WILL YOUR PRE-MARITAL AGREEMENT PROTECT YOU?

♠ Posted by Marc J. Soss in estate plan,florida estate planning,Last Will and Testament,post-marital agreement,pre-marital agreement,Revocable Trust,Sarasota attorney,Sarasota Tax Lawyer

 

In Hahamovitch v. Hahamvitch, the Florida Supreme Court Case No. Sc14-277 (September 10, 2015) addressed a divorcing spouse claim that a twenty (20) year old pre-marital agreement did not apply to the enhanced value of non-marital property, attributable to marital labor. Her position was that the enhanced value to the husband’s assets was subject to equitable distribution. The divorcing spouse additionally claimed an interest her husband’s earnings, since their agreement did not specifically address the issue.

The husband argued that the agreement did provide that the property “owned or hereby acquired by each of them respectively” would be free of claims of the other spouse. It also provided that “each party agrees that neither will ever claim any interest in the other’s property,” and if one party “purchases, [a]cquires, or otherwise obtains, property in [his/her] own name, then [that party] shall be the sole owner of same.” Thankfully, both the District Court of Appeals and the Supreme Court concurred and found that the above general waiver language was broad enough to protect enhancement in value of property and the husband’s separate earnings as separate property of the husband, thus denying the wife an interest in those assets upon divorce.

When drafting marital agreements it is important to look to Fla.Stats. Section 61.079 and Casto v. Casto,  508 So.2d 330 (Fla. 1987), in which the Florida Supreme Court found that unfairness or unreasonableness can negate enforceability, although full and complete financial disclosures will still allow for enforceability even if the agreement is unfair or unreasonable.

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STEP-CHILDREN'S RIGHTS IN FLORIDA PROBATE PROCEEDINGS

♠ Posted by Marc J. Soss in estate plan,Family Trust,florida estate planning,florida probate attorney,florida probate lawyer,Last Will and Testament,post-marital agreement,pre-marital agreement,Revocable Trust,Sarasota attorney

One of the most common scenarios, when dealing with Florida probate matters in the second marriage situation, is that upon the death of the first spouse his or her children claim that the surviving spouse is taking their parent's assets and not communicating with them. Surviving spouse typically respond with claims that all of the marital and household assets passed to them, as the surviving spouse and the step-children are interfering. To avoid this problem the following steps should be followed:

 

Step One: Make a List How the Deceased Person’s Assets are Titled

Start with a list of each spouse's assets and how they are titled.  That will determine the need for probate and the rights of the various parties.

 

Step Two: Remove All Non-Probate Assets From the List

Not all assets are Florida probate assets. Many assets pass automatically to a survivor based on how the asset is titled. Common examples of “non-probate” assets include:

• Real estate that is owned jointly with rights of survivorship will pass to the surviving owner(s).
• Bank accounts that are jointly owned will pass to the surviving owners.
• Life insurance and financial accounts (bank accounts, brokerage accounts, CDs) that have valid beneficiary designations will pass to the surviving beneficiaries.
• Assets that are titled in a living trust will pass in accordance with the terms of the trust.

 

It is important to understand that it doesn’t matter if the deceased person had a will or what the will says. If the asset isn’t a probate asset, it never gets to probate and what the will states.  The way the asset is titled will trump whatever the will says about it. 

 

Step Three: Be Sure that You can Prove Ownership of Whatever is Left

Subtracted from the list the non-probate assets and the assets that remain are assets of the estate.  These are the “probate assets” that are governed by the deceased person’s will (if he or she had one) or the intestacy laws (if he or she died without a will). If the decedent had a bank account or parcel of real estate in his or her name alone, that property will pass under the Will or through the intestacy laws to his or her heirs are beneficiaries. 

But many times, all that is left after subtracting out the non-probate assets is miscellaneous personal property (household furnishings, etc.).  You then need to be able to prove who owns that property.  If the remaining items were purchased by both spouses then it will be very difficult to prove in court who owned it. This kind of factual difficulty makes it almost impossible to claim an interest in most personal property.

 

Step Four: Decide Whether it’s Worth It

After reviewing steps 1-3, you should have a list of assets and know their value.  You then need to compare the value of the assets with the cost of probate (or an alternative to probate) to determine whether it is worthwhile to deal with the estate in court. For small estates, there may be an alternative to full estate administration that will make financial sense.  If a full administration is required, you will want to be sure that the net value of the assets (after subtracting out the debts) involved exceed the value of the decedent’s property.

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SIGNS OF ELDER ABUSE

♠ Posted by Marc J. Soss in elder abuse,elder fraud,elder law,estate plan,florida estate planning,florida probate attorney,Florida Retirement,Last Will and Testament,post-marital agreement,Revocable Trust,Sarasota attorney

The first signs of elder financial abuse are easy to miss. Maybe there's a new, overeager "best friend" who gives off a strange vibe, excessive secrecy around a new friend, or paranoia or anger when talking about money.  It is very rare to discover the sudden withdrawal of large sums of money.  

A perfect storm of factors make America's elderly the target of a fast-growing, insidious crime. Americans are living longer, and with the shift from pensions and toward retirement savings, they face an array of complex choices about what to do with their money. Making matters worse, as each year passes, their cognitive abilities tend to decline while the stakes of their money decisions get higher. Criminals always steal from where the money is, and scam artists always flock to wherever financial confusion can be found.

MetLife estimates that older Americans are cheated out of $2.9 billion annually. In another study, one in 20 older adults report being victimized by "financial mistreatment" at some point in the recent past.  The average loss is between $100,000 to $150,000, an entire lifetime of savings, with no opportunity to rebuild their savings. 

Variations on a Scam

There's a wide range of crimes older Americans face. Some crimes or deceptions are committed by family, friends or trusted advisors. It is not uncommon to hear about a neighbor, acting as a caregiver, stealing from someone suffered from dementia. In most cases the funds are gone forever, used it to pay for improvements on homes, and to purchase luxury items (boat, fancy car, etc.).

Elder fraud can also involve professional financial advice ranging from ill-conceived to criminal. Everyone has heard to story about elderly Americans being placed into costly annuities or bad insurance products.

The Biggest Challenge

To make matters worse, research confirms what those who would cheat older Americans know that the elderly are often the last to know their mental capacity is slipping. "Participants who suffer cognitive decline experience a reduction in their financial literacy but no change in their confidence in managing their money." That leaves children or other family members in the unenviable position of trying to wrest financial control from aging relatives who don't want the help.

Signs of Elder Abuse

The National Committee for the Prevention of Elder Abuse offers this detailed list of signs that someone might be suffering from elder abuse.

"Some of the indicators listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof," the agency cautions. "Rather, one should look for patterns or clusters of indicators that suggest a problem."

• Unpaid bills, eviction notices or notices to discontinue utilities
• Withdrawals from bank accounts or transfers between accounts that the older person cannot explain
• Bank statements and canceled checks no longer come to the home
• New "best friends"
• Legal documents, such as powers of attorney, which the older person didn't understand at the time he or she signed them
• Unusual activity in the older person's bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals
• The care of the elder is not commensurate with the size of his/her estate
• A caregiver expresses excessive interest in the amount of money being spent on the older person
• Belongings or property are missing
• Suspicious signatures on checks or other documents
• Absence of documentation about financial arrangements
• Implausible explanations given about the elderly person's finances by the elder or the caregiver
• The elder is unaware of or does not understand financial arrangements that have been made for him or her.

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PROTECTING INHERITED ASSETS IN CASE OF DIVORCE

♠ Posted by Marc J. Soss in estate plan,florida estate planning,florida probate attorney,florida probate lawyer,Last Will and Testament,post-marital agreement,pre-marital agreement,Revocable Trust

For those happily married, there are usually no objections to sharing gifts received from parents or grandparents. In contrast, when divorce is on the horizon the sharing of gifts is not an option. Unfortunately, past actions may subject those gifts or bequests to joint ownership and division upon divorce (separate versus marital property). To avoid this potential land mine it is important to consider the following options:

 

Pre-Marital and Post-Marital Agreement:

 

These agreements can protect inherited assets (business, property, art collection, etc.) should a divorce occur. Each spouse can agree to forgo his or her rights to any inheritance or major gift given to the other spouse before or during the marriage.

 

Maintain Separate Accounts:

 

Inherited or gifted funds should be maintained in a separate account so that it is not commingled with the other spouse’s assets or marital funds. 

 

Utilize a Trust:

 

Utilization of a Trust can prevent a gift from becoming a marital asset. For example, the Trust could own a gifted residence and charge the couple rent to live in it while they remained married, or financial account and preclude it from being a marital asset at divorce.

 

Keep Title in One Name:

 

Maintain ownership solely in the inheriting or receiving spouse’s name alone. However, the way in which the property is used and from what source its maintenance expenses are paid can change its classification from separate to marital property. 

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