Estate Planning

October 3, 2007

Personal Representative / Executor Requirements

Your Florida Estate Planning Lawyer will tell you that being appointed the PR / executor of an estate is not easy. The PR takes a personal risk and large responsibility to the estate of the decedent, the IRS, and the beneficiaries.

The main job of the PR is to manage the administration of an estate. Many small estates in Florida are distributed without the need of a Personal Representative or Executor. If the decedent had valid Florida Will, the PR can be name from the will, if not the court will appoint a PR based on qualifications and an order of priority. Generally the spouse is the first to be chosen as a PR, next the adult children along with any children who have legal guardians can be the PR. There is a statutory scheme to determining who will be the PR in a Florida Probate Case.

The PR will be responsible for locating the will, and additional documents to help determine what the debts and assets of the decedent are. In Florida probate requires a Florida Attorney. Once you are appointed as the PR, the court will issue you Letters of Administration. This document allows you to act on behalf of the estate. When you take actions, you will have to notify any interested parties (beneficiaries and creditors). The assets of the estate may be used to pay valid claims. One very important job of the PR is to file all current and final tax returns. This is one area where the PR has personal liability for unpaid taxes, penalties, and interest. Once all of the assets have been accounted for, creditors paid, and beneficiaries determined, the PR will distribute the remaining assets as instructed in the will or by the intestate statutes. The PR is also responsible for filing the accounting (a balance sheet showing the amount of the assets and whom they belong to).

October 2, 2007

Powers of Attorney for College Students

by David M. Goldman

As a Jacksonville Estate Planning Attorney, I wanted to share with you and your family an important planning idea on he use of Powers of Attorney and Health Care Surrogate forms for college students and adult family members that are under 30 years of age. These documents are recommended because of the higher standards of patient privacy that hospitals and physicians are now being held to under the Health Insurance Portability and Accountability Act (“HIPAA”). Because of this, medical providers, family doctors, and health care centers are often unable to provide medical information to anyone without the authority of the patient.

Section 1177 of HIPAA imposes strict penalties on anyone who violates the law by providing a patient’s individually identifiable health information to another person, even a parent or spouse. Specifically, the law states as follows:

(a) OFFENSE — A person who knowingly and in violation of this part–

(1) uses or causes to be used a unique health identifier;
(2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information t another person, shall be punished as provided in subsection (b)

(b) PENALTIES. — A person described in subsection (a) shall–

(1) be fined not more than $50,000, imprisoned not more than 1 year, or both;
(2) if the offense is committed under false pretenses, be fined not more than $100,000, imprisoned not more than 5 years, or both; and (3) if the offense is committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, be fined not more than $250,000, imprisoned not more than 10 years, or both.

According to Section 1171, “individually identifiable health information” means any information, including demographic information collected from an individual that:

(A) is created or received by a health care provider, health plan, employer, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provisions of health care to an individual; and

(i) identifies the individual; or (ii) with respect to which there is a reasonable basis to believe that the information can be used to identify the individual.

Because of the harsh penalties, many health care providers may be unwilling to disclose a patient’s information to anyone else, even that patient’s spouse or parents. Once a child turns 18, the natural parents no longer have authority over their child’s financial or medical decisions. In fact, when distressed parents and family members of some of the students at Virginia Tech tried to discover information about their children, medical providers were unable to release information without the proper release form. Thus, I am preparing Durable Powers of Attorney and Designations of Health Care Surrogate for many clients who have children who are 18 or older. Typically, we designate the parents as their Attorneys-in-fact and Surrogates to make financial decisions and health care decisions should they not be able to do so themselves. In addition, I ask their children whether they want to execute Living Wills. Each of our clients typically executes these documents for themselves, but in the past, many have not executed them for their adult children.
Continue reading

October 2, 2007

Are Wills Still Valid After Moving To Another State?

by David M. Goldman

If you move to Florida from any state or country, Florida will recognize any will that was properly executed as to the rules of another state except Holographic wills.

A holographic will is one that is entirely in the handwriting of the creator. Florida does have an exception to their rule against accepting holographic wills, that is for those holographic wills that are witnessed by two witnesses and notarized.

In almost all cases new states will recognize a validly executed will from another state. It is best to check with an Estate Planning Lawyer in your new state to make sure that your will is valid and deals with any special laws that may be available in the new state.

October 1, 2007

Spousal / Elective Share: Constitutional or Not?

by David M. Goldman

Often in the process of Florida Estate Planning, Florida Elder Law, or Florida Probate I get asked about the effects of Florida’s Spousal Share Statutes. The statutes reserve 30 % of the decedents estate for a spouse in the event that the decedent did not provide at least that amount in their will or other Florida Estate Planning Documents. This right can be waived by the spouse in pre or post nuptial documents. Often for wealthy clients, or those who are legally separated but not divorced the spousal share can become a big issue. If you think that a spousal share might be an issue with your estate planning, you should discuss it with a Florida Estate Planning Lawyer.

Last week a Florida Appeals Court looked at, Whether Florida’s Spousal Share Statutes were constitutional or not?

Generally Florida Statutes are constitutional unless they are not rationally related to furthering a valid governmental objective. Lane v. Chiles, 698, So.2d 260, 262 (Fla 1997) In this case the court looked at whether the potential loss of property rights were rationally related to providing a share in the assets of the decedent.

October 1, 2007

Common Law Marriage and Estate Planning

by David M. Goldman

As a Jacksonville Estate Planning Lawyer, I learned that Florida did not recognize common law marriages. About a week ago, the founding partner of Wood Atter, came into my office and asked me about an estate plan involving a couple that were married under the common law many years ago.

Later I discovered that common law marriages prior to 1969 were valid in Florida. I asked some divorce Lawyers some questions and learned, that once married under the common law, you must still be divorced in a court. The divorce is the same process as with a traditional marriage.

Then I began to think that with the number of people who separate and never get divorced, there must be some estate plans had the potential for disruption because of an unreported common law marriage.

September 29, 2007

Florida Trust Advantages for Descendants

by David M. Goldman

Florida Estate Planning Lawyers often tell clients of the many advantages of a Florida trusts. When a client leaves property to heirs in a trust instead of outright, they can control how the property is used. The control can violate public policy or law, but often good estate planning can control the property without risk of having the control stricken. Some of the major advantages are:

1. That a trust can provide a mechanism for better management and investment than the individuals may be capable of on their own.

2. That a trust can prevents the beneficiary(s) from using all of the proceeds quickly, or wasting it on unnecessary items.

3. Than a trust can protect the assets from the claims of creditors.

September 29, 2007

Abusive Trust Tax Evasion Schemes – Questions and Answers

by David M. Goldman

Florida Estate Planning Lawyers are often asked about tax strategies. Lawyers and accounts are not allowed to advise clients on tax evasion schemes. Recently I read an IRS Article named Abusive Trust Tax Evasion Schemes – Questions and Answers The questions and answers give a good general background to many of the terms used in Florida estate planning. In addition there are some links at the bottom which provide more information on tax abuse, scams, and fraud.

Basic Trust Law

Q: What is a trust?

A: A trust is an entity created and governed under the state law in which it was formed. A trust involves the creation of a fiduciary relationship between a grantor, a trustee, and a beneficiary for a stated purpose. A trust may be created by any of the following methods:

A declaration by the owner of property that the owner holds the property as trustee;
A transfer of property by the owner during the owner’s lifetime to another person as trustee;
A transfer of property by the owner, by will or by other instrument taking effect upon the death of the owner, in trust, to another person as trustee or
An exercise of a power of appointment to another person as trustee or an enforceable promise to create a trust.

Q: Who is a grantor of a trust?

A: The grantor (also known as trustor, settlor, or creator) is the creator of the trust relationship and is generally the owner of the assets initially contributed to the trust. The grantor generally establishes in the trust instrument the terms and provisions of the trust relationship between the grantor, the trustee, and the beneficiary. These will usually include the following:

The rights, duties, and powers of the trustee;
Distribution provisions;
Ability of the grantor to amend, modify, revoke, or terminate the trust agreement;
The designation and selection of a trustee or successor trustees; and
The designation of the state under which the terms and provisions of the trust agreement are to be governed.

September 26, 2007

Do it yourself Wills? Good idea or not?

by David M. Goldman

Although it is possible to create your own will using Quicken, an online service, or by just creating one on your own, a Florida Estate Planning Lawyer would likely caution against doing so.

A “Do it yourself will” can have many undesired results. The California Estate Planning Blog points to one of these. In their article they describe a man who died and bequeathed his home to five people, one being his wife. His will did not give the spouse the right to remain in the home for her life. Upon the request of any other beneficiary, the wife would either have to buy the additional interest, or be forced to move from the home. If you want to read the full details you can follow this link.

Often individually do not fully understand the consequences of the choices they make in a wills. In addition a Florida Will must comply with the Florida Statute of Wills to be valid. Most states have their own requirement for a will to be valid. A valid Florida Will requires that the person be competent, over the age of 18, understand what they are doing, know their possessions at the time they make the will, have two unrelated witnesses, and notarize the document.

September 26, 2007

Durable Power of Attoney? Why are they so Important?

by David M. Goldman

Florida Estate Planning Lawyers often include Durable Power of Attorney documents in the estate planning they do. Today I read an article on the California Estate Planning Blog entitled “Do I Need A POA Over My Spouse?”.

The article recommends that everyone needs a power of attorney over their spouse in case something happens. Without a Florida Durable Power of Attorney in place, a spouse is unable to file taxes, deal with social security, talk to creditors or deal with other financial considerations that require the spouse’s signature.

You cannot get a Florida Durable Power of Attorney if your spouse becomes incapacitated. The only alternative is to setup a Florida Guardianship. This is costly, time consuming, and requires one to act while a Florida Durable Power of Attorney gives one the ability to act, without the legal requirement to act.

September 25, 2007

Pet Estate Planning Seminar

by David M. Goldman

Often Estate Planning for your Pet can be very expensive. Some Florida Estate Planning Lawyers who also are Florida Pet Trust Lawyers have begun offering comprehensive Low Cost Florida Pet Trusts.

If you want to become more educated on Florida Pet Trusts or Pet Trusts in other states, one way is to speak to a Jacksonville Pet Trust Lawyer. In addition, you may want to attend this seminar by two Lawyers doing Pet Trusts

On September 28, 2007, Neil Hendershot PA Elder, Estate & Fiduciary Law Blog) and Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law, Texas Tech University School of Law) will explore this issues important to estate planning for pet owners both in Pennsylvania and nationally.