Estate Administration

Florida Supreme Court brings clarity to Attorney-Fiduciary privilege (different from the attorney-client privilege)

September 17, 2018 | by Chepenik Trushin LLP

FLORIDA SUPREME COURT ADOPTS “ATTORNEY-FIDUCIARY PRIVILEGE” RULE

The attorney-client privilege is one of the oldest legal concepts and the backbone of providing effective legal services. It keeps the communication between an attorney and her client secret and protects it from disclosure, with some exceptions, even when other rules compel disclosure. It is the attorney’s duty and the client’s right―an assurance that she may communicate with her attorney frankly and openly.

The privilege covers communication relating to legal representation between the lawyer and her client that the client intends not to disclose to third persons. Fla. Stat. § 90.502. This privilege is not, however, absolute and many jurisdictions have recognized an exception in fiduciary relationships. This exception allows beneficiaries of a trust to obtain privileged communication between the trustee who administers the trust for their benefit and the attorney who advised the trustee on her fiduciary duties.

Bitcoin, crypto, blockchain, tokenpots, coin plus, ether pay and Estate planning in 2018

August 29, 2018 | by Chepenik Trushin LLP

ESTATE PLANNING: CRYPTO CURRENCIES AND DIGITAL ASSETS

Although we all unquestionably live in a digital age at least for the past two decades and the legislatures are adopting new laws every day to reflect this reality, digital estate planning remains one of the areas where relying on state-made laws might not be enough. Laws in this area are scarce and only of a general nature. What happens with our digital assets after we die is usually controlled by private companies that store the data. For that reason, and because of the specific nature of digital assets, it is advisable to take these matters in your own hands.

What is a digital estate planning? It is a estate planning that covers any of your digital assets, including cryptocurrencies, websites, email accounts, social network accounts, cloud accounts, and all content stored or communicated trough these tools. What sets these assets apart from the more traditional ones is the fact that there might not be any person other than you who is aware of those assets or who could access them. In other words, no official register, no tax records, no bills, no paper contracts. Yet these assets may have a great value, both personal and monetary.

Proactive Wills

August 7, 2018 | by Chepenik Trushin LLP

Legal Capacity and Estate Planning – How to Safeguard a Will from Future Litigation or Contests

When a loved one grows older, ages and declines, their caretakers’ ever growing to-do list can become overwhelming. After dealing with the basic, everyday needs of an aging family member, it may sometimes be easy to overlook the fact that your loved one does not have a valid will. By not addressing this issue, the task of handling final affairs and estate distribution after their death becomes increasingly more difficult. If you are responsible for someone who is at risk for developing Alzheimer’s, dementia, or any other disease that can affect their mental capacity, it is important that you consult with an estate planning lawyer who can ensure that a proper will is drafted in accordance with the laws of the state of Florida.

Florida courts have held that a will can be properly admitted to probate if the testator was competent at the time the will was executed. Jervis v. Tucker, 82 So.3d 126 (FL 4th DCA 2002). A testator will be found to have been competent if they possessed the ability to “mentally understand in a general way the nature and extent of the property to be disposed of, and the testator’s relation to those who would naturally claim a substantial benefit from the will, as well as a general understanding of the practical effect of the will as executed.” American Red Cross v. Estate of Haynsworth, 708 So.2d 602, 605 (FL 3rd DCA 1998). Florida courts will apply these standards and also evaluate the facts specific to a particular case in order to determine if a testator was of “sound mind” when they created the will. Estate planning lawyers play an important role in this process and have the responsibility of ensuring that the testator is legally competent at the time the will is created.

The power of giving and altruism in estate planning

July 2, 2018 | by Chepenik Trushin LLP

FLORIDA CHARITABLE TRUSTS: ALTERNATIVE BENEFICIARIES AND CY PRES DOCTRINE

Due to applicable tax exemptions and tax deductions, Charitable trusts are a great tool for preserving the value of your property intended for charitable purposes and for reducing taxes payable by your remaining estate (intended for purposes other than charitable ones). Naturally, the main goal when setting up a charitable trust will be the fulfillment of the philanthropic objective of your choice. While the law comes to aid with mechanisms to fill in the blank spaces in the will or trust agreement, well-meant but poorly executed provisions in the documents may defend these mechanisms and obstruct the desired purpose.

Charitable purposes may include relief of poverty; advancement of arts, sciences, education, or religion; promotion of health, governmental, or municipal purposes. Fla. Stat. 736.0405(1). This list is, of course, non-exhaustive. A specific charitable purpose and beneficiary organization will usually be designated in the document. Even if it is not, the court will select one or more charitable purposes or beneficiaries that will be consistent with the settlor’s original intent, at least to the extent it can be ascertained. Fla. Stat. 736.0405(2). But what if the agreement names a purpose and a beneficiary, but the beneficiary does not exist? Or exists at the time the agreement is made, but ceases to exist before it is supposed to take the bequest? Or what if the stated purpose is impossible to fulfill? In those situations the cy pres doctrine applies to help execute the bequest in accordance with the general spirit of the will or trust agreement.

Arbitration and Estate Planning – Decisions made final

June 15, 2018 | by Chepenik Trushin LLP

WILLS, TRUSTS, and ARBITRATION AGREEMENTS

In previous blog posts, we have shown how wills and trusts are favored vehicles when protecting someone’s assets. Perhaps one of the purposes of a well-drafted will or trust is to avoid hearing the judge’s gavel when knowing who gets what part of the inheritance. Unfortunately, contentions amongst the parties may well exist. The good news is that since 2007, parties have another alternative to resolve disputes that arise out of a will or a trust. Florida Law provides the option for parties to have a clause in their will or trust requiring arbitration. See Fla. Stat. § 731.401.

Arbitration, is a private (not state-sponsored) method of resolving disputes. Arbitration is not to be confused with mediation: While mediators help the parties in finding a solution, arbitrators decide a dispute.

As a business owner, react or act – probate court expenses

April 30, 2018 | by Chepenik Trushin LLP

What is Probate?

Probate is a process, which the court supervises, for settling a deceased person’s estate. The process involves identifying assets belonging to the estate, paying the decedent’s debt, and distributing the remainder of the assets to the decedent’s beneficiaries. Costs for the probate proceeding have first priority for payment from the estate’s assets.

If a decedent dies testate (with a valid will) and designates a personal representative, then the will’s provisions govern disposition of the decedent’s probate assets. If a decedent dies intestate (without a valid will), then Florida law will govern selection of a personal representative and will govern who will receive the decedent’s probate assets.

Elder financial exploitation, Trust litigation and Undue influence

April 11, 2018 | by Chepenik Trushin LLP

What is elder financial exploitation?

The Florida Department of Elder Affairs defines elder financial exploitation as “the illegal or improper use of another individual’s resources for personal profit or gain.” This exploitation takes on many forms involving deception and/or coercion, including the improper use of a power of attorney.

What is a Power of Attorney (“POA”)?

Voluntary and Involuntary transfers of a beneficiary’s interest(s)

March 26, 2018 | by Chepenik Trushin LLP

IRREVOCABLE SPENDTHRIFT TRUSTS

Trusts are popular estate planning instruments that may bring many benefits both during lifetime and in the case of death. Some common reasons for setting up a trust include the avoidance of costs and time consumption of probate proceedings, property management for those who cannot or do not wish to manage the property themselves, continuance of property management after death or during disability, and saving of taxes and protection of the assets against the claims of creditors. However, there are several types of trusts and not all of them provide these benefits to the same extent.

The revocable trust is the most flexible one as the creator (settlor) can at modify the terms of the trust or completely revoke it at any time. See Fla. Stat. § 736.0602. However, the assets transferred into such trust are still considered personal assets of the settlor and accordingly, can be reached by his or her creditors. See Fla. Stat. § 736.0505(1)(a). Therefore, the revocable trust is not an ideal solution for asset protection purposes. Upon death of the settlor, this trust becomes irrevocable, meaning that the rules for asset distribution can no longer be changed. It is also possible to make a trust irrevocable from the outset and to afford protection against creditors by adding a spendthrift provision. See Fla. Stat. § 736.0502.

Family law implications under the 2018 Tax Bill

March 8, 2018 | by Chepenik Trushin LLP

HOW THE NEW TAX BILL MAY AFFECT DIVORCES

In one of our previous posts we informed about the new Tax Cuts and Jobs Act (“TCJA”) and the major changes it brings, including the various adjustments in tax deductions. This article focuses on deductions applicable to alimony, as the new system may significantly affect and expedite divorce settlements in the months to come.

Alimony is a form of spousal support awarded by agreement or by court decision to the lower-income spouse after divorce, typically referred to as the “dependent” spouse. The courts have wide discretion in establishing the amount of alimony and the time period during which the higher-income spouse is obligated to pay. The purpose of alimony is to help the dependent spouse overcome the divorce and to at least partially maintain the standard of living the spouses shared during their marriage. To ease the burden of splitting one household into two, the alimonies were tax deductible – at least until now.

A Will seems simple, but when executed, it can be a rocky road

January 10, 2018 | by Chepenik Trushin LLP

How to comply with formal requirements of Will execution

Florida law places great emphasis on compliance with its statutes regarding execution of wills. This is to assure the authenticity of such an important document profoundly affecting many lives, and prevent fraud and imposition in its execution. The statutory provisions, which appear in Florida Statute §735.502, set out four main requirements for executing a will. Failure to comply with the formal requirements can invalidate the will and force the estate to pass through intestate succession. It is therefore important to comply with and understand these formal requirements.

Firstly, the will must be in writing. This means that the document can be handwritten, typed, or printed. Florida does not recognize oral wills (nuncupative wills) or wills without witnesses (holographic wills). Nuncupative wills are allowed in only few jurisdictions and typically require witnesses and some exigent circumstances such as a car accident or a heart attack. Contrarily, many states recognize holographic wills and have different requirements as to their validity.