By Phil Rarick, Weston Trust Attorney, and Jasmine Benitez, Legal Assistant

Many real estate investors wrongly believe that a Florida Land Trust can offer asset protection. While this type of trust is known for providing privacy and simplifying estate planning, they do not provide comprehensive protection from creditors or legal claims. A better option is often a multi-member Florida limited liability company with a strong operating agreement that takes advantage of Florida’s anti-Olmstead law.

What Is a Florida Land Trust?

A Florida Land Trust is a legal structure where a trustee holds the title to a piece of property, but the beneficiary (property owner) maintains control. The beneficiary has all rights to use, manage, and profit from the property, while the trustee’s role is to handle administrative tasks. One of the most notable benefits of a Land Trust is that the beneficiary’s identity remains private, as the trustee’s name appears on public records instead.

Note: This means that if you wish to protect your privacy, then you cannot be the Trustee; you need to find a third party whom you trust to serve as Trustee.

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Can a Florida Land Trust Protect Your Assets?

While a Land Trust offers privacy, it is important to clarify that it does not provide true asset protection in the way that many people assume.

1. Limited Protection Against Creditors

A Florida Land Trust does not protect property from creditors or legal judgments because it is typically a self-settled Trust. If you face a lawsuit or have outstanding debts, creditors can still pursue the property held in the trust. Even with a Florida Land Trust, a creditor who obtains a judgment against you can still gain access to the property. The trust does not block creditors from identifying the beneficiary or forcing the sale of the property.

2. Lack of Lawsuit Protection

While the Land Trust keeps your name off public records, it does not prevent lawsuits or other legal actions from impacting on the property. If you are sued personally, your real estate holdings may still be at risk, as the trust doesn’t offer the same protection as forming an LLC or other business entities that legally separate assets.

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How Can a Florida Land Trust Be Used in Your Estate Plan?

While this trust itself does not fully protect assets, it can still be part of a broader asset protection strategy.

• Simplified Estate Planning: A Land Trust facilitates the easy transfer of property to heirs without probate. However, this advantage does not extend to asset protection against creditors.
• Combined with an LLC: For stronger asset protection, pairing a Florida Land Trust with a Limited Liability Company (LLC) can help separate your personal assets from your real estate holdings. An LLC offers protection from creditors by shielding your assets from liability tied to the property.

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Conclusion

Get it right the first time. To explore your best legal options to protect your real estate investments, contact an experienced Weston estate planning attorney who also concentrates on asset protection.

For more information, contact Phil Rarick, Weston Trust Attorney, at info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on the information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney who is experienced in Florida trust law. Your receipt of information from this website, blog, or Miami trust attorney does not create an attorney-client relationship and the legal privileges inherent therein.

By: Phil Rarick, Miami Trust Attorney You will miss this deadline if you do not read carefully – and you may need a magnifying glass to find it. Around the last weeks of August, you should have received in the mail a “Notice of Proposed Property Taxes” or “TRIM Notice” from your county property tax appraiser. This is NOT a bill but a notice. Buried at the bottom of your Notice in small print is an important deadline for appealing your tax assessment.

Clearly, the county does not want to encourage you to appeal your property taxes, exemptions, or right to claim homestead for your primary residence that you live in. Note these deadlines:

• Miami-Dade: The deadline for you is at the bottom of your Notice according to the Property Appraiser’s website. This is the deadline that is binding on you. The deadline on the TRIM notice I received for the property in Miami Lakes said September 17, 2024. Note, however, that your deadline is the one listed on the notice that you received. For more information click: Miami-Dade Trim Notice.
• Broward: September 18, 2024. For more information click: Broward Trim Notice.

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Should You Appeal? If your taxes have significantly increased, you may wish to consider an appeal of your assessment. Approximately 40% of appellants are able to successfully challenge their property tax assessments. The cost to appeal is only $15.

What To Do: If your property taxes have significantly increased, we recommend you have the valuation screened by a professional who is experienced in challenging assessments before the Value Adjustment Board. Many professional appraisers will take your case on a contingency fee; you simply need to pay the $15 filing fee. You need to make your own independent assessment of a professional to do this work.

Note: Our Firm does not do this appeal work and makes no recommendations of professionals who do; this notice is strictly a public service reminder courtesy of the Firm.

Homestead: Make sure you check your TRIM notice for your primary residence to confirm that you are receiving the Homestead tax exemption. Miami-Dade Appraiser cautions: Do Not Jeopardize Your Homestead Exemption by renting your homestead. When renting your home periodically for more than 30 days in two consecutive years, you will be ineligible for the Homestead Exemption or the SOH Cap.

Remember: It is not necessary to have all your evidence before you file. If in doubt, pay the $15 and file your appeal. The most important goal at this point is to get your appeal filed on a timely basis if you want to appeal. After the deadline, it is exceptionally difficult to file.

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Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on the information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami probate attorney or Miami Trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Its a New Year and time to file your 2026 Annual Report if you own a Florida LLC (limited liability company), corporation, or partnership. The deadline is May 1, 2026. The state will charge you a $400 late fee if you miss this deadline.

The official Florida web site is www.sunbiz.org. This site has “Consumer Notices” to alert you to bogus web sites that try to scam persons who file these reports.

How To Safely File

The legitimate email notice will state that it is from the Florida Department of State; Subject: Official 2025 Annual Report Notice for: [Name of your corporate entity].

This notice will give you instructions on how to file on line at www.sunbiz.org where you will find a banner that states, “’Florida Department of State, Division of Corporations”.

Florida Department of State fees for the annual registration of corporate entities are:

• Limited liability company: $138.75
• Corporation: $150.00
• Limited Partnership: $500

Watch For These 3 Scams Scam #1: F.C.F.S. – Florida Corporate Filing Services. This outfit sends you a notice in the mail that looks like they are official certificates from the State of Florida with a Tallahassee address and will request about $47 for a Certificate of Status. In another scam they may request $125 for filing corporate minutes. People are tricked into thinking such documents are required by the State – they are not. Scam #2: Corporate Filing Services Center. This group requests about $68 for a certificate of status – again, not required by the State. Scam #3: C.F.S – Certificate Filing Service. This gang has exceptionally impressive and official looking paper that resembles the quality paper of a birth certificate. They will request about $49 for a certificate of status. This is NOT required by the State. Note: The Department of Agriculture and Consumer Services (DACS) now has the statutory duty and responsibility to investigate potential scams and fine violators under the new “Government Impostor and Deceptive Advertisement Act” (GIDAA). For more information, see section 817.417, F.S. or visit the FDACS’s Division of Consumer Services. Good Time To Review Your Corporate Records – and Update Them

This is a good time to conduct an annual review of your LLC, corporation or limited partnership.

We have prepared a 10 Point Checklist to assist you. To get this list click here: 10 Point Checklist For Florida Corporate Entities

It may be advisable to make an appointment with our office to ensure your corporate minutes are properly prepared, are up to date, and accurately reflect key issues, such as who are the controlling officers, who are the owners, and what shares or units does each owner hold.

To schedule an appointment, call our office at (305) 709-2858 or email info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Here is the good news/bad news I received from my bank today regarding my Paycheck Protection Program (PPP) Application: The good news: your application has been approved; the bad: the SBA is out of money and you must wait for Congress to refund the program!

Although I have heard of a few small businesses that have received funding I am guessing that most persons reading this letter have encountered similar frustrations. Note: if you have received funding, please so reply.

We predicted in my first letter regarding PPP that the $349 billion fund would run out of money and this Thursday it did. It lasted two weeks! For an interesting map on where the funds were distributed nationwide see PPP Loan Allocation Map.

My message to you now is don’t give up. Yes, many small businesses with average monthly payroll over $1 million got preferential treatment by the big banks. However, the banks are incentivized under the SBA program to make small loans under $1 million.

And more encouraging: there is strong bi-partisan pressure to refund the program. (If only Congress could stop the bickering and see the urgency of the threats to millions of small businesses.) Regardless, if you have applied and are waiting to get approval, keep checking with your bank to make sure they have all necessary documentation and try to get confirmation your application has been approved. If you have not applied, do so immediately.

My son-in-law is a senior manager for a major regional bank in the western states and is working over-time this weekend to continue to process applications. My bank advisor also tells me she is working this weekend on her bank’s back-log of applications. Both banks believe the program will be refunded. I think that is a good bet.

DURABLE POWER OF ATTORNEY FROM DON LEWIS TO CAROLE BASKIN dated November 21, 1996

You can always count on the Americans to do the right thing – after they’ve tried everything else. – Winston Churchill.

Millions of small business owners and self-employed have filed for loans under the Paycheck Protection Program because part or all of the loan can be forgiven if you retain your employees and maintain their salary levels.

Okay, we know, as of this writing, millions have applied and few have received!

But assuming SBA gets through this current bottle-neck and the funding starts to flow, then your focus will be on maxing out the amount that can be forgiven.

The SBA will forgive the part of your loan that covers the first eight weeks of payroll, mortgage interest, rent, and utility payments immediately after you receive funding. You must use 75% of the borrowed loan for payroll costs; only 25% can be for mortgage interest, rent, and utilities.

The SBA will not forgive the portion of the loan used for other expenses; this part of the loan will be maintained at a 2 year loan at 1% interest rate. Loan payments are deferred for the first 6 months of the loan although interest will accrue during this time.

So even if part of your loan is not forgiven, the loan terms are exceptionally favorable for you – maybe this explains why many banks have been lying low in the grass and not soliciting applications because they simply do not want to take on a boat-load of low interest rate loans or short term loans that are quickly forgiven.

So here are 5 quick tips for maxing out your loan forgiveness:

1. If possible, do not reduce the number of full time employees during the 8 week period. The SBA will do a Head Count Analysis for this period and reduce the forgivable portion of your loan according to a head count formula.

Note #1: The CARES Act allows the business to remedy the forgiveness amount by June 30, 2020, but it is still unclear how mechanically you do this. Expect further SBA guidance on this point.

2. If possible, do not reduce employee salaries during the 8 week period. The SBA will do a Wage Analysis and reduce the forgivable portion according to their wage analysis formula for any such reduction. But see Note #1 above.
3. Keep the loan funds in a separate bank account and only withdraw to cover eligible expenses.
4. Keep a separate expense account to accumulate all eligible costs.
5. Document all eligible costs.

For a deep dive into the tax benefits for small business under the CARES act I highly recommend for other attorneys and professional advisors the recent webinar by estate tax lawyer, super-guru and friend Alan Gassman: Update On The Paycheck Protection Act Loan Rules.

Here is an updated calculator from Turbotax: Stimulus Check Calculator When Will Checks Arrive?

If you signed up for direct deposit on either your 2018 or 2019 tax return, the IRS reportedly will start issuing electronic deposits on April 9 and they should show up in your bank account by April 14. However, remember, this program is fluid and these target dates are subject to change.

If you receive Social Security Benefits and usually don’t file a tax return, the IRS will use the information from your Social Security benefits statement to calculate the stimulus check amount. They will send the check electronically if that is how you typically receive your Social Security payments.

Note: For persons who don’t file a tax return, the IRS plans to create an on-line portal where you can file a “simple return” to provide your bank account information. This portal should go live within the next few weeks.

If the IRS has to send you a paper check, priority will be given to lower income persons; higher income persons will wait longer to get their checks.

Quick Tip: If you want to try to get your check sooner, then file your 2019 tax return as soon as possible and sign up for direct deposit.

In these challenging times, we are here to help you, your family and small business successfully navigate this massive but temporary storm. We will get through this together! Look for our future alerts.

If you have never checked Florida’s website for lost accounts and abandoned property you should do so – immediately. You may be pleasantly surprised!

You may think that it is not possible that you have any “unclaimed” property held by the State of Florida – and you could be wrong.

The dirty secret is that many banks and life insurance companies will make little effort to find you if you do not notify them of your change of address. They will do the easy thing: transfer your account to the Florida Division of Accounting and Auditing, Bureau of Unclaimed Property. Thousands of such accounts end up in the Florida Unclaimed Property fund each year.

In the past we have had clients find more than $100,000 in old bank accounts that they had forgotten or failed to notify the bank of a change of address.

Special Note: Beware of scammers. There are a number of so called “private investigators” that may call you and tell you they can find lost money owed to you, but first you have to agree to pay them a percentage of the funds. Do not sign anything! They are simply doing what you can do for free by checking the website below.

The holidays are coming. Now may be a good time to see if Florida has any unclaimed property for you or a family member. The search is easy. Click Here: Florida Treasure Hunt.

Good luck!

Phil Rarick

Rarick Trusts & Wills Law, P.A.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Florida’s 30% elective share law was completely rewritten in 2001 because the old law could be easily circumvented by placing assets in a revocable trust or using non-probate transfers (e.g. life insurance, IRAs etc.) In an effort to curtail such tactics, the legislature overhauled the statute and broadened the share. The result is an expansive elective share that sweeps into the decedent’s “elective estate” many non-probate assets. See F.S. §732.201 —§732.2155.

What Is Included? Florida’s elective share statute retains the 30% share under prior law, but introduces the concept of the “elective estate” (sometimes referred to as “augmented estate”) that consists of the following property interests under F.S. §732.2035:

• Decedent’s probate estate;
• Decedent’s fractional interest in property held by the decedent in joint tenancy with rights of survivorship or tenancy by the entireties;
• Property in a revocable trust or a discretionary trust for the decedent’s benefit;
• Cash surrender value of insurance policies on the decedent’s life;
• Death benefits payable under retirement plans;
• Certain transfers within a year of the decedent’s death;
• Transfers in satisfaction of the elective share;
• “Pay on Death” or “POD”; “Transfer on Death” or “TOD”; and “In Trust For” or “I/T/F”; and co-ownership with rights of survivorship accounts. The decedent’s interest is that portion that the decedent could withdraw immediately before death without an obligation to any person. If Tenancy by the Entireties, one-half is included.

This is not a complete list; see F.S. §732.2035. What is Excluded?

Not much. Here are some of the major exclusions:

• Real property that constitutes the decedent’s homestead;
• Insurance in excess of the cash surrender value is generally excluded;
• Gifts that qualify for the gift tax annual exclusion; and
• Transfers with the written consent of the spouse. (Spousal consent to gift split is not written consent.)

Again, this is not a complete list; see F.S. §732.2045.

Deadline for Making Elective Share Election

The general rule is that the election must be made within the earlier of six months of the date of service of the Notice of Administration or two years from the date of death. F.S. 732.2135.

Rarick Trusts & Wills Law has been trusted by numerous law firms and many families during the past 20 years for probate, estate planning, trust and asset protection cases. To schedule an appointment with Phil Rarick, a Miami probate attorney, call (305) 709-2858 or email info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced in Miami probate attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

7 TIPS 1. Before You Clean Up Document Your Losses

Do not start clean up until you have documented your losses from Hurricane Irma. Use your cell phone to document your structural, equipment, and water damages with ample video and pictures. (Hopefully you also took pictures immediately prior to Irma.) Document everything, and then make a back up of those pictures/videos. Get a notebook and keep a log of all actions taken and all expenses, such as mitigation, clean up and professional fees. Of course, save all receipts.

2. Gather & Review All Insurance Policies

For damage to your home, the most obvious source of coverage is your residential property insurance policy. However, there may be other policies such as a separate flood insurance policy. In addition, you may have coverage under auto, boat, and marine policies. If you are faced with a potential claim from a third party, you may have a liability policy and an umbrella policy.

For business owners you need to review your commercial property policy. Flood loss is commonly excluded from residential policies but may be covered under your commercial policy.

If you do not have flood coverage, you still may have coverage under another policy where the covered cause contributes to the loss, such as wind, power outage, storm surge or other area wide causes.

3. Put Your Insurance Company on Written Notice

As soon as you have been able to assess the damages – and even if you have not been able to assess all the damages – put your insurance company on written notice by sending an email to the carrier. Even if you are not sure of coverage, put the company on notice. A notice is simply that: a notice that you may have a claim. There is no reason to delay. Make sure the notice is in writing – email is usually the best and fastest and sent to the agent required by your policy. At the top of your email put, “Please Confirm Receipt” and save all confirmations. In addition, most popular programs such as Outlook, allow you to get a “Delivery Receipt” and “Read Receipt”. Always try to get a confirmation of receipt.

Note: For water damage from Hurricane Irma be careful about the language you use to report it. Since many residential policies exclude damage from floods but do cover “wind-driven rain”, it may be best to contend that your house suffered “water damage” rather than state that “my house got flooded”. A professional adjuster can help assess whether the damage is caused by “wind-driven rain” or a flood. Never misrepresent your loss, but don’t help the insurance company by reaching premature conclusions that give them an excuse for denying coverage.

4. Demand An Insurance Adjuster Inspect Your Property ASAP!

Do not tolerate unreasonable delay by your insurance company. Yes, the insurance company representative may have a heavy case load following Hurricane Irma but you want to be near the front of the line. After you give notice, put the ball in the court of the insurance company: expect and demand that the company send an adjuster immediately to photograph your losses. If they fail to do so, document your requests via email. In the event the company acts in bad faith, proof of such delay will be critical to proving your case in court.

5. Assess Coverage for Business Interruption

If you have a small business, you may need to prove your lost profits for the time that the business was interrupted. Of course, the time frame for a hurricane such as Irma can begin well before Irma arrived, as most businesses had to close several days before the hurricane hit in order to give employees time to prepare. After the hurricane passed, there was down time for employees to return, since many evacuated out of state. Note: There are two main types of business interruption: one that covers for lost profits and one that covers contingent business interruption such as losses due to damage to customers or suppliers. The distinction between the two can raise complex issues. Your best answer to resolving these issues is a forensic accountant or public adjuster who specializes in assessing such revenue losses.

6. Mitigate Damages – Such as Mold

You can generally assume that you always have a duty to mitigate losses. If you have serious water damage, most policies require you to take prompt action to dry out the wet areas and will thereafter provide reimbursement for such costs. In South Florida, mold is a big issue. You may need to hire a professional mold remediation company that can do the clean-up and give you a warranty that the area will be free of mold for a period of time following the clean-up.

7. Hire Experienced Experts to Evaluate and Advocate

Remember the adjuster who reviews your loss is paid by your insurance company and your insurance company is in business to minimize loss. You may need to hire your own adjuster if the damages are significant to get a true, independent valuation. As mentioned, for business interruption, I strongly recommend securing the services of a CPA or public adjuster.

BIG WARNING: Be careful in signing an assignment of benefits to public adjusters or any remedial companies. Read the engagement agreement! If any questions, call your attorney.

5 TRAPS 1. Watch Out for Policy Deadlines: Calendar All Deadlines

If you miss a deadline in your policy, it could kill your claim. Therefore, after reviewing all your policies, calendar all deadlines, such as the deadline to file a proof of loss or file suit if you disagree with the insurance company. Also, it is good practice to put a “tickler” reminder on your calendar to advise you of upcoming deadlines.

2. Do Not Rely Upon Verbal Notice

If you report a loss by telephone, confirm that report with a follow-up email of your conversation with the insurance company representative. See Tip #3 above.

3. Do Not Disclose Information In Bulk

This caution applies to all claims, but is particularly important for business interruption claims. Be careful of requests from the insurance company for bulk downloads of your financial information. You should secure the advice of a professional adjuster to give the insurance company only relevant information to prove your claim.

4. Negotiate The First Offer: It May Be Low

You may get a good first offer – and you may not. Therefore, be prepared to negotiate your first offer. Insurance companies make profits by underpaying claims – not overpaying them.

5. Don’t Act Too Quickly To Release the Insurance Company

To close their case on your claims, insurance companies are going to want you to sign a release that will prevent you from having “settlor’s remorse” and asking for more payments at a later date. Beware of checks that state “Full and Final Settlement” because they mean exactly that: Full and Final. Prior to signing anything, or cashing any checks, it is advisable to first review the release – and the scope of that release – with your attorney.

How We Can Help

For over 20 years, we have helped small businesses in good times and bad – such as when big hurricanes like Irma strike and there is a need to resolve insurance claims. You pay for insurance for years to cover such times as these. It is time for your insurance company to step up – quickly. We are available to meet with you and assess your claims. Our initial consultation fee is $275. To schedule a consultation contact Christy at Rarick Trusts & Wills Law, (305) 709-2858 or email me at prarick@raricklaw.com. We look forward to working with you.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston business and estate planning attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

This report is a reminder that the FBAR or Report of Foreign Bank and Financial Account is due June 30. The FBAR is required for U.S. persons having a financial interest or signature authority over one or more foreign financial accounts, including a bank account, brokerage account, mutual fund, trust, estate, pension, cash value life insurance, or other type of foreign financial account having an aggregate value over $10,000 at any time during 2015.

Note: A U.S. person may have a reporting obligation even though the foreign financial account does not generate any taxable income.

The following is a helpful comment from a recent Forbes article:

U.S. law requires U.S. persons to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. Note that, by statute, these FBAR provisions apply to all U.S. persons and are not limited by the residency of the person since the laws of the U.S. are applicable to all U.S. citizens, U.S. residents, entities, including but not limited to, domestic corporations, partnerships, or limited liability companies created or organized in the U.S. or under the laws of the U. S., and trusts or estates formed under the laws of the United States. See Forbes, Reminder: FBAR Electronic Filing. Summary of Disclosure/Reporting Requirements for Off-Shore Assets

Here is a quick overview of the most common filing requirements for off-shore assets as reported in attorney Alan Gassman’s Thursday Report:

1. Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

When Required: If a U.S. person: (1) creates or transfers money or property to a foreign trust; (2) receives (directly or indirectly) any distributions from a foreign trust or; (3) receives certain gifts or bequests from foreign persons, estates or other entities.

2. Form 3520-A: Annual Information Return of Foreign Trust with U.S. Owner

When Required: By any U.S. person who is treated as an owner of any portion of a foreign trust under the grantor trust rules.

3. Form 8938: Statement of Specified Foreign Financial Assets

When Required: If U.S. person has interests in certain specified foreign financial assets exceeding $50,000 on the last day of the tax year, or $75,000 at any time during the year ($100,000 and $150,000 respectively for taxpayer Married Filing Jointly).

4. FBAR: Report of Foreign Bank and Financial Accounts

When Required: If a U.S. person has (1) financial interest or signature authority over one or more foreign financial accounts, and (2) the aggregate value of such accounts exceeded $10,000 at any time during the calendar year.

5. Form 5471: Information Return of U.S. Persons with Respect to Certain Foreign Corporations

When Required: Generally required for U.S. persons who are officers, directors, or shareholders in certain foreign corporations.

6. Form 8865: Return of U.S. Persons with Respect to Certain Foreign Partnerships

When Required: To report information regarding foreign partnerships controlled by a U.S. person; transfers from a U.S. person to a foreign partnership; or to report acquisitions, dispositions or changes in foreign partnership interests by a U.S. person.

More Information

For a good summary of Voluntary Disclosure of Offshore Assets see two recent articles by attorneys Alan Gassman, Lesley Share and Brandon Ketron as reported in Alan Gassman’s Thursday Report:

Voluntary Disclosure of Offshore Assets: Part I Voluntary Disclosure of Offshore Assets: Part II Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston estate planning attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Here is a Big Red Flag: bundling multiple investment properties in the same LLC. This is a mistake we are seeing more and more often: a real estate investor has six condo rental homes; all rental homes are owned by the same LLC. This investor has essentially defeated the purpose of the LLC. A slip and fall claim on one of the properties would expose all six to the claim.

Does this mean every property should have a separate LLC? In most cases, for maximum protection, the answer is yes, especially if each property has equity. But you may say that this will increase my accounting and paperwork – and heaven knows I already have too much paperwork.

The answer to this quandary is to have a holding company that will centralize and simplify management. Each property will be owned by a separate LLC and each LLC will be owned by the holding company. Bookkeeping can be centralized in the holding company. With a good accounting program like QuickBooks, accounting can be efficiently managed.

The investor may reply, “No problem. I have an umbrella insurance policy.” Frankly, there is no such thing as an “Umbrella” insurance policy: every insurance policy has gaps and exceptions. “Umbrella” is a great name the insurance companies have come up with to market and sell an insurance product. I recently reviewed an umbrella policy – by an established and reputable insurance company – and this policy had six pages of exceptions. Umbrella policies do have their place as a supplement to a comprehensive asset protection plan, but to make the policy the centerpiece of the asset protection structure is a big mistake. It provides a false sense of security and makes the properties much more attractive to attack.

Take-Away Points

1. Avoid bundling multiple investment properties in the same LLC.
2. Consider a holding company to centralize and simplify management of investment properties.
3. Do no rely upon umbrella insurance as a substitute for protection by an LLC.
4. A properly structured LLC that takes advantage of the protections provided by Florida law is the entity of choice for most investors and usually the most cost effective way to protect investment properties.

For further information contact Rarick Trusts & Wills Law at (305) 709-2858 or info@raricklaw.com. Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Here is a simple fact: most small businesses cannot afford or even survive a major dispute between partners if the dispute ends up in court. Such disputes can doom the small business due to interruption of the company business, distract the principal partners from focusing on growth, and soak up all capital needed to sustain the company.

The following are 5 Take Away Points for avoiding court intervention in your business:

1. Find a creative business attorney with a proven track record in resolving business disputes – outside of court. You often need a creative asset protection attorney with a good business and tax background. Typically, each side has to realize they will not get 100% of what they want – there will need to be compromise. But this compromise will be far less costly and destructive than having a bureaucratic court intervene.
2. Do the economic analysis. In other words do the math. Compare the cost, time, business interruption, and uncertainty of going to court with the minimal costs and certainty of reaching an agreement outside of court. Even a simple dispute can cost $20,000 to resolve if each side has to file court pleadings.
3. Do the litigation risk analysis. Litigation always involves risk. You risk getting a judge or jury who may not understand your case regardless of how strong it is. Every good litigator will emphasize this fact in their engagement letter with you: he or she cannot guarantee any results – there is no such thing as a “slam dunk” legal case.
4. Find a friendly forum. A court venue is by definition a non-friendly forum, and is designed to encourage expensive discovery and expand the contentious issues. A mediation venue is designed to encourage compromise, narrow the issues, focus on the big ones, and reach settlement quickly.
5. Preemptive Planning to avoid disputes. By far the best solution is to pre-empt disputes in the first place by having a clear agreement for resolving disputes, and a clear exit strategy if disputes cannot be resolved. This means that whenever you have one or more partners you should have an Operating Agreement, if you have an LLC, or a Shareholder Agreement, if you have a corporation. You may be best of friends with your partner now, but of course, just like you, your partner is going to put his or her interests, and the interests of his family first if disagreements arise.

Jay Beskin and I have over 50 years of combined experience helping business partners reach amicable agreements even though the differences between the partners first appeared to be insurmountable. Helping the small business owner grow and succeed while avoiding court intervention has been a major theme of Rarick Trusts & Wills Law for many years. For more information about our Miami asset protection services, contact us as (305) 709-2858 or info@raricklaw.com Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Family law attorneys are increasingly using trusts to secure and safeguard the payment of financial obligations in their marital settlement agreements. Such trusts can provide the following key benefits:

• Security that payments will be made in a timely fashion
• Assurance that the monies will be spent exactly as directed: for the child’s health, education, support – not for the other spouse’s whims and enjoyment
• Third party over-sight by neutral fiduciary on a monthly or quarterly basis
• Protection against outside creditors of the child or spouse

Of course, each trust must be tailored to the specific needs of the children or spouse. Here are a few examples of trusts commonly structured as irrevocable grantor trusts:

• Educational Trust. Purpose: secure private school tuition for minors and/or quality college/university education after high school graduation.
• Life Insurance Trust. Purpose: secure payment of life insurance premiums for child support or alimony obligations; prevent rogue spouse from changing beneficiaries.
• Safe Harbor Children Trust (Spendthrift Trust). Purpose: secure funds to provide for the health, support, maintenance and education of the children. This trust would provide the following protections: (a) child cannot “blow it” (ex: buy a new yellow Mustang upon turning 18) as the trust funds are administered by a neutral fiduciary; (b) child’s creditors cannot grab it; (c) if child marries without a prenuptial agreement the funds are protected from claims of the child’s new spouse.
• Minor’s Trust for Paternity Support. Example: Father believes mother to be a poor money manager but is ordered to pay support for the minor child. Father wants no more contact with mother. Father establishes a Minor’s Trust to fulfill his support obligations administered by a neutral fiduciary.

For more information. We publish a periodic Florida Trusts and Probate Report that flags key issues of interest to family law attorneys. Recent reports are:

• Avoiding a Marital Settlement Sand Trap: Losing Control Over Insurance Policies Solution: Irrevocable Children’s Safe Harbor Trust (Includes suggested marital settlement language)
• 7 Point Checklist for Pre-Divorce Planning
• 9 Key Benefits Available to Florida Same-Sex Couples
• The “Son-In-law Problem”: Keeping Your Wealth Safe – And Out of Reach From Your Daughter’s Husband

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For over 20 years, Rarick Trusts & Wills Law has been the trust firm other lawyers have turned to for help resolving their client’s estate planning, asset protection, and business matters. Since 1993, more than 500 similar law firms located outside of Florida have asked us to help their clients resolve legal issues concerning trusts, wills, and guardianship. We are frequently being asked to assist family law attorneys; we would be pleased to work with you and your firm.

For more information contact Phil Rarick at info@raricklaw.com or call 305-709-2858.

We welcome your comments or questions.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

In today’s modern medicine, coupled with our information age, where virtually every procedure can be scrutinized by an “expert” easily found on Google, it should be standard procedure for every doctor to have a comprehensive asset protection plan – one that is up-to-date to meet the challenges of our fast-changing legal system.

In keeping with this spirit, we have prepared practical checklists for the Florida physician who is in group practice and one for the physician in solo practice or employed with a hospital or clinic:

Asset Protection Checklist for Florida Physicians in a Group Practice Asset Protection Checklist for Florida Physicians With A Solo Practice or Employed by a Hospital or Clinic

The checklist should not take more than 10 minutes to complete. The checklist is not designed as a substitute for a consultation with an experienced asset protection attorney. However, it is a good stress test and a way to prepare for such a consultation.

For further information, contact Phil Rarick, a Miami asset protection attorney and Weston, Florida resident. Call Mr. Rarick at (305) 709-2858 or email prarick@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

For more information, contact Phil Rarick, a Miami asset protection attorney, at (305) 709-2858 or info@raricklaw.com.

* With special thanks for ideas from Alan Gassman, Esq., estate & asset protection planning attorney and guru.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Florida’s new LLC statute that became effective this past January 1, 2015 made fundamental changes in the state’s limited liability company laws. These changes are so basic that we recommend that you should have a Miami asset protection attorney review all LLC’s created prior to 2015. A key provision of the new law states that an LLC will be Member Managed unless the Operating Agreement or Articles of Organization expressly provide otherwise. F.S. § 605.0407(1). The new law drives home four Take-Away Points:

1. Every LLC should have an Operating Agreement. It may be tempting to use an on-line service to create an LLC. This service will likely file a simple 1-3 page Articles of Organization for you and send you a corporate book and seal. Under the new law, the default provision will mean you have established a Member Managed LLC and it may be construed as a single member LLC unless you clearly provide otherwise in the Operating Agreement or Articles of Organization. In Florida, we never recommend Member Managed LLC’s and you usually want to avoid a single member LLC. The Operating Agreement is the true “control center” of your LLC: it controls management, ownership, administration, and if properly drafted and structured, has strong provisions to make it difficult for creditors to attack. An LLC without an Operating Agreement is most likely a weak entity providing little or no asset protection and possible control issues for the primary investor.

2. Most LLC’s should be Manager-Managed. If the LLC is not Manager-Managed, and fails to have an operating agreement that serves the interests of the controlling investors, it is possible that persons who own less than 50% of the Membership interests, but previously controlled the LLC as a Managing Member, will now need to secure the consent of the other members regarding minor day-to-day administrative matters. Note: as mentioned above, under the default provisions of the new law, the LLC will be a Member-Managed LLC unless otherwise provided in the Operating Agreement or Articles of Organization. For an excellent overview of the new LLC law see Kenneth J. Crotty’s article, Avoiding the Cinderlla Effect – Don’t Let Your LLC Turn Into A Pumpkin On January 1, 2015, published in the Thursday Report by Gassman & Associates.

3. Divide the Management Powers into two positions: Administrative Manager and Executive Manager. You want your LLC operating agreement to provide robust protection. One key strategy to consider is to divide the management powers into the Administrative Manager, who has full authority to make all fundamental decisions for the LLC except only two: the power to make distributions and the power to dissolve the LLC. These powers are reserved for the Executive Manager. A creditor trying to attack the LLC will be limited to a charging order as their exclusive remedy. If the Administrative Manager has no power of distribution, the creditor will need to get jurisdiction over the Executive Manager in order to have a charging order of any value.

4. Make the Operating Agreement an Executory Contract: Include Ehmann Provisions. Thomas Wells, a preeminent tax attorney in Florida, writes that it is important for the operating agreement to be an executory contract because if one of the members is subject to bankruptcy the bankruptcy court cannot disregard the terms of the agreement and state law that provide asset protection benefits for the debtor member in light of the case In re Ehmann, 319 B.R. 200 (Bankr. D. Ariz. 2005). The Ehmann provisions recommended by Wells are intended to make clear that the Operating Agreement constitutes an executory contract with respect to all membership interests. See treatise, Asset Protection In Florida, Ch. 4-46, p. 4-45, Third Ed, published by the Florida Bar.

For more information, contact Phil Rarick, a Miami asset protection attorney, at (305) 709-2858 or info@raricklaw.com. Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

– Purchase or Sale of Residential or Commercial real estate. We will represent you on your sale or purchase. It is often difficult to find reliable, cost efficient title companies. We work in close collaboration with local, experienced attorneys who provide excellent title services. We can help you close virtually any real estate transaction at a cost often below other title companies.

– Commercial Leases. A good commercial lease is essential to protecting the value of your property by insuring that good tenants stay, and bad tenants can be quickly and economically removed. A strong, modern lease can help insure that you keep all your properties fully rented and tenants current in their payments. My partner Jay Beskin is experienced with commercial leases and is available to help make sure that your new lease protects your interests. An old lease may not be doing a good job of protecting you in 2015. If you have an old lease, Jay is available to review it.

3 Important Tips

1. Do Not Title Real Estate In An S Corporation

As my colleague, attorney Alan Gassman, says, “Don’t put real estate into darned S Corporations.” S corporations may have been the best choice 15 years ago, but today the entity of choice is a Florida or Delaware LLC (limited liability company), and in some cases the LLLP (limited liability limited partnership).

There are multiple reasons for this. First, the LLC is a higher quality of asset protection. Second, an LLC is easier to administer. Third, the LLC offers more flexibility for tax planning than an S corporation. For example, S corporations can only be owned by individuals and certain types of trusts. They cannot be owned by non-residents, corporations, or family limited partnerships. On death, the tax basis inside an S corporation does not change, but with an LLC it can increase to the fair market value of the ownership interest on date of death – potentially saving significant capital gain taxes for the surviving spouse or children.

2. Consider Conversion To LLC If You Have Real Estate In An S Corporation

If you have some properties in S corporations, there is a clear remedy: convert the corporation to an LLC.

3. Get It Right – At The Time Of Purchase

I recently purchased a new car for my wife. The car dealership, without asking me, began to prepare all the paperwork to title the car in my name. When I told them they had to redo the paperwork to put it in my wife’s name I heard a few moans, but they did as requested.

Title to your car should only be in one person’s name and it should be in the name of the person who drives the car the most. Otherwise, a good personal injury attorney would have two persons to sue: the driver and the owner. For real estate, it is equally important to make sure the property is titled to maximize protection.

The point here is get it right at the beginning – before you put any name on a real estate contract. Therefore, before you purchase real estate – before you sign anything – give us a call. We do not charge for short telephone conversations with our clients. We will help you determine the best way to hold title and if needed, assist with the sale or purchase.

For more information, contact Phil Rarick or Jay Beskin at (305) 709-2858 or info@raricklaw.com. Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.