CREATING A BUSINESS ENTITY MAY BE BENEFICIAL

Establishing a business entity for any type of business endeavor can be a positive move in that it provides liability protection, allows for the expensing of debts and better accounting for the same. For business owners, it is often beneficial to form an entity for some or all of the following reasons: Liability Protection, Tax Savings/tax deductions, Credibility, Formality, Perpetual Duration, Control Over the Transfer of Ownership, which also allows the raising of capital by the selling shares of the subject company, and/or Confidentiality.

Florida and Delaware are two of the best options where one can incorporate their business. These states have business, tax, and privacy laws that are beneficial for business.

As for liability protection, the law allows entrepreneurs to form corporations, LLCs as well as other legal entities as a shield against personal liability. Individual owners and officers or members are considered separate from their corporations or LLCs. When a corporate or business debt is owed, creditors can pursue the company but not the individuals operating the said company. Unless the corporate form is abused, misused or monies are comingled, owners and operators of said entity are personally protected. However, when business formalities are not followed then creditors can pierce the corporate veil and go after the subject individuals under the alter ego doctrine. Examples of the foregoing include, but are not limited to, commingling corporate and personal funds, disposing of corporate formalities, diverting corporate assets for personal use, etc., can open up a business entity to potential alter ego claims and thereby hold the owners and operators to personal liability.

Further, different entities cannot be held jointly and severally liable for a breach of contract case merely because the two have the same officers, members, owners or the same physical address or email or telephone.

For the most part, unless an individual is an actual party to a contract that individual may not sue or be sued for breach of said contract, particularly when that non-party has at most received only an incidental benefit from the subject contract. For instance, a parent company which is not a party to the said contract can be held liable for its subsidiary’s breach of the contract only when it can be shown or proven to be an alter ego of the parent and was in place merely to mislead the parent’s creditors. Business impropriety should not be presumed by the mere fact that the two entities share a physical address or office or an officer, director, or member.

The foregoing is a very brief and general overview of the benefits of forming a business entity in Florida.                                                                                                       

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

EASTER HOLIDAY-A LITTLE HISTORY & A LITTLE LAW

Easter, which falls on the first Sunday following the first full moon after the March equinox, celebrates Jesus Christ’s resurrection from the dead three days after his crucifixion. While primarily a Christian holiday, like Christmas, it has also become a cultural celebration centered around brightly decorated eggs, chocolate, candy, scavenger hunts, baskets, chicks, and rabbits.

While the following day, Easter Monday, which is also known as “Bright Monday” or “Renewal Monday,” is a public holiday throughout most of the world, however, it is not the case in the United States. It was a public holiday in North Carolina from 1935 to 1987.  Many public schools and universities are closed on Easter Monday, and often Good Friday as well, falling under the umbrella of spring break.

Easter Monday is a public holiday in 116 nations throughout the world, including Australia, Austria, Germany, Egypt, Ireland, United Kingdom, Spain, Ghana, Fiji, France, Hong Kong, Italy, Kenya, Poland, Russia, and South Africa. However, not all observations are directly centered around the Christian tradition. In Ireland, it is a day of remembrance for the people who died during the Easter Rising or Rebellion in 1916. In Egypt, the ancient festival of Sham El Nessim, which means “smelling of the breeze,” falls on the same day, marking the beginning of spring.

Some nations even recognize Easter Tuesday, including Cyprus, as a national bank holiday; New Zealand allows a mandatory holiday in the public education sector, and the Australian island state of Tasmania recognizes a legal holiday for some workers.

Easter is a religious holiday derived from two ancient traditions: one Judeo-Christian and the other Pagan. Both Christians and Pagans have celebrated death and resurrection themes following the spring equinox for millennia. Most religious historians believe that many elements of the Christian observance of Easter were derived from earlier Pagan celebrations.

In Christian religion, Good Friday is observed in remembrance of Jesus’s execution by the occupying Roman army, and his burial in a cave-tomb. Easter Sunday is the date when a group of his female followers first noticed the empty tomb and concluded that he had been resurrected.

Other countries around the world, however, do acknowledge the holiday, and even though it is not a federal holiday in the U.S., the White House traditionally hosts its annual Easter egg roll and other celebrations for Easter on the Monday following the holiday.

Easter is not a federal holiday due to the fact that it always falls on a Sunday, which is a non-working day for federal and state employees. Many companies which are normally open on Sunday close for Easter.

Again, Good Friday and Easter Monday are not Federal Holidays. All federal holidays are non-religious other than Christmas Day.

On a local level, the day is informally observed in some areas such as the state of North Dakota, and some cities in New York, Michigan, and Indiana.

Good Friday is a state holiday in 10 states-Connecticut, Delaware, Florida, Hawaii, Indiana, Kentucky (half-day), Louisiana, New Jersey, North Carolina, North Dakota, Tennessee, and Texas. It is an optional holiday in Texas.

Good Friday is an important Christian holiday celebrated two days before Easter Sunday, commemorating the crucifixion of Jesus. However, it is not a federal holiday in the United States. That means post offices and most governmental offices will be open.

In the United States, a federal holiday is one that is recognized by Congress and is designated in Title V of the U.S. Code 6103 – Holidays, which allows Congress the authority to create holidays for federal institutions.

Pursuant to 5 U.S.C. 6103(b), if a holiday falls on a Sunday, for most Federal employees, the following Monday will be treated as a holiday for pay and leave purposes.

Easter Monday is a holiday in many English-speaking countries, including England, Wales, Northern Ireland and Australia, and European counties. The tradition of having a holiday on the day after Easter Sunday was brought to Canada by European immigrants.

The earliest recorded observance of an Easter celebration comes from the 2nd century, though the commemoration of Jesus’s Resurrection probably occurred earlier.

Easter, supposed to be the date that Jesus died and then arose from the dead, but has no fixed date. Easter is religious and is set as the “first Sunday after the first full moon after the spring equinox”.

The most common date for the Western churches’ Easter is April 19th. The earliest Easter can be is March 22nd, and the latest it can fall is April 25th. This year it is April 9th, 2023.

The tradition of setting it by the moon and the spring equinox, instead of a set date in the calendar was a classic religious tradition carried out by the Council of Nicaea in 325 to sort out a problem caused by distinct parts of the Christian world marking Easter on different days.

They set it to be the first Sunday after the first full moon-on or after the vernal or spring equinox.

It was the United Kingdom where this all came to a head, when in the year 664, King Oswiu in the kingdom of Northumbria, brought up on Celtic traditions celebrated Easter on one day, while his wife, who had been brought up in Catholic traditions was celebrating Easter on a different day.

For the King to have an Easter feast while the wife is still marking Lent was somewhat of a problem, and the King decided to sort it out, summoning religious leaders to a Synod, a meeting, to settle the problem.

St. Colman, Bishop of Lindisfarne, put the case for the Celtic tradition, while St. Wilfrid, Bishop  of York, put forward the Catholic argument and won.  The King switched to the Catholic method of working out when the Easter fell.

Consequently, Easter still wobbles around the calendar. Not all Christian countries follow the Gregorian calendar, which was introduced by Pope Gregory in 1528, and countries that use the older Julian calendar celebrate Easter on a different date, although every few years, the two calendars align and celebrate Easter on the same day. The next time that will happen will be April 20th, 2025.

Historically, 400 years after the Gregorian calendar was introduced, the United Kingdom became interested in settling the Easter date, and on August 3rd, 1928, passed “An Act to regulate the date of Easter Day and days or other periods and occasions depending thereon”,  known as the Easter Act.

That did not come out of nowhere since the League of Nations, the precursor to the United Nations, had passed a resolution in 1926 calling for the date of Easter to be sorted out.

Easter would still wobble a bit, but far less than it does today and more usefully would no longer be bound by the vagaries of the moon. The effect of the act would be to establish Easter Sunday as the Sunday following the second Saturday in April, so fixed by the calendar, not the moon, and resulting in Easter Sunday being between April 9th and April 15th. The act of law has Royal Assent but has never been enforced, as it requires both Houses of Parliament to pass resolutions agreeing on when to start enforcing the law.

Eggs represent new life and rebirth, and it is believed that this ancient custom became a part of Easter celebrations. In the medieval period, eating eggs was forbidden during Lent, i.e., the 40 days before Easter, therefore on Easter Sunday, indulging in an egg was a real treat!

According to Discovery News, since ancient times, eggs and rabbits have been a symbol of fertility, while spring has been a symbol of rebirth. Even though rabbits do not lay eggs, the association of these symbols was almost natural.

In Germany in the 1700’s, children would build nests, and leave carrots out for the “Osterhase” or “Oschter Haws”, i.e., the Easter bunny. Legend has it that the Easter Bunny lays, decorates and hides eggs for good children, as they are also a symbol of new life.

According to some sources, the Easter bunny first arrived in America in the 1700’s with German immigrants who settled in Pennsylvania and transported their tradition of an egg-laying hare.  Their children made nests in which this creature could lay its colored eggs.

The foregoing is just a brief and general legal and historical overview of Easter. 

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Major Changes to Florida Tort & Bad Faith Laws in 2023

Florida Governor DeSantis signed HB 873 into law on March 24, 2023, which resulted in significant changes to Florida’s tort and bad faith laws. These changes were part of a movement by the Republican party in Florida allegedly “to decrease frivolous lawsuits and prevent predatory practices of trial attorneys who prey on hardworking Floridians.” The changes brought forth by this bill took effect once it was signed into law on March 24, 2023.

Several statutes that regulate negligence actions were revised in an effort to reduce large verdicts which have been on the rise across Florida. For instance, the statute of limitations for negligence actions accruing after the effective date of the subject statute was reduced from four (4) years to two (2) years, i.e., Florida Statute § 95.11. The most significant change was to the comparative fault statute, which now states that a claimant who is greater than 50% at fault for his or her own injuries cannot recover any damages pursuant to Florida Statute § 768.81. However, this comparative fault change does not apply to medical malpractice actions.

Florida Statute § 768.0427 was added to provide new guidelines for the admission of evidence related to past and future medical expenses in a negligence action. This statute provides that “Evidence offered to prove the amount of damages for past medical treatment or services that have been satisfied is limited to evidence of the amount actually paid, regardless of the source of payment.” It also states that proof of unpaid medical treatment can be shown by what the party’s healthcare provider was contractually obligated to pay or 120% of the Medicare reimbursement rate if the claimant does not have healthcare coverage or has healthcare coverage through Medicare or Medicaid. If there is no applicable Medicare rate for a service, the claimant can present 170 percent of the applicable state Medicaid rate. If the claimant obtains medical treatment or services under a letter of protection and the healthcare provider subsequently transfers the right to receive payment under the letter of protection to a third party, a defendant can present evidence of the amount the third party paid or agreed to pay the healthcare provider in exchange for the right to receive payment pursuant to the said letter of protection. This process also applies to future medical expenses. There are also new requirements for letters of protection and the information that must be contained within them to be considered valid.

This change is aimed at combatting so-called phantom damages that are regularly seen in bodily injury lawsuits where a claimant presents the amount of medical expenses charged, even though private health insurance, Medicaid, or Medicare pays a lesser amount. Although post-trial the damages were adjusted to account for amounts actually paid, the effect of admitting higher medical bills at trial allegedly, at times, influenced and inflated pain and suffering damages. The earlier system also encouraged claimants to seek treatment under letters of protection to obtain higher payments for medical services. In sum, this new law should reduce damages by limiting medical expenses to amounts actually paid or the amounts that should have been paid. 

In a premises liability case related to allegations of negligent security, Florida Statute § 768.0701 now states that an intentional tortfeasor (initial at fault party or instigator) can be allocated fault on the verdict form. This allocation will have a significant effect on negligent security cases as a jury can now assign a percentage of fault to the criminal actor who caused the harm. The foregoing was previously not allowed under Florida case law.

The subject bill further adds a presumption against liability in residential housing cases for an owner or manager in Florida Statute § 768.0706. This law states that the said presumption comes about when the owner or manager of residential housing implements defined security protocols, including, but not limited to, the use of security cameras, lighted parking, lighted walkways, deadbolts for each unit, locked windows, locked gates, peepholes, a crime prevention design assessment and crime deterrence and safety training. The burden of proof will rest with the owner or manager, but this new law provides a valuable defense by defining the standard of care for residential property owners in negligent security actions.

The bill also modified the award of attorney fees in bad faith actions. Florida Statute § 86.121 adds that a prevailing party is only able to obtain attorney fees where the insurer disclaims coverage and there is a declaratory judgment action. In other words, an award of fees is no longer automatic solely because an insured prevails on an argument. Furthermore, § 86.121 states that a prevailing party’s attorney’s fee claim cannot be assigned. This section also codifies the principle that issuing a reservation of rights letter is not a disclaimer. 

There were also several changes made to Florida Statute § 624.155. First, there is a new safe harbor provision for bad faith claims which states that there is no claim for bad faith if the insurer tenders the policy limits or amount being demanded within 90 days of being provided with sufficient information. The safe harbor protocol cannot be used as evidence in bad faith claims. If any insurer fails to utilize the aforesaid safe harbor period, the statute of limitations can be extended by 90 days.  Further, in a major change to existing law, mere negligence can no longer constitute bad faith. The insurer and the claimant have a reciprocal duty to act in good faith in providing information and setting deadlines. A court can also now consider comparative fault in bad faith suits. Additionally, where there are multiple claimants and insufficient limits, the insurer can file an interpleader action where the court will determine the prorated share. Finally, if the insurer and insured agree to binding arbitration, an arbitrator can decide allocation at the expense of the insurer. Any party that receives an allocation of funds must provide the insurer with a release. 

Florida Statute § 672.727 was also modified to state that prevailing party attorneys’ fees are now allowed against uninsured/underinsured motorists. 

The bill changed Florida Statute §57.104, which sets out the computation of attorney fees. The bill adds a relatively strong presumption that a lodestar fee is sufficient and reasonable in the computation of attorney fees and it can only be overcome in rare and exceptional circumstances with evidence that competent counsel could not otherwise be retained. This new provision will make it more difficult to obtain a multiplier on a claim for attorney fees. 

Finally, in construction matters, the prevailing party can now obtain attorney fees in litigation against a surety insurer. 

While the changes to Florida law are significant, it should be noted that in anticipation of this new law, claimant attorneys recently filed thousands of personal injury suits to potentially avoid the new law’s effects. Several counties were overwhelmed with filings and the online portal systems crashed or were having significant lag times. While not specifically expressed in the bill, the new laws will likely not apply retroactively. Therefore, it is expected that this massive deluge of lawsuits will be subject to the prior law while lawsuits filed after March 24, 2023, may be subject to these new provisions. 

The foregoing is merely a general and brief overview of the NEW Florida law, which causes an even greater need for the assistance of an experienced Personal Injury attorney.

If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Florida Medicaid Pay-Back

Most Florida residents do not know that Medicaid for the elderly is merely a type of loan to pay for their long-term care needs and is not a gift or grant. The basic point is that if a Florida resident is on Medicaid, any remaining assets the decedent owned upon their death is subject to a lien by the state of Florida. This is commonly known as the Medicaid pay-back or reimbursement provisions, and many residents are unaware of this provision in the law.

Florida Medicaid does have a pay-back provision, similar to other states. During one’s lifetime, if they receive Medicaid benefits, and pass away after the age of 55, the State of Florida is a creditor in their estate. The state has a claim in the amount of funds expended to the deceased party’s benefit during their lifetime, which can definitely be a great deal of money if the subject individual spends time in long-term care. HOWEVER, this situation may not generally be much of an issue in most situations.

First, if the Medicaid applicant was single, he or she was only allowed to have less than $2,000 in countable assets in order to be on Medicaid. This scenario means that the applicant likely has nothing for Medicaid to make a claim against upon the applicant’s death. A single applicant, who is already impoverished, generally has nothing for the state of Florida to take.

Further, even if the decedent owned a homestead real property or primary residence, this property is not subject to creditor’s claims (including the state of Florida) in most circumstances.    There are exceptions to this rule though, such as:

  • The decedent’s property lost its homestead status before death (possibly by renting the home, as an example);
  • Not all homestead properties are equal. If the property is a co-operative share, such as in a mobile home park, this does not get statutory protection for Florida homestead purposes; and/or
  • The decedent’s Last Will & Testament called for the sale of the decedent’s home.

Consequently, the Medicaid lien is not an issue in most circumstances. Therefore, where would a Medicaid lien take place?  There are a few circumstances where the lien could/would be applicable:

  • The decedent sold their home and went off of Medicaid before death (i.e., the applicant went on private pay);
  • The decedent received an inheritance, either before they died or after, which could then be subject to the lien;
  • The decedent did not disclose or discover all known assets as part of the application process and the assets had to be probated upon death; and/or
  • The decedent’s spouse died first and left money to the Medicaid applicant, who then passes away.

One major point to be made is that proper estate planning can avoid any potential Medicaid lien. That result is one reason to see an experienced estate planning attorney in order to ensure the family creates a good estate plan with the necessary documents to help avoid probate as well as creditor problems upon the family member’s death.

Accordingly, the Medicaid lien is not a worry for most Medicaid applicants if they either have nothing or very little at death or have created a good estate plan. This situation also merits good asset protection planning which can protect assets during one’s lifetime and at their death.

The foregoing is just a general and brief overview of the subject of Florida Medicaid’s lien & its pay-back or reimbursement in the state of Florida.

If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Advance Directives or Living Wills & Related Documents in Florida

An Advance Directive, also sometimes known as a Living Will, is a legal document which details a person’s predetermined wishes about end-of-life care. Advance Directives are highly encouraged to everyone as a means to make difficult decisions regarding one’s care in the event of a catastrophic injury such as severe brain trauma resulting in coma or vegetative state. These decisions should not be left up to family members who are already suffering and might be unsure of that individual’s wishes. Such directives help to avoid disputes as to how to proceed regarding one’s end-of-life medical treatment.

Advance Directives allow these critical decisions to be made in advance by the individual. Under Florida law, a Living Will must be signed by its maker in the presence of two (2) witnesses, at least one of whom is neither the spouse nor a blood relative of the maker. If the maker is physically unable to sign the Living Will, one of the witnesses can sign in the presence and at the direction of the maker.

Unlike the Living Will, however, an Advance Directive is not limited to terminal illness. It may also include medical events such as dementia, stroke, or coma. There are many different types of Advance Directives, including, but not limited to, a Living Will, Health Care Surrogate or medical power of attorney and Do Not Resuscitate (DNR) Order.

Technically, through Advance Directives, one can make legally valid decisions about their future medical care. Florida law recognizes two (2) types of Advance Directives: 1) A Living Will Declaration. 2) A Designation of Health Care Surrogate.

A Living Will is a legally binding document which expresses an individual’s end-of-life preferences, such as whether that person wants to be kept alive through artificial life-support means or equipment.

A Living Will is the written statement that would say that a person may want a Do Not Resuscitate Order. The Do Not Resuscitate Order, on the other hand, is a physician’s order for medical professionals to not provide CPR to the subject person, usually done on a yellow form. A Florida Do Not Resuscitate Order form (DNR or DNRO) is a document or instrument which is used by residents of Florida who suffer from incurable or irreversible medical conditions. This form states that the requester does not wish to be resuscitated in case of respiratory or cardiac arrest. A physician must sign off on a DNR order. A DNR must be honored in any healthcare setting by all medical personnel, including EMTs and paramedics outside of a medical facility. For a Florida DNR to be legally valid or effective, the form must be printed on yellow paper before it is completed by the patient/authorized representative and physician. A blank yellow form can be obtained  for free by writing to the Florida Department of Health.  Once a doctor writes a DNR order at the patient’s request, no one can override it, including family members. If the said patient changes their mind about the DNR, however, they can always speak to their doctor and have it revoked.

Anatomical donation is a document that indicates an individual’s wish to donate, at death, all or part of their body. This can be an organ and tissue donation to persons in need, or donation of their body for training of healthcare workers. One can write down their choice to be an organ donor by designating it on their driver’s license or state identification card, signing a uniform donor form, or expressing one’s wish in a Living Will.

Although some Living Wills may contain directives regarding organ donations or autopsies which remain in effect briefly after one’s death, any authority granted by a Living Will terminates or ends when the person passes away.

Although an Advance Directive may ultimately decide whether an individual continues to live with artificial life support or passes away, there are many other details that make up a Living Will. An Advance Directive should provide instruction for specific scenarios such as the use of specialized equipment including breathing machines, feeding via tube, what to do in the event of ceased breathing or heartbeat, and others. Advance Directives may also serve to name an individual to hold durable power over attorney to make these important decisions. A skilled and knowledgeable attorney can provide guidance about creating Living Wills and Advance Directives.

Proper planning for the future is one of the most responsible things a Florida resident can do. It will lessen the burden on family members and loved ones in the event of a catastrophic injury that leaves the victim unable to make decisions regarding their own health, treatment, and maintenance.

The foregoing is just a general and brief overview of the subject of Advance Directives and/or Living Wills, among others, in the state of Florida.

If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Beneficiary Designations & the Like Take Priority over Last Wills & Trusts

Beneficiary Designations as well as a Lady Brid Deed takes precedence or priority over a Last Will & Testament as well as a Trust, which means that if one gets divorced and remarries, but does not update their beneficiaries on accounts, a former spouse may be the legal heir to those accounts if you named them the beneficiary while married. Trusts control the trust estate, the assets that are placed within their ownership and titled in the trust name. They do not overlap and therefore cannot supersedeother designations.

A Last Will or living trust do NOT override the beneficiary designations for life insurance policies, retirement accounts and other types of investment or bank accounts. This includes accounts, such as life insurance policies, annuities, IRAs, other tax-favored retirement accounts and employer-sponsored benefit plans. The person(s) named on the most-recent beneficiary form will get the money automatically if one dies, regardless of what the Last Will or living trust document might state.

Deeds such as a Lady Bird with its Remaindermen (i.e., like designated beneficiaries but for real property) or ownership by the Entirety as a married couple and/or joint tenants with right of survivorship, the surviving spouse will automatically get sole ownership of the property when the other spouse dies and/or the property automatically goes to the surviving joint tenant or Remainderman.  The major advantage of these types of ownership is that they avoid probate.

Most beneficiary designations will require one to provide a person’s full legal name and their relationship (i.e., spouse, child, mother, etc.). Some beneficiary designations also include information like mailing address, email, phone number, date of birth and Social Security number.

An estate plan in Florida can include several documents, many of which may require beneficiaries, like any trusts, a person may have set up or intended to set up, non-probate assets like 401(k), IRA accounts, life insurance policies, and pensions. Assets from these accounts will go to the beneficiaries upon the owner’s death. It is important, therefore, to make sure one chooses their beneficiaries carefully. 

A beneficiary designation involves naming the person who will directly receive an asset in the event of the death of its owner. Again, assets which allow for beneficiary designations include insurance policies, retirement accounts such as 401(k) plans, annuities, and other financial accounts. Trusts also need beneficiary designations. An individual can also choose beneficiaries in their Last Will and Testament. 

It must be noted that beneficiaries are different from heirs. Beneficiaries are chosen while heirs are those who inherit the property of a person who dies intestate, or without a Last Will, usually next of kin as governed by state law.

The designation process ensures the named beneficiary directly receives the asset, rather than it passing to the owner’s estate and going through probate, which may involve significant time and expense.

Beneficiary designations are unique to each asset and may be managed by the entity that holds the subject asset.  An example would be a life insurance policy whereby the company that holds the policy will likely provide a beneficiary designation form during the enrollment process. In the said form, the applicant would specify which individuals (i.e., beneficiaries) should benefit from the subject policy in the case of death.

When a person dies, the instructions in their Last Will & Testament only distributes assets included their “probate estate” or in their name alone.  Assets with beneficiary designations get excluded from the probate estate.  To avoid a conflict, it is crucial to ensure that the language in one’s Last Will correlates with and/or considers their beneficiary designations.  It merits to perform a regular review and update of the Last Will as well as beneficiary forms as needed since, typically, a beneficiary designation overrides a Last Will.

Common categories of beneficiaries in Florida include eligible designated beneficiaries, designated beneficiaries, non-living beneficiaries, and contingent beneficiaries. Different eligibility rules may apply to various categories of beneficiaries. 

Eligible designated beneficiaries include:

  • Spouses;
  • Children under 18 years of age;
  • Individuals with a disability;
  • Chronically ill individuals; or
  • Individuals within 10 years of age of the deceased.

Eligible designated beneficiaries have additional rights to designated beneficiaries. 

A designated beneficiary is any living person who does not fall into the above categories. This may include a friend or extended family members, such as elderly parents or a sibling. 

Another type of beneficiary is a non-living beneficiary, such as a charity, trust, or estate. 

A contingent beneficiary is a “backup” beneficiary to whom receives the asset in the event the primary beneficiary is unable. 

When choosing a beneficiary, the following are key factors to keep in mind.

A beneficiary typically must be over 18 years of age. If an individual wants to gift an asset to a minor upon death, one may need to set up a minor’s trust and name the trust as the beneficiary, if appropriate; otherwise, a legal guardianship will be needed. 

Financial dependents are a good starting point when considering who to designate as a beneficiary. These may include a spouse, children, or other extended family members.

A beneficiary generally must have an insurable interest in the insured person. The foregoing means there must be a legitimate financial interest between the two, such as in the case of dependent children or a spouse. 

Some life insurance policies or pension funds set rules for naming a beneficiary. Make sure to be aware of these before making decisions and seek legal and financial advice about the options. 

Depending on the document and the terms of the contract, some beneficiaries may be irrevocable. The preceding means one cannot revoke said beneficiary’s rights unless they agree to it. At first glance, one may wonder why they even would want to designate beneficiaries as irrevocable, but there are benefits. An estate planning attorney can explain the reasons and situations where irrevocable beneficiary designations may be most appropriate as well as the reverse.

In Florida, the best way to avoid most potential issues when it comes to a beneficiary designation is to speak with a lawyer to ensure the selected designation is valid. 

Some common challenges that may arise when designating a beneficiary are as follows.

When choosing a beneficiary, it is possible to set either a fixed dollar amount or percentage the subject beneficiary will receive. However, a fixed dollar amount can cause issues if the value of the asset is insufficient (or if it increases in value, leaving a portion of the asset to probate). To avoid this, assign a percentage value instead. 

Failing to name a contingent or alternate beneficiary may result in an asset needlessly going through probate. To avoid this, identify a contingent beneficiary who will receive the asset in the event the primary beneficiary cannot accept it, such as when the primary has predeceased. 

The identity of a named beneficiary may not be clear, such as when several people in the family share the same or similar name. Names may also change as a result of marriage or divorce. Always confirm the correct legal name of the intended designated beneficiary and ensure that the applicable document is updated to reflect any name changes. 

Designating “all my children” can create challenges. For example, if a child beneficiary dies before their parent, it may be unclear as to how their portion should be distributed. It may be distributed among the surviving children, or instead, pass to their offspring or descendants. To avoid this issue, one should be specific when naming a beneficiary.

The foregoing is just a general and brief overview of the subject of beneficiary designations and the like versus other estate planning instruments in the state of Florida. If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Trusts in Florida- Revocable and Irrevocable (A Brief Overview)

In Florida, the main difference between a revocable trust and an irrevocable trust is that a revocable trust can be amended or revoked during the settlor’s (i.e., creator of the said Trust and whose assets are used to fund the Trust) lifetime, while an irrevocable trust cannot. In terms of asset protection, a revocable trust is rarely used as part of an asset protection plan, while irrevocable trusts are useful in several asset protection contexts.

A Trust is a contract between a maker of the subject trust (often called a grantor or settlor) and a trustee set up for the benefit of named beneficiaries. A maker of the said trust transfers legal title of their property to a trustee who holds the title and property as a fiduciary for the benefit of named current and future beneficiaries. Again, a settlor is the entity that establishes a trust. The term of settlor is encompassed by several other names such as donor, grantor, trustor, and trustmaker. Regardless of what this entity is called, its role is to legally transfer control of an asset to a trustee who manages it for one or more beneficiaries.

Trusts are essential tools for estate planning. People anticipate conveying their assets to estate planning trusts, but they often do not understand how various types of trusts fit into the estate planning process. Trusts have many purposes, including avoiding probate, reducing estate taxation, or protecting assets from creditor risk. The type of trust and the terms of trust depend on the priority of various planning goals.

Trusts are primarily differentiated by whether they are revocable or irrevocable. A revocable trust conveys assets to a trust expressed by a written trust agreement which expressly reserves the settlor’s right to revoke the trust entirely or amend any part of the trust agreement for any reason during the settlor’s lifetime. Most estate planning trusts that direct the disposition of the settlor’s property upon death are revocable trusts. These estate planning trusts are called “living trusts” because the settlor retains complete control benefits of the trust while he is living.

An irrevocable trust is a trust whose trust agreement prohibits revocation or amendment. Transfers to irrevocable trusts are final conveyances, with some few exceptions. A settlor cannot change his mind about transfers he makes to an irrevocable trust.

Some trusts are designed to be irrevocable from their inception; others start out revocable and later become irrevocable. An example of a trust that starts out irrevocable is a trust set up to make gifts to the settlor’s children during the settlor’s lifetime. Assets transferred to an irrevocable children’s trust are the children’s property. The trustee, as a fiduciary, must use the principal assets and trust income for the children’s benefit and not for the direct benefit of the settlor. Of course, using the trust money for the children’s education, for example, usually indirectly benefits the settlor.

An example of a lifetime irrevocable trust in Florida is an insurance trust. There are tax benefits and asset protection benefits of owning life insurance in the name of an irrevocable trust. The death benefit of life insurance (the amount paid to family members or whatever named beneficiary upon the insured’s death) is part of the insured’s taxable estate, except when the life insurance is owned by an irrevocable trust. For example, death benefits paid to family members are vulnerable to their creditors upon receipt, however, the death benefits are creditor-protected if the money is held inside a properly drafted irrevocable insurance trust.

A revocable trust becomes irrevocable upon the death of all settlors. The trust is locked at death, and the settlor’s heirs (the future trust beneficiaries) cannot change the terms of such inherited trust, with very few exceptions. The said trust becomes irrevocable. No one can change the terms of the trust or add property to it. Also, the trust settlor is no longer the trustee, instead, a successor trustee takes over. The settlor’s written notes, memorandum given to family members, or oral instructions given to family members during his lifetime will not change the revocable trust’s estate plan once it becomes irrevocable.

A revocable living contains written instructions for how the settlor desires to distribute his assets after death. The process of transferring assets, paying debts, and following the settlor’s instructions is referred to as trust administrationTrust administration is directed by the persons the settlor nominated to serve as their successor trustee(s). Trust administration in Florida is the legal procedure whereby a successor trustee of an existing trust carries out the trust document’s instructions after the settlor’s death. Trust administration refers to the tasks associated with managing the assets, distributions, and filings of a trust. Said tasks can often be quite complex and time sensitive.

Trust administration involves several tasks. For example, the family must first confirm their understanding of the settlor’s written instructions expressed in their trust agreement, and any disagreements regarding the trust instructions must be resolved. The successor trustee must find out if the settlor owed money or was subject to any legal claims. The successor trustee must use non-exempt trust assets to satisfy debts and settle claims. The settlor’s income tax liability for the year of death must be determined and paid. The successor trustee also must determine if the settlor’s taxable estate is subject to estate taxation.

Only after the trust administration is substantially completed may the successor trustee distribute trust assets to the settlor’s heirs or beneficiaries according to the settlor’s written instructions. After assets are distributed and the administration is complete, the successor trustee can close the trust. Successor trustees should get a written agreement among all beneficiaries that the subject trust administration has been successfully completed so that the said living trust and all of its trust accounts may be closed.

The foregoing is just a general and brief overview of the subject of revocable and irrevocable trusts in the state of Florida.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Florida Beneficiaries or Heirs May or May Not Have to Pay Taxes on Inheritances

There are merely a few states in this nation which can levy taxes on inherited property. These taxes are sometimes affectionately called death taxes. For beneficiaries or heirs inheriting property in the state of Florida, they will be happy to know that Florida does not have a separate income tax for inherited property. Inherited money is also untaxed at the state level since Florida does not have an income tax system. However, all property is not treated the same when it is inherited.

The following are several tax situations that inheritors of Florida assets should be aware.

While Florida does not levy an income tax on inherited property, the Federal government does. However, the federal inheritance tax only applies to estates over $12.92 million in 2023, and it is double for married couples. The tax is levied against the estate, so heirs will not be on the hook for these death taxes. HOWEVER, in 2025 the amount will be reduced to $5.49 million (adjusted for inflation), unless the law is changed. The gross estate includes Trust assets, assets held in the decedent’s name, jointly held property, accounts designating a beneficiary, life insurance, annuities, among others.

If one inherits a retirement account from a loved one, they would not have taxes levied on the transfer of the account, but taxes may be charged when one tries to withdraw funds from the account. What taxes are imposed will depend on the type of retirement account. An attorney can help ensure understanding of the tax ramifications associated with said inherited property.

If one inherits property that generates revenue, like a piece of rental property for instance, they could owe taxes on the income gained or generated from owning the transferred property. Consequently, if one inherited a multi-family building with tenants and they paid rent during the probate period, one could owe taxes on funds which were collected during the said interim period.

In Florida, there are no separated property taxes, but beneficiaries will owe federal taxes if the inherited property is sold after transfer. The heir should only owe taxes on the gains (capital gains) of the property, or if it increased in value from the point of transfer (date of death) until the point of sale.  The foregoing is called stepped-up basis. Stepped-up basis refers to a tax policy which looks at the market value of assets at the time when the person inherits the asset or real property (i.e., the deceased’s date of death) instead of the value when the prior deceased owner purchased the said assets or real property. If the asset is later sold, the higher new cost basis would be subtracted from the sale price to calculate capital gains tax liability, if any.

The foregoing is just a general overview of the subject of whether Florida Beneficiaries or Heirs may or may not pay taxes on inheritances.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

Claims Against the Federal Government & it’s Agencies under the Federal Tort Claims Act

The Federal Tort Claims Act is a 1946 federal statute that permits private parties to sue the United States in a federal court for most torts committed by persons acting on behalf of the United States. Historically, citizens have not been able to sue their government, which is a doctrine referred to as sovereign immunity. It is legal doctrine that ordinarily prohibits private citizens from bringing a sovereign state into court without its consent. Until the mid-20th Century, a tort victim could obtain compensation from the United States only by persuading Congress to pass a private bill compensating him or her for their loss.

Under the Federal Tort Claims Act, the federal government acts as a self-insurer, and recognizes liability for the negligent or wrongful acts or omissions of its employees acting within the scope of their official duties. The United States is liable to the same extent an individual would be in similar circumstances.

The Federal Tort Claims Act (FTCA) sets forth procedures for presenting and resolving administrative monetary claims for personal injury, property damage, or death arising from the alleged negligence of officers and employees.

The FTCA has several exceptions that categorically bar plaintiffs, victims or claimants from recovering tort damages in certain categories of cases. Federal law also restricts the types and amount of damages a victorious plaintiff may recover in an FTCA suit. Additionally, a plaintiff or claimant may not initiate an FTCA lawsuit unless they have timely followed a series of procedural requirements, such as providing the government an initial opportunity to evaluate the subject claim and decide whether to settle it before the case proceeds to federal court. 

When it comes to making a claim and/or suing the Federal government, or any of its agencies, there is no cap like there is in Florida. But there are other limitations. Again, that situation is governed under the Federal Tort Claims Act (28 U.S.C §2671), and the case or claim must also be brought only following proper written notice. In the administrative phase, a specific document must be filed with the government entitled Form 95.

Once the claimant or plaintiff gets past that administrative procedure, a claimant would file suit in federal court. The United States Attorney’s office defends these cases. One does not get a jury trial, i.e., the case is heard by a federal district judge, who alone decides the case called a bench trial.

There are many examples of Federal Tort Claims Act cases, which can include anything from medical malpractice at military hospitals to Federal Aviation Administration errors that cause plane crashes.

Either way, it pays to avoid situations where the circumstance pits the individual against a governmental hazard.

Federal claims are different than state claims in that if a damage or injury is the result of negligence or legal liability of the federal government or federal agency, the claim is governed by the Federal Tort Claims Act (FTCA).  More specifically, an injured party is required in FTCA cases to file a Form 95 with the governmental entity or agency within two (2) years of the date that legal liability accrued.  This two year statute of limitation or deadline is true regardless of whether there is a state statute of limitation for the same cause of action which may be longer.

Further, with FCTA cases, the governmental entity has up to six months to review the subject Form 95 claim and the claimant is not allowed to file suit during that time.  If the entity does not respond to the claim with an offer or denial within the six month period, then claim is presumed denied when the six month period expires.

Please note that said claimant only have six (6) months to file their lawsuit in a FTCA case after a governmental entity has issued a denial of the claim.  Failure to file suit within six months of being denied results in the claim being completely barred EVEN if it has been less than two (2) years since the event causing the injury!

The FTCA case begins when an injured party “presents their claim” to the agency involved.  The foregoing is accomplished by filing the Form 95.

One must also research specific procedures and rules applicable to the applicable governmental entity or agency in which the claim is sought.  These rules include not only how to bring the claim but also where the Notice should be sent and with whom one should communicate regarding the subject claim.  Many federal agencies will post this information in a section on their respective websites.

Unlike the State of Florida where damages against the state are capped, Federal Tort Claims are not capped.  Therefore, one’s Federal Tort Claim case may have significant value. In the Form 95 itself, there is a blank for the amount of damages that claimant has sustained.  The claimant must put a number, however, one should be careful not to underestimate the value of their claim.  Once a Form 95 is filed with a figure for the damages on it, one cannot increase the amount later claimed.  Consequently, one must be generous in their evaluation.

Attorney fees on FTCA cases are capped at 25% if the case is litigated while attorney fees are only 20% if the case is settled. No fee can be charged for appeals of FTCA cases. Again, the purpose is to remove some financial incentive to sue the federal government; however, it does not make it impossible or not feasible to prosecute.

Further, the FTCA imposes significant substantive limitations on the types of tort lawsuits a plaintiff or victim may permissibly pursue against the United States. The Congress that enacted the FTCA, was concerned about “unwarranted judicial intrusion[s] into areas of governmental operations and policymaking,” and opted to explicitly preserve the United States’ sovereign immunity from more than a dozen categories of claims. More specifically, Section 2680 of the FTCA establishes a number of exceptions preventing private litigants from pursuing certain categories of claims against the United States

It has been debated or at least discussed that certain provisions be enacted to modify the FTCA.  Congress, however, still retains the authority to enact private legislation to compensate individual tort victims who would otherwise be barred from obtaining recourse from the United States under the FTCA in its current form. Congress enacted the FTCA, in part, to eliminate the need to pass private bills to compensate persons injured by the federal government. Congress, though, still keeps some authority to pass private bills if it so desires.  Accordingly, rather than amend the FTCA to expand the number of circumstances in which the United States will be held liable to tort claimants, some scholars and legislators have suggested that Congress should pass individual private bills to compensate particular injured persons or groups of persons who might otherwise lack recourse under the FTCA.  To that end, Congress has occasionally provided some type of compensation to victims, plaintiffs or claimants in situations where the courts have found that the FTCA waiver of immunity provides no relief.

The foregoing is just a general overview of the subject of claims against the Federal government under the Federal Tort Claims Act.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.

PERSONAL INJURY CLAIMS AGAINST GOVERNMENT ENTITIES IN FLORIDA

In Florida, as in most other states, if an individual is injured as a result of someone else’s negligence, they can usually file a personal injury claim to receive compensation. However, when a governmental agency is involved such as a city bus or government/public hospital, then such claims must be filed against the government agency, not the employee themselves unless said employees intentionally inflicted the harm and consequently may be held liable.

Plaintiffs injured by the carelessness of government agency or one of its employees in Florida will have to deal with certain rules, regulations or standards. In this article, the term “government” will refer to a governmental entity for a city, county, or the State of Florida. Claims against the Federal Government will be dealt with in another article.

Claims Against a government entity or agency in the State of Florida are limited by law.  This limitation is known as sovereign immunity, and it is based on the English notion that the government cannot be held responsible because “the king can do no wrong.”  The limitation of sovereign immunity extends to all properties and to whomever serves the government. If a garbage truck or police car crashes into a person or a teacher abuses a student, the government decides if the victim is allowed to sue and then limits the recovery up to $200K per person or $300K per tort claim.

In 1975, the passage of Florida Statutes section 768.28 (i.e., Florida’s Waiver of Sovereign Immunity Act, Florida Statutes §768.28) opened the door to claims but also made the entire process difficult to navigate. When the subject strict guidelines are met, a state entity can be held liable for negligence under the same circumstances as an individual but considering the caps permitted under the law. In addition to the caps from 768.28, Florida has also presented a series of barriers in the form of conditions. Failure to comply with all notices, disclosures, and obligations can result in rejecting the claim.

Further, the government is not responsible for policy-making decisions, only those acts that are considered “operational” in nature.  One way of looking at it is this that the decision on whether to put up a stop sign at an intersection is immune from lawsuit.  However, once the decision to install it is made, if it is placed or installed in a wrong manner, not maintained or itself causes a harm, there can be a claim.

Florida imposes certain limitations on the types of claims that plaintiffs or victims can bring, which include but are not limited to:

  • Government employees cannot be held personally liable for damage unless they have caused it on purpose;
  • Claims against the state of Florida are limited to a total of $200K per person or $300K per incident;
  • The state may appeal any resolution of a case; and
  • Actions against State Universities must be brought in the county where the University’s campus is located.

From a practical standpoint, due to the cap on damages, the most the government will have to pay to a plaintiff is the capped amount, so an actual interest in settling pre-suit is very rare, forcing the claimant to sue.

Quite often lawyers do not take cases of damages against the county, city, or state of Florida because the injuries suffered and the medical bills are usually higher than what these cases can recover. What many lawyer try to investigate and seek out are other private parties that could be sued and held liable.

Florida’s sovereign immunity restrictions apply to almost all cases of negligence filed against the state or any of its Cities or Counties, including:

  • Car accidents caused by county employees;
  • Public hospital malpractice cases; and
  • Defective city property that causes injuries.

No matter how many people were harmed, how severe the injuries, or how many negligent parties, the government will, unfortunately, only pay the cap per incident. The maximum settlement will always be $200K per person and $300K per incident, which, as mentioned, usually is not enough to cover the actual damages. This limitation applies when dealing with injuries caused in Florida accidents involving the following, among others:

  • Public transportation vehicles;
  • Police car accidents;
  • Unposted street signs; and
  • Anything related to the municipality’s negligence.

In addition to the government agencies themselves, the Florida Legislature has passed laws giving private entities “sovereign immunity” privileges as if they were governmental bodies.  These include private charter schools, the South Florida Fair, and some hospitals and doctors.  

Additional limitations apply to cases filed against law enforcement officers or agencies. public health agencies, and the Florida Space Agency.  Claims coming from inmates of the Florida Department of Corrections are also subject to special time limits.        

Punitive damages are not allowed against Florida public entities as well as prejudgment interest, and Florida law limits attorney fees to 25% in cases against the government as a disincentive to pursue these cases.

There is a way around or beyond the $200,000 cap on cases against the State or government. It is not an easy process, but the state allows for a process called a Claims Bill. 

To get a claims bill, a victim will need legislators to draft such a bill seeking compensation beyond the sovereign immunity limit.  It is usually done after a trial and judgment has been entered, and after all appeals have been exhausted.  

If the judgment is larger than the cap, one can seek a claims bill.  But after a bill is filed, it will be sent to a special master who will re-examine the facts and circumstances, there will be hearings, and most claims bills die in committee. 

If bill does not die in committee, most special master or referee recommendations are at a reduced amount of what the award was. The legislature (House or Senate or both) may take a recommended amount and reduce it.  Both the House and Senate must pass the exact same bill and then the Governor must sign it.  There are very few claims bills that are passed and signed each year.

Bear in mind that Cities, Counties and the State generally have their own legal departments, so they will most likely litigate the case through the court system knowing that, even if they lose, they will not have to pay more than $200,000.  Accordingly, the applicable governmental entity is in a position where it will rarely voluntarily pay the full liability amount pre-suit.

Personal injury claims in Florida made against public entities can be complicated and complex, but that does not mean that a Plaintiff or victim lacks recourse when a governmental employee or agency harms them in an accident.

The foregoing is just a general overview of the subject of Personal Injury claims against government entities in Florida.

If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.