CORONAVIRUS UPDATE: What We Are Doing to Protect Our Clients

Articles Posted in Legislative Updates

For hundreds of years, most information existed in tangible form, usually in paper documents.  However the advent of digital technology, has transformed the way people acquire and store information and transact business.  As people continue to embrace digital technology, many tangible documents have been replaced by digital files.  This shift towards digital media has created challenges for fiduciaries tasked with corralling digital assets for individuals who have either lost capacity or died.

In Florida, when an individual dies or is declared incapacitated, a fiduciary is required to use their legal authority to inventory the person’s assets, pay the persons creditors and expenses, and preserve the assets while they are incapacitated or transfer the assets to the proper beneficiaries.  Traditionally, an individual’s personal information could be located by searching their paper records, where one could find information regarding bank accounts and bills to be paid.  However, the digitalization of personal information has made locating these records more complicated.  Fiduciaries must identify and locate these digital assets, determine who has control over access to the assets, and figure out how to access those assets.  Continue Reading

As was recently decided by the United States Supreme Court, same-sex couples can legally wed in every state in the country.  Not only will same-sex couples be able to marry in any state of their choosing, but they are also now afforded the same rights and benefits that have traditionally accompanied the sanctity of marriage between man and woman.  In Obergefell v. Hodges, the Supreme Court in a 5-4 ruling, legalized same-sex marriage.  Supreme Court Justice Kennedy, who wrote the majority opinion, stated that same-sex couples may exercise the fundamental right to marry.  Justice Kennedy’s majority opinion further holds that same-sex couples will no longer be denied the various benefits that states have linked to marriage.

Justice Kennedy explained that no union is more profound than that of marriage.  However, along with this profound union, comes additional and important decisions that must be made by the marrying couple, including decisions related to taxes and estate planning.  For tax planning, newly wed same-sex couples should consider the previous year’s federal and state income tax returns in order to discover if there is a positive tax arbitrage worth the time and expense of amending the prior year’s tax returns.  In addition, the current year’s federal income tax and state income tax (if applicable) opportunities should be examined.

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Earlier this year, Florida became the 36th state to legalize same-sex marriage, which was undoubtedly a monumental event for many South Florida residents. Up until then, gay and lesbian couples who wanted the benefit of marriage, but were legally unable to tie the knot, had very few options when considering things like estate planning, healthcare decisions, and taxes. After legalization, same-sex couples now have the opportunity to achieve greater economic and health benefits under the law.

Notably, as a legally recognized married couple, Floridian same-sex couples can now qualify for both homestead and tenancy by the entirety protection for property.  In Florida, homestead refers to the constitutional protection of an individual’s home from creditors.  The Florida Supreme Court in Orange Brevard Plumbing & Heating Co. v. La Croix stated that its “design and purpose is to benefit the debtor by securing to him his homestead beyond all liability from forced sale under process of any court.  The case law of this state dictates that homestead exemption laws should be liberally applied to the end that the family shall have shelter and shall not be reduced to absolute destitution.” 137 So. 2d 201, 204 (Fla. 1962).

Tenancy by the entirety is a form of ownership only applicable to married couples, where each spouse holds the whole (or the entirety of the) property, and not a share or divisible part. This means that when one spouse dies, the surviving spouse automatically owns the entire asset.  In addition to property rights, married same-sex couples can also begin to file joint tax returns and make medical decisions for the other spouse. These are everyday decisions for many of us, and now all married residents of Florida can benefit from these protections.

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It is no secret that we are living in a digital world. Our daily lives are spent online paying bills, browsing social media, checking bank accounts, and the list goes on. When you signed up for all of these accounts, you likely did not think to yourself, “I wonder who will manage these accounts if I pass away?” If you did not contemplate this aspect of managing an online account, you would not be alone. Most people do not even read the terms and conditions when creating online accounts. Instead, we take it for granted that digital accounts will make our lives easier, not harder.
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The 2014 State of Florida legislative session brought about several changes in the area of trusts and estates. Among those passing into law was the amendment to the antilapse provisions of the Florida Trust Code (Florida Statutes Chapter 736). As amended, the new provisions mirror the language and intent of similar provisions contained in the Florida Probate Code (Florida Statutes Chapter 732). It is assumed at law that in order for a named beneficiary to take under a devise, the beneficiary must survive the settlor or testator. Antilapse provisions contemplate the status of a devise to a beneficiary who predeceases the settlor or testator, a contingency presumably unanticipated by the settlor or testator. Such provisions address the consequences of the common law rule of lapse in attempting to reflect the presumed intent of the testator.
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A “guardian” is a person appointed by the court to act on behalf of the person and/or property of an individual whom the court has determined to be incapacitated, known as a “ward.” Guardians are appointed according to statutory criteria, outlined in § 744.309, Florida Statutes (2013). The guardian of an incapacitated person may exercise only those rights that have been removed from the ward and specifically delegated to the guardian. A guardian of a ward’s property has a fiduciary obligation to protect and preserve the assets of the ward, and is required to keep the court apprised of their actions through the filing of an initial guardianship inventory and annual accountings. A guardian of a ward’s person may, among other things, consent to medical treatment on behalf of the ward and, as with a guardian of property, must file an annual guardianship plan detailing the ward’s doctor visits and treatment plans for the coming year. Persons disqualified from becoming guardians include convicted felons, incapacitated persons, or persons who have been judicially determined to have committed abuse or neglect against a child or any of the other offenses prohibited under § 435.04, Florida Statutes (2013), such as acts of sexual misconduct, abuse or exploitation of an elderly person, and even indecent exposure. Additionally, prospective guardians must submit to a high level of background screening, including a credit history report and fingerprinting.
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http://www.floridabar.org/DIVCOM/JN/JNJournal01.nsf/8c9f13012b96736985256aa900624829/e000e018d4b1357685257bd4006aa1bc!OpenDocumentThe law applying to LLCs in the state of Florida is about to undergo a number of changes that will affect every single LLC that is currently doing business in the state of Florida, as well as those LLCs that have yet to be created by enthusiastic entrepreneurs.
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The Supreme Court of Florida has adopted amendments to the Florida Probate Code effective on January 1, 2011, at 12:01 a.m. Significant changes were made to Section 732.401, Florida Statutes and will effect the way homestead property is inherited by surviving spouses. For instance, prior to the changes, if a resident of Fort Lauderdale, Florida died and was survived by a spouse and one or more children, the surviving spouse took a life estate in the homestead, and the blood relatives of the deceased would receive the homestead upon the death of the surviving spouse. A life estate means that the surviving spouse has the right to use the homestead property for the duration of his/her life, but upon the death of the spouse, the homestead belongs to deceased’s blood relatives. Additionally, the surviving spouse who has a life estate is responsible for the costs of maintaining the property.

Upon taking a life estate in the homestead property, a spouse may be confronted with new economic duties, such as property taxes, insurance, ordinary maintenance, and mortgage interest. These may be expenses that the surviving spouse cannot afford. In response to these new found financial responsibilities, some practitioners attempted to use disclaimers, a process by which the surviving spouse essentially declines to accept the homestead property, to avoid inheriting a life estate. However, the courts reached inconsistent results.

The adopted amendments to the Florida Probate Rules now provide that, instead of a life estate, a surviving spouse may elect to take an undivided one-half interest in the homestead as a tenant in common. A “tenant” is the legal term for co-owner of property. If the surviving spouse chose to take a tenancy in common, instead of a life estate, the spouse would possess the property with someone else, in this case, the blood relatives of the deceased. A tenancy in common essentially means that two or more people (the surviving spouse AND the blood relatives of the deceased) would co-own the homestead property.

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