There are many benefits to avoiding probate for certain assets, and South Florida residents may have yet another. One of the reasons that individuals choose to avoid probate is because the process can take longer, and after certain budget cutbacks that process could become even slower.
]]> The Miami-Dade clerk's office has already been hit with cutbacks that have caused a slowdown in court functions such as processing paperwork in certain cases. Now, if Florida lawmakers can't come to a decision over $31 million by a July 1 deadline, the cutbacks could cause slowdown across Florida.Part of the problem in Miami has been that the clerk's office is simply understaffed. Without the extra funding, clerk's offices across the state could be forced to make staffing cuts as well and even close some satellite offices. The decreased funding could mean that the backlog would increase by an estimated 41 days for certain tasks, including probate cases.
A few types of cases will remain unaffected because law requires a speedy process. These cases include criminal cases and domestic violence cases. While few would argue the importance of those cases, they still require staff attention, which means that other cases get put on the back burner.
Backlog is not a new problem in clerk offices across the state, so if probate time is a concern of yours, a discussion with an experienced estate planning attorney is the first step.
Source: Loan Safe, "Cuts Would Strain South Florida Clerk of Courts' Offices," Alex Ferreras, May 14, 2012
]]>The difference of opinion can be found between the actress's husband and her daughter. Zsa Zsa has been married to her husband Frederic von Anhalt for 25 years. He is with her on a daily basis and acts as her caretaker. However, Zsa Zsa's daughter Constance Francesca Hilton believes that Frederic cannot adequately take care of her mother's best interests
]]> The couple may have been together for 25 years, but some of their largest disagreements have been over how to handle the actress's vast financial estate. Each spouse has on more than one occasion accused the other of mismanaging their finances.One major point of contention between the daughter and Frederic has been the mansion. Frederic claims that Zsa Zsa's income has become outweighed by her necessary expenses. Frederic wants to sell the mansion, but Hilton references a doctor's opinion that the actress needs "continued access to familiar personas and environment." The doctor said that these are "crucial to her comfort and maintenance of her continued health."
The husband and daughter plan to attempt mediation in the near future as a way to avoid litigation over the issue.
Source: The Washington Post, "Attorneys tell judge they are trying to settle case over Zsa Zsa Gabor's care, finances," May 2, 2012
]]>Gary Coleman was on the television show Diff'rent Strokes. The actor died on May 28, 2010 after he fell in his home and suffered a brain hemorrhage that lead to a permanent coma. The actor died after his ex-wife discontinued his life-support. The actor died, but he left behind two versions of his will that have created controversy over his estate.
]]> The actor and his ex-wife were married in 2007 and divorced in 2008. It is claimed the divorced couple continued a relationship after the divorce that may constitute a common law marriage. The actor's longtime friend and business partner was named as the executor of his estate, an heir and chief executive officer for his company.Gary Coleman's estate is currently in a battle over the competing wills. The battle is between his ex-wife and his business associate and concerns which will govern in the distribution of his estate. Before he died he drafted two wills, one in 1999 and a second in 2005.
In 2007, he made a hand-written amendment that declared his ex-wife as the sole heir and stated the amendment -- also known as a codicil -- should supersede all previous wills. The amendment declared it was made under free will and without coercion. The contested wills are currently pending in litigation and a final decision could depend on whether the judge believes Gary Coleman and his ex-wife reestablished a common-law marriage after their divorce. If the couple established a common-law marriage, the ex-wife may be the sole heir to the estate.
A handwritten amendment to a will could be upheld in court under certain circumstances; however it is never a truly secure way to protect your legacy. An attorney should always handle any codicil, amendment or new will. Your attorney will ensure that the proper terms are included, witnesses present and signatures signed so that the will is upheld according to your wishes.
Source: The Chicago Tribune, "Utah judge to decide fate of child TV star Gary Coleman's estate," Jennifer Dobner, May 9, 2012
]]>One of the processes in the finalization of the decedent's estate is the distribution of the estate. Sometimes the decedent's estate is distributed through a will that is validated by a probate court. This process can quickly become complicated when one or more family members contest the will or do not act with best intentions. When family members intentionally interfere with inheritance rights, is there a remedy?
]]> The answer is yes. In Florida, to prove tortuous interference with an expected inheritance, five elements must be proved. In the first place, there must be an expected inheritance to have been interfered with. It must be proved that there was an intentional interference and the interference must rise to a tortious level. There must be reasonable certainly that the expectation would have been received "but for" the interference, and that there were damages.A Florida appeals court recently ruled on the fifth element: damages. The court decision was made in a case wherein a family member was intentionally interfering with other family member's inheritance rights. After the death of the family's father, his daughters claimed that their stepmother intentially manipulated the father into changing his will. The appeals court decision stated that the damages must be proven to a "reasonable certainty," and that evidence must support this level of certainty. Essentially, evidence must show more than a general estimation.
This area of law is constantly developing, and the case law surrounding this claim will continue to develop and potentially affect probate litigation in Florida. An experienced attorney can help resolve related probate issues and help navigate through a complex probate litigation to ensure inheritance is appropriately distributed and the legacy of the deceased is preserved.
Source: Business Review USA, "Tortious Interference With Expected Inheritance in Florida," April 29, 2012
]]>As a part of their estate plan, a young family will often take out life insurance policies that would help cover expenses such as funeral costs or to supplement income so that bills will continue to be paid. Life insurance policies only work if the money is actually paid, something that some beneficiaries say MetLife failed to do for families across the nation, including some in Florida.
]]> The monthly premiums that are paid by policyholders are reinvested by the insurer. The insurer allegedly failed to keep track of whether or not the policyholders had died, which resulted in more profit for the insurer. Generally, a claim is made by a survivor to the insurer requesting the benefits. The policies in dispute are ones in which no claim was made, but where MetLife allegedly failed to conduct due diligence in search death records.The accusations against MetLife were put to rest this past week when MetLife agreed to a settlement. The settlement would not only result in approximately $188 million being paid to beneficiaries this year, but another $438 million could be distributed over the next 17 years. If no original beneficiaries or heirs can be found, the money will go to the individual's state as unclaimed property.
As a part of the settlement, MetLife also agreed to lower the "assumed age of death" from 99 years down to 90 years. The assumed age of death is used when a claim has not been made before the policyholder reached the pre-set age. At this point, the insurer investigates whether the policyholder has died and pays out the remainder on the policy either in cash to the holder if they are still alive or to the heirs or the state when an heir cannot be found.
Source: The New York Times, "MetLife Settles Cases on Benefits," Mary Williams Walsh, April 23, 2012
]]>Jointly owned property passes outside of the estate in part because of the ownership properties. When real estate is considered joint property, the transfer upon the death of one partner is not a complete transfer from one owner to a new owner. It is a transfer of interest that occurs automatically, without mention in a will or by way of an intestate transfer. So does the surviving owner have to pay an inheritance tax?
]]> In answering the question, the first issue to address is the difference between federal and state taxes. Federal estate taxes are imposed based on an exemption amount. If an estate is valued beyond the exemption amount, everything above that threshold is taxable. State laws are different everywhere and the property passed could be subject the laws of the state in which it is located. Some states laws require that a 10 percent inheritance tax be paid on the ownership interest passed.However, like every other law, there is a laundry list of exemptions from state inheritance tax. The property could fit into one of these exemptions depending on who the transfer was to -- a spouse, parent or child -- or the size of the estate or the type of property.
Estate administration is so much more complex than "I leave grandma's watch to my son." It is for this reason that many individuals seek the assistance of an experienced estate attorney when planning their legacy or for the administration of a loved one's estate.
Source: Del Marva Now!, "Legally Speaking: Does an inheritance tax have to be paid on property?" Robert McCaig, April 30, 2012
]]>A broad sales pitch such as this one, without further follow-up could leave a person a little confused. How would a trust help me? Do you have to be wealthy for a living trust to be useful? How much control can I retain? Why does it avoid probate and why is that beneficial to me?
]]> Some of the sales pitches for living trusts are made through free seminars by someone with a hurry-up agenda, but estate planning requires more thought and discussion over the unique circumstances of every individual's estate.For example, the elimination or avoidance of the probate process for the assets placed in the living trust is the primary area of confusion for those who are solicited to establish a living trust. Probate procedures and associated costs are determined by individual states, and Florida has its own probate laws which can be confusing unless explained by a knowledgeable professional.
The analysis between the associated probate concerns and the establishment of a living trust can be complex depending on the state laws and the type of assets owned by the person putting the assets into the trust.
A living trust can streamline the process for disbursement of assets for the heirs. Living trusts have many values, which are not easily understood by a simple statement that they "avoid probate." An experienced attorney can assess your individual circumstances and fully explain the benefits of each type of estate planning tool available to provide a knowledgeable and comprehensive plan for the future of your assets.
Source: Herald.net, "Living trust don't save taxes, but can be helpful," Steve Tytler, April 8, 2012
]]>The wrong power of attorney designation leaves a person suffering from Alzheimer's disease open to abuse that could leave them with damaged credit scores, closed bank accounts and foreclosed upon properties. Some assets sold as a result of abuse are very difficult if not impossible to recover.
]]> Part of the problem with the disease is that an individual suffering from it is often in denial that they may have the disease. When people suffering from Alzheimer's do not accept that they have the disease, they may not execute a power of attorney during periods of complete awareness. Unfortunately, it is during moments of confusion when they are most susceptible to being influenced by a person who does not have their interests in mind.At times, children of the aging parent can even become part of the problem. The children may fear taking away a parent's independence or meddling in his or her affairs that the children may actually fail to see when the parent needs their help.
Alzheimer's may be a difficult issue to cover with a parent, but consequences of a failure to discuss it could be worse. Discussing signs of Alzheimer's early and addressing the possibility of incapacity can help parents and children work together to ensure that a parent's estate is protected and that the right person is designated for a power of attorney document.
Source: Smart Money, "Talking to Mom About Alzheimer's and Her Money," Glenn Ruffenach, April 23, 2012
]]>After her death, a claim was levied against the son alleging that he took advantage of his mother's feeble nature prior to her death and coerced her to change her will to provide him with a larger inheritance and remover certain charitable designations. He was even convicted in 2009 with elder abuse. The contested will was finally settled this past month and the son was stripped of $14.5 of his $30 million inheritance.
]]> A will executed in 1997 acted as the basis for a settlement of the estate that resulted in several charitable donations, including a $30 million and another $3 million set aside for the museum to recover a Childe Hassam painting sold by the son. The painting was originally set to pass to the museum in the 1997 will.A portion of the $14.5 million stripped from the son's $30 million inheritance was used to pay restitution to his mother's estate for the damage caused by his abuse. Preserving a person's legacy is not something that should be taken lightly. Although the basis of estate administration is often monetary value, will contests are not always "about the money." In this instance, the grandson wanted to preserve his grandmother's legacy as a philanthropist even though it may not have resulted in a larger inheritance for himself.
Source: NY Daily News, "Anthony Marshall loses half his $31 million inheritance from mom Brooke Astor in court settlement," Bill Hutchinson, March 28, 2012
]]>Recently, a woman's will went in front of a probate court judge for review of one of the clauses within the will. The probate process illustrated in this case is similar to the probate process in Florida.
]]> The deceased woman's will, which was written in 1988, had a specific clause that stated her cat should be euthanized upon her death. The executor of the decedent's will had the probate court review the clause of the will. The executor made a request to the probate court that the clause regarding the euthanasia of the cat to be set aside.Probate courts in Florida provide court supervision for the disbursement of the decedent's assets. Probate courts provide for the identification of assets, payment of debt and distribution of assets. Although the reason the probate court did not enforce the clause in the will that related to the euthanasia of the decedent's cat was not shared, it could be presumed that the probate court determined it was against public policy.
The decedent's will has been finalized through the probate process. The trustees of the decedent's will were the bankers at the woman's bank. The trustees promptly found a new home for the cat at a local pet sanctuary. The trustees also donated food, supplies and toys to the pet sanctuary.
Source: Rockford Register Star, "Chicago home found for cat destined for death," April 12, 2012
]]>Tangible items can also help a couple determine whether they want to make some sort of joint estate plan or whether they want to make their own estate plan with their own representation. Assets themselves can help play a role in the decision.
]]> For example, a family business could lead a spouse to consider planning their estate separately. There are times when a spouse may want to make decisions about whether the business should be sold, transferred or even how an individual interest should be handled. While some of these businesses may have their own transfer of interest rules, discussion over the planning may go more smoothly without the other spouse there.Secrets can also play a major factor. In order to make an effective estate plan, it is important to know all of the details. If a spouse does not feel like they can freely speak about everything, it can hinder the process. Some secrets -- like a secondary lover or existence of a child the other spouse is unaware of -- require separate planning but need to remain secret.
Even documents can play a role in the decision. Some couples have prenuptial agreements. The agreements are made in contemplation of divorce, but are often a good indication that a couple may want to also make their estate plans separately as well. A power of attorney or executor designation is often written into wills. One spouse may have a very different opinion about who they want to have control after they are gone.
The best way to make this decision is to have a consultation with an estate planning attorney. You may decide to plan together or plan separately after the consultation, but either way, you will ensure that your interests are heard and represented in your plan.
Source: Forbes, "Estate Planning For Couples: Should It Be A Solo Or A Duet?" Deborah L. Jacobs, April 10, 2012
]]>The definition of what constitutes a family can be very diverse, which can lead to different ideas about how assets should be divided or what a child's inheritance should look like. Couples with children from previous marriages or ones with different biological parents may have varying ideas when it comes to how money should be divided or how a trust should be structured.
]]> Estate plans made after 30 years of marriage can look vastly different than those that are created after only one month or year or even five years. Not just the age of the marriage, but the age of each separate spouse can also be a factor in determining whether a couple may desire planning their estate separately.Another variable in determining whether to consult separate counsel is if there could be a dominant spouse in the relationship. A spouse who may have more wealth than the other spouse may want to consider a separate attorney in order to protect their interests. This is also true in the reverse. One spouse may simply have a more dominant personality and talk over the other spouse. Without be able to speak up or being afraid to do so could make for a plan that does not actually fit the needs of the less dominant spouse.
What a couple looks like in terms of structure or how a couple communicates are not the only factors in determining whether to seek separate counsel or to write their wills separately. The assets themselves and other tangible items can affect the decision.
Source: Forbes, "Estate Planning For Couples: Should It Be A Solo Or A Duet?" Deborah L. Jacobs, April 10, 2012
]]>Effective estate planning can provide Florida heirs a way to receive the remainder of the decedent's estate after the debt is paid. This is accomplished when the decedent paid debt as the debt was incurred. If the bulk of the decedent's debt was paid at the time of the death, the expectation is the heir will be able to pay the remainder of the debt with the decedent's liquid cash.
]]> If the decedent did not have enough liquid cash, the heir will have to liquidate assets to pay the debt. Estate planning can calculate the debt to cash ratio to ensure the heirs are able to receive an inheritance. Creditors of the estate are always paid before the decedent's heirs can collect their inheritance. Although this is the general rule, some state laws provide for processes for heirs to directly receive benefits regardless of the estate's creditors.Although many decedents are elderly family members, often the decedent can be a young person. Estate planning provides for the final wishes of the decedent and planning for the financial certainty of a family or estate. The process of estate planning is recommended to be completed at an early age to effectively plan for the future.
Source: Business Insider, "Here's What Happens To Debt When You Die," Shelly K. Schwartz, March 25, 2012
]]>Personal debt laws can differ between states and Florida residents should account for presiding laws when finalizing estate planning. In general, the personal debt of the decedent, who would also be the borrower, is not passed on to the decedent's children or spouse. Although this is the general theory, many times financial exceptions arise.
]]> Usually the person who agreed to the debt is responsible for the debt and if that person dies, the debt dies with him or her. Therefore, if the decedent's estate does not have enough money or assets to cover the estate's debt, the debt will disappear and be considered a loss. In this situation, the executor of the estate will sell the estate's collateral to pay as much of the debt as possible. In this situation, remaining family members are not responsible for the remaining debt of the estate.This scenario changes when some of the estate's debt has a co-signer. If the decedent's debt has a co-signer, the co-signer may be responsible for the existing balance of the debt. This obligation to repay the debt of the decedent can also happen to guarantors of the debt. This scenario often occurs to children of the decedent who have co-signed for their parent's medical bills.
Source: Business Insider, "Here's What Happens To Debt When You Die," Shelly K. Schwartz, March 25, 2012
]]>The Ray Charles Foundation was one of the many charities that benefited from the singer's will in some way. The foundation recently filed a suit against the seven of the singer's 12 children in federal court. The lawsuit alleges that the children wrongfully a copyright transfer that was supposed to leave the foundation with the copyrights to a handful of songs.
]]> The dispute arose from a series of trusts that were put in place for the 12 children. In 2002, the singer got as many children as could attend to come to a meeting where they agreed to be satisfied with a trust with a value of $500,000 each. In exchange, the children agreed to give up the rest of their possible interests in the estate. The promise was memorialized in a written agreement signed by each of the children.By 2010, the children had "served copyright termination or transfer notices on the publishers of approximately fifty-one individual musical compositions authored in whole or in part by Ray Charles." The termination of the copyrights came after most of the children had received their $500,000 maxim inheritance. Terminating the copyrights and further transfers would result in a large increase in income for the children and deprive the foundation of income they say they have a right to.
Source: Courthouse News, "Ray Charles Foundation Sues 7 of his Kids," Dan McCue, April 2, 2012
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