May 9, 2013

The Future of Estate Planning: The Multigenerational Life Plan

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" »

May 9, 2013

3 Important Reasons to Use an Estate Planning Attorney to Create a Durable Power of Attorney

Estate Planning.jpgA 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 Law Office of David M. Goldman PLLC 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.

May 7, 2013

6 Quick Questions to Help You Effectively Decide When is a Trust Better than a Will in Florida

Thumbnail image for will and testament.bmpA 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 Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of this page.

May 4, 2013

Taking Advantage of the Liberal Asset Protection Laws in Florida

asset-protection-cash.jpgEach state has different asset protection laws. Florida's asset protection laws are considered one of the most liberal ones. Therefore, it is a good idea to discuss your case with an estate-planning attorney with expertise in asset protection to take advantage of the liberal asset protection laws of Florida. Florida's asset protection laws apply to permanent residents and people in other states with property in Florida. Florida's asset protection laws are based on several legal sources: the Florida Constitution, Florida Legislature, and common law. Courts also establish asset protection through their interpretation of provisions of the constitution, statutes, and common law.

Florida assets protection laws provide many options to protect your assets from creditors. People anticipating substantial civil judgments often move from other states to Florida to become a resident for asset protection purposes. For example, OJ Simpson took advantage of Florida's asset protection by purchasing a large estate in Florida in part to avoid creditors.

4 Key Asset Protection Exemptions for Florida Residents

1. Homestead exemption: Article 10, section 4 of Florida's Constitution provides that the homestead is exempt from forced sale under process of any court. In a nutshell, it is nearly impossible for creditors to force the sale of a homestead. Florida's homestead exemption also protects spouses and children of decedents: a spouse cannot transfer the property by Will if survived by a spouse or minor child.

2. Life insurance and annuities: Florida statutes section 222.14 provides that the cash surrender values of life insurance policies issued upon the lives of citizens or residents of the state and the proceeds of annuity contracts issued to citizens or residents of the state are not subject to attachment, garnishment or legal process in favor of any creditor of the person whose life is so insured or of any creditor of the person who is the beneficiary of such annuity contract (unless the insurance policy or annuity contract was effected for the benefit of such creditor).

3. Qualified plans, IRAs and pension: These are fully exempt if the federal requirements are met. Florida statutes section 222.21 provides that any money or other assets payable to an owner, a participant, or a beneficiary from, or any interest of any owner, participant, or beneficiary in, a fund or account is exempt from all claims of creditors of the owner, beneficiary, or participant if the fund or account is:

  • a. Maintained in accordance with a master plan, volume submitter plan, prototype plan, or any other plan or governing instrument that has been preapproved by the Internal Revenue Service as exempt from taxation.
  • b. Maintained in accordance with a plan or governing instrument that has been determined by the Internal Revenue Service to be exempt from taxation .
  • c. Not maintained in accordance with a plan or governing instrument described in point a or b, if the person claiming exemption under this paragraph proves by a preponderance of the evidence that the fund or account is maintained in accordance with a plan or governing instrument that is in substantial compliance with the applicable requirements for tax exemption or would have been in substantial compliance with the applicable requirements for tax exemption but for the negligent or wrongful conduct of a person or persons other than the person who is claiming the exemption under this section
4. Prepaid tuition and medical savings accounts: Florida's asset protection laws protect assets in qualified tuition programs, medical savings account, Coverdell education saving account, and hurricane savings account (Fla. stat. § 222.22).

For a Florida estate planning attorney with experience in asset protection law, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of this page.

May 3, 2013

What Is Involved in Florida's Probate Process? Some Rules of Probate in Florida that You Should Know

FreeFloridaProbateHandbook-small-thumb.jpgThe grapevine is full of rumors about probate. Some of them are true, but many of them are more than misguided. The fact that each state has a different probate procedure makes the process harder to understand. If you want to get a general grasp about some basic rules of probate in Florida, then this blog is for you. However, you should discuss the facts of your case with an estate-planning attorney before deciding whether or not probate is a viable option for your estate plan or if you are faced with going through this process.

1. Estate Taxes vs. Probate Fees - Estate taxes are paid to the IRS if an estate exceeds a specific dollar limit, which varies each year. For example, in 2012 estate taxes were owed for estates that exceeded $5,120,000. Probate fees are paid to the attorney and executor (a.k.a personal representative) of an estate for any assets that go through probate. Additionally, there are filing fees needed to be paid to the probate court and appraisal fees for estate assets.

2. Compensation for Executor - An executor is entitled to a commission payable from the estate assets without court order as compensation for ordinary services. The commission will be based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during administration. A commission computed on the compensable value of the estate is presumed to be reasonable compensation for an executor in formal administration as follows:

  • a. At the rate of 3% for the first $1 million.
  • b. At the rate of 2.5% for all above $1 million and not exceeding $5 million.
  • c. At the rate of 2% for all above $5 million and not exceeding $10 million.
  • d. At the rate of 1.5% for all above $10 million.
3. Probate Bond - Probate bonds are used to ensure the accuracy and fairness of a probate proceeding. They are a type of security bond taken out by the executor of an estate entering probate and are used to ensure that the value of an estate will not be altered by the executor. A probate bond is typically used in estates that have no Will to direct the distributions of the assets, or when there is reason to believe that decedent was incompetent during the creation of his or her Will. All bonds required will be for the sum that the courts deems sufficient after consideration of the gross value of the estate, the relationship of the executor to the beneficiaries, exempt property and family allowances, the type and nature of the assets in the estate, known creditors, and liens and encumbrances on the assets.

4. Property Passing Outside Probate - Probate is necessary when a person dies owning anything in his or her name individually. However, many kinds of assets pass outside probate, for example:
  • a. Assets with beneficiary designations, like IRAs accounts and life insurance.
  • b. Joint tenancies with rights of survivorship (the right of survivorship must be expressed in the document creating the joint tenancy).
  • c. Property held in trust.
  • d. Property held as tenants by the entirety (for spouses only).
  • e. Automobiles.
For those of you who would like to learn more about probate in Florida we have a Free Florida Probate Handbook available for download

If you are faced with going through probate or are considering whether or not probate is a feasible option for your circumstances, contact an estate-planning attorney before taking any decision to make sure that the process goes smoothly. For an estate-planning attorney in Florida, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

April 19, 2013

There is a Vacancy in My Trust - Appointment of a Successor Trustee in Florida

vacancy.pngEvery 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 Law Office of David M. Goldman PLLC 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 Law Office of David M. Goldman PLLC, dial (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

April 15, 2013

A Checklist to Update Your Florida Estate Plan

checklist.pngUpdating 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 Law Office of David M. Goldman PLLC, 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 Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

April 8, 2013

Probate: Disposition of Personal Property Without Administration in Florida

document.pngThis process lets someone who paid for a decedent's final expenses, from the funeral or from the last illness, to be reimbursed from the assets of the decedent's estate. This process is only available if the decedent did not leave any real estate and the only assets in the estate are either exempt from creditor's claims or do not exceed the total amount of the final expenses. Although this process avoids probate, it might be impractical in some cases. For example, this process can open the assets of decedent's estate to the claims of creditors, can have less favorable tax benefits, and there is a risk of unintentionally disinheriting some children from one spouse but not of both spouses. Therefore, it is important to consult with a Florida probate lawyer to help you consider the variables in your case and make an informed decision.

To apply for this process and request reimbursement, you file a form called "Disposition of Personal Property Without Administration." This form is available from the clerk of the court and on many Florida circuit courts' websites. There's a small filing fee; call ahead or check the court's website to find out the exact cost. The following is a list of the things needed to file for this process and the procedure involved in it.

What You Need

  • Petition of disposition without administration: Three pages and notarized.
  • Certified death certificate.
  • If decedent has a will, then the original will has to be filed with the verified statement unless previously filed.
  • Copy of paid funeral bill.
  • Copy of paperwork showing decedent's assets, i.e. copy of stocks, bank statement, etc.
  • Copy of last sixty days' medical expenses with receipts.
  • Consents of any additional heirs with address and notarized signature, or death certificate, if applicable.
  • Statement regarding creditors.
  • Filing fee (call ahead or check the circuit court's website to find out the exact cost)
  • An Affidavit stating that decedent was never married and did not have children may be required, if applicable.

When Filing the Petition
  1. Print the decedent's name after the words "In Re:"
  2. Print your name, address, and all the required information.
  3. Check the correct box indicating that either there is no will or that you are filing one at this time.
  4. List beneficiaries (heirs) in descending order at item no. 3. If you run out of space, you may use the back of the form, but indicate in the front of the form that you have done so.
  5. When listing estate property in item no. 3, you must provide the mailing address as part of the description. Consult Florida Statutes section 732.402 for the definition of exempt property.
  6. Attach a copy of the paid funeral bill and the last sixty days medical expenses and receipts showing payment. If the asset(s) is needed to pay the bill, the order can reflect that the proceeds go directly to the funeral home.
  7. The forms may be sworn to before the deputy clerk or a notary public. After completing the forms, file all documents with the clerk along with the filing fee. All documents will be forwarded to the judge. A plain copy and a certified copy of the Order to Distribute or Transfer Assets will be provided to you. The certified copy is to be presented by you to the financial institution

CONTACT A FLORIDA PROBATE LAWYER
Disposition of personal property without administration does not apply when the asset consists of the decedent's Income Tax return (see Florida Statutes section 735.302). Moreover, as discussed initially, some circumstances in your case might make disposition without administration impractical for your case. It is wise to contact a probate lawyer for assistance with this matter. For a Florida probate lawyer contact the Law Office of David M. Goldman PLLC at (904) 685-1200 or click the "Contact Us" tab at the beginning of the page.

April 5, 2013

Formal Administration vs. Summary Administration in Florida

chess.pngThere are to main types of probate administration in Florida: summary administration and formal administration. Summary administration can only be used when the total value of decedent's assets subject to probate are $75,000 or less, or when the decedent has been dead for more than two years. Formal administration is used for all other estates or whenever a personal representative is required for other purposes.

SUMMARY ADMINISTRATION
Steps

  1. Preparation of the documents.
  2. Publication of the notice to creditors.
  3. Determination of homestead (if applicable).
  4. Distribution of the funds to creditors and beneficiaries per court order.

Costs and Time Frame: The current court costs are around $400 and publication costs range from $30 to $300, depending on the county and news paper. However, most costs are around $200. The approximate time frame is three to five months - unless extraordinary circumstances occur, like a will contest. Decedent's estate cannot be closed while litigation is pending.
 
Pros
  • Shorter proceeding than formal administration: three to five months compared to four to twelve.
  • Less work and less expensive than formal administration.
  • Less complicated than formal administration: Summary administration involves less hoops and hurdles than formal administration.
Cons
  • A personal representative is not officially appointed: In formal administration, the appointed personal representative is given authority to request all the information he or she needs regarding the decedent's assets. Without this authority, requesting information regarding decedent's assets might be a little more challenging.
  • No letters of administration are provided: if you need letters of administration for any reason, or if the estate will be subject to litigation, you should open a formal administration
  • All assets need to be accounted for before filing.

FORMAL ADMINISTRATION
Steps
  1. Preparation of the documents.
  2. Appointment of personal representative.
  3. Publication of notice to creditors.
  4. Filing of the inventory of decedent's estate.
  5. Determination of homestead (if applicable).
  6. Distribution of the assets to creditors and beneficiaries.
  7. Closing of the estate.

Costs and Time Frame: The current costs are $400 plus publication costs that can range from $30 to $300. Depending on the county and newspaper. However, most costs are around $200. The approximate time frame is four to twelve months unless extraordinary circumstances occur: i.e. litigation. The estate cannot be closed while litigation is pending.

Pros
  • A personal representative is appointed: with authority to secure information about decedent's assets or debts.
  • Letters of administration are provided: banks and financial institutions are more comfortable with letters of administrations than with orders of summary administration.
  • Best choice when there are many known creditors.
  • Best choice when decedent's estate will be subject to litigation.
Cons
  • Longer proceeding than summary administration: four to twelve months compared to three to five months.
  • More expensive than summary administration.
  • More work required than in summary administration.

WHICH SHOULD I CHOOSE?
The answer is it depends. There are important variables to consider when making the choice. Every probate case is different, even if the differences are small. For example, some cases require letters of administration, making summary administration not a viable option. Be sure you are making an informed choice. To make an informed choice, contact a probate lawyer. For an attorney in Florida, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the beginning of the page.

April 3, 2013

How to Use a Florida Durable Power of Attorney

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.

April 2, 2013

General Guidelines for Successor Trustees in Florida

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" »

March 30, 2013

How to Transfer the Decedent's Property in Florida to Your Name

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

housepuzzle.pngSomebody 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 Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

March 29, 2013

How to Obtain Your Devised or Inherited Property from a Florida Resident

Thumbnail image for probate.jpgWhen someone dies, his or her assets will not necessarily be distributed automatically to those entitled to them. If a person dies with a Will that devises his or her assets to you, then probate is necessary to carry out the instructions of the Will. Similarly, probate becomes necessary when a person dies owning anything in his or her name individually. This blog discusses the things that you need to receive your devised or inherited property that is in Florida and the process involved.


INGREDIENTS

  • Decedent's original Will.
  • The Will's self proving affidavit. If it is not available, then an oath from one of the following will be required: a witness to the Will, the nominated personal representative, or any disinterested person who believes the Will is genuine.
  • Probate's filing fee and advertising costs. These fees vary based on the type of proceeding and county of the decedent's residence.

PROCEDURE
NOTE: In Florida most probate cases require hiring an attorney.

  1. The custodian of the Will must deposit the original Will in the office of the clerk of Court within ten days of receiving information that the person is deceased. The custodian should deposit the Will with the Clerk of the Circuit Court in the county where the decedent resided. The custodian must also supply the decedent's date of death or decedent's social security number to the clerk upon deposit of the Will, if this information is available.
  2. There are three basic types of proceedings to administer a decedent's estate and the one used depends on the size of decedent's estate:
    • a. Formal administration: used when there are considerable assets and it is necessary to appoint a personal representative to act on behalf of the estate.
    • b. Summary administration: used when the value of the entire estate does not exceed $75,000 or when the decedent has been dead for more than two years.
    • c. Disposition of personal property without administration: used to request release of the decedent's assets to the person who paid for final expenses such as funeral bills or medical bills that accrued in the last 60 days.
  3. Once Probate is opened and the appropriate proceeding has been selected, the court appoints a personal representative for decedent's estate. The court gives deference to the person nominated as the personal representative in decedent's Will.
  4. The personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent's Will and the Probate Code as expeditiously and efficiently as is consistent with the best interest of the estate.
  5. The personal representative can use decedent's estate to pay for the costs involved in probate and must notify decedent's creditors so that they can file their claims against decedent's estate.
  6. After paying decedent's creditors, the personal representative distributes the remainder of decedent's assets to the beneficiaries entitled to them.
  7. After the administration of decedent's estate has been completed, the personal representative is discharged.

What if There is Not a Will?
If there is not Will, probate might still be necessary to distribute decedent's assets. Probate proceedings are initiated by filing a petition seeking to administer decedent's estate. A filing fee will also be required. Decedent's assets will be distributed according to Florida Statutes section 732.102, 732.103, and 732.104.

Contact a Florida Estate Planning Attorney
Going through the probate process can be a frustrating and daunting scenario. The best thing to do is to hire an estate planning attorney to assist you with this issue. Moreover, an estate planning attorney can help you plan your estate to assure an efficient distributions of your assets. For an estate planning attorney in Florida, contact the Law Office of David M. Goldman PLLC by dialing the number (904) 685 - 1200, or by clicking the "Contact Us" tab at the top of this page.

March 29, 2013

The Guardianship, the Guardian, and the Ward

When a person cannot take care of himself or herself, a court may appoint a guardian to take care of that person and/or that person's affairs. The person appointed a guardian is known as "ward." A guardian has the powers and duties stated in Florida Statutes section 744.361. The Ward retains the rights stated in Florida Statutes section 744.3215.

Types of Guardianship
There are three types of guardianship: guardianship of the person, of the property, and of the person and property. The court may appoint the type of guardianship that it determines is appropriate for the ward's incapacity.

The Guardian's Powers and Duties
The guardian of an incapacitated person may exercise only those rights that have been removed from the ward and delegated to the guardian. The guardian of a minor has to exercise the powers of a plenary guardian. A guardian has the following duties:

  • Duty to file an initial guardianship report.
  • Duty to file a guardianship report annually.
  • Duty to implement a guardianship plan.
  • Duty to consult with other guardian, when more than one guardian has been appointed.

A guardian who is given authority over any property has the following duties:

  • Protect, preserve, invest prudently, and account faithfully for any loss in the property.
  • Perform all other duties required by law.
  • Deliver the property of the ward to the person lawfully entitled to it at the termination of the guardianship.
The Ward's Rights A person who has been determined to be incapacitated retains the following rights:
  • Right to have an annual review of the guardianship report and plan.
  • Right to have continuing review of the need for restriction of rights.
  • Right to be restored to capacity at the earliest possible time.
  • Right to be treated humanely, with dignity and respect, and to be protected against abuse, neglect, and exploitation.
  • Right to have a qualified guardian.
  • Right to remain as independent as possible.
  • Right to be properly educated.
  • Right to receive prudent financial management for his or her property and to be informed how his or her property is being managed, if he or she has lost the right to manage property.
  • Right to receive services and rehabilitation necessary to maximize the quality of life.
  • Right to be free from discrimination because of his or her incapacity.
  • Right to have access to the courts.
  • Right to counsel.
  • Right to receive visitors and communicate with others.
  • Right to notice of all proceeding related to the determination of capacity and guardianship, unless the court finds the incapacitated person lacks ability to comprehend the notice.
  • Right to privacy.
The following rights may be removed from a person by an order determining incapacity, but may NOT be delegated to the guardian:
  • Right to marry: if the right to enter into a contract has been removed, the right to marry is subject to court approval.
  • Right to vote.
  • Right to PERSONALLY apply for government benefits.
  • Right to have a driver's license.
  • Right to travel.
  • Right to seek or retain employment. The following rights may be removed from a person by an order determining incapacity and MAY be delegated to the guardian:
    • Right to contract.
    • Right to sue and defend lawsuits.
    • Right to apply for government benefits.
    • Right to manage property or to make any gift or disposition of property.
    • Right to determine his or her residence.
    • Right to consent to medical and mental health treatment.
    • Right to make decisions about his or her social environment, or other social aspects of his or her life.
    Contact a Florida Guardianship Attorney

    Guardianship is a last resort process and it is established only when there are not less restrictive means of intervention. Therefore, the best thing to do is to contact a guardianship attorney before facing with the possibility of needing a guardian to discuss the options available to avoid guardianship. For an attorney in Florida, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of the page.

March 28, 2013

Guardianship in Florida

guardianship.pngWhat is Guardianship?
Guardianship is a legal process in which the circuit court appoints someone to protect and exercise the legal rights of an incapacitated person. A person is incapacitated if it is judicially determined that the person lacks capacity to manage at least some of his or her property, or to meet at least some of the essential health and safety requirements. An incapacitated person is known as a "ward," and the individual appointed by the court to act on behalf of the ward's person, property, or both is known as a "guardian." A guardian can be an individual or an institution.

How is it Determined that a Person is Incapacitated?
Any adult can commence the process to determine whether someone is incapacitated. The first step is to file a verified petition in court stating the following points: (Fla. Stat. § 744.3201)

  • Name, age, and present address of the person filing the petition and his or her relationship to the alleged incapacitated person;
  • Name, age, county of residence, and present address of the alleged incapacitated person;
  • The primary language spoken by the alleged incapacitated person, if known;
  • A declaration that person filing the petition believes that the alleged incapacitated person is incapacitated and specify the factual information in which such belief is based and the names and addresses of all persons known to the petitioner who have knowledge of such facts through personal observations;
  • Name and address of the alleged incapacitated person's attending or family physician, if known;
  • The rights enunciated in Florida Statutes that the alleged incapacitated person is incapable of exercising, to the best of petitioner's knowledge.
  • Names, relationships, and addresses of the next of kin of the alleged incapacitated person, so far as are known, and specify the dates of births of any who are minors.


The court then appoints a committee to determine whether the person alleged to be incapacitated is in fact incapacitated. This committee is composed of three persons: two physicians and one person with the capacity to form an expert opinion

The person alleged to be incapacitated is represented by an attorney, either one that he or she chooses or one provided by the court. If the examining committee finds that the person is unable to exercise certain rights, the court will schedule another hearing to determine whether the person is totally or partially incapacitated. However, a guardian will be appointed if it is determined that the person is incapacitated in any respect - unless there is a lesser restrictive alternative to guardianship that adequately addresses the person's incapacity.

Can Guardianship be Avoided?
Probably. Florida law requires the use of the least restrictive alternative to protect someone incapable of caring for himself or herself. For example, a health care directive might prevent the need for a guardian in the event of incapacity. Therefore, it is always wise to discuss with an Estate Planning Attorney the available options to avoid Guardianship.

Is a Guardianship Permanent?
Not necessarily. If the person declared to be incapacitated recovers in whole or in part from the condition that caused him or her to be incapacitated, then a petition can be filed with the court to restore the ward's rights. After the petition is filed, the court will have the ward reexamined and can restore some or all of his or her rights.

Contact a Florida Guardianship Attorney
For more information about guardianship, contact an attorney. For an Estate Planning Attorney in Florida, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200. Or click the "Contact Us" tab at the top of the page.