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.

The Covid-19 Pandemic has changed the world as we know it and presented daunting challenges we have not encountered in our life time. It requires a total review of your estate plan and business entities to assure you are taking full advantage of Florida laws designed to protect your family and business.

The hard new reality: What plan was best for you prior to 2020 may not be what is best for you today

Take this three minute survey for a quick assessment:

If single: Special 2020 Asset Protection Checklist for Single Professionals

If married: Special 2020 Asset Protection Checklist for Married Professionals Note to All: Two important legal documents for everyone over age 18:

• An up-to-date Florida specific Durable Power of Attorney
• A comprehensive Florida Health Care Surrogate

Special note to all parents with college students and young adults:

We now know that COVID-19 can attack any age. The last people who consider a DPA and Health Care Surrogate mentioned above are young adults. If you are a parent with adult children over age 18, I urge you to convince your sons or daughters to secure these important legal instruments. For a flat fee, we are available to prepare these documents, review the key legal provisions with your adult children, and email them for signing.

We will get through this together, as we did after Pearl Harbor and 9/11, and will be a stronger, more united country. Stay well and stay safe!

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

Irrevocable minors trusts should always be an important tool in the Family Law Attorneys bag of tools because a well designed trust can address multiple issues that cannot be fully resolved through a Marital Settlement Agreement. It may be a good idea to brainstorm possible trust solutions with an experienced estate planning attorney at the commencement of the case. Here are three examples:

Problem #1: Wife, Husband (or both) are Poor Money Managers. Example: Husband and wife have minor children, ages 8 and 10. Wife is big shopper and bad money manager. Your client is the Husband. He is concerned that if child support payments go directly to wife she will use some of the funds to buy expensive clothing and keep up her lavish life style – to the detriment of the children. Both parents agree that they want to ensure that the children go to a private high school and a prestigious college or university after high school.

Solution: Safe Harbor Educational Trust For Minor Children. A Safe Harbor Trust with prepared by a Miami Trust attorney with the following purposes: (1) Ensure that all support funds go the children, and (2) the children secure a first rate high school and university education. These goals are achieved by having the funds under the management of a third party trustee – who can be an attorney, CPA, trust company, or other trusted person. The trustee can be directed, pursuant to the Settlement Agreement, to purchase a 529 plan or Florida Prepaid College Plan for the children’s educational needs and the balance of the funds would be set aside to meet the Husband’s support obligations and the private high school. Of course, the Trust can incorporate many other unique requirements of the Settlement Agreement. Each quarter the Trustee provides an informal accounting of Trust payments so both parents are kept fully informed of all trust expenses, income, and distributions. Read More: Children’s Safe Harbor Trust.

Problem #2: Love Child But No Marriage. In this situation Mark Anthony (not the actor) has a two year old daughter from a prior relationship. The child’s mother is harassing Mark, demanding child support of over $1 million by posting pictures and demands on Facebook and Instagram. Mark is willing to make the payment, but wants to end all further communications with the mother.

Solution: As required by the Support Agreement, Mark establishes an Irrevocable Minor’s Trust with the purpose of providing for the daughter’s support needs until she is 25 or secures a degree from a fully accredited college or university, whichever occurs first. Mark funds the Trust with a onetime payment of $1 million. Thereafter, it is the Trustee’s obligation to ensure that the funds are conservatively invested and used for the health, education, and support of the minor daughter, and special activities, such as summer camp and tennis lessons. The Trustee provides an informal accounting to both the mother and Mark every 90 days.

#3: Protecting Homestead Contributed by Grandmother. Jose and Emily Perez live in a house owned by Jose’s elderly mother. They have twin daughters, age 7. Jose’s mother wants to devise the house to the twins upon her death. She wants Emily to continue to live in the house with her and the girls after the divorce as long as she does not remarry, but upon grandmother’s death, she wants the house or the sale proceeds available for the twins living needs or education until they are at least 25.

Solution: Irrevocable Homestead Trust For Minor Children. Grandmother deeds the homestead to an irrevocable Trust but retains a beneficial interest for life so Grandmother can still claim the three big benefits of homestead: (1) protection against creditors; (2) $50,000 property tax credit; (3) 3% Save Our Homes cap. Of course, grandmother must continue to occupy the house. Upon grandmother’s death, the trust can continue to qualify for homestead, upon application by the Trustee, provided one of the beneficiaries continues to reside at the home. If sold, the proceeds are distributed to the Trust accounts under the fiduciary management of the Trustee, and used for the education or other needs of the children.

Take-Away Points

1. Irrevocable Minor’s Trusts are often good “insurance policies” in a Marital Settlement Agreement to ensure marital funds go the children and are not misused by a free-spending spouse or young adult who is not a good money manager – such as the young teenage boy turning 18 who would prefer to buy the yellow Mustang rather than go to college.
2. These are just a few examples of how Irrevocable Marital trusts can be used in Marital Settlement Agreements. If is often a good idea to brainstorm with an experienced Miami Trust attorney about ways a trust may be used to protect marital funds.

Everyone admired the Anderson family. Walter and Joan had 5 children and had worked hard all their lives to give their children the best of American life: each child received a car when they were a junior in high school – provided they had a 3.2 GPA. Two children went to FSU, two went to University of Miami, and one to Cornell. They all enjoyed the benefits from Walter and Joan’s small business – a flower import business next to the Miami airport. Walter and Joan had started the business 45 years ago, the year they were married, and it had grown into a business with 19 employees and many good customers including Publix.

All children were now married and Walter and Joan had 7 grandchildren. However, only one child, Felix, was interested in the business. Felix had been working in the business since he graduated from Cornell. Every year, without fail, the children and grandchildren gathered at the luxurious home of Walter and Joan with a massive, 2,000 sq. ft. pool – and a Tiki Hut bar and grill next to the pool – for the 4^th of July, Thanksgiving, Christmas and New Year’s Eve holidays.

As in every family there were family disputes. But Walter and Joan ruled the family with an iron hand. Whenever there was a problem, the final word belonged to Walter and Joan: all the children respected their decisions. The children did ask their parents to sit down with an experienced estate planning attorney and Walter and Joan agreed, but they could never find time in their busy schedule to set up a meeting with an attorney.

Suddenly, at age 81, Walter had a stroke that left him mentally impaired and within two weeks of Walter’s stroke Joan, at age 76, had a heart attack and died. Neither Walter nor Joan had a trust or will. The family almost immediately plunged into internal fights and bitterness. Felix with his brother filed a Petition to be named Guardian for Walter; the other three children filed a counter-petition asking to be named Guardian. The Guardianship battle lasted for over 2 years and cost over $150,000. Before the court could name a permanent Guardian, Walter died.

The case is now in probate and attorney probate fees are in excess of $200,000. Felix filed another costly lawsuit against his siblings claiming that he should have 51% interest in the flower business because he had been working in the flower shop for the last 10 years without any help from his siblings and had helped grow the business. Because of the lawsuit, the business has declined; valuation experts say the business is now worth only thirty cents on the dollar.

The families no longer gather for Thanksgiving or any of the other holidays. The grandchildren have grown apart.

Take-Away Points

1. Leave clear instructions – and don’t procrastinate. Most likely, all of these problems could have been avoided had Walter and Joan left clear instructions on such critical issues as who would take charge if they became mentally incapacitated and how the flower business would be divided upon death. A living trust is simply this: clear instructions in the event of incapacity or death. This is why virtually every family – no matter how cohesive and bonded – needs a living trust.
2. Plan Now. While Walter and Joan were fully mentally capable, all the children respected their decisions. The family problems erupted when Walter had a devastating stroke and Joan died. We are all mortal – plan ahead.

Here is a scenario we see more and more with persons who try to do estate planning themselves, specifically Florida Wills, without consulting with an experienced estate planning attorney. Louise has three adult daughters, Erma, Madeline, and Roseanne. The daughters are all close and speak to each other at least once a week. Louise wants to treat them all equally. Louise has four major assets: her home, a traditional IRA, a checking account, and a savings account.

Louise downloads a Florida Will form on the internet and says each child is to get one-third of everything she might own at death. She is careful to sign the will before a notary and two witnesses with a “Self-Proving Affidavit”. Louise dies, and the daughters schedule a meeting with a Probate Attorney. At the meeting the probate attorney informs the daughters that the Will is good under Florida law. However, despite the Will, 100% of the assets go to Erma. Madeline and Roseanne are not happy. How can this happen?

1. Home. Louise wanted to avoid probate. She thought a simple way to avoid probate was to title the home in her name and Erma’s name as Joint Tenants With Right of Survivorship. She had a friend draft the deed for her home. The house did avoid a probate process, but upon her death, the house transferred to Erma by operation of law; Madeline and Roseanne received nothing.

2. Traditional IRA. Louise had an IRA that she set up many years ago when Erma was born, and before Madeline and Roseanne were born. She never thought to check the beneficiaries named on the IRA or maybe she thought the Will would over-ride any beneficiary designations on the IRA (they do not). Therefore, 100% of the IRA transferred to Erma.

3. Checking and Savings Account. Three years prior to her death, Louise had trouble keeping up with the property taxes on her house and paying bills. As a convenience, she went to the bank and retitled the checking accounts in her name and Erma, as JTWROS – joint tenants with right of survivorship. Again, by operation of law, upon her death the checking account and savings account transferred 100% to Erma.

Some persons have the mistaken idea that a signed and executed Florida Will over-rides beneficiary designations on life insurance, annuities or assets such as those owned by Louise. They do not.

How The Story Ends. Louise did avoid the costs of probate – but at a high cost to her family. Erma has two children and recently was forced to retire early. She explained to her sisters that she really needs the inheritance and cannot share it with them. After all, the probate attorney advised her that the law says she is the sole beneficiary. Madeline and Roseanne no longer talk to Erma.

There are many ways to avoid these issues from arising in your family. If you wish to consult with an experienced Weston Estate Planning attorney contact Phil Rarick at 305-709-2858.

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.

One of the most common questions I get as a Weston estate planning attorney is, do I need to record my living trust? Some persons believe that a trust needs to be publicly recorded like a corporation or a deed. This is generally wrong; not only is recording not required or needed for most trusts, in most cases recording would negate one of the chief benefits of a trust: confidentiality. Let’s look at more specific questions.

Does a Living Revocable Trust Need To Be Recorded During the Life of the Trustmaker?

The short answer is no. One of the great benefits of a living trust in this era of Google – where is it difficult to keep anything private and out of the public domain – is that a living trust is confidential. It does not need to be recorded, filed, or registered except in certain circumstances I will discuss below. A living trust, properly drafted by an experienced Weston estate planning attorney is a powerful legal instrument to protect the privacy of your personal and financial information.

Does a Living Revocable Trust Need To Be Recorded Upon Death of the Trustmaker?

No. Unlike a Will that does need to be filed with the Clerk of Court within 10 days of death, a trust can allow you to keep personal financial information out of probate. Probate is the legal and very public process many families must go through upon death of a family member. A properly “funded” living trust does not need to go through a public probate process.

Note: Funding of your trust is transferring all major assets to your trust by changing title or beneficiary designation. For example, the primary beneficiary of your life insurance should usually be your living trust. We advise reviewing the funding of your trust at least every three years with a Weston Estate Planning Attorney.

What Are the Exceptions?

The most common exception are real estate truncations, and even in such cases, it is not necessary to record the entire trust. Sometimes in real estate transactions it is necessary to file a Certification of Trust, but this Certification will not contain any personal or financial information about the trust. A Certification of Trust may be required by a title company or bank to prove that the trust exists, the names of the trustees, and that the trustees have powers under the trust to transfer the real estate or secure financing. The Certification of Trust is often a short, 1-3 page document summarizing these key elements.

Take Away Point: Avoid Snooping, Meddling Persons

One of the great benefits of a living revocable trust is that it is private and confidential – it does not need to become a public record; it does not need to be recorded, registered or filed. This is just one reason why a living trust has become the preferred planning legal instrument for most persons. The alternative, a Last Will and Testament, must be deposited with the court and usually must go through a public legal process called probate. Properly funded, a living trust will avoid probate and keep your personal and financial information off of public records and away from snooping persons that may wish to meddle in your affairs.