Fiduciaries

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.

Quarantined – take the time to review your estate planning documents, joint tenancy agreements and beneficiaries

April 22, 2020 | by Chepenik Trushin LLP

COVID 19 – Is Your Estate In Order? Non-Probate Transfers and Pitfalls of Beneficiary Designations

In the wake of the recent Corona virus pandemic, many people are understandably concerned about their estate plan. A common misconception is that if you have executed a will or even a trust, then you are all set. In fact, it may not be that simple. In fact, a will is not the only instrument capable of passing down an estate to the decedent’s heirs, and some assets may not be controlled by your will and/or trust at all.

For example, in a joint tenancy with rights of survivorship, the property automatically passes to the surviving owner. So, if A and B own a piece of land in joint tenancy and A dies, B immediately gains full ownership of the land, without a probate administration. A’s right to the land extinguishes and thus, A has nothing to leave to his heirs through a will, or otherwise. Another way to avoid probate is through accounts with Transfer-on-Death (TOD) clauses. An account with a TOD beneficiary will transfer the ownership of the account will be transferred to the beneficiary at the decedent’s death, without a will or trust.

Part 1 – The Secure Act (the rules changed very recently for beneficiaries)

February 21, 2020 | by Chepenik Trushin LLP

The Secure Act: Retirement Accounts and Your Estate Plan

Beginning on December 20, 2019, the Secure Act substantially changed the rules for designated beneficiaries of retirement plans, with wide raging implications for estate planning.

The old rule used to be that upon the death of a retirement account owner, the beneficiary of the plan would be able to take required minimum distributions based on that beneficiary’s life expectancy. This was beneficial especially for younger beneficiaries with long life expectancies who could “stretch” the payments over many years, allowing the assets to stay invested in the plan longer. It was also possible for beneficiaries to receive these stretch payments if a trust for their benefit was named as the beneficiary, as long as the trust qualified as a “see-through” trust. If no beneficiary was named, or if a non-see-through trust was named as beneficiary, the entire plan had to be distributed within 5 years of the date of death of the participant. Because many clients wish to leave their assets in trust for their children, much of the focus of estate planners up until this point had been drafting trusts so that they qualified as see-through trusts in order to avoid the 5-year rule.

Lack of Testamentary capacity and undue influence – what are the legal standards?

December 23, 2019 | by Chepenik Trushin LLP

How Can you Prove Undue Influence?

For a Will to be valid, certain conditions must be met. The testator must have legal capacity, at least eighteen years old, must have testamentary intent, and the will must not be a product of undue influence or duress. The first two requirements are usually relatively easy issues to resolve, but undue influence and duress is not always clear. As the Supreme Court of Florida explained, “[u]ndue influence is not usually exercised openly in the presence of others, so that it may be directly proved, hence it may be proved by indirect evidence of facts and circumstances from which it may be inferred.”

In In re Estate of Carpenter, the Supreme Court of Florida listed a set of seven, non-exhaustive factors to consider when deciding cases of Undue Influence:

Four important reasons to update your estate plan and/or your trust documents

December 2, 2019 | by Chepenik Trushin LLP

I Already Have a Will; When Should I Update My Estate Planning Documents?

When someone executes a valid will, some people assume that if their wishes do not change, they should never have to revisit their estate plan. However, there are certain common events in life that should cause you to review or update your estate planning documents.

Marriage/Divorce: A surviving spouse is entitled to a percentage of a decedent’s estate, regardless of whether the decedent included the spouse in the decedent’s will. Interestingly, the amount that a surviving spouse is entitled to may vary depending on whether the will was executed before or after the marriage. If you execute a will and subsequently marry, the spouse will receive a share equal to what he or she would have had, had the testator died intestate. This typically amounts to either one-half of the estate (if there are children of the decedent who are not children of the surviving spouse), or the entire estate (if there are no surviving children, or if the surviving spouse and the decedent are the parents of the only surviving children). Fla. Stat, Sec. 732.301 and Sec. 732.102. In either case, this is more than the amount that a surviving spouse is entitled to under the “elective share” which is thirty percent (30%) of the decedent’s estate.

Trust Income, know the Tax laws

July 26, 2019 | by Chepenik Trushin LLP

Legitimate Taxation or “Confiscation?”

Taxing Trust Income

Which states can tax a trust’s income? This exact question was taken up by the Supreme Court in their recent opinion North Carolina Department of Revenue v. Kimberly Rice Kaestner 1992 Family Trust. North Carolina was of the opinion that they could tax the trust income of any and all trusts with at least one beneficiary residing in their state. The Supreme Court, however, disagreed.

Help mom and dad with estate planning, but know your boundaries under the law

June 10, 2019 | by Chepenik Trushin LLP

Avoiding Undue Influence, as an Adult Child, Assisting Parent’s Estate Planning

Writing a will is a process most people view as a terrible chore, but it is one that is necessary. The process may get further complicated when one spouse has already passed away and the adult children of the surviving elderly parent assist in managing and dividing finances. This has become more of a reality as more and more middle-aged children are caring for elderly parents. Perhaps, not surprisingly, this phenomenon is more pronounced in Florida, which according to the U.S. Census Bureau, leads the nation in terms of greatest share of its population aged 65 and older in 2010.

This scenario can lead to issues in estate planning especially if the parent is experiencing diminished mental capacity where too much of an adult child’s influence over estate planning decisions of the parent may bring legal problems such as legal charges of “undue influence.” Every state has its own undue influence laws to address these types of issues not only in the context of children’s undue influence on parents but others outside the family, such as a girlfriend or caretaker. In Florida, in order to raise a presumption of undue influence, a petitioner must show “(1) the existence of a confidential or fiduciary relationship between the decedent and the procurer of a will; (2) the active participation of the procurer in the planning and drafting of the will; and (3) the realization by the procurer of a substantial benefit under the provisions of the will.” These elements in Florida are found in common law as opposed to codified statutes so the court’s decision will be based on how convincing the evidence is in a case.

Paternity in Probate bench court – timing is everything, be aware

May 28, 2019 | by Chepenik Trushin LLP

Seeking Paternity in Probate: Are You Out of Time?

When an estate enters probate and is being distributed, the distribution is usually between family members. Family members can include spouse, children from the marriage, parent, adopted child, aunt, cousin, etc. If there are issues or questions about the status of these individuals, they are usually litigated after the estate holder passes. But what if you are a child born out-of-wedlock? What status do you have and what rights do you have to the estate?

Under Fla. Stat. § 732.103, any children from the marriage are automatically deemed heirs of the estate, and entitled to a share of the intestate estate. But out-of-wedlock children have to establish paternity if they want to share in the distribution of the estate. But do these individuals have the opportunity to litigate the paternity after the father has passed? The opportunity is there, but it is subject to a statute of limitations under Fla. Stat. § 95.11(3)(b). The statute imposes a four year limitation for paternity actions generally, starting from the date the individual turns eighteen.

Beneficiaries and fiduciaries, know your entitlements under the law

May 6, 2019 | by Chepenik Trushin LLP

Fiduciary Exception for Attorney-Client Privilege is Extinct in Florida

If you are an attorney hired by a fiduciary, whether it be a trustee, a guardian, or a personal representative, you not only are working for the fiduciary, but you are also working for the best interests of the third party ward or beneficiary. However, can the beneficiary come forward and demand access to privileged communications between the fiduciary and the fiduciary’s attorneys? The “fiduciary exception” to the attorney-client privilege would allow beneficiaries to demand access, as long as the information is related to the normal administration issues of the trust or estate. Because the beneficiary is the intended third party beneficiary of the trust or estate, they are entitled to the information related to the trust or estate.

The original rule created confusion and uncertainty for fiduciaries and their attorneys, so Florida legislatively abolished the “fiduciary-exception” rule by adopting Fla. Stat. § 90.5021. Specifically § 90.5021(2) states that any communication between a lawyer and client acting as a fiduciary is privileged and protected to the same extent as if the client was not a fiduciary. However, there was still much litigation over this issue, and the Supreme Court of Florida on more than one occasion expressed concerns over its constitutionality. However, the Supreme Court of Florida finality resolved the issue in In re Amends. to Fla. Evidence Code, No. SC17-1005 (Fla .Jan. 25, 2018), in which it upheld the constitutionality of the statute.