The Florida Estate Planning and Probate Law Blog is focused on recent federal and state case law and planning ideas.


Our beloved pets (dogs, cats, pigs, birds, etc..) are typically buried in a pet cemetery. However, there is a growing movement today to allow pet owners to be buried (or their cremated ashes) with their pets in a human cemetery. New York is just one of a few states to pass laws allowing such burials (in cemeteries that are willing to handle them, as Church cemeteries may opt out). Similar bills are pending in Louisiana, Indiana, Massachusetts, and elsewhere. In Pennsylvania, cemeteries can offer one section for people, another for pets, and a third area for both. Virginia permits pets and owners to lie in a designated area of a cemetery, as long as they’re in separate caskets. The issue impacts over half of the households in the U.S. On an international level, Germany has allowed owner-pet cemeteries for several years. While the idea may seem strange to none pet owners, individuals devoted to their pets consider them members of the family and grieve their deaths deeply.


The term “Snowbird” refers to an individual who spends their winters in one of the sunshine states (Florida, Arizona, etc..) and their summers in one of the cooler weather states (Northeast, Northwest, etc..). Most Snowbirds claim one of the sunshine states, without or a limited state income tax, as their permanent residence. Problems can arise for a Snowbird when their former state of residence still deems them to be a resident of that state and subject to its states taxing authority. For example, a New York resident is subject to both state and federal income taxes on all income earned. In contrast, a Florida resident is only subject to New York income taxes on income derived from “New York sources” (rental income, etc.). When challenged, a former New York state resident will be forced to show by “clear and convincing evidence” that they intended to moving to Florida or another one of the sunshine states permanently and not just a rouse to avoid their former state of residences income tax burden. While “intent” can be a very subjective test, states with income taxes and estate taxes use written audit guidelines to help them determine a taxpayer intent (where is your permanent place of abode). They will examine and look at where you spend more than one hundred eighty-three days a year, business involvement, family connections, your driver’s license registration, where you are registered to vote, where you maintain your family heirlooms, works of art, books, antiques, family photo albums and receive your mail. It is important, to avoid this dilemma, that if you intend to make Florida your permanent residence you: (i) obtain the homestead exemption on your Florida residence; (ii) register to vote in Florida (even if you are renting a home or condominium); (iii) register your vehicles in Florida; (iv) update your estate planning documents to reflect Florida as your state of residency; and (v) affiliate with a Florida house of worship (church, temple, mosque, etc..).


The Elder Abuse and Prevention Act has a high chance of becoming law this year. The legislation has received substantial support among elderly advocacy groups because of its promise to make the world a safer place for seniors. Additionally, the Act will increase penalties for marketing fraud schemes targeting seniors and expand data collection of elder abuse to help create more reliable statistics highlighting the prevalence of this problem. The Act is also aiming to enlist the Justice Department to become a greater protector of seniors.


In a 2016 study, 26% out of 3,105 wealthy individuals surveyed had a complete estate-planning strategy to transfer their wealth to the next generation. Further, only 54% had created a will, but most had not updated them. As a result, $1.5 trillion of the $3.2 trillion is without direction as it falls into the hands of the next generation. Perhaps, the reason why people avoid preparing an estate plan is because they are not sure what they want to do with their wealth at some distant point in the future and a clearer picture of what heirs should receive will present itself at a later date. Another part of a solid estate plan is to communicate important facts so that the heirs are able to prepare for an inheritance. The sooner in life these conversations are expressed, the smoother the wealth transfers. Don’t Delay Planning Your Estate, Barron’s, February 10, 2017.


In December 2015, legislation went into effect that requires the IRS to provide a list of names to the State Department of individuals with “seriously delinquent tax debt” (more than $50,000 in unpaid federal taxes, including interest and penalties). These individuals, if their tax debt is not resolved (pays the tax in full, enters into an installment agreement, an offer in compromise with the IRS or a timely request for collection due process hearing), are at risk of having their U.S. passports revoked within the next few months. The legislation requires that the State Department to refuse to issue new passports and provides them with discretion to revoke currently issued passports. The IRS recently announced that it would begin sending IRS Letters 508C, notice of certification of seriously delinquent federal tax debt to the State Department, to the taxpayer’s last-known address. The letter will inform the taxpayer that the IRS has certified him/her as owing “seriously delinquent tax debt.” At that time, the IRS will also send the certification to the State Department. The IRS reports that the State Department will take action within 90 days.


The IRS has published Rev. Proc. 2016-55 and the federal estate and gift tax limits for 2017. For 2017, the credit against federal estate tax (federal exclusion amount) is increased to $5,490,000. For an individual who passes away during 2017, no federal estate tax will be imposed if his or her gross estate is less than $5,490,000. For a married couple (including a same-sex couple) the federal exclusion amount is $10,980,000. For 2017, the federal gift tax limit of $14,000 remains in place. This allows an individual to gift up to $14,000 in 2017, to any individual without being required to report the gift to the IRS or utilizing a portion of their lifetime gift tax exemption (also $5,490,000). Spouses can make a joint gift of $28,000 without being required to report the gift to the IRS or utilizing a portion of their lifetime gift tax exemption. The federal gift tax limit does not apply to gifts between spouses. However, if the gift is made to a spouse who is not a United States citizen, the first $149,000 of gifts are not included in the total amount of taxable gifts that must be reported to the IRS. In addition, the federal gift tax limitation does not apply to qualified gifts paid on behalf of another individual directly to a college or university or for medical purposes.


Congress is considering making it more difficult for a community spouse to utilize an annuity to qualify for Medicaid. The proposed bill would prevent married couples from using assets to purchase an annuity for the community spouse, so that the institutionalized spouse can apply for Medicaid. The bill would count half of the income from a community spouse's annuity as income available to the institutionalized spouse for purposes of Medicaid eligibility. Savings from the legislation would be utilized to reduce waiting lists for home health care waivers. In addition, Congress is reviewing legislation that would: count lottery winnings as income; and require Medicaid applicants to prove U.S. citizenship or residency before receiving benefits.