Florida Probate Litigation Lawyer Blog

Supreme Court Denies Survivor Benefits to Posthumously-Conceived Florida Twins

November 26, 2012 | by Bart Chepenik

As technology continues to develop, its impact is seen in many areas of law. In today’s world, natural conception is not the only way to conceive a child. Often times, a parent may choose to have a child through in-vitro fertilization, even after their significant other has passed. However, under common law, a posthumously-conceived child (a child conceived after the death of the father) is always considered a non-marital child because marriage ends at the death of one of the partners. Specifically, under Florida law, “a child conceived from the eggs or sperm of a person or persons who died before the transfer of their eggs, sperm, or pre-embryos to a woman’s body shall not be eligible for a claim against the decedent’s estate unless the child has been provided for by the decedent’s will.” Fla. Stat. § 742.17. This statute means that a posthumously-conceived child may not state a claim against his father’s estate, unless that child is deliberately named in the father’s will.

In a recent United States Supreme Court opinion, Astrue v. Capato, a mother conceived and gave birth to twins after the father had passed away from esophageal cancer. The Capatos naturally conceived one son, but the couple wanted that son to have siblings. Before Mr. Capato entered chemotherapy, he had his semen frozen because the doctors explained that the chemotherapy could force him to become infertile. A few months before he died, Mr. Capato executed a will that named the son he had with Ms. Capato and two children from a previous marriage as beneficiaries. The will failed to mention his unborn children as beneficiaries. After her husband’s death, Ms. Capato began receiving in-vitro fertilization treatments, using her husband’s previously frozen sperm. The process was successful, and eventually, she gave birth to twins.
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Tortious Interference with Inheritance

November 21, 2012 | by Bart Chepenik

It is a classic scenario – the evil step-mother taking everything when her husband dies even though his children were expecting an inheritance. What do you do if someone swoops your inheritance, or your expectation of an inheritance, out from under you? Florida recognizes a cause of action for tortious interference with an inheritance or expectancy of such. See In re Estate of Hatten, 880 So. 2d 1271 (Fla. 3rd DCA 2004). This means that if an inheritance or the expectancy of an inheritance is diverted, destroyed, or something of the like by a third party, there is a cause of action by which the person who did not receive the expected inheritance may be compensated.

Tortious interference with inheritance is defined as, “[o]ne who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift.” Restatement (Second) of Torts § 774B. There can also be many related causes of action to a tortuous interference with inheritance claim, such as breach of contract, undue influence, and unjust enrichment. A person who has been the victim of such wrongful conduct may bring an action for a constructive trust or damages.
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Revocable Trusts

November 16, 2012 | by Bart Chepenik

There are many instances in which a trust can be terminated, e.g., when the trust ceases to be economically efficient to administer or when the trust has been created as a result of fraud, duress, or undue influence. Recently, in Florida, more individuals have been creating revocable trusts. Floridians often choose this type of trust to avoid probate and to keep their private affairs out of the public eye in a probate proceeding. But when is a trust revocable? Who can revoke the trust? What steps must be taken and procedures followed to ensure that the trust is revocable?

One of the key distinguishing features of a revocable trust, as opposed to an irrevocable trust, is control. A settlor has control not just to revoke the trust, but to alter the trust as well. For example, the settlor of a revocable trust may add or remove beneficiaries of the trust during the settlor’s life and may also change the property that is owned by the trust. A major downside of this control is that the trust’s assets are easier for creditors of the settlor or of the beneficiaries to reach. Whereas, with regard to an irrevocable trust, the settlor does not have control once the trust is established, but the assets of the trust are better protected from the settlor’s creditors, and, depending on how the trust is structured, those assets may also be better protected from creditors of the beneficiaries.
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Foreign Persons and Florida’s Homestead Exemption

November 10, 2012 | by Bart Chepenik

Just how far does Florida Constitution’s homestead ad valorem tax exemption extend? Recently, the Florida Supreme Court decided this issue in Garcia v. Andonie, 65 So.3d 515 (2011). In Andonie, the Court held that if the resident children of a non-resident reside on property owned by the non-resident, the property may qualify for the ad valorem tax exemption. Andonie involved Honduran parents who resided in a Florida condominium with their children. The children were United States citizens, but the parents were not. The parents did not have a legal right to remain indefinitely in the United States. Under Florida law, every person who has the legal or benificial title to real property in the state and who resides thereon as his or her permanent residence, or the permanent residence of his or her self and their dependants, is entitled to an exemption. Fla.Stats. §196.031(1). Under the Florida Constitution, however, every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon. Fla. Const. Article VII, §6(a).

The property appraiser argued that the parents must be residing indefinitely in order for the property to qualify under the Florida statute. Therefore, because the parents could not, as a matter of law, indefinitely reside on the property, the property must not be subject to the exemption. Nonetheless, the Court rejected the property appraiser’s argument and interpreted the Florida Statute as adding another layer to the constitutional provision.
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Removing a Personal Representative

November 5, 2012 | by Bart Chepenik

What happens when the personal representative of an estate is not performing his or her duties or is not acting in the best interest of the estate? The Florida Probate Code lists causes for removal of a Personal representative. In addition to a physical or mental incapacity that would prevent a personal representative from performing his or her duties, the following are other circumstances and conditions under which the pesonal representative of an estate may be validly removed:

Failure to comply with a court order;
Failure to account for the sale of property or provide an inventory;
Wasting the assets of an estate;
Failure to post bond;
Conviction of a felony;
Insolvency of a corporate personal representative;
Except for a surviving spouse, acquiring a conflict of interest that may or will interfere with the administration of the estate;
Revocation of the will naming the person as personal representative;
Removal of Florida as a Domicile, unless domicile is not a requirement; or
If the personal representative would not now be entitle to appointment.

Any interested person may petition for the removal of a personal representative. The petition must allege an interest and facts comprising a statutory ground for removal. Fla. Prob. R. 5.440. Furthermore, the removal of a personal representative appointed by a decedent is a last resort. See In re Estate of Murphy’s, 336 So.2d 697 (Fla. 4th DCA 1976).
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The Impact of FATCA on Foreign Trusts and Estates

October 22, 2012 | by Bart Chepenik

In 2010, congress passed the Foreign Account Tax Compliance Act (“FATCA”) after a series of high-profile tax evasion cases. The main purpose of FATCA is to force foreign financial institutions to comply with reporting requirements of the Internal Revenue Service and curb non-compliance. However, FATCA will have new reporting requirements for individuals, as well. Classically, any United States citizen with an interest in a foreign bank account was required to file an FBAR form disclosing their interest in any foreign bank account with their regular tax return. FATCA has broadened filing requirements “to all specified foreign financial assets” held by “specified individuals” with the implementation of section 6038D to the Internal Revenue Service. The new requirement seeks to ensure that the Internal Revenue Service has all potential information to prevent assets that could produce taxable income from being concealed in foreign jurisdictions. For section 6038D purposes, a specified individual is a United States citizen, a resident alien of the United States (as determined under section I.R.C. 7701(b) and §§301.7701(b)-1 through I.R.C 301.7701(b)-9), or a nonresident alien who has elected under section 6013(g) or (h) to be taxed as a United States resident. Under FATCA, specified individuals with a specified financial interest must file an information form (form 8938) with the Internal Revenue Service. Section 6038D may also apply, at the discretion of the Treasury Department, to domestic entities formed for the purpose of holding a specified foreign financial asset under I.R.C. 6038D(f).
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Trust Decanting

October 15, 2012 | by Bart Chepenik

Trusts are an important tool of estate planning for many reasons, one of which is the tax benefits associated with holding assets in a trust. Trusts are routinely set up as a planning tool and contain various different provisions about how and when trust assets are distributed to the qualified beneficiaries of the trust. Trustees can have different ranges of power depending on the terms of the trust instrument, and the extent of the discretion afforded to the trustee dictates what they are able to do with the trust assets. Trustees with a discretionary power to distribute trust assets may do just that – distribute the assets to the qualified beneficiaries. Trustees with a special power of appointment have greater rights and can have the right to invade the principal of the trust. Giving a trustee a power of appointment, especially an absolute power of appointment, can allow the trustee to distribute assets in ways that can be extremely advantageous to the qualified beneficiaries.

Can a trustee of a trust distribute the principal of a trust to a new trust that may have different terms? The answer is yes, provided certain conditions are met. When a trustee with the discretion to distribute the principal of the trust uses that discretion to distribute the principal into a new trust, it is called “decanting the trust.” Trust decanting is a means of planning that helps beneficiaries retain the tax benefits of a trust. The reason decanting is allowed is that if the trustee, through his power of appointment, has the ability to distribute property to the beneficiaries or for their benefit, then that power of appointment should allow the trustee to distribute property into a second trust for the benefit of the qualified beneficiaries.
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Pet Trusts

October 5, 2012 | by Bart Chepenik

When planning their estates, most people consider provisions that take into account their family and friends, but people often fail to make arrangements for loved ones that fall somewhere in between: their pets. Dogs, cats, horses, birds, reptiles, rodents, and amphibious friends can also be provided for in estate documents. Florida Statute 736.0408 allows individuals to create trusts specifically to care for animals that the owner predeceases. The statute specifically allows individuals to:

Provide for the care of an animal or animals alive during the settlor’s lifetime;
Appoint an individual to enforce the trust for the animal(s);
Ensure that money set aside for the animal(s) will only be used for that purpose.

Dependent Relative Revocation

September 30, 2012 | by Bart Chepenik

As people progress through different stages of their lives, their beliefs and objectives sometimes fluctuate and change. One situation in which an individual may change his or her mind is when writing a will. People often change their minds about whom to devise or bequest their property. But, what causes people to change their minds? What if someone revokes their will based on a mistaken assumption of law or fact? Is the new will effective? Does the old will get revived if the new will is ineffective?

Over the years, courts have wrestled with such questions and, resultantly, have come up with the doctrine of dependent relative revocation (“DRR”). Essentially, the courts have decided that if a testator claims to revoke his will, and he or she does so based on a mistaken assumption of law or fact, the revocation is invalid if the testator would not have revoked the initial will had he known the truth. Once it is clear to the court that the revocation of the prior will was based upon the validity of the new will, the court will apply DRR. The doctrine creates a “rebuttable presumption that the testator would have preferred to revive his earlier . . . bequests rather than let the property go by intestacy.” In re Estate of Pratt, 88 So. 2d 499, 501 (Fla. 1956).
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Non-Citizen Spouses and Estate Planning

September 24, 2012 | by Bart Chepenik

What legal issues will you face if you are married to a noncitizen or planning on leaving part of your estate to a noncitizen? The answer to this question is not as easy as one might think. Noncitizens do not necessarily escape the United States’ estate tax, nor do they always qualify for some of the deductions given to US citizens.

The imposition of the estate tax on noncitizens is largely dependent on where the noncitizen is domiciled. There is an estate tax levied on the worldwide net estate of domiciled noncitizens. In contrast, the estate tax is only levied on the US property of non-domiciled noncitizens. Therefore, a crucial issue is determining whether or not a noncitizen is considered domiciled. Domicile is generally determined by whether a person is living in the United States and whether that person has the intent to remain in the country. Intent is a subjective judgment based on weighing the individual facts of a situation. Residency does not necessarily mean domicile, nor is it a requirement of domicile for estate tax purposes. This means a US vacation home left to a non-domiciled noncitizen would be includable in their gross estate. Property is not limited to real property in this scenario, but can also include things such as stock in a US corporation and even certain assets.
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