In St. Louis County, a jury awarded Barbara Morriss $77 million for mismanaging her family’s trust. The court agreed the bank breached its fiduciary duty, the duty to act in the beneficiary’s best interest, by failing to fully disclose significant financial transactions that allowed the trusts to lose millions of dollars

Barbara Morriss first learned of her trust’s lost assets when her credit card was declined at a local department store in 2011. Her son is a venture capitalist named B. Douglas Morriss, and was recently sentenced to five years in prison for tax evasion in 2013. Through his companies and others, B. Douglas Morriss and partners raised millions before the companies filed for bankruptcy with more than $35 million in debt. Continue reading

What documents do young adults need?

It’s hard to believe that when your child turns 18 years old, he or she is legally an adult. When a child reaches this milestone, the mother and father’s parental rights have terminated. This means that if the child experiences a medical emergency, the parent may not be able to help or even receive information on the child’s well being without the property authority.

A parent loses parental rights over their children due to a number of privacy laws. One important law is FERPA, the Family Educational Rights and Privacy Act, which restricts the information a school can release about an adult student. The other is HIPAA, the Health Insurance Portability and Accountability Act, which limit those to whom health care providers can release data.

The privacy laws do have a valid purpose, which is to allow young adults to visit doctors and make independent health care decisions about their bodies. However, most parents want to be able to support their children in the case of an emergency without having to petition a court to allow it. Once a child learns how the law operates, and learns of the potential ramifications of not having a power of attorney, her or she is likely to want the parent to assist them in the event of an emergency.

Without a power of attorney a parent may be unable to even discuss a child’s condition with a doctor. It is not uncommon to hear of parents frantically calling an emergency room to get an update on an unconscious child’s condition, only to be told they are not allowed to talk with the doctor. If a child is not able to give consent, and there is no power of attorney, the doctors will most likely not speak to a parent about the child’s health care. No family wants to go through a Terri Schaivo situation, where the family spent years fighting for the control of Schiavo’s health care.

So what estate-planning documents do a young adult to prevent these nightmare scenarios from happening?

The first document the child needs is a health care power of attorney, which gives the child the authority to name a person, most likely the parent; to make medical decisions for him or her is he is not capable of giving consent. The child may also need a property or durable power of attorney. This type of document will allow someone else to manage the child’s financial life if he or she is not able to do so. Most young adults do not possess many assets, however, there are some times when this power of attorney could be useful. One example is when a child is traveling abroad and needs money transferred to him out of his account. Another good example is when the child needs the parent to hire an attorney for him or her.

Some 18 year olds may resist the idea of naming someone in a power of attorney, as this can seem like an intrusion on their adulthood and privacy. It might be a good idea to let the child meet with an estate-planning attorney here in Florida to explain how valuable the documents could be for his or her well being. It is not necessary that a parent be named in the documents, and a child can always amend these documents later in life. As you are planning for your child to enter or return to college, it may be time to prepare in case the unexpected happens. For more information on how to obtain a power of attorney, contact the Law Office of David M. Goldman today.

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

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

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

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

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

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

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

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

BB King’s heirs have alleged the blues legend’s business manager has misappropriated millions of dollars and unduly influenced his estate. A lawyer representing BB King’s heirs told the press the heirs would seek to challenge the will and the actions of the manager as undue influence.

The law allows the heirs of an estate to challenge wills in cases of undue influence, fraud, or mental incapacity. The heirs of BB King’s estate have long suspected King’s manager La Verne Toney had misappropriated millions of dollars and had undue influence over his estate planning decisions. The law requires the testator to pass away before his estate or will can be challenged. Therefore, the heirs of BB King’s estate were unable to challenge the alleged undue influence until now.

Undue influence is where a beneficiary, or other party with standing, alleges a third person has so influenced the testator’s mind by persuasion that the testator did not act voluntarily when executing his will.

In Florida, the person challenging a will under a theory of “undue influence” has the burden to establish the presumption of undue influence. This means that the person being accused is given the benefit of the doubt that he or she acted appropriately unless some evidence shows otherwise. The elements of showing undue influence are: Continue reading

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

Attorneys Fees and Costs

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

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

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

New laws for Attorneys acting as Fiduciaries

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

Personal Representatives liable for attorney’s fees if not qualified

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

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

The rules that surround our retirement plan accounts and IRA’s can be tricky, especially when it comes to determining an individual’s required minimum distributions, or RMDs.

RMDs are the minimum amounts that a retirement plan account owner must withdraw as required by the federal government. Generally, a person is required to take RMDs from an IRA or retirement plan account in the year when he or she reaches age 70 ½ or later. If the retirement plan is an IRA or the account owner is a five percent owner of the business sponsoring the retirement plan, the RMDs must start once the account holder is age 70 ½ regardless of whether he or she is retired.

The rules for minimum distributions can be confusing, but a person’s RMD for any year is the account balance as of the end of the preceding calendar year divided by a distribution period from the IRS “Uniform Lifetime Table.” This is the way most people will calculate their RMD. However, if a spouse is the sole beneficiary of an IRA, and is more than 10 years younger, the Joint Life and Last Survivor Expectancy table must be used. A person is also allowed to take penalty-free distributions from their IRA or retirement account plans at age 59 ½.

One reason we urge clients with retirement account plans to prepare for RMDs is the large tax penalty the owner must pay if he or she makes an error. If the account owner fails to withdraw the RMD, fails to withdraw the full amount of the RMD, or fails to take a RMD prior to December 31, the owner is taxed 50 percent of the amount not withdrawn.

Different rules apply to the beneficiary of a retirement plan account or IRA when the owner of these accounts dies before RMDs have begun. Usually, the entire amount of the owner’s benefit must be distributed to the beneficiary who is an individual either:

  1. Within 5 years of the owner’s death, or
  2. Over the life of the beneficiary starting no later than one year following the owner’s death.

RMD rules do not apply to the original Roth IRA owner, but the rules do apply to beneficiaries who inherit an IRA. A spouse is allowed to move the assets to his or her own Roth IRA instead of taking an inherited Roth IRA to avoid RMDs. Roth accounts in 401(k) and 403(b) plans are subject to RMD requirements.

Another rule to remember is that if a person has multiple retirement plans, the RMDs must be calculated separately for each plan. There is an exception for some IRAs. If a person has more than one IRA, whether a traditional, SEP, or simple IRA, he or she can add the RMDs and take the combined distribution amount from any one or more of the IRAs.

RMDs also are used to calculate your income and can be used to disqualify you from certain benefits.  Some individuals can benefit from taking larger distributions at lower tax rates and you should consider this and discuss it with your CPA, financial planner, and estate planning lawyer.

The IRS offers a worksheet that can be used to calculate someone’s RMD, located here,-Employee/Retirement-Topics-Required-Minimum-Distributions-%28RMDs%29   Calculating RMDs can an a tricky process to figure out even with guides like this. We recommend you start developing a financial strategy for these required minimum distributions now to ensure your estate is in order and all beneficiary designations are taken care of. Contact the Law Office of David Goldman PLLC today at 904-685-1200 to plan for your RMDs.

Naming a trust as a beneficiary of life insurance policy can have a huge benefit for people with large estates that are not taxable. It is also a great way to protect the insurance proceeds from future creditors and to help beneficiaries better manage their assets

There are a few common types of trusts that can serve as the owner or beneficiary of a life insurance policy. These trustees might include: an irrevocable life insurance trust, a living trust, a special needs trust and a spendthrift trust.

Irrevocable Life Insurance Trust

This type of trust, often referred to as ILIT, is used to irrevocably purchase insurance on the life of the grantor of the trust. This means the trust will have actual ownership of the policy, rather than the person the policy is for. This is done usually to avoid the taxing of life insurance proceeds at death under the Federal estate tax.  Since the person does not actually own the life insurance policy, the proceeds are not subject to estate tax or included in that person’s estate when he or she dies.

Once a person with an ILIT dies, the insurance proceeds will be deposited into the ILIT. Usually, an ILIT is set up to provide for the other spouse during his or her lifetime, and the balance passes to the children or other named beneficiaries.

ILITs are typically used to save money on estate taxes by ensuring the life insurance proceeds would not be included in the insured person’s estate.   In 2002, the estate tax exemption was only $1 million. Since 2013, Congress has raised the estate tax exemption has been raised to $5.43 million, and $10.86 for married couples.  This much higher exemption means a large number of estates are no longer facing estate taxes. However, those with larger estates can still benefit greatly from the use of an ILIT. In addition, some families are still using ILITs incase the estate tax exception is lowered in the future.

Living Trusts Continue reading

The U.S. Supreme Court recently ruled that an inherited IRA is not a “retirement account” for purposes of protection under the Bankruptcy code. This now means that inherited IRAs are available to satisfy creditor’s claims in order to pay off debt.

The court characterized an inherited IRA as money that is set aside for the original owner’s retirement rather than money set aside for a designated beneficiary’s retirement. The court reached this conclusion using three elements to differentiate an inherited IRA from a participant-owned IRA:

  1. The beneficiary of an inherited IRA cannot make additional contributions to the account, while an IRA owner can.
  2. The beneficiary of an inherited IRA must take required minimum distributions from the account regardless of how far away the beneficiary is from actually retiring, while an IRA owner can defer distributions at least until age 70 1/2.
  3. The beneficiary of an inherited IRA can withdraw all of the funds at any time and for any purpose without a penalty, while an IRA owner must generally wait until age 59 1/2 to take penalty free distributions.

Continue reading

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

Assets that Avoid Probate

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

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

Summary Administration

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

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

Formal Administration

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

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

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

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

Here at the Law Office of David Goldman, we wanted to list some of the more important clauses that might be used in a Florida will or Florida Living Trust. Every person who makes a will or trust has different circumstances and therefore every will or trust is designed with that person’s specific needs in mind. Many of these clauses might not be needed in your will or trust, but we like to include them anyway in case the unexpected happens to you or your family. We urge our clients to learn about these clauses, so they can decide if these clauses might help to meet their estate-planning needs or how they may want to make changes to deal with their specific family circumstances.

Disaster Clause

This clause deals with what happens if both spouses or a beneficiary die at the same time. This will or trust usually states that a spouse’s assets will only be transferred to the second spouse or beneficiary if the second spouse survives the first spouse by a certain time period. This period is usually 30 days. This clause can help to prevent the confusion of where assets should go based upon who died first.  The time limit can be increased to add additional protection, but this can delay distributions also.


This clause is great for if a testator already has previous wills or codicils. A revocation clause will revoke the older wills and trusts and let a court know this document is now the controlling force on the testator’s estate. Without this clause, a court would be forced to determine which portions of each will applies. This clause can save the estate from a very expensive probate process or unnecessary court intervention.

Appointment of executor or personal representative

One of the most important parts of creating a will is naming someone to serve as the will’s executor or as we call them in Florida the Personal Representative (PR). The PR is the person in charge of gathering the estate’s assets and distributing them to the beneficiaries. If an executor is not appointed, the state will then be forced to appoint an executor, and the court will usually chooses someone from the immediate family such as the spouse, child, or close relative. A PR has many duties, such as protecting the assets, and the paying debts and taxes of the estate. This means that a PR should be chosen carefully.

Spendthrift Provisions.

Earlier this week we covered the benefits of a spendthrift provision in your will or trust documents.

Guardianship of children

In Florida, a will allow a testator to name a guardian for his or her minor children in the event of the testator’s death. This clause usually takes effect if the other spouse is deceased or incapacitated. Naming a guardian is a good idea to prevent other family members from later fighting over custody of the children. To qualify as a guardian in Florida, the person named must be of sound mind and at least 18 years old. In addition, they must either be a resident of Florida or be a close family member or spouse of a close family.  You can also choose different people to be the guardian of the person and the property.

Total failure clause

If all the named beneficiaries and eligible heirs die before a testator dies, their estate is given to the government. This very rarely happens, but many testators find they would rather see the money go to a good someone else or a charity. Therefore a total failure clause will allow a testator to name a charity as the beneficiary if no eligible heirs are alive at the time of the testator’s death. Many people choose to have their closes family relative as a default.

For information on how a will can be drafted to meet your individual estate-planning needs, contact the Law Office Of David Goldman today.

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