong with the will. The situations in which a will may be contested are:

Mental incapacity: If you believe the decedent did not have the mental capacity to write the will it may be grounds for a will contest. To prove mental incapacity a statement from a doctor who examined the person around the time the will was created is beneficial. Medical records and witnesses can also be used to establish mental incapacity.

Fraud: Sometimes a person is fraudulently induced into signing a will. If fraud occurred or the Florida will was signed without the person knowing it was a will it may also be contested as fraudulent. Another type of fraud occurs when someone signs a will under a mistaken believe that caused a change in the will or the distribution of assets to a beneficiary.

Undue Influence:Often caretakers, friends, or children are in a position to exert undue influence over a person and induce them to change or create a will. Wills can be contested on the basis of undue influence. In some cases with a child, spouse, or agent there is a fiduciary relationship. When there is a fiduciary relationship the burden of proving undue influence can shift to that person to prove that there was no undue influence.

Not Executed Properly: On other way to contest a Florida will is to check and make sure that it was executed properly. A Florida will must comply with the statute of wills and be signed by the creator in the presence of two witnesses who each see the signing process. In addition a Notery must authenticate the signatures. If the Florida Will or Florida Trust was not witnessed properly, it may be invalid.

If you want to contest a Florida will, you should contact an Florida will contest lawyer immediately because a claim will need to be filed timely with the court.

December 18, 2007

Do it yourself Estate Planning: Bad News Part 8

Could you imagine an Estate Planning Lawyer selling wills or estate planning documents with a disclaimer in small print that your documents may not be valid in Louisiana or some other state.Jacksonville, Jacksonville Beach, PVB, Ponte Vedra Beach, Orange Park, Florida Will

Today I found another example of when using quicken is a bad idea. Paul Rabalais the author of Estate Planning in Louisiana: A Layman's Guide to Understanding Wills, Trust, Probate, Power of Attorney, Medicaid, Living Wills & Taxes and Your Louisiana Estate Planning Blog wrote an article about how buying Quicken can be the Worst Buy at Best Buy. Apparently there is a small print on their software which says Estate Planning documents Not Valid in Louisiana. I wonder what other states their documents are not valid in. I have examined several trusts created by quicken, and they do not address the new Florida Trust Code that was implemented in 2007.

Some other examples of Do it your self wills and bad news are covered in my articles listed below

Do it Yourself Wills? More bad news and
Do it Yourself Wills? a Good Idea or Not?
Do it yourself Estate Planning: Bad News Part 3
Do it yourself Estate Planning: Bad News Part 4
Do it yourself Estate Planning: Bad News Part 5
Do it yourself Estate Planning: Bad News Part 6
Do it yourself Estate Planning: Bad News Part 7

This is a common mistake found in Florida Probate cases, when people try to make their own wills, or transfer their assets without getting professional help from an attorney or accountant who is familiar with the effects of gifting and estate planning.

If you have used software, a form, or an online service to prepare your will, you should have it reviewed by a Florida Estate planning Attorney for potential problems.

December 18, 2007

Do I Need a Revocable Living Trust?

Family Estate Planning with Living Trusts in FloridaA Living Trust is a tool used by Jacksonville Estate Planning Lawyers to hold assets for the benefits for one or more beneficiaries. Often the initial beneficiaries are the people who create them. In this case, a person or couple can use the assets of the trust just like they would do with their own assets. The big advantage to a Florida Living Trust is that upon the death of the creators of the trust, the assets have a predefined beneficiary.

This enables properly created trust assets to avoid the delays and costs associated with a Florida Probate. Florida's new trust code requires that to be eligible to create a Florida Trust, you must some nexus or connection with the state of Florida.

Some additional benefits of a Florida Revocable Trust are that the way in which the assets are distributed are not public like with a will or assets that pass under the state's intestate statutes.

Assets that are to pass to young children can be held for them until they become responsible or reach a predefined age.

There are no tax consequences of having assets in a revocable trust in Florida. Once the creator (grantor or settlor) dies, the trust is converted into an irrevocable trust and a Federal Employee number must be obtained.

If you are considering a Florida Revocable Trust, have a revocable trust from another state, or want to find out how a Florida Revocable Trust can benefit you, contact a Florida Revocable Trust Attorney or a Florida Living Trust Lawyer for more information.

December 17, 2007

Bad Will can Cost $1 Million dollars

A recent article on Your Louisiana Estate Planning Blog, For Families With More Than $2 million of Assets: Bad Wills Can Cost You $1,000,000 talks about how poorly drafted wills can quickly cost your over $1Million in estate taxes. I see several clients a month that would have tax bills in excess of 1 Million dollars upon their death.

For those of you who have assets in excess of 2 million or expect to have assets in 2011 in excess of 1 million dollars, did you know that almost 1/2 of your estate will go to pay the tax bill?

If you have substantial assets and want to leave them to your family instead of the government, talk to a Florida Estate Planning Lawyer about how to structure your assets.

December 17, 2007

How to Collect Child Support Upon the Death of the Primary Caregiver

In Florida as with many other states, current child support payments and past due child support payments are an asset of the estate of the decedent. When there is back child support due and the primary caretaker passes away, the personal representative or executor of the estate may take action to collect the payments from the other parent.

Even though it is the estate who is going after the payments, these payments are for the benefit of the child and not available to creditors or other beneficiaries.

If you are trying to collect back child support from a parent and there is an estate involved, you should discuss this with a Jacksonville Estate Planning Attorney who works with a Jacksonville Family Attorney.

December 16, 2007

Who should be invloved in Florida Estate Planning

Jacksonville Estate Planning LawyerIdeally your estate plan will be created by a Florida Estate Planning Lawyer, yourself and some or all of the following people:

1. Mother and Father
2. Tax Attorney
3. CPA
4. Financial Advisor
5. Trust Officer
6. Insurance Professional
7. Business Valuation Expert
8. Philanthropic Consultant
9. Fundraiser/Planned Giving Officer
10. Family psychologist or family facilitator

The likelihood of involving these people decreases as you go down the list, and increases as the amount of money involved in the plan increases.

Although children or heirs are almost never included in the preparation of these documents. It might be wise to have a meeting with them once they are prepared or in the later states so that the documents can be discussed. This is a time when any disputes of misreading the documents or their interpretations can be resolved.

December 15, 2007

Why Create a Florida Trust

Jacksonville Estate Planning, Jacksonville Trust Lawyer, Florida Trust AttorneyA Florida Trusts are created to fulfill different needs and obligations. Today people find it necessary to protect their investments and properly allocate their resources while taking the least risks with regards to finances. A Jacksonville Trust Lawyer can help you analyze your assets and determine if a Living Trust will work for you.

Some Florida Trust are created for the purpose of privacy. The terms of a Florida trust are not public, unlike the terms of a Florida will.

Trusts are also created to protect one's assets. There are different types of Florida Truss based on individual needs. Often a spendthrift provision is included in a Florida Trust to protect beneficiaries from creditors or assignment of the assets.. These can protect a person from his or her own lack control his or her own money.

Florida Trust are also created for Florida wills and Florida estate planning. Trusts are often present in wills Often if a person's children are under 18, a trust is created to hold and protect assets until the required age is reached.

Florida Trust are also created for charities. Sometimes trusts, proven to be very flexible of functioning as an investment vehicle, are created as investment trusts.

Florida Trusts are also widely used for asset protection, tax planning, and co-ownership of properties.

If you think you may benefit from a Florida Trust , please contact a Florida Trust Lawyer or Attorney to help evaluate your needs and what type of Florida Trust may be best for your circumstances.

December 14, 2007

Animal Rights and Pet Trusts

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It wasn't long ago that animals had no rights when their owner died. Today you make a difference in your Pet's life after you are gone.

Estate planning for pets gained momentum during the 1990s, and pet trusts are now legal in most of the 50 states, including Florida.

A smooth transition

If you die or become incapacitated, what will happen to that special "member of the family?" Legally, a pet is your tangible personal property. It would pass to your heirs or the beneficiaries of your estate unless you have a will or trust stipulating otherwise. Even if you have a will, it doesn't likely address who is actually the best person to care for your pet, nor does it address the immediate problem of care, which pets will need at once. They can't wait until after the will is through probate.

The Florida pet trust is your chance to smooth the transition for your pet while providing the funds for its care and any special needs during its natural life. Details of such trusts vary by state, but no matter how you establish one, there are basic decisions to make before you act.

Picking a caretaker

Perhaps the most difficult step is finding the most suitable caretaker - someone not only able, but also willing to take on the care of your pet. Relatives and friends may enjoy visiting with your pet, but that doesn't necessarily translate into a willingness to provide for its daily care.

Discuss what financial provisions should be made to reimburse the caretaker for actual expenses for food, toys, walking, veterinary care and any special needs.

If you have no relatives or friends willing to accept possible pet-care responsibilities, you could investigate the fairly large number of non-profit organizations willing to do it.

Pet information

Whether a person or an organization, your pet's designated caretaker will need comprehensive information - both short-term (suppose you are hospitalized for a limited time) and long-term. This could include registration papers, if they exist, and descriptions that amount to reliable ways of identifying your pet - the story is told of a caretaker of a black dog who kept finding other black dogs to keep the trust income coming in long after the original pet had died. Markings are obvious identification points, but beyond that, you might consider DNA identification or micro chipping.

Other essential information includes a veterinary history, details of any medical conditions, dietary requirements, sleeping and exercise habits, even social preferences - especially any negative reactions your pet has to certain types of persons. For many, taking care of pets left behind is a particularly sensitive subject. If your situation fits certain criteria you may want to consider a Florida Pet Trust.

Pet trusts use to be very expensive to create, no a Florida Estate Planning Lawyer can include provisions in your Florida will or trust to deal with your pet for less than a few hundred dollars. For more information on Florida Pet trusts contact a Florida Estate Planning Lawyer.

December 13, 2007

Who should be invloved in Florida Estate Planning

Ideally your estate plan will be created by a Florida Estate Planning Lawyer, yourself and some or all of the following people:Jacksonville Estate Planning Team, Florida estate Planning techniques

1. Mother and Father
2. Tax Attorney
3. CPA
4. Financial Advisor
5. Trust Officer
6. Insurance Professional
7. Business Valuation Expert
8. Philanthropic Consultant
9. Fundraiser/Planned Giving Officer
10. Family psychologist or family facilitator

The likelihood of involving these people decreases as you go down the list, and increases as the amount of money involved in the plan increases.

Although children or heirs are almost never included in the preparation of these documents. It might be wise to have a meeting with them once they are prepared or in the later states so that the documents can be discussed. This is a time when any disputes of misreading the documents or their interpretations can be resolved.

December 12, 2007

Do it yourself Estate Planning: Bad News Part 7

Jacksonville, Jacksonville Beach, PVB, Ponte Vedra Beach, Orange Park, Florida Will

Today I found an article on where an individual purchase a preprinted will form and filled in the blank space incorrectly. He hand wrote:

My shares of Lee Bros. Holding Co. My property of 817 North Park St., Victoria, B.C. and 35% of cash & bonds to my brother Horace. 35% to my sister Estelle of cash & bonds. 35% divided evenly for my sisters Elsie, Edythe, Effie and my brothers Harold & Henry of cash & bonds.

A few months later Mr. Henry Lee died with over $2,600,000 in assets. Apparently the will was witnessed prior to the blank being filled in and this did not meed with the formal requirements of a will.

The Rule of Law has an extensive review of this case.

In the final ruling the Judge said:

Hubert’s contributing action was his honest, but ill-advised decision, to use a store-bought form will without involving a lawyer. Horace’s contributing action was his bad faith and fraudulent behaviour.


After two trials and many years each party had to pay their own legal fees. This all could have been avoided if a lawyer was used. I am not sure why someone with $2.6 Million dollars in their estate would have used a preprinted will form or a software program to generate a will.

The moral of the story:
Online wills are only forms. Even if they imply that a lawyer created them, a lawyer is not looking at your documents or your assets when you make decisions. If you make the wrong decisions or follow the wrong procedures what will the cost to your estate be?

Some other examples of Do it your self wills and bad news are covered in my articles listed below

Do it Yourself Wills? More bad news and
Do it Yourself Wills? a Good Idea or Not?
Do it yourself Estate Planning: Bad News Part 3
Do it yourself Estate Planning: Bad News Part 4
Do it yourself Estate Planning: Bad News Part 5
Do it yourself Estate Planning: Bad News Part 6

This is a common mistake found in Florida Probate cases, when people try to make their own wills, or transfer their assets without getting professional help from an attorney or accountant who is familiar with the effects of gifting and estate planning.

If you have used software, a form, or an online service to prepare your will, you should have it reviewed by a Florida Estate planning Attorney for potential problems.

December 11, 2007

Estate Planing is Not a One Time Event

When was the last time you sat down with someone to review your Floria trust, Florida will, Florida power of attorney, health care directive, and other documents intended to make sure that your assets will be managed and distributed according to your wishes? If it has been longer than a year, you are probably overdue for an estate planning check-up.

Changes in your assets

Acquiring different of assets or changes in the value of the assets may require Estate Planning that was not anticipated.

Changes in the law

Florida Estate plans
become outdated or are not as effective over time. This year there were substantial changes to the Florida Trust laws that are retroactive on older trusts. Recent tax changes can have a dramatic impact on how estates are planned. There have been changes in health care privacy laws which can make it difficult for family members to care for loved ones without the proper documents.

Changes in family circumstances or relationships

Events such as births, deaths, marriages and divorces can have significant impacts on an Florida estate planning. Your feelings about people who you appointed to handle your estate or make health care decisions can change.

Changes in your goals or desires
A change in your goals or desires throughout their lives can also effect Florida Estate Planning.

To update your Florida Estate Planning contact a licensed Florida Estate Planning Lawyer and discuss your current documents and desires.

December 11, 2007

How can a living trust save on estate taxes?

Jacksonville Elder Law Lawyer, Medicaid Planning AttorneyThe Ferrell Law Firm in Memphis bloghas a series on Living Trusts vs. Wills. Many of the issues discussed are similar to those in Florida. For those of you who are unsure as to whether you need a living trust, will, or both you might review their 4 part article.

Their Answer to "How can a living trust save on estate taxes?"
If you die in 2007 or 2008 and the net value of your estate (assets minus debts) is more than $2 million, federal estate taxes must be paid on the excess at a rate of 45%. If you are married, your living trust can include a provision that will let you and your spouse leave up to $4 million estate tax-free to your loved ones, saving up to $900,000 in taxes.

To create a Florida Living Trust or Florida Will contact a Florida Estate Planning lawyer

December 10, 2007

Do it yourself Estate Planning: Bad News Part 6

Jacksonville, Jacksonville Beach, PVB, Ponte Vedra Beach, Orange Park, Florida Will

Last week I had a client call me about a Probate problem? It turned out that this client had used a Do it yourself Will Program that was online ( LEGALZOOM). Her husband executed his will, but she did not. Then her husband died. The problem is that because her husband had a bank account in his name and did not have a Payable on Death designation, the bank account needed to go through probate.

This could have happened if a lawyer had prepared the will, but the lawyer would have probably inquired into the title of the assets in his possession. This little mistake cost $1500 in probate fees.

The odd thing is that she doesnt want her will or assets reviewed by an attorney because it will cost around $100. Some people never learn.

The moral of the story: Online wills are only forms. Even if they imply that a lawyer created them, a lawyer is not looking at your documents or your assets when you make decisions.
This client could have spent $100 more than the online cost and had an attorney prepare, and review their documents for mistakes like the one she missed.

Some other examples of Do it your self wills and bad news are covered in my articles listed below

Do it Yourself Wills? More bad news and
Do it Yourself Wills? a Good Idea or Not?
Do it yourself Estate Planning: Bad News Part 3
Do it yourself Estate Planning: Bad News Part 4
Do it yourself Estate Planning: Bad News Part 5

This is a common mistake found in Florida Probate cases, when people try to make their own wills, or transfer their assets without getting professional help from an attorney or accountant who is familiar with the effects of gifting and estate planning.

If you have used software, a form, or an online service to prepare your will, you should have it reviewed by a Florida Estate planning Attorney for potential problems.

December 9, 2007

Will a "No Contest" Clause Keep Your Estate Out of Court in Florida

Jacksonville, Jacksonville Beach, PVB, Ponte Vedra Beach, Orange Park, Florida WillMany couples and individuals want to place no contest clauses in their Florida Wills. The purpose of a no contest clause in a will is to keep the beneficiaries heirs from fighting over who gets what or how assets are distributed upon your death.

In many states no contest clauses become fights over the language used in the Florida will. Florida does not recognize no contest clauses for Florida Wills. Although it is possible to have a no contest clause if the laws of another jurisdiction or state are chosen to govern the will.

One example of a no contest clause that was struck down in Louisiana is found on Your Louisiana Estate Planning Blog. The article mentions a clause which stated that if any "named legatees should contest any provision in this will, then the naming of that person in my will shall be struck and they shall not be considered to be a legatee."

The court ruled that since, a beneficiary of a testamentary trust is not a "named legatee" the beneficiary was not bound by the clause.

If you desire a no contest clause in a Florida Will, you should speak with a Florida Estate Planning Lawyer who works withe Estate Planning Lawyers of other states who can determine how to properly implement such a clause.

December 5, 2007

Credit Card Debt and Offers for the Incompetent: Power of Attorney, Guardianship, or Credit Freeze

Kimberly Palmer of U.S. News & World Report wrote an article on the Alpha Consumer Blog where she discussed these issues. Her reader wrote:

My husband, who is retired, has dementia. He responds to credit card offers in the mail and charges things to them, even though he shouldn't, because he is on limited Social Security disability income. He knows better, but his mind is weak. He always says he won't use the cards, but he still does. Even if I cut the cards in half, more come in the mail. We are now in $15,000 of debt, and it continues to rise. How can I get him to stop making charges? Will I be responsible for the debt, even if he passes away before I do?

She offers several solutions including
1- using http://www.optoutprescreen.com/
2- using a credit monitoring service.
3- using a durable power of attorney or guardianship if the person is incapacitated
4- Notifing the credit card companies directly


She also discusses the liability for the wife in the event of the husbands death.

If you need help with a Florida Durable Power of Attorney, Florida Guardianship contact a Florida Estate Planning Lawyer, or Florida Guardianship Attorney.

December 3, 2007

Speaking (or Emailing) from the Grave

Gerry Beyer, author of the Wills, Trusts & Estate Professors Blog has an interesting article on a novil service called Deathswitch. This service could be used to provide some of the services I have discussed in relation to the Digital Asset Trust.

There are many things that people may want to be handled a certain way after their death. Deathswitch.com, offers peoplethe ability to send messages or inform people in the event they are critically injured or disabled.

Deathswitch is an automated system that regularly prompts users for a password. If the user fails to respond timely, the system assumes that he or she is dead or critically disabled and e-mails pre-scripted messages. Each person can pick the frequency of the prompts and the maximum time to respond. These time-frames can range from one day to one year. Gerry Beyer states that some of the ways in which Deathswitch can be used include:

    • Sending computer passwords to co-workers and family
    • Providing loved ones with bank account and other financial information

    • Making known one’s final wishes

    • Sharing unspeakable secrets

    • Leaving love notes

    • Having the last word in an argument

    • Providing the loved ones with funeral instructions

Neil Hendershot also discusses this service on his blog where he ponders the ramifications of a premature discharge of an intended postmortem email message

I have also discussed the need for this type of service in my articles on Digital Asset Trusts.

December 1, 2007

NEW Estate Planning Guide from American Bar Association

ABA-guide-to-wills-trusts.jpgWhether you live in Jacksonville Florida or anywhere in the United States, you should find this guide helpful in educating yourself on what the various estate planning documents are used for.

This Guide is downloadable in its entirety; or it can be viewed online by chapters, all in PDF format, which include:

Ch. 1: Getting Started
Ch. 2: Transferring Property without a Will
Ch. 3: Making a Will
Ch. 4: Trusts
Ch. 5: Living Trusts
Ch. 6: Common Estate Planning Situations
Ch. 7: Special Considerations
Ch. 8: Death and Taxes
Ch. 9: Changing Your Mind: Changing, Adding to, or Revoking Your Will or Trust
Ch. 10: Choosing the Executor or Trustee
Ch. 11: Planning Now to Make Things Easier for Your Family
Ch. 12: When You Can't Make the Decision: Living Wills, Powers of Attorney, and Other Disability Issues


December 1, 2007

Durable Power of Attorney or Guardianship / Conservatorship

One of the most common questions I get is "What is the difference between a Durable Power of Attorney and a Guardianship?"

Richard Shea an attorney in Connecticut who publishes the Connecticut Estate Planning & Elder Law Blog has a good description of each and the differences in an article titled Power of Attorney v Conservatorship.

He summarizes the differences by stating:

A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. If you do not have a power or attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Conservatorship. A court proceeding is not only costly, but the person appointed as your Conservator may not be the person whom you would have chosen yourself. And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or Medicaid planning that could be done on behalf of the principal.

Another significant difference that I often emphasize with my clients is that although a Durable Power of Attorney allows you to act when and if you want to, a Guardianship makes you legally responsible to act.

You should discuss your specific plans for a Florida Durable Power of Attorney or a Florida Guardianship with your Florida Estate Planning Lawyer to determine which is the right vehicle for your needs.