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Archive for Probate

FAILURE TO UPDATE YOUR ESTATE PLAN: THE UNEXPECTED BLESSING

Friday, May 16th, 2014 by

Sometimes blessings occur when we least expect them, but a lack of planning for such blessings can have unpleasant results. In the recent case of Maher v. Iglikova, a Florida court dealt with the ramifications of an unexpected blessing: the discovery of a previously unknown child.

Mr. Maher executed a will in 2001, but unfortunately disappeared in 2004 and was declared dead some years later. At the time Mr. Maher executed his will, he thought he had one child – a son. Yet, about one year after executing his will, Mr. Maher learned he had another child—a daughter – who was born in 2000. Mr. Maher confirmed that he was the girl’s father and then financially supported her.  But, he never updated his will.  So, after Mr. Maher’s death, a question arose: how does Florida law treat a child born before a will was signed but unknown, until afterwards? Would Florida law provide a way for the daughter to be included in the will?

The Florida legislature has tried to help people take care of children who come into their lives after a will is signed.  Florida law provides that a “pretermitted child”, a child either “born” or “adopted” after a will is made, inherits not under the will but under a statute that entitles the child to share equally with any other children.  Because the daughter was born before the will was made, she argued that her father’s acknowledgment of paternity and financial support legally constituted an “adoption” after the will was made, thus making her a pretermitted child entitled to share equally with the son under the statute.

Unfortunately for the daughter, the Court held that she was not a pretermitted child because Mr. Maher’s acknowledgment, financial support and even a court ruling changing her birth certificate to show Mr. Maher as her father did not amount to “adoption.”  Thus, the daughter lost her claim to share equally in the estate. Worse, the daughter and son suffered collateral damages. Because Mr. Maher failed to update his will once he discovered his daughter, he left open the question of how much inheritance he intended her to have. Thus, the son and daughter ended up suing each other to resolve the question. (And the case went to trial and through an appeal—both costly prospects.)

Mr. Maher could have prevented the wasting of his estate assets and family friction merely by updating his will to clarify his wishes. If you would like to learn more about how we help our clients create estate plans, and  keep them updated, you are welcome to attend one of our monthly “Truth About Estate Planning” workshops. Because adoptions can create different issues in estate planning, we will begin a series of articles on adoptions in our next newsletter.

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Estate Administration: Another Do-It-Yourself Minefield

Friday, August 16th, 2013 by

Hopefully our faithful readers all know by now that there are many hazards to do-it-yourself estate plans.  What you may not know is that trying to administer your loved one’s estate without legal help is just as treacherous.  It is a great honor to be named as a loved one’s personal representative (executor) or trustee, but these roles come with great responsibility and many legal duties.

Unfortunately, we recently have encountered several individuals and families who thought that they could simply read the will or trust and hand out assets without speaking to an attorney.  Please do not make this mistake!  If you are administering a will, you do not have the authority to handle the estate just because your name is in the document – you must be appointed by a probate court.  Even if you are a trustee who manages to avoid probate court, Florida law imposes significant duties on you both when you start acting as trustee and every year thereafter.  Both personal representatives and trustees may be removed and even held personally liable if they fail to perform their duties properly.

We have seen some serious legal messes created by good people who tried to do the right thing but just did not have the right advice.  Don’t become one of them by trying to do it yourself – we are here for you and happy to help.  For more information on do-it-yourself disasters, check out our past articles: Perils of Do-It-Yourself Estate Planning; Why Would You Risk Going to Jail Rather than Talk with a Lawyer?; IRS Gift Tax Audits: Yet Another Reason to Avoid Do-It-Yourself Estate Planning

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LAWYER’S BEHAVIOR AT TRIAL IS NOT EVIDENCE OF ELDER ABUSE

Thursday, April 18th, 2013 by

 

Here is an interesting case from California that caught our attention.  An 83 year old man filed for a protective order against his 56 year old daughter because of alleged abusive treatment.  In the court hearing over the matter, the daughter’s attorney’s  confrontational cross-examinationof the elderly gentleman was found by the trial court to be consistent with the daughter’s desire to treat her father in such a fashion.  He then granted a protective order which stated that the daughter could not contact, molest, attack, strike, threaten, assault or otherwise disturb the peace of her father.  The daughter appealed the case arguing that her attorney’s behavior and her lack of response to it should not be used as evidence by the trial court.  The appellate court agreed and said that the trial judge was wrong to base his decision on the lawyer’s conduct.

While this decision is good news for us lawyers, it does highlight the fact that we are too often aggressive and confrontational, particularly in guardianship, probate, and other elder law cases.  It is important that all lawyers recognize when in the probate court that we are not trying high profile criminal or personal injury matters.  We are involved in disputes among family members where emotions are already running high and we should avoid making matters worse.  We can represent our clients effectively in elder law matters without being either abusive or confrontational.

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SUMMARY ADMINISTRATION: AN EASY AND INEXPENSIVE SOLUTION? OR NOT?

Thursday, February 7th, 2013 by

 

Formal estate administration (the most common form of probate) is a detailed process set out by Florida law which can be expensive and time-consuming.  As you might imagine, there are some situations where formal administration does not make sense, economically or otherwise.  Florida statutes recognize this and set out an alternative process when the decedent either (1) has been dead for more than two years or (2) left less than $75,000 of assets that need to go through probate.

 

This alternative process, called “Summary Administration,” is supposed to be simpler, shorter, and less expensive than formal administration.  Theoretically, summary administration allows for an estate to be opened and closed, and the assets distributed, with only a few documents filed and no court hearing.  The law even says that summary administration may be done without an attorney.  However, our experience has been that many summary administrations have legal and procedural issues that even attorneys cannot entirely solve.

 

For example, summary administration quickly becomes more complicated when the decedent left unpaid bills or other debts because summary administration does not use the streamlined process for creditors’ claims that formal administration offers.  Formal administration allows a Notice to Creditors to be published in a local newspaper as soon as the estate is open.  This publication of notice gives creditors a maximum of three months to file their claims; if they fail to do so, their claims are barred and the estate does not have to pay them.  The estate also has a right to object to any creditor claim that is filed.

 

In summary administration, however, the estate cannot publish a Notice to Creditors until after the Order of Summary Administration is entered.  Any Order of Summary Administration (the order closing the estate and listing the persons who will receive the estate assets) entered by the court must provide for the payment of creditors “to the extent that assets are available.”  This is true even though creditors may be unknown.

 

The result is that beneficiaries may suffer in summary administration because there is no clear way for estates to object to and avoid paying creditor claims.  New creditors may pop up after the Notice to Creditors is published, which may diminish the amount each beneficiary receives.  Another danger is that no Notice to Creditors is published, because it is not required by law, creating the possibility that unknown and unpaid creditors may be able to come after the estate beneficiaries years later

 

Although summary administration may be a viable solution in some situations, we recommend that our clients take advantage of the formal administration process if there is any possibility that a decedent left unpaid creditors.  We would also recommend at least consulting an attorney before pursuing a summary administration.

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Categories : Probate
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DEFINITIONS OF FAMILY: YOURS VS. THE STATE’S

Friday, December 7th, 2012 by

With the holiday season in full swing, you are likely thinking about and spending time with your loved ones, your “family.”  Chances are, they are not all related to you by blood.  Most of us have spouses, in-laws, stepchildren, stepparents, or even friends that we consider to be part of our family.  Sometimes we are more tightly bonded with these people than with our actual blood relations.

Unfortunately, the state of Florida defines “family” much more narrowly for the purposes of intestate succession (who gets your stuff if you die without a will).  Your current spouse is your closest family member under Florida law and will get everything if you have a “traditional” family.  However, as soon as you get into a blended family situation – i.e. either you or your spouse had a child with someone else – things get messy.  Your spouse will have to split your assets with your kids in the proportions dictated by the state, regardless of what you would have wanted.  Stepchildren are left out altogether because they are not considered “family” unless you have legally adopted them.

Florida law’s preference for blood relatives can produce even less desirable results if you die without a spouse, children, or a will.  We recently had a case where a man’s assets, primarily his home, were split between more than a dozen blood relatives (siblings, nieces and nephews), many of whom did not even speak to the decedent, rather than going to the few people, including his girlfriend of many years, who actually took care of him.

The state’s intestate definition of “family” is one size fits all, meaning that it often fits no one.  If you don’t agree with the people that definition includes and, especially, excludes, you need to make your definition of family clear with a will or trust.

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PERSONAL REPRESENTATIVE’S PERSONAL LIABILITY FOR PAYING TAXES OWED BY THE DECEDENT

Friday, September 28th, 2012 by

    A Personal Representative of an estate (“PR”) is personally liable for paying a decedent’s outstanding tax bills.  This would include income taxes, gift taxes or estate taxes that may be owed by the decedent at the date of his or her death.  For this reason, it is important that a Personal Representative engage a CPA, in addition to a probate attorney, for assistance in resolving potential tax issues. 

     A Personal Representative must be careful not to distribute any portion of the estate to beneficiaries before all federal taxes are paid, because he or she could be held personally liable to the extent of that distribution.  It is the better practice not to make any distributions until tax issues have been identified and resolved.  The costs of estate administration, which include compensation of Personal Representatives and their attorneys, along with reasonable funeral expenses not to exceed $6,000, do take priority over a claim by the IRS.  Nevertheless, any family member clamoring to become a PR and take “control” of an estate should be aware of the potential tax liability that comes with obtaining that control.

     What is even scarier is that, because failing to pay income taxes is deemed to be a breach of the personal representative’s fiduciary duty, the PR cannot dodge a claim by the IRS by declaring bankruptcy.  A breach of fiduciary duty judgment against a Personal Representative generally is not dischargeable in bankruptcy.  These are important considerations before you sign on to be PR of an estate. 

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Categories : Probate, Uncategorized
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“THE PLAYERS” OF ESTATE PLANNING

Thursday, May 10th, 2012 by

The beginning of May always brings national attention to the Jacksonville area when the Players Championship comes to town.  For one week each year, the Players is the hot ticket in town and for good reason; the tournament, which is part of the PGA tour, brings international golf superstars to town and raises millions of dollars for local charities.  As Jacksonville estate planning attorneys, we find two different meanings in the words “the players”: we are reminded of all the positive energy that flows through the city at the time of the tournament, but also think about the players of estate planning.

Your estate planning “players” are the people you choose to protect your assets during your lifetime and distribute or manage them after your death.  This would include the trustee(s) of your trust, the executor(s) of your will, and anyone to whom you have given a durable power of attorney.  Other important players are those individuals to whom you have granted access your health care information or the power to make health care decisions for you, such as your designated health care surrogate.

The players you choose for your estate plan should be people that you trust completely and who know you well enough to make the decisions you would have made.  They must also be willing and able to perform their duties.  If it has been more than a couple years since you designated your estate planning players, you should review them to ensure that your choices are still appropriate and relevant today.

 

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Will Your Facebook Profile Be Part of Your Estate?

Thursday, March 29th, 2012 by

If you are savvy enough to be online reading this blog, you most likely have a Facebook profile. Also, you are probably wondering what on earth Facebook has to do with probate. In most states, the answer to that question is still “nothing,” but that is no longer the case in Oklahoma.

In 2010, Oklahoma legislators passed a law that gives executors (called Personal Representatives in Florida) control over accounts on social media sites like Facebook and Twitter that were registered to the decedent. The idea is that the executor will be able to access, clean up or even shut down each account, according to his or her own judgment or instructions left behind by the account owner, if any.

It is easy to see the logic behind Oklahoma’s social media law; for many people, Facebook has become a virtual scrapbook full of photos, notes from friends, and family trees. It makes sense that the loved ones left behind would want to access and preserve these memories. It is equally clear that the creator of such a detailed profile might have an opinion as to who should access their personal information after their death.

The idea of social media profiles as estate assets is beginning to catch on in other states as well; Nebraska is already developing a law similar to Oklahoma’s and Oregon may be close behind. In states without such laws, your digital accounts and passwords should definitely be included in your overall estate planning.

If you have concerns about securing your virtual assets or any other aspect of estate planning, please feel free to contact us.

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Common Estate Planning Myths and Superstitions

Thursday, February 2nd, 2012 by

In honor of today’s holiday, Groundhog Day, we wanted to share some common myths and superstitions about estate planning. Most Americans know the story of Groundhog Day: if a groundhog comes out of its burrow this morning and sees its shadow, it will retreat back into the burrow and six more weeks of winter weather will follow. On the other hand, if the groundhog does not see its shadow and remains aboveground, winter will soon end.

Most of us recognize that the ability of a groundhog to accurately forecast the weather is just a myth. (The reality is that groundhogs get it right only 39% of the time.) However, many people still believe in the following estate planning myths and superstitions (or at least use them as an excuse not to plan):

#1: You are more likely to die once you complete your estate planning. This is simply absurd; generally, the only people who die shortly after executing an estate plan are people who waited ALMOST too late to plan in the first place.

#2: Estate planning is only for the wealthy. When you hear the word “estate,” do you think of a palatial mansion or fine jewels? The truth is that if you own a home, a car, a bank account, life insurance, etc., then you have an “estate”.

#3: Estate planning only matters after death. A big part of the estate planning we do at our firm is planning for possible future disability. Wouldn’t you like to leave directions for how you want to be treated if you become incapacitated as well as for who gets your stuff when you’re gone? What about requests for who will care for you and/or your children?

Please feel free to post comments on our Facebook or Twitter or make an appointment if you have individual questions or concerns.

Cramer Law Center offers full estate planning services including wills, trusts, durable powers of attorney, health care surrogate designations, living wills, designations of preneed guardian, and more.

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THE IMPORTANCE OF THE PRE-ARRANGED FUNERAL

Monday, November 14th, 2011 by

The single most important benefit of estate planning is peace of mind. We often focus on the legal documents necessary for us to create an estate plan that provides such peace of mind. However, I recently had a personal experience that reminded me of the importance of one of the more practical aspects of planning.

My mother passed away a few weeks ago. Although my siblings and I had a general idea of what the funeral arrangements would be, no plans had been finalized. This lack of planning created a chaotic situation when I arrived to visit my mother in hospice care. I was immediately and less than delicately informed by the hospice caseworker that I had to make my mother’s funeral arrangements straight away. So before I could focus my attention on my mother in her final hours, I had to phone different funeral homes until I found the one I needed.

Making last-minute funeral arrangements for my mother added more stress to a situation that was already emotionally taxing. Especially after my experience, I highly recommend taking care of funeral arrangements in advance to avoid creating greater stress for your loved ones at such a difficult time.

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