Florida Estate Planning and Probate Law Blog focused on recent case law and planning ideas.

THE IMPORTANCE OF A LAST WILL & TESTAMENT



SARASOTA, Fla. -- It's something that experts say you don't want to have running away from you. If you pass away without a will in the state of Florida, the state statutes would decide where your assets go. "Everyone should have a will, because what it does, it shows the court and all the beneficiaries how you want your assets to pass," said Marc Soss, a Sarasota attorney. According to estate planning attorneys, around two-thirds of people don't have a living will. Many folks we talked with at Bayfront Park on Thursday are in the same boat. "At this point we do not have a will and it's something we do need to take care of," said Shannon Ashburn. "We just haven't gotten around to it yet." "I have had a will and it was up to date," said Donna Wilson, "but I divorced and that's null and void now, so I need a new one but you know you put that kind of thing off." It's a little bit of smoother ride for Joe Giannetti. Several years ago he had an attorney put together his will. "We have two children, they're both married and we have grandchildren," said Giannetti. "I feel we're in great shape if something should happen." Attorneys say the will process is typically quick and easy with costs running as low as $100 for an attorney to do it. "Creating a will is actually a very simple process," said Soss. "In most cases, a simple will can take less than 15 minutes." Following the death of Prince, because it's reported he had no will, a bank has officially been appointed to handle his assets said to be worth hundreds of millions of dollars. Marc Soss says this a lesson everyone can learn from. "Whether you have minimal assets or multi-millions of dollars people fail to plan for the important things in life," said Soss.


FIDUCIARY ACCESS LAW IN FLORIDA



On March 10, 2016, Governor Scott signed in law the “Fiduciary Access Law.”  Effective July 1, 2016, the law allows custodians to turn over "data, text, images, videos, sounds, codes, computer programs, software, databases" and other files. Under the law, Internet service providers and other custodians can grant access to fiduciaries who submit written requests with certified death certificates, letters of administration and other documents that show proof of power of attorney. They can request usernames, addresses and other unique subscriber information to identify accounts or ask for a court order to show the fiduciary requires disclosure to administer the estate.

The new law allows account holders to designate authorized users and specify what content they can access. It also permits custodians, like telecom companies that store files, to share that content with fiduciaries or guardians. Many internet companies already have these policies in place. 

CHANGES TO THE PARTNERSHIP RULES COMING IN 2017



The Bipartisan Budget Act of 2015 has strengthened the IRS’s ability to audit partnerships (including multi-member LLCs). The new rules apply to tax years beginning after 2017, and will apply to partnerships of 100 or more partners. To prepare for these changes, Partnerships should amend their Partnership Agreements and select a “Partnership Representative” (sole contact individual with the IRS auditor and someone authorized to make all decisions regarding how to handle the audit).

The new rules require the IRS to assess the partnership if filing errors are detected during an audit. The Partnership Representative will then be responsible to determine whether the partnership itself (the current partners, indirectly), or those who were partners during the audit period, should pay the assessment. The Partnership Representative will also be able to determine whether the entity could opt-out of the new rules (if it has 100 or fewer partners, individuals, S corporations, C corporations, or estates of deceased partners). If you have an S corporation partner, then you must count each of its shareholders for this purpose. If a Partnership Representative is not designated by the entity, the IRS reserves the right to appoint one for the entity.

Partnerships should begin planning for 2017 today by determining: (i) who will serve as the Partnership Representative; (ii) the level of indemnification they will receive against any costs or liabilities that may be incurred in that role, and (3) the level of accountability they will have to the company and its partners. It is important to note that Partnership Representative does not need to be a partner of the entity.

ONLY ONE RESIDENCY TAX EXEMPTION AT A TIME: DON'T BE GREEDY

FloridaHomestead law provides two major benefits: (i) creditor protection; and (ii) partial exemption from ad valorem tax. However, each of these benefits can be lost if you claim a residency based tax exemption in another state (you can’t be a resident of two states at the same time). The recent Fourth District Court of Appeals ruling in Venice L. Endsley, Appellant, v. Broward County, Finance and Administrative Services Department, Revenue Collections Division, Appellees. 4th District. Case No. 4D14-3997. March 23, 2016, makes that fact abundantly clear.

In Endsley, a husband, with a residence in Indiana, and a wife, with a residence in Florida, simultaneously received residency based property tax exemptions. In August 2006, the Broward County Property Appraiser, in reliance on Article VII, Section 6(b) of the Florida Constitution ("[n]ot more than one exemption shall be allowed any individual or family unit or with respect to any residential unit") challenged the wife’s eligibility for the Florida Homestead exemption. The challenge dated back to 1996, the first year the couple had simultaneously claimed a residency based property tax exemption in Indiana and Florida, and removal of the Save our Homes protection. Both the trial court and 4th DCA found that the plain language of the Florida Constitution meant that only one homestead exemption was allowed, regardless of location.