Articles Posted in Estate Administration

Until the last two years, it has been illegal in the United States to make remittances to any Cuban nationals. The United States put an embargo in place as a sanction against Cuba in the 1960s, which was intended to make U.S. dollars inaccessible to the Cuban government. The embargo included a freeze on Cuban assets in the United States, regardless of whether the assets were owned by the government or a private individual. If a Cuban national had any ownership interest in property in the United States, the property was blocked from being transferred. These accounts are called “Cuban Blocked Accounts.” Also, once the sanctions were in place, if a person subject to the jurisdiction of the United States made a remittance to a Cuban national, then he or she would face severe criminal penalties. However, in 2009, President Obama removed certain restrictions affecting relationships between individuals residing in the United States and those residing in Cuba. These policy changes have made it possible to make remittances to Cuban nationals during a person’s lifetime, as well as remittances in the form of an inheritance, subject to certain restrictions.
Continue Reading

Usually when an executor is appointed to administer an estate, he or she does not think that the liabilities of the estate could actually become their own. However, in U.S. v. David A. Tyler and Louis J. Ruch, a federal judge ruled that an executor can be held liable for the unpaid federal income taxes of an estate. In Tyler, the executor of an estate conveyed real property to the son of the decedent. The son was also one of the executors of the estate. The estate had a large unpaid income tax liability at the time of the real property conveyance. The son, who was aware of the unpaid income tax, sold the real estate and claimed to have lost the proceeds in the stock market. As a result, the Internal Revenue Service found itself trying to get blood from a stone because real estate conveyance essentially drained the estate. Tax liens are not extinguished by death and do stay attached to an estate’s property. Interestingly though, the Internal Revenue Service found recourse not in the Internal Revenue Code, but under Title 31 of the United States Code in Tyler. Under 31 USC 3713(b), the fiduciary in charge of assets is liable for unpaid claims of the government if (1) the fiduciary distributed assets, (2) the distribution rendered the estate insolvent, and (3) the fiduciary had actual or constructive knowledge of the liability before the distribution took place. Clearly, this underscores the importance of executors being properly advised when distributing assets of an estate.
Continue Reading

Just how far does Florida Constitution’s homestead ad valorem tax exemption extend? Recently, the Florida Supreme Court decided this issue in Garcia v. Andonie, 65 So.3d 515 (2011). In Andonie, the Court held that if the resident children of a non-resident reside on property owned by the non-resident, the property may qualify for the ad valorem tax exemption. Andonie involved Honduran parents who resided in a Florida condominium with their children. The children were United States citizens, but the parents were not. The parents did not have a legal right to remain indefinitely in the United States. Under Florida law, every person who has the legal or benificial title to real property in the state and who resides thereon as his or her permanent residence, or the permanent residence of his or her self and their dependants, is entitled to an exemption. Fla.Stats. §196.031(1). Under the Florida Constitution, however, every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another legally or naturally dependent upon the owner, shall be exempt from taxation thereon. Fla. Const. Article VII, §6(a).

The property appraiser argued that the parents must be residing indefinitely in order for the property to qualify under the Florida statute. Therefore, because the parents could not, as a matter of law, indefinitely reside on the property, the property must not be subject to the exemption. Nonetheless, the Court rejected the property appraiser’s argument and interpreted the Florida Statute as adding another layer to the constitutional provision.
Continue Reading

When a person dies and was a recipient of Medicaid assistance, Medicaid may have a claim against the estate for any amounts spent on behalf of the recipient. This claim is called a Medicaid Estate Recovery. Medicaid can recover against an estate if it has a valid claim. The deceased person could have died either with or without a will. It is important for any Miami-Dade County, Broward County or West Palm Beach County resident to have a good attorney when handling the deceased person’s estate. Medicaid serves approximately 3.19 million people in Florida, with more than 1 million of recipients being aged 21 years or older. An attorney can take steps to ensure that the Medicaid claim has been paid, before distributing assets to beneficiaries.

Medicaid’s claim against and estate will include all payments made by Medicaid for services or goods when the recipient was age 55 years or over. Payment of benefits for a person under the age of 55 years does not create a debt. Florida Statutes requires that the attorney or personal representative of any estate in which the decedent at the time of death was 55 years of age or older, promptly send a notice and a copy of the death certificate to the Agency for Health Care Administration. Once received, ACS (Affiliated Computer Services) will determine whether Medicaid provided any medical assistance and, if so, file a claim with the probate court. The claim will state the amount owed. The Clerk of Court then forwards a copy of the claim to the estate attorney or personal representative.
Continue Reading

A personal representative of an estate has a duty to make a reasonable search to determine the names and addresses of creditors. Creditors may include banks, electric companies, service providers, judgment creditors, or a past healthcare provider. A personal representative may wonder what type of “search” is required. Florida law requires that the search must be diligent to discover all “reasonably ascertainable creditors”. What does this mean in the real world? A personal representative should:

• Monitor the decedent’s mail and examine all bills that are received • Review the decedent’s checking account to find any regular check payments

• Ask friends and family members of any creditors the decedent might have • Obtain search judgments from a title company • Ask known health care providers about other health care providers • Review business records and inquire about accountants, lawyers, business partners or business employees who may know of creditors • Review old tax returns to see about sources of income and payments

Under Florida Statutes Chapter 735, when a probate estate is valued at less than $75,000.00, the estate qualifies for summary administration, a simplified and much quicker probate process. It is important to remember, however, summary administration is not the default type of administration. To obtain summary administration, a petition must be filed by any beneficiary within two years of the death of the decedent. Once the court approves the petition, the court may enter an order allowing the immediate distribution of the assets of the estate to the persons entitled to them. While summary administration may seem ideal for smaller estates, there may be some disadvantages for estates in Miami, Fort Lauderdale or Palm Beach if, for instance, real property owned by the estate is in foreclosure.

When calculating the assets subject to probate, it is necessary to know that most stock accounts, IRAs, life insurance and primary residences are not usually subject to probate and therefore would not be included in the $75,000 dollar calculation. For most estates, the most valuable asset is the primary residence. When this qualifies under Florida homestead, the residence passes directly to their heirs as proscribed by the Florida Constitution and therefore is not included in calculating the probate estate and not part of the $75,000 to determine whether the estate qualifies for summary administration.

Summary administration may seem like a great idea for an efficient distribution of a smaller estate. One major disadvantage, however, with summary administration is that a personal representative will not be appointed by the court. If a decedent died without a will, the court will not name a personal representative in a summary probate administration as they would in a formal probate administration. There is only a petitioner. This is the individual who files the petition for summary administration. A petitioner is not given the same authority as a personal representative to inquire, manage or dispose of assets as the personal representative does. This can cause a lot of problems with the administration of the estate. For instance, if decedent dies with a home in foreclosure, a personal representative may be necessary to discuss the options on this property with the bank. A petitioner would not have such broad authority.