Florida Probate Attorney and Florida Inheritance Lawyer Florida Probate Attorney Blog

New Florida Intestate Succession Law and other Trusts and Estates legislation.

E Lobbyist reports regarding Florida Trusts and Estates legislation that has sailed through the legislature and is expected to be signed into law by the Governor. 

The site summarizes the legislative changes saying that it provides fiduciary lawyer-client privilege; revises provisions relating to intestate share of surviving spouse; provides right to reform terms of will to correct mistakes or achieve tax objectives; provides for award of fees & costs in reformation & modification proceedings either against party's share in estate or in form of personal judgment against party individually; clarifies that revocation of will is subject to challenge on grounds of fraud, duress, mistake, or undue influence, etc.  

MyFloridaHouse.gov shows their more complete summary of the proposed legislation which appears will shortly become Florida Trusts and Estates law. It has a significant change to Florida Intestate Succession law in that for decedents dying on or after October 1, 2011 that do not have a will the law will be changed. The current law is that when a decedent leaves children all of whom are also the children of the surviving spouse then the spouse receives the first $60,000 and then one half of the remainder. The new law will be for intestate estates when that situation comes up the spouse will receive everything. When one or more children are not also children of the surviving spouse then the law will remain the same for Florida Intestate estates that the spouse will receive one half and the children will receive one half. 

TV Plot explained inheritance law incorrectly Sunday. Pretermitted Spouse law.

On Sunday night flipping channels to see a few minutes of tv I happened to see part of the show Desperate Housewives. The interesting thing to me and this blog is that one character who was the mom of a woman who had just killed themself told her husband that he had effectively bought her a home since he had bought several pieces of real estate and one he had put into her daughters sole name. He said that she did not have a will and he was her spouse so he would receive her property anyway which would be correct. She then said that she had found an old will from prior to they were married and that all the property in the will went to her as a result. 

That would not be accurate in Florida or most if not all jurisdictions in the US since even if the will had the required 2 witnesses and even if it were self proved with a notary as it should be the will would not validly pass the property given the concept of a pre termitted spouse. That means that they were married after a will was executed and it was not in contemplation of marriage or having mentioned him. Since they got married after the will was executed the spouse gets their intestate share and since they had no children together that would be everything. While they live on a fictional lane in Florida the law for pre termitted spouses can be found by clicking here. It may not have advanced the plot they wanted to show although having the discussion and making the point that the will was prior to the marriage and there was no pre nuptial agreement just showed they were operating in a fictional tv environment as far as wills and inheritance law are concerned. People should be aware though that if there is no pre nuptial agreement and there are no children but there is a will prior to their marriage unless the slayer statute applies or the marriage is properly challenged the spouse will receive all the property passing through the probate estate of the decedent. 

US Trust Survey shows Wealthy Boomers plan to enjoy wealth. Less concerned re passing on Inheritance.

althy Baby Boomers keeping Inheritance for themselves. 

A US Trust survey of 457 high-net-wealth individuals with at least $3 million in assets they could invest released Tuesday found 51 percent said it is not important to leave their kids an inheritance.

"These are mainly self-made people," 50 percent of whom said they paid a price in personal relationships and possibly their own health when they made their wealth, US Trust President Keith Banks told CNBC. So they think "I’m going to get a return on that investment for myself, number one, and maybe my children down the road."

Among the study's other findings: 75 percent said their wealth is the result of their own focus and hard work, 52 percent have not fully disclosed their wealth to their children and 55 percent intend to actively volunteer after retirement.

  "This is the 'forever young' generation. So they don’t think like our parents did" that when you hit 65 you relax in Florida, he said. "These are people that are serial entrepreneurs, they’re looking forward to starting new businesses, they want to volunteer, they want leisure time, they want to travel. It’s almost a new beginning for a lot of them. It’s also a way, in their minds, to stay young and feel young."

While nearly all had at least a minimal plan in place most were far from comprehsive planning that they should have been doing to help protect for the long term care of their finances and values. 

Only 3% of the business owners in the survey had a succession plan in place. 

 Also interesting that of the ultra wealthy Bill Gates and Warren Buffet are recruiting to give at least half of their wealth to charity. The article does not really address the issue but it can be more helpful to provide less for the children of the very wealthy. If they have too much they will not feel the need to be productive and work for themselves. Ivanka Trump for example went to a top school and has worked in professional capacity and not merely earned money from being famous or partying. This point is made in the movie Arthur. Although he is wealthy it delays his growing up and he relies to heavily on the family and others to care for him. Funny for a movie but for real life it is sad when a child's ambition is taken away by never needing to work. 

U.S. Trust found that many children of these first-generation wealthy families are not receiving the guidance and support they need to handle either the emotional aspects or financial responsibilities associated with family wealth. Among wealthy parents surveyed:

• Only about one third (34 percent) strongly agree that their children will be able to handle any inheritance they plan to leave them.
• Nearly half (45 percent) do not believe their children will reach a level of financial maturity to handle the family money they will inherit until they are at least 35 years old.
• About half (52 percent) of parents surveyed have not fully disclosed their wealth to their children, and 15 percent have disclosed nothing about the family wealth. When asked why they haven’t, one in three (31 percent) parents said they had never thought to do it.

Other reasons cited were fear that their children would become lazy (24 percent); would make poor decisions (20 percent); would squander money (20 percent); or would be taken advantage of by other people (13 percent).

Though 84 percent of parents think their children would benefit from discussions with a financial professional, nearly six in 10 (59 percent) have never introduced their children to the professionals managing their financial affairs.

 

See Margo Beller - CNBC April 19 Boomer Wealthy saving for themselves

 See also Business Wire.com Info re the US Trust Survey

 

Tax compromise to come to the floor in Congress Monday

Tom Cohen of CNN wrote an article today discussing that the tax compromise agreed to President Obama and the White House Administration and the Republican leaders in Congress will come to the floor despite threats to prevent it from Democratic leaders in Congress. 

Senate Dick Durbin of IL The # 2 leader in the Senate for the democrats said that "If we want to change Washington and move in the right direction we need to stand together and compromise so that he was supporting the bill. 

Among its provisions an extension of the Bush era Tax Cuts which the Congressional Budget Office scored as costing $400 Billion. $225 Billion worth in a 2% reduction to the payroll tax for a year. 

$57 Billion to extend the unemployment compensation provisions which have already been extended a few times for another 13 months and a $5 million dollar estate tax exemption with a 35% rate. 

Congressional Democrats point out that the estate tax change from $3.5 million which congressional democrats agreed to instead of the $1 million with a 55% rate that it was scheduled to go to up to $5 million exemption amount increase its cost from just $25 B for the 2 year term when it had a 45% rate to $68 Billion for the same two year period while only impacting 6600 families during that time. Congressman Paul Ryan a Republican however responded that the estate tax is currently 0 and is increasing to 35% and it is a compromise to move it that much and start the estate tax again but they would not lower the exemption amount. Congress will likely work out this tax dispute soon as it is coming to the floor tomorrow and there are only a few days remaining of the legislative term prior to the holidays and members of Congress going back to their districts. 

 

http://www.cnn.com/2010/POLITICS/12/12/tax.plan/index.html?hpt=T1

Grantor Retained Annuity Trusts may be far more restricted soon.

Bessemer Trust Bank prepared a PDF outline regarding the main changes that Grantor Retained Annuity Trusts (Grats) are going to have under the small business and infrastructure Jobs Tax act which. Assuming it passes in the senate it will then be signed by the President and provide that the minimum term would be a ten year Grat. It will also provide that the payments may not decline during any future year. These rules are designed to significantly minimize those who are seeking to game the system through a series of short term Grats they were confident to live past or have minimal inclusion or were able to time the market more in seeking to reduce their tax exposure. The law will not be retro active but will only impact the ability to do a GRAT without the restrictions after the law becomes law if that occurs so the planning opportunity still exists but may not shortly.

To read further the Bessemer Trust summary click here.

Warren Buffet $10k invested for 45 years would be worth $80 Million

Given the track record of Warren Buffet and Berkshire Hathaway no wonder he is one of the World's richest and allowed others to build vast wealth and leave behind nice inheritances for their loved ones.

As MSN.com reported $10,000 invested with Warren Buffet for 45 years now worth $80 Million If a person had invested $10,000 on October 1 1964 (equivalent of $60,000 in todays dollars) it would now be worth $80,000,000. Annualized 20% compounded gain a year.

Only two mutual funds are anywhere close with Fidelity Magellan Fund having a return of 16.3% and Templeton 13.4%. However the difference in returns is substantial that gain on Fidelity would still be impressive but $9 million instead of $80 while the Templeton gain being $2.9. Shows the time value of money and value of compounding gains. Also by comparison the S&P 500 had the same investment been made in it would have returned $560,000.

Buffet has preached low turnover of stocks with a buy and hold mentality and has expressed the idea of being fearful when others are greedy and being greedy when others are in fear in order to get the best values.

Inheritance less likely than been expected for baby boomers

As this article from the Philadelphia Inquirer mentions there are fewer inhertiances than had been previously been expected by baby boomers and others.

The article indicates that 81% of baby boomers have not received any inheritance. 15% percent now expect they will while 27% had expected it in 1989.

Several reasons for less inherited wealth to reach the next generation include among other reasons

The significant health care costs resulting from longer life expectancies, more procedures and higher medical costs.

Reverse Mortgages have become more popular among the elderly which takes the cash (equity) out of the primary asset - the home of the parents. 

There are fewer traditional pensions to fund the longer lives.

The average families have grown and are now 3.3 children.

The seniors are now living more active lives in retirement and spending their assets for themselves.

Also the article indicates that the wealthiest 7% of estates are going to leave significant inheritances. The inherited wealth of the top 7% of the estates account for 50% of all the inherited property. People are advised to continue to work and not plan on an inheritance. 

Nigerian Inheritance Scam

Quartet nabbed for Nigerian inheritance scam

Florida Probate Blogs.com reported earlier today about online Inheritance scams and that they often originated with claims of inheritance in Nigeria and that anyone who receives as an email claiming they have inherited millions from an unknown relative should just delete it. Further evidence that a large number of people are unfortunately not doing so. As Dan Kaplan reported in an article published in the United Kingdom about two weeks ago which can be found by clicking here four men have been indicted on federal charges they masterminded a Nigerian get-rich-quick spam scheme that netted the alleged fraudsters more than $1 million, the U.S. Department of Justice announced Thursday.

The defendants – Nnamdi Chizuba Anisiobi, Anthony Friday Ehis, Kesandu Egwuonwu and "John Doe 1" – are accused of persuading victims into sending them more than $1.2 million in cash in exchange for a piece of an non-existent inheritance, according to a Justice Department statement.

The men were charged with eight counts of wire fraud, and one count each of mail fraud and conspiracy. Anisiobi additionally was charged with one count of bank fraud.

"The defendants allegedly sent spam email to thousands of potential victims in which they falsely claim to have control of millions of dollars located in a foreign country that belongs to an individual with a terminal illness," the statement said. "The defendants allegedly solicited the help of the potential victims to collect and distribute the funds to charity."

The emails promised to provide the recipients with a piece of the inheritance if they helped, but only after they first wired fees to cover legal representation, taxes and bogus documentation, the statement said.

"We cannot allow these scam artists to prey on innocent victims in this country," U.S. Assistant Attorney General Alice S. Fisher said, "and we will work across the globe to knock out these fraudulent get-rich-quick schemes."

U.S. Attorney Roslynn R. Mauskopf warned Americans to protect themselves against similar solicitations.

"Potential victims need to know that any email offering millions of dollars that requires they send money to receive this windfall is a scheme," she said. "Delete it."

The mail and wire fraud charges carry up to 20 years in prison, while the maximum sentence for bank fraud is 30 years. The conspiracy charge carries a five-year maximum sentence.

Beneficiary Designations and Transfer on Death Accounts

It is important to remember when doing estate planning that the will only controls property that passes from a decedents sole name and a trust only passes property which is funded in the trust. Property that is intended to provide an inheritance for other beneficiaries may go to the wrong individuals unless a person keeps the beneficiary designations and transfer on death recipients updated.

Unlike provisions to a former spouse in a Florida will which are automatically voided by the divorce (effect of Subsequent marriage, birth, adoption or dissolution of marriage statute click here) and provisions in a Florida trust to a former spouse are voided on divorce (for the Florida statute click here) unless an intent to the contrary is explicitly stated beneficiary designations and transfer on death accounts will often be fixed at whatever they say. There is no express statute which voids them. Therefore if someone has a million dollar life insurance policy naming an ex spouse they have not talked to in 10 years or a bank account or some other account that is setup as being in trust for that person it is important those be updated or the inheritance plans may not match what your desires would actually be.

The positive aspect of avoiding probate would clearly be wasted by potentially having none of the property passing to the desired beneficiaries. While it is important to keep a will and trust up to date it can be even more important to keep property that will pass outside of the estate or a trust passing to the desired individual.

Family Inheritance Discussions

Inheritance litigation is on the rise as was indicated in a prior post that can be found here it can be helpful to discuss inheritance issues within the family. This can help reduce the amount of inheritance disputes and minimize the emotional and financial costs of Probate and Trust Litigation contest proceedings.

Andy McKenzie and Mike Riedel Financial Advisors with McKenzie & Riedel Investment Consulting Group of Wachovia Securities have written an interesting article about discussing family inheritance issues in advance and a smooth transition of wealth without inheritance disputes. Their article can be found here with portions of it below.

A Family Conversation About Wealth and Inheritance

Talking to your children about your finances is about more than telling them the location of your most important documents. It’s also about imparting responsibility and respect for your values regarding money.

As parents grow older, they must eventually face the challenge of talking to their adult children about wealth, inheritance and the financial implications of their mortality. Unfortunately, ‘‘many parents postpone (the conversation) because they think they have time,’’ says Dr. Eileen Gallo, a Los Angeles psychotherapist who counsels families about the emotional aspects of wealth.

That can be a mistake. Communicating openly with your kids won’t solve every problem, but it can reduce family conflict and provide you with more options for empowering your children to act on your behalf, should it become necessary. Open communication can also help prepare your loved ones to become responsible inheritors. It may also help avoid future will or trust contest litigation in probate court if the family all understands the plan and is on the same page.

A Family Meeting of the Minds

Annual family meetings without waiting until it is too late can be very helpful. Family meetings also enable parents to clarify their intentions related to any possible misunderstandings that might arise from disproportionate splits of an estate. This is especially important when remarriages and second families are involved, or when parents want to name charities or unknown entities as beneficiaries. ‘‘If there are no surprises, you may avert a legal battle later.’’ 

Probate Court battles can be both time consuming and expensive. Although not the typical family circumstances an extreme example of what can happen when things are unclear or each of the relatives are not on the same page is the Anna Nicole Smith case which was argued before the Supreme Court earlier this year. (Her legal name of Vikie Lynn Marshall v E. Pierce Marhall) She married a billionaire substantially younger than herself and has been fighting his son in probate and bankruptcy courts for several years. For information about this case click here. In more typical family situations it may be the siblings that are fighting over the inheritance and that may create deep family conflicts for generations as well as consume large portions of the estate. When needed inheritance litigation attorneys can be of great help to families and beneficiaries who are not receiving what they are legally entitled to but with better planning and knowledge within the family of what the intent is and avoiding the surprises these matters can be avoided and the family can remain more harmonious which can be even more important than the money.

Conversation Points

Begin your family meeting with a discussion of the basics. You should identify your personal representative and specify where you keep your will and other important documents and account statements. A personal representative is allowed to choice any attorney they chose to assist with the estate administration regardless of the direction of the will. If it desired for them to have a specific attorney assist they should know that and possibly have them meet so they are comfortable with one another in advance.

Although it’s not important that everyone know all the details of your financial situation, it is imperative to make at least one family member or beneficiary aware of the location of important records. Also someone trusted should have acess. If one person is the sole person on a safe deposit box a court order is sometimes required and at times the key is not even available and it needs to be drilled.

Some of the specific issues you may wish to discuss in this regard include the following:

1. Have you granted someone a durable power of attorney, a living will, and health care surrogate? Where are the documents located? Why was that person chosen?

2. Do you have a safe deposit box? Where is it located, and where is the key and the list of contents?

3. Does your retirement program have a death benefit for survivors?

4. Have you established any trusts, and for what purpose?

5. How have you arranged to handle any applicable estate taxes?

6. Have you shared the names and contact information of your financial, tax and legal advisors with your children?

A Trusted Strategy

When talking to your adult children about wealth, ‘‘it is important to provide a very practical financial education on managing your assets.’’ One approach is to introduce your children to a trusted advisor who can help them understand their financial options and encourage them to make choices that support their long-term interests, such as retirement planning or education planning for their own children.

Many parents use trusts to transfer assets to their children or grandchildren. A trust may be used temporarily to hold and manage assets until a young adult matures. Other parents choose to set up a trust for life to protect their children’s assets from creditors, divorce settlements and estate taxes. It’s important to talk about the trust with one’s beneficiaries and explain its purpose.

Wealth and Values

One option for parents seeking influence is an incentive trust, which enables parents to establish terms governing the distribution of funds. An incentive trust can provide financial motivation for adult children to excel and to meet certain goals. Still there can be ‘‘a fine line between adding too many constraints and providing positive incentives for the beneficiary to be a productive member of society.’’

Regardless of how you plan to transfer your wealth, raising children who can identify their own passions and interests in life is the best way to ensure responsible money habits. ‘‘Trusts and inheritance decisions should provide enough money to encourage productivity, but not so much money that your adult children do nothing.’’

Work with your attorney and your financial advisor to determine what funding vehicles are appropriate for your goals. The benefit, time and cost of planning in advance can be invaluable versus the problems that can arise if the assets are difficult to locate or an extended inheritance lawsuit exhausting estate assets and tearing the family apart.

Inheritance Scams

Inheritance scams have not been slowed much with all the crackdown on spam unfortunately based on the number of calls my Florida law firm which helps clients with Inheritance issues has received from potential clients who think they had just inherited millions of dollars from long lost relatives in foreign countries they had never met. 

It is a general rule that if something sounds too good to be true it probably is. Although I have not heard of anyone stealing money to get involved with the the scams and try to receive their "inheritance" I have had calls of people saying they wanted help to receive a few hundred million from a relative they never heard of in Nigeria and they did not know of having any family there but received an email that told them if they just wired a few thousand dollars to a P.O. box in a foreign country made out to cash they would start the process. Typically they have already sent hundreds or thousands and now wonder where there money is or ask if they should then pay a second more significant amount to pay the taxes. The scammer asks they send them a check to cover the taxes prior to receipt and of course sent directly to them and not any government.

While a inheritance is passed through the probate first to those named in a while or if none to the lineal descendants or more remote heirs if no children and it is possible to receive property one should be very suspicious based on nearly all of the above facts. If someone is legitimately an heir they will be served with formal return receipt notice and legitimate court documents. They will not have to pay anything prior to receiving the money and the correspondence should have a law firm name, address and phone number as well as a court case number which can be verified.

Sadly even with a P.O. Box, several thousand being needed prior to receipt of any proof and no other contact information a number of people have followed up then wondered why they do not receive the inheritance later. Some of the stories I have had calls from even fell for being heirs to Nigerian Kings estates.

Fortunately as the spam controls improve this should block some of these emails and in Florida some representatives are seeking to pass legislation to outlaw internet scams like this at least those which originate within the state and they would be able to enforce.

Anytime sounds too good to be true such as a lottery someone wins without entering an substantial inheritance someone is alleged to be receiving for a decedent they did not know or other situations they should be very suspicious and likely just delete as spam if found online. If it looks more legitimate the situation should still be researched prior to acting as it is likely a scam.

An article by the Grand Rapids Press can be found here. Portions of the article below mention a former school principle who is alleged to have fallen for an inheritance scam and embezzled funds to try to receive his "inheritance"

The former principal of Otsego Baptist Academy will have to wait in jail two more weeks to find out whether he will stand trial on charges he embezzled up to $80,000 from the school to invest in a Nigerian Internet scam.

Millward is charged with two felonies, embezzlement and soliciting money under false pretenses, for allegedly collecting money for the school without its knowledge, including a donation from a Kalamazoo foundation. Authorities allege Millward told victims the money was for computers for Otsego Baptist Academy, where he served as principal starting in 2003.

Investigators said the "Nigerian Scam" involved Millward allegedly wiring more than $80,00 through Western Union to a Nigerian location, where the recipients would use the money to cover legal fees to secure him a $15 million inheritance in England.

The scam has received wide media coverage since it began in the early 1980s and grew in the mid-1990s.

Inheritance and greed led to murder plot

Inheritance Led to murder plot as CNN.com reported with the story below.

In addition to being obviously wrong and disgusting to murder someone for their money and even worse to do so to an elderly relative in Florida and most other states it also will generally be another example of the phrase that crime does not pay.

Florida prohibits people from receiving an inheritance if by the greater weight of the evidence a person is found to have caused or procurred the death of the victim who was a Florida resident or a person whose property Florida has jurisdiction over such as a Florida trust or ancillary administration. The Florida Statute which provides a Killer is not entitled to receive property or other benefits by reason of victim's death can be found by clicking here. As a result of the Florida Statute not only would Mr Lally not have received prison time for his murder conviction if his action happened in Florida but he also would have received no inheritance which he otherwise would have been entitled to. Most states have a similar statute. 

Massachusetts (AP) -- A man accused of plotting to kill an 84-year-old woman for a share of the inheritance was found guilty Thursday of beating her in the head with a frying pan and smothering her with a pillow.

Thomas Lally, 24, of Massachussets, was convicted of first-degree murder in the December 2001 slaying of Marina Calabro, a retired hairdresser also from Massachusetts.

When Calabro's body was found at the bottom of a flight of stairs in her home, the death originally was ruled an accident. But prosecutors say an accomplice in the crime told a friend about the beating, and the friend went to police.

Prosecutors told jurors that Lally, Jason Weir, and Marina Calabro's great nephew, Anthony Calabro, plotted to kill her so Anthony Calabro could get his share of an inheritance worth more than $260,000.

Lally's attorney, Robert Griffin, argued that Weir killed Calabro, then struck a deal with prosecutors to testify against Lally and Anthony Calabro to save himself.

The jury deliberated less than a day before finding Lally guilty.