Florida Estate Planning Lawyer Blog

The Homestead Exemption in Florida, which was established in the State's Constitution, has always provided for the protection of the Family home free from creditors and liens. In 1985 the Constitution was amended to extend the protection to the "natural person" and not necessarily having to be the head of the household. The 4th district Court of Appeals ruled that a husband and wife who are separated for a period of time can BOTH claim the Florida Homestead Protection from creditors. This ruling does nothing to allow two homestead tax deductions. Law v. Law et al., 738 So. 2d 522.

The case involves a husband and wife who were separated for several years. They both claimed Homestead exemption for the Hollywood home that they owned jointly. But when his mother got sick, he and his wife decided to sell the home to pay for the medical bills. His ex-wife had a claim against him for support and brought action to seek recovery through the sell of the home. He filed for Homestead exemption. The court of appeals ruled that "we see nothing inconsistent with our public policy if we extend a homestead exemption to each of two people who are married, but legitimately live apart in separate residences, if they otherwise meet the requirements." Court referencing Colwell v. Royal International Trading Corp., 226 B.R. 714 (Bank S.D. Fla. 1998) to show precedent on allowing dual homestead exemption. The court seemed to find it important to find that the separation was not contrived to defraud creditors.

If you would like to talk about how to create two homesteads and document them to avoid unnecessary litigation over the issue, contact a Florida Estate Planning Lawyer or if one or more of your home is in foreclosure contact a Jacksonville Foreclosure Defense Lawyer.

Due to the recent decision of the Florida Supreme Court, many single-member limited liability company owners have been left confused and upset. The Ohmstead decision expressly eliminated most of the asset protection benefits that single-member LLCs were thought to have. Creditors of the member can use all available remedies to recover their debt, not just the charging lien that was thought to be the sole remedy. Now it may be possible for a creditor to force the sale of LLC assets and seize all management decision-making.

This decision has sparked new ideas on how to protect debtors who are the owner in a single-member LLC. According to one academic, adding an unrelated business partner as a new member could offer protection. This would require the new member receive some consideration such as a share of the profits so that the reorganization would not be a fraudulent transfer. Also, a second option would be to reorganize the LLC in another state with more desirable LLC protections. Some LLC owners may consider converting to limited partnerships to offer a stronger protection that might be available under the current law. The Florida legislature is expected to address this issue in the future to clarify the standing of multimember LLC's

While the decision did not deal with multi-member LLC's, there is language in the opinion that has raised concern with many around the state over the issue of whether a multi-member LLC offers asset protection in Florida. It seems that it might be possible for a creditor to pierce a LLC and foreclosure on the shares, which may not be possible with a limited partnership interest. Given the current uncertainty with asset protection and LLC's in Florida you should have your operating agreements reviewed to make sure that they are updated to include provisions that would not permit a creditor who has taken an interest in the LLC to vote or participate in the business decisions, is not guaranteed any distributions, and any moneys that would be provided to the original members who have creditor problems are use to purchase annuities for that member or are paid in the form of wages if that individual's wages are protected from creditors

Although these options may seem like quick fixes, they are complex and are not guaranteed solutions to the problem because it will take years for appellate courts approve them. If you have any questions about how this decision may affect you, contact a Florida Asset Protection Attorney for help.

The Apple Law Firm has expanded again and added a Jacksonville Bankruptcy Lawyer and a Jacksonville FDCPA Lawyer who can help Stop Creditor Harassment in Florida. Look for an exciting announcement with a new lawyer addition next week in a related area of Florida Estate Planning.

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Whether a death is expected or unexpected, the deceased will probably die with some outstanding debts. It is the responsibility of the estate of the decedent to pay whatever outstanding debts are owed. If you are wondering whether a debt owed by a recently deceased person is collectible, a probate judge will make that decision for you under Florida Statutes. Normally, tax debts are collected first followed by probate fees and all other debts including mortgages, account payables and credit card bills.

In order to pay the remaining debts the executor of the estate will use estate assets, which may require selling off illiquid portions of the estate to create funds to pay the debts. However, if there are not enough assets in the estate to cover all the debts then you may be left wanting. A creditor must file a claim with the estate within a fixed date after the death of the debtor. Therefore, you will go onto a list of creditors to be paid if you meet this deadline. A creditor will always be paid before a beneficiary unless the beneficiary also can make a claim as a creditor. As a result, if an individual leaves their estate insolvent, creditors will end up with their pockets full while your beneficiaries end up with nothing.

With an economy still slow to recover, more and more estates are left insolvent. A Florida Estate Planning Lawyer or Jacksonville Estate Planning Lawyer may be able to assist you in creating an Florida Estate Plan that can protect assets from some types of creditors and allow your heirs to receive a larger portion of your estate. If you would like a Free Florida Probate Handbook, let us know

In a recent article by Kelly Greene of the Wall Street Journal, she explains methods in which individuals can protect their retirement accounts. Over an individual's lifetime an IRA (Individual Retirement Account) can accrue hundreds of thousands, or even millions of dollars. There is a high possibility that these retirement accounts will have significant assets left in them when you pass away. One of the main goals of Florida Estate Planning is to make certain your hard earned money is spent according to your final wishes. In order to control how quickly your children or heirs can spend their inheritance, most individuals are led to trust documents.

In a ruling last year, a Florida State Court found that inherited IRAs are not protected from creditors in civil court cases, with the exception of bankruptcy proceedings. Consequently, it is advisable to create an IRA trust where the account holder can name one or more trusts as the retirement account beneficiary instead of leaving the IRA outright to an heir where it could be subject to the claims of their creditors. Not only do you control how your retirement account is spent, but also with this type of Florida Estate Planning you can receive tax-free growth on the funds. Forming an IRA Trust is a complicated process therefore if you require any assistance contact a Florida Estate Planning Lawyer.

Estate planning for Digital Assets is a topic that was covered in a two part article by Oregon Estate Planning Attorney on his Wealth Law blog. In the second part of his article Estate Planning and "Virtual Assets" - Part 2 Michael discusses the importance of determining who should receive your virtual assets and cautions readers in the use of commercial services to hold your virtual assets because of the risk of loss associated with the improper storage or release of the assets to others.

While these are valid points, a bigger concern in my mind is that most of these commercial services appear to violate the the terms of the licenses by allowing others to use your accounts after your death and potentially create liability to your estate. The Digital Asset Protection Trust is the only solution that appears to resolve the legal issues and deal with digital assets correctly. To create a Digital Asset Protection Trust contact a Florida Estate Planning Lawyer to discuss your circumstances.

While video games have become increasingly realistic over the last few years, they still cannot compete with the virtual world reality of computer based Internet services. To some, SecondLife.com may seem like a game, but to others it really is a "second life." Second Life is a website that allows users to interact with each other by downloading a software program. Each user creates an avatar that can resemble himself, a celebrity, or anyone they can imagine. All users interact, socialize, and even conduct business with each other in the same world known as "the grid."

One of the unique abilities built into the software is a modeling tool that allows the user to build virtual objects in the virtual world. The terms of service guarantee that the users will retain all copyrights to the substances they design and create. With their digital rights management, the virtual community of Second Life generated approximately $55 million of real money last year. By having such a unique way to create an asset, the user must choose a unique way to protect it for heirs.

I would suggest a Digital Asset Trust because Second Life will only transfer an account when there is a relevant legal documentation. By setting the account up in the name of a trust, licenses and use restrictions will no longer apply to transfer of property to another. If you would like assistance in protecting your Second Life account and property, contact a Florida Estate Planning Lawyer today.

In a recent TIME article written by Gaelle Faure, the tragedy of daughter's death is told. Like many parents of teenagers and young adults, Pam Weiss has never had a social networking account of any kind. Many older generations have remained reluctant to create a Facebook or MySpace account due to their lack of technological expertise. However, any lack of expertise did not stop Weiss from turning to Facebook when her daughter died in a sledding accident back in 2007. Knowing that her daughter, a UCLA student, had an account with Facebook prompted Weiss to use the social network to find photos memorializing her daughter. Before long Weiss was reliving several memories her daughter shared with friends through the contacts Weiss made online.

Back in 2007, Facebook's policy was to take down the profile of a deceased user 3 months after their death. Since that time, Facebook has amended their policy to allow loved ones a way of honoring the deceased. This policy sends the profile into a memorial state in which many features such as status updates are removed. No friends can be added, and only the friends of the deceased on the day of their death may view the profile. Facebook also seals the profile from any future log-in attempts but leaves the wall open for family and friends to pay their respects.

As the online presence of individuals continues to grow, more and more information that was once written on paper is stored digitally. To ensure these memories are not lost forever in cyberspace, you should take action now. The best option is create a Digital Asset Protection Trust that would incorporate your digital assets in your Florida Estate Plan. Permitting an experienced Florida Estate Planning Lawyer to help to achieve your goals will guarantee your digital assets are kept safe.

The Supreme Court of Florida recently had a chance to consider the single member LLC and the charging order protections under Florida Law. As expected by many, the single member LLC is not afforded the protection that a multi member LLC can be under certain circumstances. If you are wanting to structure your business entities and assets to protect against future and unknown liabilities, you should discuss these with a Florida Asset Protection Attorney.
Here is what happened in this recent case. This is not our typical blog posting, but its very fact specific so we have decided to post a short summary of the case for those who want to look at the facts, issues, and holding of the court. If you want a copy of the full case, let me know and I can send it to you.

Continue reading "Florida Asset Protection : LLC issues: Olmstead v. Federal Trade Commission" »

In today's society, intellectual property rights are rapidly increasing for those individuals that are business savvy and artistically or scientifically talented. Intellectual property rights (aka intangible assets) include patents, copyrights, trademarks, and publicity rights. In most instances, intangible assets are obtained as a direct result of someone's job, profession, or trade. With the vast expansion of the Internet, many new intangible assets have been acquired in the last 10 - 15 years. Therefore, the issues involved with these assets are continually evolving and the governing law is struggling to keep up.

The rules governing these intangible assets and the way they are treated when passed through an estate is anything but clear. There are a few key issues that should be addressed when intellectual property is incorporated into an estate. First, valuing the asset always poses a challenge, especially when the formula involves reducing the future earnings to present value. How to address current and future income from the asset is another key issue. Next, some intangible assets have a specific life for which the owner has exclusive rights. According to federal law, copyrights last for the life of the author plus 70 years. On the other hand, patent rights are divided into two categories with design patents receiving 14 years and utility patents receiving 20 years.

Furthermore, intellectual property creates a unique concern with the return of the Federal Estate Tax in 2011 and the looming effect on everyone with a slightly more than modest estate. For example, the executor of a best-selling author's estate may be forced to sell the future publication rights of a book in order to cover estate taxes. The author may be uncomfortable with the thought that his unfinished work could be published once he is gone. Enhancing your estate with a life insurance trust can guard against these estate tax concerns.

Many complicated matters of estate planning revolve around intangible assets. To address the concerns herein, contact a Florida Estate Planning Lawyer today to make sure the distribution of your assets is done according to your final wishes and determine if a Digital Asset Protection Trust is something you should be considering.

A garnishment is a way of collecting money from a defendant by ordering a third party (usually an employer) to pay money, otherwise owed to the defendant, directly to the plaintiff. Florida is one of the few states in the country to allow an exemption from wage garnishment. In Florida, the wages of the “head of family,” meaning the person who provides greater than 50% support for a child or other dependent, may be exempt from garnishment altogether. However, the wages are subject to a waiver and a cap on the earnings that can be exempted.

Florida statutory law provides the exemption from wage garnishment to the head of family’s disposable earnings if they are less than or equal to $750 a week. Disposable earnings are the earnings of any head of family remaining after subtracting the amount the government withholds from those earnings. In addition, individuals that make over $750 a week also qualify to receive the exemption unless they have agreed to a waiver in writing. The agreement to waive the protection provided must:
1. Be written in the same language as the contract or agreement to which the waiver relates;
2. Be contained in a separate document attached to the contract or agreement; and
3. Be in substantially the following form in at least 14-point type.

It is important to know your rights when creditors are attempting to garnish your hard earned wages. Florida provides this protection so that people who have fallen on hard times may get back on their feet again before having to deal with creditors. If your wages have been garnished and you believe you fall under the exemption contact a Jacksonville Lawyer today.

Digital Asset Protection Trust can help preserve your pictures and other website information after you die or if you become incapacitated.

Most picture sharing websites promote the freedom to assign ones property rights to another. While all of these websites prohibit reselling the account to another, Flickr was the only picture sharing website that prohibited the assignment of rights in their terms and conditions of use. This may be due to their affiliation with Yahoo! which has one standard user agreement for many of the websites they own.

Part of the appeal of picture sharing sites is that they allow many family members and friends to view your pictures. Although it may not be illegal to assign your rights to the pictures, they may be deleted automatically if your account is deactivated due to inactivity. Therefore, a Digital Asset Trust should be created to protect your Digital Assets from being destroyed when you pass away.

We have started reviewing digital assets for whether they are assignable and when they will be deactivated.

There are services that purport to pass on login information to who you designate after you die. Remember that such a transfer does not appear to be legal and may create liability to the beneficiaries of your estate if damage is done to them or information is obtained by and used by others. The best way to address this issue is to create a Digital Asset Trust and have the trust own the assets, that way there is no transfer upon your death only a change in management- the trustee.

Below is our first summary of some of the major services. A Digital Asset Trust can prevent the loss of valuable Digital Assets upon your death.

In the case of Robertson v. Deeb 16 So.3d 936 (FL. Dist. Ct. App. 2 DCA 2009) the court held that an inherited IRA does not have the same creditor protection that an individual's IRA by concluding that F.S. 222.21(2)(a) “does not apply to inherited IRAs because the plain language of that section references only the original ‘fund or account’ and the tax consequences of inherited IRAs render them completely separate funds or accounts.”

When a person dies, who owned a property protected by a Florida Homestead we generally expect the property to be free from the claims of creditors.

There are certain situations when this is not true and other types of planning could prevent creditors from making claims against your Florida Homestead.

So when will your property lose homestead protection upon your death:
1) if you are not survived by a spouse or children and devise your property o people not listed in Florida Statute 732.103.
2) If you are not survived by a minor child and have a valid prenuptial agreement or waiver of homestead rights with your spouse and devise the property to someone not named in Florida Statute 732.103.

(Florida Statute 732.103 deals with the spouse, descendants, parents, siblings, grand parents, uncles, aunts, their kindred, and great-grand parents.)

If you want to leave your homestead to someone who is not defined in Florida Statute 732.103 we can help you maintain protection from the claims of creditors and avoid probate. Since there can often be many unexpected and significant expenses associated with end of life, it could be a good idea to plan to protect what could be your single largest asset- your home.

Note that many people incorrectly believe that a Revocable living trust can protect your home from the claims of creditors. While there may be homestead protection for those defined in Florida Statue 732.103, a Florida Revocable Trust in an of itself does not provide asset protection.

To talk about how to protect your assets and home from the claims of creditors, contact a Florida Estate Planning Lawyer.