Archive for the ‘Thursday Reports’ Category

The Thursday Report – 2.12.15 – We Have Never Been in a War Helicopter

Posted on: February 12th, 2015

Delaware Trusts and the Statute of Limitations

Big Changes to the Rising Costs of State University Tuition

Obtaining a Taxpayer Identification Number

The New Rules of Estate Planning Question & Answer

Gregory Gay’s Corner – Health Care Surrogate Designations

Richard Connolly’s World – When a Will is Not Enough and Law School is Buyers’ Market with Top Students in Demand

Thoughtful Corner – Let’s All Slow Down by Gregory W. Coleman, President of the Florida Bar

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

 This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Delaware Trusts and the Statute of Limitations
by Travis Arango

TrustCo Bank v. Mathews is an ongoing Delaware case in which the judge has determined that a self-settled spendthrift trust will not be accessible to a creditor who has claimed that the grantor maintained “impermissible control” over property transferred to it. This will be the first of our continuing coverage and analysis of this important case.

Executive Summary:

TrustCo Bank v. Mathews is a case that involves a potential fraudulent transfer and an attempt by a creditor to gain access to these funds. The issue of whether the transfers are fraudulent was never discussed as a more pressing issue arose: whether the statute of limitations had run and which state’s statute applied. The case involved contacts in Delaware, Florida, and New York. The plaintiffs argued that New York law applied, while the defendants argued that Delaware or Florida law applied. You can probably guess that New York has the longer statute of limitations while Delaware and Florida have shorter statutes. The plaintiffs also contended that Ms. Mathews maintained impermissible control over the property that was transferred and thus, the Qualified Dispositions in Trust Act (QDTA) does not apply. The court stated, “I find it unnecessary to resolve the question of whether, in this case, the QDTA requires application of Delaware’s fraudulent transfer statute of limitation without regard to the normal choice of law analysis or the borrowing statute.” In the end, the plaintiff’s claims were barred for many reasons, regardless of which state law was used.

Facts:

In TrustCo Bank v. Mathews[1] the plaintiff TrustCo Bank had given a loan for $9,300,000 to the defendant StoreSmart, a Florida LLC. Ms. Mathews, a resident of Florida, had personally guaranteed the loan. Mathews had created three Delaware trusts in 2006. StoreSmart defaulted on the loan in 2011, and a foreclosure action was filed against it. A judgment was rendered in 2011 in favor of TrustCo for $8.2 million. TrustCo assigned its right in the foreclosure judgment to ORE in 2012. Plaintiffs, ORE and TrustCo, claimed that the transfers to the three trusts were fraudulent. However, the issue of whether the transfers were fraudulent or not was not reached by the court since the issue became whether the statute of limitations had run. “The parties dispute whether the initial transfers that funded the Three Trusts were fraudulent at all…however, I need not resolve this dispute.”[2]

There were two sets of transfers that occurred in January of 2007 where Ms. Mathews transferred stock to two of the trusts. The Plaintiffs claimed that they did not have sufficient notice of the transfers until July 19, 2011. Defendants stated that the Plaintiffs had multiple occasions of notice. One such time was when Ms. Mathews presented a financial statement showing a net worth of $11,773,446 on March 25, 2008. Then on April 11, 2008, a revised statement was sent to TrustCo showing her net worth at $5,578,857, and disclosed the presence of new irrevocable trusts. This statement also included information on the trusts.

The issue became what state statute of limitations would apply: Florida, Delaware, or New York. Under New York law, the statute of limitations states that a claim must be brought within “the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it.”[3] Under Delaware law, a claim must be brought “within 4 years after the transfer was made or the obligation was incurred or, if later, within 1 year after the transfer or obligation was or could reasonably have been discovered by the claimant.”[4] Florida’s statute of limitations is the same as Delaware’s. The court stated that if Delaware or Florida’s statute applies then the transfers are outside the limitations period.

There is a general rule that the court is to apply the forum state’s statute of limitations. However, Delaware modified this rule with its “Borrowing Statute,” which states:

Where a cause of action arises outside of this State, an action cannot be brought in a court of this State to enforce such cause of action after the expiration of whichever is shorter, the time limited by the law of this State, or the time limited by the law of the state or country where the cause of action arose, for bringing an action upon such cause of action. Where the cause of action originally accrued in favor of a person who at the time of such accrual was a resident of this State, the time limited by the law of this State shall apply. [5]

The Delaware Supreme Court has stated that there are some situations where the Borrowing Statute does not apply.[6] The exception to the statute is only when absurdity would result. The plaintiffs attempted to argue that the dispute arose only out of New York, and that it would not be fair to use the Borrowing Statute. However, the court stated that the contacts to New York are not as important as the plaintiffs claim. [7]

The court used the “most significant relationship” test to determine what state the cause of action arose out of. The court held that Florida had the most significant relationship, with Delaware a close second, and New York being last. The court was careful to point out that, even if it had found that New York has the most significant relationship, there is nothing in the facts that would allow an exception to the Borrowing Statute rule. Thus, the court held that the stock transfer claims were barred by the statute of limitations.

The court then gave an analysis as if the New York statute of limitations applied. The court held that, even if it applied, the claim was still barred. New York law has a duty of inquiry, which reads as follows:

“Where the circumstances are such as to suggest to a person of ordinary intelligence the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth…knowledge of the fraud will be imputed to him.” [8]

The defendants had shown evidence of four other dates prior to July 19, 2011, where the plaintiffs had notice of the allegedly fraudulent transfer. The evidence consisted of deposition testimony in 2010 where the transfers were discussed. Thus, this shows that TrustCo had an official that was aware of the transfers by July 2010 and because they filed suit in March 2013, their claims were untimely under New York law.

Comment:

Vice Chancellor Parsons’ opinion is extremely well-written. I appreciate his thoroughness because most opinions will select the law that is to be used and just analyze it from that perspective. Here, however, Vice Chancellor Parsons not only applied the correct law but also analyzed the issues under the other laws in case he chose the wrong state law from the outset. This does not leave the reader guessing as to what would have happened if another state statute of limitations had applied. The analysis given seems correct and helps to support the proposition that asset protection trusts situated in states that have favorable statute of limitations and “borrowing” statutes can have important advantages for those who wish to protect their assets from creditor situations that have not yet arisen.

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[1] A copy of the case can be found at http://courts.delaware.gov/opinions/download.aspx?ID=218050
[2] Id.
[3] N.Y. C.P.L.R. § 213(8).
[4] 6 Del. C. § 1309.
[5] 10 Del. C. § 8121.
[6] The court goes on to talk about Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical Co. 866 A.2d 1 (Del. 2005). In this cause, a Saudi Arabian sued his joint venture partners in Delaware. Saudi Basic argued that the Borrowing Statute required the court to use the Delaware statute of limitations. However, the court did not apply the statute because under Saudi law, the claims were “eternal,” and had no limitation period. The court held that applying the statute would “subvert the statute’s fundamental purpose…” Id. At 18-19.
[7] The court cited to Juran v. Bron 2000 WL 1521478 (Del. Ch. Oct. 6, 2000) and stated that this situation is not as severe as the facts in Juran.
[8] Gutkin v. Siegal, 926 N.Y.S.2D 485, 486 (A.D. 2011) (quoting Armstrong v. McAlpin, 699 F.2d 79, 88 (2d Cir. 1983)) (internal quotations omitted).

Big Changes to the Rising Costs of State University Tuition
by Travis Arango

Florida has been called many things, such as the Sunshine State or the Gunshine State, but what we should be known for is affordable state colleges. Florida has seven schools in the top seventy top values in public colleges and universities. Of the Top 10, the University of Florida, which comes in at number three, has the lowest total in-state cost.1 These costs will only get better, as House Bill 851 takes effect.2

House Bill 851 became law July 1, 2014. It reduces future costs at state universities. The bill accomplishes this by limiting increase of the Tuition Differential Fee that occurs annually. The maximum increase has been changed from 15% to 6%.3

People who purchased Florida Prepaid plans can already see these effects. Florida Prepaid sent out a letter stating that because of these changes, the monthly price has been drastically reduced. One customer had his monthly price of $879.52 reduced to $443.69. This decrease will add up to a total savings of $23,970.65 for that particular plan. This particular customer even got a refund check based on an overpayment to the account because of these changes. This is a serious change that any parent should be happy about.

If someone with an 8 year old child plans for that child to go to college in 2025 when they are 18, the monthly payment plan is $250.80, the 5 year payment plan is $522.69 and the lump sum payment is $27,250.34.

It is good to see that Florida is taking steps to stop the rise of education costs and to slow down the student loan debt crisis that many young Americans face today and will face in the future. This is certainly a step in the right direction and a big step nonetheless.

To see a copy of House Bill 851, please click here.

For more information about this topic, please click here.

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1 Kiplinger’s Best College Values
2 Bill Text
3  Tampa Bay Times. “Florida Gov. Rick Scott signs bill to give in-state tuition to undocumented students.” June 9, 2014.

Obtaining a Taxpayer Identification Number

The following details how to obtain a taxpayer identification number and is excerpted from our New Entity Formation Letters.

Taxpayer Identification Number Application (Form SS-4):

Please click here to download the Form SS-4 Application for Employer Identification Number.

A taxpayer identification number can be obtained for [NAME OF ENTITY] in one of several ways. Please indicate which of the choices below you would prefer to use in order to obtain a taxpayer identification number. We typically suggest using alternative A, whereby you can simply execute the attachments and send them to our office so that we can handle this on your behalf with the IRS.

  1. Our office can contact the IRS on your behalf by internet to obtain the taxpayer identification number (“EIN”). This procedure requires that we have a signed and completed Form SS-4 (Taxpayer Identification Number Application) in our possession, which can be faxed, e-mailed, or physically given to us. If you want us to contact the IRS in this manner, please sign the attached Form SS-4, insert your social security number at Item 7b, and return the form to us by fax, email, or mail.
  2. You can fax the signed and completed Form SS-4 to the Internal Revenue Service at FAX-TIN: 1-631-447-8960. You must provide your fax number so that the IRS can fax the EIN back to you, which fax should be sent within 4 business days. By using this procedure, you are authorizing the IRS to fax the EIN without a cover sheet. Please feel free to provide the IRS with our fax number if you want us to receive this information from them.
  3. You can obtain this on the Internet (instantaneously) by going to irs.gov with the attached SS-4 form and answering the questions consistent with how we have filled out this form. After logging onto the website, select “Online EIN Application” located on the left-hand side under Online Tools. Scroll down and click on “Apply Online Now.” Please note, the information contained under the Third Party Designee portion of the form we have provided is only necessary when our office is applying for the EIN and not relative to the online process. Once you have completed the online application, an EIN will be issued immediately. You will be given the option of printing out an official letter awarding the EIN, and we recommend that you print this letter for your records and please provide your accountant and our office with copies.

In addition to applying for a taxpayer identification number, you will also need to apply for, register for, or comply with any and all other tax or governmental requirements, including but not limited to state sales tax, social security withholding, federal unemployment tax, state unemployment insurance tax, state corporate income tax, state intangible tax, county intangible and tangible tax, workers’ compensation, state and local occupational licenses, etc. Some of these may not be applicable to your particular business.

The New Rules of Estate Planning Question & Answer

A few months ago, we received the following email from a client:

Alan,

I read a Wall Street Journal article this weekend on “The New Rules of Estate Planning.” It mentioned that exemption equivalent trusts aren’t needed anymore due to the portability of the estate tax exemption between married couples (which we’ve discussed). It went on to say that the trusts may hurt tax-wise due to the loss of step-up in basis at the first death.

What are your thoughts on this, and should we meet to discuss?

Thanks for your thoughts,

John Client

We responded with the following email:

John,

The portability allowance does not grow with the CPI, and a credit shelter trust formed on the first death can grow as the investments grow. The portability allowance is lost or reduced if the surviving spouse remarries and the new spouse dies before the surviving spouse and leaves no such allowance, or leaves a smaller allowance, or has a personal representative that refuses to fill out the necessary estate tax return forms to allow for the allowance.

We do have new language that we use to give the surviving spouse and the Trustees the ability to decide whether to use portability or fund the credit shelter trust after the first death, and to also allow for a stepped up basis on the second death to allow for capital gains avoidance if the estate tax goes away or is less than the capital gains tax up the road.

It would be easy to add this language to your existing trusts.

It never hurts to have a sit-down review of where you stand. Please let me know if you have any other questions, thoughts, or comments.

Best regards,

Alan Gassman

To see the Wall Street Journal article in question, please click here.

Gregory Gay’s Corner
Health Care Surrogate Designations

2 - Gregory Gay

Gregory G. Gay, Esquire is an attorney from Tarpon Springs who specializes in meeting the special needs of senior citizens and the disabled. He is Board Certified in Wills, Trusts & Estates and in Elder Law by the Florida Bar. He has also been named a Certified Advanced Practitioner by the National Elder Law Foundation.

Mr. Gay is the author of the Florida Senior Legal Guide, the 8th edition of which can be purchased by clicking here. In the coming weeks, we will be profiling some of the best chapters from this excellent publication. Our deepest thanks to Mr. Gay for making this content available to Thursday Report readers!

This week Gregory Gay’s series continues with a brief conversation on health care surrogate designations, including what this means, what role the surrogate plays, and how a health care surrogate can be established.

Health Care Surrogate Designations

A person is presumed to be capable of making health care decisions until determined to be incapable of making such decisions. A patient is considered incapable of making health care decisions only after the patient’s attending physician gives an opinion that the patient lacks the mental ability to make health care decisions or give informed consent. The attending physician will indicate this in the patient’s medical chart.

Before becoming incapacitated, a person can sign a written document that names another person as a surrogate to make his or her health care decisions. This document must be signed by the person making the designation in the presence of two adult witnesses. A person physically unable to sign this document may, in the presence of two subscribing witnesses, direct that another person sign the document for him or her. The person who is to serve as the surrogate cannot serve as a witness to the signing of the document. At least one of the witnesses must be someone other than the patient’s spouse or blood relative. A document designating a health care surrogate may also designate an alternate surrogate. The alternate surrogate may assume his or her duties as surrogate if the person originally named as surrogate is unwilling or unable to perform his or her duties.

A health care surrogate has the authority to make all health care decisions for the person during a time of mental incapacity. A person may designate a separate surrogate to consent to mental health treatment in the event he or she is determined by a court to be incompetent to consent to mental health treatment and a guardian advocate is appointed.

The surrogate must make all health care decisions in accordance with the previous instructions of the person for whom he or she is serving. Health care decisions include consenting, refusing to consent, or withdrawing consent to any and all heath care, including life-prolonging procedures. If there is no indication of what the principal would have chosen, the surrogate may consider the patient’s best interest in deciding that proposed treatments are to be withheld or that treatments currently in effect are to be withdrawn. Health care decisions also include applying for private, public, government, or veterans’ benefits to defray the cost of health care. A health care surrogate also has the right to access all medical records of the person who designated him or her that are necessary for the health care surrogate to make decisions involving health care and to apply for benefits.

A surrogate’s authority to make health care decisions remains in effect until there is a determination that the person who signed the health care designation has regained the capacity to make medical decisions. Upon the commencement of the surrogate’s authority, the patient’s spouse and adult children must be notified that such an appointment has been made and that the surrogate has the authority to make decisions for the patient.

If the surrogate is not able or not willing to make health care decisions according to the patient’s wishes and no alternate health care surrogate is named, the health care facility caring for the patient may seek the appointment of a health care proxy.

Next time, Gregory Gay’s series will continue with a discussion of the purposes and specifications of the Baker Act statute, as well as a look at Guardian Advocate Provisions under the Baker Act. If you would like to read the Florida Senior Legal Guide in its entirety, please visit http://www.seniorlawseries.com. Mr. Gay can be reached at gregg@willtrust.com.

Richard Connolly’s World Double Header:
“When a Will is Not Enough” &
“Law School is Buyers’ Market with Top Students in Demand”

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with a link to the articles.

This week, the first article of interest is “When a Will is Not Enough” by Lindsay Gellman. It was featured in The Wall Street Journal on November 15, 2014.

Richard’s description is as follows:

When there’s a will, there’s a way – and sometimes an ugly family feud.

To head off bickering over your personal possessions, consider supplementing your will with a letter of instruction…

Unlike a will, the letter of instruction is not legally binding, but it can be a helpful road map for your family in your absence and can provide more detail than is customary in a will.

Please click here to read this article in its entirety.

Our second article of interest this week is “Law School is Buyers’ Market, with Top Students in Demand” by Elizabeth Olson. This article was featured in The New York Times on December 1, 2014.

Richard’s description is as follows:

Summer was waning and students were already packing for the fall semester, but Professor Daniel B. Rodriguez, dean of the Northwestern University School of Law, was still fielding phone calls from incoming students seeking to bargain down the tuition at the elite school.

“It’s insane,” Professor Rodriguez said. “We’re in hand-to-hand combat with other schools.”

In the new topsy-turvy law school world, students are increasingly in control as nearly all of the 204 accredited law schools battle for the students with the best academic credentials.

“Students are voting with their feet and demanding a better deal,” said Professor Rodriguez of Northwestern, who is also president of the Association of American Law Schools. “And they are willing to spend less,” he said, meaning they are seeking the best deal.

Please click here to read this article in its entirety.

Thoughtful Corner
Let’s All Slow Down
by Gregory W. Coleman

Coleman Final

Gregory W. Coleman has been practicing law in Palm Beach County for more than two decades. He joined the Law Firm of Critton, Luttier & Coleman in 1995 and was named partner in June of 2000. In June 2014, he was sworn in as President of The Florida Bar. Coleman has been awarded the Florida Bar President’s Award of Merit by The Florida Bar three times; he is the first lawyer in Florida to receive such a distinction.

The following was published in The Florida Bar Journal in February 2015. You can see the original post by clicking here. Thanks to Gregory for allowing us to share this great article with our Thursday Report readers!

Let’s All Slow Down

Is it me or is the world we live in moving faster and faster? I remember the days when the only distraction at work was my phone, and it had a cord.

Today, we are bombarded with an endless array of digital information and communication. We feel compelled to constantly check our emails, text messages, Facebook page, Twitter account, voicemails, etc, etc, etc.

This never-ending cycle of checking our devices for mostly useless information has created a society of people who are constantly distracted and unable to focus on any one thing for more than five minutes. This is not a good thing.

Fifteen years ago, a trial lawyer could take a paper file and sit in a conference room undisturbed. He or she could spread out the pleadings, depositions, discovery, and exhibits and carefully, thoughtfully, and diligently create a strategy for the case. This quiet time was absolutely critical to creative and analytical thinking. As lawyers, this is what we were trained to do. He or she could really think about the case and use his or her education and training to properly prepare the matter for trial.

These uninterrupted blocks of time seem to be long gone. Today, the same lawyer often will not isolate himself or herself in the way necessary to conduct this thoughtful exercise. Instead, we run from email-created emergency to emergency. We are constantly putting out small fires or trying to avoid them.

Everyone today seems to expect an instant response to their instant communication. Often, if an email is not returned within 30 minutes, the client, opposing counsel, or managing partner is sending a follow-up email asking why you did not respond to this missive…and the cycle continues.

Additionally, instant communication sometimes creates an instant response often attached to an instant emotion. Fifteen years ago, if you received a nasty letter, you could dictate a nasty response, and it would take a day or so for you to get it back from your assistant. When you received the draft back, you would cross out all of the nasty parts of the response because there was a built-in cooling-off period. Today, people often respond with a visceral reaction due to the instant emotion.

So what do we do to combat this digital epidemic? We need to learn to use more self-control. We need to learn to use restraint. We need to take a deep breath and wait before we hit the “reply” button when we receive a nasty communication.

We need to slow down. This is easier said than done, but I am convinced we can do this together.

We also need to learn to step away from our devices. We need to re-engage with our surroundings. Watch a sunset or simply listen to the waves. Hug your child or loved one. Soak up a little bit of this beautiful world we live in, and remember, it won’t last forever.

Humor! (or Lack Thereof!)

Alan Gassman is back stateside again, but if you tried to email him while he was away on his tour of Italy, you might have received one of the following messages in return, written by Alan and Kristen Sweeney.

Rome

Great to hear from you, but I’m not at home-a,
I’m currently visiting the city of Roma.
There’s pasta to eat,
And a cool Pope to meet,
I hear the Pantheon’s just a big dome-a.

Did you know that Italy measures wine by the liter?
And the biggest church here is the home of St. Peter?
I’m so excited that I can
Go visit the Vatican,
I hope a Swiss guard is my greeter.

On seven great hills the city was founded,
By men raised by wolves- you could say they were “hounded.”
One killed the other,
Although they were brothers,
In this history Roma is grounded.

Marcia, Brent, and I are planning to visit,
Old Trevi Fountain, magical- is it?
Lots of museums,
And of course the Colosseum,
Before you toss your coin, kiss it!

Before you fret or say what a hack!
I’m definitely coming back.
Maribeth or Tina are your guides,
They are always on your side,
So that nothing you need you will lack.

Pompeii

I’ve left on a trip,
To a place pretty hip,
We are away to visit Pompeii.

There’s a whole lot here stewin’,
It’s more than just ruin,
I’ll tell Brent and Marcia you said hey.

Though Pompeii’s pretty tiny,
It’s famous from Pliny,
Who wrote all about it in a letter.

There was lots of destruction,
A population reduction,
Events not exactly for the better.

The gold and the cash
Were all trapped in the ash
When the great big volcano erupted.

Although you could say,
In a curious way,
Those assets could now be deducted.

If you should need help,
Give Maribeth or Tina a yelp,
(You can always bribe them with guava).

They’re totally free,
To take notes for me,
Until I’m done exploring the lava.

Upcoming Seminars and Webinars

LIVE WEBINAR:

John D. Goldsmith and Alan S. Gassman will present a webinar on BP OIL SPILL CLAIMS – IMPORTANT ISSUES FOR ADVISORS.

Date: February 17, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: To register for this webinar, please click here or email agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

March 4, 2015 – Premium Financing in 22.5 Minutes

March 17, 2015 – Split-Dollar in 22.5 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

4 - Rao and Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

5 - Rates

The Thursday Report – 2.5.15 – The Leonardo da Thursday Report

Posted on: February 5th, 2015

Leonardo da Thursday Trivia Test

Avoiding Disaster on Highway 709 – Gift Tax Return Filing Checklist with a Hypothetical Fat Pattern and Sample Form 709 Completed Pages

Don’t Inadvertently Lose S Corp Losses When Terminating an Irrevocable Trust Holding S Corp Stock – Not All Unused Losses are Treated Equally by Logan Baker

Richard Connolly’s World Double Header – PA First State to Restrict Lawyers as Financial Advisors and A Peek at the Highest Earners’ Tax Returns

Thoughtful Corner – Public Listening or When Silence Speaks by Matthew Stillman

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

 This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Leonardo da Thursday Trivia Test

2 - da Vinci

This week, we here at the Thursday Report are coming to you live from Italy. Not the Italy at Epcot, but the real Italy, where they invented Pizza Hut and Olive Garden! Take our Leonardo da Thursday Trivia Test and win a free last supper for you and eleven friends.

1.) What was Leonardo da Vinci’s father’s profession?

  1. Legal Notary
  2. Painter
  3. Barber
  4. It was never identified.

ANSWER: (A) Leonardo da Vinci’s father was a legal notary in the Republic of Florence.

2.) What was unique about how Leonardo painted The Last Supper on the wall of the Santa Maria delle Grazie monastery dining hall in Milan?

ANSWER: Leonardo painted The Last Supper on a dry wall rather than employing the traditional fresco style of painting on wet plaster. He wanted the painting to have a greater level of detail and luminosity than could be achieved with a fresco style painting, so he sealed the stone first, painted the wall with a white lead undercoat, and then applied his work on top. Additionally, rather than isolating Judas, the disciple who would eventually betray Jesus, to the opposite side of the table from the other disciples, da Vinci chose to seat him among the others leaning back into the shadows.

3.) Which of the following was a function that da Vinci told the Duke of Milan he could perform if hired in a letter written in 1482?

  1. Construct bridges
  2. Construct subterranean passages
  3. Supply infinite means of attack and defense in times of war
  4. All of the above

ANSWER: (D) In an effort to secure a job with the Duke of Milan, Leonardo da Vinci wrote what we would refer to today as a cover letter, detailing 10 functions he could perform that would prove invaluable during times of war. Surprisingly, his artistic abilities (painting and sculpting) did not make his list of 10 talents and were, instead, mentioned as an afterthought at the bottom of the letter. Click here to look at the letter and click here to see a translation of the letter. Leonardo da Vinci got the job, which he held until the French captured his employer.

4.) Leonardo da Vinci was accused of sodomy, but charges against him were dismissed.

TRUE                   or                    FALSE

ANSWER: TRUE. Leonardo da Vinci and 4 others were arrested upon accusations of sodomy in 1476, but charges were eventually dismissed because the accusations against him were not signed. Legally, for sodomy charges to end in prosecution, the initial accusations could be made secretly, but they could not be made anonymously, and no witnesses against da Vinci ever came forward. Additionally, sodomy charges seldom ended in punishment in Florence, Italy, where homosexuality was common and generally tolerated.

5.) Which US city is currently displaying Leonardo da Vinci’s Codex Leicester, a 72-page manuscript containing da Vinci’s observations on the arts, science, and engineering?

  1. Los Angeles, CA
  2. Austin, TX
  3. Phoenix, AZ
  4. New York City, NY

ANSWER: (C) The Codex Leicester was purchased by Bill Gates in 1994 for $31 million. It is currently on loan to the Phoenix Art Museum in Phoenix, Arizona, where it can be viewed by the general public until April 12, 2015. For more information, click here.

Avoiding Disaster on Highway 709
Gift Tax Return Filing Checklist with a Hypothetical Fact Pattern and Sample Form 709 Completed Pages
by Kenneth J. Crotty

3 - Ken

The following checklist could help a practitioner obtain the necessary information to complete a gift tax return and provide adequate disclosure to the IRS.

  • Donor Information
    • Donor’s name, address, and social security number
    • Does the donor have a deceased spousal unused exemption amount?
    • Copies of past gift tax returns that were filed
    • Confirmation regarding any consideration received by the donor for a gift
    • Is the donor opting out of automatic allocation of generation skipping tax?
    • Citizenship of donor
  • Spouse’s Information
    • Confirmation that the donor’s spouse is a United States citizen or resident
    • Will the gifts be split? If so, the consenting spouse’s name and social security number
    • If gift splitting is desired, confirmation that the clients were married when the gifts were made
    • If gift splitting is desired and the donor and the donor’s spouse have divorced, confirmation whether either the donor or the donor’s spouse have remarried during the taxable year
  • Reportable Gifts
    • List of all gifts made, including gifts to spouses and charitable donations
    • Were gifts made to 529 Plans?
      • If so, were these intended to be split ratably over a five-year period?
    • Inquire about life insurance premiums paid for life insurance policies owned by Irrevocable Trusts
    • Did the donor establish a lifetime QTIP Trust?
  • Information Required for Particular Gifts
    • The donee’s name and address and relationship to the donor
    • Description of the gift
    • Donor’s adjusted basis of the gift
    • The date of the gift
    • The value as of the date of the gift
    • Appraisals or explanations of valuation discounts
    • Obtain Form 712 for transfers of life insurance policies
    • For stock sold on an established exchange, determine the number of shares gifted, whether the shares are common or preferred, obtain the CUSIP number, and determine the mean between the highest and lowest quoted selling prices on the valuation date
    • For transfers of closely held corporations, obtain the balance sheet, earning statements, and dividends received for the five years prior to the gift.
    • If bonds are transferred, obtain the number of bonds transferred, the principal amount of each bond, the name of the obligor, the date of maturity, the rate of interest, the date or dates when interest is payable, the series number, exchanges where listed, or if unlisted, the principal business office of the issuer, the CUSIP number, and determine the mean between the highest and lowest quoted selling prices on the valuation date.
  • Information Required for Trusts
    • Copies of all of the Trusts which received gifts during the year (or a brief description of the terms of each trust)
    • Taxpayer identification number for the Trust
    • Name and address of Trustee of Trust
    • Check Trust documents for Crummey right of withdrawals
    • If the Trust does not provide for Crummey rights of withdrawal but the Trust allows the grantor to designate withdrawal powers, a copy of the designation should be attached.

Hypothetical Fact Pattern

John and Mary Doe are married to each other and have been married to each other for all of 2013. John was widowed in 2011, prior to marrying Mary.

John and Mary have two children: Henry Doe and Ruth Anderson.

John and Mary have five grandchildren: Jean Anderson, Lily Anderson, Kate Anderson, Stella Doe, and Buddy Doe.

Mary is the grantor of the Ruth Anderson Irrevocable Trust. Each of Ruth, Jean, Kate, and Lily have Crummey rights of withdrawal.

During the 2013 tax year, John and Mary made the following gifts:

  • 1-1-2013; John gifted $28,000 to Henry;
  • 3-31-2013; John made a $40,000 donation to Community Foundation;
  • 8-1-2013; Mary made an $18,000 tuition payment to College University for Stella;
  • 9-1-2013; Mary gave Stella $18,000;
  • 9-1-2013; Mary funded a 529 Plan for Buddy with $140,000;
  • 12-1-2013; Mary contributed $210,000 to the Ruth Anderson Irrevocable Trust; and
  • 12-30-2013; John contributes $6,000,000 to the Doe Descendants Trust

Find a completed Form 709 using the above stated hypothetical fact pattern by clicking here.

This concludes Ken Crotty’s series on Avoiding Disaster on Highway 709. To view the article in its entirety, please click here.

Don’t Inadvertently Lose S Corp Losses When Terminating an Irrevocable Trust Holding S Corp Stock – Not All Unused Losses are Treated Equally
by Logan Baker

3 - Logan

Logan Baker is a Trust Advisor with Regions Private Wealth Management in Clearwater. Prior to joining Regions, Logan practiced law in Vermont, Montana, and Florida, primarily in the areas of estate planning, taxation, and insurance regulation. Logan received his J.D. from the University of Montana School of Law, his LL.M. from the New York University School of Law, and his M.B.A. from Florida State University.

It is often beneficial to place ownership of S corporation shares into a trust for tax, estate, succession, and other planning purposes. However, not all trusts are permissible S corporation shareholders. Check with an advisor before transferring ownership of S corporation shares, since placing ownership of the shares into a non-permissible trust may jeopardize the corporation’s Subchapter S election. Assuming the shares are owned by a trust that is permitted to hold S corporation shares under IRS rules, the S corporation’s income, loss, and other tax attributes will “pass through” to the trust. While this “pass through” treatment is relatively simple when an individual owns the S corporation shares, an additional layer of complexity arises when the shareholder is a trust. This additional complexity is due in part to the fact that the trust lies between the income and loss-generating S corporation and trust beneficiary.

In many cases, the trust will eventually terminate and distribute the S corporation shares and/or any other trust property to the beneficiary. In addition to the distribution of property, IRS rules also allow the trust to, in effect, “distribute” certain tax attributes to the beneficiary. Code Section 642(h) provides that unused net operating loss carry forwards and unused capital loss carry forwards are allowed as deductions to the beneficiary of a trust to the extent existing and unused at the time of termination of the trust. This provision is quite helpful, since important non-tax considerations regarding trust termination can be addressed without worrying that these unused losses will be wasted upon trust termination.

However, not all unused losses are treated equally under the IRS rules. While Code Section 642(h) allows the trust beneficiaries to utilize a terminated trust’s unused net operating losses, the same cannot be said for another common type of loss that looks very similar to a net operating loss. S corporations and their shareholders frequently encounter the loss limitation of Code Section 1366(d)(1), which prevents an S corporation shareholder from taking a “pass through” loss that exceeds the shareholder’s basis in the S corporation stock. For example, if a shareholder has a basis of $100,000 in the stock of an S corporation, and that corporation incurs a $150,000 loss in a given year, the shareholder would be limited to a “pass through” loss of $100,000 in that year. The remaining $50,000 of the loss is suspended until a future year in which the shareholder has sufficient basis to utilize it.

S corporation stock basis, for purposes of this limitation, is generally based upon past contributions plus undistributed income that has been recognized by the company, less distributions, and plus loans from shareholders. Section 1366(d)(1) provides that basis for this purpose is determined with regard to paragraphs (1) and (2)(A) of Section 1367(a), in addition to shareholder’s basis in S corporation debt.

A loss that is suspended under Code Section 1366(d)(1) is similar in several respects to a net operating loss that has been carried forward in that both arise from an excess loss limitation, and (with certain limitations) both may be carried forward until they can be used. However, upon termination of a trust that holds S corporation stock, only the net operating loss can be used by the trust beneficiaries. This is because the suspended loss under Code Section 1366(d)(1) is not actually “occurred” for federal income tax purposes until the trust has sufficient basis to absorb it. If the loss is still suspended in the year the trust terminates, it follows that the trust has insufficient basis in that year and that the loss has not yet “occurred.” Therefore, there is no loss to which the trust beneficiaries could succeed. Support for this interpretation is found in Treasury Regulation Section 1.1366-2(a)(5)(i), which provides that the suspended loss “is personal to the shareholder and cannot in any manner be transferred to another person.” That section also provides that: “If a shareholder transfers all of the shareholder’s stock in the corporation, any disallowed loss or deduction is permanently disallowed.”

In the case of a trust with a suspended loss with respect to its S corporation stock, these provisions mean that the suspended loss is personal to the trust and cannot “in any manner be transferred to” the trust beneficiaries. The conclusion to be drawn is that the provisions of Code Section 642(h), which allow the trust beneficiaries to utilize the trust’s unused net operating loss carryovers, will not apply to the trust’s Section 1366 (d) suspended losses. If the trust terminates, those suspended losses would be wasted.

Trustees and their advisors should consider adding basis to S corporations held under trusts to release otherwise limited losses before the trust terminates and distributes the S corporation stock.

Richard Connolly’s World Double Header
PA First State to Restrict Lawyers as Financial Advisors
and
A Peek at the Highest Earners’ Tax Returns

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the first article of interest is “Pennsylvania First State to Restrict Lawyers as Financial Advisors” by Ted Knutson. It was featured in Financial Advisor magazine on January 13, 2015.

Richard’s description is as follows:

Pennsylvania is becoming the first state to restrict the ability of lawyers to give financial advice. As of January 30, Keystone State lawyers who are state or federally licensed financial advisors or insurance agents will be barred from recommending or making an investment for clients if they or their family members have financial stakes in the transactions.

Beyond the ban against profiting from a financial transaction, the board will prohibit lawyers from giving financial advice unless they have specific registrations with the state or the SEC.

Please click here to read this article in its entirety.

Our second article of interest this week is “A Peek at the Highest Earners’ Tax Returns” by Laura Saunders. It was featured in The Wall Street Journal on November 24, 2014.

Richard’s description is as follows:

The 400 individuals and couples reporting the highest adjusted gross income for 2010 – the latest data available – earned an average of $265 million per return, according to new statistics from the Internal Revenue Service.

To make the list, taxpayers had to have at least $99 million of income, well below the 2007 cutoff of $138.8 million.

The IRS’s tables show that the top 400 taxpayers had an average tax rate of 18%. But more than half, or 221, had average effective tax rates between 10% and 20%, while 37 had an average rate of less than 10%.

Please click here to read this article in its entirety.

Thoughtful Corner
Public Listening or When Silence Speaks
by Matthew Stillman

4 - Stillman

Photo Credit: @stillmansays/Twitter

Matthew Stillman is, in his words, a professional Problem-Re-Imaginer. He identifies unseen connections, uses creative techniques to find new solutions, and helps move his clients towards new opportunities. He also helps to teach the Creativity and Personal Mastery course developed by Dr. Srikumar Rao. Prior to this career, Matt was a program development executive at the Food Network and a student at the Upright Citizens Brigade Theater in New York City, where he studied with Amy Poehler. His film, The End of Poverty, was featured at the Cannes Film Festival and has been shown in over 40 festivals around the world.

In April of 2009, Matt started an experiment in Union Square. He would sit in Union Square in New York City with two chairs, a table, and a sign that reads “Creative Approaches to What You Have Been Thinking About.” He publishes stories about his experiences at this table on his website, which can be viewed by clicking here.

The following article has been reprinted with permission. Thanks to Matt for bringing this story to Thursday Report readers!

Public Listening or When Silence Speaks

I am always grateful when someone as lovely as K comes to the table. She exuded a simple joyous quality coupled with a fine air of stillness that radiated from her in equal measure. Soft spoken, but clear and easy to talk to. The sort that you just start talking, assuming that you have already been friends for some time.

In her admiration of my project, she revealed what she needed a creative approach to.

“I love your table and have been thinking about doing something similar called ‘public listening.’ What do you think of it, and what could I do with it?”

Hearing a woman of this depth say those two words – public listener – I could just see her out there being an amazing resource. My experience of putting myself out there with chairs and a table interacting with the public as a service/experiment/art project/exploration of something I am good at has been a total joy. Profoundly rewarding and deeply nourishing for me and others.

As my mind telescoped into the future, I could see moments of the same for K. But as I looked into the sweet face of K, the one twist to the project popped into mind that somehow fit with K.

“This is brilliant. What if you actually just listen only? You don’t speak. You just have a pad of paper to say anything if you need to say anything. Just receive. That could be a service unlike any other particularly because of the depth of your presence and attention.”

As I said this, K broke into tears of relief.

“Yes! Thank you for saying that. I’m a professional singer. I love singing but need to do it all day. Sing songs. Sing commercials. At night, I sing at bars and shows. I am almost at a point where I need a break from hearing myself. I didn’t realize that this project could save me and give me space, too. How could you have known this about me?”

I understood why she was crying. The realizing that our own ideas often have the keys to our own freedom. To what we need most. I saw the unspoken silence in K and called it out. Her silence spoke back. We lovingly embraced goodbye like new old friends.

Sometimes it is just that simple out here in Union Square.

Humor! (or Lack Thereof!)

If you try to email Alan Gassman while he is away on his tour of Italy, you might receive one of the following messages in return, written by Alan and Kristen Sweeney.

Milan

I’ve left for Milan,
And am not putting you on.
We’ve crossed the Atlantic by plane.

For great art, food, and fashion,
To quench Marcia’s strong shopping passion.
In this place conquered by Charlemagne.

The history’s a muddle
Of political struggle
Will the Guelphs or Ghibellines reign?

The big family is Visconti,
Did they invent biscotti?
A question not exactly germane.

If you need help while I’m in Lombardy,
Maribeth and Tina feel free to bombard-y.
They’re great at keeping me sane.

In the meantime I’m fine,
Sampling kegs of red wine,
Can’t wait to see you stateside again.

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Florence

Thank you much for writing,
I report it’s quite exciting
To be in Florence writing articles for LISI,

In the home of Machiavelli,
And delicious cavatelli,
I’ll tour the palace of the Medici.

I’m pleased that there is ample
Time for a gnocchi sample.
And we absolutely love veal bolognese.

Firenze’s simply grand,
Next to David I did stand.
Chianti gives the Duomo a lovely haze.

On Thursday, February 12th, I will return,
With lots of new things I’ve learned,
Such as: Did Italy really invent the pizza?

But for now this lucky fella
Is with Marcia and Brent dancing tarantella,
With an appetite and of course- the office Visa.

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Naples

I am reporting happily
That I’m out of town in Napoli,
The third stop on my European tour.

In Greek it means “new city,”
And it sure is awfully pretty,
Down here on the bright Italian shore.

Way back when in World War II,
They were heavily bombed, it’s sad but true,
And were reconstructed under Mussolini.

High speed rail’s now a staple,
Of the big port town of Naples,
And my favorite dish is clam sauce with linguine.

If your legal matters need motion
While I’m across the ocean,
(I’m learning how to play the mandolin)

Maribeth or Tina can assist,
They’re keeping a detailed list,
For my return so I can dive right in.

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We received the following from Char Pfaelzer in response to the Florence poem:

Nothing could be neater,
Enjoy La Dolce Vita.
Family [no fights!],
Pasta, vino, and sights…
Enjoy special time
In Firenze sublime

Safe travels home.

Stay tuned for more Italy-inspired poems from Kristen Sweeney and Alan Gassman in next week’s Thursday Report!

Upcoming Seminars and Webinars

LIVE WEBINAR:

John D. Goldsmith and Alan S. Gassman will present a webinar on BP OIL SPILL CLAIMS – IMPORTANT ISSUES FOR ADVISORS.

Date: February 17, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: To register for this webinar, please click here or email agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

March 4, 2015 – Premium Financing in 22.5 Minutes

March 17, 2015 – Split-Dollar in 22.5 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

4 - Rao and Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here. To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE. 

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

5 - Rates

The Thursday Report – 1.29.15 – BP Mistakes and the June 8, 2015 Deadline

Posted on: January 29th, 2015

Florida Matters: Alan Gassman’s Interview with WUSF (not to be confused with UNICEF!) on Same-Sex Marriage

June 8, 2015 BP Claim Filing Deadline – An Important Issue for Advisors Involved in BP Claims

Seminar Spotlight – How to Handle Stressful Matters in an Ethical Way with Dr. Srikumar Rao and Alan S. Gassman

Avoiding Disaster on Highway 709 – The Confusion Regarding the Gift Tax and GST Annual Exclusions

Richard Connolly’s World – Beware Crazy Clauses in Condo Contracts

Thoughtful Corner – Is Your Need for Sleep Illusory?

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Florida Matters: Alan Gassman’s Interview with WUSF (not to be confused with UNICEF!) on Same-Sex Marriage

Carson Cooper - FINAL

Last week, Alan Gassman was interviewed by world-renown radio talk host and commentator Carson Cooper and Mike Reedy of Equality Florida on the legal aspects of same sex marriage. Lottie Watts, of WUSF Public Media, emailed us the links to the interview earlier this week.

The description for the radio show reads as follows:

Florida Matters: Same Sex Marriage in Florida

Same-sex marriage has been legal in Florida since January 6, 2015, and to mark the occasion, Hillsborough County Clerk Pat Frank held a group wedding at a park across the street from the courthouse. The issue is heading to the US Supreme Court this summer, but in the meantime, marriage licenses are being issued to same-sex couples across the state. Mike Reedy of Equality Florida and attorney Alan Gassman with Gassman, Crotty & Denicolo, P.A. in Clearwater discuss many of the questions facing same-sex couples as they consider tying the knot.

To listen to the interview in its entirety and for more information on the subject, please click here.

An excerpt of this interview is as follows:

Carson Cooper: Now you specialize in things like estate planning, and you wrote a book called The Florida Legal Guide to Same Sex Couples

Alan Gassman: Yes. Yes, and I felt that this book needed to be written because there are so many different laws, so many different tax rules, so many different qualification areas that change when somebody becomes married.

Carson Cooper: Now you wrote this book, and it was published back in June. Now there is no way that you could have seen this coming back then. Right?

Alan Gassman: I was thinking this was going to be a three to four year process. I was so delighted that the federal court did what it did and that the train is rolling faster here.

Carson Cooper: Now are you, as an attorney, getting a lot of questions now from same-sex couples who have yet to tie the knot? And what are they asking?

Alan Gassman: They are asking what happens to their legal rights when they get married? What happens to their homestead rights when they get married? What happens to their ability to leave assets to their children? What happens to their social security? What happens to their income taxes? What happens with their place of employment and their employment rights and benefits? They are asking a lot of questions; there is a lot of areas that have to be understood to avoid a haphazard situation.

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Carson Cooper: The US Supreme Court has agreed to hear cases from Ohio, Tennessee, Michigan, and Kentucky, combined into one case known as Obergefell v. Hodges. The court will consider two questions. Number One – does the 14th Amendment to the US Constitution require a state to license a marriage between two people of the same sex, and Number Two – does the 14th Amendment require a state to recognize lawful out-of-state same-sex marriages? So Alan Gassman, let’s take this one at a time. Does the 14th Amendment, which guarantees equal protection and due process of law, forbid folks from treating gay couples differently than heterosexual couples?

Alan Gassman: The overwhelming majority of court decisions by both federal courts, state courts, and appellate courts have said yes, you cannot discriminate from a basis of sex. You have to treat the same sex couple the same as you would treat a cross-gender couple. So hopefully the US Supreme Court will go along with that and agree. Public sentiment is certainly that way, and you now have tens of thousands of marriages that have taken place based upon all of these decisions.

Carson Cooper: Well let me ask you this about equal protection. What exactly does that mean?

Alan Gassman: No one is sure exactly what the planners of the Constitution meant when they passed the Legal Protection Act. At the time, there were same sex couples in prison because it was a felony punishable by death to have a same sex relationship back then. But what they said was, as you have heard, that all men and women were created equal, and it took our system until the 1950s and 60s to realize that black people would be treated the same as white people. And now it is taking our system this long to ask the Supreme Court, can same sex couples be treated the same way as traditional couples?

Carson Cooper: And, in fact, wasn’t the 14th Amendment cited in a case? I believe it was in the 1960s in Virginia v. Loving or Loving v. Virginia, which banned interracial marriages, and that was overturned.

Alan Gassman: Right.

Carson Cooper: Based on the 14th.

Alan Gassman: Right. And, you know, the way history goes is that you do not ask the Supreme Court something that you are going to get a “no” answer to; you wait until society is ready for the “yes” answer.

To hear and read another excerpt of the Florida Matters interview with Alan Gassman and Mike Reedy, please click here.

To listen to the interview in its entirety and for more information on the subject, please click here.

To purchase The Florida Legal Guide for Same Sex Couples, please click here.

And if you don’t want to click here, click here!

Thanks to Lonnie Watts of WUSF Public Media for making this content available to our Thursday Report readers!

June 8, 2015 BP Claim Filing Deadline – An Important Issue for Advisors Involved in BP Claims

Don’t let your clients who were told they had no claim (by you and others) go without rechecking if they are in the medical, legal, or accounting industries!

The BP Claim Class Action Right of those whose businesses and professions had a presence in Counties that have water exposure to the Gulf of Mexico will reportedly expire this coming June 8, and thousands of businesses and individuals with potential claims will doubtlessly not file by then because they are not aware of the changed accounting rules.

A great many law firms, CPAs, and consulting firms have run numbers for many companies and individuals and concluded that a number of them do not qualify under the automatic damages assumption rules due to the monthly revenue earnings patterns prescribed by the complex Class Action rules. These rules, however, have changed to provide that the cash amounts received each month will not be controlling in many situations where the income was actually earned as opposed to received under what many are referring to as a “modified accrual method of accounting,” which will apply to several industries, including medical, legal, and accounting.

As a result, many who have filed claims actually have bigger claims than they thought, many have smaller claims than they thought, and many who were told they had no claims at all actually do. Those who fall into the last category should get working fast to file their claims as soon as possible.

Goldsmith and Gassman

More information on this very important, opportune, and treacherous situation will be provided in detail by John D. Goldsmith and Alan S. Gassman in a webinar on February 17, 2015. To register for this 12:30 pm webinar, please click here.

To see a webinar on BP Oil Spill Claims: Avoid Mistakes and Maximize Claims – 170 Calculation Errors and Why Everyone is So Excited to Help Pursue Claims with John Goldsmith and Alan Gassman, please click here.

Seminar Spotlight
How to Handle Stressful Matters in an Ethical Way
with Dr. Srikumar Rao and Alan S. Gassman

 4 - Rao and Gassman

On February 19, 2015, Dr. Srikumar Rao and Alan S. Gassman will present a free, 50-minute webinar entitled “How to Handle Stressful Matters in an Ethical Way.”

This webinar is classified as Advanced and will qualify for 1 hour of CLE Ethics Credit. If you’re on the fence about signing up, see Professor Rao’s Ted Talk YouTube video, which can be viewed by clicking here, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well.

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed?, which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

For more information, please email agassman@gassmanpa.com or click here to sign up for the webinar.

Avoiding Disaster on Highway 709
The Confusion Regarding the Gift Tax and GST Annual Exclusions
by Kenneth J. Crotty

3 - Ken

If a gift qualifies for the Gift Tax Annual Exclusion, then some or all of the gift will not utilize the donor’s applicable exclusion amount for lifetime gifts, depending on the size of the gift. For 2014, the gift tax annual exclusion is $14,000 per donor per donee. This amount is indexed for inflation. I.R.C § 2503(b)(1). If a donor makes a gift to a donee in excess of the gift tax annual exclusion, assuming the gift qualifies for the gift tax annual exclusion, then the reportable value of the gift will be reduced to $14,000.

Only gifts “of present interests” qualify for the gift tax annual exclusion. A gift is a present interest if the donee has an immediate right to use, possess, or enjoy the property. Treas. Reg. § 25.2503-3.

When gifts are made to a trust, the terms of the trust will often provide beneficiaries with a Crummey right of withdrawal, which gives the beneficiary an absolute right to withdraw the gift or a certain portion of the gift during a stated time. Frequently, this right of withdrawal is for 60 days. This right of withdrawal helps to qualify the gift as a present interest.

Gifts of future interests do not qualify for the gift tax annual exclusion. Examples of future interests include remainders, reversions, and any other interest that commences in use, possession, or enjoyment at some future time. Treas. Reg. § 25.2503-2. A gift of a future interest must be reported at its full value and uses an amount of the donor’s lifetime gift tax exemption equal to the fair market value of the gift.

The GST Annual Exclusion

The GST annual exclusion and the gift tax annual exclusion are not identical. The GST annual exclusion is much more limited, and a transfer that qualifies for the annual gift tax exclusion may not qualify for the annual GST exclusion.

An outright transfer to a skip person (such as a grandchild) qualifies for the GST annual exclusion.

For a transfer in trust to qualify for the GST annual exclusion, the trust must be a “qualified trust” as described in I.R.C § 2642(c)(2). To satisfy this requirement, the trust must be held for the benefit of an individual and

  1. During the life of such individual, no portion of the corpus or income of the trust may be distributed to any other person, and
  2. If the trust does not terminate when the individual dies, the assets of the trust must be included in the gross estate of such individual. I.R.C § 2642(c)(2).

Crummey Gifts Often Use Up GST Exemption

Most often a trust with a Crummey right of withdrawal which meets the requirements for the gift tax annual exclusion will not meet the requirements for the GST annual exclusion. Therefore, the donor will need to allocate GST exemption to the trust if the transferor wants the trust to have an inclusion ratio of zero.

Direct Skips (GST Transfers)

A direct skip is a transfer made to a skip person, which is subject to gift or estate tax. A skip person is a person who is two or more generations below the generation of the transferor, unless the predeceased ancestor exception applies. A skip person also includes a “non-relative” who is more than 37.5 years younger than the donor. A non-relative is an individual who is not a lineal descendant of a grandparent of the donor or the donor’s spouse (which includes individuals who have been legally adopted or individuals who are married to such a descendant.)

A non-skip person is any person who is not a skip person.

A trust may also be considered a Skip Person if:

  1. All of the interests of the trust are held by skip persons, or
  2. The likelihood that a non-skip person would receive a distribution from the trust is less than 5%. I.R.C § 2613(a)(2).

Indirect Skips and GST Trusts

An indirect skip is a gift subject to gift tax that is not a direct skip and is made to a GST Trust. I.R.C §2632(c)(3)(A). Most trusts are GST Trusts. If the children of the donor are beneficiaries of the trust, then the Trust will almost always be a GST Trust. Therefore, transfers to these trusts are indirect skips.

Where are Direct and Indirect Skips Reported?

We often see mistakes made with respect to which Schedule on the Gift Tax Return is appropriate for reporting these gifts. Direct skips are to be reported on Schedule 2, and indirect skips on Schedule 3. Therefore, gifts to GST trusts, which include most (if not all) trusts where the children of the donor are beneficiaries, should be reported on Schedule 3 and not on Schedule 2.  To see a Sample Form 709, please click here.

Richard Connolly’s World
Beware Crazy Clauses in Condo Contracts

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “Beware Crazy Clauses in Condo Contracts” by Robert Milburn. It was featured in Barron’s on November 29, 2014.

Richard’s description is as follows:

It’s a seller’s market for new condos in cities like San Francisco, Miami, and New York. If, for example, a buyer in a recently erected New York building unloads his condo for a profit within a year of purchase, a new standard line in contracts states that the condo owner must hand the developer half of his windfall. Meanwhile, buyers in Florida are putting down deposits of as much as 50 percent on condos, which developers can draw down to 10 percent to help pay for their construction costs. If the Florida real estate market tumbles or the developer goes bankrupt, chances are good that buyers are never going to get their money back.

So how’s a buyer to protect himself?

After you get all of the key documents to your attorney – including a few years of the building’s financials, the offering plan, and the house bylaws – review the building’s rules and regulations for easy-to-spot conflicts, like a building that won’t accept your 70-pound golden retriever.

In short, buying a condo in a fashionable city has become a brutal contact sport – so you should have a top-rated real estate lawyer close by your side.

With clients now heading to warmer climates, attorneys may get requests for help with condo purchases, which may include unusual terms like those identified in the article.

Please click here to read the article in its entirety.

Thoughtful Corner
Is Your Need for Sleep Illusory?

Most Americans reportedly need between 7 and 7.5 hours of sound sleep to function optimally, and it is easy to believe that if you do not have sufficient sleep, you will not feel good, function well, or be healthy.

The truth is that different people need different amounts of sleep, and many people are led to believe that if they do not get enough of it, they will be cranky, tired, forgetful, or feel like they have the flu.

In many cases, this is absolutely wrong. Due to this belief, people end up rolling around in bed, wishing they could get sleep and becoming frustrated, restless, and irritable when sleep doesn’t come. Instead, they could be up and about doing what they would like to do and having more hours for enjoyment or productivity while feeling well and vibrant.

Many successful, healthy adults have reported that they function very well on 5 hours of sleep or less three to four days a week and catch up on sleep later.

This might be you, and you might not know it because you have not given this theory a chance. Instead, millions of Americans medicate themselves with sleeping pill prescriptions, which can negatively affect brain wave functions, short term and long term memory, and health in general.

Try waking up earlier or staying up later if your body tells you to, while holding steadfastly to your need to wake up at the same time each day when the alarm rings. If you end up sleep deprived for the day because you were up too late, you can go to bed earlier that day or even take a nap.

Stop caffeine in the afternoon or at least four hours before bedtime. Exercise anywhere from two to twenty minutes approximately four hours before bedtime. Get some relaxing reading done, and give your body and mind the chance to tell you how much sleep you need and not the other way around.

If you are addicted to sleeping pills, you might try to get off of them. One positive effect of Benadryl, which is a 4 or 8 hour antihistamine, is that it induces sleep while not impacting memory or being considered addictive.

Many people (and only with doctor supervision, of course) will gradually reduce their sleeping pill prescription use while taking Benadryl. They then find that they sleep better, with better memory, no grogginess in the morning, and with better control of allergies.

Another thing that will throw sleep off is the jet lag that you get if you stay up extra late Friday and Saturday night and then expect to get right back into a normal sleep rhythm Monday and Tuesday. The older you get, the more difficult that becomes.

If you do choose to stay up until 4:00 AM when the bars close, consider waking up earlier than you normally would the next morning and taking a power nap in the afternoon or going to bed earlier in the evening to get back into the right rhythm. Melatonin is reported to reset the biological clock if you take it at your normal bedtime, but it makes some people groggy the next morning.

Let’s face it – our bodies and minds were designed or evolved to be based upon a 24 hour clock. We’re programmed to go to bed when it gets dark and wake up when it is light in the morning. When your modern brain is telling you to move the time you go to bed and the time you wake up all around from day-to-day, you can expect some resistance from the reptile brain and the body.

Please do not take the above to mean that you should deprive yourself of sleep to do better things. If and when your body is telling you you need sleep, then you usually will be able to sleep. If not, then a doctor or other counselor can be of help. A great many people have reported that using meditation, self-hypnosis, or tapes that you can listen to at night that will “put you to sleep” can help immensely.

The art and science and falling asleep is something that you will want to master if you can. People who have been in the military or have otherwise taken transcendental meditation, self-hypnosis, or other training will often report that they can go to sleep at will within two to three minutes. Reading old Thursday Reports has been rated as one of the top six ways of falling asleep by the National Boredom Foundation. Others report that drinking warm milk before bedtime or an herbal tea can be helpful. Meditation coaches can also help someone learn how to reach a relaxed and sleep-like state of consciousness quickly and efficiently.

If you think about the above and listen to your body, you can be more productive and enjoy deeper sleep.

One more tip – one well-known business advisor points out that when you have not gotten enough sleep, people get “stupider.” Lack of sleep can cause anxiety, loss of patience with other people in situations, and otherwise.

When you are short on sleep, remind yourself every hour or so that you might be seeing the world through a harsher filter. That realization, along with the ability to step back before reacting, may help you get used to those days when you have been sleep deprived as the result of whatever may have occurred.

The above article has not been approved by the Attorney General, any medical doctor, or Colonel Sanders. Take it with a grain of salt and a Benadryl, and enjoy some great dreams tonight.

Humor! (or Lack Thereof!)

THIS ACTUALLY HAPPENED:

A child at Disneyland spread measles to other children and guests in the park. Could this happen here in Florida?

NEW WALT MEASLEY WORLD THEME SONG
(to the tune of “It’s a Small World”)
by Ron Ross aka “Uncle Winkie”

A kid with measles arrives from Spain
Passes it on to a kid from Ukraine
It’s the germs that we share that make us aware
It’s a small world after all.

Tourists arrive with bacteria
Spreading flu and mumps and diphtheria
Then the kids can’t be cleaned till they’re all quarantined
It’s a small world after all.

A trip to Disney is a kid’s greatest wish
But the park itself is a big petri dish.
Diseases will spread right to Mickey’s head,
And they’ll close this small, small world.*

*For a while. Remember, never smile at Mr. Crocodile.

Upcoming Seminars and Webinars

LIVE WEBINAR:

John D. Goldsmith and Alan S. Gassman will present a webinar on BP OIL SPILL CLAIMS – IMPORTANT ISSUES FOR ADVISORS.

Date: February 17, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: To register for this webinar, please click here or email agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

March 4, 2015 – Premium Financing in 22.5 Minutes

March 17, 2015 – Split-Dollar in 22.5 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

4 - Rao and Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on PREMIUM FINANCING IN 22.5 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 22.5-minute webinar on SPLIT-DOLLAR IN 22.5 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)

 LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

8 - Rates Chart

The Thursday Report – 1.22.15 – Is Obama the Taxman?

Posted on: January 22nd, 2015

Is Obama the Taxman?

Bruce Steiner & the President’s Proposals for a Simpler, Fairer Tax Code that Responsibly Invests in Middle Class Families

Florida Department of State Consumer Alerts

Special Seminar Announcement – An Update to How to Read Life Insurance Illustrations

Gassman Law Associates in the News – Listen for us on WUSF 89.7!

Florida Law Trivia, Part II

Gregory Gay’s Corner – Selling a Residence and Homestead Exemptions, Part II

Richard Connolly’s World – A New Tool to Make Your Money Last

Thoughtful Corner – How to Get the Most from Those Who Work With You or For You

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Is Obama the Taxman?

Does anyone remember the song “The Taxman”? Try this on for size!

We thank Kristen Sweeney, Bernie Taupin, and Tom Waits for their assistance with the lyrics of this song. We thank George Harrison for writing the music to the original lyrics, which you can see by clicking here.

The state of this Union will be,
No estate in this world goes tax-free,
Cause he’s the taxman,
Yeah, Obama is the taxman.

Dividends up to 28,
But two-earner couples get a break,
Cause he’s the taxman,
Yeah, Obama is the taxman.

Since 2009,
Capital gains I’ve doubled.
IRAs aren’t safe,
Hate to burst your bubble.
We will tax billions (320!),
In just 10 short years.
But it’s for a good cause (education!),
So wipe away your tears.

If your millions number 3.4,
You can’t contribute any more.
Cause he’s the taxman,
Yeah, Obama is the taxman.

Beware to those of you who’ve died,
Declare each dime, let nothing slide.
Cause he’s the taxman,
Yeah, Obama is the taxman.

The state of this Union will be,
No estate in this world goes tax-free,
Cause he’s the taxman,
Yeah, Obama is the taxman.

Bruce Steiner & the President’s Proposals for a Simpler, Fairer Tax Code that Responsibly Invests in Middle Class Families

Bruce - FINAL

Bruce Steiner, of the New York City firm of Kleinberg, Kaplan, Wolff & Cohen, P.C., is a long-time LISI commentator and has provided LISI members with a first look at the Administration’s Revenue Proposals for several years. This year, on the day of the 2015 State of the Union address, Bruce provided a first look at President Obama’s 2015 Tax Code proposals.

On January 17, 2015, the White House released the details of the President’s proposal for a Simpler, Fairer Tax Code that Responsibly Invests in Middle Class Families (no need for additional humor after that title!). You may view this proposal by clicking here.

Some of the proposed changes that will affect individual taxpayers are as follows:

  • The President proposes to increase the top tax rate on qualified dividends and long-term capital gains to 28% for couples with income over $500,000.
  • The President proposes to treat bequests and gifts other than to charitable organizations as realization events.
  • The President proposes a second-earner credit equal to 5% of the first $10,000 of earnings of the lower-earning spouse.
  • The President proposes to make permanent the additional earned income credit and child credit benefits that are scheduled to expire at the end of 2017.
  • The President proposes to increase the maximum child and dependent care credit for families with children under age 5 to $3,000 per child.
  • The President proposes to exempt Pell grants from taxation and the American Opportunity Tax Credit (AOTC) calculation.
  • The President proposes to roll back the expanded tax cuts for 529 plans that were enacted in 2001 for new contributions.
  • The President proposes to give a tax credit of up to $3,000 to any employer with 100 or fewer employees that offers an auto-IRA.

Bruce goes on to provide commentary on the proposed changes, the introduction to which is re-printed below:

The President’s proposals are not law, nor even a bill.  Given the 2010 and 2012 tax legislation, attempting to predict tax legislation is difficult.  However, these proposals are worth watching.  Some of them are similar to recent Republican proposals.  Some of them may be enacted soon.  Some of them may be enacted eventually.  Some of them may never be enacted.

To see the complete list of proposed changes, and to read Bruce Steiner’s full commentary, please click here.

Our thanks to Bruce Steiner, Steve Leimberg, and Leimberg Informational Services for making this available to our readers.

Florida Department of State Consumer Alerts

Rip-off companies that send letters to newly incorporated entities selling “certificate of status,” “annual minutes,” and “annual corporate record forms” are recognized by the Secretary of State as being confusing and inappropriate, but otherwise, the government is not doing anything about these.

If you are active in incorporating clients, then you already know about this, but if not, the Consumer Alerts posted on the Secretary of State website are shown below. Pay particular attention to the last two alerts listed on the page.

2 - Consumer Alerts

Examples of the deceptive letters that go to the newly incorporated companies can be viewed by clicking here.

It is a shame that crime pays, and it is a bigger shame that the government does nothing to try to stop it.

Special Seminar Announcement
An Update to How to Read Life Insurance Illustrations

Jerry Hesch to join How to Read Life Insurance Illustrations webinar on Monday, January 26 at 5:00 PM

FINAL Hesch

Barry Flagg and Alan Gassman were pleased when Jerry Hesch accepted our invitation to join as a co-presenter next Monday for our 5:00 PM webinar on How to Read Life Insurance Illustrations.

The discussion will be led by Barry Flagg, and this will be an important experience for those of us who look at life insurance illustrations and help clients determine how life insurance vehicles will best fit into their estate and family planning.

Please do not miss this webinar! Click here to register.

This webinar is just the first in a series of presentations we are planning with Barry Flagg. Please also note the below announcements for subsequent installments of this webinar series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

You can find the links to register for each of the four webinars listed above in our Seminars & Webinars section.

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program, and we thank Jerry Hesch for agreeing to co-present our first installment!

Gassman Law Associates in the News
Listen for us on WUSF 89.7!

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This morning, Alan Gassman was interviewed by world-renown radio talk host and commentator Carson Cooper and Mike Reedy on legal aspects of same sex marriage. Mike Reedy is a statewide organizer with Equality Florida, the largest civil rights organization committed to obtaining equality for Florida’s growing LGBT community, and we were very impressed with his remarks. Alan’s remarks were not that great, but you can listen to them anyway. Alan’s interview will be broadcast on WUSF 89.7 on Tuesday, January 27 at 6:30 PM and Sunday, February 1 at 7:30 AM. They will air again on the classical station WSMR 103.9 FM on Monday, February 2 at 10:00 PM. Hopefully you have something better to do, but if not, tune in!

Alan was invited to discuss his recent book, The Florida Legal Guide for Same Sex Couples, but the conversation took a path of its own. To purchase the Kindle edition of our book for only $0.99, please click here so that you can help others (and both of their mothers!)

Florida Law Trivia, Part II

We had many successful participants in Part I of our Florida Law trivia contest, which you can see by clicking here. We thank both of them.

Here is Round II, with questions 7 through 12 and two questions for extra credit.

7. A debtor must generally have lived in Florida for __________ consecutive days in order for Florida law to apply in Bankruptcy Court.

A. 1, 215
B. 730
C. 365
D. 25

ANSWER: (B) Under the Seven Hundred and Thirty (730) Day Rules, a debtor will usually be required to have lived in Florida for the seven hundred and thirty (730) consecutive days before filing bankruptcy in order to have Florida law apply.

8. 36 states permit married couples to own assets jointly as tenants by the entireties.

TRUE            or                    FALSE

ANSWER: FALSE. Florida and twenty-four (24) other states permit married couples to own assets jointly as tenants by the entireties and do not allow creditors with a judgment against one (1) spouse to lien or seize any part of tenancy by the entireties assets.

9. The ______________ has the power to waive beneficiaries’ rights to annual trust accountings, to receive information regarding the trust and the trustee, and to represent and bind the applicable beneficiaries with respect to any notices, accountings, information, or reports related to the trust.

A. Power of Attorney
B. Grantor
C. Designated Representative
D. Personal Trainer

ANSWER: (C) The Designated Representative has the power to waive beneficiaries’ rights to annual trust accountings, to receive information regarding the trust and the trustee, and to represent and bind the applicable beneficiaries with respect to any notices, accountings, information, or reports related to the trust. Any such action taken by a Designated Representative, or any notices, accountings, information, or reports given to a Designated Representative on behalf of a specific beneficiary or beneficiaries, have the same effect as if the action was taken or the items were given directly to the applicable beneficiary or beneficiaries. The Designated Representative is not liable to the beneficiaries that he or she represents, or to anyone claiming through such beneficiary, for any actions or omissions to act that are made in good faith.

10. A(n) _________________ indicates that there can be no transfer or encumbrance without the written consent of a specified individual or company.

A. Statement of Authority
B. Order to Stop
C. Notification saying, “You can’t do that.”
D. Statement of Authorization

ANSWER: (A) A Statement of Authority can be filed with the Secretary of State and recorded in the county where real estate is held, indicating that there can be no transfer or encumbrance without written consent of a specified individual or company. The Statement can specify that consent is needed before any transfer or mortgage of real estate occurs and will expire five years after being filed.

11. The surviving spouse can elect to become a one-half undivided owner of the homestead with the descendants equally sharing ownership of the other one-half undivided interest effective upon the decedent’s death.

TRUE            or                    FALSE

ANSWER: TRUE. By recent law change, the surviving spouse can elect to become a one-half (½) undivided owner, with the descendants equally sharing ownership of the other one-half (½) undivided interest, effective upon the decedent’s death. This can be avoided by placing the homestead into joint ownership with right of survivorship with the spouse so that the surviving spouse would become the sole owner upon death, but this could leave the children of the dying spouse out in the cold.

12. There are ________ exceptions that permit a creditor to invade a third party spendthrift trust providing for health, education, and maintenance of one or more beneficiaries.

A. 5
B. 1
C. 0
D. 3

ANSWER: (D) A third party settled spendthrift trust providing for the health, education, and maintenance of one or more beneficiaries can generally not be invaded by their creditors, divorce or child support claimants, or parties who provide services associated with the trust itself, except in the following situations:

  1. A beneficiary’s child, spouse, or former spouse who has a judgment or court order against the beneficiary for support or maintenance;
  2. A judgment creditor who has provided services for the protection of a beneficiary’s interest in the trust;
  3. A claim of the state of the US to the extent a law of Florida or federal law so provides.

These exceptions only apply when there are no other resources and/or assets available.

BONUS ROUND:

  1. If a WAVE is a Florida girl in the Navy, and a WAC is a Florida girl in the Army, then what is a WHOCK?

ANSWER: A WHOCK is what you throw at a Wabbit.

  1. What did the sea say to the shore?

ANSWER: Nothing; it just waved.

Gregory Gay’s Corner
Selling a Residence and Homestead Exemptions, Part II

Greg - final

Gregory G. Gay, Esquire is an attorney from Tarpon Springs who specializes in meeting the special needs of senior citizens and the disabled. He is Board Certified in Wills, Trusts & Estates and in Elder Law by the Florida Bar. He has also been named a Certified Advanced Practitioner by the National Elder Law Foundation.

Mr. Gay is the author of the Florida Senior Legal Guide, the 8th edition of which can be purchased by clicking here. In the coming weeks, we will be profiling some of the best chapters from this excellent publication. Our deepest thanks to Mr. Gay for making this content available to Thursday Report readers!

In Part I of this article, which you can see by clicking here, we discussed reverse mortgages and capital gain exclusions on the sale of a residence. This week, we turn our focus to the Florida Documentary Stamp Tax, title insurance, and property tax exemptions.

Florida Documentary Stamp Tax

A documentary stamp tax must be paid to the clerk of the circuit court in the county where a parcel of real property is located before a deed transferring the ownership of that real property can be recorded in the official records of the clerk of that court. This tax is presently $.70 for each $100 of the amount paid for the real property. Thus, the sale of a home for $70,000 will give rise to a transfer tax of $490 payable to the state of Florida.

Although the contract for purchase and sale of this real property can provide otherwise, it is customary for the contract to require the seller of the real property to pay for the documentary stamps. The seller normally pays the documentary stamp tax because the seller is expected to deliver a deed that is marketable.

It is customary for the contract for purchase and sale of real property to provide that the buyer will pay the documentary stamp tax relating to the issuance of a promissory note given to borrow the money necessary to pay a portion of the purchase price. This documentary stamp tax for the privilege to issue a promissory note is $.35 for each $100. This means that if the seller accepts a promissory note from the buyer for $50,000 of the purchase price, the documentary stamp tax that the buyer will pay to the clerk of the circuit court will be $175. Likewise, if the buyer borrows some of the purchase price from a third party such as a bank, the buyer will pay this documentary stamp tax to the clerk of the court for the promissory note he or she gives to the bank.

Since the seller or the lender will want the repayment of the promissory note to be secured by a mortgage constituting a lien on the real property, there is also an intangible tax that must be paid for the privilege of giving a mortgage. The intangible tax on a mortgage is paid to the clerk of the circuit court when the mortgage is recorded in the official records. The intangible tax is presently two mills per dollar, or $2 per $1,000, on the exact dollar amount of the new mortgage. So if the buyer gives a mortgage to secure the repayment of a $50,000 promissory note, the intangible tax will be $100.

LIFE SITUATION #8

Paul and Carol wish to sell their home for $100,000. In addition to possibly paying a real estate commission, they will also be responsible for the transfer tax for the privilege of selling the real property which will amount to $700 ($.70 x $100,000). The buyer will probably be responsible for the cost to record the deed. The buyer will also be responsible for the transfer tax for the promissory note signed to finance the purchase and for the intangible tax.

Title Insurance

The seller of real property or a person offering real property to secure the repayment of a loan may also be required to pay for title insurance. The purpose of title insurance is to reimburse the buyer of the real property or the owner of a mortgage against a loss in case the owner’s or mortgagor’s title to the real property is later determined to be defective or invalid. A new title insurance policy is issued when the present owner sells or refinances the real property even if that owner received a title insurance policy from the previous owner. This is because the coverage provided in a title insurance policy extends only to the owner who is being insured at the time of that particular closing. Thus, an owner’s title insurance policy cannot be assigned to the next buyer of a parcel of real property.

Property Tax Exemptions

An Amendment to Florida’s Constitution was approved by its voters on January 29, 2008. One of the provisions of this Amendment increases the current $25,000 homestead exemption to $50,000. However, the additional $25,000 exemption applies to the assessed value of the homestead between $50,000 and $75,000, but does not apply to the school tax levy.

Presently, a person entitled to a homestead exemption has his or her homestead assessed at just value as of January 1 of each year. However, the change in the assessment cannot exceed the lower of 3% of the assessment for the prior year or the percentage of change in the Consumer Price Index for all urban consumers, U.S. City Average. Thus, homesteads often have a just value assessment and a lower taxable value assessment. The new Constitutional Amendment provides the taxpayer with the opportunity to transfer this accumulated Save-Our-Homes benefit to a new homestead within one year but not more than two years after relinquishing the previous homestead. If the owner moves to a home with an equal or greater value, the owner may transfer to the new home’s valuation the lesser of 100% of the current Save-Our-Homes benefit or up to $500,000 of the benefit. If the owner moves to a home with a lesser value, the owner may transfer to the new home’s valuation the lesser of the percentage of the current Save-Our-Homes benefit or up to $500,000 of the benefit. If two or more people own multiple homesteads (one each) and are moving into one new homestead, they may transfer the largest of the benefits to the newly established homestead up to $500,000. If two or more persons jointly own a homestead and are moving into more than one new homestead, they must divide the value of their benefit among the new homesteads based on the number of owners.

This Constitutional Amendment also limits the amount of the increase in the assessed value for non-homestead property to 10% per year, and at no time may the assessed value exceed the market value. The base year for assessing the 10% cap is 2008, which means the protection from the assessment increases began in 2009. The assessment limitation does not apply to school tax levies. This portion will expire after 2018, at which time the voters will decide whether it should be reauthorized.

Next time, Gregory Gay’s series will continue with a brief conversation on health care surrogate designations, including what this means, what role the surrogate plays, and how a surrogate can be established. If you would like to read the Florida Senior Legal Guide in its entirety, please visit http://www.seniorlawseries.com. Mr. Gay can be reached at gregg@willtrust.com.

Richard Connolly’s World
A New Tool to Make Your Money Last

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “A New Tool to Make Your Money Last” by Glenn Ruffenach. It was featured in The Wall Street Journal on January 12, 2015.

Richard’s description is as follows:

Get ready to hear a lot more in 2015 about “longevity insurance,” an increasingly popular product among would-be retirees and a potentially important tool for financial advisors.

Longevity insurance is more properly known as a deferred income annuity (DIA). “Deferred” is the key word. An immediate annuity begins making payments soon after you buy it; a deferred annuity payout typically begins 10 or 20 years into the future.

That delay means a buyer can get large payments in later life with a relatively small payment upfront.

Fifteen insurers now sell deferred annuity products, up from three insurers just three years ago.

Deferred Income Annuity (DIA) Example:

A male age 65 paying a $100,000 premium to New York Life is guaranteed $59,300 per year for life, $4,941.65, beginning at age 85.

Please click here to read the article in its entirety.

Thoughtful Corner
How to Get the Most from Those Who Work With You or For You

Well-trained professionals are always told to make the client happy first. THE CLIENT IS KING!

Team members are told this also, but what causes us to treat team members like second or third class citizens in the process of doing what we do for clients?

It is certainly human nature to put all of the effort “front stage” to the best of our abilities while remaining less cordial, more informal, and sometimes or oftentimes blowing steam and treating team members and the colleagues we work with without reference to the “golden rule” or appropriate civility.

What if, for one week, you treated your team like A-plus clients by doing the following things, which might be almost unheard of in your present office environment?

  1. Smile, make eye contact, and thank your team members for coming in every morning to help their day start out on a friendly, positive, and grounded footing.
  2. Find something to compliment each person you interact with on at least once a day.
  3. Do not complain, criticize, or speak negatively about anything in the office. When mistakes are made or frustrations occur, approach them very, very gently but professionally without “pulling rank” or making the situation any more unpleasant than it has to be.
  4. At the end of the day, say goodbye and thank each team member for what they have done, particularly for any projects they have done a great job on or that have been frustrating.
  5. Say please before each request, or phrase it as a question instead of a command (“Would you mind showing Mrs. Peterson how the copier works?”) and say thank you for anything you receive.

How much time would it take from your busy day to facilitate the above? Three minutes a day? Seven minutes a day? Twenty-five minutes a week?

What will you get in return?

  1. A better office environment, as positivity bounces back to you
  2. More loyalty and productivity from your staff
  3. Less chance of errors occurring or team members being leery of making suggestions or calling problems to your attention
  4. Genuine friendships with people you work with

Yes, there are people that we have to work with who are less than perfect and who do not always have a good attitude or work ethic, but if you treat someone like a failure, it is almost guaranteed that they will be a failure. On the other hand, if you treat a C+ student like an A student, they may well turn out to be an A student with proper encouragement and polite but firm remedial action.

If you have been a terrible grouch, you might start out with the one person on your team who you think would be most accepting of this type of change in you, and do not be surprised if you do not get an immediate reaction. They will at first be very cautious and wonder what is happening. When they figure out that you have not left your spouse and are not trying to move in with them, you may see a whole new attitude.

When was the last time you paid for someone’s lunch when they did a good job on something or sent an email to five or six staff members telling them how fortunate you were to have them achieve something specific or stay late to get something done right?

By the same token, when someone makes a mistake unintentionally, how often have you thanked them the next day for correcting the error and reducing the damage to the extent possible?

There are some great books available to help you on your path to making your clients happier because your staff treats them like they have never been treated before. A fantastic book for long-term offenders is What Got You Here Won’t Get You There by Marshall Goldsmith. The One Minute Manager by Kenneth Blanchard is an essential, quick read on how to take corrective action while giving a compliment and deliberate instruction.

How to Win Friends and Influence People by Dale Carnegie is a “must read every five years” book for anyone successful in this area.

While thinking through how to best treat your team so that they produce at their best and treat your clients well, take a look at our write-up on the Gallop organization’s 12 Elements of Great Managing. This will give you more ideas about how to have a fantastic and synergistic workplace.

If you find this Thoughtful Corner piece to be of interest and would like to see more like it, please let us know, and feel free to share.

This is one of the many things that we will be covering at the Ave Maria School of Law on Saturday, February 21 on Lawyer Success and Professional Acceleration in the Real World.

As always, we welcome your questions, comments, and suggestions.

Upcoming Seminars and Webinars

LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on TRUST PLANNING FROM A TO Z for the Florida Institute of CPAs.

Learn how to plan, structure, and protect wealth using revocable and irrevocable trusts and trust systems to effectuate wealth preservation and inheritance planning in a tax-efficient manner.

This course is designed for both new and experienced accountants and includes valuable materials, free use of estate tax projection software, client explanation letters, and a number of useful Excel spreadsheets that can be used on client matters.

Many past attendees have expressed significant praise for this presentation, indicating that it is both dynamic and interesting, while providing a fresh new look at both time tested and new strategies and planning considerations with an emphasis on the numbers, practical application and an accountant’s role in planning and implementation.

Part Two of this presentation will be offered on May 21, 2015 at 10 AM and is entitled “A Practical Trust Planning Checklist and Practitioner Compliance Guide for Florida CPAs.” Please view the seminar announcement below for more details.

Date: January 26, 2015 | 10:30 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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FREE LIVE WEBINAR SERIES ON LIFE INSURANCE FOR TAX ADVISORS:
Alan Gassman, Jerry Hesch, and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on HOW TO READ LIFE INSURANCE ILLUSTRATIONS in the first of a series of webinars intended to help tax lawyers and CPAs understand how life insurance and life insurance structuring works from a technical and mechanical standpoint.

Bring your wrench and screwdriver as we look under the hood to see how we can do our clients some good!

Date: January 26, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register for the January 26th webinar, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

4 - Rao and Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS
(These conferences are so good that we were not invited to speak!)
 

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

8 - Rates Chart

The 7520 rate for January is 2.2% and for December was 2.0%.

The Thursday Report – 1.15.15 – On the First Day of Heckerling…

Posted on: January 15th, 2015

The Five Days of Heckerling Poem

Gassman Law Associates in the News

  • Biel Rio, Cheese, and Proceedings Supplementary

  • Bay News 9 Article and Appearance

Florida Law Trivia, Part I

Avoiding Disaster on Highway 709 – 9 Common Mistakes Related to Spousal Gift Splitting

Richard Connolly’s World – IRS Commissioner Predicts Miserable 2015 Tax Filing Season

Thoughtful Corner – Check Email Less to Reduce Stress

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

The Five Days of Heckerling

The Five Days of Heckerling
by Alan Gassman, Kristen Sweeney, and Chris Denicolo

(Don’t forget to read the footnotes!)

On the first day of Heckerling,
My love Marcia said to me,
“Stay away until the end of the week.”
I drove to Orlando; it was better than Disney!
There was a JEST talk by Howard Zaritsky[1].

On the second day of Heckerling,
Donaldson said to me,
Clayton QTIPs work wonderfully.
The Interactive booth was all one big party.
With Marty Shenkman, Natalie Choate, and tax geeks.

On the third day of Heckerling,
Blattmachr said to thee,
Use the SPLAT for a house on the beach (instead of a QPRT).
Jerry Hesch told me planning news, a thrill you need to seek,
And some issues that the IRS leaked.

On the fourth day of Heckerling,
Someone said to me,
“Are you and your partners serious or just JEST-ing?”
I think my favorite sponsor is Bloomberg BNA
Aen Webster let my smart aleck footnote stay[2].

On the fifth day of Heckerling,
Everyone starts to flee,
We’ll all be back in 2016!

Then on the Monday after Heckerling, my assistant shrieked at me:

You have twelve clients waiting,
Eleven new estate plans,
Ten dozen unanswered voicemails,
Nine new probate cases,
Eight letters pending,
Seven revised petitions,
Six angry attorneys,
FIVE IRS CLEARANCE LETTERS!!! :-)
Four notebooks lost,
Three articles due,
Two binders of bills to review…

Oh, how long until the next Heckerling???

The Thursday Report would like to thank professional writer Kristen Sweeney for her assistance in the writing of this poem.

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[1] I rose 7 feet in the air
When Howard was kind enough to compare
The JEST designed with my partner Chris Denicolo
In a way that I didn’t have to wear my helmet for polo.
Here’s what Howard said: “Alan Gassman and a couple of other lawyers…created what they call “The Joint Estate Step-Up Trust” or “JEST.” Okay, I kind of like that acronym. I am not a big fan of acronyms, but at least it is a word. DSUEA is not a word, and I really do not like using it. At least JEST is something. I think the JEST is a great technique for what it is seeking to do.” For his complete comments on the JEST system, please click here.
[2] Our Bloomberg BNA article on the Bifani case called “Way Down Upon the Bifani River” had the following footnote, which is important for an understanding of the case and Florida homestead: “The Suwannee River is a 246 mile black water river that can take you much of the way from the Bankruptcy Court in Tampa to the 11th Circuit Court of Appeals in New Orleans, which is where this case went before the debtor’s raft sank, made famous by Stephen Foster’s song, “Old Folks at Home” (Foster never saw the river but read about it). Mr. Gassman owns two lots on this river that he bought in 2007 and would gladly sell for half of what he paid, no extra charge for the alligators who live there. See Way Down Upon the Suwannee River Far Far Away, LLC on the Sunbiz Website, and also Hey Hey Santa Fey (river), LLC and Withlacoochee Coochee-Coo, LLC, which own his other failed river investments. This article is dedicated to the memory of Joan Rivers, who performed in Tampa Bay shortly before her death at age 81 with great energy and physical strength.”

Shenkman
Martin M. Shenkman

We have been enjoying our week at the 49th Annual Heckerling Institute on Estate Planning in Orlando. If you’ve missed this superb event, Marty Shenkman’s amazing and thorough daily write-ups on the sessions at Heckerling can be viewed on Steve Leimberg’s LISI (Leimberg Information Services, Inc.) service.

For an example of how tight and accurate Marty’s write-ups are, please click here.

The following appears in Marty’s write-up concerning the JEST system:

  1. With portability, you are not as concerned with the problem of the first spouse not having money. In fact, the best portability comes from an insolvent estate of the first spouse. They got no use of their exemption. The only problem is convincing them to file a federal estate tax return. This can be a little tricky. Somebody has to pay for preparing the return.
  2. The problem of 1014(e) was addressed by Alan Gassman and a couple of other lawyers in a series of articles – where they created what they call “The Joint Estate Step-Up Trust” (or “JEST”).
  3. The concept looks a great deal like the tax basis revocable trust, with one very clever distinction, and that is that the assets of the donor surviving spouse that are includible only because of the General Power of Appointment (where the first spouse to die does not have enough assets to fully fund their exemption) to bring the estate up to the exemption amount, which are thus includible only because of 2041, and are attributable to the property that was owned by and contributed by the surviving spouse. These will go into a non-marital trust that the surviving spouse is not a beneficiary of, and the rest is for marital deduction funding. That absolutely ought to work in terms of 1014(e).
  4. You still have the question of whether the spousal gift is the moment before or the moment after, and when you are explaining the technique to the client in writing, you need to point out this one little tiny item of uncertainty. You can state that you think it unlikely that this will be a problem – that all the private rulings take favorable positions. All of them. There are none taking an unfavorable position. That’s something. We can cite them, but we can’t rely on them, but it is still something.So they have some significance.
  5. Once the client can get past that one little piece of risk, I think the JEST is a great technique for what it is seeking to do. It is a way to minimize the problems of 1014(e). I commented earlier that you can accomplish the same concept if you are dealing with an inter-spousal gift within one year of death, you say “fine, the access I was given within one year of death is a little different – non-marital trust. It is a great technique– – the cases I mentioned about the – whether or not it is really a general power. I had a debate with Mitch Ganns, who said – the rulings don’t really say that, and I went back and read them, and said, yes they do really say in my opinion they really do say that, and while Mitch is one of those people I usually defer to in judgment – I really disagree on this one.
  6. So, the JEST actually is a workable technique to get the basis step-up on the estate of the spouse to die, when they don’t have money or enough money. It is a way around 1014(e) – the tax basis revocable trust – not so much.
  7. The JEST is a material improvement.
  8. Page 201 – I’ve got to say, that Alaska and now, Tennessee, community property trust is probably the simple best basis play in estate planning, and no one seems to be using it, and I am a little – I think it is outrageous that it isn’t being proposed more often, but there it is.
  9. We mentioned that community property has a really swell rule that both sides get a basis step-up on the first spouse’s death. (Howard continued to cover the Alaska and Tennessee Community Property Trust discussion, stating that it is the best technique available).

You can get a free trial subscription to LISI or sign in as a member to read the rest of Marty’s remarkable reports by clicking here.

Gassman Law Associates in the News

Biel Rio, Cheese, and Proceedings Supplementary

The December 18th and January 1st editions of the Thursday Report featured write-ups on the Florida District Court of Appeals Biel Rio case, where it was determined that a debtor who had engaged in a fraudulent transfer more than four years before was nevertheless subject to having the transfer set aside under a proceedings supplementary brought in state court by the creditor.

The solution to this would’ve been for the debtor to file bankruptcy, as explained in our new Leimberg commentary letter that is being released tonight on the Leimberg system. To view our Leimberg letter, please click here. This is not to be confused with limburger cheese or Charles Lindbergh, although Steve Leimberg likes cheese and probably could fly an airplane across the Atlantic Ocean.

If you are not subscribed to the Leimberg system, we highly recommend that you click here and sign up for a free trial. Try it; you’ll like it, whether that’s the Leimberg system or limburger cheese, which reminds us of the Monty Python Cheese Shop skit, which you can watch by clicking here. (There will doubtlessly be more clicks on the Monty Python skit than on our article, which we promise to not take personally – well, not too personally!) For a write-up on limburger cheese, click here. It may smell like sulfur, but it tastes somewhat better. Buy 12, get one brie!

And now for something completely different!

Bay News 9 Article & Appearance

Bay News 9 was kind enough to profile our book entitled The Florida Legal Guide for Same-Sex Couples on their website. The complete article can be viewed by clicking here and reads as follows:

Clearwater Attorney Writes Book, Helps Same-Sex Couples
by Chris Hopper, Reporter

Marriage can be wonderful, but if you’re not sure of all the legal challenges, the process can also be a nightmare.

“There are a myriad of legal and tax issues that face somebody deciding whether or not to get married,” said Alan Gassman, a Clearwater attorney.

Same-sex couples across the state of Florida tied the knot for the first time on Tuesday, January 6.

It was a joyous moment for thousands, but with that happiness comes some new legal challenges. To understand the legal complications of marriage, Gassman wrote a book called The Florida Legal Guide for Same-Sex Couples.

“I really felt that there was a need for this type of information,” said Gassman.

Gay or straight, the average person couldn’t possibly know all the rules off-hand.

“Things like your homestead property settlements, alimony obligations, a dramatic change in your social security rights, the list just goes on and on,” Gassman said.

It took Gassman and his team hundreds of hours to put together all the research.

“A same-sex couple that has been together 15 to 20 years now getting married are going to be treated much differently, they typically have separate property, they have separate children, they have a myriad of considerations.”

Gassman said it’s not about spoiling the celebration for same sex couples, it’s about helping them navigate the journey.

People can buy Gassman’s book on Amazon for their Kindle.

When the video becomes available on the Bay News 9 website, we will be sure to link to it in a future Thursday Report. Sorry we didn’t know that they were going to film Alan’s desk, which was allegedly a bit messy!

Thanks to reporter Chris Hopper, who can be reached by clicking here.

To purchase the Kindle edition of our book for only $0.99, please click here.

Florida Law Trivia, Part I

The first three people to email us all six correct answers will get an advanced copy of questions 7 through 12!

  1. Unless the Operating Agreement or Articles of Organization provide _____________ to the LLC having a manager or being managed by its members, the LLC will be treated as a member-managed LLC.
    1. Words of wisdom
    2. Words of similar import
    3. Words of similar export
    4. Whatever words you want

ANSWER: (B) The new LLC Act in Florida may override the Operating Agreement so that the majority of members can override the managing member depending upon the terms of the Operating Agreement and/or Articles of Organization. Unless the operating agreement or articles of organization provide “words of similar import” to the LLC having a manager or being managed by its members, the LLC will be treated as a member-managed LLC. Florida Statute § 605.0407(1)(b) specially provides that “words of similar import” do not, in and of themselves, include the terms managing member or managing members. If all of the members are managing members, then essentially there will be no change to the management of the LLC under the new Act.

  1. The Florida Homestead Tax Exemption is usually $25,000.

TRUE                        or                    FALSE

ANSWER: FALSE. The Florida Homestead Tax Exemption, which is normally $50,000 and also prevents escalation of appraised value by the greater of the CPI or three percent (3%) per year, can cause significant confusion and loss of opportunities. The homestead must be the primary residence of the owner or owners by December 31 of the year before the exemption begins to apply, and the owner or owners must apply for the Homestead Tax Exemption on or before March 1st of the following calendar year. Instructions are provided by the county property appraiser.

  1. The property appraiser sends a Notice of Proposed Property Taxes, or a _____________ notice in August, and the owner has 25 days to contest the proposed value after receiving the notice.
    1. Truth-in-Lending
    2. Truth and Lies
    3. Truth or Dare
    4. Truth-in-Millage

ANSWER: (D) The Truth-in-Millage, or TRIM, Notice contains the property’s value on January 1, the millage rates proposed by each local government, and an estimate of the amount of property taxes owed based on the proposed millage rates. The date, time, and location of each local government’s budget hearing are also provided on the notice. This provides property owners the opportunity to attend the hearings and comment on the millage rates before approval.

  1. Equity from a protected homestead can be sold and used to invest in mutual funds without being considered a fraudulent transfer.

TRUE                        or                    FALSE

ANSWER: FALSE. Equity from a protected homestead that is sold can only be safely used to purchase a protected replacement homestead or to open a designated bank account that is used to purchase a protected homestead without being considered a fraudulent transfer. While all other exempt assets can be converted into other exempt assets without being considered a fraudulent transfer, proceeds from the sale of a homestead that are transferred to a non-homestead-exempt asset will not be considered exempt.

  1. Post October 1, 2011, a __________________ will only permit an agent to act with respect to items specifically described in the Power of Attorney and will not authorize a number of acts to be taken unless they have been specifically authorized and initialed or separately signed under by the principal.
    1. Durable Power of Attorneys
    2. Weak Power of Attorneys
    3. Trusts
    4. Court Orders

ANSWER: (A) This Florida law will not prevent an out-of-state power of attorney that is in compliance with the law of another state to be given full force and effect. Pre-October 1, 2011, springing powers of attorney will still be honored but only if an affidavit delivered by the principal’s primary care physician states that: (1) the physician is licensed to practice medicine, (2) the physician is the primary care physician of the principal, and (3) that the physician believes the principal lacks the capacity to manage property.

  1. Florida Statute § 222.21 has not always provided that inherited IRAs were exempt from the creditors of beneficiaries.

TRUE                        or                    FALSE

ANSWER: TRUE. Fla. Stat. § 222.21 did not always provide that inherited IRAs were exempt from the creditors of beneficiaries. In 2011, the statute was refined to expressly provide that IRA and qualified retirement plan benefits payable to a surviving spouse and other beneficiaries of the retirement plan participant or IRA owner will be creditor protected if the beneficiary resides in Florida. Therefore, inherited IRAs and rollover IRAs will be considered as exempt assets in bankruptcy or otherwise, as long as the beneficiary resides in Florida or another state that provides exemption for these assets.

BONUS: If a WAVE is a Florida girl in the Navy, and a WAC is a Florida girl in the Army, then what is a WHOCK?

ANSWER: The answer will appear next week. Get your guesses ready!

Stay tuned for more trivia in our next edition of The Thursday Report.

Avoiding Disaster on Highway 709
9 Common Mistakes Related to Spousal Gift Splitting
by Kenneth J. Crotty

Ken_Crotty

When a husband and wife consent to “split gifts” for a given calendar year, all of the eligible gifts that they both made are considered as having been transferred one-half by each spouse. This applies even if the assets transferred were owned by one spouse individually and not jointly or as tenants by the entireties. If spouses elect to split gifts on a gift tax return, such election will also apply for GST purposes. The following three conditions must be met for spousal gift-splitting:

  1. Both spouses must be US Citizens or residents on the date of the gift.
  2. Both spouses must consent to having all of the eligible gifts made by each of them treated as having been made one-half each.
  3. The spouses must have been married when all of the gifts were made during the year and cannot divorce and remarry during the remainder of the calendar year. I.R.C. § 2513(a).

Below are 9 of the most common mistakes we see with respect to spousal gift-splitting and how to avoid them.

Mistake #1 – Not Making the Election Correctly

  • If the spouses agree to split the gifts, they need to confirm that they have appropriately completed Boxes 12, 13, 14, and 18 of the Form 709. You can see a sample Form 709 by clicking here.
  • If both spouses need to file gift tax returns, both spouses will need to sign each of the returns where indicated.
  • If both spouses need to file gift tax returns, the spouses should file both of the individual gift tax returns together in one envelope to help the IRS process the returns and to avoid correspondence from the IRS. Form 709 Instructions, page 5 (I.R.S. 2012).

Mistake #2 – Forgetting to Make the Election

  • Generally, consent to split gifts cannot be made after the later of:
    • April 15th of the year following when the gifts were made (or October 15th if an extension is applied for) or
    • The date the donor spouse files the gift tax return
  • This prevents a couple from filing a gift tax return reporting all of the gifts as having been made by one spouse and then waiting to see if the return is audited before electing gift splitting.

Mistake #3 – Having the Donor’s Spouse Split the Gift to a Trust that the Donor’s Spouse is a Beneficiary of or to a Trust that the Donor’s Spouse is Likely to Receive Benefits From

  • If a split gift is gifted to a trust that has the ability to benefit one or both spouses, then the split gift may not be effective, unless the couple can demonstrate that it is highly unlikely that the beneficiary spouse will receive any benefits from the trust.
  • See Private Letter Ruling 200345038 and the case of William H. Robertson vs. Commissioner, 26 TC 246 (1956).

Mistake #4 – Thinking it is Too Late to Make the Election – One Possible Exception to the April 15th Deadline

  • An election to split gifts may be made by spouses after April 15th of the year following when the gifts are made if:
    • No gift tax return has been filed by either spouse by April 15th, and
    • When the gift tax return for the year in question is filed, the spouses elect to split the gifts
  • It is important to note, however, that a late gift tax return cannot be filed splitting gifts if a notice of deficiency has already been sent by the IRS.

Mistake #5 – Dead or Incompetent Spouses Can Make the Election

  • The executor for a deceased spouse may consent to split a gift made prior to the death of the deceased spouse. Treas. Reg. § 25.2513-2(c).
  • However, a donor may not split the gift with his or her deceased spouse if the gift is made after the spouse’s death. Rev. Rul. 55-506, 1955-2 C.B. 609.
  • The guardian for a legally incompetent spouse may consent to split a gift.

Mistake #6 – Spouses May Not Remarry During the Year

  • It is important to note that spouses can elect to split gifts that were made when they were married, but only if they do not divorce and then remarry during the remainder of the year.
  • If the spouses divorce and one spouse remarries before the end of the year, then the gifts made while the spouses were married cannot be split.
  • In the event that clients divorce and one client has made a large gift which was intended to be split, consider adding in a provision in a marriage settlement agreement to ensure gift-splitting remains viable.

Mistake #7 – The Split is on All Gifts by Both Spouses – No “Picking and Choosing”

  • If spouses elect to split gifts, the election is effective with respect to all eligible gifts made by either spouse to any third party.
  • It is not possible for the clients to pick to split only some of the gifts.
  • The only exception to this rule is gifts to a spouse. These gifts may not be split.

Mistake #8 – Thinking the Election is Irrevocable

  • Many practitioners believe that the election to split gifts is irrevocable. While this is generally true, the following exception applies.
  • Either spouse may rescind the election to split gifts if:
    • The consent was originally made on a return filed before April 15th of the year after the gifts were made, and
    • The consent is rescinded before April 15th of the year after the gifts were made

Mistake #9 – Sometimes the Consenting Spouse Does Not Need to File a Gift Tax Return

  • The consenting spouse does not need to file a gift tax return if only one spouse made gifts, and
    • All of the gifts are present interests, and
    • The total amount received by each donee from the donor spouse does not exceed twice the annual exclusion ($28,000 for 2014),
  • Only the spouse making the gifts needs to file a gift tax return, and the consent of the spouse splitting the gifts must be granted on the gift tax return.

Next time, on Avoiding Disaster on Highway 709, we look at the confusion regarding the gift tax and GST annual exclusions.

Richard Connolly’s World
IRS Commissioner Predicts Miserable 2015 Tax Filing Season

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “IRS Commissioner Predicts Miserable 2015 Tax Filing Season” by Ashlea Ebeling. It was featured in Forbes magazine on November 4, 2014.

Richard’s description is as follows:

Internal Revenue Service Commissioner John Koskinen warned that close to half the people trying to reach the IRS by phone might not get through during the upcoming 2015 tax filing season. “Phone service could plummet to 53 percent,” he told an audience of tax practitioners at the AICPA National Tax Conference in Washington, D.C. today. That would be down from an already unacceptable 72 percent during the 2014 filing season. The average hold time projection: 34 minutes! What’s to blame? Budget woes.

National Taxpayer Advocate Nina Olson was even gloomier. “This filing season is going to be the worst filing season since I’ve been the National Taxpayer Advocate {2001}. I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.”

Please click here to read the article in its entirety, including a discussion on the five key factors that will complicate the upcoming filing season.

Thoughtful Corner
Check Email Less to Reduce Stress
by Alan S. Gassman and Stephanie Herndon

A recent study by the University of British Columbia shows that individuals who check their emails only periodically at preset times each day are less stressed and more efficient than those who check emails constantly.

We doubt that very many people were surprised at the results of this study, which took 124 busy undergraduate students, graduate students, and health care, finance, academia, administrative, and information technology professionals and put them into two groups.

For the first week of the study, the first group was told that they could keep their email inboxes open throughout the day and check them as often as they liked, notwithstanding whether doing so is inefficient or interruptive in the long-run. These participants continued to check their email at approximately the same rate they did prior to beginning the study.

The second group was told that they could only review emails at three set times during each business day. They were also instructed to keep their inboxes closed and turn off email notifications on their phones so they could not be interrupted by emails or text messages during any other time.

These instructions were reversed for the study’s second week – the group allowed to keep their inboxes open all day had to switch to only checking their emails three times per day, and the group formerly under restrictions were allowed free reign of their inboxes once again.

Throughout the two week study, participants also answered brief daily surveys about their stress levels and how much work they got done throughout their days.

It should come as no surprise that stress levels were high when the three-times-per-day rules were first imposed. Most participants reported this practice to be quite difficult to follow. The suspense of not knowing what emails were sitting unanswered, the necessity of not being able to use the checking of emails as a diversion from concentrated effort, and the general changing of an important workplace habit made the first week a big adjustment.

As participants got used to their new routines, however, the group that was only checking emails three times per day reported feeling much less stressed and getting much more done! Their minds knew that they would not be interrupted by emails and that their work plans and patterns would not have to change with continuous and spontaneous interruption of thought.

When was the last time you looked down from 30,000 feet in the clouds to think through whether your email response system and habits are optimum for you, your team, and your clients?

Do clients want an immediate response, or would they rather have their work done by a professional who is thinking clearly, deliberately, and efficiently, without experiencing constant interruptions?

A number of very well respected and very busy professionals simply do not answer emails until the end of the day or sometimes even the next day.

The next time you are in line to buy a coffee, get a prescription filled, or get your second martini, check your thoughts instead of your emails. Make a date to think through how you should best be handling your emails and other office interruptions. Turn off your monitor and your iPhone and think about how to best live your life during a decade filled with distractions and an expectation of 24/7 availability.

Please email this to a friend and ask for an immediate response.

For more on the study referenced in this article, please click here.

Upcoming Seminars and Webinars

LIVE FLORIDA BAR FORT LAUDERDALE REPRESENTING THE PHYSICIAN LAW CONFERENCE:

Alan Gassman will speak at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. We thank chair Lester Perling for doing most of the work on this annual conference.

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will speak at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS. We have put a great many hours of time into a comprehensive, easy-to-understand outline that we plan to have become a book on this topic. Satisfaction guaranteed!

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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FREE LIVE WEBINAR SERIES ON LIFE INSURANCE FOR TAX ADVISORS:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on HOW TO READ LIFE INSURANCE ILLUSTRATIONS in the first of a series of webinars intended to help tax lawyers and CPAs understand how life insurance and life insurance structuring works from a technical and mechanical standpoint.

Bring your wrench and screwdriver as we look under the hood to see how we can do our clients some good!

Date: January 26, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register for the January 26th webinar, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

Rao & Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS
(These conferences are so good that we were not invited to speak!)
 

LIVE CLEARWATER PRESENTATION:

RUTH ECKERD HALL PLANNED GIVING ADVISORY COUNCIL MEETING

Ruth Eckerd Hall’s next Planned Giving Council Meeting will be a spectacular two-part event, featuring an educational presentation at 4:30 p.m. and a networking session at 5:30 p.m.

“Improve with Improv: Using Humor and Immediate Responses to Enhance Client, Professional, and Social Interaction” will be led by Jack Halloway, a well-known improvisational coach and actor. This workshop will cover the basic and effective methods of improvisation in order to increase participants’ ability to think quickly, listen closely, and feel more comfortable responding to situations.

The presentation will be followed by a social networking and information session led by Ruth Eckerd Hall’s President and CEO Zev Buffman.

Call Ruth Eckerd Hall, learn improvisation, get an hour of credit, a glass of wine, and a great time!

Date: Tuesday, January 20, 2015 ǀ 4:30 p.m.

Location: Ruth Eckerd Hall’s Margarete Heye Great Room

Additional Information: For more information, or to RSVP, please contact Alan Gassman at agassman@gassmanpa.com or Suzanne Ruley at sruley@rutheckerdhall.net.

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information. 

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

8 - Rates Chart

The 7520 rate for January is 2.2% and for December was 2.0%.

The Thursday Report – 1.8.2015 – Margaritaville and Heckle and Jeckle Part I

Posted on: January 8th, 2015

Header

 A Message From The Thursday Report

Avoiding Disaster on Highway 709: The Ten Biggest Mistakes Made on Gift Tax Returns and How to Avoid Them

Gregory Gay’s Corner – Selling a Residence and Homestead Exemptions, Part I

Richard Connolly’s World – The Way Early ‘529’ Gift

Seminar Spotlight – Tampa Bay Estate Planning Council Dinner Program

Thoughtful Corner – Using Personality Test Results to Improve Your Team Performance, Synergism, and Satisfaction

Humor Lite!

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

A Message From The Thursday Report

Lite Edition Notice – The National Thursday Report Advisory Council (NTRAC) has placed the Thursday Report on probation for excess humor and is requiring us to issue a lite version every other Thursday in order to enhance the quality of our even numbered Thursday Reports.  We find this to be odd, but will comply for the foreseeable future.  On opposite weeks we will still bring you full Thursday Reports packed with all of the information and humor you or a bucket of Kentucky Fried Chicken can hold!  We hope that you will continue to join us each week!

— The Management

“The above is untrue and being investigated.”

— The National Thursday Report Advisory Council

Avoiding Disaster on Highway 709: The Ten Biggest Mistakes Made on Gift Tax Returns and How to Avoid Them

Ken_Crotty

by Kenneth J. Crotty

The Top 10 Mistakes we see with respect to filing gift tax returns are as follows:

  • The gift tax return does not contain sufficient information to provide “adequate disclosure” to the IRS. This prevents the statute of limitations on the ability of the IRS to audit the gift from starting to run.  As a result, the IRS will have an unlimited time to audit the gift.
  • The return is filed and does not utilize the client’s annual exclusion to reduce the value of the reportable gifts that are made. When the preparer does not reduce the value of the reported gifts by the donor’s applicable annual exclusions, then a portion of the donor’s gift and estate tax exemption is wasted, which could cause the family to owe unnecessary gift or estate tax.
  • The gift tax return does not exclude from the reportable gifts the gifts which qualify for the educational or medical exclusion. This oversight will also unnecessarily use the donor’s lifetime gift and estate tax exemption, which could cause the family to owe additional gift or estate tax.
  • The return misreports gifts to 529 plans that exceed the annual exclusion. Gifts to 529 plans can be spread out over a period of 5 years, but this election must be affirmatively made on a gift tax return.  If a gift to a 529 plan in excess of the annual exclusion is not split, then the gift will use some of the donor’s gift tax exemption, which could cause the family to owe unnecessary gift or estate tax.
  • The return is prepared assuming that annual exclusion gifts also qualify for the GST tax annual exclusion. Most gifts that qualify for the gift tax annual exclusion that are made to trusts do not qualify for the GST tax annual exclusion, and utilize some of the client’s GST tax exemption.  If these are misreported, then the client may have less GST tax exemption remaining than what is stated on the return, which could significantly impact future planning.
  • When a gift is made to a trust, the gift tax return is filed without attaching either a copy of the trust or a brief description of the trust’s terms to the return. Pursuant to Treasury Regulations, if a reportable gift is made to a trust and the gift tax return is filed without attaching either a copy of the trust or a brief description of the trust’s terms, then adequate disclosure has not been provided to the IRS.  Per Mistake #1 above, the statute of limitations on the ability of the IRS to audit the gift does not start to run.
  • Gifts made to trusts which are not direct skips for GST tax purposes are reported on Schedule A Part 2 and not on Schedule A Part 3. Returns prepared this way are incorrect and might be considered to not provide adequate disclosure.
  • A joint tax return is filed. Spouses may not file a joint gift tax return.  If a joint gift tax return is filed, more than likely the statute of limitations will not begin to run for any of the gifts that are reported on the return.
  • Mistakes related to gift splitting. Married spouses may split the gifts they make so that the gifts are treated as having been made one-half by each spouse.  There are numerous traps related to gift splitting which may prevent the gift from actually being split.
  • The possibility of opting out of the automatic allocation of GST Exemption is not considered. If the value of property that was an indirect skip has decreased when the gift tax return is filed, the return preparer should consider opting out of the automatic allocation of GST Exemption. In this case, a second return could be filed allocating GST exemption equal to the reduced value of the property, thereby saving the client’s GST exemption.  It is important to note that this should only be considered for indirect skips and not direct skips, otherwise GST tax would be payable.

Next, the Disaster on Highway 709 series continues with a look at 9 Common Mistakes Related to Spousal Gift Splitting.

Gregory Gay’s Corner
Selling a Residence and Homestead Exemptions, Part I

2 - Gregory Gay

Gregory G. Gay, Esquire is an attorney from Tarpon Springs who specializes in meeting the special needs of senior citizens and the disabled. He is Board Certified in Wills, Trusts & Estates and in Elder Law by the Florida Bar. He has also been named a Certified Advanced Practitioner by the National Elder Law Foundation.

Mr. Gay is the author of the Florida Senior Legal Guide, the 8th edition of which can be purchased by clicking here. In the coming weeks, we will be profiling some of the best chapters from this excellent publication. Our deepest thanks to Mr. Gay for making this content available to Thursday Report readers!

This week, we turn our focus to real estate with an examination of reverse mortgages and capital gain exclusions on the sale of a residence.

Capital Gain Exclusion on the Sale of a Residence

A single taxpayer can exclude up to $250,000 of the gain received on the sale of a principal residence, provided that the taxpayer has owned and occupied the residence as a principal residence for at least two of the past five years prior to the date of sale. This exclusion increases to $500,000 for married couples who meet this requirement.

A taxpayer who cannot meet these new requirements because of a change of employment or a disability is able to exclude a portion of the taxpayer’s capital gain earned on the sale of a residence.

LIFE SITUATION #6

Paul and Carol purchased a residence in New York in 1960, for $30,000. They retired to Florida on January 1, 2012 to a new residence for which they then began claiming a homestead exemption. Paul and Carol would like to sell their New York residence, which now has a fair market value of $300,000. Since Paul and Carol have resided in the New York residence for two of the last five years, they can exclude the entire $270,000 capital gain realized for federal income taxation purposes if they sell their New York residence by December 31, 2014. This is because they resided in their New York residence in 2010 and 2011.

If Paul and Carol continue to reside in Florida and do not sell the New York residence by December 31, 2014, they cannot claim they lived in the New York residence for two of the past five years. If they wait to sell the residence after the year 2014, they will have to pay income tax on a capital gain of $270,000 if they sell it for appraised value unless they return to New York and reside in their New York residence for two years before selling it. They will need to abandon their claim for the Florida homestead exemption in the years they subsequently reside in New York. Florida has no state income tax. However, Paul and Carol should be aware that there is a state income tax in New York. Thus, any capital gain may also be subject to taxation at both the federal and New York rates.

LIFE SITUATION #7

Sally, a widow, purchased a residence in 2010 but in 2012 entered a nursing home where she has continued to reside. If Sally sells her residence, she will be able to exclude the entire capital gain on the sale of her residence. There is an exception to the two-year residency requirement if the owner is physically incapable of residing in his or her residence.

Until now, if a spouse died late in the year, the surviving spouse had to quickly sell the family residence before the end of the year if the surviving spouse wanted to preserve the $500,000 exclusion on the sale of a residence. The law now gives the surviving spouse a $500,000 exclusion if the sale of the residence occurs not more than two years after the year of the death of the first spouse and all of the other conditions apply. If the surviving spouse remarries before the residence is sold or exchanged, this new two year exclusion will not apply.

Reverse Mortgage

A reverse mortgage is a home loan that provides cash advances to a homeowner, but does not require any certain repayment until the home is sold or the surviving homeowner dies or relocates. The funds received from a reverse mortgage can be used for any purpose a homeowner deems appropriate including the additional expense related to a homeowner’s assisted living or nursing home cost. The proceeds from a reverse mortgage can also be used to pay for unexpected repairs to the home due to storm damage.

A reverse mortgage is different from a traditional mortgage, or a home equity line of credit, in that a homeowner must have sufficient income and little or no debt to qualify for these types of loans. In addition, the homeowner is required to make monthly mortgage payments. By contrast, a reverse mortgage is available regardless of the homeowner’s current income. In addition, the homeowner creating a reverse mortgage cannot be foreclosed or forced to vacate the home because he or she does not make a mortgage payment.

The amount a homeowner can borrow on a reverse mortgage depends on the age of the youngest borrower, the current interest rate, and the appraised value of the home or the Federal Housing Administrations mortgage limits for the homeowners county, whichever is less. Generally, the more valuable the home, the older the homeowner, and the lower the interest rate, the greater the amount that can be borrowed.

While the homeowner is not required to make payments as long as the house remains his or her principal residence, the homeowner is still required to pay the real estate taxes, assessments and property insurance. When the home is sold or is no longer used as the borrower’s primary residence, the borrower must repay to the lender the cash received from the reverse mortgage, plus the accrued interest and closing costs. The remaining equity in the home, if any, belongs to the borrower. None of the borrower’s other assets will be affected by a reverse mortgage loan.

The most common reverse mortgage is the Home Equity Conversion Mortgage. This is the only reverse mortgage that is insured by the Federal Housing Administration (FHA). Over 493,815 senior citizens have taken advantage of FHA’s Home Equity Conversion Mortgage as of May, 2010. All of the homeowners must be age 62 and older in order to receive a Home Equity Conversion Mortgage. By contrast, a “proprietary” reverse mortgage is lent by a private company that owns the mortgage. Loan costs can vary from one type of reverse mortgage to another.

Not all reverse mortgages include the same type of loan costs. As a result, the true total cost of reverse mortgages can be difficult to understand and compare. That is why federal Truth-in-Lending law requires lenders to disclose a “Total Annual Loan Cost” for these loans. This is the same comparison used for a traditional “forward mortgage”.

If funds actually drawn from a reverse mortgage are not spent in the same month as received, these funds will be counted as available assets to the community spouse or the nursing home patient. These excess assets could disqualify the nursing home spouse’s Medicaid eligibility for subsequent months if the community spouse or the nursing home spouse has too many countable assets. Medicare and Social Security benefits are not affected by monies received from the reverse mortgage.

On October 4, 2010, the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) introduced a new program called the HECM Saver. The HECM Saver is an option to the existing HECM program that will now be referred to as the HECM Standard. While the HECM Standard will continue to charge an initial mortgage insurance premium of 2 percent of the maximum amount of the mortgage, the HECM Saver will only charge .01 percent of the loan amount. Thus, the MIP for a $200,000 HECM Standard will be $4,000 while the MIP for a $200,000 HECM Saver will be $20. The trade-off will be that the amount the borrower can finance will be reduced between 10 to 18 percent. This will reduce the risk to the FHA insurance fund by reducing the principal limit or the amount of money available to the borrower.

Further information regarding reverse mortgages can be obtained from the Internet at www.aarp.org. The Department of Housing and Urban Development also provides information regarding its approved lenders without cost. Approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and referrals to HUD’s approved lenders.

Next time, Gregory Gay’s series will continue with commentary on Florida Documentary Stamp Tax, title insurance, and property tax exemptions. If you would like to read the Florida Senior Legal Guide in its entirety, please visit http://www.seniorlawseries.com. Mr. Gay can be reached at gregg@willtrust.com.

Richard Connolly’s World – The Way Early ‘529’ Gift

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “The Way-Early ‘529’ Gift: Grandparents Can Start a College-Savings Plan Before a Baby is Born.” It was featured in The Wall Street Journal on November 3, 2014.

Richard’s description is as follows:

So you just threw your daughter a big wedding. Now comes the not-so-obvious next step: setting up “529” plans for the future grandchildren.

If that seems like rushing things, think again. With the average four-year price of a private college nearing $165,000 and rising 3.7% a year, anxious families are looking at lots of strategies for helping future grandchildren get a college education. One strategy is to open a 529 college-savings plan and have it start growing years before the future student is even born.

Please click here to read the article in its entirety.

Seminar Spotlight
Tampa Bay Estate Planning Council Dinner Program

Wednesday, January 21, 2015, 6:45 p.m. at the Tampa Club,

101 E. Kennedy Blvd, Tampa, FL

Planning for Ownership and Inheritance of Pension and IRA Accounts and Benefits, the Handbook and Charts You Have Always Wanted

By Alan S. Gassman, J.D., LL.M. and Christopher J. Denicolo, J.D., LL.M.

This presentation will provide attendees with clear directions for understanding and applying the rules with reference to minimum distributions, transfers and rollovers, trust beneficiaries, and how to otherwise handle pension and IRA accounts. The discussion and handbook will also cover creditor protection aspects of pension and IRA planning, non-qualified variable annuity distribution planning, annuitized IRA planning, qualified longevity annuity contracts (QLACs) and more.

The presentation will also discuss:

  • Understanding the rollover, aggregation/non-aggregation, creditor protection, borrowing, and first-time homeowner rules as they apply to living participants
  • Understanding the four different methods of calculating minimum distributions and when each of them applies
  • Understanding what post-death decisions can be made and what flexibilities can be programmed into an estate and trust plan so that the best possible decisions can be made during the 9 months after the death of the IRA/Plan Participant
  • Being able to determine how to best integrate Roth and regular IRA and plan distribution planning with Q-TIP marital deduction trusts, generation skipping trusts, and non-generation skipping trusts
  • Understanding the differences in the payout rules that apply based upon whether the deceased IRA owner/plan beneficiary was receiving minimum distributions by reason of having reached age 70.5
  • Understanding annuitized IRA contracts, qualified longevity contracts (QLACs) and beneficiary designation planning under non-qualified variable annuity contracts

Alan Gassman will present this talk at the Tampa Bay Estate Planning Council Dinner Program on January 21, 2015. This dinner program will take place at The Tampa Club on 101 E Kennedy Boulevard, 41st Floor in Tampa, Florida.

The event runs from 5:30 p.m. to 7:30 p.m. The presentation described above will run 30 minutes, from 6:45 p.m. to 7:15 p.m.

If you are interested in attending or for more information, please email Alan Gassman at agassman@gassmanpa.com.

Thoughtful Corner
Using Personality Test Results to Improve Your Team Performance, Synergism, and Satisfaction

It amazes us that many companies and law firms are able to put together an effective team without using traditional and effective psychological test results. These results can help make sure that jobs are appropriately tailored to the prospective employee’s personality and talent characteristics. They can also help coach supervisors on how to best handle each employee’s specific traits.

We have been using the Omnia Profile system for over 25 years, and we will not leave home without it!

If the Omnia Profile report says that something is likely to go wrong with a prospective employee, then we simply stay on watch for that, and it will almost always happen.

We have learned the hard way that hiring against Omnia’s advice is almost always a very bad idea.

Why don’t other offices use these techniques?

Usually we find that this is either inexperience with use or a desire to save $150 at the risk of spending a few thousand dollars.

Humor Lite!

Heckel and Jeckel

 Upcoming Seminars and Webinars

LIVE FLORIDA BAR FORT LAUDERDALE REPRESENTING THE PHYSICIAN LAW CONFERENCE:

Alan Gassman will speak at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. We thank chair Lester Perling for doing most of the work on this annual conference.

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will speak at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS. We have put a great many hours of time into a comprehensive, easy-to-understand outline that we plan to have become a book on this topic. Satisfaction guaranteed!

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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FREE LIVE WEBINAR SERIES ON LIFE INSURANCE FOR TAX ADVISORS:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on HOW TO READ LIFE INSURANCE ILLUSTRATIONS in the first of a series of webinars intended to help tax lawyers and CPAs understand how life insurance and life insurance structuring works from a technical and mechanical standpoint.

Bring your wrench and screwdriver as we look under the hood to see how we can do our clients some good!

Date: January 26, 2015 | 5:00 p.m.

Location: Online webinar

Please note the below announcements for subsequent installments of this series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Additional Information: To register for the January 26th webinar, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

Rao & Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!
This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS
(These conferences are so good that we were not invited to speak!)

 LIVE ORLANDO PRESENTATION

49th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 12 – 16, 2015

Location: Orlando World Center Marriott, 8701 World Center Drive, Orlando, Florida

Additional Information:

Don’t miss Howard M. Zaritsky and Lester B. Law’s January 12th morning discussion of Basis – Banal? Basic? Benign? Bewildering?, which will include mention and some commentary and advice on the use of our JEST trust system. Don’t leave home without it!

When browsing the tables, be sure to stop by Management Planning, Inc. or Veralytic for a chance to purchase one of our books or check out our EstateView software! Phil’s Ultimate Estate Planner will also be featuring our JEST forms and instructional webinar.

For more information please visit: https://www.law.miami.edu/heckerling/?op=0

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LIVE CLEARWATER PRESENTATION:

RUTH ECKERD HALL PLANNED GIVING ADVISORY COUNCIL MEETING

Ruth Eckerd Hall’s next Planned Giving Council Meeting will be a spectacular two-part event, featuring an educational presentation at 4:30 p.m. and a networking session at 5:30 p.m.

“Improve with Improv: Using Humor and Immediate Responses to Enhance Client, Professional, and Social Interaction” will be led by Jack Halloway, a well-known improvisational coach and actor. This workshop will cover the basic and effective methods of improvisation in order to increase participants’ ability to think quickly, listen closely, and feel more comfortable responding to situations.

The presentation will be followed by a social networking and information session led by Ruth Eckerd Hall’s President and CEO Zev Buffman.

Call Ruth Eckerd Hall, learn improvisation, get an hour of credit, a glass of wine, and a great time!

Date: Tuesday, January 20, 2015 ǀ 4:30 p.m.

Location: Ruth Eckerd Hall’s Margarete Heye Great Room

Additional Information: For more information, or to RSVP, please contact Alan Gassman at agassman@gassmanpa.com or Suzanne Ruley at sruley@rutheckerdhall.net.

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

8 - Rates Chart

The 7520 rate for January is 2.2% and for December was 2.0%.

Happy Thursday from the New Year’s Report – 1.1.15

Posted on: December 31st, 2014

1 - Header

2 - Thursday

Happy Thursday from Kristen Sweeney and The New Year Report

Biel Reo is Not in Rio de Janeiro – The 4-Year Fraudulent Transfer Statue Will Apply in Bankruptcy, Even if Trumped by the Florida Supplementary Proceedings Law

Judge Williamson’s Comment on Ill-Gotten Gains and the Bifani Case

Find Us in Bloomberg BNA’s Estate and Gift Tax Quarterly!

Best of The Thursday Report 2014, Part II

Richard Connolly’s World – Focusing on the Human Element of Estate Planning

Thoughtful Corner – Resolutions are Not Legally Binding

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Happy Thursday from Kristen Sweeney and The New Year Report

Kristen Sweeney

You might never guess from the bright Florida sun,
But 2014’s over, finished, and done.

Its sendoff had whistles and confetti rain
And beautiful flutes of bubbly champagne.

We watched the ball drop, way up in Times Square,
And we thought, “It’s so crowded; I’m glad I’m not there!”

Then we all yelled and shouted at 11:59
When they said, “Let’s open one more bottle of wine.”

If you woke up this morning with red bloodshot eyes,
Just have a mimosa, your headache disguise.

You might watch football all day on TV
Or maybe it’s time to take down the tree.

It might be this Thursday you find some solutions
To help follow through on this year’s resolutions.

Take time to be grateful for all that you’ve got.
The sunshine is warm or the fireplace hot.

You might write a goal, a thing or two,
That in this year you would like to do.

You might join the gym or go on a diet.
But today’s a family day – wait for tomorrow to try it.

You might pass the Bar or buy a new car,
Whatever you choose, you’re sure to go far.

Before the new habit you were going to abort,
Don’t forget to share your Thursday Report.

Every day is special and the only day you are in,
But Thursdays are the best when you are Thursday Report’n.

So onward and upward, toward the future we lean,
Here’s the first Thursday Report of 2015!

Biel Reo is Not in Rio de Janeiro – The 4-Year Fraudulent Transfer Statue Will Apply in Bankruptcy, Even if Trumped by the Florida Supplementary Proceedings Law

A previous Thursday Report reported on the Biel Rio case, in which the First District Court of Appeals found that the four-year fraudulent transfer statute does not block a judgment creditor from proceeding against a transferee more than four years after a transfer made to avoid creditors. Click here to see our previous commentary on the case.

Here is what one very bright bankruptcy lawyer has had to say about avoiding this result by filing bankruptcy:

The decision in Biel Reo, LLC v. Barefoot Cottages Development Co., LLC  — So.3d — (2014) is interesting and raises a number of questions about Florida law (including exactly how far back can a judgment creditor look to recover transfers made before a judgment is entered). That said, the decision begs one strategic federal question as to why the judgment debtors’ families did not pursue a different path. Specifically, perhaps Gwin and Shoults should have considered seeking relief in a Chapter 7 bankruptcy case.

In that event, once the bankruptcy case was filed, the right to recover the transfer would be property of the bankruptcy estate, not the judgment creditor. In re Moore, 608 F.3d 253, 261 (5th Cir. 2010) (fraudulent transfer claims “become estate property once bankruptcy is under way by virtue of the trustee’s successor rights under § 544(b)”); In re C.D. Jones & Co., Inc., 482 B.R. 449 (Bankr. N.D.Fla. 2012); In re Zwirn, 362 B.R. 536 (Bankr. D.S. Fla. 2007).

The automatic stay would then immediately stop the proceedings supplementary. 11 U.S.C. §362(a)(1), (2), and (3). At that point, only the bankruptcy trustee has standing to pursue the transfers. In re Pearlman, 472 B.R. 115, 121-122 (Bankr. M.D.Fla. 2012) (“Indeed, only the trustee can bring federal and state law fraudulent transfer actions to recover property for the bankrupt estate.”) The trustee would have different and greater limitations problems than the judgment creditor. 11 U.S.C. §546(a); In re Hill, 332 B.R. 835, 843 (Bankr. M.D.Fla. 2005) (“the Trustee cannot use Florida Statute §56.29 as an alternative basis to set aside the transfers”).

A bankruptcy discharge would take care of the judgment. 11 U.S.C. §524(a)(1) & (2) (“[a] discharge in a case under this title voids any judgment at any time obtained [and] operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt.”). To be sure, there are lots of other issues to consider, but taking the bankruptcy route before the ruling on the proceedings supplementary could have meant millions of dollars of difference for the judgment debtors’ families.

Judge Williamson’s Comment on Ill-Gotten Gains and the Bifani Case

Last week, we published a follow-up article about the Bifani bankruptcy/homestead case. You can see our article by clicking here.

Since our last Thursday Report went out, Judge Michael Williamson had this to say:

While Havoco attracts the most attention in allowing a fraudulent conversion of non-exempt property into a homestead, what is often overlooked is that Havoco itself recognizes the Fishbein exception, 619 So. 2d 267 (Fla. 1993), which allows the imposition of an equitable lien where there are two frauds: (1) the permitted fraudulent conversion into the homestead, and (2) the initial wrongful conduct that taints the proceeds as being ill-gotten, e.g. the funds were stolen or obtained through fraud. The 11th Circuit in Bifani simply confirms what has long been the law in this area.

In Havoco, the Florida Supreme Court found that an intentionally fraudulent transfer into homestead would not be set aside because the protection of homestead under the Florida Constitution trumps the Florida Fraudulent Transfer Statute. In Fishbein, however, the Florida Supreme Court found that when ill-gotten monies are transferred into homestead, the transfer can be set aside. In Bifani, the 11th Circuit agreed with Judge Williamson that a fraudulent transfer made by someone contemplating bankruptcy will be considered as ill-gotten gains for purposes of recapturing the transfer from the homestead of the transferee that was funded thereby.

Stay tuned for more details on this case next year!

Find Us In Bloomberg BNA’s Estate and Gift Tax Quarterly!

Check out Bloomberg BNA’s January 2015 Estate and Gift Tax Quarterly with our articles on The Most Common Mistakes Florida Planners Make (besides not reading The Thursday Report every week!) and Way Down Upon the Bifani River. We thank Aen Webster, Esquire for all of her assistance and patience in editing and designing our articles.

“I love deadlines. I love the whooshing sound they make as they fly by.”
Douglas Adams

Best of The Thursday Report 2014, Part II

Remembering Michael Keane
originally published in the February 20, 2014 Thursday Report

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We were very sad last February to note the passing of St. Petersburg litigator, Michael J. Keane.  Michael was a great friend of almost every client he represented and had magical powers both in the conference room and the court room.

Michael was always very sympathetic to clients having business, family, and emotional challenges.  Michael settled his matters whenever he could but also would not hesitate to go to court to fight for his clients’ rights.

Perhaps one in one hundred or three hundred lawyers has the passion, total dedication, and amazing raw talent that Mike Keane had and so freely shared.

Mike had so many close friends in the community, garnered from the time he spent as a great father, a baseball coach, and a friend and confidant for many.  Almost everyone who practices in St. Petersburg and many of us who practice in the Tampa Bay area have a couple of great stories about Mike.

Mike’s amazing partners Shirin Vesley, Brandon Vesley, and Charles Gerdes and associates, R. Garrison Mason and Nicole M. Ziegler, along with their wonderful staff will carry the torch to help a great many people in the upcoming years.  Let’s wish them and Michael’s family the very best, and remember how privileged we are to carry our own torches to help others in need while serving as platforms to uphold and improve the integrity of our legal, tax and judicial systems.

We welcome any comments and suggestions for further observance of Michael Keane and express our most sincere condolences to his family and friends.

George Allen – A University of Florida and National Hero Who Overcame Racial Obstacles to Succeed in Practicing Law and Helping Others
By Alan S. Gassman, Esq. and Dena Daniels
originally published in the February 20, 2014 Thursday Report

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Dena Daniels is from the small town of Jasper, FL and is the first individual from both sides of her family to receive a bachelor’s degree.  Dena Daniels is a second-year law student at Stetson University College of Law. She was amongst the first group of students from Hamilton County High School to complete the dual-enrollment program at North Florida Community College; she graduated high school with 62 college credit hours. Dena graduated with her B.S. in Business Administration from the University of South Florida and her Masters of Business Administration from Valdosta State University. Dena is seeking a concentration in Social Justice Advocacy and is a law clerk at Gassman Law Associates.

Born on March 3, 1936 in a totally segregated Sanford, Florida, Attorney W. George Allen was the first African-American to receive his J.D. from the University of Florida Law School. Allen grew up working in the celery fields of Sanford, Florida where the county closed down the black schools in the winter and forced every able-bodied black person to work in the fields.  Blacks were arrested for not working.   Mr. Allen never saw a toilet flush until he was four years old. He grew up in a small house on a dirt road and attended elementary school, middle school, and high school in all black programs.

After graduating with the highest grade point average from his high school, Crooms Academy, in 1954, Allen attended college at Florida A&M University in Tallahassee, FL. While he was a student there, Allen was a high level seeker. He mentions in his book, “Where the Bus Stops,”  “I sought out the hardest, most demanding teachers because I learned more from teachers who were demanding and who challenged students to achieve at their highest level.” Allen was extremely active on campus. He became a member of the Alpha Phi Alpha fraternity in 1955.  Allen became vice president and was elected president during his senior year of Beta Nu Chapter of Alpha Phi Alpha. He was also a member of the ROTC.  While in college, Allen suffered financial hardship, “Also, in my freshman year I did not have funds to buy the required texts, so I borrowed my books, principally from athletes who were mostly uninterested in studying and reading the books. I would read the entire book and go to class to take notes.” Because Allen did not have enough money to afford his books, he had two jobs during his junior year. Without being affected by his hardship, Allen gained popularity at FAMU, “I was popular, smoked a pipe, wore bowties, and engaged in my share of extracurricular activities. I made many trips to Hoffman Restaurant and Bar, which was near the campus and where most of the popular students met to drink Spearman Beer.” Upon graduation in 1958, he was commissioned as a 2nd Lt. in Army Intelligence. In 1960 Allen applied to four law schools: the University of Florida, Florida A&M University, Harvard, and the University of California at Berkeley. Being accepted to the three of the four schools (he never heard from Florida A&M Law School), he decided to attend the University of Florida after George Starke (a Sanford native and the first black to be admitted to the University of Florida Law School) and Regina Langston (one of the first blacks to attend the University of Florida Medical School) withdrew from these University of Florida graduate schools due to unbearable racial discrimination.

Mr. Allen faced significant racial mistreatment from fellow students, but he had some support from the administration. In his book, “Where the Bus Stops”, Mr. Allen shares one of the many tensed racial moments that he experienced at the University of Florida School of Law. During his second semester of law school, Mr. Allen was standing in line for over 30 minutes to register for courses; the courses were assigned on a first-come, first-served basis. Mr. Allen details in his book:

“When it was my turn to choose courses, Ralph Paul Douglas, whom I did not know, stepped in front of me and said, ‘boy I’m next’. I became incensed about being called boy and his attempt to move in front of me, so I hit him with a right cross on the chin and knocked him out. I stepped over Ralph, spread my list of courses in front of Professor Weyrauch, and said, ‘Sir, I would like to register for these courses.’ The professor signed me up, I turned, stepped over Ralph and left the library with many students whispering about my violent behavior.”

Much to his surprise, years later, Mr. Allen appeared in West Palm Beach, FL for a hearing and the presiding judge was none other than the receiver of his deadly cross, Ralph Paul Douglas. Automatically realizing who each other was, the judge asked Mr. Allen, “Should I duck?” and his response was, “Only if I am insulted.” The two laughed as they both reflected on the once tensed situation, but regardless of their past, Judge Douglas was fair and justice was served.

Throughout his law school career Mr. Allen experienced an insurmountable amount of threats and discrimination. Allen and his wife attended a wedding in Tampa in 1958, and to celebrate they went to the famous Columbia Restaurant. They were not permitted to eat there because of their color. He mentions: “That treatment buttressed my desire to attend law school and fight to end discrimination in public accommodations in all institutions in Florida.” He even got into a few physical altercations. In an interview he stated, “I made it known that I don’t believe in non-violence like Martin Luther King. You bother me, I’m violent.” His no nonsense attitude shaped him to be the perfect individual to successfully handle the rigor of being black in a southern institution of higher learning. Allen graduated from the University of Florida Law School in 1963. He has run a successful practice in Ft. Lauderdale, FL for forty-two years, and he has helped to liberate many minority organizations and individuals from being mistreated.  Mr. Allen indicates that there is still a significant amount of discrimination and societal resistance to equal treatment, but he is proud of what he and other black lawyers have accomplished in the past five decades.

Please be sure to read W. George Allen’s autobiography, entitled “Where the Bus Stops.”  You will not want to stop until you are completely done with this book.

New 4th DCA Decision May Dramatically Change the Landscape for Many Creditor Protection Plans
originally published in the May 15, 2014 Thursday Report

Florida’s fourth district court of appeals chewed an opinion on March 5, 2014, which indicated that Florida courts do not have in rem or quasi in rem jurisdiction over foreign states and does not have the authority to order the debtors to turnover foreign stock certificates.  In this case a gentleman named Mohammad Anwar Farid Al-Saleh, who is a citizen of the Country of Jordan, sued two individuals for having proceeded with a corporate business arrangement without sharing profits with him.  He received a judgment for over $20,000,000 and then asked the Palm Beach County court, in a motion for proceedings supplementary, to order the two defendants in the case to turn over “all stock certificates and similar documents memorializing their ownership interest in any corporation.”

The court noted that “allowing trial courts to compel judgment debtors to bring out-of-state assets into Florida would effectively eviscerate the domestication of foreign judgment statutes”.  The court also noted that “there may be competing claims to the foreign assets and we believe that claims against a single asset should be decided in a single forum – and . . .that the forum should be, as it traditionally has been, a court of the jurisdiction in which the asset is located.”  The court cited the 2009 New York Court of Appeals case of Koehler v. Bank of Bermuda Ltd., 911 N.E.2d 825 (N.Y. 2009) for the above quotation, and distinguished the situation in this case from the circumstances of the Koehler decision, where an international bank with a presence in New York was ordered to turn over stock certificates that it was holding outside of New York.  In this case the party with the physical possession of the stock certificates apparently has no physical ties to Florida.

This case has made the national news and will be quoted by many for the proposition that the best place to keep stock certificates and other evidence of ownership may by in foreign countries.

In this case the subject stock certificates concerned assets located in the Bahamas, the Netherlands, Jordan, The Isle of Man, and the Dominican Republic.

Courts may find that the assets owned and/or the state of incorporation is Florida, then a debtor may be required to turn over stock certificates, no matter where they are.

As the result of this case many planners will doubtlessly encourage clients and potential clients to keep more assets in offshore companies, and to issue stock certificates and have them held in jurisdictions that do not recognize U.S. judgments.

Tea for Two Liked by Bloomberg BNA, Too!
originally published in the July 3, 2014 Thursday Report

Our recent article entitled “Tea for Two and Two for TBE” has been featured in the July edition of the Bloomberg BNA Tax Management Estates, Gifts and Trusts Journal, with the following introductory poem:

Tea for Two,

And two for TBE,

Many clients want to own assets jointly,

If not sure, why not try and see………..

The article explains that same gender couples residing in Florida and other states that do not recognize their marriages may still nevertheless attempt to use tenancy by the entireties in anticipation of court decisions that will quite likely provide that state law must recognize these marriages.

For a copy of the article, please click here.

What about situations where the individuals are married and one dies owning a homestead and Florida does not recognize the marriage?  Will there be a cause of action later to the effect that the surviving spouse had homestead inheritance rights?  Time will tell, but on some days it is better to be a lawyer than a title insurance company.

Some Kind of Wonderful – Can I Get a Witness?
Fifth Circuit Court of Appeals Leaves the IRS in a Grand Funk
originally published in the September 25, 2014 Thursday Report

Tax Court overturned on decision to grant IRS-requested 10% discount on partial ownership of artwork where only the estate had experts to testify; 14 million dollar refund results

Just 10 days ago, the Fifth Circuit Court of Appeals delivered an early Rosh Hashanah gift to the Elkins family, who stuck by their guns with reference to the valuation of a very special art collection.

The Fifth Circuit Court of Appeals rejected the Tax Court’s 10% discount, and applied the estate expert’s discount at 47.5%. In Estate of Elkins v. C.I.R., 2014 wl 4548527 (2014), the decedent had an aggregate 73.055% interest in the art, and his three children had the remaining interest divided equally among them. In the Tax Court proceedings, the estate had two experts testify that any hypothetical willing buyer would demand discounts because they would become co-owners with the Elkins decedents. The Commissioner, however, did not use any evidence to establish another fractional-ownership discount but instead stayed with his no-discount position.

The Court of Appeals stated that the Commissioner had the burden to refute the estate’s discounts under U.S.C. section 7491. The court held, however, that the Tax Court’s failure to give the burden of proof made no difference in the end. “This is because, having put all of his eggs in the one, no-discount basket at trial, the Commissioner cannot be heard on appeal to question the quantity, quality, or sufficiency of the evidence adduced by the estate to prove the quantum of the fractional-ownership discounts to be applied.”1 Thus, the Tax Court was required to accept the discounts that the estate proved through their expert’s testimony.

The Court of Appeals held the estate’s expert’s testimony was satisfactory to determine how much a hypothetical willing buyer would pay for the art: “a potential willing buyer would undoubtedly insist that his potential willing seller further discount the sales price to account for the virtual impossibility of making an immediate ‘flip’ of the art.”2 The Court of Appeals held that the Estate was entitled to a refund of $14,359,508.21.

The estate in this case was lucky that the Commissioner stuck to his no-discount guns and did not present an expert, and should be praised for their savvy use of expert witnesses.

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1Estate of Elkins v. C.I.R., 2014 wl 4548527 (2014).
2Estate of Elkins v. C.I.R., 2014 wl 4548527 (2014).

MSA Homestead Rights Nixed by Florida Constitution: Friscia’s Make for Uncola Decision: MSA Provision MIA According to DCA Opinion That Is Supported by a Prior DCA Opinion
originally published in the October 2, 2014 Thursday Report

Note–Fresca® is a carbonated beverage that was introduced in 1966.  Advertised as the UNCOLA, this grapefruit-based, sugar-free soft drink enjoyed great popularity in the 1970s.  It was so popular that the author’s grandmother drank 8 or more Frescas a day.  It was so popular, in fact, that Lyndon B. Johnson had a soda fountain that dispensed Fresca installed in the Oval Office.  Fresca eventually succumbed to the likes of Diet 7-Up, but still remains on the market, unlike Mrs. Friscia Two.

In Friscia v Friscia, Mr. Friscia tasted the real UNCOLA by divorcing Mrs. Friscia One and signing a Marital Settlement Agreement under which he owned one-half of the house, without right of survivorship, and Mrs. Friscia One (presumably unsweetened) had the right to live in the other half with their minor son (“Little Friscia”) until he graduated from high school. After the child’s graduation, the residence was to be listed for sale and the proceeds divided equally between the former spouses.

Mr. Friscia then married a slightly sweeter Mrs. Friscia Two and they lived happily, but not ever after, close to a grocery store that stocked plenty of Diet 7 Up, in the event that Mrs. Friscia Two got tired of Mr. Friscia.

Mr. Friscia apparently tired of Mrs. Friscia Two first; he kicked the can and died intestate.  Mrs. Friscia Two wanted to have the value of the residence included in determining her elective share, and wanted to stake a claim for control of the former marital residence as an asset of the estate.

Mr. Friscia’s estate had creditors who weren’t so sweet, and filed claims exceeding the value of the other estate assets.

The probate court and the 2nd DCA (“Desweetening Commission and Authority”) determined that the Florida Constitution trumped the MSA (Marital Sweetness Agreement). The court concluded that because the decedent died intestate the protected homestead interest descended to the second wife as a life estate with a vested remainder in the two sons.  The first wife can continue to live there until the son graduates, then the home must be sold or the first wife has the option to buy out the interest owned by the second wife. This is because of Article X, Section 4 of the Florida Constitution (some wonder if they were drinking Coca-Cola with cocaine in it while drafting it, however Coca-Cola did not come out until 1892), which states that:

(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon,…the following property owned by a natural person:

(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon…; or if located within a municipality, to the extent of one-half of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family;

(b) These exemptions shall inure to the surviving spouse or heirs of the owner.

Mrs. Friscia Two thus owns her half plus her choice of (1) a life estate in Mr. Friscia’s half, and his children have a remainder interest, or (2) a half interest in his half and his children own the other half. A guardian will have to be appointed by the probate court to hold the minor child’s interest if it is to be sold or mortgaged or traded for a few kegs of root beer.

So when drafting MSAs for sweet Mrs. Friscia One, or representing Mrs. Friscia Two, or Mr. Friscia, or artificially sweetened children, make sure to take into account the FL Constitution, and hold the aspartame.

Even a six-pack of Mrs. Friscias would not have overcome the Florida Constitution, and thus there was no Southern Comfort to be added to this mix for the creditors or Mrs. Friscia Two.

Solutions (without Aspartame):

Next time: (1) have Mr. Friscia’s homestead interest placed in an LLC or other homestead device if you represent Mrs. One; and/or (2) give her a recorded lease on the home to enforce her rights; or (3) have the child adopted by its stepfather (Dr. Pepper) after Mr. Friscia gives up parental rights.

Also, during his life, Mr. Friscia could have mortgaged his half, with Mrs. Friscia One’s  permission, to a friendly creditor (like Aunt V-8 or Uncle Sanka) who was not sweet but may have helped liquefy his financial position.

Specific case language that helped to carbonate and ice this case and its result are as follows:

The final judgment of dissolution did not operate to transfer the Decedent’s interest and the former marital home had not been deeded when the Decedent died. Thus, the Decedent and the Former Wife still owned the former marital home as tenants in common at the time of his death.1

The Decedent’s interest retained its homestead protection because the Decedent’s sons, whom he still supported financially, continued to live on the property.2

Because the Decedent died intestate and was survived by a spouse and lineal descendants, the probate court properly determined that the Decedent’s protected homestead interest descended to the Second Wife as a life estate with a vested remainder in Nicholas and Thomas.3

The Personal Representative argues that, by agreeing to these [MSA] provisions, the Decedent waived his homestead rights in his interest in the former marital home. The rights at issue in this case are the Decedent’s homestead rights in his own property, not in the property of the Former Wife. Thus, these waiver provisions are inapplicable.4

Hope that this helps you to help other bubbly families prevent calamities.

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1Friscia v. Friscia, 2D13-412, 2014 WL 4212689 (Fla. 2d Dist. App. 2014).
2 Id.
3Friscia v. Friscia, 2D13-412, 2014 WL 4212689 (Fla. 2d Dist. App. 2014).
4 Id.

Richard Connolly’s World
Focusing on the Human Element of Estate Planning

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “Focusing on the Human Element of Estate Planning” by Paul Sullivan. It was featured in The New York Times on November 7, 2014.

Richard’s description is as follows:

John A. Warnick remembers exactly when he realized trust and estate lawyers like him were doing a disservice to their clients.

It was early on a Tuesday, after a holiday weekend, when a 21-year-old client called cursing and saying that she wanted to fire her trustee. She hadn’t received her monthly distribution check from a trust fund set up for her and her siblings.

Mr. Warnick tried to explain that, given the holiday weekend, the check had probably been delayed in the mail and would arrive in the next day or two. But she was convinced the trustee was holding back the money.

“The trust was created for them to get an education, and here she was at 21, dropped out, living on a monthly distribution,” he said. “What I found out is she had spent the weekend gambling at a casino in the mountains and had written checks that were going to bounce if she didn’t get a distribution.

I said, ‘There has to be a better way to do planning so all this tax-efficient, elegant trust planning doesn’t hurt people,’” he said. “I saw well-intentioned, technically precise plans reap negative unintended consequences.”

His solution: purposeful planning.

Please click here to read the article in its entirety.

Thoughtful Corner – Resolutions are Not Legally Binding

Congratulations on having successfully survived another holiday season!

A majority of Americans make New Year’s Resolutions, but statistics show that most of them are broken, causing a good deal of disappointment and bounce back.

The following are some simple strategies to make the most of New Year’s Resolutions and the opportunity for change that the new year brings:

Be Realistic

It takes fourteen or more days to make a new habit, and it is very difficult to change more than two habits at a time. Most resolutions require software changes in our minds, which don’t come from merely wishing that these changes will be so.

Unless changing the habit becomes a number one goal with respect to that aspect of your life, it is simply not going to happen. Most goals cannot be attained without accountability, support, and realistic approaches.

Based upon the above, you might think through the following today and also maybe next week, when you are not as hung over from staying up so late last night (yes, this means you!)

  1. Write down each of your resolutions – This triggers true communication with your conscious and subconscious mind.
  2. Prioritize each resolution – Mark each resolution on an alphabetical scale. A is the best and most important and E means disregard it completely.
  3. Write down two advantages to be derived from following through with the resolution. Also consider the two biggest cons involved.
  4. Write down what you have to change to accomplish the resolution and who can help you make the change(s).

For example, if you are trying to lose weight, seriously consider a program like Weight Watchers or following what Weight Watchers and all other accountable change organizations recommend for this. Some of their recommendations are listed below:

  1. Write down everything you eat. If you do this, you will lose weight. That is absolutely guaranteed.
  2. Count calories and carbohydrates, whether this is direct or indirect
  3. Plan ahead with reasonable daily parameters
  4. Count exercise as increasing your allowance
  5. Weight yourself periodically and be accountable
  6. Reward yourself emotionally and with appropriate attention for success
  7. Get your spouse or significant other involved – Have them make sure unhealthy food or unwise choices are excluded from being in your sight or being readily available
  8. Consider reduction of alcohol both for calories and willpower purposes
  9. Stay the heck away from KFC!

Weight Watchers is successful simply because their program models work. There is something quite magical that happens when ten or fifteen people sit in a room and talk about planning their food intake and what they will achieve, knowing they will face each other again the following week and receive recognition for goals accomplished and support for goals still to be reached.

Also pledge to take the next step if the above steps do not work for you. Try something more extreme, such as seeing a doctor or a psychologist if you have not lost five pounds in the first six weeks.

If you make a resolution to lose more weight your number one priority and are high-fiving yourself every time you do something right, the rest of your life will be better. Nothing will suffer but the sellers of unhealthy foods.

Help a Friend or Two Reach Their New Year’s Resolutions
While Keeping Track of Your Own

Choose one or two of your resolutions and have a serious talk with somebody you trust about what you are trying to change. Arrange to speak with them at least once a week about this for no more than three minutes. Then, do the same for them. Listen to their goals and what they would like to change about themselves. What can you do to help them get there?

Make 2015 the best it can be!

But understand your limitations.

This is well surmised by the renowned psychologist and author Robert Kegan in Chapter 3 of his book entitled The Evolving Self: Problem and Process in Human Development, which we will review in more detail next year. You can purchase or preview this book by clicking here.

Have a great Thursday and a great new year!

Humor! (or Lack Thereof!)

Esate Planning in the Mongol Empire:

Mongol leader Genghis Khan established the largest empire in history, stretching from Western China to Eastern Europe. He was unable to pass the land down to his descendants because he had killed all the lawyers. Have you been to Eastern Europe? Did you meet anyone named Genghis?

I rest my case.

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Little Known Historical Fact:

During the War of 1812, American Francis Scott Key was being held prisoner abroad the British warship HMS Tonnant while the enemy bombarded Fort McHenry near Baltimore. Key passed the time by fishing off the side of the ship.

He later wrote the well-known patriotic anthem describing his experience, “The Star Spangled Angler.”

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6 - Cartoon

Upcoming Seminars and Webinars

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on TRUST PLANNING FROM A TO Z for the Florida Institute of CPAs.

Learn how to plan, structure, and protect wealth using revocable and irrevocable trusts and trust systems to effectuate wealth preservation and inheritance planning in a tax-efficient manner.

This course is designed for both new and experienced accountants and includes valuable materials, free use of estate tax projection software, client explanation letters, and a number of useful Excel spreadsheets that can be used on client matters.

Many past attendees have expressed significant praise for this presentation, indicating that it is both dynamic and interesting, while providing a fresh new look at both time tested and new strategies and planning considerations with an emphasis on the numbers, practical application and an accountant’s role in planning and implementation.

Part Two of this presentation will be offered on May 21, 2015 at 10 AM and is entitled “A Practical Trust Planning Checklist and Practitioner Compliance Guide for Florida CPAs.” Please view the seminar announcement below for more details.

Date: January 6, 2015 | 11:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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FREE LIVE WEBINAR SERIES ON LIFE INSURANCE FOR TAX ADVISORS:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on HOW TO READ LIFE INSURANCE ILLUSTRATIONS in the first of a series of webinars intended to help tax lawyers and CPAs understand how life insurance and life insurance structuring works from a technical and mechanical standpoint.

Bring your wrench and screwdriver as we look under the hood to see how we can do our clients some good!

Please note the below announcements for subsequent installments of this series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Date: January 7, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FLORIDA BAR FORT LAUDERDALE REPRESENTING THE PHYSICIAN LAW CONFERENCE:

Alan Gassman will speak at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. We thank chair Lester Perling for doing most of the work on this annual conference.

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will speak at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS. We have put a great many hours of time into a comprehensive, easy-to-understand outline that we plan to have become a book on this topic. Satisfaction guaranteed!

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

Rao & Gassman

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE PRESENTATION:

2015 MOTE VASCULAR SEMINAR

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS
(These conferences are so good that we were not invited to speak!)
 

LIVE ORLANDO PRESENTATION

49th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 12 – 16, 2015

Location: Orlando World Center Marriott, 8701 World Center Drive, Orlando, Florida

Additional Information:

Don’t miss Howard M. Zaritsky and Lester B. Law’s January 12th morning discussion of Basis – Banal? Basic? Benign? Bewildering?, which will include mention and some commentary and advice on the use of our JEST trust system. Don’t leave home without it!

When browsing the tables, be sure to stop by Management Planning, Inc. or Veralytic for a chance to purchase one of our books or check out our EstateView software! Phil’s Ultimate Estate Planner will also be featuring our JEST forms and instructional webinar.

For more information please visit: https://www.law.miami.edu/heckerling/?op=0

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LIVE CLEARWATER PRESENTATION:

RUTH ECKERD HALL PLANNED GIVING ADVISORY COUNCIL MEETING

Ruth Eckerd Hall’s next Planned Giving Council Meeting will be a spectacular two-part event, featuring an educational presentation at 4:30 p.m. and a networking session at 5:30 p.m.

“Improve with Improv: Using Humor and Immediate Responses to Enhance Client, Professional, and Social Interaction” will be led by Jack Halloway, a well-known improvisational coach and actor. This workshop will cover the basic and effective methods of improvisation in order to increase participants’ ability to think quickly, listen closely, and feel more comfortable responding to situations.

The presentation will be followed by a social networking and information session led by Ruth Eckerd Hall’s President and CEO Zev Buffman.

Call Ruth Eckerd Hall, learn improvisation, get an hour of credit, a glass of wine, and a great time!

Date: Tuesday, January 20, 2015 ǀ 4:30 p.m.

Location: Ruth Eckerd Hall’s Margarete Heye Great Room

Additional Information: For more information, or to RSVP, please contact Alan Gassman at agassman@gassmanpa.com or Suzanne Ruley at sruley@rutheckerdhall.net.

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

8 - Rates Chart

The 7520 rate for January is 2.2% and for December was 2.0%.

The Thursday Report – 12.25.14 – Merry Creditormas Edition!

Posted on: December 24th, 2014

1 - Header

Way Down Upon the Bifani River: Setting Aside Fraudulent Transfers into Florida Homestead

Best of The Thursday Report 2014

Richard Connollys World 2014 Recap

Visit our Friends and Heckle Us at Heckerling!

Thoughtful Corner Becoming Bigger Than Your Problem

Humor! (or Lack Thereof!)

This week we especially thank judges who write debtor/creditor opinions that can keep us at the edge of our seats. Last week, we rushed out an article on the Bifani bankruptcy/homestead case, which can be viewed by clicking here.

We have a better write-up on this case this week and welcome all questions, comments, and suggestions as we prepare to publish this in periodicals even more respected than The Thursday Report (by many.)

Way Down Upon the Bifani River: Setting Aside Fraudulent Transfers into Florida Homestead
by Alan S. Gassman, Travis Arango, and Dena Daniels

Debtor’s Transferee Who Received Pre Bankruptcy Fraudulent Transfer Ends Up All Wet

Footnote from Editor–The Suwannee River is a 246 mile blackwater river that can take you much of the way from the Tampa Bankruptcy Court to the 11th Circuit Court of Appeals in Atlanta, which is where this case went before the debtor’s raft sank. Made famous by Stephen Foster’s song, The Old Folks at Home (Foster never saw the river but read about it), Mr. Gassman owns two lots on this river that he bought in 2007 and would gladly sell for half of what he paid, and no extra charge for the alligators who live there.  See Way Down Upon The Suwannee River Far Far Away, LLC on the Sunbiz Website, and also Hey Hey Santa Fey (river), LLC and WithLacoochee Coochee-Coo, LLC, which own his other failed river investments.

This article is dedicated to the memory of Joan Rivers, who performed in Tampa Bay shortly before her death at age 81 with great energy and physical strength, like many of us who love what we do and intend to die in the saddle.

The Florida Supreme Court, in Havoco of America, Ltd. v. Hill, 790 So.2 d 1018 (Fla. 2001), held that the homestead protection afforded under the Florida Constitution trumps the Florida Fraudulent Transfer Statute, and therefore a debtor subject to an impending or actual judgment can use monies to purchase or pay down the mortgage on a homestead owned by the transferor, with the creditor having no remedy against the homestead unless or until the debtor files for bankruptcy by reason of the provisions of the 2005 Bankruptcy Reform Act “Mansion Law”.

But what if the debtor, knowing that he or she may be going into bankruptcy, gives the monies to a close friend who puts them into a homestead and then intends to hunker down and remain judgment proof, and outside of bankruptcy, so that the creditor is not able to recover the funds? And the debtor is able to live with the close friend and enjoy the benefit of the home. Will this boat float?

This exact factual pattern has occurred more than once, leading the courts to look for a way to reach the home equity and prevent this type of conduct, as opposed to waiting for Congress to endorse an appropriate remedy by amending the Bankruptcy Code.

Judge Michael Williamson, a very able and well respected bankruptcy judge of the Middle District Bankruptcy Court sitting in Tampa, came to the conclusion in 2013 that a fraudulent transfer, directly or indirectly, into the debtor’s cohabiting and apparent significant other before filing bankruptcy rose (like a river) to the level of being considered as secretion of “ill-gotten gains” under the Florida case law, saying specifically that:

Here, LaMarca’s Sarasota house was acquired with ill-gotten proceeds. LaMarca used the nearly $670,000 from the sale of the Golden Eagle Road property to purchase her Sarasota house. It would be inequitable and unjust to allow the Debtor (Bifani to fraudulently transfer property to LaMarca to keep it from his creditors.[1]

The Federal District Court sitting in Tampa found that the decision did not hold water, and overturned it, but the Eleventh Circuit Court of Appeals agreed with the judge, finding that:

Under Florida law, homestead property purchased with funds obtained by fraud is not exempted from equitable liens. See Havoco, 790 So.2d at 1028. The facts of this case do not fall within Havoco ‘s exception because the funds used to purchase the Sarasota property were obtained through Bifani’s fraudulent transfers…..That the fraud occurred in a bankruptcy proceeding rather than a criminal offense is irrelevant.[2]

It is almost certain that the U.S. Supreme Court will have any interest in hearing this case, and the Florida Supreme Court will not have jurisdiction because bankruptcy court cases pass to the federal system, and not under the state system.

The Eleventh Circuit Court of Appeals could have requested guidance from the Florida Supreme Court by certifying the issue as a question of importance but apparently chose not to do so.

Floridians and their advisors will now most likely need to wait for a number of years before similar factual patterns occur in Circuit Courts and become subject to Circuit Court decisions that are appealed to District Courts of Appeals, and then eventually to the Florida Supreme Court.

A prominent bankruptcy attorney has had this to say about the case:

If you think it through, the whole idea of getting around the Federal Bankruptcy law by doing something through an apparent straw man that you cannot do directly, you can certainly conclude that at least the spirit of the 2005 Bankruptcy Act was violated. That doesn’t really shock me. If you’re going to try to take advantage of the Florida Homestead law, you need to follow the centuries old method of buying your own house, and if this is a fraudulent transfer you also have to stay out of bankruptcy for 10 years thereafter. It’s not escaping taxes or domestic relations liability, it’s not money you stole from somebody else, but a well-respected bankruptcy judge, with affirmation from the highest federal court overseeing Florida Federal Courts have found that it is the equivalent of transferring ill-gotten games into homestead. Debtors and advisors are going to have to stick with the patterns that worked, at least for the foreseeable future. It could be a decade or more before the Florida Supreme Court or the US Supreme Court ever look at this.

While this case may be criticized by some as being judicial legislation, and may add to the longstanding misconception among some courts and advisors that a fraudulent transfer somehow constitutes fraud and is therefore bad or per se illegal, it also shows that conventional knowledge will sometimes be turned on its ear, without warning, and that clients and advisors should not rely upon any one creditor protection technique, or any particularly creative or aggressive one, when multiple techniques are available. Also, as we all know, hogs are often slaughtered.

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[1] In re Bifani, 493 B.R. 866, 871 (Bankr. M.D. Fla. 2013)
[2] In re Bifani, 580 F. App’x 740, 747 (11th Cir. 2014)

Best of The Thursday Report 2014

Never before, since the founding of The Thursday Report, and even before that, when you were a child, has there ever been a Thursday Report Christmas, also known as our Creditormas Edition in honor of the two gifts given by recent court decisions to creditors, one of which fortunately rhymes with the name of a river, released in the same year that Joan Rivers passed away.

Since even some of our best friends are creditors, we can provide you with thoughts and input on these two new cases, which don’t make a great deal of (frankin) sense.

Speaking of Al Franken, he was quoted as follows with reference to his conversion from being a comedian to being a politician:

“At Saturday Night Live, I wrote political stuff, but I never felt the show should have an axe to grind. But when I left in 1995, I could let my own beliefs out.”

“Comedy to the Senate? Well, there certainly hasn’t been a satirist or a political satirist who’s done that. So that really was uncharted territory during the campaign. But I think it’s a good thing. Some people thought it was an odd career arc, but to me, it made absolute sense.”
– Senator Al Franken

Yes, we were as disappointed in these quotes as you were, but this is the best that our writing staff could find on short notice. And remember, if you have a beer stein with Al Franken’s face on it, it’s a Frankenstein!

So we hope that you enjoy a great Christmas, are prepared for a wonderful New Year, and that you print extra copies of this Thursday Report and put it in the stockings of your family and friends (but only the ones hung by the fireplace, please – and don’t damage fishnets!) and enjoy yet another poor excuse for professional and humor literature as we recap some of the best/worst Thursday Report stories from 2014 this week and next.

Best regards,

Colonel Santa Claus

2 - Stick Figure

Why Wyoming?
originally published in the January 16, 2014 Thursday Report

The benefits of limiting liability of owners and shareholders exist under the law of many states and many clients are best served by using a state other than Florida for confidentiality, creditor protection and cost reduction purposes.

While Florida’s limited partnership and LLC laws are among the best in the country, the Florida Supreme Court decision in Olmstead, annual changes in the statutes thereafter, confusion resulting from the above, and the question as to whether there will be further changes leads some planning lawyers to the conclusion that Wyoming secrecy rules and stability help make it the appropriate jurisdiction for many entities.

Many clients are married and want their ownership of an entity to qualify as tenancy by the entireties, which cannot be assured unless the state where the entity is formed or recognition of tenancy by the entireties exists.  Delaware and Wyoming are considered to be incorporation havens because they do not impose any income tax and have pro-business laws.  In addition, both Delaware and Wyoming recognize tenancy by the entireties, and have good secrecy practices as well, but we have found Delaware to be much more expensive and cumbersome to use than Wyoming, except that Wyoming does not have electronic filing like Delaware does.  Colorado and Nevada are also popular, but do not recognize tenancy by the entireties.  Wyoming is the only state in the union that is a perfect rectangle with its lines being north and south and east and west.  It is more square than Colonel Sanders.

The filing fees and annual report fees for limited partnerships and LLCs in Florida, Delaware, and Wyoming are as follows:

3 - Wyoming Chart

Please note that a Registered Agent will need to be retained in the state of formation.

Marty Shenkman’s JEST Review from Heckerling 2014
originally published in the January 30, 2014 Thursday Report

We were very proud that estate tax lawyer and author Marty Shenkman included mention of our JEST Trust (Joint Exempt Step-Up Trust) in his 47 page Heckerling review, which was provided in Leimberg Information Services Estate Planning Email Newsletter  – Archive Message #2188 on January 24, 2014.

Howard Zaritsky will be speaking on the JEST trust in Orlando at the Heckerling Estate Planning Institute on Monday, January 12. We will, of course, report on what he says.

Marty’s summary of our JEST technique can be viewed by visiting http://gassmanlaw.com/wp-content/uploads/2014/01/Shenkman-Leimberg-Article.pdf

Our 2 part Estate Planning Magazine article from October and November of 2013 on the JEST Trust can be viewed by visiting http://gassmanlaw.com/wp-content/uploads/2014/01/Part-1-and-Part-2-Published-Versions.pdf.

Don’t forget that married couples may be able to receive a stepped-up basis on all joint assets on the first death by using the JEST Trust or other techniques.

Everything You Need to Know About IRS Transcripts
originally published in the April 3, 2014 Thursday Report

It is now relatively easy to get a comprehensive IRS transcript to show past tax payments, taxes due, and historical tax return history.

What is an IRS Transcript?

These can now be used to help assure that there has not been an identity theft or fraudulent tax refund filed for a client, and can also be used to verify the taxpayer’s income and tax filing status for various purposes.  The IRS provides these transcripts free of charge to individuals.

Many individuals may be hesitant to request their tax information due to assuming that it may create a flag on the account and trigger an audit.  We do not believe that there is any correlation between the chances of being audited and whether someone has requested their tax information.  Taxpayers who request their information are probably more likely to be compliant than the average taxpayer.

Different Types of Transcripts

There are 5 different types of transcripts that an individual can obtain.  These are as follows:

  1. Tax Return Transcript – Displays the majority of the line items from your originally filed tax returns as well as any accompanying forms and/or schedules, however, this transcript does not show any changes made by the taxpayer or the IRS.
  2. Tax Account Transcript – Shows any adjustments made by the taxpayer or the IRS after the tax return was filed.
  3. Record of Account Transcript – Combines the information provided in the tax return and tax account transcripts.
  4. Wage and Income Transcript – Displays information and data from your returns, including, but not limited to, W-2s, 1099s, 1098s, and other forms that were submitted to the IRS.
  5. Verification of Non-Filing Letter – Proof from the IRS that you did not file a return for the requested year; only available after June 15th.

How to Get Your Transcript?

Transcripts can be received by mail or online.  Online is preferred because it allows you to view and print the transcript immediately, and eliminates the chances that someone from the post office or who receives your mail will obtain a copy.

The mail order transcript reportedly arrives between 5 to 7 business days after the IRS receives the request.

A third party or representative can request a transcript on behalf of an individual taxpayer, but in order to do so a Form 4506-T must be filed with the IRS.

When requesting a copy of your transcript online, you may view and print the transcript immediately. The online method allows you to choose among a tax return, tax account, record of account, wage and income transcripts or a Verification of Non-filing letter.

Step-by-Step Instructions for Getting Your IRS Transcript are as follows:

1) Go to www.irs.gov

2) Under Tools, Click “Get Transcript of Your Tax Records

4 - IRS 1

3) Choose whether you want to receive your transcripts via the online method or via mail

5 - IRS 2

4) If you choose the online method, your screen will look as follows. You will need to create an account if this is your first time requesting a transcript online. Proceed to follow the on-screen instructions and enter the proper information.

6 - IRS 3

5) If you choose the mail method, your screen will look as follows and proceed to follow the on-screen instructions and enter the proper information.

7 - IRS 4

Letter Explaining the Use of Life Insurance for a Physician Client as a TBE Substitute in Case the Non-Physician Spouse Dies
originally published in the May 1, 2014 Thursday Report

Recently a client asked us the following question:

Alan,

Mary and I were doing some planning and were looking at life insurance options.  You and I had discussed getting a new policy to stagger expiration dates for coverage, specifically, to replace a $2 million dollar policy with two $1 million dollar policies, one for 20 years and one for 30 years.

Can you refresh my memory on the asset protection component of doing this?  As I recall, there was an issue with TBE assets becoming exposed if I die and there was a tax issue as well.

Thanks,

John

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Our response to the client is as follows:

Dear John and Mary:

Thank you for your email asking for guidance on the new life insurance.

We favor having multiple policies because once you buy a policy you can never reduce the death benefit.  If you buy two $500,000 policies and decide in later years that you only need half of the coverage then you can drop one policy and keep the other.

It does not cost much more to have two $500,000 policies, as compared to one $1,000,000 policy.

On the death of one spouse the life insurance proceeds can be held for the health, education and maintenance of the surviving spouse without being subject to the federal estate tax on the surviving spouse’s estate.

Also, the life insurance proceeds can be held without creditors having access to them.

For example, if Mary dies you are going to lose your tenancy by the entireties protection, but if she dies leaving life insurance in a trust that benefits you for your lifetime without being subject to federal estate tax or creditor claims, this helps to replace the tenancy by the entireties assets and to supplement your future creditor protection and the protection of your children’s inheritance from a potential future spouse and potential future children.

From an estate tax standpoint if we think that there is a good likelihood that the insured spouse will die during the term of the policy, and that the couple will have a net worth exceeding what passes estate tax free (which is presently $5,340,000 per spouse, increased with inflation under the present system), then we can place the life insurance into an irrevocable life insurance trust.  This helps to protect the actual ownership of the life insurance policy in case the insured spouse were to ever die, and also avoids federal estate tax on the policy proceeds.

Would you like to set up a ten minute call between the three of us to discuss this?

Best personal regards,

Alan

What Estate Planning and Other Lawyers Need to Know About Bankruptcy
by Alberto F. Gomez and Alan S. Gassman

This year, Al Gomez and Alan Gassman updated their article on bankruptcy. It was originally published in Trusts & Estates in October of 2007 under the title “Avoid Catastrophe – Know the Bankruptcy Code to Ward Off Devastating Surprises to an Estate Plan.”

Al and Alan brought this article to Thursday Report readers in 2014 in an 8-part series published between July 3, 2014 and September 4, 2014, and reader feedback was absolutely amazing. Thousands of advisors sent us cards, letters, flowers, gifts, and candy. One person even offered us a child from Minnesota. Her name was Kelly, and she wanted to be a lawyer when she grew up, so we doubted her judgment and rejected the offer.

Thanks so much to Tampa bankruptcy lawyer and friend Al Gomez and everyone who worked so hard on this article, or at least pretended to.

Executive Summary:

Many estate planners are familiar with asset protection mechanisms, such as state law exemptions, family limited partnerships (FLPs), offshore asset protection trusts (OAPTs), and domestic asset protection trusts (DAPTs). They also are acquainted with some creditor protection rules such as state fraudulent transfer acts as well as ethical considerations that apply to creditor protection planning. Many advisors also have some knowledge of the U.S. Bankruptcy Code.

Unfortunately, though, even those advisors who are familiar with portions of the Bankruptcy Code are unaware of certain provisions—such as those governing preferential transfers—that can have a catastrophic effect upon an estate plan. Indeed, many estate tax- and income tax-oriented planning structures risk being dismantled by a bankruptcy judge, even though the plan’s primary purpose had nothing to do with creditor protection.

That is why it is critical to not only know the basics, but also to recognize certain rules that apply in the bankruptcy forum and the need to consult with a bankruptcy lawyer in certain situations. The following information will provide an update, review, or excellent introduction to this most important segment of financial services.

To view this article in its entirety, please click here.

Richard Connollys World 2014 Recap

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

We began this column at the end of October, and it has rapidly become one of our most popular inclusions in The Thursday Report! As the year comes to a close, please enjoy this quick recap of all the best Richard Connolly had to offer us this fall.   

The first offering Richard had for us was a great article from UBS about the importance of talking to heirs about their inheritance. As the holiday season reaches its peak and families are once again together, this is a good time to give this article another glance. View the report by clicking here.

Other notable titles shared by Richard this year include:

Using Charitable Remainder Trusts to Turn Bothersome Rentals into Hassle-Free Income  by Kelly Kearsley

Court Ruling Sparks Rush to Shield IRAs by Robert Powell

Beyond a Parent’s Reach: When a Child Legally Becomes an Adult by Alina Tugend

An Estate Plan for Your Treasures by Veronica Dagher

Why Everything You Think About Aging May Be Wrong by Anne Tergesen

IRA Rollovers Get New IRS Rules for 2015 by Karen Damato

The 10 Biggest Celebrity Estate Stories of 2014 and What Can You Learn by Danielle and Andy Mayoras

Thanks, Richard, for bringing these articles to Thursday Report readers! We look forward to more of your insightful findings in 2015!

Visit our Friends and Heckle Us at Heckerling!

With the 49th Annual Heckerling Institute on Estate Planning coming up in just a few short weeks, three friends of Gassman, Crotty & Denicolo, P.A. have been kind enough to allow us to display our books and software at their tables.

Management Planning, Inc. (MPI) has graciously agreed to allow our books to be sold at their table, with all profit going to the charity of your choice or to purchase buckets of Kentucky Fried Chicken. Hats off to Joe Gitto for all that he does for the estate planning professional community.

Veralytic, and its brilliant founder and dynamo, Barry Flagg, have also graciously agreed to provide us with space, which is very much appreciated. Veralytic is enables trustees and other professionals to evaluate life insurance policies and historical and comparable product and carrier data. Take a look at a sample report and you will learn a great deal about how insurance products work and what to look for in evaluating products and carriers.

Phil’s Ultimate Estate Planner will also have a booth at Heckerling that will feature our JEST forms and instructional webinar. Howard Zaritsky and Lester Law will be covering JEST trust planning in the Monday morning Fundamentals section. We will be sitting in the front row!

Please plan to stop by these tables and say hello to each of these fine companies. Give them your card for the opportunity to win four buckets of Kentucky Fried Chicken, three copies of an old Thursday Report, four AAA batteries, and a Colonel Sanders Gardening Club membership!

Thoughtful Corner
Becoming Bigger Than the Problem

Dr. Srikumar Rao’s widely acclaimed book Are You Ready to Succeed? (now published in over 60 languages!) covers a good many thought exercises. One of his favorite exercises, that does not get discussed nearly as often as it should, is Becoming Bigger Than the Problem.

This can mean a few things, but the most important thing it means is to keep in mind that you, as a thinking and functioning organism, do not need to get bogged down by a problem that may be causing undue distraction or hardship to yourself or others.

The following are a few different, interesting approaches to implementing this school of thought:

1.) “Man Up” – Please excuse the use of the dated and somewhat sexist expression, and think about what this phrase can mean. In short, whether you are a man or a woman, stop letting the little stuff bother you. No matter what the problem is, it is only one of many you will face throughout your life, and chances are, it’s not something that can’t be overcome. You are bigger than the problem. So pay the dues, tolerate the pain, and move on to your next situation.

2.) Is the problem you’re facing one that you can pay to remove? Can you afford, from a financial, psychological, time, or other resource standpoint, what’s necessary to eliminate and remove this problem from your life? If you’ve answered yes to both questions, you have an expense, not a problem.

3.) Problems are one or more perceived obstacles, and solutions will be found by thinking through each obstacle. Everyone gets “analysis paralysis” at times, and an inability to think through situations at other times. There may be an emotional cause or a simple conclusion that the issue cannot be easily resolved. Take some time and step away from your problem. Work through these emotions, and try to think about your problem logically. You may arrive at a solution faster and easier than expected!

4.) Imagine yourself in a situation with a person who represents the problem you’re currently facing. Now imagine yourself to be 18 feet tall, while the person who represents the problem stays at their average human height. The problem probably doesn’t look so threatening anymore.

Manipulate your imagining further. Maybe you are in color, and the person who represents your problem is in black and white. Maybe the “problem person” has an amusing, cartoon-ish voice. All of these things can make the problem seem less challenging. Believe it or not, this can actually work!

5.) Get creative! As Albert Einstein said, “we can’t solve problems by using the same kind of thinking we used when we created them.” Get some help from a creative thinker or from someone who has already been through the experience that you are facing. Gaining a fresh perspective can make the problem dissolve like Alka-Seltzer in water!

Dr. Rao and Alan Gassman will be presenting a webinar entitled How to Handle Stressful Matters in an Ethical Way on February 19, 2015. This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See our Seminars and Webinars section for more information, or click here  to register.

Humor! (or Lack Thereof!)

This week, we feature some holiday humor from our frequent comedy contributor Ron Ross.

‘Twas the Night Before Christmas aka The Story of Standra Claus
by Ron Ross

‘Twas the night before Christmas
And all through the house
Sirens were blaring
Because Dad is a louse

Santa lies on the floor
Inside a chalk outline
And Dad will get off
Without even a fine

He got Santa with a bullet
Right square in the jaw
But Dad is not worried
Because “Stand Your Ground” is the law!

THIS WEEK’S MOST IMPORTANT QUESTION: How old should your children be before you tell them there’s no Colonel Sanders?

AND THIS WEEK IN LEGAL NEWS:

Pinocchio pleads the fifth, stating, “I could have just gotten on the stand and lied…well, no, I guess I couldn’t do that,” and Sony cancels a moderately-anticipated film about brave studio executives who stand up for freedom of expression.

And now on to a cartoon by Gassman Law Associates assistant Amy Bhatt:

8 - Cartoon 1

9 - Cartoon 2

10 - Cartoon 3

Upcoming Seminars and Webinars

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on TRUST PLANNING FROM A TO Z for the Florida Institute of CPAs.

Learn how to plan, structure, and protect wealth using revocable and irrevocable trusts and trust systems to effectuate wealth preservation and inheritance planning in a tax-efficient manner.

This course is designed for both new and experienced accountants and includes valuable materials, free use of estate tax projection software, client explanation letters, and a number of useful Excel spreadsheets that can be used on client matters.

Many past attendees have expressed significant praise for this presentation, indicating that it is both dynamic and interesting, while providing a fresh new look at both time tested and new strategies and planning considerations with an emphasis on the numbers, practical application and an accountant’s role in planning and implementation.

Part Two of this presentation will be offered on May 21, 2015 at 10 AM and is entitled “A Practical Trust Planning Checklist and Practitioner Compliance Guide for Florida CPAs.” Please view the seminar announcement below for more details.

Date: January 6, 2015 | 11:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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FREE LIVE WEBINAR SERIES ON LIFE INSURANCE FOR TAX ADVISORS:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on HOW TO READ LIFE INSURANCE ILLUSTRATIONS in the first of a series of webinars intended to help tax lawyers and CPAs understand how life insurance and life insurance structuring works from a technical and mechanical standpoint.

Bring your wrench and screwdriver as we look under the hood to see how we can do our clients some good!

Please note the below announcements for subsequent installments of this series:

February 18, 2015 – Criticism of Hybrid Index Life Insurance Products – What the Heck are These, and Why are They Becoming So Popular?

March 4, 2015 – Premium Financing in 15 Minutes

March 17, 2015 – Split-Dollar in 15 Minutes

March 31, 2015 – Comparing the Financial Strength and Risks Associated with Different Life Insurance Carriers

Gassman, Crotty & Denicolo, P.A., and The Thursday Report receive no direct or indirect compensation from any investment advisors and have no financial relationship with Barry Flagg or Veralytic. We thank Barry for putting together what we are sure will be an informative and objective program!

Date: January 7, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FLORIDA BAR FORT LAUDERDALE REPRESENTING THE PHYSICIAN LAW CONFERENCE:

Alan Gassman will speak at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. We thank chair Lester Perling for doing most of the work on this annual conference.

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will speak at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS. We have put a great many hours of time into a comprehensive, easy-to-understand outline that we plan to have become a book on this topic. Satisfaction guaranteed!

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on CRITICISM OF HYBRID INDEX LIFE INSURANCE PRODUCTS – WHAT THE HECK ARE THESE AND WHY ARE THEY BECOMING SO POPULAR?

Date: February 18, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE FREE ETHICS CREDIT WEBINAR:

Alan Gassman and Dr. Srikumar Rao will present a free 50-minute webinar on HOW TO HANDLE STRESSFUL MATTERS IN AN ETHICAL WAY.

This webinar will qualify for 1 hour of CLE Ethics Credit and is classified as Advanced. See Professor Rao’s Ted Talk YouTube video, and you will understand how important this webinar might be to accelerating your law practice and enhancing your enjoyment of the practice as well. You can sign up for this free webinar by clicking here.

11 - Rao

Dr. Srikumar Rao is the creator of the original Creativity and Personal Mastery (CPM) course that has helped thousands of executives and entrepreneurs achieve quantum leaps in effectiveness. He earned a Ph.D. in Marketing from Columbia University and has taught the course at Columbia University, Northwestern University, University of California at Berkeley, and the London School of Business. He is the author of Happiness at Work and Are You Ready to Succeed? which can be reviewed by clicking here. Are You Ready to Succeed? has been published in over 60 languages!

Date: February 19, 2015 | 12:30 p.m.

Location: Online webinar

Additional Information: Please email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here.

To register for this program please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on PREMIUM FINANCING IN 15 MINUTES.

Date: March 4, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015 on HEALTHCARE TAX ISSUES.

To see the complete schedule for this program, please click here.

Date: March 6 – 7, 2015 ǀ Alan Gassman will speak on March 6 at 11:00 AM

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 15-minute webinar on SPLIT-DOLLAR IN 15 MINUTES.

Date: March 17, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE WEBINAR:

Alan Gassman and Barry Flagg, CPF, CLU, ChFC, GFS, of Veralytic will present a 30-minute webinar on COMPARING THE FINANCIAL STRENGTH AND RISKS ASSOCIATED WITH DIFFERENT LIFE INSURANCE CARRIERS.

Date: March 31, 2015 | 5:00 p.m.

Location: Online webinar

Additional Information: To register, please click here or email Alan Gassman at agassman@gassmanpa.com for more information.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION:

FLORIDA BAR WEALTH PRESERVATION PROGRAM 

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR

Alan Gassman, Ken Crotty, and Chris Denicolo will present a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE PRESENTATION:

2015 MOTE VASCULAR SEMINAR

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS
(These conferences are so good that we were not invited to speak!)

LIVE ORLANDO PRESENTATION

49th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 12 – 16, 2015

Location: Orlando World Center Marriott, 8701 World Center Drive, Orlando, Florida

Additional Information:

Don’t miss Howard M. Zaritsky and Lester B. Law’s January 12th morning discussion of Basis – Banal? Basic? Benign? Bewildering?, which will include mention and some commentary and advice on the use of our JEST trust system. Don’t leave home without it!

When browsing the tables, be sure to stop by Management Planning, Inc. or Veralytic for a chance to purchase one of our books or check out our EstateView software! Phil’s Ultimate Estate Planner will also be featuring our JEST forms and instructional webinar.

For more information please visit: https://www.law.miami.edu/heckerling/?op=0

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LIVE CLEARWATER PRESENTATION:

RUTH ECKERD HALL PLANNED GIVING ADVISORY COUNCIL MEETING

Ruth Eckerd Hall’s next Planned Giving Council Meeting will be a spectacular two-part event, featuring an educational presentation at 4:30 p.m. and a networking session at 5:30 p.m.

“Improve with Improv: Using Humor and Immediate Responses to Enhance Client, Professional, and Social Interaction” will be led by Jack Halloway, a well-known improvisational coach and actor. This workshop will cover the basic and effective methods of improvisation in order to increase participants’ ability to think quickly, listen closely, and feel more comfortable responding to situations.

The presentation will be followed by a social networking and information session led by Ruth Eckerd Hall’s President and CEO Zev Buffman.

Call Ruth Eckerd Hall, learn improvisation, get an hour of credit, a glass of wine, and a great time!

Date: Tuesday, January 20, 2015 ǀ 4:30 p.m.

Location: Ruth Eckerd Hall’s Margarete Heye Great Room

Additional Information: For more information, or to RSVP, please contact Alan Gassman at agassman@gassmanpa.com or Suzanne Ruley at sruley@rutheckerdhall.net.

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

7 - Federal Rates December

The 7520 rate for December is 2.0% and for November was 2.2%.

The Thursday Report – 12.18.14 – New Creditor Law Cases

Posted on: December 18th, 2014

Way Down Upon the Bifani River: Setting Aside Fraudulent Transfer into Homestead – A New Doctrine

Why the Four-Year Fraudulent Transfer Statute May Not Apply

Will the January 6th Same-Sex Marriage Law Change Apply Only in Washington County or in Every County of the State? by Dena Daniels

The Florida LLC Act: Tips, Tidbits, and Tricks by Ken Crotty and Chris Denicolo

Medical Billing 501: Quick Tips to Enhance an Already Efficient Billing Operation – Employee Incentive Plans by Colin Shalin

Richard Connolly’s World – The 10 Biggest Celebrity Estate Stories of 2014 and What You Can Learn

Visit our Friends and Heckle Us at Heckerling!

Thoughtful Corner – How to Make a Great Litigator Even Better – Take Off the Weekends! By Jay Fleece

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Way Down Upon the Bifani River: Setting Aside Fraudulent Transfer into Homestead – A New Doctrine
by Travis Arango

The Florida Supreme Court found in 2001 that the homestead protection accorded under the Florida Constitution trumps the Florida Fraudulent Transfer Statute, and therefore an individual who has a judgment against him or her can use monies to purchase or pay down the mortgage on a homestead owned by the transferor, with the creditor having no remedy against the homestead unless or until the transferor files for bankruptcy by reason of the provisions of the 2005 Bankruptcy Act.

What if the debtor, knowing that he or she may be going into bankruptcy, gives the monies to a close friend who puts them into a homestead and then intends to hunker down and remain judgment proof and outside of bankruptcy so that the creditor is not able to recover the funds? The debtor is then able to live with the close friend and enjoy the benefits of the home.

This exact factual pattern occurred more than once, making it necessary for the courts to attempt to find a way to reach the home equity and prevent this type of conduct, as opposed to waiting for Congress to endorse an appropriate remedy by amending the Bankruptcy Code.

Judge Michael Williamson, bankruptcy judge of the Middle District Bankruptcy Court sitting in Tampa, came to the conclusion that a fraudulent transfer directly or indirectly into a close friend’s homestead before filing bankruptcy arises to the level of being considered as “ill-gotten gains” under the Florida case law, saying specifically that:

Here, LaMarca’s Sarasota house was acquired with ill-gotten proceeds. LaMarca used the nearly $670,000 from the sale of the Golden Eagle Road property to purchase her Sarasota house. It would be inequitable and unjust to allow the Debtor to fraudulently transfer property to LaMarca to keep it from his creditors.1

The Federal District Court sitting in Tampa disagreed with Judge Williamson and overturned the decision, but the Eleventh Circuit Court of Appeal agreed with him, finding that:

Under Florida law, homestead property purchased with funds obtained by fraud is not exempted from equitable lines. See Havoco, 790 So.2d at 1028. The facts of this case do not fall within Havoco’s exception because the funds used to purchase the Sarasota property were obtained through Bifani’s fraudulent transfers.2

It is doubtful that the U.S. Supreme Court will have any interest in hearing this case, and the Florida Supreme Court will not be able to hear the case because bankruptcy court cases pass to the federal system, and not the state system.

The Eleventh Circuit Court of Appeal could have requested guidance from the Florida Supreme Court by certifying the issue as a certified question but apparently chose not to do so.

Floridians and their advisors will now most likely need to wait for a number of years before similar factual patterns occur in Circuit Courts and become subject to Circuit Court decisions that are appealed to District Courts of Appeal, and then eventually to the Florida Supreme Court.

Stay tuned for more about these interesting and somewhat frustrating cases, which show that conventional knowledge will often be turned on its ear, without warning, and that clients and advisors should not rely upon any one creditor protection technique when multiple techniques may be available.

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1 In re Bifani, 493 B.R. 866, 871 (Bankr. M.D. Fla. 2013)
2 In re Bifani, 580 F. App’x 740, 747 (11th Cir. 2014)

Why the Four-Year Fraudulent Transfer Statute May Not Apply
by Brandon Ketron

In this December 12th, 2014 decision the First DCA has surprised many by applying a 1950 Florida Supreme Court Opinion (Young v. McKenzie) that will have a very large impact on creditor planning in Florida.

While most advisors and practitioners have understood the 4 year Fraudulent Transfer Statute to mean that a judgment creditor cannot pursue a transferee or the transferred property once 4 years has passed from the date of the transfer, the First, Fifth, and Third DCA have concluded that if the judgment is received within the 4 year period it can be enforced under the proceedings supplementary statute for the life of judgment (20 years).  The judge presiding in the action that resulted in the judgment will sit as a Court of Equity under the proceedings supplementary statute, Florida Statute Section 56.29, which includes the following language:

(5)       The judge may order any property of the judgment debtor, not exempt from execution, in the hands of any person or due to the judgment debtor to be applied toward the satisfaction of the judgment debt.

(6)       (b)  When any gift, transfer, assignment or other conveyance of personal property has been made or contrived by defendant to delay, hinder or defraud creditors, the court shall order the gift, transfer, assignment or other conveyance to be void

Is it appropriate to construe the proceedings supplementary statute to have this effect, when the Florida Fraudulent Transfer Statute, Section 727, reads as follows?:

A cause of action with respect to a fraudulent transfer is extinguished unless action is brought within 4 years after the transfer was made, or if later within one year after the transfer or obligation was or could reasonably have been discovered by the claimant

The First DCA determined that despite the fact that proving and defending fraudulent transfer claims brought under § 56.29 borrow substantively from the UFTA (Section 727), this fact does not require the adoption of the UFTA’s much shorter limitations period.  Instead § 56.29’s contrary scheme and precedent establish that proceedings supplementary can be initiated at any time during the life of the judgment, when a valid, unsatisfied execution exists.1

This will doubtlessly be the subject of future litigation in the other districts.

For a copy of the First DCA and other referenced Court opinions please contact agassman@gassmanpa.com.

Additionally the oral argument can be viewed by clicking here.

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1 The court relied upon the following cases as precedent in determining that a proceeding supplementary could be initiated for the life of the judgment.  Young v. McKenzie, 46 So. 2d 184, 185 (Fla. 1950); Zureikat v. Shaibani, 944 So.2d 1019, 1022–23 (Fla. 5th DCA 2006); Ferre v. City Nat’l Bank of Miami, 548 So.2d 701 (Fla. 3d DCA 1989)

Will the January 6th Same-Sex Marriage Law Change Apply Only in Washington County or in Every County of the State?
by Dena Daniels

The Greenberg Traurig Law Firm, representing the 67 Clerks of Court, has been reported to have opined that the Federal District Court decision that same sex couples could marry in Florida beginning January 6th will only apply in the county where that suit was filed, which is Washington County. Based on the its legal counsel, the clerks association notified its members on Tuesday, December 16, 2014 that they could be guilty of a criminal act if they issue marriage licenses to same-sex couples pending the expiration of the stay on January 5th. The notice provides:

Florida’s Court Clerks & Comptrollers’ duty is to act in accordance with Florida law,” the association said in a statement. “Florida Statutes are unique in regard to prohibiting the issuance of a marriage license to a couple that is not a man and a woman, in that it provides that a Clerk who violates this prohibition is guilty of a criminal act and subject to a fine and/or imprisonment.

This gray area arose from an order issued by Judge Robert Hinkle, District Judge in the U.S. District Court for the Northern District of Florida. Judge Hinkle opined that the state’s ban on same-sex marriage is unconstitutional, however, he issued a stay on granting same-sex marriages until there was an opportunity for an appeal. The opinion concludes:

The Supreme Court has repeatedly recognized the fundamental right to marry. The Court applied the right to interracial marriage in 1967 despite state laws that were widespread and of long standing. Just last year the Court struck down a federal statute that prohibited federal recognition of same-sex marriages lawfully entered in other jurisdictions. The Florida provisions that prohibit the recognition of same-sex marriages lawfully entered elsewhere, like the federal provision, are unconstitutional. So is the Florida ban on entering same-sex marriages.

In response to the stay, Pam Bondi, the Attorney General of Florida, filed a request in the 6th Circuit Court of Appeal for an extension of the stay issued by Judge Hinkle. The 6th Circuit denied the request to extend the stay, resulting in the expiration of the stay issued by the District Court on the close of business on January 5, 2015.

As the year draws to an end and the January 5th expiration date rapidly approaches, it will be interesting to see how this plays out.

The Florida LLC Act: Tips, Tidbits, and Tricks
by Ken Crotty and Chris Denicolo

WHAT DOES IT TAKE TO AMEND AN LLC’S OPERATING AGREEMENT AND ARTICLES OF ORGANIZATION UNDER THE NEW LLC ACT

We also have received a few questions as to the voting threshold necessary for the members of a Florida LLC to amend the LLC’s Operating Agreement or Articles of Organization under the new Florida LLC Act. There is some confusion as to whether a majority vote or unanimous vote of the Members is required to cause such an amendment, and as to whether the same voting threshold applies to an amendment of an LLC’s Operating Agreement and Articles of Organization.

As with other statutorily based “Acts” (such as the old Florida LLC Act and the Uniform Commercial Code), the new Florida LLC Act provides for a set of default rules that will apply if the LLC does not otherwise modify such rules in its Operating Agreement or Articles of Organization, subject to certain default rules espoused by the new LLC Act being non-modifiable. The default rules that may not be modified by an LLC’s Operating Agreement are provided in Florida Statute § 605.0105(3).

Florida Statutes § 605.04073 provides the default rule that would apply in the event that the Operating Agreement or the Articles of Organization are silent on the degree of vote needed to amend the Operating Agreement or the Articles of Organization. Specifically, subsections (2)(d) and (3)(e) state that the Operating Agreement and the Articles of Organization may be amended only with the affirmative vote or consent of all members. However, this rule seems only to apply to the extent that the Operating Agreement or the Articles of Organization do not provide otherwise.

Florida Statute § 605.0105(1)(d) expressly allows an Operating Agreement to specify the means and conditions for amending the Operating Agreement. Further,  nothing in subsections (3) or (4) of this Statute prevents an LLC Operating Agreement from specifying a methodology for amending the Operating Agreement different from the unanimous vote default rule described above under § 605.04073. Based on this, the LLC Operating Agreement can specify that a majority vote of the members (or some other action or threshold) is all that is required to amend the LLC’s Operating Agreement.

Additionally, it appears that Section 605.0105 does not preclude stating in the Operating Agreement that a specified action or voting threshold other than the unanimous vote of members may amend the Articles of Organization. Subsection (1) specifically provides that “[e]xcept as otherwise provided in subsections (3) and (4), the operating agreement governs the following: (a) relations among the members as members and between the members and the limited liability company.” Neither subsection (3) or (4) provides anything that would prohibit the amendment of the Articles of Organization by a majority vote of the members or by some other specified action.

Therefore, an LLC’s Operating Agreement or Articles of Organization may provide for the applicable action or voting threshold that is necessary to amend the LLC’s Operating Agreement or Articles of Organization, and if the Operating Agreement or Articles of Organization are silent, then a unanimous vote of the LLC’s members would be required to effectuate any such amendment.

Medical Billing 501: Quick Tips to Enhance an Already Efficient Billing Operation – Employee Incentive Plans
by Colin Shalin

Colin Shalin is a Practice Management Consultant specializing in A/R and financial management with an emphasis on billing and collection process and performance improvement.  Contact him by phone at (727) 244-1179 or by emailing consultcolin@gmail.com. © 2014

Implementing an employee incentive plan can provide the collection performance boost you have been missing at a fairly low cost. Utilization of this tactic can be especially beneficial when there is a large amount of aged A/R, which is still deemed reimbursable, but your Collectors can never seem to “get to it.” To be fair, most employers will implement a reward structure including eligibility for employees within all aspects of the billing process, including the Front Desk staff. Before attempting to develop an all-encompassing model, test a scaled-down version to be sure it will be a good fit for your practice. Here are some tips to consider when implementing your plan:

Eligibility

Start small & focused when implementing an employee incentive program. Determine the volume and amount of uncollected A/R by Payer including the amounts due from patients. Next, determine a tiered reward level for every 25% increase in your Insurance collections separate from your Patient collections. Include a team reward and an individual reward for each level achieved.

Be sure to set a timeframe for each level to be attained and limit the entire plan to no more than 4 months in duration. Try to set fair goals, but also ensure the first 2 tiers can be met. Raise the reward substantially for the last 2 tiers. Establish your monitoring program to ensure you can quickly determine the results to give immediate feedback at selected intervals throughout the plan’s duration and immediately upon reaching your tiers.

Start with your Collection staff, including anyone who works denials. Announce the plan – which is best accomplished by a pizza party – and include parameters regarding interference with regular work duties, special hours allowed including overtime, or other guidelines to ensure normal operations continue as expected. Make sure you put a tracking schedule up on the wall and update it at least weekly to keep a high level of interest in the project.

Gauge the success of your plan during the implementation phase and feel free to modify it as needed to maintain the staff focus and efforts required to meet your goals.

Upon completion of this initial plan testing, determine your ongoing reward structure by functional area throughout the billing process. Remember your Front Desk area is the best place to collect patient due balances (prior to treatment) so consider this area an extension of your collection department when developing your future plan.

Rewards

The best reward systems include both monetary and non-monetary benefits. Cash, of course, is a great motivator, but it should not be the only one. Team rewards tend to work best when they are non-cash items. In addition to the plan kick-off event, pizza parties or other group events such as lunches, ice cream socials, breakfast snacks, tea time, afternoon walks, in-office massages, or other creative activities are best.

Individual “non-cash” rewards can include movie passes, theatre tickets, restaurant gift cards, dinner parties, grocery store or other store gift cards, spa treatments, out-of-town travel weekends, or other purchased items.

Remember, time off is a valuable reward, especially if you have a PTO system. Rewarding employees with an extra “holiday” will please most employees, but be sure to check your employee manual or with your benefits expert prior to using this method.

All rewards should be announced at the plan kick-off. Be sure to modify them if you do not receive positive feedback or results. No more than one or two rewards should be a surprise.

Don’t be afraid to be creative and make the experience fun for your employees. Remember, you want them to succeed as that means you will have collected on accounts before they have no value!

Get moving now! The sooner your plan is implemented, the quicker the collection results can be realized.

Richard Connolly’s World
The 10 Biggest Celebrity Estate Stories of 2014 and What You Can Learn

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “The 10 Biggest Celebrity Estate Stories of 2014 and What You Can Learn” by Danielle and Andy Mayoras. It was featured on Forbes.com on December 4, 2014.  

Richard’s description is as follows:

When the proper estate planning isn’t done, it’s the family members left behind who pay the price, often with ugly, expensive, and bitter probate court battles. They happen to families all across the country on a daily basis, from those of modest wealth to the very rich.

This article shares 10 of the top celebrity estate stories of 2014 and how they highlight important lessons in estate planning.

Click here to view the full article.

Visit Our Friends and Heckle Us at Heckerling!

With the 49th Annual Heckerling Institute on Estate Planning coming up in just a few short weeks, three friends of Gassman, Crotty & Denicolo, P.A. have been kind enough to allow us to display our books and software at their tables.

Management Planning, Inc. (MPI) has graciously agreed to allow our books to be sold at their table, with all profit going to the charity of your choice or to purchase buckets of Kentucky Fried Chicken. Hats off to Joe Gitto for all that he does for the estate planning professional community.

Veralytic, and its brilliant founder and dynamo, Barry Flagg, have also graciously agreed to provide us with space, which is very much appreciated. Veralytic is the only credible system to enable trustees and other professionals to evaluate life insurance policies and historical and comparable product and carrier data. Take a look at a sample report and you will learn a great deal about how insurance products work and what to look for in evaluating products and carriers.

Phil’s Ultimate Estate Planner will also have a booth at Heckerling that will feature our JEST forms and instructional webinar. Howard Zaritsky and Lester Law will be covering JEST trust planning in the Monday morning Fundamentals section. We will be sitting in the front row!

Please plan to stop by these tables and say hello to each of these fine companies. Give them your card for the opportunity to win four buckets of Kentucky Fried Chicken, three copies of an old Thursday Report, four AAA batteries, and a Colonel Sanders Gardening Club membership!

Thoughtful Corner
How to Make a Great Litigator Even Better
Take Off the Weekends!
by Jay Fleece

3 - Fleece

Jay Fleece of the Baskin and Fleece law firm in Mid-Pinellas County (North St. Petersburg) has taken off about every weekend since March of 2014 after years of working just about every weekend.

The result is resoundingly positive. Jay will rarely, if ever, review his business emails after late Friday and before Monday morning and reports much better business and personal relationships and much higher productivity Monday through Friday.

Jay’s write-up on this important phenomenon, which many of us should consider, is as follows:

TIME – IT’S A LAWYER’S CURRENCY AND A LAWYER’S CURSE

Lawyers are obsessed with time. The more hours we bill, the more money we make. The more work we do, the more deadlines we create, and so it goes – a perpetual hamster on a treadmill lifestyle. Many lawyers work six and seven days a week at their office. There are many reasons why. They want to make as much money as possible, deadlines have to be met, or they think they would be bored by not working. I used to be guilty of all of the above. I paid my dues. I am a reformed workaholic, and I admit it. But I still covet time: my weekend time.

The Jewish theologian Abraham Joshua Heschel wrote that the Sabbath is a cathedral in time rather than in space. “Six days a week, we wrestle with the world, wringing profit from the earth; on the Sabbath, we especially care for the seed of eternity planted in the soul.” The British essayist Pico Iyer picks up on this theme. To paraphrase him, the 48 hours we take off for the weekend is our “cathedral in time” and “becomes a vast empty space through which we can wander, without agenda, as through the light-filled passageways of Notre Dame.”

My wife and I decided that we didn’t want to grow old and only have memories of hard work to show for it. So we decided to buy a house on the water, which we did, and a boat. I haven’t worked a weekend since. Most weekends I now worship at the altar of Tampa Bay – fishing the flats off of Weedon Island or the mangrove coast line or its reefs and jetties. I get to spend the weekends with my wife fishing or just cruising around the water watching the dolphins play or the manatees plodding along. Just being on the water works wonders.

My life has become richer and more fulfilling, and I actually accomplish more at work by doing less. I am sure there are many studies which analyze and corroborate my new found belief, but let me speak from experience. Clarity in thought and in expression is what we seek. I have found that by not working on the weekend, I come back into the office on Monday morning refreshed, re-charged, and raring to go.

Many times the perplexing problems that were doing calisthenics in my head on Friday have resolved themselves in a quite orderly fashion in my subconscious mind during the weekend, and the solution on Monday seems clear as day. I do not check work email from Friday when I leave the office until Monday morning. The world survives. The clients and the work are still there, but I have gained the most precious commodity there is – time: time to disengage, to be still, to go fishing, to experience the awesome power of nature, and to be with friends and family.

After a weekend, I am ready to hit it hard again Monday morning. It is amazing how your thinking becomes clearer and more focused, and, for the rest of the week, I gladly deal with the deadlines and pressures of time knowing that the weekend will be here before I know it.

In addition, my relationships are much better. My wife Cynthia, too, is beginning to cut digital ties on the weekend, but being in health care, her job does require her to be available by telephone. She has dealt with many a crisis now with a fishing pole in her left hand and a cell phone in her right. She is very adept!

If you aren’t taking weekends off, try two in a row and then decide if you will ever go back! Your family, your personal self, your staff, and your wallet will all thank you for taking the plunge and taking some time off.

Upcoming Seminars and Webinars

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will be presenting a webinar on TRUST PLANNING FROM A TO Z for the Florida Institute of CPAs.

Learn how to plan, structure, and protect wealth using revocable and irrevocable trusts and trust systems to effectuate wealth preservation and inheritance planning in a tax-efficient manner.

This course is designed for both new and experienced accountants. Many past attendees have expressed significant praise for this presentation, indicating that it is both dynamic and interesting, while providing a fresh new look at both time tested and new strategies and planning considerations with an emphasis on the numbers, practical application and an accountant’s role in planning and implementation. Includes valuable materials, free use of estate tax projection software, client explanation letters and a number of useful Excel spreadsheets that can be used on client matters.

Date: January 6, 2015 | 11:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE FORT LAUDERDALE PHYSICIAN LAW CONFERENCE:

Alan Gassman will be speaking at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. The schedule includes:

17 - Representing the Physician

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will be speaking at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS.

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here. To register for this program please email agassman@gassmanpa.com.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015. Topic is To Be Announced.

Date: March 6, 2015

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION: 

FLORIDA BAR WEALTH PRESERVATION PROGRAM

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will be presenting a webinar on A PRACTICAL TRUST PLANNING CHECKLIST AND PRACTITIONER COMPLIANCE GUIDE FOR FLORIDA CPAs for the Florida Institute of CPAs.

Review a practical planning checklist and practitioner tax compliance guide to facilitate implementing a comprehensive overview of practical planning matters and tax compliance issues in your practice. This presentation will cover over 20 common errors and missed planning opportunities that accountants need to understand and counsel their clients on.

This course is designed for practitioners who wish to assure that trust planning structures and compliance are both aligned with client objectives and that common catastrophic errors and misconceptions can be corrected.

Past attendees have indicated that this is an interesting and practical presentation that offers a great deal of practical information for both compliance and planning functions, based upon an easy to follow checklist approach.  Includes valuable materials.

Date: May 21, 2015 | 10:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org. To register, please click here.

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LIVE PRESENTATION:

2015 MOTE VASCULAR SEMINAR

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

NOTABLE SEMINARS BY OTHERS

(These conferences are so good that we were not invited to speak!)

 LIVE ORLANDO PRESENTATION

49th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 12 – 16, 2015

Location: Orlando World Center Marriott, 8701 World Center Drive, Orlando, Florida

Additional Information:

Don’t miss Howard M. Zaritsky and Lester B. Law’s January 12th morning discussion of Basis – Banal? Basic? Benign? Bewildering?, which will include mention and some commentary and advice on the use of our JEST trust system. Don’t leave home without it!

When browsing the tables, be sure to stop by Management Planning, Inc. or Veralytic for a chance to purchase one of our books or check out our EstateView software! Phil’s Ultimate Estate Planner will also be featuring our JEST forms and instructional webinar.

For more information please visit: https://www.law.miami.edu/heckerling/?op=0

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LIVE CLEARWATER PRESENTATION:

RUTH ECKERD HALL PLANNED GIVING ADVISORY COUNCIL MEETING

Ruth Eckerd Hall’s next Planned Giving Council Meeting will be a spectacular two-part event, featuring an educational presentation at 4:30 p.m. and a networking session at 5:30 p.m.

“Improve with Improv: Using Humor and Immediate Responses to Enhance Client, Professional, and Social Interaction” will be led by Jack Halloway, a well-known improvisational coach and actor. This workshop will cover the basic and effective methods of improvisation in order to increase participants’ ability to think quickly, listen closely, and feel more comfortable responding to situations.

The presentation will be followed by a social networking and information session led by Ruth Eckerd Hall’s President and CEO Zev Buffman.

Call Ruth Eckerd Hall, learn improvisation, get an hour of credit, a glass of wine, and a great time!

Date: Tuesday, January 20, 2015 ǀ 4:30 p.m.

Location: Ruth Eckerd Hall’s Margarete Heye Great Room

Additional Information: For more information, or to RSVP, please contact Alan Gassman at agassman@gassmanpa.com or Suzanne Ruley at sruley@rutheckerdhall.net.

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

7 - Federal Rates December

The 7520 rate for December is 2.0% and for November was 2.2%.

The Thursday Report – 12.11.14 – BP, Disregarded TBE LLCs, and the Law of Slaw

Posted on: December 11th, 2014

Case Update: Madoff Claw-backs and BP Appeals by Travis Arango

Year-End Estate Tax Planning by Alan Gassman

The Florida LLC Act: Tips, Tidbits, and Tricks by Ken Crotty and Chris Denicolo

Yes, it is Usually Safe to Consider an LLC Owned as TBE as Disregarded for Income Tax Purposes by Alan Gassman and Brandon Ketron

Gregory Gay’s Corner – Medicare, Part 3

Richard Connolly’s World – IRA Rollovers Get New IRS Rules for 2015

The Law of Slaw: How to Best Protect Your Favorite Recipes

Thoughtful Corner – Happiness Habits

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

 This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Case Update: Madoff Claw-backs and BP Appeals
by Travis Arango

Madoff Investors have a Two-Year Clawback Statute of Limitations

Madoff stole $17.5 billion in a Ponzi scheme and plead guilty in 2009. The trustee of the bankruptcy case is attempting to recoup some of the money stolen and return it to the victims. However, the Court of Appeals for the Second Circuit in New York ruled that the trustee in the Madoff proceeding can only pursue profits received from investors within two years of the date of filing the petition. This amounts to the trustee not being able to gain access to $1.6 billion received by Madoff investors outside of that two-year period.

United States Supreme Court Takes the Lead out of BP’s Tanks

On December 7th, the Supreme Court denied hearing the BP appeal that was challenging the settlement over the oil spill that occurred in the Gulf of Mexico four years ago. The Supreme Court did not issue a comment and rejected the appeal with no dissenting Justices. This decision allows businesses and others to make claims for another six months. This time limit could possibly be extended if BP requests reconsideration, as the court’s decision marks the official beginning of the six-month deadline. It’s time to get those claims understood and finalized!

Year-End Estate Tax Planning
by Alan Gassman

While many clients will no longer have estate tax issues, given the $5,430,000 threshold that will apply beginning January 1st, a number of taxpayers are or will be well above that level (or twice that level as to married couples), and it is therefore essential to make sure that they understand what they can do before January 1, 2015 to reduce or possibly even eliminate federal estate tax exposure for their families.

On January 1st, there will no longer be the opportunity to gift up to $14,000 for each donee, whether directly or into trusts that can provide long-term benefits and possibly even be used to benefit the donor and/or the donor’s spouse.

If the ownership interests transferred can qualify for valuation discounts and/or are expected to grow rapidly in value, then the impact of these arrangements can be significant.

There are only 20 days left between now and December 31, 2014. Are you reaching out to your clients who have or should have concerns about federal estate tax to help make sure that they do not lose the opportunity to make the best possible use of presently existing strategies, which most notably include the ability to gift up to $14,000 per donee/donor per year into long-term trusts that can benefit present and future generations, the donor’s spouse, and, in many cases, even the donor.

With a 1.89% Mid-Term Applicable Federal Rate, there is also the opportunity to sell discounted entity interests and/or assets expected to increase in value dramatically in exchange for 9-year interest only promissory notes on an income tax free basis, under circumstances where the seller/donor can pay the income taxes on behalf of the purchasing trust that is the result of interest, dividend, business operational, and capital gains income that benefit the trust.

In many cases, these trusts are already established, and the only thing needed is to assign ownership interests in existing entities to the trusts based upon the number of individuals having $14,000 (or $28,000 for a married couple) each withdrawal powers.

While far fewer clients are concerned about these rules, those who are can be particularly appreciative, and many do not realize that with earnings, growth in investments, and inflation, they will be in the “estate tax zone” almost before they know it.

The Florida LLC Act: Tips, Tidbits, and Tricks
by Ken Crotty and Chris Denicolo

WHY WE NEVER PROVIDE FOR MANAGING MEMBERS IN OUR OPERATING AGREEMENTS

We have had a number of questions in the last few days about the new Florida LLC Act, which takes effect January 1, 2015 for all Florida limited liability companies.

A common point of confusion revolves around what the statute is going to do to change agreements and arrangements now in effect that call for Managing Members.

The drafters of the new statute recognized how much confusion occurs when a “Managing Member” is referred to in an Operating Agreement. Under the new statutes, the concept of a Managing Member has been removed, and a Florida LLC would either be classified as Manager Managed or Member Managed. The determination of whether an LLC is Manager Managed or Member Managed is based on the terms of the LLC’s Operating Agreement or Articles of Organization.

In last week’s Thursday Report, we ran an article detailing this change in Florida LLC law, which contained the following chart to describe the distinctions between an LLC that is Manager Managed or Member Managed that has a Managing Member.

7.2 - Chart

Clients and many advisors do not understand how important it can be to divide these functions, and the failure to provide that an LLC is either Manager Managed or Member Managed could cause the intended “Managing Member” to have next to no authority to manage the affairs of the LLC without the consent of other members.

For example, if an LLC Operating Agreement provides that the LLC is to be managed by a “Managing Member,” and the LLC is determined to be Member Managed under the new LLC Act, then it is possible that a majority vote of all members of the LLC would be required with respect to any decisions regarding the operation of the LLC. This could cause a minority share member who has been serving as the Managing Member of an LLC to be required to obtain a vote of at least 50% plus one of the LLC membership interests in order to effectuate actions on behalf of the LLC. However, this situation could be avoided by an amendment to the Operating Agreement which provides that the LLC will be Manager Managed by the individual or entity who was previously serving as Managing Member.

We wanted to republish the above chart and address this issue again in this week’s Thursday Report because of the possibility of significant unintended consequences that could be prevented by a simple amendment to an LLC’s Operating Agreement and/or proper drafting of future LLC Operating Agreements. A full copy of last week’s article can be found here.

Yes, it is Usually Safe to Consider an LLC Owned as TBE as Disregarded for Income Tax Purposes
by Alan Gassman, JD, LLM, and Brandon Ketron, CPA, almost JD

One of the most common questions that we are asked by certified public accountants, tax lawyers, and other advisors is whether an LLC owned as tenants by the entirety between a husband and a wife can be disregarded for income tax purposes.  Many times the LLC will also be partly owned directly by one spouse or the other or through a trust considered as owned by one spouse or the other for income tax purposes (a defective grantor trust), and we believe the same result applies.

General Requirements to be a Disregarded LLC

An entity with a single owner can be disregarded as an entity separate from its owner for federal income tax purposes.[1]  Therefore an LLC with only one member (Single-Member LLC) will be treated as disregarded.  The issue becomes less clear when an entity is owned by a husband and wife jointly.

LLCs Owned By Husband and Wife

In general, a business entity with two or more members is classified for federal tax purposes as either a corporation or a partnership, and cannot be treated as a disregarded entity.[2]  However, many authorities agree that an LLC owned as tenants by the entirety by a husband and wife can be disregarded.[3]  The IRS has yet to provide specific guidance on this issue, but has provided other guidance that supports this conclusion.

In Rev Proc. 2002-69 the IRS stated that an entity owned solely by a married couple as community property, under applicable local law, can be treated as disregarded for federal tax purposes. Under the laws of community property, assets are owned equally by the husband and wife and neither spouse has a full interest in the assets.  Similarly under the laws of tenancy by the entirety each spouse has an equal and undivided interest in the assets.  Therefore the IRS is likely to look at an LLC owned by a husband and wife as tenants by the entirety in the same way they look at an LLC in the community property state.

Practical Suggestions

When creating a single-member LLC held as tenants by the entirety between the husband and wife, the following recommendations should be considered:[4]

  1. Issue a single certificate labeled husband and wife as tenants by the entirety
  2. Draft an operating agreement that clearly sates the entity as a single-member entity.
  3. No distinguishment between voting, profits and losses, or capital as between the spouses.
  4.        The personal tax returns of the spouses should be filed jointly disregarding the entity and recognizing all the income as if the entity were disregarded.

What Happens if IRS Does Not Agree – Usually Nothing

According to Rev. Proc. 84-35, if certain requirements are met, then there is no penalty for a failure to file a partnership return, and since there is no additional tax owed, there would be no interest.  A husband and wife treating an LLC as disregarded (even if determined to be improper) will meet these requirements.  As a result, even if the IRS does not agree with the above conclusion, the partnership will not be liable for the failure to file a partnership return.

The penalty for the failure to file a partnership return is $195 per month, per partner, up to a maximum of twelve months.[5]  This brings the maximum penalty to $4,680, unless it can be shown that the failure to file is due to a reasonable cause.[6]

A domestic partnership composed of 10 or fewer partners is automatically deemed to have met the reasonable cause test and will not be subject to the penalty if all partners have fully reported their share of income on their timely filed income tax returns.[7]  A husband and wife treating an LLC as disregarded, will each report their share of income on a timely filed tax return.  Thus the husband and wife would fall into the exception and not be subject to the penalty.

The S-Corporation Exception        

As mentioned above, an exception to this position is if the LLC owns S-Corp stock.  This is due to the fact that if the LLC was determined to not be disregarded, the S election would be lost and back taxes (with interest) would be owed due to the entity now being treated as a C-Corporation.  This is much different, and creates a riskier situation than where a disregarded LLC would be taxed as a partnership.

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[1] § 301.7701-3
[2]Rev. Proc. 2002-69
[3] Howard E. Abrams Esq. & Fred T. Witt Esq. “Disregarded Entities,” 704-2nd Tax Mgmt. (BNA) U.S. Income, at B-7 (Dec. 9, 2014);  Domenick R. Lioce Chinks in the Armor: Current Trends in Limited Liability Company Structure After Olmstead , Fla. Bar. Journal January, 2011 Volume 85, No. 1 Pg. 36;
[4] Lioce Chinks in the Armor Fla. Bar. Journal
[5] I.R.C. § 6698
[6] Id.
[7] Rev. Proc. 84-35, 1984-1 C.B. 509

Gregory Gay’s Corner – Medicare, Part 3

2 - Gregory Gay

Gregory G. Gay, Esquire is an attorney from Tarpon Springs who specializes in meeting the special needs of senior citizens and the disabled. He is Board Certified in Wills, Trusts & Estates and in Elder Law by the Florida Bar. He has also been named a Certified Advanced Practitioner by the National Elder Law Foundation.

Mr. Gay is the author of the Florida Senior Legal Guide, the 8th edition of which can be purchased by clicking here. In the coming weeks, we will be profiling some of the best chapters from this excellent publication. Our deepest thanks to Mr. Gay for making this content available to Thursday Report readers!

This week, we conclude our look at the national Medicare system with information on Medigap insurance policies, Medicare Part D, and the Medicare Advantage.

Medigap Insurance Policy 

“Medigap” is the term used to describe the supplemental insurance policy needed to cover the health care costs, deductibles and co-pay amounts not provided by Medicare. This policy is important for Medicare recipients who rely on traditional Medicare coverage Medicare Part A.

The standardized Medigap policies that may be sold are as follows:

Plan A contains the basic or “core” benefits. The following is a list of the benefits that are contained in the core policy and that must be contained in all Medigap policies:

  1. Part A hospital coinsurance for days 61 to 90 ($296 per day in the year 2013;
  2. Part A lifetime reserve coinsurance for days 91 to 150 ($592 in 2013);
  3. 365 lifetime hospital days beyond Medicare coverage;
  4. Parts A and B three pint blood deductible;
  5. Part B 20 percent coinsurance.

The other Medigap policies contain the core benefits plus one or more additional benefits are as follows:

  • Plan B policies contain the core coverage and 100% of the Part A deductible.
  • Plan C policies contain the core coverage for 100% of the Part A deductible; the skilled nursing home facility coinsurance, 100% of the Part B deductibles, and foreign emergency care.
  • Plan D policies contain the core coverage plus 100% of the Part A deductible, SNF coinsurance, and foreign emergency care.
  • Plan E is no longer available since it included the same coverage as plan D.
  • Plan F contains the core coverage plus 100% of the Part A deductible, SNF coinsurance, 100% of the Part B deductible, 100% of the Part B excess charges and foreign emergency care. There is also a high deductible option with the same benefits plus a $2,000 deductible that is adjusted for the CPI since 2011.
  • Plan G contains the core coverage plus 100% of the Part A deductible, SNF coinsurance, 100% of the Part B excess charges, and foreign emergency care.
  • Plan H has been discontinued since it provided the same coverage as plan D but with drug coverage that is no longer necessary due to Medicare Part D.
  • Plan I has been discontinued since it provided the same coverage as plan G but with drug coverage that is no longer necessary due to Medicare Part D.
  • Plan J has been discontinued since it provided the same coverage as plan F but with drug coverage that is no longer necessary due to Medicare Part D.
  • Plan K contains the core coverage plus 100% of the Part A hospital coinsurance for the 61st through the 90th day and for days 91 through 150 and for 100% of Part A eligible expenses after these benefits are exhausted, including lifetime reserve days; 50% of coinsurance for 21st through 100th day, until out-of-pocket limit is met, 50% of Hospice care, 50% of reasonable cost for three pints of blood, 100% of cost-sharing for Part B preventive services after deductible paid and 100% of all cost-sharing under Part A and B for balance of year after out-of-pocket met.
  • Plan L contains the core coverage and 100% of the Part A hospital coinsurance for 61st through 90th day and for days 91 through 150, 100% coinsurance amount for each Medicare lifetime inpatient reserve day used; 100% of Part A eligible expenses after benefit exhausted, including lifetime reserve days; and 75% of the skilled nursing facility coinsurance for 21st through 100th day, until out-of-pocket limit is met; 75% of cost-sharing for all Part A eligible expenses until out-of-pocket limit met and 75% of reasonable cost for three pints of blood Part B.
  • Plan M contains the core benefits plus 50% of the Part A deductible, the skilled nursing facility coinsurance, and foreign emergency care.
  • Plan N contains the core benefits plus 100% of the Part A deductible, the skilled nursing facility coinsurance, and foreign emergency care and the lesser of $20 or the Part B coinsurance/co-payment for office visit (including specialists) and the lesser of $50 or Part B coinsurance/co-payment for emergency room visits. The co-payment waived if patient admitted to hospital and the emergency visit is subsequently covered under Part A.

Medicare Advantage

The ever increasing cost of the Medicare deductibles, the Medicare supplement and the additional cost of the Medicare Part D prescription drug plan will eventually drive most of the 35 million fee-for-service Medicare beneficiaries into joining the 11.7 million Medicare beneficiaries presently enrolled in a Medicare Advantage plan. These services are found in Part C of the Medicare Statutes. This is known as a Medicare Advantage plan. A Medicare Advantage plan is owned by a private company that provides all of a beneficiary’s health care and prescriptions through the plan’s health care providers for a capitated rate paid by the Centers for Medicare and Medicaid. The Medicare Advantage company must provide all the services currently available under Medicare Parts A and B. The primary physician who is assigned to the Medicare Advantage beneficiary serves as a gatekeeper to specialists. Thus, the beneficiary’s health care cost is reduced while his or her health is maintained. However, a Medicare Advantage beneficiary loses the right to select any doctor and must select from a panel of physicians offered by the plan.

Every year in November, the Center for Medicare and Medicaid conducts an annual coordinated enrollment period during which time all Medicare beneficiaries are able to choose between the original Medicare program and a Medicare Advantage plan. A Medicare beneficiary has between October 15 and December 7 to join, switch or drop a Medicare Advantage Plan. The coverage begins on January 1 of the ensuing year, as long as the plan receives the request by December 7th. Between January 1 – 14, a person who is a member of a Medicare Advantage Plan can leave his or her plan and switch to the original Medicare. If a person switches to the original Medicare during this period, he or she will have until February 14 to also select a Medicare Prescription Drug Plan to add drug coverage. The coverage will begin the first day of the month after the enrollment form is received. Although Medicare Advantage may seem to save beneficiaries more money at first, they will only save money if the Medicare beneficiary uses the plan’s doctors for all their care. In addition, because Medicare Advantage plans only have one-year contracts, the provider can decide to change its costs and even leave the Medicare program.

Medicare Part D

Medicare’s prescription drug program began on January 1, 2006. This program known as Medicare Part D provides limited financial assistance with drug expenses to persons enrolled under Medicare Part A or Part B who pay the additional Part D premium to a private company. These prescription drug plans offered pursuant to Medicare Part D are provided by private companies. Thus, a person eligible for Medicare must affirmatively enroll in a voluntary prescription drug coverage program under Medicare Part D for one year at a time. Medicare Advantage Plans normally provide prescription coverage.

It is important to understand that the drugs offered by different plans vary. This new law does not authorize the establishment of specific lists of medications that must be offered by the Medicare Part D formularies. In general, once a person selects a prescription drug plan, he or she is locked in to the drug plan and cannot change until the next annual enrollment period. This is true even though the plan in which he or she enrolls changes the formulary or cost sharing arrangement, with enrollment in the new plan becoming effective January 1 of the following year. The annual enrollment period for Medicare Part D is between October 15th and December 7th of each year. During this period, a person who is eligible for Medicare can enroll in a plan or change his or her enrollment from one plan to another. An individual who is already in a plan can decide if he or she wants to remain in the same plan for the current year or if he or she wants to select another plan. There is a late penalty for failure to timely enroll when a person is first eligible. The penalty is 1% of the national average premium for every month that a person delays enrollment. Thus, a person who becomes eligible to enroll in Part D at age 65 and delays enrolling until age 66 can be assessed a 12% penalty on his or her premium for the remainder of his or her life. The amount of the penalty will vary each year as the national average premium changes. However, this penalty is waived if a person had creditable coverage with an employer or through the Veterans Administration or Tricare. Creditable coverage means that the employer’s drug plan is equivalent to the Part D benefit.

The monthly premium that a Medicare beneficiary will have to pay on a monthly basis for Part D drug benefits varies from company to company and depends on the formulary being provided by that company. A Medicare beneficiary who elects to pay this premium will then pay an annual deductible for prescriptions. The annual deductible for 2013 is the first $325 of prescription drug expenses incurred during 2013 for drugs on the plan’s list of covered drugs or formulary. The enrolled Medicare beneficiary then pays a coinsurance amount equal to 25% of his or her prescription costs, for formulary drugs, in excess of the annual deductible up to the initial coverage limit in 2013 of $2,970. The Medicare beneficiary’s prescription drug plan sponsor pays the remaining 75% until total drug expenses paid for by the plan and the beneficiary reach $2,930. The Affordable Care Act then provides that the drug manufacturer will pay 50% of the cost of the brand-name drugs and the plan will pay another 2.5%, providing seniors with total coverage of 52.5% in what is called the donut hole. Coverage by the plan of generic drugs in this donut hole is 21%. Once the total formulary expense has exceeded $6,733.75 in 2013, the Medicare beneficiary enters the catastrophic portion of the Medicare Part D Program. The Part D plan then covers 95% of the excess drug expense incurred. The cost-sharing by the patient is set at the greater of a 5% coinsurance amount or fixed copayments. The fixed copayments are $2.65 for a generic/preferred multi-source drug and $6.50 for any other drug.

The annual premium and the deductibles are expected to increase each year as the cost of this additional Medicare benefit increases. Prescription costs will be treated as incurred by the Medicare beneficiary only if they are paid by the eligible beneficiary or by another individual on behalf of the eligible beneficiary. If the eligible individual is reimbursed for such costs through insurance, a group health plan, or other third-party payment arrangement, the prescription cost may not count toward the eligible beneficiary’s incurred share of cost.

In addition to the normal monthly premium, there is also a Part D premium surcharge for high income individuals and married couples that is based on that person’s or married couple’s 2011 adjusted gross income plus tax-exempt income. An individual who in 2011 had annual income greater than $85,000 and married couples who had income greater than $170,000 will pay a Part D Medicare additional premium of $11.60 per month in 2013. An individual with income for 2011 greater than $107,000 and married couples with 2011 income greater than $214,000 will pay an additional monthly premium of $29.90 in 2013. An individual with annual income in 2011 greater than $160,000 and married couples with an annual income in 2011 greater than $320,000 will pay an additional monthly premium in 2013 of $48.10 each. An individual with annual income greater than $214,000 and married couples with annual incomes greater than $428,000 in 2011 will pay an additional monthly premium in 2013 of $66.40.

This concludes our look at the United States Medicare system. If you would like to view the Medicare article in its entirety, please click here.

Next time, Gregory Gay’s series will continue with an examination of selling a residence and homestead exemptions. This article will include information on title insurance, property tax exemptions, Florida Documentary Stamp Tax, and reverse mortgages. If you would like to read the Florida Senior Legal Guide in its entirety, please visit http://www.seniorlawseries.com. Mr. Gay can be reached at gregg@willtrust.com.

Richard Connolly’s World
IRA Rollovers Get New IRS Rules for 2015

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature one of Richard’s recommendations with a link to the article.

This week, the article of interest is “IRA Rollovers Get New IRS Rules for 2015” by Karen Damato. It was featured in The Wall Street Journal on November 11, 2014.  

Richard’s description is as follows:

In its new guidance, the IRS said owners of multiple IRAs get a “fresh start” on January 1. That is, a 60-day rollover made in 2014 “will have no impact on any distributions and rollovers during 2015 involving any other IRAs owned by the same individual,” the IRS said.

Another significant clarification, according to Jeffrey Levine, a CPA at Ed Slott & Co. in Rockville Centre, NY: The rule applies to IRA and Roth IRAs in the aggregate

Click here to view the full article.

The Law of Slaw: How to Best Protect Your Favorite Recipes
by Amy Bhatt

Amy Bhatt is an Early College student at St. Petersburg College. She is majoring in Paralegal Studies and maintains a 4.0 GPA. Her long-term goal is to earn a Juris Doctor from Stetson University College of Law. Amy has been working as an assistant at Gassman Law Associates since she was 15 years old, and we are proud to say that she wrote this article about the legal securities behind America’s healthiest fast food enterprise without assistance!

It’s one of the best kept secrets in the food industry. With top-level security guarding the vault that houses it, only a few people in the world know its contents in their entirety. What is so secret that it requires a state-of-the-art vault surrounded by motion detectors, cameras, and around-the-clock guards? Why, it’s none other than Colonel Sanders’s fried chicken recipe containing the famous 11 herbs and spices!

Today, the recipe is protected as a trade secret, which is defined as a formula, pattern, compilation, program, device, method, technique, or process that allows a company to gain a competitive advantage by keeping certain information secret. To remain a trade secret, reasonable efforts, like the ones in place for the KFC recipe described above, must be made to maintain its secrecy.

But if KFC wants to protect its recipe, why go through the expense of getting a vault surrounded by motion detectors, cameras, and guards? Why not just patent the recipe? Patenting the recipe means KFC would have to disclose the secret 11 herbs and spices. According to the United States Patent and Trademark Office, KFC would have the “duty to disclose…all information known to…be material to patentability.” Since the recipe is what would be protected by a patent, all of the ingredients would need to be disclosed.

In return, the patent would grant KFC a temporary monopoly, usually for about twenty years, over the sale of its chicken. During this time, while the patent is still in force, other companies would not legally be able to make, use, or sell the recipe. If a company does infringe on the patent, it could be sued. However, once the twenty years are up and the patent expires, the recipe would be considered part of the public domain, meaning those companies that would formerly be infringing upon the patent would then have the right to use the recipe however they please.

While the process of obtaining a patent requires registration and procedural formalities, the process of obtaining a trade secret is relatively simple. Since trade secrets do not require any type of registration, there is no application to file with the government. The only requirements are 1) The information must be secret, 2) it must have economic value from being a secret, and 3) reasonable efforts must be made to maintain its secrecy.

Since the Colonel’s recipe is currently protected as a trade secret, if a person was to reverse engineer the recipe and sell it, it would be fair game since that person did not acquire the recipe through illegal means. However, trade secret “theft” can occur if someone who knows the recipe divulges it to the public. To prevent this, many companies require those select, in-the-know individuals to sign non-disclosure and confidentiality agreements.

This doesn’t mean a company should not get a patent to protect other types of information. In fact, Colonel Sanders did have a patent. On April 12, 1966, he was granted a patent on the process of producing fried chicken. In his autobiography, the Colonel describes his reasoning for obtaining the patent: “I did that so if they cancelled with me, they couldn’t keep going with my cooker and fool the public into thinking they were still selling my Kentucky Fried Chicken.”

Thoughtful Corner
The Happiness Habits
by Thurston Thursday, III

Copyright © 2014 The Thursday Report

Last week, we talked about the Happiness Hurdles, those obstacles which may prevent happiness and satisfaction for illogical reasons. To see this discussion in last week’s Thoughtful Corner, please click here.

Today, we discuss the Happiness Habits, which are the opposite of Happiness Hurdles. It is only through using the Happiness Habits that the Happiness Hurdles can be overcome.

Even if you cannot change your circumstances, you can change your reactions and “inter-programming” to be happier with what you are achieving and the results that come from your work. You can do this by building new habits based upon proven and enjoyable thought and planning strategies that will allow you to spot the issues, analyze the problems and think through your reactions, strategize, and then enjoy the process of achieving and progressing in a positive manner.

These habits are:

  1. Identifying hurdles as unnecessary obstacles and thinking about them appropriately
  2. Understanding that the process of setting and achieving goals is best effectuated by someone who can enjoy the process of working toward a goal as well as accomplishing the goal itself
  3. Understanding that handling problems is best effectuated by someone who finds fulfillment in addressing problematic issues while also working to improve methods and systems to avoid future problems
  4. Approaching obstacles in a way that eliminates the need to become angry or frustrated when situations occur that are beyond one’s control.

That calm, collected person we all know and admire has typically worked hard on himself or herself in order to be able to handle or eliminate obstacles efficiently and effectively.

If you take every problem as a signal that something can be improved in your organization or approach, then the problem can be welcomed, and your organization, protocols, and team can be improved as a result.

Add in humor and a sense of accomplishment and see what can happen.

An exercise to help you create strategies for dealing with your own obstacles by using common happiness and effectiveness habits can be viewed by clicking here.

Upcoming Seminars and Webinars

LIVE CLEARWATER PRESENTATION:

Alan Gassman will be hosting a workshop for lawyers and other professionals who are interested in improving their futures both personally and professionally. Topics to be explored include goal setting, overcoming frustrations, problem solving, and strategies to help attract and retain the type of clients that will help grow your practice.

This workshop will be followed by a tour of the Gassman Law Associates office.

Date: December 14, 2014 | 9:00 a.m. – 3:00 p.m.

Location: 1245 Court Street, Ste 102, Clearwater, FL

Additional Information: For more information, or to register for this free workshop, please email Alan Gassman at agassman@gassmanpa.com.

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LIVE WEBINAR:

Alan Gassman and Lester Perling will be presenting a 30 minute webinar on LESSONS LEARNED FROM THE HALIFAX CASE

Date: Tuesday, December 16, 2014 | 12:30 p.m.

Location: Online webinar

Additional Information: To register for the webinar please click here.

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LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Chris Denicolo will be presenting a webinar on TRUST PLANNING FROM A TO Z for the Florida Institute of CPAs.

Date: January 6, 2015 | 11:00 a.m.

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or Thelma Givens at givenst@ficpa.org.

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LIVE FORT LAUDERDALE PHYSICIAN LAW CONFERENCE:

Alan Gassman will be speaking at the 2015 Representing the Physician Seminar on the topic of DISASTER AVOIDANCE FOR THE DOCTOR’S ESTATE PLAN.

Please consider attending the Florida Bar 2015 Representing the Physician Seminar at the beautiful Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale on Friday, January 16, 2015.

Start a great weekend there and then work yourself down to South Beach or stay at The Breakers in West Palm.

The topics (and speakers) are unbeatable. The schedule includes:

17 - Representing the Physician

Date: January 16, 2015

Location: Renaissance Fort Lauderdale Cruise Port Hotel, 1617 SE 17th Street, Ft. Lauderdale, FL.

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or click here to download the registration package.

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LIVE TAMPA PRESENTATION:

Alan Gassman will be speaking at the Tampa Bay Estate Planning Council Dinner Program on the topic of PLANNING WITH RETIREMENT ACCOUNTS.

Date: January 21, 2015 | 5:30 p.m. – 7:30 p.m.; Alan Gassman will be speaking from 6:45 to 7:15.

Location: The Tampa Club, 101 E Kennedy Boulevard, 41st Floor, Tampa, FL

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com

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LIVE NEWPORT BEACH PRESENTATION:

Jerry Hesch will present THE MATHEMATICS OF ESTATE PLANNING at the Society of Trust and Estate Practitioners 4th Annual Institute on Tax, Estate Planning, and the Economy. This conference is a collaboration between STEP Orange County and the University of California, Los Angeles, School of Law.

Professor Hesch’s presentation will make use of the materials that Alan Gassman, Ken Crotty, and Chris Denicolo presented to the 40th Annual Notre Dame Tax & Estate Planning Institute on November 14, 2014.

Date: January 22 – 24, 2015

Location: California Marriott Hotel and Spa at Fashion Island, Newport Beach, CA

Additional Information: For more information, please email agassman@gassmanpa.com or visit http://www.step.org/4th-annual-institute-tax-estate-planning-and-economy.

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LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP

Alan Gassman will present a full day workshop for third year law students, alumni and professionals at Ave Maria School of Law.  This program is designed for individuals who wish to enhance their practice and personal lives.

Date: February 21, 2015 | 8:30am – 5pm

Location: Ave Maria School of Law, 1025 Commons Cir, Naples, FL 34119

Additional Information: To see the official program for this workshop, please click here. To register for this program, please email agassman@gassmanpa.com.

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LIVE ORLANDO PRESENTATION:

THE ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2015

Alan Gassman will speak at The Advanced Health Law Topics and Certification Review 2015. Topic is To Be Announced.

Date: March 6, 2015

Location: Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Blvd., Orlando, FL 32827

Additional Information: For more information, please email agassman@gassmanpa.com.

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LIVE NAPLES PRESENTATION:

2nd ANNUAL AVE MARIA SCHOOL OF LAW ESTATE PLANNING CONFERENCE

Date:  Friday, May 1, 2015

Location:  Ave Maria School of Law, 1025 Commons Circle, Naples, Florida

Additional Information:  Alan Gassman, Jerry Hesch, and Richard Oshins will present The Mathematics of Estate Planning.  If you liked Donald Duck in Mathematics Land, you will love The Mathematics of Estate Planning.  This will not be a Mickey Mouse presentation.

Other speakers include Richard Oshins on Oshins 11 Outstanding Planning Ideas, Jonathan Gopman on Asset Protection, Bill Snyder, Elizabeth Morgan, Greg Holtz, and others.

Please let us know any questions, comments, or suggestions you might have for this amazing conference, which features dual session selection opportunities in one of the most beautiful conference facilities that we have ever seen.

And don’t forget to have a great weekend in Naples with your significant other or anyone who your significant other doesn’t know!  Domino’s Pizza is extra.

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LIVE MIAMI PRESENTATION: 

FLORIDA BAR WEALTH PRESERVATION PROGRAM

Denis Kleinfeld and Alan Gassman have released the schedule and topics for FUNDAMENTALS OF ASSET PROTECTION, AND ADVANCED STRATEGIES. This seminar will be presented on May 7th and May 8th, 2015, and is sponsored by the Tax Section of the Florida Bar.  Attendees can select one day or the other, or to attend both days.

Day One will be for fundamentals and will be an excellent review or an introduction to the basic rules and practice aspects of creditor protection planning for both new and experienced practitioners.

Day Two will be an advanced treatment of creditor protection and associated planning, which will be of great use to both new and experienced practitioners.

Date: May 7 – 8, 2015

Location: Hyatt Regency Miami, 400 SE 2nd Avenue, Miami, FL 33131

Additional Information: To pre-register for this conference, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com. 

NOTABLE SEMINARS BY OTHERS

(These conferences are so good that we were not invited to speak!)

 LIVE ORLANDO PRESENTATION

49th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 12 – 16, 2015

Location: Orlando World Center Marriott, 8701 World Center Drive, Orlando, Florida

Additional Information:

Don’t miss Howard M. Zaritsky and Lester B. Law’s January 12th morning discussion of Basis – Banal? Basic? Benign? Bewildering?, which will include mention and some commentary and advice on the use of our JEST trust system. Don’t leave home without it!

For more information please visit: https://www.law.miami.edu/heckerling/?op=0

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LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION

Date: Thursday, February 12, 2015

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Speakers include Richard A. Oshins, Melissa Langa, Stephanie Loomis-Price, Steve R. Akers, William R. Lane, and Abigail E. O’Connor. For a full list of speakers and presentation descriptions, please click here. For a complete seminar schedule, please click here.

Please contact Lydia Bennett Bailey at Lydia.Bailey@allkids.org for more information.

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LIVE PRESENTATION:

2015 FLORIDA TAX INSTITUTE

Date: Wednesday through Friday, April 22 – 24, 2015

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, FL 33607

Additional Information: Please contact Bruce Bokor at bruceb@jpfirm.com for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

7 - Federal Rates December

The 7520 rate for December is 2.0% and for November was 2.2%.

 

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