Month: March 2022

PERSONAL INJURY SETTLEMENTS & SUBROGATION RIGHTS IN FLORIDA

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In a settlement, the injured person agrees to a payment amount from the insurance company or other driver or at fault party, and in exchange gives up the right to pursue any further legal action in connection with the accident or incident.

The amount one recovers reflects the full settlement sum minus attorney fees, court costs, liens, and other expenses. Receiving the settlement check usually marks the end of the personal injury case.

In most cases, injured parties have incurred medical bills which may have been paid by insurance, Medicare, Medicaid, Worker’s Compensation or may remain unpaid. What concerns most clients is not the total recovery or settlement amount but the net proceeds they will receive after bills, liens, expenses, and fees are paid. Attorneys should negotiate with not only the at fault party or their liability insurance but also lienholders as well as medical providers (physicians, clinics, MRI facilities, hospitals, etc.) who provided care for the subject case.

Most medical treatment provided and paid by an insurance will have a right of subrogation or reimbursement when the case settles, except for Personal Injury Protection (PIP Insurance) in a motor vehicle accident. The foregoing includes traditional health insurance carriers, Worker’s Compensation and others like Medicare, Medicaid, or the VA. Temporary disability insurance as well as Med-Pay auto insurance coverage may also have a right of reimbursement.

The reasons a case progresses slowly can be based on several general points. Acase may be delayed by legal or factual issues. The case may involve significant damages and substantial compensation. The client/patient has not reached maximum medical improvement or has not completed treatment from the injuries sustained in the accident 

It can take anywhere from a few months to years for an accident case to settle. There may be much for each side to investigate, and if an innocent party suffered extensive injuries and property damage, this scenario could also explain why the settlement process is lengthy. Further, negotiating liens and medicals bills can sometimes take the same or longer time than the underlying case, particularly when the policy limits are low, and damages are large.

The reimbursement right of each entity can differ significantly considering how lien rights are calculated and/or protected by state or Federal law or statute and by the circumstances of each individual case. For example, Federal law provides protections to certain insurance companies governed by ERISA law, which provides them the right to insist on their full lien recovery from the settlement. Certain public hospitals have greater protections under state law as well.

A Settlement Closing Statement itemizing the Fees, expenses & liens should be given to the client prior to the signing of a Release of Claims so that they are fully informed as to what the final total amount recovered would be as well as their net recovery.This document is prepared by the client’s personal injury attorney and must be reviewed and approved by the client before any money can be disbursed. The closing statement will set forth the funds that will be going to the client’s personal injury attorney for his or her fees, the costs involved in the litigation or case, the money that is being paid to providers, and the amount of money that will be disbursed to the client. Often this document is signed as well as the release when the settlement funds are received or prior thereto.

Once the Release of Claims and Settlement Closing Statement are signed and the insurance draft or check is received and then deposited in the law firm’s Trust Account, the case against the responsible party is concluded, if pre-suit or a dismissal is filed with the Court in the lawsuit unless the case went to verdict and/or a judgment was obtained. Thereafter, once the settlement check clears the bank, all liens must be resolved and paid as well as the attorney’s fees and expenses, and then, the net proceeds are paid to the client. At that point, the subject case should be concluded.

If you have been injured in an accident or have any additional QUESTIONS regarding the foregoing matters, contact or call the Attorneys at CASERTA & SPIRITI.

LADY BIRD DEEDS IN FLORIDA (A QUICK REVIEW)

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Lady Bird or Ladybird deeds are recognized in a number of statesincluding Florida. Each state has its own requirements for validity, so it is important to use a lady bird deed form specifically designed for use in the state where the property is located. The lady bird deed in Florida allows one to avoid probate court, reserve powers to the current owner, maintain Medicaid eligibility, and qualify for the Florida Homestead exemption.

A lady bird deed is a way to transfer property to someone else outside of probate while retaining a life estate in the property. This type of deed got its nickname when former President Lyndon Johnson used it to convey real property to his wife, Lady Bird Johnson.

Specifically, a lady bird deed is a transfer of property to another with a reservation of a life estate, which means a person can transfer property and retain ownership in the subject property until death, at which point it will then transfer to the other.  With the Florida lady bird deed, a current owner or owners canconvey tothemselves and/or retain a life estate interest (enhanced life estate) in their property. A life estate is a right to live in the property until death. When they die, the real property passes to their beneficiaries designated in the lady bird deed, called the remaindermen.

It is also known as an enhanced life estate deed, which allows the estate holder to convey or mortgage the property without the approval of the remainderman. This gives the property owner of the life estate flexibility during the owner’s lifetime.

The single biggest advantage to securing a Lady Bird Deed in Florida is that, after death, the owner’s estate can avoid probate, and for now, the remaindermen or beneficiaries get the property at a stepped-up basis regarding capital gains.  When figuring capital gains taxes, property transferred in a lady bird deed gets taxed on the value of the property on the date of the owner’s death, instead of the owner’s tax basis when purchased. This usually results in a much lower tax. During the current owner’s lifetime, it does not affect Medicaid eligibility, and the current owner remains eligible for the Homestead Exemption. While a lady bird deed may cost a little more than another type of deed due to its potential complexity, it is still less expensive to obtain than a trust or going through probate.  Also, to record a deed, documentary stamp taxes are ordinarily paid. With a Florida lady bird deed, there is no need to pay the taxes immediately. The reason for this is that there is no immediate transfer of ownership. The taxes may be due, however, when the person holding the estate passes away.

If you should have any additional questions or would like to discuss your situation, concerns and needs, please call an Attorney at CASERTA & SPIRITI.

GAP INSURANCE & A TOTAL LOSS VEHICLE FROM A FLORIDA AUTO ACCIDENT-WITHOUT IT, YOU COULD OWE MONEY

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Many Florida residents are surprised to find they still owe money on their car loan after insurance pays for their total loss vehicle. How does that happen? The answer is the insured or claimant still owes more money than the motor vehicle or automobile was worth at the time of the accident. Insurance pays for a total loss vehicle (i.e., when value is less than the cost to repair) the Insurance company pays its fair market value, not the amount owed on the loan or what it will cost to get another similar or replacement vehicle.

As understood by most, a motor vehicle loses a significant amount of its value when merely driven off the sales lot. How can one be protected? GAP (Guaranteed Auto Protection) insurance is a type of insurance coverage which pays the difference in these situations between what one owes the bank or lender on their auto loan and what the car was worth at the time of the subject accident.

Generally, GAP is not prohibitively expensive and can be a major protection if involved in a motor vehicle accident and one has a financed car. When insurance pays the value of a depreciated vehicle, which was financed, GAP insurance pays that difference on the remaining balance of the loan. No Florida resident wants to pay for a vehicle they cannot use.

Specifically, Gap insurance in Florida works the same way as GAP insurance in the rest of the U.S. It pays the balance remaining on a car loan or lease contract after a liability, comprehensive, or collision policy coverage pays out the actual cash value of a totaled vehicle. The state of Florida does not require any driver/owner to carry GAP insurance. However, certain lenders in Florida may require customers to carry it if they get an auto loan or lease.

Various companies, including banks and dealerships, offer GAP insurance in Florida. While an individual should take their time deciding which one is right for them, one can also have confidence that it can provide a major protection under their particular circumstances at the time of an unfortunate accident.

It is worth noting that GAP coverage is usually cheaper to purchase from an insurance company than a dealership.

GAP insurance takes about 5-45 days to pay the policyholder after an accident insurance claim is filed. For drivers to receive a GAP insurance payout, the subject vehicle first needs to be declared a total loss, and the insurance company needs to accept the claim.

Again, if a person financed a vehicle, Florida GAP insurance covers the outstanding balance that remains in the event that their motor vehicle is totaled, and they owe more on the auto loan than the actual cash value of the vehicle. GAP insurance in Florida can be purchased from an insurance provider, the dealership, or even stand-alone companies. However, the cheapest Florida GAP insurance rates come from insurance providers at an average of $5.00 per month or $60.00 annually, subject to inflation.

Finally, one can drop GAP insurance from their Florida auto insurance policy after a sufficient payoff of the applicable loan, so the specific vehicle is worth more than the remaining loan balance, or at the very least, when the said loan is paid off.

If you should have additional questions, please contact your insurance agent, insurance carrier, dealer, lender or one of the attorneys at CASERTA & SPIRITI before an auto accident occurs.

TIMESHARES IN FLORIDA

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Florida is the home to over 350 timeshare resorts, each offering an atmosphere of luxury and comfort for vacationing. Florida has over 8 thousand miles of coastline, making it the perfect destination for a beach getaway.

A timeshare is a vacation property arrangement that lets a person share the property cost with others to guarantee time at the property. However, what is not mentioned are the ever-increasing maintenance fees and other incidental costs each year that can make owning one intolerable.

Legally, a timeshare is a form of fractional ownership in a property, typically in a resort or vacation destination. For example, if a person purchased one week at a timeshare condominium each year, they own a 1/52 part of that unit. Timeshares may be evidenced by a deed (a purchase of an ownership interest in the property) or just a contract (a leasing of the right to use the property).

Usually if one purchases a deeded timeshare, there is no expiration date. This means one is paying the maintenance fee indefinitely, even if the property is not used annually.

There are two basic types of timeshares: (1) the owner of the unit owns a piece of the real estate and (2) the owner of the unit has a lease or right to use the unit for the specified time. If a person owns a unit of a condominium for a week, then they own real estate.

When a timeshare property is owned by deed (deeded ownership), it is considered real property. As such, many real estate laws (though not all) apply to timeshare owners in the same way they are to homeowners. For instance, owners of deeded timeshares must pay property taxes on their vacation real estate. A timeshare estate is a parcel of real property under the laws of the state of Florida.

RTU timeshares are non-deeded and gives an individual the right to use a unit for a set amount of time. This means that, unlike a deeded timeshare contract, one does not actually own the property. The number of years each timeshare contract lasts depends on the resort and brand.

Having a deeded ownership means the subject timeshare is one’s property and have continuing obligations. One can enjoy it with family or friends, rent it out to other vacationers, and/or pass it down to relatives when done using it or after death.

When the owner dies, the timeshare becomes part of their estate. The inheritors of the timeshare become the new owners, and they are compelled to take over the timeshare fees.

Timeshares can pass by Will, Trust or Deed including a Ladybird deed.

In brief, one can refuse to inherit a timeshare. While the laws for rejecting an inherited timeshare can vary from state to state, the actual process will be the same and is widely known as Renunciation of Property.

However, in the case of the owner’s death, a timeshare becomes part of the estate, and therefore, the obligations attached to it are passed onto the next-of-kin or the beneficiary of the estate. Further, depending on the fees and any existing payments, the timeshare can either be a welcomed gift or a financial nightmare.

On average, it costs between 5 to 6 thousand dollars and takes about 12 to 18 months to get out of a timeshare contract using a timeshare exit company or attorney. However, the cost and the timeframe can vary depending on a number of factors including, how many contracts are attached to a timeshare.

Again, there are two distinct types of timeshare contracts one can purchase: a deeded ownership and a Right to Use timeshare. With a deeded timeshare, you own an actual fraction of the property through a deed. Right to use (RTU) gives a person the right to vacation at the property.

Once the owner of a timeshare dies, the timeshare is now subject to probate. Having a Last Will & Testament does not avoid probate, but rather, it instructs legally how the assets (such as the timeshare) should be distributed.

What does Fee Simple mean? Fee Simple is just another way of saying that a timeshare property is “deeded.” A deed is a legal document which provides the title to a timeshare property and grants official ownership rights. Fee Simple is regarded as the preferred type of vacation ownership.

Timeshare agreements usually contain a “perpetuity clause,” saying that the timeshare isvalid for the lifespan of the original owner. When the owner dies, the timeshare becomes part of their estate. The inheritors of the timeshare become the new owners, and they are obligated to take over the timeshare fees.

With approximately 10 million timeshare owners in the U.S. and annual revenues topping 10 billion dollars, vacation ownership is clearly an enormous business. Florida is one of the leading states in terms of the number of timeshares and the fact that several of the largest timeshare companies have their headquarters in the state.

For many timeshare owners, however, ineffective estate planning – or no estate planning at all – leaves their heirs with an expensive and aggravating mess figuring out what to do with the decedent’s timeshare when they pass. This is because owners often think of their timeshare as personal property, like a car or boat, instead of what it really is – deeded real estate.

For most timeshare developers, part of the sales pitch is that the owner can pass their ownership onto their children when they die, which is true. However, because it is legally considered real estate or real property, the only way ownership can transfer from one person to another is via a deed or court order (i.e., probate).

Consequently, what happens when a timeshare owner dies without addressing their ownership in their estate planning? Like many timeshares, it ends up in probate. The probate process is not only expensive and time-consuming, but it also means creditors see it as an asset and can pursue it to settle any debts against the estate.

Furthermore, in Florida, any probate administration involving a Florida-based timeshare must take place in Florida, regardless of where the owner or the heirs live. That can add even more complexity, more aggravation, and more expense to the process. And while there are ways to legally refuse or disclaim an inherited timeshare, that procedure is also a complicated, paperwork laden process, which will require the assistance of an estate planning attorney.

Instead, a more effective course of action is to avoid probate entirely and include one’s timeshare interest in their estate planning, treating it like the deeded real estate that it is. This can be carried out in one of several ways:

  1. Distribution through a trust. With a living or inter vivos trust, one can transfer assets into the trust and continue to have access to them. The assets are then distributed directly to one’s beneficiaries after death, bypassing probate entirely. By placing one’s deeded timeshare into a trust, ownership will go to their heirs without having to hire an attorney and go through a probate court proceeding.
  • Adding heirs through a deed transfer. By having the names of one’s heirs added to the timeshare deed, they become co-owners by right of survivorship or as a type of designated beneficiary known as remaindermen. That means, when one dies, full ownership automatically transfers to the survivors. One may even want to transfer the deed entirely to their heirs prior to death. However, that will make them legally responsible for the maintenance payments and property taxes sooner than later.

Either of these options will effectively eliminate a great deal of frustration and legal expense for the heirs. Unfortunately, most timeshare owners are not aware of this issue and the property ends up going through probate. When that happens, the timeshare often does not seem worthy of the time and expense involved with the probate administration. Conversely, including it in one’s estate planning will allow the heirs to continue enjoying the travel benefits as part of deceased’s legacy.

If you have questions about how to keep a timeshare out of probate or would simply like to discuss related issues with a qualified estate planning and/or real estate attorney or how to protect your family and assets, contact the office of CASERTA & SPIRITI for a consultation.