Florida Bar Annual Convention 2019: Elder Law and Estate Planning Updates

Episode Notes

Transcript

The Florida Bar Podcast

Florida Bar Annual Convention 2019 Elder Law and Estate Planning Updates

06/27/2019

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Intro: Welcome to The Florida Bar Podcast, where we highlight the latest trends in law office and legal practice management to help you run your law firm, brought to you by The Florida Bar’s Practice Resource Center. You are listening to Legal Talk Network.

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Geoff Probst: Hello and welcome to The Florida Bar Podcast, recorded from the 2019 Florida Bar Annual Convention in Boca Raton, Florida.

This is Geoff Probst, and I’m the host for today’s show.

Joining me now, I have Peggy Hoyt and Alex Douglas. They were co-presenters this morning on the Elder Law and Estate Planning Case Update and they are going to get to tell us a little bit about what they talked about this morning now.

So before we get started I’d like to give you both the opportunity to tell us a little bit more about yourselves, so why don’t we start with you Peggy, where do you work and what do you do?

Peggy Hoyt: So I work in Oviedo, Florida for the Law Offices of Hoyt & Bryan, and I am the outgoing Chair of the Animal Law section and a member of the Executive Council of the Solo Small Firm Section.

Geoff Probst: All right, well if we have time I know we want to talk about the animal law section work at some point, so we’ll see if we can get to that.

All right, and Alex, how about you?

Alex Douglas: I am partner with Shuffield, Lowman in Orlando, Florida, and I practice in the area of probate trust and guardianship litigation.

Geoff Probst: All right, well we’re not going to ask you to repeat the entire presentation you gave this morning, but let’s jump right in. I know that you had some practice tips based on some of the case law updates, let’s start with qualified beneficiaries.

Peggy Hoyt: So there were a number of cases this last year on the definition of qualified beneficiaries and both Alex and I think that this is something that’s going to continue to be at issue in the future, you need to look at the statute, you need to look to all the beneficiaries that are named in a will or a trust and then make a determination if they are “qualified beneficiaries”. And Alex has a really good practice tip in this area.

Alex Douglas: I do and we’re purposely not mentioning cases during this presentation so that hopefully you guys can go back and view the recording of the presentation this morning on the probate and elder law update. But one of the key points that we were making with regard to this issue of qualified beneficiaries is that from a litigation standpoint, it is very important when you bring an action, a trust litigation action that you name all the qualified beneficiaries, because if you do not whatever judgment you’re getting from the court, whether it’s modifying the trust or clearing up an ambiguity, if you don’t have all the qualified beneficiaries named then those persons who have been omitted from the lawsuit will not be bound by the judgment.

And therefore, it’s important that you go through the analysis like what Peggy was saying. One of the things that we learned about today is that if you have a remainder beneficiary that is a charity, there is a special statute that addresses what a charitable qualified beneficiary is and special rules that apply to that.

Additionally, if you are in doubt as to whether a person or party is a qualified beneficiary, don’t leave them out or also don’t name them as a qualified beneficiary if you’re unsure, rather include them as a party and include a declaratory judgment count to ask the court to declare whether or not that person is a qualified beneficiary and cite that there is an ambiguity and you’re unsure.

As a far better practice to do that and get a judgment declaring that they’re not a qualified beneficiary, then taking the risk that you omitted someone that is important to have bound by your judgment.

Peggy Hoyt: I think that’s an excellent practice tip Alex, and the other reason that qualified beneficiaries are so important is that they are entitled to the annual trust accountings each year. And so, if you’re not giving your trust accountings to the correct people; again, you won’t be bound by those accountings, the statutory six-month time period won’t run on the notice to the proper beneficiaries and you could end up with a breach of fiduciary duty count later on.

Alex Douglas: Excellent point Peggy. The running of the Statute of Limitations is really so important and one of the worst things that you can do is fail to give that yearly annual report and accounting to the beneficiaries, because if you disclose what you did and they don’t take action within either the six-month limitation notice if you provided one or the four year regular statute or breach of fiduciary duty if you didn’t give the shorter limitation notice, then they’re on notice as to what happened and it’s up to them to do something about it.

(00:05:05)

Geoff Probst: That’s great. Those are good tips. Now we talked, before we got on the mics, a little bit about some other practice tips with respect to homestead issues I think.

Alex Douglas: Sure, and Peggy and I spoke about a couple of cases dealing with the issue of homestead rights, particularly with regard to the election that a spouse can make to either take a life estate of the homestead when her spouse or his spouse has passed away or 50% interests and the property.

And one of the things we learned is that, that is a statutory limitation that has to be met. If you miss that statutory time by which to make that election, then excusable neglect does not apply.

Peggy Hoyt: And if you do need an extension of time, it’s important to note that that extension has to be requested timely so before that six-month time period elapses. The other thing that’s important to note here on a — just a practice pointer basis is that this might become a mathematical equation for some folks depending on the age of the surviving spouse and the value of their life estate versus the value of their 50% interest.

But both Alex and I have been involved in cases where we have surviving spouses that are not related to the lineal heirs who might be the remainder beneficiaries and trying to avoid some of the remaindermen type litigation or just problems that come up with regards to the maintenance of the property.

Alex Douglas: Exactly, and I’ve been involved in some of those cases and I don’t think it’s purely one of finances, though financial effect will obviously in most cases drive the decision, but the non-tangible issues of how well do you get along with the remainder beneficiaries, because if there is animosity between the life tenant and the remainder beneficiaries, there could be a lot of issues and problems with regard to whether the life tenant is properly maintaining the house, what damages to the house the life tenant is responsible for versus what the remainder beneficiaries are responsible for.

There’s a lot of complications where if you don’t have a good working relationship between the life tenant and the remainder beneficiary, there can be litigation.

So if you’re advising the spouse in a situation like that, if the money part is maybe equal or even if it’s a little less favorable, if you have that situation where you potentially could have litigation down the road. It’s not a bad idea to just take the 50% and be done with it.

Peggy Hoyt: Great idea Alex. The other issue that came up on homestead was the definition of voluntarily leaving your home and whether or not you lost your homestead protection, where there was an involuntary leaving of the home. So I think that’s an interesting one and then the other one was whether or not a spouse had to — oh that was the same case, on the involuntary leaving, whether a spouse had to join in the conveyance of that homestead property.

Alex Douglas: Right, exactly, and so what we learned from one of the cases we had today was that if you involuntarily leave your homestead, that does not relinquish your constitutional rights in your homestead. You have to voluntarily and willingly relinquish your constitutional rights and of course, we have situations all the time where a spouse and in this particular case, sold the property to a third party without the wife’s signature.

And then also as Peggy mentioned at the presentation today, we had a case together where the husband took out a second mortgage without the wife’s signature. So these issues do come up and it’s important to understand the uniqueness of the Florida Constitutional protections and homestead.

Peggy Hoyt: So the homestead issue can also come up in an elder law or asset protection, Medicaid planning context, where a person is in a nursing home, no longer living in their home was that a voluntary or involuntary abandonment of the property and usually, there’s an intent to return home, so we can maintain the homestead status of the property.

Alex Douglas: Peggy, that’s an excellent point.

Geoff Probst: That’s great. It sounds like you got a few points in there that if you’re dealing with litigation at the very least if you can’t avoid it you can do a few things to be prepared for it. So all right, how about guardianship, that was one of the other topics you hit this morning, wasn’t it?

Peggy Hoyt: So there was an important case this last year with regard to guardianship and I regularly say to my clients that guardianship is probably the worst kind of a lawsuit, because it’s one that your family files against you, you get to pay for it and ultimately you lose.

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So in this particular case, there was a man, we’ll call him the alleged incompetent person who was deemed to be incompetent by a three-party panel, but ultimately the court found that the panel did not strictly follow the regulations of the statute requiring both a physical and mental examination.

So ultimately that case had to go back down, have a new panel appointed and I think this was the right result and I think Alex will agree with me, because it’s for the protection of the ward.

Alex Douglas: Yeah so though there was a stinging dissent in that case arguing that from a practical standpoint, there’s only so much resources and it doesn’t make a lot of sense to strictly interpret the statute requiring every examining member including like a social worker to do a physical exam and cited to the body of case law and practice procedure; whereby an expert is allowed to rely upon the reports of other experts if that is something they do in their typical practice.

So here the doctor did look at medical records where there was a thorough physical examination and the dissent was pointing out that that was perfectly fine. This is a very difficult issue because as Peggy mentioned, a guardianship is a very terrible situation for a family to face.

It’s really a situation that a family should never get to if they do their proper estate planning. And one of the things I tell my friends and neighbors is the most important document I think even beyond a will or a trust is a power of attorney, because if you do a power of attorney, giving a trusted individual the ability to handle all your financial affairs and any other powers you want to give them, then if you do become incapacitated in Florida, then there should be no need for a power of attorney.

Same thing with a living will or a health care surrogate designation. You want to designate someone to make all your medical decisions so if you’ve become incapacitated and you can’t, then they can do that for you. That avoids in most circumstances a guardianship.

Now, where we have a bad person, a bad child that abuses the power of attorney, then you cannot avoid a guardianship, because there the lesser restrictive alternative of the power of attorney is not going to be sufficient and unfortunately we’re seeing more and more of these exploitation cases in Florida where you’re ending up in guardianship court because of a bad family member.

Peggy Hoyt: Point well-taken. So do your estate planning early and often.

Alex Douglas: Absolutely.

Geoff Probst: I know that we’re running a little bit short on time, but I think we have time for at least one more topic. So I think and maybe two if we’re lucky.

Peggy Hoyt: I want to talk about animal law.

Geoff Probst: I know you do, all right. Let’s see if we can’t get them both in, irrevocable trusts, let’s hit that first and then animal law next.

Alex Douglas: One of the cases that we talked about earlier today involved a grantor that did an irrevocable trust and then basically wanted to get out of it. Well, an irrevocable trust is just that. It’s one where a person sets up money to be held in trust for another person and cannot be changed, very dissimilar to a revocable trust which most people are familiar with where you – the grantors often, the trustee and the function of the trust really doesn’t come into effect and certainly does not become irrevocable until the grantor dies.

But where a parent or a person may implement an irrevocable trust there could be a lot of different reasons for that. It could be as easy as my children keep hounding me to change my estate planning and I want to avoid that by doing something that’s irrevocable. I don’t have to worry ever again about changing.

If you do that, just remember you can’t change it. Now, here in the case that again, if you go to our presentation you can get to details and the citations dealt with the creative argument of getting out of an irrevocable trust by arguing unilateral mistake.

The court didn’t buy it, the DCA agreed that no, a unilateral mistake is not sufficient to get out of an irrevocable trust. You have to show undue influence, fraud in order to rescind an irrevocable trust and the facts of the case just didn’t support it.

Peggy Hoyt: And I know everybody wants to hear about planning for your pets. So we’re just going to talk real quick about when you do your estate planning, if your pets are valued members of your family, which they likely are, you want to make sure that you include your horses, your dogs, your cats, your birds, your tarantulas, your guinea pigs, and your chinchillas as part of your estate plan.

And if you need help with that, you can definitely reach out to an estate planning practitioner. If you need a pet trustee, you can look to animalcaretrustusa.org.

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Alex Douglas: Peggy, I’m just curious, with regard to pet trust, what is a typical amount that people leave for their pets?

Peggy Hoyt: I try to get people to leave as much as is necessary to provide for the lifetime care of that pet. So it’s going to vary based on the pet. So if you have horses you got to leave a lot more money than if you have an elderly dog, for example. So it’s a case-by-case analysis and it just depends on how you want your pets to be cared for.

If I die, I want my pets to stay in their home, so of course that’s going to cost a lot more then whether I were to give my pet to somebody else and then just provide for its lifetime care.

Geoff Probst: And what is the most interesting or unusual type of pet you have ever provided a trust for?

Peggy Hoyt: I think chinchillas, but I’m working with a gentleman right now that we’re planning for North American spotted turtles.

Alex Douglas: Who would have known?

Geoff Probst: It’s amazing.

Peggy Hoyt: You can’t, you love who you love, Alex.

Alex Douglas: Absolutely.

Geoff Probst: All right, well it looks like we have reached the end of our program. I want to thank Peggy Hoyt and Alex Douglas for joining us today. If our listeners have any other questions or wish to follow up with you, how can they do that, Peggy?

Peggy Hoyt: So I can be contacted at [email protected].

Geoff Probst: Right and Alex?

Alex Douglas: And I can be contacted at [email protected].

Geoff Probst: And you both mentioned the presentation that you gave this morning. If listeners wanted to try to access that or get it, how could they do that?

Peggy Hoyt: Through the Solo Small Firm Section of the Florida Bar and the Florida Law Update and it will be available after the end of this conference.

Geoff Probst: Wonderful. Well, that’s all the time we have for this episode of the Florida Bar podcast. Thank you to our listeners for tuning in. If you like what you heard, please rate and review us in Apple podcasts, Google podcasts, Spotify or your favorite podcasting app.

I am Geoff Probst, until next time thank you for listening.

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