Articles Posted in Probate

Florida’s 4th District Court of Appeals recently decided the case of what to do with a will that left the murder’s children the victim’s estate. The trial court held the “slayer statute” did not affect the will, and did not find enough evidence of undue influence to invalidate the will, however, the appellate court did not agree.

The husband Ben was murdered in 2009 and the case became famous when his wife Narcy was arrested and convicted of the murder, and the murder of Ben’s mother, shortly after. The court opinion stated she murdered Ben to assure that she and her family would obtain his considerable wealth. Narcy had a daughter by another marriage, and this daughter had two sons. Narcy’s daughter and the two sons were to inherit Ben’s estate if Ben’s mother and Narcy passed away before Ben. Continue reading

When lawyers draft estate-planning documents they are made with current laws in mind. However, estate-planning laws have changed in some key ways over the last few decades. Here are 4 key dates that have changed estate-planning. If your documents created before these dates it may be time to update them.

HIPAA

The first date to look out for is April 14, 2003, which is when the privacy rules under the Health Insurance Portability and Accountability Act first took effect. Although HIPAA was enacted in 1996, its privacy regulations were not enacted until several years later on April 14, 2003.

This act brought about much stricter guidelines regarding the disclosure of a person’s health information to third parties without explicit permission. Now, only a few people are allowed to receive this information, which becomes a much bigger issue if the person becomes incapacitated, such as in Terri Schiavo’s case. Now, a durable power of attorney is needed to make important health care decisions for loved ones. If your will, revocable trust, durable power of attorney or health care power of attorney was executed before this date, your executor, trustee, or agent may not be able to effectively work with your medical care providers or insurers.

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In Florida, a personal representative is required to administer the estate of the deceased.   Usually, this person is named in the estate owner’s will, and is someone the estate owner trusts to transfer his or her assets to friends and loved ones. If the person does not have a will, or does not appoint a representative, the court will appoint one. The question then becomes what if the person is not fit to serve as the personal representative? The Florida Probate Code provides some guidelines on how to remove a personal representative.

First, it’s important to understand the rules of how a court appoints a personal representative. If the deceased died without a will, or died with a valid will but did not name a personal representative or grant anyone the power to appoint a personal representative, then the personal representative is appointed by an order of preference as set forth in Florida Statute § 733.301.

Usually for a person without a will, the court will appoint the spouse to serve as the personal representative. If the spouse is not available, the court will appoint the person selected by a majority in interest of the heirs, or the heirs nearest in degree. If more than one of these rules apply, the court may select the person best qualified to administer.

These are the usual rules for how a personal representative is selected in Florida, however, for various reasons, a beneficiary of the estate may wish to remove the person initially named as the personal representative of the estate.

In Florida, a personal representative may be removed for the following:

  1. The personal representative is incapacitated.
  2. A physical or mental incapacity rendering the personal representative incapable of the discharge of his or her duties.
  3. The personal representative has failed to comply with a court order.
  4. Failure to keep proper records of the sale of property or a failure to produce assets of the estate when required.
  5. Wasting or poor administration of the estate.
  6. A failure to give security or a bond for any person
  7. The personal representative has been convicted of a felony.
  8. Insolvency of a corporate representative.
  9. The possession or acquisition of conflicting or adverse interests against the estate that will or may interfere with the administration of the estate as a whole. (This cause of removal does not apply to the surviving spouse because of the exercise of the right to the elective share, family allowance, or other exceptions as provided in the Florida probate codes.
  10. Revocation of the decedent’s will that authorized the appointment of the personal representative or designated the appointment.
  11. The personal representative has been removed of his domicile in Florida, if domicile was a requirement of initial appointment.
  12. The personal representative would not now be entitled to appointment.

Florida Statute 733.504 states that if any of the foregoing causes are present, a person may seek removal of the personal representative.

To start the process of removing a personal representative, the person seeking removal must file a petition for removal in a court that has jurisdiction of the estate’s administration. If you are the beneficiary of an estate and wish to have a personal representative removed, contact the Law Office of David Goldman PLLC to represent your interests in ensuring the estate is properly administered.

In Florida, the Florida Probate Code and the Florida Trust code govern the administration of estates and trusts.   These codes establish the rules and procedures for all probate matters such as the administration of a will. The Florida Legislature has recently amended the Florida Probate Codes.

Attorneys Fees and Costs

Both the probate and trust codes provide that an attorney who has provided services to an estate or trust may be awarded reasonable compensation. The latest update to the codes has been in response to inconsistent application of these laws which used to require there be a finding of “bad faith, wrongdoing, or frivolousness” in order to award a party attorney’s fees and costs. The codes have now eliminated this vague language and have enumerated a list of factors that a court should use when deciding to award attorneys’ fees in a case.   These considerations allow a court to even direct, in its discretion, from which part of the estate or trust attorney’s fees and costs may be paid.

Courts will now award attorney’s fees and costs whenever the court finds it just and proper, and will consider:

  • What impact an assessment will have on the value of each beneficiary’s portion of the estate.
  • The total amount of costs and fees taken from someone’s part of the estate.
  • The extent to which a beneficiary whose part of the estate is to be assessed actively participated in the proceeding.
  • The potential harm to a person’s estate
  • The merits of the claims, defenses, or objections that were asserted by someone who’s part of the estate is to be assessed
  • Whether the person assessed was the prevailing party
  • Whether the person to be assessed unjustly caused an increase in the costs and attorney fees that were incurred by the attorney.
  • Any other relevant facts or circumstances.

New laws for Attorneys acting as Fiduciaries

An attorney serving as a personal representative who provides legal services, administering an estate is permitted to receive compensation for both the personal representative services and for his or her legal services. An attorney can only receive compensation for serving as a fiduciary if the attorney discloses the fee in writing before the will or trust is signed. Failure to obtain written consent will not affect the validity of the will, but it will prohibit the fiduciary from obtaining compensation.

Personal Representatives liable for attorney’s fees if not qualified

A personal representative is a person or entity assigned by a court to administer an estate. In Florida, a personal representative is required to be 18 years old, a resident of Florida, and has full mental capacity. The latest amendment will require personal representatives who are not qualified at the time of appointment to resign. Further, the personal representative may be personally liable for attorney’s fees and costs incurred in the removal proceedings. This will depend on if the representative should have known of facts that would have required him or her to file and serve notice of disqualification.

For more information on the latest changes to Florida’s Probate and Trust codes, see the latest Senate analysis from 2015

In Florida, the assets of an estate can be transferred in three different ways upon the death of the estate owner. Some assets are transferred freely without a court’s approval by contractual terms. A court will also provide limited administration for an estate worth under $75,000. Finally, there is a formal administration for large estates without a valid will. A lengthy probate is not always necessary if the owner of the estate has a will that dictates how a person’s assets are to be distrusted upon his or her death.

Assets that Avoid Probate

There are some types of property that can be transferred to a new owner without a probate court’s approval. One of the most common types of non-probate property is property that is owned by multiple people in joint tenancy with rights of survivorship or as tenants by the entireties.  This property is usually owned by married couples such as a car or house.

Assets held in a trust may also avoid the probate process. The other type of asset that can bypass the probate process is an asset for which the person has designated a beneficiary. A good example of this is a payable on death bank account or life insurance proceeds.

Summary Administration

When a person dies with very few assets, the executor of the estate may use a summary administration. A summary administration is a much quicker process than the formal administration. A summary administration can be used in Florida if: (1) the death occurred more than 2 years ago, or; (2) the value of the probate estate, not including the non-probate assets, is not more than $75,000.00.

To start a summary administration,  the personal representative will file a petition for summary administration.  The petition must be formally served to the beneficiaries, if they did not sign or consent in writing with the petition, If there is no executor, and the court determines that the estate qualifies for summary administration, the court will simply issue an order to release the property to the beneficiaries.

Formal Administration

If the estate does not qualify for a summary administration, formal probate may be necessary. The probate proceeding will usually take place in the county where the deceased person was living at the time of his death. The law in Florida requires anyone who has possession of a will to file it with the local circuit court within 10 days of receiving notice of the death.

The court will then issue a Letters of Administration, which gives the executor the authority to settle the estate. If a will exists, it must be filed with the court and proven valid. Most likely the will be deemed “self-proving.” Under Florida law, a will is self-proving, if the witnesses sign the will in front of a notary public.

The executor will be responsible for gathering assets, paying debts and taxes, and distributing the assets to the beneficiaries. After the estate has been properly distributed, the executor files the receipts of his distribution with the court, and asks the estate to be closed. The court will then issue an order closing the estate and the executor will be relieved of his duties.

For more information on an estate is probated and how a will can prevent a lengthy probate process, contact the Law Office of David Goldman PLLC today at 904-685-1200.

Most people assume when they receive an inheritance, either through a will or a trust, that they must accept it. This is actually not the case as a beneficiary is also allowed to disclaim, or not to accept, the inheritance. Refusing an inheritance may seem like an alien concept, but can actually be the best course of action for many beneficiaries in some situations.

There are many reasons to disclaim an inheritance, with the most common reason being to avoid costly taxes. A common example of this might happen when parents leave money to affluent adult children. In this case, the children could disclaim the inheritance in order for the grandchildren to receive the inheritance instead. The money would then be taxed at the grandchildren’s tax rate rather the adult’s rate, which could save a large portion of the inheritance from being taxed. In addition, if the disclaimed assets would not be subject to the estate taxes of the parent.

Letting the inheritance pass to the next beneficiary through a disclaimer can be a much more efficient process compared to the beneficiary accepting the gift and passing the gift to the next beneficiary herself.   This is especially true if the gift is real property as is does not require the first beneficiary to go through the re-titling process. Someone with a large estate can also use a disclaimer to save on gift taxes, which will be incurred if the beneficiary takes the inheritance and passes it to another person.

A disclaimer can also be used for personal reasons, such as when a beneficiary knows another beneficiary needs the money more than she does. A good example of this occurs when a parent leaves her estate to two children, and names each child the alternative beneficiary.   In this scenario lets assume one child is a doctor and the other is a school teacher who supports a large family. The doctor may disclaim the inheritance so the schoolteacher receives her share of the inheritance because she knows the schoolteacher needs the money more.

In some cases there are restrictions on funds or assets that make them much more valuable to the children and a disclaimer can be used to remove the restrictions.

A beneficiary may wish to disclaim an inheritance if she is facing bankruptcy. In Florida, the bankruptcy law is complicated and may not allow a beneficiary to become a disclaimant.   We recommend consulting with a bankruptcy attorney before disclaiming an inheritance in order to avoid any fraudulent transfers of assets.

Beneficiaries often disclaim property that has become undesirable. A property might become undesirable for many reasons such as when extensive repairs are needed, or the property has incurred large debts.   It might often cost the beneficiary more to use or sell the property, and in taxes, than it would be worth. A disclaimer would allow the property to go to another beneficiary or back to the settlor’s estate.

All disclaimers should be done according to the Internal Revenue Code § 2518 to be valid, and should be prepared by an experienced estate-planning attorney. For more information, contact The Law Office of David Goldman at 904- 685-1200.

A common estate-planning problem arises when parents with young children die or become incapacitated. Usually when one parent dies, the second parent assumes custody, but if the second parent is also not available the issue is who has the right to and who will raise the minor children.

The best solution to avoid this issue is to plan ahead by naming a guardian through a will. A guardian should be someone who is willing to raise the minor children in the event something happens to the parents. To qualify as a guardian in Florida, the person must be at least 18 years old and of sound mind.

In the will, a personal guardian should be named for each of the parent’s children. It is also a good idea to name an alternative guardian in the event the first guardian is unable to serve. Besides the age requirement, a guardian must be a Florida resident unless a close blood relative or spouse of one. A testator, or one who executes a will, may also name co-guardians if they prefer that two people care for the child. This could allow another couple to raise the children, and would give each guardian the ability to make important decisions for the child.

The parents can select one guardian to raise the child, and another to take care of their property.

Selecting a guardian is not a process that should be taken lightly and there are many factors we urge clients to consider before naming a guardian in the will. The most important factor is whether the prospective guardian has a genuine desire to care for the children. A parent should have an honest discussion with the guardian to determine if this person is fully prepared to take on this big responsibility.

Even if the guardian is 100 percent on board with the idea, we urge clients to weigh other factors as well, such as if the prospective guardian is physically capable of raising the children. A parent might also want to consider how much time the guardian has to be a parent, and whether the guardian would be able to afford raising the children.   The latter factor may also depend on if the parent can leave the guardian any assets to help. A parent might also wish to factor whether the guardian already has children, and if their children would need to move out of state.

The majority of the time, parents will wish for their children to stay together with one guardian. However, it is possible for different guardians to be appointed for different children. This might be a good idea if children have become attached to different adults within the extended family. For instance, the older child may like spending the majority of her time with the grandmother, while the other child may prefer an uncle. This situation arises most commonly when a parent has children from different marriages.

If one parent dies, the default rule in most jurisdictions is that the other parent will retain custody of the child.   This will happen unless the other parent has legally abandoned the child or the parent is deemed unfit by a judge. It is often difficult to prove a parent is unfit, however, courts may rule a parent to be unfit if they have a serious problem such as habitual drug or alcohol abuse, a mental illness, or a history of child abuse.

For more information on how to name a guardian through a will, contact Florida estate-planning attorney David Goldman at 904-685-1200.

A will is an important tool in the estate planning process that allows a testator, a person who creates a will, to distribute the assets of an estate in the manner is deemed most appropriate. If no will is present, a testator’s estate is executed by the rules of intestate succession and assets are distrusted to the testator’s predetermined beneficiaries at a certain percentage.

To create a valid will, Florida requires the testator to posses the intent to create a will. To make a will, Florida requires the testator to be of sound mind and at least 18 years old. Additionally, a court requires the testator to understand the extent of her property, and to know the nature and scope of the act of executing a will. The testator must also be able to sign the will with this intent.

Courts do not allow a will to be signed by a power of attorney, guardian, or conservator of the testator.

Often people do not think someone is competent, but they may still be able to execute a will. There is a difference between a court determining someone to be incompetent and a doctor saying it.

In Florida, case law has shown that even if a testator is deemed incapacitated, it can still execute a Will without a guardian. Generally, an incapacitated person does not have the testamentary capability to execute a will.   It must be proved that the testator returned to a state of testamentary capacity by demonstrating that the will was executed during a lucid moment. A “lucid moment” is a period of time during which the testator returned to a state of comprehension and possessed actual testamentary capacity.

If a will was executed while determined to be incapacitated by a court, the burden of proof lies with the proponent of the will, which means those who wish for the will to be executed must present some evidence that the testator was lucid and possessed the proper intent to execute the will. In Am. Red Cross v. Estate of Haynsworth, the proponents of the will provided two expert witnesses that stated they believed the testator to be lucid when the will was executed. However, only one of the witnesses had examined Mr. Haynsworth and the other had not examined him near the time he signed the will. The court did not buy the proponent’s argument because neither of the expert witnesses, or lay testimony, offered any evidence that Haynsworth was lucid near the time the will was executed.

Therefore, the proponents of a will should have the incapacitated testator examined by an expert or the will could be deemed invalid by a court. The court in Haysworth did not further define how near the examination by the expert should take place in regards to when the will is executed. The best course of action would be to have the testator examined by a physician and psychiatrist on the same date the will is executed, and to then seek a judicial determination of competence by the court.

For more information on how to execute a will, or the effects of an incapacitation in estate planning, contact The Law Office of David M. Goldman PLLC at 904-685-1200.

The estate executor or personal representative is one of the most important roles in managing a loved one’s estate after death.   Serving as an executor comes with many responsibilities, but knowing what to expect will make the transition into this important role much easier. The following checklist can be helpful in organizing your efforts.

The first step an executor should take is to look for records and important documents that relate to the deceased’s estate.

The common places to look for records

  • Personal filing cabinets: Many people keep physical copies of financial records in a home filing cabinet, safe, or in other types of physical storage. Financial records might also be kept near areas where bills are paid in the home.
  • Electronic storage: Search through the deceased’s home computer, laptops, and other electronic devices for folder names that might relate to the estate. A good place to look on a computer include the “my documents” and “downloads” folders on PC or Mac.   Important files are often times kept in storage devices such as an external hard drive or USB thumb drive.
  • Mail: Look for correspondence from banks and other investment companies. These institutions will periodically send financial statements or even checks.

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If you live in Florida and own property in another state an ancillary administration will be necessary upon the death of the owner(s) of that property. This special probate administration will be in addition to the administration you have where you lived. This is required because real estate or real property is treated differently than personal property.

There are several ways to avoid the additional administration:

  1. The real estate could be owned in a business entity. This converts the ownership from one of the real estate to one of a personal property interest in the stock or membership of the business entity.
  2. The real estate could be owned in a trust. Because the trust survives you, the trust will distribute the property according to the terms of the trust. The trust can also be used for other property and may even enable you to avoid the probate of your entire estate.
  3. The real estate could be retitled using a ladybird or enhanced life estate deed. This special type of deed, available in some states, is very similar to a deed with a beneficiary designation.

Florida’s statutory probate fees apply for an ancillary administration like other forms of probate in Florida. The legal fees start at $1500 and are typically 3% or less for the first million dollars of value. If your property is located in another state, the fees may not be as reasonable as they are in Florida.

We would be happy to discuss your specific situation and help you determine if a business entity, trust, or enhanced life estate deed could benefit your family and help to avoid the costs and delays invovled with probate. Note: some methods of avoiding probate can protect assets from creditors of your and your estate.

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