What should you do if your loved one is suffering from Alzheimer’s Disease?

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Seeing a loved one suffering from this devastating disease is very difficult. Alzheimer’s Disease affects the person’s memory, his or her ability to carry out daily activities, and the ability to manage important affairs.

You might be asking yourself: what can I do to help my loved one during this difficult time?

Guardianship may be an alternative, if your loved one is not able to manage his or her affairs, or is unable to make important financial or medical decisions. You can help your loved one by filing a Petition to be Appointed Guardian with the Court. In the proper circumstances, the Court will appoint an individual to act on behalf of the person who is incapable of making decisions. The Petition can ask to be appointed guardian of the person, guardian of the property, or both. You may also be appointed to exercise all delegable legal right and powers of an adult after the Court finds that the person is incapacitated, this is called a plenary guardian.

The Court will first make a determination as to whether the person is incapacitated. The process is very involved, and it includes the Court appointing a three-member examining committee to make an assessment as to capacity. The Examining Committee members are usually psychologists, nurses or guardians. Once they assess the person, they prepare a report as to their opinion regarding incapacity, and then they file it with the Court. The Court will also appoint an attorney to represent your loved one during the incapacity proceedings. This is done to make sure that your loved one’s interests are protected. You will meet this attorney when he or she comes visit your loved one to read the Court documents. If the Court finds that your loved one is incapacitated, then the Court will move on with the Petition to Appoint you as guardian. If the Court appoints you as guardian, you will be able to act on your loved one’s behalf and protect his or her interest. As a guardian, you will be required to file annual plans with the Court to ensure that you are protecting your loved one’s best interests, and that you are properly managing his or her assets. It is important that you have a competent and devoted attorney to assist you during this complex process.

Florida’s New Elective Share Statute

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On June 16, 2017 Governor Scott signed CS/CS/SB 724 into law. The new law, which took effect on July 1, 2017, modifies several sections of the Florida Probate Code relating to the elective share.

For those readers who are unfamiliar with the term “elective share,” it is basically the gender-neutral successor to the “dower and curtesy” which was abolished in Florida in 1975. Since their initial passing, the Florida Legislature has revised the elective share laws several times, each time making them more expansive to ensure that a surviving spouse will not be completely disinherited.

As it currently stands, the elective share allows a surviving spouse to elect to take thirty percent (30%) of the decedent’s elective estate (see footnote 1), in lieu of whatever they would have received under the decedent’s will or trust.

In addition to the elective share, the Florida Homestead Law grants a surviving spouse certain rights to the decedent’s homestead property. At a minimum, the surviving spouse is entitled to receive a life estate in the homestead, which can be converted to a one-half interest as a tenant in common if the surviving spouse makes the election within 6 months of the decedent’s death. The decedent’s children take the remainder interest. If, however, the decedent had no descendants whatsoever, the surviving spouse receives the entire homestead property.

Prior to the enactment of CS/CS/SB 724, homestead property was one of very few assets not included in the valuation of the elective estate. This new law changes that. Unless the surviving spouse wives his/her homestead rights, CS/CS/SB 724 expressly provides that the decedent’s protected homestead shall be included in the elective estate. It also provides for different valuations depending on the interest that the surviving spouse would have in the homestead, i.e. one-half of the date-of-death fair market value in the case of a life estate, or the entire date-of-death fair market value in the case of a fee simple interest.

Some other areas affected by the new bill include awards of attorney’s fees and costs and the deadline to take the election. Prior to the new law, attorney’s fees against the surviving spouse could not be awarded unless the court determined that the election was made or pursued in bad faith. The new law removes the bad faith requirement and provides that the court may award fees and costs in any proceeding under the elective share statute, not only instances where the surviving spouse makes or pursues an election.

Also prior to the new law, the surviving spouse was required to file his or her election with the court either within 6 months of being served with the Letters of Administration or within 2 years of the death of the surviving spouse, whichever was earlier. The surviving spouse could also petition the court for an extension of time to make the election, but the petition had to be filed within these same timeframes. The new law does not change the two-year maximum, but it does allow the surviving spouse to move for an extension within 40 days of the termination of any proceeding which affects the amount the spouse is entitled to receive under Section 732.2075(1), even if this occurs after the 6 months of service of the Letters of Administration.

To read all of the changes enacted by CS/CS/SB 724, visit: http://laws.flrules.org/2017/121

(1) The decedent’s elective estate is not limited to the probate estate. It includes assets that pass outside of probate such as joint and “pay on death” bank accounts, Totten trusts, property held in joint tenancy and tenancy by the entireties (limited to decedent’s interest in the property), revocable trusts, pensions and retirement plans, among others. See Section 732.2035, Florida Statutes.

Competing Standards for Testamentary Capacity: Lucid Interval Standard v. Clear and Convincing Evidence Standard

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Testamentary Capacity is the legal term of art used to describe a person’s legal and mental ability to make or alter a valid will or a power of attorney. There are currently two standards used for determining whether someone has capacity.

Raimi v. Furlong, 702 So.2d 1273 (Fla. 3d DCA 1998) discusses the “lucid interval” standard of testamentary capacity. The Court held that:

“To execute a valid will, the testator need only have testamentary capacity (i.e., be of “sound mind”) which has been described as having the ability to mentally understand in a general way (1) the nature and extent of the property to be disposed of, (2) the testator’s relation to those who would naturally claim a substantial benefit from his will, and (3) a general understanding of the practical effect of the will as executed.”

The Court in Raimi went on to explain that “an insane individual or one who exhibits “queer conduct” may execute a valid will as long as it is done during a lucid interval.

In Mimi Rescue Mission, Inc. v. Roberts, 943 So.2d 274, 31 Fla. L. Weekly D2979 (Fla. 3d DCA Nov 29, 2006) the Court relied on the “clear and convincing” standard, which looks at the testator’s general health and mental wellbeing in the days leading up to the will signing. This standard is facts specific. The Court made its finding based on testimony of the neurologist, and also based on the deterioration of the decedent’s mental condition days before her death.

What is left unsaid is which standard the Court will utilize in subsequent cases.

It appears that the clear and convincing standard would be easier to satisfy, if we can show serious enough facts leading up to the last days of the decedent’s death. These facts would indicate a deterioration in decedent’s general health and mental condition, which is what the standard requires. On the contrary, the lucid interval standard seems very hard to meet if the decedent’s mental health significantly deteriorates days before passing. This standard is more difficult to meet because it is hard to show a lucid moments if the decedent shows a deterioration in his or her general and mental condition.

Gov. Scott Vetoes Electronic Wills

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In recent years, transactional lawyers have watched as more and more dealings went digital – from sale of goods contracts, to real estate transactions and beyond. So, many argue, it is only a matter of time before estate planning follows suit.

As it stands, the law in Florida states that, for a will to be valid, it must be (1) written, i.e. typed or printed (holographic, or handwritten, wills are not valid in Florida) on paper, (2) signed by the person making it (known as the “testator”) (3) in the presence of two witnesses. Every state imposes some version of these same requirements, known as will formalities, to deter tampering or fraud.

That almost changed this year. On May 5, 2017, the House and Senate passed House Bill 277, known as the “Florida Electronic Wills Act” (See Footnote 1). The statute proposed to regulate electronic wills, i.e. wills that are prepared, executed, and stored entirely on digital platforms, by leveraging new technology such as video conferencing to fulfill the presence requirement using remote witnesses. In what many thought would be unlikely move by Governor Rick Scott, he vetoed the bill on June 26th, 2017 citing several concerns including the ability of notaries to properly authenticate identities remotely.

If HB 277 had been signed into law, Florida would have been only the second state in the U.S. to enact an electronic wills statute (See Footnote 2). The reluctance by states to make the leap, despite strong market demand for digitization, is due in large part to the serious and legitimate concerns voiced by lawyers, legislators, and now Governor Scott, regarding authentication.

The physical presence requirement, which is intended to protect the testator from undue influence and prevent future will contests, accomplishes the intended goal by having two witnesses and a notary attest to the fact that the testator is who they say they are and does not appear to be incapacitated or acting under duress at the time the will is signed. Whether a video conference affords the same degree of authentication is hotly debated and remains to be seen.

Hacking and document destruction are also major concerns when it comes to electronic wills. As we know, websites are frequent victims of hacking, so it’s only natural that the thought of massive cloud-based archives of documents containing extremely sensitive personal and financial information would make people uneasy.

However, proponents of electronic wills contend that their benefits outweigh the risks. According to a Gallup Poll from 2016, a jaw-dropping fifty-five percent (55%) of Americans do not have a will. Electronic wills, by making the process faster and less expensive, arguably make it more feasible for those less fortunate to create an estate plan. Some argue that if this increased access does indeed result in less people dying intestate, i.e. without a will, judicial efficiency will be served because there will be less estate disputes, thus saving the courts time and taxpayer money.

Another frequently-cited advantage of electronic wills is the ease with which the testator would be able to make changes – they would simply log in, make the desired amendments and log out. The document’s metadata, which can later be reviewed, would contain a log all interactions with or alterations to the original file, such as records of when and who accessed or edited the document.

While we cannot deny that electronic wills represent the future of estate planning, we are somewhat relieved that the Florida Electronic Wills Act, as it is currently written, was not signed into law this week. There are just too many issues that, if left unresolved, could flood the courts with will contests due to improper authentication. Until those kinks are worked out, we must resist the urge to put the horse before the cart.

House Bill – https://www.flsenate.gov/Session/Bill/2017/00277

Senate Bill – https://www.flsenate.gov/Session/Bill/2017/206/ByVersion

Gallup Poll: http://www.gallup.com/poll/191651/majority-not.aspx

(1) To read the full next of the House Bill, see https://www.flsenate.gov/Session/Bill/2017/00277. For the Senate Bill, see https://www.flsenate.gov/Session/Bill/2017/206/ByVersion.

(2) Nevada’s electronic wills statute has been on the books since 2001. See Nev. Rev. Stat. 133.085.

All About the Guns

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In my 20+ years practicing probate law, I have made an observation that some of our readers might find curious. If you had to guess, what would you say is the single most coveted item – the item that is most likely to go “missing” once someone passes away. Most people would say it’s mom’s jewelry, or dad’s classic muscle car or some priceless piece of artwork. Those are all great guesses. But, here in Polk County, it’s usually the gun closet that gets ransacked first.

Although making specific gifts of firearms in a will or personal property memorandum might prevent the thievery, those gifts oftentimes create problems of their own. This is because many gun owners forget to consider the recipient’s legal eligibility. If, for example, the intended beneficiary is a minor, a convicted felon, or resident of a state with more stringent regulations, the personal representative’s hands may be tied when it comes to making the distribution.

Enter the gun trust. A well-drafted gun trust can ensure that firearms and other items regulated by the National Firearm Act (NFA) (also referred to as “Class 3 weapons”) are distributed as intended by the decedent.

Gun trusts have gained so much popularity in recent years that many gun shops and websites have jumped on the bandwagon, offering on-the-spot gun trusts using standardized forms. Needless to say, this one-size-fits all approach to estate planning has some major disadvantages.

Take, for instance, the fact that gun shop employees and website administrators do not have the legal expertise to explain the structure of the trust, i.e. who the trust actors are and what powers and responsibilities each has with regard to administering the trust. Perhaps more alarming is the fact that the trust code varies from state to state and many of these standard-issue forms do not account for those nuances.

If the overarching purpose of estate planning is to provide you with peace of mind, you should at the very least understand how your trust works and know, with certainty, that it complies with the law in your jurisdiction and that your property will end up where you want it to.

A bespoke gun trust drafted by a professional affords that peace of mind and much more. In the context of antiques or NFA items such machineguns, suppressors, and short barreled rifles or shotguns, a well-drafted gun trust can be especially valuable. Because those items are heavily regulated, transferring them requires extensive background checks which – let’s face it – some beneficiaries will not pass. Gun trusts give you the opportunity to designate multiple beneficiaries, thus reducing the possibility that a gift will lapse because of one beneficiary’s ineligibility. Additionally, attorneys can draft special provisions into these trusts to allow for the removal of trustees, the inclusion of addition items, and to articulate the grantor’s intent to comply with the NFA, the Gun Control Act of 1968, and local state and federal laws.

Information on Firearms Regulation – https://www.atf.gov/rules-and-regulations/national-firearms-act

The National Firearms Act Handbook – https://www.atf.gov/firearms/national-firearms-act-handbook

ATF 41F Forms and Transfers – https://www.atf.gov/rules-and-regulations/final-rule-41f-background-checks-responsible-persons-effective-july-13

Mail Scam Alert!

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We at Medina Law Group have recently come across a new scam. But this time, the scam came by mail. Apparently, scammers are now monitoring new corporate filings with the Florida Secretary of State.

After creating a new entity for a client of ours, we received a letter from the “Corporations Filing Service” (CFS). The letter was fashioned after an annual corporate minutes statement, and it requested that the recipient provide the information of all company shareholders, directors and officers.

The letter additionally prompts the recipient to pay a $155.00 fee for the preparation of corporate consent records.

As always, we encourage the readers of this blog to disseminate this information to anyone who might be making corporate filings with the Florida Secretary of State.

Phone Scams Top the IRS’ ‘Dirty Dozen’ List of Tax Scams for 2016

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For many of us, this is a familiar scene: You get home from work, aching to wind down after a long day, only to be yanked out of your post-nine-to-five bliss by a jarring message left on your answering machine by someone claiming to be from the IRS.

The messages vary, but the scripts typically read something like this: “We have made several attempts to reach you. This is officially a final notice from the Internal Revenue Service. The reason for this call is to inform you that the IRS is filing a lawsuit against you. An urgent callback is necessary.” In the more menacing versions, the caller threatens police arrest, deportation, license revocation, and the levying of liens on the recipient’s assets and bank accounts within 24 hours unless some phantom past-due amount is settled.

Although these voicemails might seem laughable to the savvy tax practitioner, the Treasury Inspector General for Tax Administration (“TIGTA”) has reported that nearly 3,000 victims have been collectively swindled out of more than $14 million as a result of these phone scams. Along with identity theft and phishing scams (emails email about a tax bill or refund claiming to be from the IRS), these phone scams ranked in the top three tax scams for 2016.

The fact is, many of our friends and neighbors are indeed vulnerable to these scammers because they don’t know one thing: The IRS will never initiate contact with a taxpayer by phone, email, text messages or social media channels. The IRS will always send notices regarding tax delinquencies, refunds, and even suspected civil tax fraud by mail. The only exception to this rule are cases of suspected criminal tax fraud, where an IRS Special Agent will actually show up on your doorstep, with proper identification. In those cases, however, I would advise that the taxpayer concern himself less with whether he is being scammed, and more with whether he knows a good tax attorney.

In any event, I encourage the readers of this blog to disseminate this information to their friends and families, because you never know who the next victim might be.

To report an phone scam to the TIGTA, email the IRS at phishing@irs.gov (Subject: ‘IRS Phone Scam’), or visit https://www.treasury.gov/tigta/contact_report_scam.shtml

To learn more about IRS phone scams, visit: https://www.irs.gov/uac/newsroom/phone-scams-continue-to-be-a-serious-threat-remain-on-irs-dirty-dozen-list-of-tax-scams-for-the-2016-filing-season

To learn more about the 2016 IRS “Dirty Dozen” List, visit: https://www.irs.gov/uac/newsroom/irs-wraps-up-the-dirty-dozen-list-of-tax-scams-for-2016