Florida Estate Planning Lawyer Blog

June 3, 2015

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.

June 2, 2015

How to remove a personal representative in Florida

by David M. Goldman

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.

June 1, 2015

BB King Heirs to Challenge his Will

by David M. Goldman

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

May 29, 2015

Florida’s Probate and Trust Codes, 2015 Amendments Regarding Attorney’s Fees

by David M. Goldman

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.

May 29, 2015

What are required minimum distributions during retirement and how much are they?

by David M. Goldman

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.

May 28, 2015

Why you should name a trust as the beneficiary of your life insurance

by David M. Goldman

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

May 27, 2015

How did the court in Clark v. Rameker change estate planning in Florida?

by David M. Goldman

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:

The beneficiary of an inherited IRA cannot make additional contributions to the account, while an IRA owner can.
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.
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.

May 26, 2015

How does the probate process work in Florida?

by David M. Goldman

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.

May 22, 2015

Important Clauses to include in a will or revocable trust

by David M. Goldman

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.

May 21, 2015

The benefits of a Spendthrift Provision in a Florida Will or Trust

by David M. Goldman

There are many ways that a settlor, or a person who creates a trust, can help to prevent creditors from attacking the assets he or she leaves a beneficiary through a trust or a will. One of the best ways to protect a trust’s assets is through a spendthrift clause.

In a trust, most beneficiaries are able to freely transfer their interest in the trust to someone else. A spendthrift provision prevents a beneficiary from being able to transfer their interest in the trust either voluntarily or involuntarily. While this puts a restraint on the beneficiary’s rights, it has the added benefit of preventing creditors from reaching these funds.

The provision must restrict the beneficiary’s ability to make voluntary and involuntary transfers. A restriction on just involuntary transfers will generally not be deemed valid by a court and will still allow creditors to reach the trust funds.