Articles Posted in Personal Representative

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.

A Will can be challenged by Caveat or Functional equivalent

On March 9, 2018, Florida’s Second District Court of Appeal held that the functional equivalent of a caveat may serve to properly contest a will.[1]  The court observed that the Appellant in the case at issue “filed a pleading styled ‘Answer and Affirmative Defenses’ and did not file a pleading styled ‘caveat.’”[2]  Nonetheless, the court found the pleading sufficient to function as a caveat.[3]  Here is why.

First, what is a Caveat?

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”)?

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.

Guardianship:  When No Less Restrictive Alternative is Available

What is guardianship?

The simple answer: court intervention to safeguard the property and care of an individual unable to make such decisions themselves.

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.

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.

Legal Capacity and Estate Planning- How to Help Safeguard a Will from Future Litigation

When a loved one grows older, their caretakers’ ever growing to-do list can be 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.

Where There’s a Will, There May Not Always Be a Way for Attorney-Client Privilege

Attorney-client privilege may not always apply in probate litigation. In fact, the Third District Court of Appeal has held that under the Florida Evidence Code, a lawyer may not invoke attorney-client privilege under certain circumstances.

Attorney-client privilege is a key hallmark of the attorney-client relationship. The privilege prevents disclosure of confidential communications pertaining to legal advice between a client and her attorney. Attorney-client privilege therefore promotes candor and better representation. Rule 4-1.6(a) of the Florida Rules of Professional Conduct states that “[a] lawyer must not reveal information relating to representation of a client . . . unless the client gives informed consent.” https://www.floridabar.org/rules/rrtfb/rule/?num=4-1.6. Further, under the official comments to Rule 4-1.6, a lawyer has an ethical obligation to assert attorney-client privilege on a client’s behalf, including during proceedings involving evidentiary matters.

Expanding Florida’s Homestead Exemption

Florida voters will have an important decision to make for the 2018 election—whether to raise the Florida homestead exemption. At first glance, the legislation offers a substantial property tax break for homeowners; however, if approved, the homestead exemption bill may cost counties and cities enormous revenue.

The Florida legislature created the homestead exemption in 1934 to aid residents affected by the Depression. The homestead exemption—then $5,000.00—allowed residents to keep their homes despite inability to pay property taxes. http://www.tampabay.com/news/politics/legislature/florida-homestead-exemption-increase-closer-to-ballot/2322311. In 1980, under Democratic Governor Bob Graham, Florida voters raised the exemption to $25,000.00, and again in 2008 to $50,000.00 under Republican Governor Charlie Crist. http://www.tampabay.com/news/politics/legislature/florida-homestead-exemption-increase-closer-to-ballot/2322311. Now, the November 2018 ballot will give Florida voters the choice to raise the exemption even higher.