Avoiding Conflicts Between Your Advance Healthcare Directive and Organ Donation Directive

            If you have or are thinking about obtaining an advanced healthcare directive, an organ donation directive, or both, this information is vital!  An advanced healthcare directive indicates which specific treatments are not desired at the end of your life—whether it be CPR, ventilators, or other life sustaining equipment.  People often think of an advance directive as an indication of when to “pull the plug.”  An organ donation directive indicates your desires about the donation of your organs and/or tissues upon your death.  Individuals may become organ donors in the State of Florida by 1) legally executing a Uniform Donor Card, 2) adding “organ donor” to your driver’s license, 3) legally executing a living will, or 4) obtaining an advance healthcare directive.

             A conflict between your advance healthcare directive and your organ donation directive may occur when you are, for all intents and purposes, dead (i.e. cardiac death or brain dead), but your body still functions so that your organs could be donated.  If you have experienced cardiac death or brain death, your organs are still functioning and may be donated.  However, if you have executed an advance healthcare directive, life sustaining procedures will cease upon your death, and organ death will soon follow.  Because of relatively quick organ death, the time to harvest your organs into a new recipient is extremely (if not impossibly) small.  Therefore, your advance healthcare directive essentially cancels out your organ donation directive because it has become impossible to keep the organs healthy long enough to place them in a recipient.

 To avoid this conflict, contact my office at 904-321-0987 so we can draft your documents to preserve and prioritize your end of life wishes.

Proper Execution of a Will

Proper Execution of a Will

 

            There are several requirements of Florida Statute 732 that must be met in order to have a validly executed will.

 

            Florida requires that all wills must be written—no oral wills.  There is a preference for typed documents, but a hand written will is sufficient if the will meets all of the other criteria.

 

            A will executed in Florida by a nonresident is valid in Florida if the executed will meets all of the execution requirements of the testator’s home state.

 

            First, the testator (the person who signs their will) must sign at the end of the will.  If the testator is unable to sign the will, a proxy may be used to sign the will, but the proxy must sign the will at the testator’s direction and in the testator’s presence.

 

            There are to be no changes made to the will after the testator has signed it.

 

            Second, the witnesses must either see the testator sign the will or be present when the testator acknowledges that s/he signed the will.  There must be two witnesses, one of the witnesses cannot also serve as the notary.  The witnesses must sign the will in the presence of each other and the testator.  Beneficiaries of the will may serve as witnesses, but this could lead to a legal challenge in the future, so it is a best practice to have non-beneficiaries witness the will if possible.

 

            There is some disagreement over the “presence” requirement.  The best practice is to have the testator, witnesses, and notary all in the same room within sight of each other while executing the document. 

 

            Third, the will must be notarized by a valid notary public.

 

            In addition to the will, the testator, witnesses, and notary should simultaneously execute a Self-Proving Affidavit.  The Self-Proving Affidavit eases the probate process.  The Self-Proving Affidavit includes statutorily required language that indicates the Will being entered into probate is the same will the witnesses and notary saw the testator execute.

 

            When executing a will, self-proving affidavit, or any other estate planning document, precise legal procedures must be followed.  If one of the legal requirements are not met, the document may be deemed invalid.  Avoid these problems and consult with an estate planning attorney, such as myself, to walk you through this process.  Please call me today to schedule your appointment.

 

Financial Exploitation of the Elderly

             The elderly are frequently targets of financial abuse; however, in these tough economic times, elderly victims are targeted even more frequently.  Abusers are not always fly by night repair men or individuals calling on the phone with a “free offer.”  Potential abusers of the elderly are conservators, caregivers, agents acting under durable powers of attorney, trustees, representative payees, financial planners, attorneys, family members, friends, and caregivers.

 Types of Elder Abuse

             Elder abuse is an act or failure to act by a person required to act that results in harm to an older person.  Forms of elder abuse include 1) physical abuse, 2) sexual abuse, 3) emotional and psychological abuse, 4) neglect, 5) abandonment, 6) self-neglect and 6) financial exploitation. 

             Financial exploitation is the illegal or improper use of an older person’s funds, property, or assets.  Examples of financial exploitation are 1) telemarketing fraud, 2) identity theft, 3) home improvement scams, 4) predatory lending, and 5) abuse of estate planning fiduciary duties.  In this article, we will focus on the abuse of estate planning fiduciary duties.

 Exploitation in Estate Planning

             Estate planning is the ordering of one’s legal (and sometimes non-legal) affairs in preparation of one’s incapacitation or death.  Individuals frequently maintain many estate planning documents including wills, codicils, trusts, power of attorney, health care surrogate, living wills, and other miscellaneous documents.  Often, an elderly individual will sign over some or all of their legal power as an individual to a trusted family member or caregiver.  An example of this is a power of attorney wherein an elderly individual will allow a trusted individual to make certain legal or financial decisions on their behalf.  The opportunity for financial exploitation here is rampant because of the vast power transferred in the legal document.  Even though the elderly individual may believe this person is a trusted individual, the individual may have their own motives, which may include wiping out the individual financially, involuntarily placing the elderly individual in a long-term medical facility, or prematurely making life or death medical decisions.        

 Warning Signs

             Behavioral signs of financial exploitation of the elderly are that the individual is withdrawn, afraid, secretive, or hesitant to talk freely with others.  Additional indicators of financial exploitation is that the abuser becomes overly protective of the elder individual, refuses to allow visitors, and/or isolates the victim from other friends and family. 

             Financial signs are unusual bank account activity (is the individual even capable of physically getting to an ATM machine, etc.); forged financial documents; documents that were signed or financial transactions that took place when the elder individual is mentally incapable of understanding the transaction or what s/he was signing; several unpaid bills after someone has been assigned this task; a change in spending habits; and someone who shows up and tries to weasel their way into the elder individuals life and finances.

 Prevention and Remedies

 Many of the above situations can be prevented by consulting with my office to ensure your legal documents not only reflect your needs and desires, but protect you from financial exploitation.

 If you believe someone is a victim of financial exploitation, contact my office so we can discuss your legal options, including possible criminal charges.

 

 

 

 

 

Challenging a Will

A will is challenged when a person, known as the “contestant,” comes forward, and tries to show that the will is invalid and should not be probated.  A will challenge must occur within a certain time period or is forever waived.  Either the entire will or only the affected portions may be determined invalid.  Challenges to the validity of the will often include one or a combination of the following:  improper execution, valid revocation, lack of testamentary capacity, execution of the will while the testator was under the undue influence of another individual, mistake, or fraud.

 

Improper Execution

In Florida, a will must be signed by the testator, at the end of the document, with no additional changes to the same document after the document has been executed.  Further, the will must be notarized and signed in the presence of two disinterested witnesses.  The notary cannot also serve as a witness.

 

Valid Revocation

The will was validly revoked by operation of law, subsequent instrument (such as a new will or a codicil), or physical act.  For more about valid revocation, please contact my office, as this is a very particular aspect of Florida law.

 

Lack of Testamentary Capacity

Lack of testamentary capacity claim charges that testator 1) was under the age of eighteen (18) at the time the will was executed, and was not emancipated; or 2) did not have the mental capacity at the time the will was executed to understand the extent of their property or the nature of the disposition being made.

 

Undue Influence

To succeed in an undue influence claim, the contestant must prove that 1) influence was exerted over the testator, 2) the influence overwhelmed the testator’s free will, and 3) that the will would not have existed in its current form if the undue influence had not existed.  Begging, pleading, nagging, joking, etc., are generally not sufficient to overcome the testator’s free will.

 

Mistake

Mistake usually occurs when the testator did not know s/he was signing a will, but thought they were signing a different document instead (i.e. a power of attorney).

 

Fraud

Either a misrepresentation was made as to the nature or contents of the instrument, or the testator was induced into making a will or gift by misrepresentations of fact that influence her motivation.

 

For more information about wills, please contact my office at (904) 321-0987.

When to update your Will

When do I need to update my Will?

Typical reasons for changing or updating a Will are:

(1) Marriage or divorce;

(2) Birth or adoption of a child;

(3) Death of a family member or beneficiary;

(4) Changes in the Federal Estate Tax laws or State Tax laws;

(5) Substantial change in the value of your estate;

(6) Change in the nature of your property holdings—for example, if your Will leaves the farm to a son, and the ranch to your daughter, and half the balance to your son and daughter, and then you sell the farm, your daughter would wind up with more (the whole ranch plus one half of everything else) than your son (who would get only one half of the balance);

(7) A Guardian or Executor or Trustee moves away, dies, or is no longer willing or able to serve;

(8) Your children are no longer minors, or are old enough to handle financial matters on their own;

(9) You move to another state; or

(10) You wish to eliminate gifts to certain beneficiaries.

Fighting Over Fido

10/6/08 Update:  This topic received additional coverage on the Virginia Family Law Blog’s article, “Who Gets The Pets?”

 

As more and more people view pets as people and as their “children,” pets are becoming a battleground in divorce proceedings.  Prevent the heartache of having to let go of Fido by including him in your prenuptial agreement, postnuptial agreement, marital settlement agreement, or other living arrangement agreement. To read more, click here.

What happens to Fido if you die before he does?  Pet trusts are also becoming more popular as people are considering the long-term care of their pet.  Add a pet trust into your estate plan.  It’s a very simple way to make sure Fido is taken care of after you have departed.

Benefits of Establishing a Testamentary Trust

A trust involves placing legal title with one person or institution for the benefit of one or more beneficiaries. It can be revocable and changeable, or it can be irrevocable. The person creating the trust is usually referred to as the trustor or settlor. The trustee is the person or entity selected to take legal title and administer the trust assets.

 

Trusts are often an important part of estate planning. Most estate planning trusts do not become effective or funded until the person creating the trust dies. If established by the person’s last will and testament, the trust does not even come into existence until the person dies. When the trust is established by a will, it is termed a testamentary trust. The remainder of this article we will discuss some of the uses for testamentary trusts.

 

Believe it or not, some families have what could be affectionately termed a “black sheep.” This person is not good with money, addicted to gambling, alcohol or drugs, frequently married and divorced or just not good with finances. If the black sheep is a beneficiary of the will, he or she may spend or lose their inheritance quickly.

 

Instead of giving the black sheep an inheritance, his or her portion can be left to a trustee in trust. Terms of the trust can provide for distribution of income, payment of medical bills, rent, emergency expenses and such other items as the person creating the trust deems appropriate. The trust can also include provisions prohibiting assignment by the beneficiary and prohibiting attachment by creditors of the beneficiary.

 

Protection from creditors is done by including a “spend thrift” provision. This provision prohibits assignment or anticipation by the beneficiary, which means a creditor cannot reach the beneficiaries interest in the trust. This feature can be attractive even where a black sheep is not involved, as the funds in the trust can provide a safety net for the beneficiary, free from unforeseen creditors. I frequently refer to the unexpected car accident as creating an unforeseen creditor.

 

Trusts are often used to provide for minor children. Funds are placed in trust until such time as the beneficiary, or beneficiaries, attain a certain age. Funds in the trust can be used for the health, welfare and education of the beneficiary, with the remaining assets not distributed until the minor has reached the age that the person creating the trust felt would be sufficiently mature to deal with a large financial gift.

 

Grandparents often create educational trusts for grandchildren. Such trusts usually limit use of the monies to post high school education and provide for final distribution of any remaining funds at the time the beneficiary reaches a certain age.

 

Estate tax savings may also be realized by creating what is known as a credit shelter trust in the will. Under current estate tax law, each person may give two million ($2,000,000) dollars to beneficiaries other than the person’s spouse, free of estate tax. There is generally no estate tax due on a gift to a spouse. However, when the spouse dies, the spouse will be limited to the two million ($2,000,000) dollar exemption from estate tax when assets pass to children, grandchildren or others. The IRS allows tax payers to have most of their cake and eat it too, if a credit shelter trust is utilized.

 

A maximally funded credit shelter trust will involve a decedent leaving two million ($2,000,000) dollars in trust when he or she dies. In simplest terms, the income from the trust can be automatically paid to the surviving spouse and the trustee can have power to invade principal if needed by the surviving spouse. Assets in the trust when the surviving spouse dies pass to children, grandchildren or others free of estate tax, so that the ability of both spouses to give two million ($2,000,000.00) dollars at death free of estate tax is preserved. Better yet, if the credit shelter trust assets increase in value between death of the first spouse and final distribution, that increase also escapes estate tax. Since the estate tax rate on the non-exempt portion of an estate is 49 percent, fully funding the credit shelter trust can save $780,800 dollars in taxes.

 

Even without tax savings, a trust might be created for benefit of a surviving spouse. This is often done in a second marriage situation, where the first spouse to die sets up a trust for benefit of the surviving spouse. At death of the surviving spouse, the assets remaining in the trust are distributed to children from a previous marriage.

 

A trust is a flexible instrument that can be applied to almost any situation. Creating a trust should be discussed with your estate planning attorney.

 

Source:  William G. Morris, Esq., MarcoNews 

Divorce Planning Tip

Many individuals planning for a divorce, or going through a divorce, or who have already divorced overlook the fact they have executed estate planning documents naming their (former) spouse as beneficiary, decision maker, health care representative, etc.  Please be sure to change these documents ASAP to avoid having your (former) spouse making these decisions or receiving benefits you no longer wish them to have (life insurance proceeds for example).

Talk to your family law attorney about taking care of this important issue.  If your family law attorney does not prepare these types of documents, he/she knows someone who does.

Probate Formal Administration

This week, I will walk us through the steps necessary to open and eventually close a formal administration of probate. I will attempt to offer a simplified explanation of the probate process, keeping in mind that West’s 2008 Probate Code and related laws and court rules are over 850 pages, plus an index of 160 pages.

 

If the decedent’s assets do not qualify for summary administration, or the will directs formal administration, or there are issues such as keeping the homestead free from creditor’s claims, elective share issues, federal estate tax obligations, then the attorney will have to commence formal administration for large estates. Formal administration may also be necessary where a life insurance product names the estate as beneficiary or where assets cannot be located and banks require the letters of administration issued in formal administration in order to avoid a confidentiality issue for their deceased client.

 

Commencement of the estate is done by the attorney preparing a petition for administration, which is filed with the probate court in the county of the decedent’s death, together with a certified short form death certificate. The long form can be purchased when a life insurance company, for example, requires the form to list the cause of death. Cause of death is normally nobody’s business, but may be grounds for the insurance company to contest payment of the claim.

 

The petition, among other things, must inform the court of the decedent’s death, the decedent’s residence at the date of death, even though he may have died elsewhere on vacation, and Social Security number, and lists his spouse, if any, and his next of kin. It also states the name of the person nominated as personal representative, if qualified, and a list of assets or general nature of the assets, and whether a federal estate tax return will have to be filed. Tax matters at death are so complicated that I decided to devote next week’s article to that.

 

The attorney must also prepare an oath of personal representative to promise the court that the nominee will diligently and faithfully administer the estate. The oath, signed before a notary, must include a designation of resident agent, who must be a resident of the county where the estate is pending. The agent, who is typically the attorney for the estate must sign accepting this designation. Anyone suing the personal representative, either in its representative capacity or in his individual capacity, for claims arising out of the estate, may serve papers on the attorney as agent for service of process.

 

Once all papers, together with suggested orders prepared by the attorney for the judge’s signature, and together with a court filing fee of approximately $285, are submitted to the clerk of the probate court, the judge will review the file and may request a hearing. If everything is in order, the judge will sign the Letters of Administration, of which the attorney will purchase, from the clerk, multiple certified copies. The court may require a surety bond be purchased from an insurance company in an amount the judge deems fit, which the attorney must arrange. Sometimes the attorney can obtain the waiving of the bond, but the bond is a good protection so that the estate will be reimbursed by the insurance company if the personal representative does not do the right thing.

 

Often, the relatives are told by the bank all they need to cash out the account is a letter of administration, but understanding the whole process shows it is not that simple. The Letter of Administration is a form prepared by the attorney that orders and authorizes any person with assets or financial information to deliver that information and those assets to the personal representative to be held and administered according to the will. The personal representative now has court authorization to find assets and locate creditors and take other appropriate action to fully administer the estate.

 

The attorney will then arrange a notice to creditors to be published in an appropriate local newspaper once a week for two consecutive weeks. This notice should also be served on known creditors. The notice also sets a time limit of 30 days after the date of service on the creditor and 90 days from date of first publication of the notice, unless claims are barred because the decedent has been dead for two years. The attorney for the estate has a duty to creditors according to the U.S. Supreme Court and must carefully keep track of these many time limits. After letters of administration are issued, the attorney will prepare a Notice of Administration to be served on beneficiaries and interested parties. This notice gives time limits to any person who objects to the validity of the will or the person nominated as personal representative to file their claim with the probate court, with copy to the attorney.

 

The rules contain a specific procedure and time limits for creditors to make their claims. If the estate disputes the claim, the attorney may prepare an objection to the claim within 30 days and the creditor must then file an independent lawsuit to collect the claim within 30 days unless a written motion for extension has been filed with the clerk and copy served on the creditor. There is also a procedural requirement to notify the Florida Department of Revenue, in case it has a claim for back taxes. If the decedent is over age 55, there is a procedure to notify the group which administers the Florida estate recovery program for Medicaid.

 

There are deadlines for inventories of the estate to be filed and on whom copies must be served. There are also forms, procedures, and time limits for the personal representative to file accountings of the estate’s property and income during the period of administration. Finally, to close the estate, the personal representative must seek an order of discharge after properly investing the estate, making distributions called for in the will and obtaining the consents of the beneficiaries or holding a hearing on the petition for discharge. The estate may be further complicated by problems with the elective share of the surviving spouse, the collection of sufficient assets from the trust to pay all creditors and obligations of the estate, Medicaid recovery issues, cash security, Medicare, determination of exempt assets, the fighting among beneficiaries that is quite common, Blue Cross/Blue Shield, convenience accounts set up as paid on death transfers, joint property issues and a whole host of other unforeseen problems.

 

The attorney and the personal representative should not be expected to handle these matters, which involve significant responsibility and personal liability, for free. Fortunately, Florida statute sets some guidelines for payment of fees, which will be discussed next week, along with the very complicated tax issues that face the attorney and the personal representative.

 

Source:  William Edy, Fort Myers News-Press

How to Prove a Will in Florida

Mr William Edy has posted another extremely education article in the NewsPress about how to prove a will:

Last week, I mentioned that any document purporting to be a last will, or document attempting to make dispositions of a person’s property after his or her death, must be filed with the clerk of court within 10 days after receiving notice that the will-maker, called the “testator,” is dead. Even if they believe the will is invalid or fraudulent, Florida Statute requires that the custodian of the will deposit the will with the court for the proper county, where the probate judge will decide if it is valid and should be admitted to probate. Even if there are no assets in the probate estate, and even if no one intends to file a petition for administration, the custodian must still file the will with the court. Upon the filing of a petition for probate, the judge will decide if it is a valid will.

 

Florida Statute sets forth the requirements for a will to be valid. Any document which attempts to devise the property of a deceased person after his or her death must be executed or signed by the testator in the presence of two witnesses. No particular form of words is necessary to the validity of the will if it is executed with these formalities required by law. The proper execution of the will must be proven to the satisfaction of the probate judge. Probate comes from the Latin word meaning “to prove.”

 

There are three ways to prove the proper execution of the will. The first method is by the inclusion of an affidavit attached to the will, which is signed by the two witnesses stating that they signed their signatures above the affidavit in the presence of the testator, who also signed above the affidavit. This affidavit must be notarized by a notary public who takes this sworn statement from the witnesses and from the testator. The notary must state that the notary either knows the persons taking this oath personally or has seen acceptable identification. The suggested words for the affidavit are set forth in Florida Statute 732.503 entitled Self-proof of will.

 

Attorneys who prepare wills generally attach this self-proving affidavit to the will because it makes it much easier to commence the probate process. FS 733.201 states that self-proved wills may be admitted to probate without further proof.

 

If the will is not a self-proofing will, the second way to prove the will is by the oath of one of the witnesses. One of the witnesses will be required to sign an oath in front of the judge or deputy clerk of court or commissioner appointed by the court. A commissioner is a notary public that the judge appoints to take the witnesses’ oath based upon the request made by the filing of a written motion. A commissioner is generally used when the witnesses are not located in the same county.

 

The third way to prove the will is by the oath before the judge, clerk of court, or commissioner signed by the personal representative nominated by the will, whether or not the personal representative is named a beneficiary of the estate. If the personal representative nominated in the will is not available, then the oath may be signed by any person who is not interested in, or a beneficiary of, the estate. The oath must state that the will is believed to be the last will of the decedent.

 

Individuals moving to Florida often ask the Florida attorney if their will signed in their former state is valid. Florida Statute states that any will, other than a holographic or nuncupative will, executed by a nonresident of Florida is valid if the will would be valid in the state where the will was signed. If the will does not meet the Florida requirements it may become expensive to prove to the judge that the will would be valid in the other state unless it was already admitted to probate in that other state. A holographic will is a will written in the handwriting of the testator. A nuncupative will is an oral will.

 

Lowell Schoenfeld, a Florida board-certified wills, trusts and estates attorney, e-mailed me asking that I remind our readers that oral wills are not valid. Even written letters or statements from the decedent that, for example, one child is to receive an extra $50,000, if that document is not properly witnessed by two witnesses, will not be considered a valid will or even a valid codicil. A codicil is an amendment to a will. He indicated that he had three cases in one week where this issue arose. That oral statement or un-witnessed document will not be effective by the court to authorize the extra gift.

 

Florida Statute also provides that the testamentary aspects of a revocable trust, that is, those aspects which attempt to transfer interests to others after the death of the trust maker, must be executed with the same formalities of the will and may be proved in the same manner as a will. Recently, a client who executed a trust some time ago sent me a courtesy copy of an amendment to his trust to place in his file. I had to call him and inform him that the amendment was not valid because it was not properly executed, even though he had signed the document he prepared himself. Because not all states have this requirement, it is dangerous to use a form from a self-help book or off the Internet.

 

I believe it is improper for an attorney to do something to ensure he or she will be hired to complete the probate.

 

One way is for the attorney to designate himself or herself to be the personal representative, unless the client is a relative or the client has no other friend or relative to nominate.

 

Another way is for the attorney to retain the original of the will so the beneficiaries will have to come to the law office to obtain the original, at which time they will be pitched. Some attorneys do store the originals, but I believe it looks bad.

 

A third way attorneys used to ensure their hiring is to not prepare a self-proving will so the beneficiaries will have to hire that attorney who witnessed the signing of the will to go to court to sign the oath before the judge or clerk of court. Other than out-of-state wills, I do not often see this practice done by Florida attorneys.

 

If you have signed a will, you should have the original in a safe place and review it to ensure that it is a valid will. You should review it or ask an attorney to review it, every few years, especially if you have married, or have adopted, a child after signing the will, which is called “pretermitted.”

 

A pretermitted child has the right to receive the same share they would have received if the deceased died without a will, unless the will clearly indicates that the omission was intentional or unless the decedent is survived by at least one child which is not pretermitted and the will devises substantially all the assets to the spouse. If the deceased failed to marry the other parent of the pretermitted child, the child could inherit all of the estate and the other parent or siblings receive nothing.

 

A pretermitted spouse has the right to the same share they would have received if the decedent died intestate, unless the right to inherit is specifically waived in a prenuptial or postnuptial agreement, or the spouse is provided for, or the will evidences an intention to not make provision for the spouse. Even if the will omits the spouse or fails to give the spouse 30 percent outright, the spouse may elect to take a 30 percent elective share, which was the subject of an earlier article.

 

The elective share may be a problem if the surviving spouse is receiving Medicaid for nursing home expenses. The receipt of assets from the deceased spouse, or the right to receive them through the elective share, could cause loss of those benefits, unless a certain type of will is used by the community, or at-home, spouse.

 

Assuming the will is valid, the attorney handling the probate process will have to decide whether the estate must utilize formal administration, or whether the estate qualifies for one of the simpler administrations for small estates, which will be the subject of next week’s article.

 

Source