Rules of Procedure Update:

On September 2, 2010 the Supreme Court of Florida provided amendments to the Florida Probate Rules to include that the Inventory for an estate does not need to be served on the Department of Revenue and does not need to be served on non-residuary beneficiaries. However, a non-residuary beneficiary can request a copy of the Inventory. Rule 5.340 of the Florida Probate Rules. What is the significance of the change? First off, a non-residuary beneficiary (one who receives a specific item or money from a specific fund in the estate but not a share of what is left over in the estate) now will not be informed as a matter of course about all of the assets in the estate. Without knowledge regarding the value of assets in the estate that beneficiary cannot make decisions about his or her inheritance until it is actually received (or possibly even thereafter until the estate is closed if the beneficiary receives the inheritance prior to the closing of the estate). There may be creditors of the estate for which the personal representative of the estate could have to expend all of the residue of the estate and then require the specifically gifted item(s) from the non-residuary beneficiary to pay the remainder of the debt owed. If the beneficiary does not know of the estate's liquidity to pay all the debts, the beneficiary may make significant expenditures with the expectation of receiving a significant inheritance only to discover that the residuary of the estate was not sufficient to pay the creditors of the estate so the beneficiary has to surrender the inheritance to the creditor. Also, a beneficiary who does not receive the Inventory may have an expectation of receiving a certain percentage of the estate and may be duped into believing that his share is extensive when actually the beneficiary may have been disinherited significantly. If the disinheritance was from undue influence or while the deceased was incapacitated, the beneficiary may have lost an opportunity to challenge a will and get a greater share from the estate. The aforementioned revision to the Florida Probate Rules should make it even more apparent to beneficiaries that they should be represented in estate matters to get the knowledge that they need to make proper decisions and to assure their inheritance.

Legislative Update:


Florida Statutes has been revised in section 655.935 to clarify that only 3 things may, upon the request of a surviving spouse, parent, adult descendant, or person named as personal representative in a purported will of a lessee of a safe deposit box, be removed and delivered: (1) a purported will (delivered to the clerk of the court in the county in which the bank is located), (2) a burial plot deed and/or burial instructions, and (3) an insurance policy to the beneficiary named in the policy. Benefits of this statute are that a will goes directly to the court which allows a deceased person to assure that the will is private during life but does not suffer risk of being lost or destroyed by a disinherited person (the presumption is that a lost will was destroyed with the intention to revoke the will, meaning the deceased wishes may not be carried out). If a person cannot afford a safe deposit, the person should have his attorney or other trusted third party to store the will in a fire-proof and otherwise secure place. Individuals should plan for their demise by giving a copy of the will (or at least the first page, signature page and page designating a personal representative) to the named personal representative if there will be no surviving descendants, spouse, or parent because the statute does not provide for next of kin or friends to request that a will be retrieved from a safe deposit box without a court order. Also, the statute highlights the need to make sure that the life insurance policy includes the beneficiary designation or that the beneficiary change be included with the policy. The thing of greatest import that this statutory clarification highlights is that if you put other valuables in the safe deposit box, those cannot be retrieved until an estate has been opened for the deceased. However, on balance it may be more important that the valuables of a senior failing in health be safeguarded from unscrupulous caregivers or other opportunists than avoid the cost of a probate.

Caselaw Update:


Asset Protection just became a little harder. Limited liability companies (LLC) have been trumpeted as providing greater protections from creditors to owners of businesses than the protection provided by corporations. Although both corporations and LLC can provide the owners of the company protection in their personal assets from liability that occurs in the operation of their business, only LLC have provided protection of owners' ownership interests in the company from person liability problems of individual owners (avoiding disruption of business from creditors of an owner seizing an ownership interest in the company). In this sentinel case, the Supreme Court of Florida determined that a trial court could order a judgment debtor to pay over all his interest in an LLC to the judgment creditor when the judgment debtor was the only owner of the LLC. Considering that the vast majority of LLC are single owner LLC, what are the little guys to do to get the same protections that multiple owners LLC have? Find business partners? Add their spouses/significant others as owners? Olmstead v. FTC, Supreme Court Florida 2010

Legislative Update:


Imagine this scenario. A father is elderly and in dementia. A short-term girlfriend of the father's arranges a quickie marriage and has the father's attorney prepare a new will and trust granting most of the decision making authority to the bride. The children lose most of their father's business and property that for decades had been promised to them.  The legislature has attempted to give some recourse to children  from this scenario by enacting Florida Statutes section 732.805 to challenge and deny certain rights to a surviving spouse who arranges a marriage by fraud, duress, or undue influence. If you have lived in Florida for any length of time, you have probably heard of this scenario playing out. Engage a lawyer to fight for justice.

Where have all the billionaires gone? Multiple billionaires have died this year, and what do they all have in common? They will avoid estate taxes in the United States this year, perhaps even if Congress tries to make the estate tax retroactive for 2010. The estate tax returns in 2011 with a rate that is higher than and an exemption amount that is lower than it has been in nearly a decade. George Steinbrenner's heirs have saved hundreds of millions of dollars in the untimely (or should I say timely?), death of Mr. Steinbrenner this year. Certainly other billionaires (and millionaires) will be choosing their health care proxies for end of life decisions very carefully this year.

Caselaw Update:


Will you be able to find the witness to your last will and testament 5, 10, 15, or 20 years after you sign your will? This case is a stark reminder to safeguard the original of your last will and testament in a safe deposit box or with your attorney in a fire-proof file cabinet. A lost or destroyed will is presumed destroyed with the intention to revoke the will (frustrating the intention of the deceased if the deceased did not intend to revoke the will). This court case determined that a written affidavit (a document signed under oath in front of a notary) of a witness to the signing of the will along with a copy of the will is not sufficient to get the lost will admitted to probate (the process to determine how the property of the deceased is paid to the heirs and creditors of the deceased). The court determined that there must be live testimony by a disinterested witness. Will any of the witnesses still be living in the local area where the deceased lived allowing for their testimony?  Brennan v. Estate of Brennan (5th DCA Florida 2010)

Caselaw Update:


This court case upholds the decision making of a mother prior to becoming incapacitated to determine that her children would be her guardian in the event of incapacity. The case holds that where a pre-need guardian designation has been properly filed and appoints multiple children to serve who are not unanimously in agreement on the level of care needed by the ward, nevertheless it is an abuse of discretion for a judge to appoint another to serve in their stead. Acuna & Magill v. Dresner (3d DCA Florida 2010)

Caselaw Update:

Get it in writing. When the written real estate purchase contract required changes to the contract to be in writing, a verbal agreement to change part of the terms could not be enforceable.

In re A & M Florida Properties II, LLC (Bankruptcy S.D.N.Y. 2010)

Caselaw Update:

Is it time to use individual retirement annuities rather than IRA when beneficiaries have creditor problems? In this criticized court case, the Second District Court of Appeals for Florida found that a beneficiary who opted to transfer his father's IRA into an "inherited IRA," meaning the account goes out of the name of the decedent into the name of the decedent for the benefit of the beneficiary so that distributions can be spread over the beneficiary's life, would not be allowed protection from creditors provided by Florida Statutes section 222.21. Robertson v. Deeb, 16 So. 3d 936 (Fla. 2d DCA 2009)

Caselaw Update:

Assessment of taxes by the IRS may not be stopped by a statute of limitations (3 years) as would be the case in a normal income tax return filing if the filer files an erroneous tax return reporting no tax (i.e. is an invalid return) and the taxpayer formally rescinds the return. In re McKay (Mid. Dist. FL Bankruptcy 2010)

LEGISLATIVE UPDATE:

The surviving spouse may take the homestead as tenants in common rather than as a life estate if decedent tries to disinherit the surviving spouse in his or her will or trust. (This can amount to a huge boon to the step-children of the deceased person if the surviving spouse is elderly or also this can harm the surviving spouse if children of the deceased person pursue court process to force the sale of the home.)

Section 7. Section 732.401, Florida Statutes, is amended to read:

732.401 Descent of homestead.—

(1) If not devised as authorized permitted by law and the Florida

constitution, the homestead shall descend in the same manner as other

intestate property; but if the decedent is survived by a spouse and one or

more descendants, the surviving spouse shall take a life estate in the

homestead, with a vested remainder to the descendants in being at the time

of the decedent’s death per stirpes.

(2) In lieu of a life estate under subsection (1), the surviving spouse may

elect to take an undivided one-half interest in the homestead as a tenant in

common, with the remaining undivided one-half interest vesting in the

decedent’s descendants in being at the time of the decedent’s death, per

stirpes.

(a) The right of election may be exercised:

1. By the surviving spouse; or

2. With the approval of a court having jurisdiction of the real property, by

an attorney in fact or guardian of the property of the surviving spouse. Before

approving the election, the court shall determine that the election is in the

best interests of the surviving spouse during the spouse’s probable lifetime.

(b) The election must be made within 6 months after the decedent’s death

and during the surviving spouse’s lifetime. The time for making the election

may not be extended except as provided in paragraph (c).

(c) A petition by an attorney in fact or guardian of the property for

approval to make the election tolls the time for making the election until 6

months after the decedent’s death or 30 days after the rendition of an order

authorizing the election, whichever occurs last.

(d) Once made, the election is irrevocable.

(e) The election shall be made by filing a notice of election containing the

legal description of the homestead property for recording in the official record

books of the county or counties where the homestead property is located. The

notice must be in substantially the following form:

CASE UPDATE:

Trial court can order a mouth swab for DNA testing of legitimate children to substantiate indeterminate children claiming paternity of decedent. Doe v. SunTrust Bank Fla. 2d DCA 2010.

Practice Areas:

Mr. Brink will prepare your probate documents, wills, living trusts, powers of attorney, health care directives, living wills, guardian designations, life insurance trusts, complex estate tax planning trusts, family limited partnerships, premarital agreements, deeds, easements, leases, real estate and business closing documents, licensing agreements, franchise agreements, incorporation/ organization documents, bylaws, corporate minutes, buy/sell agreements, shareholder agreements, operating agreements, partnership agreements, employment separation agreements, employment agreements, employee handbooks, consultant/independent contractor agreements, office sharing agreements, condominium and homeowners association documents, guardianship documents, and gift and estate tax returns. Also, Mr. Brink will negotiate your IRS disputes.