FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG

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

FLORIDA GUARDIAN CHARGES BIG BUCKS TO PROTECT WARD WITH ALZHEIMER'S LIVING IN HUNGARY

♠ Posted by Marc J. Soss in ,,,,,


www.abcactionnews.com

A grieving daughter is fighting against a system that was designed to protect her dad

SARASOTA, Fla. - A grieving daughter is fighting against a system that was designed to protect her dad. She regrets the decision of turning to Florida's professional guardian system for help. She says that decision cost her father's estate a million dollars, and as the I-Team found out, the guardian was racking up those bills, when her father was living thousands of miles away.


“He was an immigrant, came here with one little suitcase and worked himself into millions of dollars,” said Mercedes Gyorgy, describing her father Akos Gyorgy. He earned millions as a Sarasota real estate broker, eventually owning 8 homes in three countries.. But his family says his estranged wife exploited him when he got alzheimer's disease.


They asked for the court to appoint a guardian to protect him and his assets, but now believe that was bad decision. “We turned to the courts to stop the financial abuse, and after that, over a million dollars has been spent on this guardianship,” Mercedes Gyorgy said. On Wednesday, she asked the court to release her late father's remaining assets to his estate, but the guardian and the guardian’s attorney are fighting against that.  “In the first two months of the case, one attorney billed $30,000,” Mercedes said.  And some of those bills came while her father was not even around.


He had disappeared while his Emergency Temporary Guardian was supposed to be protecting him. “I Called the police. They never called the police. They never called the police and said this man was missing,” Mercedes said. In a court document filed weeks later, it was revealed that Akos Gyorgy, who was incapacitated, managed to catch a cab from Sarasota to Orlando, then flew to Frankfort, before catching another flight to Budapest Hungary. Gyorgy was originally from Hungary, as was his estranged wife.


Mercedes says her father met her when his friend placed an ad in a Hungarian newspaper seeking a new bride for him, after his first wife died of cancer. He lived there for five years, which family members contend was out of the Sarasota court-appointed guardian’s jurisdiction.  While the guardian supposed to protect him from his estranged wife, she made multiple trips to Hungary to visit him. So did the guardian. On one visit, he billed his ward nearly $24,000 for a first class plane ticket, lodging at a 5-star hotel, and other expenses. “It was a vacation for sure,” Mercedes said. And that's not all. The court allowed the guardian to use the ward’s money to buy him a $200,000 home in Hungary just weeks before he died.


“It's a crazy case, but unfortunately, it's not that out of the norm with what's been going on in guardianship in the state of Florida,” said Marc Soss, who represents Gyorgy’s family. The judge says he's taking all of the testimony under advisement and will rule in the near future when the remainder of the ward's assets will be transferred back to the ward's family.
Read More

HOW YOU CAN PREPARE FOR YOUR ESTATE PLANNING MEETING

♠ Posted by Marc J. Soss in ,,,,,,,



While meeting with an estate planning attorney may not be on your bucket list of items to accomplish during your lifetime or among your New Year’s resolutions, it is not something that you should put off until you are on your death bed. Many individuals are intimidated by the prospect of planning their estate, however, in most cases it is much easier if you come prepared.



A typical Florida estate plan consists of the following important documents: Last Will and Testament; Revocable Trust (for many individuals); Power of Attorney; Health Care Surrogate; Living Will; and Pre-Need Guardian Declaration. The Revocable Trust (if one is created), Power of Attorney, Health Care Surrogate, Living Will, and Pre-Need Guardian Declaration are all designed to operate during your lifetime and provide guidance in how your personal and financial affairs are handled during your lifetime.  In contrast, the Revocable Trust and Last Will and Testament control how your property is distributed after your death.



When you meet with your estate planning attorney, they will guide you through the various choices and planning options available to you, so that your legal documents reflect your intentions. In order to make your time with your attorney most productive, the following is a list of things that you should discuss and prepare in advance of the meeting:



Create a list of your assets and liabilities. This list should include the value of your home (including mortgage), bank accounts, investment accounts, business interests, personal belongings with value (e.g., artwork or jewelry), insurance policies on your life and retirement accounts. For each asset on the list, include an estimate of its value or current balance, as well as whether you own the asset in your individual name or in joint name with another person, such as your spouse or children. This information will assist your attorney in guiding you through the planning process.



Agents During your Lifetime



Health Care Surrogate: Who will make medical decisions for you if you become incapacitated. The individual you name to serve as your health care surrogate will be empowered to make health care decisions for you, if you are unable to do so. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Power-of-Attorney: Who will take care of your financial affairs if you become incapacitated. The individual you name to serve as your power of attorney will act as your agent with regard to your financial matters during your lifetime. The power of attorney will become effective immediately after you sign it. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Living Will: End of Life Decisions. The individual you name to serve as your surrogate will act as your agent with regard to your financial matters during your lifetime. The power of attorney will become effective immediately after you sign it. Thought should be given to whom should be appointed for this position, along with a successor to him or her.



Administration Upon Your Death



Who has the ability and skill to serve as your Personal Representative(s). The individual or professional entity that you select to serve as the Personal Representative of your probate estate will be charged with settling your estate following your death.  Their duties will include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the remaining estate assets to your beneficiaries. With married couples, each spouse typically names the other to serve as their personal representative.  The next consideration is who or what entity will serve as their successor, if they fail to survive you or are unable to serve. You may name more than one individual to serve in this role, but under Florida law they must either be a family member or resident of the state. Most importantly, it is important that the selected individual(s) or entity are trustworthy.



Who has the ability and skill to serve as your Trustee(s). The individual or professional entity that you select to serve as the trustee of your Trust, upon your death or inability to serve, will be responsible to manage your financial affairs, while you are alive, and settling your financial affairs following your death.  Similar to a Personal Representative, their duties will include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the remaining estate assets to your beneficiaries. With married couples, both spouse’s typically serve as the trustees, while they are capable. The next consideration is who or what entity will serve as their successor, if they fail to survive or are unable to serve. You may name more than one individual to serve in this role, without any restrictions of family membership or resident of the state. Most importantly, it is important that the selected individual(s) or entity are trustworthy.



Items of Personal Property and to whom they should pass upon your death.  Create a written document which states how you would like to dispose of your personal items (wedding ring, jewelry, automobile(s), baseball card collection, etc.) at your death, even if you do not believe they have any monetary value. Without a separate written statement, your personal items will pass to a surviving spouse or be divided equally among your children or beneficiaries. The itemized list can potentially avoid family disputes over items with sentimental but no monetary value.



Plan for Distribution of your Estate. How, to whom and in what amounts you want your remaining estate assets distributed is the next important decision you will need to consider. Your assets can be distributed to any individual (family member, friend, acquaintance, etc.) or charity you may select. The assets can be distributed outright or over an extended time period (they reach a certain age, until the beneficiary needs or wants funds, etc.). There is no wrong decision as you are free to distribute your assets as you choose.
Read More

SAME -SEX COUPLES CONTEMPLATING MARRIAGE SHOULD NOT PUT IT OFF

♠ Posted by Marc J. Soss in ,,,,,


A recent New Jersey Tax Court ruling, unpublished opinion, emphasizes the importance for same-sex couples to not put-off marriage for estate planning purposes. New Jersey has both an estate tax and an inheritance tax, and taxpayers must pay the higher of the two taxes. The estate tax impacts estates of more than $675,000. Notwithstanding a 31-year relationship, registration as a same-sex domestic partner under New Jersey's Domestic Partnership Act (DPA), and a marriage scheduled to take place with 6 days of his death, the New Jersey Tax Court Judge ruled that the survivor did not qualify as a surviving partner for estate tax purposes under New Jersey law.  As a result of his failure to qualify as a surviving spouse he was not entitled to a $101,041 estate tax deduction under New Jersey tax law.



The Judge, in applying a “very strict reading of the statute,” reached this conclusion based upon the fact that the couple were eligible to enter into either a civil union or a marriage as of the date of the decedent's death and did neither. In 2007, New Jersey had enacted the Civil Union Act which allowed same-sex partners, who entered into a civil union, to be treated the same as opposite-sex spouses for purposes of calculating the New Jersey estate tax. Subsequently, in October 2013, the New Jersey Supreme Court, in Garden State Equality v. Dow, permitted same-sex couples to marry. The New Jersey's statute on domestic partnership is “unequivocal” in providing exemptions only for personal income and inheritance taxes and not the estate tax.  
Read More

THE IMPORTANCE OF A LAST WILL & TESTAMENT

♠ Posted by Marc J. Soss in ,,,,,,,


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.


Read More

FIDUCIARY ACCESS LAW IN FLORIDA

♠ Posted by Marc J. Soss in ,,,,,


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. 
Read More

CHANGES TO THE PARTNERSHIP RULES COMING IN 2017

♠ Posted by Marc J. Soss in ,,,,,,


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.
Read More

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

♠ Posted by Marc J. Soss in ,,,,,
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.
Read More

DO NOT FORGET TO COLLECT YOUR SOCIAL SECURITY SURVIVOR BENEFITS

♠ Posted by Marc J. Soss in ,,,,,,,,

There are few upsides (maybe relief from pain and suffering) to the death of a spouse. In order to ease the burden, the U.S. government offers a few Social Security survivor benefits.



Survivor Benefits: The main benefit for a surviving spouse is that they may be able to receive Social Security payments if their deceased spouse met the requirements to qualify for Social Security retirement benefits. If both spouses are collecting Social Security benefits, the surviving spouse will only receive the larger benefit. 



Others eligible for benefits include: spouse of the deceased, aged 60 or older; spouse of the deceased, aged 50 or older, if disabled; spouse of the deceased at any age, if he or she is caring for the deceased's child who is younger than 16 or disabled; an unmarried child of the deceased who is younger than 18, or younger than 20 if still a full-time student in elementary or secondary school or 18 or older and with a disability that began before age 22; a stepchild, grandchild, step-grandchild, or adopted child under certain circumstances; parents aged 62 or older, who were dependent on the deceased for at least half of their support; and a surviving divorced spouse, under certain circumstances.





Death Benefit:  In addition to the benefits described above, a surviving spouse may be eligible for a one-time payment of $255.  Eligibility for the benefit requires the surviving spouse to have been living with the deceased spouse, at their date of death, or, if living apart, to have been receiving benefits based on the deceased spouse's Social Security record.







How to Claim Social Security Survivor Benefits: In order to claim Social Security survivor benefits you must inform the agency of the death of your spouse. Typically, the funeral home will notify the Social Security Administration with regard to the deceased.  In order to contact the Social Security Administration you must either visit your local Social Security office or speak with the agency on the phone (at 800-772-1213). hen speaking with them it is important to also inquire about: (i) survivor benefits; (ii) retirement benefits; and (iii) eligibility for the one-time $255 lump-sum benefit.
Read More

CHARITABLE PLANNING WITH YOUR RETIREMENT ACCOUNT

♠ Posted by Marc J. Soss in ,,,,,,


 
 
For the past several years, Congress has employed a last minute temporary rule that allowed IRA owners to exclude their required minimum distributions (RMDs), from their adjusted gross income, by making a direct contribution of the funds to a qualified charitable organization. However, this last minute action made planning difficult for taxpayers. Finally, in December 2015, the Qualified Charitable Deduction (“QCD”) provision became a permanent part of the U.S. Tax Code.  This allows taxpayers to comfortably utilize the provision and establish long-term planning strategies around it moving forward.
 

Eligibility and Advantages:

Any IRA owner or beneficiary who is at least 70.5 years old, no exceptions, can use the QCD rule to donate their required minimum distribution or up to $100,000 per year to charity and exempt the funds from taxation. All contributions and earnings inside the IRA are QCD eligible but are classified as a nondeductible contribution. Taxpayers may not utilize a joint gifting strategy for the purpose of QCDs. 

The biggest benefit of utilizing the QCD provision is the ability for a taxpayer to lower their adjusted gross income, since the gifted funds do not count as taxable income to them. This can allow a taxpayer to stay in a lower income tax bracket, reduce or eliminate the taxation of Social Security or other income and remain eligible for deductions and credits that might be lost if the taxpayer had to declare the RMD amount as income. Another advantage is the taxpayer will not have to itemize deductions in order to qualify for this deduction (since the exclusion applies to adjusted gross income and not taxable income).

Rules

In order for the donation to qualify under the QCD rules it must be made directly to the charity. The IRA owner or beneficiary can personally receive the check and deliver it to the charity, but they cannot deposit the funds and then make out a check to the charity. The recipient charity must also be a qualified 501(c)3 organization and a charitable gift annuity will not qualify. The charitable donation amount must be substantiated by the charity with a written receipt.
Read More

ROTH IRA ADDITIONAL PLANNING OPTIONS

♠ Posted by Marc J. Soss in ,,,,,

Most individuals view a Roth IRA as a great way to save more for the future using after tax dollars. While the funds deposited into a Roth IRA are subject to income tax, they grow tax-free and are not subject to tax, even the growth, when withdrawn (assuming certain requirements are met).  However, a Roth IRA has other advantages that most individuals do not know about or utilize:

Saving for College:

A Roth IRA can be utilized to pay college expenses without the contributed funds being subject to any income tax or early withdrawal penalty. Unfortunately, while account earnings on contributions can be withdrawn penalty free, they still may be subject income taxation. 

In contrast, a 529Saving Plan will allow you to save a larger amount for college expenses but are not as flexible when it comes to investing and utilizing the funds. While contributed funds will grow tax-free, the account earnings will be subject to income tax upon withdrawal and subject to a 10% penalty if not utilized for college expenses.

Saving for a Home

A Roth IRA can be utilized to save for a down payment on the purchase of a home. To qualify, the purchasers must be first-time home buyer (someone who hasn't owned an interest in a home within the past two years) and had their Roth IRA set up for five years. Subject to those restrictions, they can withdraw up to $10,000 to buy, build, or rebuild a home without paying the 10% early withdrawal penalty or worrying whether your withdrawing contributions or earnings. The exemption may also be utilized to assist children or grandchildren purchase their first home.

Savings Option:

While the opportunity to contribute to a traditional IRA stops the year you turn 70.5 years old, contributions can be made to a Roth IRA as long as you live. If you're over 50 years old, you can contribute up to $6,500 per year as long as your income is below annual limits.

 Sarasota and Manatee County residents can contact me directly to learn more.
Read More