Articles Posted in Young Professionals

Do you own a home health care agency or nurse registry? Safeguard your referral sources through a non-compete agreement and enforce it!

The home health care industry generally includes businesses that provide skilled nursing, physical therapy, and other health-related services to homebound patients.  If you run a home care company, you know that referrals are crucial.  This is because patients typically seek out home care services after a referral from a “middle man,” such as a physician, hospital, or skilled nursing facility. As a result, home care companies hire marketing representatives to promote the companies and cultivate relationships with the middle men in hope of securing future patient referrals for their business.

Imagine that you hire such a marketing representative, train her, and give her access to your company’s internal referral source database, preferences, and strategies.  Naturally, you want to protect your sources, so the representative signs a confidentiality and non-compete agreement as part of her employment contract.  After some time, the representative quits, and all of a sudden you start receiving significantly less referrals from the sources that the representative worked on while employed by you.  Coincidence?  It turns out that the representative started working for your direct competitor and used her relationship with your precious referral sources to your competitor’s benefit, in direct violation of the non-compete agreement.  Surely the law is on your side, right?

4th DCA Recognizes Homestead Exception for Alimony Creditors

The Florida Constitution provides powerful homestead protection against creditors.  Generally, only three types of super-creditors can breach this protection – (1) government entities with a tax lien or assessment on the property; (2) banks or other lenders with a mortgage originating from the purchase of the property; and (3) creditors with liens originating from work or repair performed on the property.

However, a recent decision by the District Court of Appeal for the 4th District confirmed a “long recognized” fourth category of super-creditors – alimony creditors.  The facts of this case are as follows:  Robert Spector (“Husband”) and Renee Spector (“Former Wife”) divorced in 1996, and agreed in a post-nuptial agreement that Husband would (1) pay Former Wife $5,000 per month in alimony until his or her death, or until she remarried; (2) transfer to Former Wife the title and interest in their marital home; and (3) maintain a $750,000.00 life insurance policy for Former Wife’s benefit.  Subsequently, Husband was held in civil contempt for “willful and deliberate failure to comply with the alimony provisions” of the post-nuptial agreement and was also denied a bankruptcy petition as alimony arrearages were not subject to bankruptcy discharge.

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 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 importance of a Semicolon – Does property partially used as primary residence and partially for business purposes qualify as Homestead?

Does property partially used as primary residence and partially for business purposes qualify as homestead under Article X, Section 4 of the Florida Constitution? Surprisingly, the answer apparently rests on a semicolon.

This question was addressed in 2003 by the Florida Court of Appeal for the First District in Davis v. Davis, 864 So. 2d 458 (Fla. 1st DCA 2003). The facts of this case are as follows: Mr. Horace Davis lived with his wife Carolyn on a contiguous piece of property measuring less than 160 acres outside of municipality in an unincorporated portion of Nassau County. The property included the couple’s residence and on a portion separate from the residence, Mr. Davis operated a mobile home park generating profit through rent. Mr. Davis died in 2000 having written a will.

Florida: A Safe Haven for Surviving Spouses in Probate

          Marriage is one of the most sacred and respected institutions in our society.  Both state and federal governments provide benefits to encourage marriage with beneficial incentives. Florida provides several benefits for surviving spouses as illustrated in Florida’s Constitution and Probate Code. This article reviews some of those benefits but is not an exhaustive list.

First, surviving spouses receive protection under Florida’s Homestead Exemption.  The Florida Constitution prohibits a decedent from freely devising his or her homestead, when the decedent is survived by a spouse or minor child. Art. X, § 4 (c), Fla. Const.  However, the decedent can devise a homestead to his surviving spouse if there is no minor child. § 732.4015 (1), Fla. Stat. (2010).  If a decedent tries to devise a homestead to someone other than a surviving spouse or minor child under a will, then the homestead property will be transferred to the decedent’s surviving spouse and the decedent’s descendants, with the surviving spouse receiving a life estate in the homestead and the descendants receiving a remainder, per stirpes at the decedent’s death.§ 732.401 (1), Fla. Stat. (2012).  Alternatively, “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.”  § 732.401 (2), Fla. Stat. (2012).  To receive the homestead exemption, “an individual must have an ownership interest in a residence that gives the individual the right to use and occupy it as his or her place of abode.”  In re Alexander, 346 B.R. 546, 551 (Bankr. M.D. Fla. 2006).

Effect of Marital Agreement on Entitlement to Probate Estate

When it comes to estate planning, multiple factors can influence the distribution of the estate, besides a trust document or a will. One such device is a martial agreement made between spouses prior to their marriage. The marital agreement can change the distribution of the estate if the agreement addresses the surviving spouse’s rights to the estate in the event of a death. The Second District recently decided a case involving a marital agreement and a subsequent claim against the estate for additional money allegedly pursuant to the agreement.

In Northern Trust v. Shaw, the surviving spouse, Natalia Shaw, sued the estate of her deceased husband for money allegedly due to her under their marital agreement (also known as a prenuptial agreement). Mrs. Shaw and her husband Andrew were married in February 2009. Before they were married, Mr. and Mrs. Shaw executed a marital agreement that provided for the disposition of their assets in the event of their deaths. Under the agreement, Mrs. Shaw waived her rights to Mr. Shaw’s estate except for a few items: (1) $500,000 from Mr. Shaw’s estate, (2) any testamentary gifts made by Mr. Shaw during the marriage, (3) any retirement and pension benefits in which Mrs. Shaw was named the beneficiary, and (4) a life estate interest in any principle residence owned by Mr. Shaw.

Time Limitations for Proceedings Against Trustees: Discussing Failure to Account

An individual serving as a trustee owes certain duties to the beneficiaries of that trust. One such duty is the duty to account to the beneficiaries.  Failure to provide an accounting as required in § 736.0813, Fla. Stat. is a breach of trust by a trustee. Fla. Stat. § 736.1001(1).  A beneficiary can institute an action for an accounting and/or against a trustee for breach of trust, but the factual circumstances of the case may determine the time limitations for bringing such actions. These limitations are found in the Florida Trust Code under  § 736.1008, Fla. Stat. Under  § 95.11, Fla. Stat., the statute of limitations for a legal action alleging breach of trust or fiduciary duty is four years.

The Trust Code, specifically §  736.1008, Fla. Stat., provides further clarification as to how Chapter 95 applies in trust matters. Under § 736.1008(1), if the trustee issued a trust disclosure document that adequately discloses information, the four year statute of limitations applies, beginning on the date that the beneficiary receives the disclosure. For all matters not adequately disclosed in a trust disclosure document if the trustee has issued a final trust accounting, the trustee has given final notice to the beneficiary that the trust records are available, and has given written notice of the applicable limitations period, the limitation period begins on the date that the beneficiary receives the final trust accounting and notice. However, under § 736.1008(3), when the trustee does not provide a final trust accounting, or give notice to the beneficiary that the trust records are available, the applicable limitations period for a matter not adequately disclosed begins on the date the beneficiary has actual knowledge of the facts underlying the claim.  Florida Statute § 736.1008(2) provides a way for a trustee to shorten the amount of time the beneficiary has to file a claim from four years to six months. In order for the six month time limitation to apply, the trust disclosure document must adequately disclose the information, and the trustee must inform the beneficiary of the shortened limitations period. The shortened limitations period starts on the date the beneficiary receives both the disclosure document and the limitations notice. .

Gun Trusts: Background Check Loophole Eliminated

A gun trust is a legal device that makes it easier to handle firearms after the gun owner’s death. These trusts are used for guns that are regulated by federal laws: the National Firearms Act of 1934 (NFA) and a revision of the NFA, Title II of the Gun Control Act of 1968. Gun trusts must take into account both federal and state weapons laws. Some of the weapons regulated by the NFA include silencers, machine guns, grenades, short-barreled shotguns, and short-barreled rifles. These weapons already have some regulations in place, including requiring its serial number to be registered with the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Although there are restrictions in place, the NFA allowed the making or transferring of a firearm without a background check through a gun trust. The Attorney General, on January 4, 2016, signed a regulatory rule to close up this dangerous loophole: Machineguns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Trust or Legal Entity With Respect To Making or Transferring a Firearm. This rule, also known as ATF Final Rule 41F (the “Rule”), will have a huge impact on the use of trusts in the sharing and in the acquisition of weapons regulated by the NFA. It seeks to ensure that proper identification and background checks apply equally to legal entities, trusts, and individuals. The rule became effective on July 13, 2016, 180 days after its signing. However, the Rule is not retroactive, and as such, pending applications will not be affected.

Florida Appeals Court Comes Down Against Probate Creditor Claims From Child For Child Support Arrearages

On May 11, 2016, the Fourth District Court of Appeal issued its decision in Davis v. Hengen regarding creditor claims for child support arrearages against a decedent’s estate, when the decedent dies with unpaid child support obligations.

Upon the dissolution of their marriage, Clifford Davis and his then wife entered into a marital and property settlement agreement. According to the agreement, Clifford was obligated to pay monthly child support to his ex-wife to support their daughter, Deborah. When the father died, he died intestate. At the time of his death, the father had outstanding child support payments due. Deborah and Clifford’s current wife, Acaia, were appointed co-personal representatives of Clifford’s estate.

The Shifting Landscape of Guardianship Law: Three Consecutive Years of Changes

(Published in The Florida Bar Journal, September 2016) 

Members of The Florida Bar Real Property, Probate and Trust Law Section’s (RPPTL) Guardianship, Power of Attorney and Advance Directives Committee are keenly aware that there have been major changes to Florida’s guardianship laws in the last several years. The political climate of the past few years has been decidedly against guardianships and, in particular, professional guardians, due to perceived abuses by them. The current political climate is due in part to hearings held before the Florida Legislature during the 2014 session in which organized members of the public testified about the horrors of guardianships. While some of the horror stories came from disgruntled family members unhappy with the results of their particular guardianship litigation, others made legitimate points regarding the need to improve the system.