Beneficiaries

Irrevocable Trusts, Revocable Trusts – A guide to understanding in Florida laws

January 15, 2021 | by Chepenik Trushin LLP

I Made an Irrevocable Trust a Long Time Ago: Can I Change it Now?

People make irrevocable trusts for many reasons, one major reason being tax planning. In order to make a completed gift for tax reasons, a donor has to part with control over the gifted asset, and making a gift to a trust that is irrevocable is one of the ways this can be accomplished. But that if your circumstances change, or tax laws change, and you would like to modify or terminate an irrevocable trust? Can a trust still be modified if it is irrevocable?

The answer is yes, if certain conditions are met. Florida statutes specifically allow for modification of irrevocable trusts in certain circumstances. For instance, by court order (Fla. Stat. § 736.0410), to modify tax provisions (Fla. Stat. § 736.04114), or where the trustee and all beneficiaries unanimously agree (Fla. Stat. § 736.0412), just to name a few. But there are certain situations where none of the Florida statutes apply. For instance, a modification under Fla. Stat. § 736.0412 by agreement of trustees and beneficiaries can only be accomplished if the settlor has passed away and only with respect to a trust that was made irrevocable after January 1, 2001. That leaves some situations that are not covered by the Florida statute.

Elder law, Medicaid planning and Special Needs Trusts: What happens when Medicare will not pay for long-term medical care costs?

December 10, 2020 | by Chepenik Trushin LLP

Needs Based Government Assistance and Special Needs Trusts

It is never too early to start Medicaid planning. The goal is to focus on paying for long-term medical care and protecting your assets. By planning for Medicaid to pay for an amount of long-term care, it allows seniors to pass on their wealth while still maintaining long term medical care. With careful planning and the assistance of an attorney, you may be able to receive needs-based government benefits without having to deplete your assets, and ensure that and your children will be able to receive such government assistance if needed.

There are selected categories of people in Florida who may be eligible for Medicaid benefits, such as the elderly (age 65 and above), pregnant women, and people with certain disabilities. There are also a few other requirements to be eligible for Florida Medicaid, such as being a resident of the State of Florida, a U.S. national, citizen, permanent resident, or legal alien; having a financial situation that is considered low income or very low income; and owning assets below a certain threshold. If you are one of the selected categories of people who qualify for Medicaid, there is planning that can be done to help you meet the other requirements. However, there is a 5 year look-back rule regarding any uncompensated transfers that you make, so it is best to plan early and anticipate your future need.

Enforcing a contract to create a Will is complex – read the details

November 4, 2020 | by Chepenik Trushin LLP

Contracts to Create a Will

A last will and testament must be the consequence of a person’s free will (which is why they are aptly referred to as “wills”). Nevertheless, a person may execute a contract during life to include certain terms and/or beneficiaries in their will in exchange for goods or services.

Enforcing a contract to create a will is more complex than enforcing a normal contract. With these types of agreements, it may be impossible to tell whether the testator lived up to his or her side of the bargain until their estate plan is revealed after their death. Additionally, the terms of a will do not come into effect until death, so there may not technically be a breach of the contract until the decedent’s death. Further, if you were supposed to be a part of the decedent’s estate plan, but were not included, it’s possible you may never even receive notice regarding the administration of the decedent’s estate.

Florida Homestead Protection 101 – what to know

October 9, 2020 | by Chepenik Trushin LLP

Homestead Protection: Can You Lose It in Probate?

A person’s home (homestead) is often the most important asset in their estate plan because of the monetary and sentimental value that is inherent in a person’s main residence. Florida has special rules that govern a person’s primary residence, known as homestead property. Unless a creditor is the IRS, a mortgagee, or a laborer that performed work on the home, a homestead property is safe from creditors’ claims. Essentially, the homestead is exempt from a forced sale of the property unless there is a special creditor.

To qualify for homestead protection, a person must be a permanent resident of Florida, and the homestead must be that person’s primary place of residence, among other rules. This means that second homes and investment properties are ineligible for such protection. However, there is no monetary cap associated with the exemption, so a Florida resident that invests millions of dollars into their primary residence will receive full protection.

Real property and wills – Educate yourself on the implications of Probate proceedings

August 27, 2020 | by Chepenik Trushin LLP

Does My Will Control My Joint Property?

There are several different ways to hold real property with another individual in Florida. The three main ones are: 1) tenancy in common, 2) joint tenancy with a right of survivorship, and 3) tenancy by the entirety. The way co-ownership of real property is classified may have significant impacts on the disposition of an estate after one of the owners dies.

In Florida, the default classification of real estate ownership is known as tenancy in common. If a property title lists only the names of owners without specifying another classification, there is a presumption that the property is a tenancy in common (unless the individuals are married). Additionally, unless specifically stated otherwise, tenants in common own equal shares of the property. When a tenant in common dies, the real property passes according to that person’s estate plan. This type of ownership will ensure that the property will flow through the owner’s estate. However, unless this property is held by a mechanism that can avoid probate proceedings (e.g. a Revocable Trust), it must go through the time consuming, expensive and public probate process to transfer title to the heirs.

Your beloved pet “Sploot” is alive and well, so how do we keep that state of calm and relaxation?

July 31, 2020 | by Chepenik Trushin LLP

What Happens to My Pets When I Die? Florida Pet Trusts

Many people consider their pets to be an integral and indispensable part of their families. For that reason, many people want to ensure their beloved dog, cat, horse, or other animal will be provided for in the event of their death. Pets are considered tangible personal property in Florida, and can be devised, so in the absence of a specific bequest, your pets will go to whomever you have designated to receive your tangible personal property.

For many people, such an arrangement is fine, but some people may want to ensure that their pets are taken care of after they are gone, and for those people, a pet trust may be appropriate. A pet trust is a legal mechanism that specifies and arranges for how your pet would be taken care of and financially provided for should you become incapacitated or die. In Florida, Fla. Stat. § 736.0408 enables the creation of a pet trust.

In Florida, if you are going through a Divorce or Family Collaborative law process, ensure to include your Estate planning and Beneficiaries

July 9, 2020 | by Chepenik Trushin LLP

What Happens to My Estate Plan When I Divorce?

People often designate their spouse as a primary beneficiary in their will, trust, or beneficiary designation, but what happens in the case of divorce? Oftentimes, a person may neglect to update their testamentary plan following a divorce and leave their ex-spouse as a beneficiary. Thankfully, in Florida, several laws help automatically update a person’s estate plan upon divorce to avoid unintentionally bequeathing a gift to an ex-spouse.

Florida law provides that any provision of a will in favor of a divorced spouse treats that former spouse as if that spouse had already died. The controlling statute, Fla. Stat. § 732.507(2) states the following:

What to know under Florida law during COVID-19 – Naming your kids as beneficiaries of life insurance policies

June 19, 2020 | by Chepenik Trushin LLP

COVID-19 – Buying Life Insurance to protect your children, but what happens when you name them as the beneficiaries?

During these uncertain times, people are attempting to prepare for the worst. This is especially true for those who have minor children. The fear of getting infected with the virus, developing a serious illness that could potentially lead to death, and leaving their children unprotected is very real. Thus, individuals are opting to buy life insurance to make sure their children are taken care of in the event of their death.

But what happens when you die and your minor children are the beneficiaries under your life insurance policy? Since minors cannot legally manage property, the court will appoint a guardian to handle the money for the benefit of your children until they reach the age of majority—a guardianship proceeding. Alternatively, life insurance companies will sometimes ask you to name a custodian, which will create a custodianship account under the Florida Uniform Transfers to Minors Act (“UTMA”), also until the age of majority.

Can a Beneficiary act as a Witness during a pandemic?

June 1, 2020 | by Chepenik Trushin LLP

Social Distancing and Signing Documents: Can a Beneficiary Act as a Witness?

During COVID-19, we have had to adapt the way we sign estate planning documents while maintaining safe social distancing. Although businesses are slowly reopening and things appear to be getting back to a sense of normal, it is still important to be cautious and keep our exposures to a minimum. One of the strategies Chepenik Trushin LLP has adjusted is to make the estate planning process entirely remote, with phone and video conferences, email communications, and sending estate planning documents through regular or electronic mail with detailed instructions for clients to sign on their own. For some clients, this has worked well, but for others, it has been a challenge to find two witnesses and a notary, which are required for many estate planning documents. A frequent question that has arisen is whether a relative or a beneficiary may serve as the witness to a will or other estate planning documents, such as a trust.

For a number of years, Florida law disfavored beneficiaries under a will from also being witnesses to the will. Under current Florida law, a will or codicil is not invalid simply because the will or codicil is signed by an interested witness. Fla. Stat. § 732.504(2). Based on the Florida statute, a beneficiary can serve as a witness to a will.

Quarantined during COVID 19 – How do I get my estate planning documents notarized?

April 23, 2020 | by Chepenik Trushin LLP

How to Safely get Documents Notarized During a Pandemic

For the indefinite time being, social distancing and staying home are necessary safety measures. However, that does not mean the world stops. People still have needs and documents that must be notarized. There are ways to do that without leaving the house and risking exposure.

Florida Statute sections 117.201-117.305 went into effect on January 1, 2020 and allows notarization to occur remotely once a notary completes an application and training course. Usually, when getting a document notarized, the notary either confirms that they know you personally or verifies your identity by looking at government-issued identification. Now, according to Florida Statute § 117.265, via audio-video communication, a notary can do the same thing with an additional step. If the notary does not know you personally, you can remotely show your government-issued identification and then answer a few questions to confirm your identity. See Fla. Stat. § 117.265; See also Fla. Stat § 117.295. Once that is complete, the notary can watch you electronically sign the document and notarize it from his/her computer. When looking for a notary to provide this online service, look for someone that is a Remote Online Notary, also known as a “RON.” Not all notaries are qualified to perform this service remotely. The lawyers and staff at Chepenik Trushin LLP can help you through this process, keeping you and your loved one’s safe.