Estate and Business Planning Legal Blog

Most Floridians have attended, at some point during their Florida residency, one or more seminars given by attorneys, discussing the need to avoid probate in Florida and instead create a revocable living trust.  For the most part, the attorneys are correct.  In general, it is highly recommended that if you are a Florida resident, that you create a revocable living trust in order to avoid probate.  

One of the problems with the aforementioned advice is that while clients create these trusts, they often fail to transfer all of their assets into the trust.  Sometimes, they create the trust and never fund it at all, thus necessitating probate.

According to the U.S. Census Bureau, nearly one in five people have special needs which means that a large number of families have a member in this category: child, adolescent, young or middle-aged adult, or elderly person. For special needs individuals who are unable to work or support themselves, the government provides disability income in the form of Social Security Disability Income (SSDI) or Supplemental Security Income (SSI). The primary difference between the two is that SSDI is available to workers who become disabled after accumulating enough work credits to qualify for the assistance.

It is part of the operation of most businesses to become involved in contract negotiation.  Even if you are in a type of business where contracts are not utilized for customers or clients, it is inevitable that when purchasing products or services you will be presented with a written contract. 

There are many reasons why a client would want to leave their retirement accounts (IRA's, 401k's, TDA's, etc.) in a trust for the benefit of their heirs.  For example, if a beneficiary is under the age of eighteen (18), he/she can not legally inherit.  In addition, if the retirement accounts are sizable, most people properly do not want to leave large sums of monies to a young person.  One should also consider a trust if a beneficiary is disabled, so that the assets are controlled and protected.
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Why should I create a trust?

One of the primary services an estate planning attorney provides is assisting clients in creating trusts. While some believe that trusts are only useful for the wealthy, in fact trusts have important functions for anyone who is interested in effectively planning for the future. Working with a competent estate planning attorney who is tuned in to your particular needs and familiar
with the laws of the state (or states) you reside in can make a substantial difference in how efficiently your wishes are carried out and how well your loved ones are provided for.

It is not uncommon for one or more of the partners in a partnership to decide that they no longer want to be involved in the business and, thus, seek the consent of the others to withdraw.  Hopefully, the partners entered into a well drafted partnership agreement at the outset, setting for the procedure to be followed if a partner wishes to withdraw and detailing how the assets of the partnership will be dealt with, what price will be paid, if any, for the partnership interest.

Some of the issues which need to be addressed in an agreement wherein a partner leaves the partnership include:  what price will be paid for that partner's interest, if any, which will likely include the value of inventory, equipment and receivables; how will receivables and payables be treated; how the purchase price will be paid; and what happens with liabilities.

These sound like simple issues, but they can become quite complicated.  Perhaps one of the most contentious issues has to do with liabilities.
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The most important reason to have a will prepared is so that the laws of intestacy do not control the disposition of your assets. Put simply, if one dies without a will, the laws of the state one resides in determines who inherits. For example, in New York, if one dies leaving only a spouse, the spouse inherits all.  If one leaves a spouse and children, then the spouse inherits half and the children inherit the other half.  Clearly, one problem with this scheme is that you may not want to leave your assets in the manner set forth by state law.
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A durable power of attorney is a document which gives someone broad powers over your financial affairs.  Especially as one gets older, this document becomes a necessary evil.  Why is it evil?  By its nature, a power of attorney gives control to a person of your choosing to transact business on your behalf.  It gives the power to deposit and withdraw funds, change beneficiaries on ones accounts, and even to liquidate funds.  If one becomes unable to handle his or her own financial affairs, whether it be due to a temporary or permanent physical or mental disability, it is imperative that someone take over this necessary function.
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While the probate process is usually quite simple and straightforward in New York, that is not the case in Florida.  What is probate and why does probate become necessary?  When a person passes away, there needs to be a legal mechanism for transferring assets from the deceased person to the deceased person's heirs.  Usually, that mechanism is through the use of a last will and testament, which then gets filed with the Court and the Court looks to see if the will was properly prepared and executed.  Of course, probate can often be avoided by transferring one's assets to a revocable living trust, and/or by having beneficiaries on one's accounts.  There are many reasons why the trust and beneficiary designations may not be the best choice.

Regardless of the type of business one has, some type of contract is usually required for one's dealings with customers, suppliers, and the like.

Clients often ask me, when they are moving to the State of Florida, or considering such a move, whether the wills which they have prepared in New York need to redone.  Assuming the wills were properly drafted and executed in accordance with New York law, then the wills are valid in Florida, and in any other state for that matter.  While the execution requirements are more stringent in Florida, there is absolutely no need to redo one's New York wills, but one should be aware that when the time comes to probate the will, if that occurs in Florida, then the Court will request an affidavit from a New York attorney, stating that the will was executed properly in accordance with New York law.

While one's New York wills are valid for Florida purposes, probate is an entirely different issue.  If a former New York resident dies as a resident of the State of Florida, the law requires that the probate of the will occur in Florida.