Florida Estate Planning Lawyer Blog

Joseph Percope has written an article The Impact of Co-ownership on Florida Homestead in the Florida Bar Journal that discusses the tree kinds of homesteads defined in a 1997 Florida Supreme Court case: The tax exemption; The Protection from Creditors; and The restrictions on alienation of homestead property in Florida.

While most are primarily concerned with their tax breaks, as a Florida Estate Planning Lawyer we often deal with the second two more often in our planning. We see families attempting to avoid probate by adding kids on to deeds all the time. We also see parents who own part of their children's homes. The problem begins when in either of these situations one or more of the owners does not live in the home. The home or at the ownership of the person not living in the home is subject to the claims of their creditors.

When no ownership percentage is specified, Florida will apply equal percentages of ownership to each person named on the deed. If a single person adds their child onto their deed as joint tenants with rights of survivorship, 50 percent of the equity in the home will be exposed to the creditors of the child who is not living in the home.

Once a creditor takes an ownership in the home, it is possible to force the sale of the home.

While these types of deeds are rarely a good idea because of the tax and basis considerations, many have not considered the additional risk due to the creditors of co-owners who do not live in the home or qualify for the second type of homestead (the constitutional protection from creditors)

The same scenario applies to those who try to use a traditional life estate deed to avoid probate. ( a Florida Enhanced Life Estate Deed does not have many of the problems that a traditional life estate does.

If you are trying to avoid probate in Florida and would like to also have protection for your homestead from creditors, not have adverse tax consequences, not lose stepped up basis, and/or not create a disqualifying transfer of assets for Medicaid purposes, you should contact a Florida Estate Planning Lawyer to discuss how to protect your homestead and the options available that deal with your circumstances and goals.
=

Historically a Florida Will could not be changed and had to be strictly complied with by in a Florida Probate.

A recent change to Florida Probate allows for the court to step in and change the terms of a person's will when there is no question about what the terms when there is clear evidence that what the testator intended.

Anyone can ask a court to change the terms of a Florida Will when there is clear and convincing evidence that a mistake of fac or mistake of law caused the will to reflect something other than the testator's true intent.

Mistake of law is a legal principle referring to one or more errors that were made by a person in understanding how the applicable law applied to their past activity that is under analysis by a court.

The underlying intent of this new law is to carry out the true intentions of the testator.

A Florida Enhanced Life Estate Deed (sometimes called "The Lady-Bird Deed" is a tool used by Florida Estate Planning Attorneys, Florida Elder Law Attorneys, and other by Florida Lawyers to preserve the homestead for the benefit of the family and avoid a Probate in Florida. Upon the death of the homeowner's the property will pass to the people designated without the need for a costly probate process in much the same way as a bank account with a beneficary designation.

Why Use an Enhanced Life Estate Deed?
The Florida Enhanced Life Estate Deed provides a mechanism to bypass the probate process and thus the creditors. Under this document, the husband and/or wife retain a Life Estate Interest under which he or she retains the right to live on the property for their life. Unlike a Life estate, the husband and/or wife retain the right to sell, mortgage, convey, gift, or cancel the remainder interest at any time during their life. If there is any property interest upon the last to die of the husband and/or wife, the remainder will pass in fee simple to the designated individuals named in the deed.

Who should use the Enhanced Life Estate Deed?
A Florida Enhanced Life Estate Deed or Florida Lady-Bird Deed should be use by individuals or couples who want to simplify the transfer of their property upon their death and retain full authority and possession over their property.

Will using an Enhanced Life Estate Deed affect my Florida Medicaid Eligibility?
As long as the individuals demonstrate an "intent-to-return" to the homestead Medicaid Eligibility should not be affected.

What are some common mistakes with deeds?
Many Florida residents add their children on their deeds as Joint Tenants with Rights of Survivorship.
Many Florida Residents deed their property to their children and retain a life estate.

What can happen if I have made a common mistake on my deed?
1) My home may not be protected from creditors and/or loose its homestead protection.
2) I may be disqualified from Medicaid in the event that I need to go into a Nursing home.
3) I may have made a gift, subject to Federal Gift Taxes, Penalties, and Interest which my heirs and/or family may be responsible for paying.
4) I may not be able to sell my home or use the proceeds from my home to enhance my quality of life, travel, or pay for the necessary medical care I need.

If I have made a mistake transferring my property, can it be fixed?
Yes, You should meet with a Florida Estate Planning Lawyer to evaluate your situation, and prepare the documents necessary to allow you to qualify for Medicaid, deal with the Gift taxes, protect your homestead, and pass your homestead to the desired beneficiaries without the costly expense and delay of Florida probate.

Florida statutes define probate assets as those assets subject to a probate administration. There are several types of Probate in Florida which are discussed in our Free Florida Probate Handbook that you can request.

Often it is easier to define which assets are not subject to probate.
In Florida any asset with a surviving joint owner, valid payable on death designation, or contract clause which defines what happens to the asset upon death are not subject to probate. Often these include life insurance policies, annuities contract or retirement account with a transfer on death clause, jointly owned bank accounts, real estate with and valid beneficiary designation clause. One of the most common items that is not subject to probate is a Florida homestead. While a homestead is not devised through probate typically, title companies will often require it to be dealt with in a Florida probate to issue title insurance. The good news is unless you messed up your will or other documents, a Florida Homestead will not be subject to the claims of your creditors or the creditors of your beneficiaries if it is their homestead.

a Florida Probate can be expensive so it is wise to review your estate plan with a Jacksonville Estate Planning Lawyer to see if any of your assets will be subject to a Florida Probate and if a probate in Florida can be avoided.

There are very limited opportunities to establish paternity after the death of a parent but it is possible to do so as long as the mother was not married at the time the child was born and no paternity has been previously established.

According the Florida Department of Heath, if a birth record contains an error it may be possible to correct the record depending on the type of correct and the age of resistant, documentary evidence may be required to support the correction.

Once the father has died it is still possible to establish paternity by one of the following

(a) The natural parents participated in a marriage ceremony before or after the birth of the person born out-of-wedlock, even though the attempted marriage is void.

(b) The paternity of the father is established by an adjudication before or after the death of the father. Chapter 95 shall not apply in determining heirs in a probate proceeding under this paragraph.

(c) The paternity of the father is acknowledged in writing by the father.

Acknowledgment in writing may be in the form of a birth certificate, affidavit, or other writing such as a beneficiary designation under a life insurance policy. There are no formalities that are required and one court refused to require such evidence. In re: Estate of Jerrido, 339 So.2d 237 (Fla. 4th DCA 1976) the court refused to require authenticated evidence.

The Florida Slayer Statute bars a murderer from profiting off the victim's assets. The victim's assets which are subject to a Florida Probate pass as if the murderer had predeceased the victim and other jointly held assets are severed so that the victim and murder each owned 50%.

One problem with the slayer statute is that the effect of the statute does not take place until there is either a criminal or civil conviction. It is possible to make changes to the ownership of the assets prior to a court determination that the slayer statute applies. While there are some safeguards in place to prevent those with knowledge from profiting from these types of transfers, there appears to be certain situations where one could protect the assets prior to such a determination. I have not seen any case-law where this has been challenged and do not know what the outcome would be but like with many asset protection techniques, it can put someone in a better position to negotiate if there are any funds or asset left.

One recent case in South Florida involved a beneficiary of a trust. This individual adopted his girlfriend so that she would be a legal beneficiary of the trust. While it does not appear that these asset would have been subject to a slayer statute claim, it is the type of planning that we are referring to and can create the desired results through creative planning.

If you are involved with a potential probate in which a relative was believed to be responsible for the murder of the decedent, contact a Jacksonville Probate Lawyer to discuss how to structure the assets or what steps can be taken to protect your rights.

We often get asked questions as a Ponte Vedra Beach Probate Lawyer about inheriting debt. Just as you can inherit property and other assets from a Florida Estate, it is possible to inherit the debt that is associated with the property.

When the debt associated with an asset is worth more than the asset itself, one must decide whether they want the asset or not. Just because you inherit something does not automatically mean you are financially responsible for the debt which is associate with the property.

In Ponte Vedra Beach and around Florida we are finding that homes often are worth less than the amount of debt remaining on the mortgage. Just because you inherit the property does not make you responsible for the debt. You may abandon the property in the Florida Probate or decide not to even probate the property or estate until the item which are upside down are dealt with in legal proceedings such as a Florida Foreclosure Case.

The only way a beneficiary is responsible for the debt is if they were a co-signer on the debt or signed a new document which created a financial responsiblity.

If you are dealing with a Florida Probate and there are assets which may not be worth what is owed, you should contact a Ponte Vedra Beach Probate Lawyer to discuss your options.

The number of death certificates you will need will vary greatly depending on the amount and number of assets that the person had at the time of death. Most insurance companies, banks, & many creditors will request a death certificate. In addition, you will need a death certificate (short form - one without the cause of death) to open a probate case in Florida. While insurance companies will typically ask for a long version, most other creditors and institutions are ok with a short version. The Probate court will not accept a short version. For this reason it is a good idea to get 3-5 long versions and 5-10 short versions. You can always get more and many companies only need to see a copy of a death certificate.

Often in an attempt to avoid a relatively small probate fee, individuals can create huge penalty periods and taxable issues for themselves. Take for instance, a woman in New York who, two years before applying for Medicaid, transferred money from her account to an account with a co-owner. Transferring individually owned funds to an account with joint tenants is a common way to avoid a Florida Probate.

While her estate planning attorney seems to have given the advice, he was not aware of the problems that estate planning techniques to avoid probate can have on Medicaid eligibility.

Not only can transfers like this have problems for the individual making the transfer, but they can also create problems for the beneficiary or the new co-owner who will now have additional assets in their name, that may disqualify them from government benefits like Medicaid.

Before you try to save a few dollars and do what worked for your parents or friends, you may want to discuss your circumstances with a Jacksonville Estate Planning Lawyer who is familiar with Medicaid and Elder law issues.

There are certain times when a Probate case can use Formal Notice to reduce the time required and other times when it is required. Formal notice is defined by the Florida Probate Code to be notice which is sent by via certified mail to each interested person. Sometimes notice can be by publication when the whereabouts of a particular interested person or entity cannot be determined. This notice by publlication requires a much longer time period to the party to object than the 20 days when an interested party is serverd by formal notice. Some examples of when Formal Notice can or will be used include:

Petition for Administration
Petition to Determine Beneficiaries
Petition to Revoke The Probate of A Will
Petition to Probate Lost Will
Petition to Construe Will
Petition to Remove A Personal Representative
Petition to Surcharge Personal Representative
Petition to Cancel a Devise

The 2nd District Court of Appeals for Florida held in McDonald v Johnson that the increase in a company stock value that happened during the marriage can be used to determine the value of an elective share calculation. The lower court ruled that the surviving spouse had no right to discovery of a company's financial information because the company stock was not subject to probate. The 2nd DCA found that Section 742.2155(6)(c) excluded nonmartial assets as defined in Section 61.075. Because the increase in value of an asset that happens during a marriage is a martial asset, they concluded that the spouse was entitled to do discovery that was necessary to determine if it would be to her benefit to claim an elective share.

Section 732.2155(6) provides as follows:
Sections 732.201-732.2155 do not affect any interest in property held, as of the decedent's death, in a trust, whether revocable or irrevocable, if:

(a) The property was an asset of the trust at all times between October 1, 1999, and the date of the decedent's death;
(b) The decedent was not married to the decedent's surviving spouse when the property was transferred to the trust; and
(c) The property was a nonmarital asset as defined in s. 61.075 immediately prior to the decedent's death.

The courts reasoning is as follows:

We conclude that the fact that section 732.2155(6)(c) cites to section 61.075 without a specific citation to the subsection defining nonmarital property indicates the legislature's intent that the entire statute, which defines both marital and nonmarital property, is to be considered in determining whether the property in the revocable trust was nonmarital at the time of death. The definition of marital assets includes "[t]he enhancement in value and appreciation of nonmarital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both." § 61.075(6)(a)(1)(b), Fla. Stat. (2010). In other words, if the value of the MCC stock in the decedent's revocable trust increased pursuant to the terms of section 61.075(6)(a)(1)(b), that increase would not be excluded from the elective share under section 732.2155(6)(c). Thus, to the extent the information sought by the surviving spouse is necessary to her determination whether the MCC stock value was enhanced during the marriage due to the efforts of the decedent, it is relevant.

Often before the death, a spouse or someone else in control of assets attempts to rearrange the assets so that it will benefit them and in doing so it can interfere with the desires of the decedent.

In these situations, the prospective beneficiaries who have been damaged have the right to bring a cause of action against the person who manipulated the decedent's assets.

Some examples of this type of activity include cashing out insurance policies, paying bills our of one account but not another, removing funds from one account and transferring them to another in which they are the beneficiary. Selling or disposing of assets that would go to one beneficiary and converting them to cash what is distributed in another manner.

In a recent appeal over this issue it was made clear that it is not enough to have shown that someone engaged in this type of wrongful activity, but also must provide legally admissible evidence of the damage that was caused to the beneficiaries. Failure to show damages, a required element of the claim, subjected the case to a directed verdict and final judgment of dismissal.

If you are considering a claims against someone who has interfered with your expectancy, you should contact a Florida Estate Planning Lawyer who understands the elements of the cause of action as well as the ability to gather and introduce legally admissible evidence.

In Florida, a creditor may open a probate to reach assets of a decedent which were kept in a trust. The trustee of a decedent's trust is responsible to file a notice of trust with the probate court. If you are unsuccessful in having the trust pay the debts directly, you can open a probate on behalf of the estate, file your claims and are entitled to be reimbursed for the legal expenses related to the opening of the probate. See Florida Statute 736.05053. Remember that failure to file a claim within 2 years of the decedents death can waive your rights to file a claim in the probate court.

If you are owned money by a decedent and can not figure out how to file a claim, contact a Florida Estate Planning Lawyer to discuss your options.

In Florida a Will must be in writing, signed by the signed by the testator and authenticated by two witnesses. Florida does not recognize holographic wills that are valid in another state if they do not meet the above requirements. Other than holographic wills, Florida will recognize a will that was validly created in another country.

Therefore a foreign will other than a holographic will is valid in Florida and holographic wills created in anther state or country which are signed by the testator and authenticated by two witnesses are also valid in Florida.

There are three ways in which a will can be contested in Florida.

1. Undue Influence;


2. Testamentary Capacity;


3. Failure to Execute with the Required Formalities.

The above example would involve Failure to Execute with the Required Formalities.
Florida Statute 732.502 defines the requirements that a testator must follow to create a valid will. Carefull attention need to be paid to a will that was not executed in Florida, or an old will to make sure that the requirements were followed at the time the will was created and not necessarily the current requirements.

In addition, a foreign will could be challenged under testamentary capacity. To have the proper testamentary capacity to make a will in Florida you must be of sound mind and either an emancipated minor or more than 18 years of age. Sound mind is having the mental ability to understand the making of a will, knowing what your assets are, and being able to choose who is going to receive them. You do not have to understand it later, but only have a lucid moment at the time you execute the document. If there is a question about mental capacity, it is a good idea to ask questions, and document the answers at the time the will is signed to create evidence of mental capacity for any future dispute.

The third type of will contest deals with undue influence. This happens when a beneficiary or another person causes a person to change a will to the detriment of another person. These are very hard cases to prove but do occur. Often a family member, caregiver, friend, or neighbor with access to a person can cause them to change a will with undue influence.

If you are considering contesting a will in Florida, you should discuss your situation with a Florida Estate Planning Lawyer to determine what your options are.

Once the personal representative (PR or executor) is appointed by a Florida court, takes the oath of office, and posts bond (if required), then he or she is authorized to administer the decedent's estate. A Florida personal representative has a fiduciary responsibility to the creditors, the IRS, and the beneficiaries for proper administration of the estate. The personal representative must not comingle the estate's funds with his or her own funds, and needs to be fully accountable for all of the decedent's property during the administration of the estate. The personal representative may sell some or all of the assets of the estate to raise cash to pay the debts and expenses of the estate, if necessary or appropriate.

The personal representative is obligated to:

a) Identify, gather, value, and safeguard the assets.
b) Publish the "notice to creditors" in a local newspaper, giving creditors an opportunity to file claims relating to the estate.
c) Serve "notice of administration" on specific persons, giving information about the estate and giving notice of requirements to file any objections relating to the estate.
d) Conduct a diligent search to locate "known or reasonably ascertainable" creditors, and notify them of the time by which their claims must be filed.
e) Contact the Social Security Administration and the Veteran's Administration to apply for any death benefits or survivor benefits for which the decedent's estate may be eligible.
f) Locate insurance policies and apply for benefits if the proceeds are payable to the estate.
g) Contact the decedent's employer and any club or fraternal organization to which the decedent may have belonged to determine if the estate or surviving family members are entitled to any benefits.
h) Examine the circumstances surrounding the decedent's death to determine if there are any claims against third parties, which need to be asserted or preserved, such as claims for wrongful death or worker's compensation.
i) Collect rents, accounts receivable, interest, dividends and other income due to the decedent prior to death and that becomes due to the estate thereafter.
j) Assume the responsibility for any litigation or settlement of pending lawsuits in which the decedent had an interest.
k) Keep the property of the estate in good repair.
l) Keep the estate property invested properly until the administration is complete.
m) Locate and access any safe deposit boxes in the decedent's name.
n) Object to improper claims and defend suits brought on such claims.
o) Pay the valid claims.
p) File all past due and current tax returns.
q) Pay the taxes.
r) Employ necessary professionals to assist in the administration of the estate.
s) Pay the expenses of administration.
t) Distribute the statutory amounts or assets to the surviving spouse or family if claims are made.
u) Distribute the appropriate assets to beneficiaries.
v) Close the probate administration.

No personal representative shall be compelled to pay the debts of the decedent until after the expiration of five (5) months from the first publication of notice to creditors and is obligated to make payment of expenses of administration and creditors' claims against the estate in accordance with the priorities set forth in §733.707, Fla. Stat.