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


On Wednesday, April 27, 2017, President Trump outlined his plan for income tax reform. His plan includes the following: decreasing the top corporate tax rate from 35% to 15%; imposing a one-time tax on the repatriation of previously untaxed overseas profits at a to-be-determined rate; conversion from the current system of taxation on worldwide profits to a territorial-tax system in which foreign profits are not taxed; decreasing the number of income tax brackets from seven (7) to three (3); a top individual income tax rate of 35% (down from the current 39.6 percent); maintaining the long-term capital gains and dividends tax rate at a maximum rate of 20%; repeal of the Alternative Minimum Tax, Estate Tax, and 3.8% Medicare tax on Net Investment Income; elimination of itemized deductions (deduction for state and local taxes); and doubling of the standard deduction (from $12,000 to $24,000 for married couples filing jointly and from $6,000 to $12,000 for single filers). The 15% corporate rate would apply to profits of pass-through businesses (S Corporations and LLCs) whose profits currently flow through to individual taxpayers and are taxed at a current rate as high as 39.6%. Itemized tax deductions for charitable contributions, mortgage interest and retirement savings will remain in place.


We live in an ever-changing federal income and estate tax environment. On January 1, 2017, the federal estate tax exemption increased to $5.49 million per individual. That amount excludes over ninety-five (95%) percent of all decedent estates from payment of any federal estate tax. In addition, thirty (30) U.S. states have no estate or inheritance taxes while twenty (20) states and the District of Columbia currently impose an estate (14 states) or inheritance (6 states) tax, or both. As a result, your estate could be exempt from the federal estate tax but subject to a large state estate tax.


With almost 70% of the retiree population solely living on social security it is not surprising that the percentage of families with debt headed by someone age 65 to 74 rose from about 50% in 1989 to about 66% in 2013. Personal debt nearly doubled during the same time period from 21% to about 41%. For most seniors the debt is not being utilized to live a lavished lifestyle but to pay for expensive nursing home, aids and in-home care. As seniors accumulate this debt their families become concerned over what happens to their unpaid bills when they die. It is recommended that families discuss these increasing debts, what amounts, if any, will be the responsibility of their estate, and what they can do to protect an inheritance for their heirs. Families need to recognize that their children are not responsible for their debts at death and only the decedent’s estate assets (subject to probate or Trust administration, but excluding exempt assets) can be utilized to repay the debt. For example, a retirement account (IRA or 401(k)) with a designated beneficiary is creditor protected. A parent’s federal student loan debt will be canceled at death, although taxes may be owed on the forgiven debt. It is important to consult with a legal specialist to learn more about the options that are available in each state.


The new State of Washington Power of Attorney statute went into effect on January 1, 2017 (“Act”). The Act provides several changes and additions to the previous law, which aim to address previous ambiguity in the law and to provide safeguards to prevent possible abuse of authority by an agent under the power of attorney. Some of the key provisions of the Act are: Agent/Attorney in Fact: If the principal names co-agents to act on his or her behalf, the Act now clarifies that co-agents must exercise their authority jointly, unless the document specifies that each co-agent may act independently. When Effective: Under the Act, a power of attorney must now expressly state that the document is not affected by the disability of the principal, or that it becomes effective upon the disability of the principal in order for the power of attorney to be “durable” and not affected by the principal’s subsequent disability. The powers granted to the agent may be effective immediately upon signing or may spring into effect only when the principal becomes incapacitated. Powers Granted to Agent: The Act allows the principal to grant authority to the agent over broad subject matters, including but not limited to, the authority to manage the principal’s real and personal property, stocks, bonds, and other financial instruments; to make gifts; to manage the principal’s estate, trusts, and other beneficial interests; and to manage and operate a business. By drafting the power of attorney to refer to certain specific categories of powers the agent may be granted, the power of attorney can incorporate the more detailed descriptions of these powers set forth in the Act. This could eliminate ambiguity in the document itself regarding the scope of the agent’s particular powers and may allow the power of attorney document itself to be simplified. Under the Act, the authority to make gifts is limited to the amount of the federal gift tax annual exclusion ($14,000 per year to each recipient) unless otherwise stated in the document. Formalities: The principal’s signature must either be: (i) acknowledged by a notary; or (ii) attested by two or more witnesses, who are competent, and are not home care providers for the principal or related to either the principal or agent by blood or marriage.


Section 732.802 of the Florida Statutes is known as the “Florida Slayer Statute.” Subsection (3) provides “that a named beneficiary of a life insurance policy “who unlawfully and intentionally kills … the person upon whose life the policy is issued is not entitled to any benefit …” Moreover, subsection (5) provides that a final judgment of conviction of murder of any degree is conclusive, but in the absence of such a conviction, “the court may determine by the greater weight of the evidence whether the killing was unlawful and intentional for purposes of this section.” In The Prudential Ins. Co. of Am. v. Harding, 2016 WL 6568085 (M.D. Fla. Nov. 4, 2016), a court found the claim of self-defense to be enough to avoid application of the Florida Slayer Statute in a domestic partners death. A physical altercation in February 2015, resulted in the death of one of the partners (the owner of a life insurance policy with a beneficial value of $466,000). The alleged criminal perpetrator was the sole beneficiary of that life insurance policy. The decedent’s sister argued that the surviving partner was ineligible to collect the life insurance benefits under Florida’s Slayer Statute. However, the State Attorney didn’t pursue charges against the surviving partner as it did not believe there was enough evidence to obtain a conviction. The Circuit Court applied the greater weight of the evidence standard and found that it wasn’t more likely than not that surviving partner acted unlawfully in his actions; and it was just as possible that he acted in self-defense. Accordingly, the court found that Florida’s Slayer Statute didn’t apply and ordered the distribution of the life insurance benefits to the surviving partner.


Although a challenge to a Last Will and Testament (“Will”) or Revocable Trust (“Trust”) (an inheritance dispute) are a sad reality there is no guarantee that even with proper planning a contest may be avoided. Will and Trust contests are typically the result of a disgruntled family member or friend challenging the validity of the documents. The have a higher probability of occurring in in blended families, when a child is disinherited or when the children are not treated equally. The following are some proactive steps that can be taken: • Create your estate plan early in life and update it regularly. Many inheritance disputes result from estate planning documents being signed shortly before the death of the testator. • Keep copies of your old estate planning documents. Your old estate planning documents may be reinstated or serve as evidence of your intent if a newer document is successfully challenged after your death. It makes it difficult for Nephew John to challenge your estate planning documents when all your prior documents also excluded him as a beneficiary. • Explain a disinheritance or inequity in distributions. Make sure your estate planning documents include specific language as to why an individual who might be expecting an inheritance is not receiving one, or why your estate will not be equally divided between your children (prior gifts to one child). • Establish your competence with regular medical visits and notes. Have disinterested individuals witness the executed of your estate planning documents to diminish the ability of a challenge of undue influence. • Discussing the general contents of your estate plan with your family. If nephew John knows years in advance that he will not be a beneficiary, it may decrease his motivation to challenge your estate plan.


Family inheritance disputes have become common place throughout the world. The recent case of Edwards and Kuiper v. Maxwell, 42 Fla.L.Weekly D742a (1st DCA, March 31, 2017) evidences that it know impacts adopted siblings. In this case, an adult son was a discretionary beneficiary (distributions to him were at the sole discretion of the trustee) of his great-grandparents Trust. His father later adopted another child (which also made him a beneficiary of the Trust). After the adopted son was dispersed thousands of dollars from the Trust, the adult son challenged the adoption since he was never provided with notice of the adoption or the opportunity to challenge it. In reversing the lower court, the 1st DCA found that the adult son's "interest as a beneficiary was only “contingent” since subject to the discretion of the trustee," and he did not possess a direct, financial and immediate interest in the trusts.