Roger Ailes' Florida homestead protected from lawsuit liabilities

Roger Ailes, the media mastermind behind Fox News, died May 17 after falling at his Palm Beach home. The medical examiner attributed his death to bleeding on the brain, exacerbated by the fact that Ailes suffered from hemophilia. He leaves behind his wife, Elizabeth and a son, Zachary. Ailes was 77.


Ailes launched Fox in 1996, leaving the network last year amid a widening web of sexual harassment accusations. Two lawsuits naming him personally were ongoing at the time of his death. An individual's debts and liabilities do not disappear when the person passes away. Instead, the estate substitutes for the decedent. Attorney Gloria Allred has said she expects the lawsuits against Ailes to continue, with his estate now the target of the proceedings. 


Newsweek estimates Ailes' fortune at $100 million. He earned $20 million annually while at Fox, and took a $40 million severance package upon leaving the network. He also owned several homes, including the $36 million Palm Beach residence he purchased just after leaving Fox. That was a shrewd legal move: Ailes had recently declared himself a Florida resident, qualifying his Florida residence as homestead property. Under Florida law, homestead property is beyond the reach of creditors. Thus, unless his wife Elizabeth has waived her homestead rights, the home will pass to her, safe from any legal judgments.


In addition to availing himself of Florida homestead law, Ailes' relocation here offers other tax advantages. Since Florida has no estate tax, his estate will owe none. In terms of the federal estate tax, what is owed will depend upon the nature of the estate planning Ailes did. (Federal estate tax kicks in for all taxable assets over $5,490,000.)


The evidence fueling the two pending lawsuits against Ailes is based on private conversations he allegedly had with the plaintiffs, Andrea Tantaros and Julie Roginsky. Ailes always denied their allegations. Without him here to defend himself, the defense may be weakened. On the other hand, the plaintiffs may need to buttress their case with evidence beyond those private conversations. It is possible that Ailes' estate may now be eager to settle out of court, in order to sew up his affairs as quickly as possible.

Florida Homestead Exemption Hike On the 2018 Ballot

Florida voters next year will vote on whether to raise the Florida homestead exemption. The November 2018 ballot will include a constitutional amendment to increase the exemption from $50,000 to $75,000 on homes worth $100,000 or more. If 60% of voters approve, the new rate will take effect January 1, 2019.

Available to Floridians for their primary residences, the homestead exemption reduces the value of the residence for property tax assessment purposes. According to estimates, the hike would save 4.3 million state residents about $644 million. The average homeowner would see a savings of $170 annually.

The measure has its advocates and critics. In all likelihood, homeowners will vote "yes" to putting money in their pockets. Florida municipalities and counties, on the other hand, are concerned about the amendment's impact on critical services. According to various estimates, annual lost revenue for Palm Beach County would be $62.7 million; Broward County, $73.5 million; Martin County, $8 million; and St. Lucie County, $8.2 million.  

At a recent regional meeting covered by WPTV, Indian River County Administrator Jason Brown said assisted living facilities in the western part of the county could be affected by cuts to fire services. And St. Lucie County officials said the new library, scheduled to open later this year, might lack the necessary funds to operate. 

Advocates for the amendment argue that voters deserve a chance to vote on the property tax break, particularly in light of the fact that many people's home values have yet to recover from the 2008-2009 recession. The measure is sure to get plenty of press coverage as we get closer to the 2018 election.

Downsizing and in debt? FL Supreme Court says sale proceeds protected from some creditors

Under Florida law, homestead property is protected from creditors (except for creditors secured to the property such as mortgagors, mechanic's liens, property taxes, homeowners associations, etc.). If you sell homestead property, are the sale proceeds protected from non-secured creditors? That is often the crucial issue for near-retirees and retirees who are in debt but cannot downsize to a less expensive home to save money, fearful that the sale proceeds will be vulnerable to creditors.

If this describes your situation, here is some good news  from a recent Florida Supreme Court case. In JBK Associates Inc. V. Sill Bros, the court ruled that the proceeds from the sale of homestead property are protected, just as the homestead itself is protected prior to sale, so long as these conditions are met: 

• You hold the monies from the sale separately and do not co-mingle them with any of your other funds.
• You designate that the sale proceeds are solely for the purpose of buying a new homestead.
• You purchase new homestead property within a reasonable period of time.  (Unfortunately, the court did not clearly define "reasonable.")

The ruling makes downsizing a more viable option for retirees and near-retirees with credit problems.Read the Florida Supreme Court ruling, JBK Associates Inc. v. Sill Bros. Inc., here

Florida Homestead Exemption: March 1 is filing deadline

If you purchased a home in Florida as your permanent residence in 2015 and occupied it before the end of the year, you may be eligible for the Florida homestead exemption. The deadline to file is March 1. The standard homestead exemption knocks up to $50,000 off the assessed value of your property. You must be a permanent Florida resident.

There are additional property exemptions that may be available to you, too. Among them:

• If you have built a "granny flat" on your property as a home for parents or grandparents age 62 or older.

• If you are a homeowner age 65 or over whose income falls below a certain level.

• If you are confined to a wheelchair and are permanently and totally disabled, the property may be entirely exempt from ad valorem taxes.

• If you are a veteran, you may also be eligible for certain property tax breaks. For example, the homestead of a veteran who is totally and permanently disabled as a result of military service may be entirely exempt from ad valorem taxes. Veterans with a 10% or more service-connected disability may qualify for a $5,000 exemption.

• If you are a widow or widower, you may apply for an additional $500 exemption.

Please refer to your local Property Appraiser's Office for detailed information on these exemptions. A list of local property appraisers offices by Florida county may be found here.

Is there common law marriage in Florida?

In my estate planning practice, I advise many clients who have been living together for a long time, sometimes for decades. They are committed to one another, take care of one another, and often refer to each other as spouses. But they have chosen not to marry, typically because (1) there are children from prior marriages whose inheritances they wish to protect, and/or (2) each one wishes to shield his/her assets if the other requires long-term nursing care.

These individuals often ask me if Florida considers them to be common-law married. In most cases, the answer is no. Florida recognizes common law marriage only if the marriage is valid in one of nine states that recognize it, or if it occurred in Florida prior to January 1, 1968. In all my years of practice, I have run across only one case of a couple whose union would be considered a common law marriage.

Not being considered married is a relief to most unmarried clients, because it allows them to avoid the above-mentioned legal entanglements. But there's a downside, too: they are denied the automatic privileges they may want, such as property rights, or even something as simple as the right to talk with their partner's doctor in the event of a medical emergency. From a legal perspective, unmarried couples are no more connected than two strangers.


If you are in a committed, non-married relationship, the good news is that there are affirmative legal steps you can take to protect one another and secure some of the benefits married couples enjoy. Here are a few of the most important issues you should consider and discuss with your estate planning attorney:

• Who will get to make your health care decisions if you are incapacitated? It's not uncommon for a patient's children and partner to lock horns over those decisions; emergency room waiting areas are frequently where such battles begin. If you want your partner to make your decisions, to participate in the decision-making with other family members, or even have the right to talk to your health care providers, you need to make your wishes clear with the appropriate written documents, such as a health care power of attorney.

• Unmarried couples often live in a home owned by just one of them. Unlike a married couple, the survivor has no legal right to stay in the home after the owner passes away, and could be forced out - unless the appropriate arrangements have been made to prevent that from happening. These arrangements should be carefully built into your will or trust.

• Take a look at your IRA, 401K, life insurance, etc. People tend to forget about these items as the years go by. Make sure your beneficiary designations reflect your wishes and are up-to-date.

To discuss your options, contact The Karp Law Firm and we will be happy to talk with you.

Florida Medicaid eligibility criteria changes for 2015

Effective January 1, 2015, changes occur to several eligibility criteria for Florida Medicaid benefits for long-term care costs. A summary of the changes:

Asset cap for the community (well) spouse: The well spouse is entitled to retain up to $119,220 in assets, plus exempt, non-available and income-producing assets. Prior figure was $117,240.

Income cap for Medicaid applicant: The Medicaid applicant's gross monthly income cannot exceed $2,199, up from $2,163. If the applicant's income exceeds that level, a qualified income trust (also known as a Miller Trust), composed solely of the applicant's income, must be established in order to establish eligibility. 

Homestead: The applicant's equity interest in the homestead may not exceed $552,000.  The prior figure was $543,000.

Look-Back: Effective January 1, 2015, there is a 5-year look-back for all uncompensated transfers.

More information on Florida Medicaid long term care benefits.

Veterans and active duty service members may qualify for special Florida property tax exemptions

Florida offers certain property tax exemptions to veterans and active service members. Are you taking advantage of them? From the Florida Department of Revenue, here are the different types of exemptions that may be available to you:

Disabled Ex-Service member: An ex-service member disabled at least 10% in war or by service-connected events may be entitled to a $5,000 exemption on any property he or she owns.

Service-Connected, Total and Permanent Disability or Confined to a Wheelchair: An honorably discharged veteran who is totally and permanently disabled or requires a wheelchair for mobility resulting from their military service may qualify for total exemption of their homestead. Under some circumstances, the benefit of this exemption can carry over to the surviving spouse.

Discount for Veterans 65 and Older with a Combat-Related Disability: A veteran who is disabled, 65 or older, and owns homestead property may qualify for a property tax discount based on their percentage of disability. To be eligible, you must have been honorably discharged from military service and be partially disabled with a permanent service-connected disability, at least part of which is combat-related.  

Deployed Military Exemption: A member or former member of any branch of the United States military or military reserves, the United States Coast Guard or its reserves, or the Florida National Guard may receive an exemption on this year’s tax bill if he or she: 

• receives a homestead exemption

• was deployed during the last calendar year outside the continental United States, Alaska, and Hawaii in support of a designated operation (each year the Florida legislature designates operations for this exemption), and

• submits an application, Form DR-501M, to the property appraiser.

The percent of the taxable value that is exempt for the current year is determined by the percent of time during the last year when the service member was deployed on a designated operation.

Surviving Spouse of Military Veteran Who Died in the Line of Duty: A surviving spouse of a veteran who died from service-connected causes while on active duty may be granted a total exemption on their home. 

 

Filing and Keeping Your Homestead Exemption: When a person serving in the Armed Forces owns a property and uses it as a homestead, the service member may rent the homestead without abandoning the claim to the homestead exemption. Service members who can't file a homestead exemption claim in person because of a service obligation may file the claim through next of kin or through any other person who has been authorized in writing to file on behalf of the service member. 

For additional information on property exemptions, contact your county Property Appraiser,  or click here. 

Florida residents: how the Defense of Marriage Act ruling may affect you and your loved ones

The Supreme Court last week struck down the 1996 federal Defense of Marriage Act, which defined marriage as a union solely between a man and a woman. The 5-4 ruling found DOMA unconstitutional because it denied same-sex couples equal protection under the Fifth Amendment of the U.S. Constitution. The ruling means that same-sex legally married couples should be entitled to all the same rights and benefits under federal law as opposite-sex married couples. That's 1000+ rights and benefits. 

For couples who were married in and reside in the District of Columbia or one of the twelve states that currently recognize gay marriage, the situation is a clear-cut and positive development. The situation is less clear for same-sex couples who reside in Florida and have been legally married in another state, because Florida does not recognize the legality of same-sex unions. The Florida Constitution, as amended, bans same-sex marriage and expressly does not recognize same-sex marriages from other jurisdictions.

In this post I clarify what we now know, and still have yet to learn, about the impact of DOMA's reversal on same-sex couples residing in Florida who have been married elsewhere, with emphasis on estate planning, life planning and long-term care planning issues. I also point out how the Supreme Court ruling may affect anyone planning his/her estate who wishes to include a beneficiary who is in a same-sex marriage ,regardless of where that beneficiary resides.

Federal Benefits for Same-Sex Married Couples

Some legal experts have questioned whether spouses in same-sex marriages living in states like Florida will be eligible for all the federal benefits and rights accorded to straight married couples, notwithstanding DOMA's reversal. One early signal that they probably will: Just 48 hours after the Supreme Court ruling was issued, the U.S. Immigration and Citizenship Services Agency awarded a green card to Bulgarian immigrant Train Popov, a man, who had been married in New York to another man, American Julian Marsh. The couple lives in Miami. Based on this development, one can reasonably presume that other federal agencies will fall into line, and that same-sex married couples living in Florida will have access to the full range of federal benefits that provide preferential treatment for spouses.

That said, it is important to point out that different federal agencies use different standards to identify who is or isn't married. Some agencies, including the Social Security Administration, Internal Revenue Service and Veterans Administration have historically used place of residence as the criterion, meaning that they consider a couple to be married only if their domicile considers them married.  From that point of view, a same-sex couple who has been married in, say, Vermont and who now resides in Florida, would not be considered married. Obviously this is a grey area of the law that has yet to be resolved.

Assuming for the moment that all federal benefits will apply to same-sex married couples regardless of where they live, the federal benefits they will receive include:

• Federal estate tax breaks:  Unlimited marital deduction when one spouse passes his/her estate to the survivor. (Prior to the DOMA ruling, any amount in excess of $5.25 million passed to your partner was subject to federal estate tax.) A surviving same-sex spouse may also use any unused portion of the deceased spouse's exemption (portability).

• Social Security advantages: Like their heterosexual counterparts, a surviving spouse in a legal same-sex union may opt to collect the decedent's Social Security benefits if those benefits are greater than what the survivor is currently receiving. Also, while both spouses are alive and collecting Social Security, the lesser-earning spouse can elect to receive 50% of the higher-earning spouse's benefit.

• V.A. Benefits: All the benefits that heterosexual married couples have enjoyed are now available to same-sex marrieds. For example, if the spouse is entitled to pension with aid and attendance, the survivor will also be entitled to those benefits, provided of course that he/she meets all other criteria. 

• 401-ks:  Under federal law, the spouse is the automatic beneficiary. Therefore, if you are legally married in a state that recognizes same-sex marriage, your spouse will automatically be your beneficiary (whether you like it or not). 

• Individual Retirement Accounts: A deceased spouse's Individual Retirement Account can now roll over into the survivor's account without being taxed, and the survivor may take minimum required distributions based on his/her own life expectancy, and then let the ultimate beneficiary stretch it out.

• Medicare: All the spousal privileges and benefits that apply to opposite-sex married couples are now available to same-sex marrieds. Spouses of Medicare recipients can enroll in the program even if they lack the requisite work history. 

• Income taxes: Same-sex married couples may now file joint returns, which is generally advantageous.

 

What has NOT changed at the Florida state level for same-sex married couples

 
As noted above, nothing has changed at the state level, at least for now. Florida laws affording preferential status to married couples do not apply to same-sex married couples, despite the marriage being recognized as legal in a different state. Among the Florida benefits still NOT available to same sex marrieds are:

• The right to an elective share of the spouse's estate.
• The right to a life estate in your spouse's homestead, or one-half ownership in that property.
• Consideration as the natural health care proxy for your spouse, second only to a court-ordered guardian.
• Same-sex spouses may not hold assets as tenants by the entireties, which heterosexual couples may do and which provides creditor protections.
• If a same-sex spouse dies intestate, the survivor is entitled to nothing. Married opposite-sex survivors are entitled to 50% of the estate if there are children from the decedent's prior marriage, or 100% if the decedent has no children from a prior relationship.

At this juncture, it may be wise for committed same sex couples who reside in Florida to consider being married in a state that recognizes same-sex unions. Although it obviously will not change the nature of the relationship from the point of view of Florida law, the spouses will at least be considered married for federal benefits purposes.

If you are in a same-sex marriage recognized in another state, but you are domiciled in Florida, you must take particular care with your planning to ensure that you and your spouse are protected, since the state provides you none of the protections available to same-sex married couples. Contact our offices for the expert advice required for your situation.

A grey area: Long-term care Medicaid benefits for same-sex married couples

Florida Medicaid regulations are a compilation of both federal and state statutes. Therefore it is unclear as to how the DOMA ruling will play out for Florida same-sex couples who are legally married in other jurisdictions and who wish to do Medicaid planning to protect themselves and one another from the cost of long-term care. Two tools commonly used by elder law practitioners in Medicaid planning, spousal refusal and unlimited interspousal transfers, may not be available in Florida to such couples.Only in the fullness of time will we know how these issues will be resolved by the courts. Meanwhile, our experienced Florida elder law attorneys can give you the most accurate and up-to-date advice.

Estate planning if one or more of your beneficiaries are in same-sex marriages

The Supreme Court ruling opens up sticky problems for those planning their estates and whose intended beneficiary (or beneficiaries) is in a same-sex marriage. 

For example, suppose you are a Florida resident and your daughter Ann resides in Massachusetts, where she was married to her spouse, Susan. If Ann predeceases Susan, do you or do you not want Susan to get Ann's share? If your will identifies Ann's "spouse" as the contingent beneficiary, will the Florida Probate Court recognize the validity of that language and allow Susan to receive the bequest - and is that what you desire? If it is, in my view it would be better to omit the word "spouse" and instead identify Susan by name.

Powers of appointment create another area of uncertainty. Sometime a client who wants to leave money to someone in a trust does so with a general power of appointment; meaning the beneficiary is permitted to leave the funds to anyone the beneficiary chooses. In other instances, someone will leave funds under a limited power of appointment, restricting to whom the beneficiary may leave the funds, generally that beneficiary's "spouse and lineal descendants." As you can imagine, DOMA's reversal opens up a legal can of worms with respect to limited powers of appointment. Can you now put restrictions in your limited power of attorney restricting the gender of the beneficiary's spouse? If your limited power of appointment states that your son can only leave his share to his "wife," does that disqualify a same-sex spouse, and is that what you want?  Our highly experienced estate planning attorneys can anticipate these potential problems and draft your estate planning documents in a way that ensures your wishes are carried out in this new legal world.
 
In conclusion, we can look forward to many test cases, lawsuits and rulings on all of these matters over the coming months and yes, even years. Check our website and this blog to keep up with these developments and what they may mean for you and your loved ones.

To read the Supreme Court decision, click here. 

Florida Constitutional Amendment 11 Passes

An update to my prior post: Florida Amendment 11 has passed. It was one of only three amendments on the ballot that received the necessary 60% approval. The Florida Senior Homestead Tax Exemption Amendment will help low-income seniors by giving Florida cities and counties the ability to provide them with additional property tax relief. Additional eligibility requirements include:

• The homeowner must be 65 years of age or older
• The homeowner must have lived in the home for a minimum of 25 years
• The homeowner's annual income may not exceed $27,500
• The value of the home may not exceed $250,000.

 Click for details.

Decision Time on the Florida Senior Homestead Tax Exemption Amendment

Among the decisions facing Florida voters this November is passage of Amendment 11. Passed by the Florida House and Senate on a bipartisan basis, the amendment gives the Florida Legislature the power to allow cities and counties to offer up to a 100% homestead exemption to low-income seniors. Currently, the special exemption cap for low-income seniors is $50,000. In order to qualify, the taxpayer must be 65 years of age or older; the home must be worth $250,000 or less; and income must not exceed $27,500. Sixty percent of voters must vote yes in order to pass the measure.

Critics claim that Florida's ailing economy will be further compromised by passage, but proponents say it will help Florida's financially strapped seniors and also attract more people to the state.

Early voting begins Saturday, October 27.

Read more about Amendment 11 here.

Applying for Long-Term Care Medicaid Benefits? Eligibility requirements changing in 2012

The Centers for Medicare and Medicaid Services have announced some key changes in qualifications for Medicaid long-term care benefits. The following changes will take effect January 1, 2012:

Changes in income criteria:

Applicant's income: The applicant will now be able to retain  monthly income up to $2094 (was $2022.) However, if the applicant has excess income, our Florida Certified Elder Law Attorneys can establish a Qualified Income Trust (also known as a Miller Trust) that will help the applicant qualify for benefits, assuming he or she meets all other criteria.

Spouse's income:  Theres is no limit on the spouse's income. However, if the spouse's income is below $1838.75 (was $1839), a portion of the applicant's income may be diverted to the spouse.

Changes in asset criteria:

Applicant's assets:  Applicant may not have countable assets in excess of $2000 (unchanged from 2011).

Spouse's Assets:  The well spouse may retain up to $113,640 in countable assets (was $109,560).

Change in homestead equity limit:

Applicants may have no more than $525,000 in equity in their homestead property (was $506,000).

If you are seeking Medicaid benefits to pay for the cost of a loved one's long-term nursing care, you should know that there are legal strategies that can often make someone eligible, even if he/she has excess assets or income, or the spouse has excess assets. Contact our Florida Medicaid Attorneys for advice. We can often help preserve a good portion of the family's assets, even if the applicant is already in a nursing facility.

Update: Florida Medicaid Longterm Care Benefits Criteria Modified

The Florida Department of Children and Families has modified two rules that impact on applicants for Medicaid longterm care benefits, and their spouses.

Minimum Monthly Maintenance Needs Allowance changes: If the Medicaid applicant has a well (i.e., "community" spouse) whose income is below $1839, a portion of the applicant's income may be diverted to the well spouse to bring the well spouse's income to the minimum level. Effective July 1, 2011, the Minimum Monthly Maintenance Needs Allowance increases from $1822 to $1839.

Home Equity Exemption: Under Florida law, an applicant's homestead property is exempt if the fair market value is below $506,000. (The figure prior to July 1 was $500,000.) If a home is held in any form of shared ownership, Medicaid considers only the fractional interest of the applicant requesting long-term care Medicaid benefits.

Comprehensive information on qualifying for Florida Medicaid benefits for longterm nursing care.

Protect Your Florida Nest, Snowbirds!

If you're a snowbird ready to fly away from Florida for the summer - or if you're already roosting somewhere else - make sure you take care of this important detail.

If you own homestead property, your county's Property Appraiser sends a card annually to verify ownership of your homestead property. But that card is NOT forwarded by the Post Office, even if you have left a forwarding address with the Post Office. If the card bounces back to the Property Appraiser, you could jeopardize yourr $25,000 homestead exemption because of a simple technicality.

The solution: Contact the Property Appraiser in person, or by phone or mail to request that correspondence be sent to your alternate (non-Florida) address while you're away. This is also an important step for the purposes of Florida Medicaid eligibility, since Medicaid considers homestead property (up to a certain amount of equity) to be an exempt asset. If you lose your homestead status, you could end up losing or being denied Medicaid benefits.

Here are some links to the Florida Property Appraiser offices where many of my clients reside:
Palm Beach
Martin County
St. Lucie County
Broward County
Indian River County
Okeechobee County