Florida Estate Planning Lawyer Blog

Probate can have the reputation of being a nightmare, and many hate the idea of going through this process. If the idea of transferring your assets through probate daunts you, then you will be happy to know that living trusts can avoid probate. The probate process is usually more expensive and time consuming than having a living trust set up to transfer assets. Moreover, a living trust has many more advantages than skipping probate. An estate-planning attorney can discuss with you the specific advantages that a living trust will bring to your estate plan and can assist you with setting up one to effectively address your needs and the needs of your beneficiaries. Meanwhile, here are 6 general benefits of using a living trust in your estate plan.

BENEFIT #1: A living trust can protect the assets in the trust for certain beneficiaries.
Sometimes, the intended beneficiaries are not capable to handle their full inheritance. For example, many states do not allow minors to own property. And even if a child was old enough to receive property legally, a full inheritance can detriment the child by tempting him to quit school or start an early retirement. Moreover, there are those beneficiaries who will spend all their inheritance at their first opportunity. A living trust can prevent any of these scenarios by allowing you to appoint a trustee to keep your assets for the benefit of your beneficiaries. The trustee would invest the assets in your trust for your beneficiaries' benefit until they are capable of handling their inheritance.

BENEFIT #2: A living trust can reduce and even eliminate estate taxes.
Even though there are no provisions in the federal tax code that exempt living trusts from estate taxes, living trusts are often used by people and families to take advantage of certain deductions and credits that are allowed under tax laws.

BENEFIT #3: A living trust can help manage your assets upon incapacity.
If you become incapacitated without having done some prior estate planning, then your loved ones may have to file an application with the probate court to have a guardian appointed to manage your property. This can be a wrenching experience because your assets and affairs will have to be prepared before total strangers. A living trust allows a successor trustee to take over the management of your assets if you ever become incapacitated.

BENEFIT #4: A living trust can avoid probate.
The assets in your living trust will not go through probate when you die. However, your outstanding debts and taxes will have to be paid. The reality is that avoiding probate might not be a viable option for some individuals. Discuss the factors of your case with an estate-planning attorney to find out whether or not skipping probate is a viable option in your case.

BENEFIT #5: A living trust can avoid a Will contest.
A Will is more likely to be contested than a living trust. This is so because a Will goes into effect when the person dies, whereas a living trust goes into effect as soon as the trust instrument is signed and usually lasts sometime after the grantor's death. To challenge a Will, an interested party needs only to show that the testator was either incompetent or under undue influence when he or she signed the Will. To challenge a living trust, on the other hand, an interested party may have to show that the grantor was incompetent or under undue influence when the trust was signed, when each asset was transferred to the trust, when each investment decision was made, and when each distribution was made to the owner or to anyone else. This is much harder to do than challenging a Will.

BENEFIT #6: A living trust can offer you privacy.
Probate is a public process. Therefore, theoretically, anyone can go into the probate court and look at a specific decedent's estate file. Unscrupulous sales persons often go through estate files to locate grieving heirs to prey on. A living trust can prevent this because it is private, does not get filed with the probate court, and no one gets to look at it unless the grantor or trustee allows it.

Contact an estate-planning attorney to assist you with setting up a living trust today. For an estate-planning attorney in Florida, call the Apple Law Firm at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

Over the last year I worked with an intern in our office of a Law Review article for Texas Tech University. This article describes problems with current estate planning and takes the premise that most estate planners have become lazy because of advancements in technology. That is, most only ask their clients about issues that their software is capable of addressing. We identify 6 primary areas that are not addressed in most estate plans:

1. Firearms;
2. Digital Assets;
3. Asset Protection;
4. Life Planning;
5. Controlling from the Grave; and
6. Pets

The citation for the article is
David Goldman & Charles Jamison, The Future of Estate Planning: The Multigenerational Life Plan, 5 Est. Plan. & Community Prop. L. J. 1 (2012).

Continue reading "The Future of Estate Planning: The Multigenerational Life Plan" »

A Durable Power of Attorney (DPA) allows you, the "principal", to designate someone, the "agent", to act on your behalf. Depending on the DPA, your agent will have authority to oversee your financial affairs or your medical treatment. Having a DPA is a good idea, but only if it is done properly. Otherwise, a DPA will probably not serve its intended purpose and it might create additional problems. To avoid this, contact an estate-planning attorney to assist you with this issue. Meanwhile, this blog discusses three important reasons to hire an estate-planning attorney to draft your DPA.

1. A DPA is effective right after it is executed.
Before October 2011, a DPA could remain "dormant" after it was executed. This type of DPA is known as "springing DPA" and is not effective until the occurrence of the event specified in the document, like the principal's incapacity. However, pursuant to a revision to Florida Statutes section 709.2108, a DPA is ineffective if it provides that it is to become effective at a future date or upon the occurrence of a future event or contingency. Therefore, springing DPAs are no longer recognized by Florida and a DPA is effective the moment that is executed. So if you want a DPA to protect your financial affairs in the event that you become incapacitated, your agent will have authority to oversee your finances as soon as the DPA is created. This can be a problem. Even if your agent is a person that you completely trust, like your spouse, the fact that he or she has authority over your finances can be against your interests. An estate-planning attorney from the Apple Law firm conveniently addresses this issue by offering an escrow service in which you chose the attorney as your agent and instruct him or her what to do in the event that the DPA is used. Meanwhile, the DPA will be kept in a secure place and will not be used unless you instruct the attorney to do so, a court mandates the attorney to do so, or two Affidavits from two different Doctors state that you are incapable of deciding for yourself. This way you can be better assured that your agent will not abuse his or her power over your affairs.

2. A DPA is one of the most complicated estate-planning documents.
DPAs involve a series of complex issues that make it more likely to make a mistake in a DPA than in any other estate-planning document. For example, a DPA might not survive the principal's incapacity or might not be effective if it does not have the appropriate language. An estate-planning attorney knows what language to include in your DPA to protect it from claims against its validity and to help it addresses the issues that need to be addressed in your circumstances.

3. If you ever become incapacitated, you need more than a DPA to address all of your health care needs.
Your agent might need more than a DPA to effectively oversee your medical treatment if you ever become incapacitated. For example, to have access to your medical records, your agent will need a HIPAA release. Also, a living will, although not necessary, can direct your agent to refuse for you medical treatment that will only prolong your suffering. An estate-planning attorney can assist you with gathering all the additional documents needed to create an effective health care directive package to prepare for possible future incapacity.

A Florida Will is one of the most basic estate-planning documents. A Will allows the grantor to devise his or her property with very limited encumbrances; however, there are issues that are better addressed with other estate-planning documents - like a Trust. If you are debating whether to use a Trust or a Will, then this blog will help you. However, it is wise to seek assistance from an estate-planning attorney before making a decision.

What is a Will?
A Will is a written instrument, signed by the decedent and at least two witnesses in each other presence, that fulfills the requirements of Florida law. A Will names the beneficiaries for the testator's probate assets. The testator can also designate guardians for minor children and a personal representative to administer the estate. If a Will was validly executed in another state, Florida courts will recognize the document as a Will except in the case of a holographic Will. Holographic Wills are Wills written entirely in the testator's own handwriting and in most states witness signatures are not required. However, Florida law requires that holographic Wills be witnessed and signed in the same manner as any other Florida Will.

What is a Trust?
A Trust is a relationship created at the direction of an individual, in which one or more persons hold the individual's property subject to certain duties to use and protect it for the benefit of others. The creators of a Trust may control the distribution of their property during their lives or after their deaths through the use of the instrument. There are many types of Trusts and many purposes for their creation. A Trust may be created for the financial benefit of the person creating the Trust, a surviving spouse or minor children, or for a charitable purpose.

TRUST VS WILL
Some common reasons to use a Trust over a Will include:

• A. Are you seeking to avoid probate?
  You must first open probate to carry out the instructions in a Will. A Trust, however, can provide a way to bypass probate because the Trust owns the property the day it is transferred to it. Therefore, the dead of the settlor does not impact ownership in the property.
• B. Are you seeking to plan for mental disability or special needs?
  If you have special needs or dependents with special needs, a Trust can be customized to meet these needs. A Will, on the other hand, allows you to transfer property but does not allow you to exercise substantial control over your heirs' use of property.
• C. Is privacy one of your main goals?
  If a Will is probated, then all records of the proceeding are publicly available. Therefore, a Will is probably not a viable option if your primary goal is privacy.
• D. Do you have a blended family?
  If you have children that are not children of your spouse, then a Will might not be the best option to leave them your property. A Trust is more flexible than a Will and can be a better option for blended families.
• E. Do you own real property in more than one state?
  If you leave property in a Will located in another state, then it might be necessary to hire an attorney in the other state to have the property transferred. A Trust, however, can provide you the option to pass property located in another state without the need of incurring the extra expense of hiring the out-of-state attorney.
• F. Are you looking to protect assets from creditors?
  Some trusts can protect assets from your creditors as well as make the assets exempt form the claims of medicaid.

The choice between a Trust and a Will might not be as straightforward as it seems. Minuscule details in your case might easily pass unperceived but still have a tremendous impact on your decision. Your best option to make an informed decision is to contact an estate-planning attorney. For an estate-planning attorney in Florida, call the Apple Law Firm at (904) 685 - 1200 or click the "Contact Us" tab at the top of this page.

Every trust needs at least one trustee to administer the trust and to carry on its terms. If a person designated as a trustee ceases to act as one, then a vacancy in the trust occurs and it might need to be filled. Succession of trustees is perhaps one of the most common occurrences in the administration of a trust. A succession of trustee can be done by the terms of the trust, by the beneficiaries, or by appointment of the court. The overriding concept is that if one trustee ceases to act for any reason, the result depends upon the circumstances of each case. This is why it is wise to consult an estate-planning attorney to analyze all the factors affecting your case and assist you with this issue.

1. When does a vacancy occur?
A vacancy in a trusteeship occurs in the following circumstances:
· A person designated as trustee declines the trusteeship.
· A person designated as trustee cannot be identified or does not exists.
· A trustee resigns.
· A trustee is disqualified or removed.
· A trustee dies.
· A trustee is adjudicated to be incapacitated.

2. When does a vacancy need to be filled?
A vacancy in a trusteeship must be filled if the trust has no remaining trustee. If one or more co-trustees remain in office, however, then a vacancy in a trusteeship does not need to be filled.

3. Priorities in filling a vacancy in a trusteeship of a non-charitable trust.
A vacancy in a trusteeship of a non-charitable trust that is required to be filled must be filled in the following order of priority:
· By a person named or designated pursuant to the terms of the trust to act as successor trustee.
· By a person appointed by unanimous agreement of the qualified beneficiaries.
· By a person appointed by the court.

4. Priorities in filling a vacancy in a trusteeship of a charitable trust.
A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:
· By a person named or designated pursuant to the terms of the trust to act as successor trustee.
· By a person selected by unanimous agreement of the charitable organizations expressly designated to receive distributions under the terms of the trust.
· By a person appointed by the court.

5. Appointment of an additional trustee or special fiduciary by the court.
The court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust. This is so whether or not a vacancy in a trusteeship exists, or whether or not a vacancy is required to be filled.

The Apple Law Firm has experienced estate-planning attorneys that can apply the law to your particular circumstances to effectively assist you in a succession of trustee. Remember that the results in a succession of trustee depend upon the circumstances of each case. Moreover, the answer might not be as straightforward as it appears. For example, even if the terms of the trust designate a person to act as successor trustee, those terms might be invalid or the designated person might not qualify as a trustee. To contact the Apple Law Firm, dial (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

Updating your estate plan is as important as having one. Many find it easy to procrastinate about updating their estate plan because they do not want to spend the money on a Florida estate-planning attorney. However, a lot of money can be lost through missed estate planning opportunities and family legal battles over out of date estate planning documents. Therefore, updating your estate plan can actually save money in the long run. Many Florida estate-planning lawyers, including the Apple Law Firm, will actually review your current estate plan free of charge. When updating your estate plan, consider the following points.

• Consider whether you need a trust: A trust can be very helpful to achieve your goals, even if you do not have a lot of assets. In numerous situations, a trust or series of trusts in conjunction with other documents can be the best option for even those with modest means. Trusts are often used for the following reasons
  • Protect your assets from creditors
  • Provide for the car of your family and yourself financially in case you no longer are able to handle your own affairs.
  • Provide for children of a previous marriage in the case of your death.
  • Avoid probate, keep your assets private, and save money for your beneficiaries
  • Protect money for minors, so they cannot spend the money in the trust immediately on thing you may consider unnecessary.
  • Protect assets from a future ex son or daughter-in-law.
• File an estate tax return if you lost your spouse: A surviving spouse has the option of adding any unused tax exclusion of the deceased spouse to her own $5 million exclusion. This option is known as "portability". You may thin that you will never need this additional exclusion, but they laws could change and significantly reduce the amount of portability in the future. Portability is not automatic. To get portability, the executor of the estate of the decedent spouse must file an estate tax return, even if no estate tax is due.
• Consider whether to give away some of your assets now to save taxes: If you have enough money for retirement, it might be in your best interest to transfer some of it now to save some taxes. If you have a lot of assets, it is a good idea to seek an estate planning attorney to discuss the option of using leveraging techniques that can allow you to give away a large part of your assets gift-tax free.
• Update basic estate planning documents: If you have not revised your estate plan in more than five years, then you should have someone look at your current estate plan to make sure it still reflects your intent and is flexible enough to accommodate present uncertainties. Consult an estate planning attorney to discuss whether your current estate plan needs some arrangements.
• Prepare for a time when you may not be able to think for yourself: Notwithstanding your present age or health it is important to prepare for the possibility of becoming physically or mentally incapacitated. To prepare for this possibility, you should select someone to be a durable power of attorney for health care as well as financial decisions.
• Chose a guardian for your children that are minors or have special needs: Even if you are married it is important to select who will take care of your children if you pass away so that a court is not making this decision on behalf of your children. This can be done by appointing a guardian in your will.
• Use beneficiary designations or style accounts to assure you or your spouse has enough money to cover immediate expenses in case one of you suddenly passes away. It is wise to maintain a joint account designated for these types of emergencies because when a spouse dies, the surviving spouse generally does not have immediate access to the decedent spouse's private bank account. These issues can also be dealt with in various types of Trust documents.

An estate planning attorney can review your current estate plan to assure that your intent has not been frustrated with circumstances arising after the creation of your estate plan. New laws or unconsidered circumstances can easily frustrate at least part of your estate plan's purpose. For an estate planning attorney in Florida, call the Apple Law Firm at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

Using a Durable Power of Attorney in Florida
When you have been appointed as an agent by a person to act as an attorney-in-fact for that person, you must keep three important ideas in mind.

Agent Authority
Because you are acting as an agent, you are obligated to either act in accordance with specific instructions given to you by the principal (the person who appointed you) and/or in that person's best interest. If you are making independent decisions on behalf of your principal, you must think carefully about the situation and be certain you can justify your decision as being in the best interest of the principal. It is important to understand what powers you have been granted and that your authority ends when the principal dies.

Disclosure
You must keep in mind that you are acting for another person, not for yourself. It is very important that you disclose the agency relationship when you are signing documents on behalf of the principal. This means you do not sign documents or conduct business in your own name, but rather in the name of your principal. If you sign documents in your own name, you may become liable for the debt or liability arising out of that signature.
The proper way to disclose the agency relationship and to sign a document in the principal's name using a Power of Attorney is as follows: Principal's name By Agent's Name as Attorney-in-fact

Records
A person acting on behalf of another with a Power of Attorney should always keep good records of all actions and transactions performed on behalf of the principal with the Power of Attorney. It is possible that the principal, or a guardian, trustee, or executor on behalf of the principal, may call upon the agent to account for his actions on behalf of the principal. Good records are essential to protecting the principal's interest and to protecting the agent against accusations of acting improperly.

Conclusion
In summation: (1) keep in mind you are acting on behalf of another person's best interest; (2) disclose the agency relationship in all signatures on behalf of the principal; and (3) keep complete records so there can be no question about what you did as attorney-in-fact or why.

The management of a revocable living trust is intended to be a simple, private, inexpensive matter handled by the Settlor and those people the Settlor chooses, without court intervention. It is always a good idea to seek professional advice when taking over the management of another persons trust. Generally the roles, responsibilities, and duties can be explained quickly and stop many problems before then create harm.

The following are general guidelines that you should supplement with the specifics of the trust you will be managing; these guidelines are not intended to be specific advice for any particular situation. These guidelines apply to successor trustees who find themselves in charge of a trust.

There are three situations in which you may have assumed the title of Trustee: 1) The Settlor has been determined to be incapacitated as defined in the Trust; 2) The Settlor has died; or 3) The Settlor has resigned as the Trustee and either appointed you as the Successor Trustee or named you the Successor Trustee in the Trust document.


An Overview
Regardless of why or how you came to be trustee, all successor trustees should keep a few general ideas in mind.

1. You are handling someone else's property, not your own. When you act as a Trustee you should follow the rules and laws that apply to the trust. These rules and laws come from two sources. The first source is the trust document. In that document you will find many paragraphs that describe what you are allowed to do, what you are required to do, and what authority you have to exercise your own discretion in making decisions. The second source is the state and federal laws that apply to the trust.

   A successor trustee should immediately familiarize himself or herself with the trust document, and any amendments to the trust, to be certain that the successor trustee knows what is expected and what is required by way of management, distributions, reporting, accounting, and any other specific duties that the trust might place on the trustee.

2. You will be required to account for and explain your decisions and activities in the management of the trust. You will be required to provide regular accountings to the beneficiaries of the trust, and may be required to make certain reports to the tax authorities. Detailed records will make that reporting a lot easier. Your records might include detailed checking ledgers much like you would keep for your own checkbook. The records should show the check number, date, amount paid or received, whom the payment was from or to, and the purpose of the payment. Another good idea is to keep a journal or log book of activities for the trust, in which you would make notes about what you have done and why. You should have a good initial accounting where you list the assets at the time you took over the job.
3. Clear communication between the trustee and the beneficiaries can avoid future misunderstandings.
4. Avoid self-dealing. Do not have your spouse or family provide services for the trust if they will be paid for their work. If you feel that you must be involved people who you have a close relationships with, you should only do so after a full disclosure of the terms and circumstances and obtaining written approval from each of the beneficiaries. A small degree of formality now can avoid a major misunderstanding later when the trustee and the beneficiary may have quite different recollections of an arrangement.

Continue reading "General Guidelines for Successor Trustees in Florida" »

Below is a summary of the more common ways that property is transferred in the state of Florida when someone dies.

Somebody just died leaving you an interest in a piece of property. To reclaim your interest in the property you must prove that you own it by documenting the transfer from the estate of the decedent to you. The procedure involved varies depending on the interest held on the property by the decedent, and on many other factors.

Joint Tenancy with Rights of Survivorship
When two people own a property as joint tenants with rights of survivorship, each one of them owns an undivided interest in the property. When one owner dies, his or her title passes automatically to the surviving owner. However, the instrument creating the joint tenancy must explicitly provide for the right of survivorship. If decedent and you owned the property as joint tenants with right of survivorship, then the real property is automatically transferred to you. To reclaim your interest in the property, you just need to file with the clerk of court the decedent's death certificate.

Tenancy by the Entirety
This is a special form of joint ownership available only to married couples. A property held in this manner does not belong to one spouse individually; each spouse owns the property as a whole. Consequently, the property passes automatically to decedent's surviving spouse if it was owned as a tenancy by the entirety.

Tenancy in Common or Single Ownership
Probate is necessary if a person dies owning anything in his or her name individually. Probate is a court-supervised procedure in which the assets of the decedent are identified and gathered to pay decedent's debts and to be distributed among the decedent's heirs or beneficiaries. The following steps illustrate the distribution process of the property through probate:

1. Probate is opened.
2. Court appoints a personal representative (PR).
3. PR can use decedent's estate to pay for the costs involved in the probate procedure.
4. Court determines if the property is homestead (not subject to the claims of creditors) or non-homestead (subject to the claims of creditors)
5. PR notifies and pays decedent's creditors. If the property is non-homestead the property may be available to pay creditors' claims
6. PR distributes decedent's remainder assets to decedent's beneficiaries or heirs.

• If decedent died with a will: You will receive a deed naming you as an owner of the property devised to you under decedent's Will.
• If decedent died without a will: All decedent asset's will be distributed as stipulated in Florida Statutes section 732.102, 732.103, 732.104. You will receive a deed naming you as an owner of the property you are entitled to under Florida law.

7. Record the deed in the real property records of the county where the property is located.

Ancillary administration: It is the administration of a decedent estate in a state other than the one in which he or she lived. Ancillary administration might be needed when the decedent died living property in Florida and a domiciliary probate for his or her estate has been commenced in another state. To start this process, file a petition in the circuit court where the decedent's property is located. You must attach an authenticated copy of each of the following original documents:

• The foreign will.
• The petition for probate.
• The order admitting the will to probate appointing the personal representative.

Keep in mind that authenticated means that each copy must have a court seal from the court where the original document was filed stating that the copy is an authenticated copy of the original.

SEEK ASSISTANCE FROM AN ESTATE PLANNING ATTORNEY
An estate planning attorney can discuss with you the options you have to dispose of your property avoiding probate. Moreover, an estate planning attorney can assist you in the process of transferring the property from the decedent to the person entitled to it. For an estate planning attorney in Florida call the Apple Law Firm at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

We often get questions regarding the creation of Pet Trusts in Florida. Florida Statutes have provided for pet trusts for many years but they do not always make sense. I have attached a document which you can use to help gather information that will be necessary to determine if a Florida Pet trust is right for your family or you should be looking to add separate provisions to your Florida Will or Florida Revocable Trust to deal with taking care of your pets in the case that you are unable to. Which ever way you decide to go, we provide free Pet Trust provisions or instructions with all of our estate plans when they are requested. This means that there are no additional charges for standard instructions or basic Pet Trusts with any estate plan we draft. Obviously if your situation requires a more complex plan there will be charges associated with it, but we love animals and want to make it easy and inexpensive to take care of your pets.

To begin the process download the Florida Pet Trust Document, take a few minutes to complete it and return it to us with your estate planning objectives.

You can transfer ownership of your real estate property through probate, or by signing an instrument known as a deed.1 Using a deed to transfer ownership of your real estate allows you to bypass probate, but there are some risks associated with this alternative. This blog discusses the advantages and disadvantages of using a deed to transfer ownership of your real estate property.
Advantages of Using a Deed to Transfer Ownership

1. A transfer by deed can allow you to reserve the right to use the real estate property transferred for the remainder of your lifetime: There are different types of deeds that can be used to transfer property and each one of them serve a different purpose. Some deeds, like the life estate deed, allow you to transfer ownership of your real estate property while reserving you the right to use the property for the remainder of your lifetime.


2. A transfer by deed can simplify the transfer of your real estate property: A deed transfers ownership of your real estate property automatically and bypasses probate. Therefore, a transfer by deed avoids you the delays and expenses of Florida probate.


3. A transfer by deed can bypasse both your creditors and your beneficiaries' creditors: Property transferred through probate is subject to the claims of your creditors and the creditors of your beneficiaries unless the property transferred qualifies as your homestead.

Disadvantages of Using a Deed to Transfer Ownership

1. A transfer by deed can place your home in jeopardy to other's creditors: The Florida Supreme Court noted in Snyder v. Davis that there are three kinds of homestead that have the following purpose: preserve the family home for its owner and his or her heirs. One kind of homestead protects the home from forced sale by creditors. Sometimes families attempt to transfer their home by adding kids on to the house deed to avoid probate. These families face a problem when one or more of the owners mentioned in the deed do not live in the home. The problem is that the ownership percentage of the person not living in the home is subject to the claims of his or her creditors. The problem is aggravated when no ownership percentage is specified in the deed since Florida assumes that there are equal percentages of ownership to each person named on the deed. If a creditor takes an ownership in the home, then he can force the sale of the whole property. Therefore, adding someone to your house deed to transfer ownership of the property avoiding probate might leave you with nothing to transfer. The same scenario applies to those who try to transfer ownership of their house with a Florida life estate deed.


2. A transfer by deed brings adverse tax consequences: There may be gift taxes or penalties associate with the failure to report the gift if the value is over the yearly gift tax limits.


3. A transfer by deed can cause you to lose stepped up basis: This can cause a much greater income tax upon the sale of the property in the future.


4. A transfer by deed might cause you to pay gift tax: If you do not receive payment for the transfer, then the IRS views the transaction as a gift and requires you to pay a gift tax. However, there are some exclusions to this tax.


5. A transfer by deed can create a disqualifying transfer of assets for Medicaid purposes: This can be for as long as 5 years.

If you are trying to avoid probate in Florida and would like to also have protection for your homestead from creditors, not have adverse tax consequences, not lose stepped up basis, and/or not create a disqualifying transfer of assets for Medicaid purposes, you should contact a Florida Estate Planning Lawyer to discuss how to protect your homestead and the options available that deal with your circumstances and goals. To contact a Florida Estate Planning lawyer call the Apple Law firm at (904) 685 - 1200.

While personal income tax returns and gift tax returns for taxable gifts made during 2011 are due on or before April 17, 2012, estate tax returns for decedents who died during 2011 are not due on April 17, 2012.

If a decedent who died in 2011 is required to file a federal estate tax return or a generation-Skipping Tax Return, it is due on or before nine months after the decedent's date of death.

For example, if the death occurred on April 1, 2011, then IRS Form 706 will be was Due on or before January 1, 2012. If they died after April 1st you still have time to file the returns.

Do I need to file a return? This information will help you to determine if Form 706 is needed for a decedent who died in 2011:

If the Gross estate exceeds $5 million the a Form 706 must be filed for the estate of every U.S. citizen or resident who died in 2011 and whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $5 million. To determine whether a return must be filed, add:

1. The adjusted taxable gifts (under section 2001(b)) made by the decedent after December 31, 1976;


2. The total specific exemption allowed under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) for gifts made by the decedent after September 8, 1976; and


3. The decedent's gross estate valued at the date of death. (See Instructions for Form 706 for additional information.)

Should I Make the portability election. Even if the value of an estate of a decedent who died in 2011 does not exceed $5 million, the surviving spouse will want to consider filing IRS Form 706 in order to take advantage of the election to use the deceased spouse's unused estate tax exemption.

Note: The estate tax exemption has dropped to 1 Million for 2013 so this will apply to many more people unless congress acts to change the estate tax and gift tax exemptions this year

John Buchanan has an article in Central Florida's Agri-Leader which was published on October 24th which discusses the effects of the expiration of the estate tax exemption on farmers.

Many farmers end up loosing farms because of estate taxes and the inability of their families to become liquid enough to pay the estate tax bills. Over the past few years, the estate tax exemption has been high enough that many small farmers have not had to worry about this effect, but that could all change on January 1, 2013.

I was interviewed by John Buchanan about some of the potential solutions that small farmers could use to help insulate against the huge tax changes set to take effect next year.

One solution involves the purchase of life insurance to offset the taxes that will become due. Another solution involves a gifting strategy that takes advantage of the 5 million dollar gift tax exemption that is also set to expire 12/31/2012. There are other strategies, but you should discuss your objective and circumstances with an estate planning lawyer to see which options make sense for you and your family.

Phyllis Korkki with the NY Times wrote an article dealing with some of the problems our aging society has when they have no children or natural caregivers and ways to help deal with it. In the article, she quotes me in dealing with some ways you can use legal documents that can be prepared by an attorney to deal with giving someone legal rights to help you make decisions if and when you need it.

These documents can also help avoid a guardianship and limit the ability for some to hijack your assets and use them up with unnecessary fees.

Follow this link to the NY Time article or contact us to discuss how we can provide documents to help manage these situations for your, your friends, or your family.

In the Florida case of Jervis v. Tucker, 37 Fla. L. Weekly D349 (Fla. 4th DCA 2012)

Bernice J. Meikle executed a revocable trust agreement in 1991, which she subsequently amended by executing a first amendment. Her trust, as amended by the first amendment,
provided that Meikle's power to revoke or amend the trust would be suspended upon her being "adjudicated incapacitated by a court of appropriate jurisdiction." The trust further provided that Meikle's powers could be restored by an order of an appropriate court having jurisdiction over Meikle, or upon the issuance and receipt by the Trustee of a written opinion from two licensed physicians after their examination of Meikle.

Meikle was adjudicated incapacitated in 2000. On December 27, 2001, Meikle executed a second amendment to her trust without obtaining a court order authorizing the amendment or restoring her capacity to amend the trust,and without written opinions from two licensed physicians.

The second amendment attempted to reallocate the distribution of her assets. Meikle died in 2007 and the second amendment to her trust was subsequently challenged by beneficiaries under her first trust amendment. In granting a motion for summary judgment, the trial court ruled that the second amendment was "void and of no legal effect." On appeal, Appellant argued that the record evidence showed that Meikle did not lack testament capacity when she executed the second amendment in 2001. The Fourth District found that the plain meaning of the trust agreement, as amended by the first amendment, required Meikle to either have her capacity restored by the court or through the written opinion of two licensed physicians.

Although the trial court had judicially restored certain of Meikle's rights before her death, it had not restored her rights concerning her property. Moreover, at the trial level, Appellant only offered the opinions of one licensed physician in support of his argument that Meikle had testamentary capacity. Although Appellant also offered the opinion of a licensed nursing home health care administrator, the Fourth District noted this witness, even though possessed of expert experience, was without a physician's license.

Therefore, because the unambiguous provisions of the trust had not been met, the Fourth District affirmed the trial court's ruling that Meikle lacked the requisite testamentary capacity to execute the second amendment to her trust.

It is important to understand and comply with the terms of the trust when making changes. You not only have to comply with the trust but with state laws that may override the terms of the trust. In this case, the Ward did not have their ability to deal with property restored by the court nor did they have two doctors state that she was not incapacitated. Even with two doctors the court order determining incapacity would have seemed to have not restored the power to deal with property including her trust.