The Thursday Report – 8.1.13 – Ringo, New Land Trust Law & LLC Clinic

No No Song

By Ringo Thur

 A tax lawyer I know just came from Nashville Tennessee-o.

I smiled because he did not understand.

Then I held up a recent Thursday Report

And he said I was the smartest of the land

And I said no, no, no, no,

I don’t read updates no more (or fill in your favorite vise)

I’m tired of waking up on the floor

No, thank you, please, I’d rather have a disease than

Give up my Thursday Report, au revoir.

Land Trusts – Use, Abuse, and Confusion by Alan S. Gassman

Ken Crotty’s LLC Clinic – More Information Regarding the Duty to Update Inaccurate Information in the Articles of Organization of a Florida LLC

1^st Annual Estate Planner’s Day at Ave Maria School of Law

Additional Filing Requirements for Disregarded LLCs, Part 3

Our Recently Updated Article from Leimberg Information Systems – The Windsor Effect – Why Many Affluent Same-Sex Couples Will Be Leaving Florida and Where They Should Go

Enhance your professional practice, and enjoyment thereof – an afternoon with Srikumar Rao, Ph.D.

Research on Google

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.

Land Trusts – Use, Abuse, and Confusion by Alan S. Gassman

Many of us use land trusts for a number of purposes.  In the purist form, a land trust is simply an ownership titling device, under which an individual or entity can be the full and controlling beneficial owner of real estate or other property that is titled in the name of a trustee that will act only as and when specifically instructed.

This can facilitate confidentiality in the public records, the ability to transfer beneficial ownership without a subsequent deed (by transferring beneficial ownership of the land trust itself), and avoidance of probate and guardianship if the land trust has provisions that specifically require the trustee to transfer legal title to a successor entity or beneficiary.  Oftentimes an out-of-state LLC can be formed in a jurisdiction that does not disclose ownership or officers to be the trustee of the land trust.

Most states do not recognize or have laws that will facilitate the many uses of land trusts that can be implemented in Florida, Illinois and the other states that have land trust judicial or statutory recognition.

Many layman, and some misled or confused professionals, believe that an individual or entity can place real estate under a land trust, and then transfer beneficial land trust ownership interests and avoid documentary stamp taxes and transfer reporting requirements.  This is simply not the case.  Florida land trusts can be very useful for avoiding the necessity of transferring deeds, and maintaining confidentiality of ultimate ownership, but for tax and transaction reporting purposes clients should be advised that the transfer of beneficial ownership of a land trust will have the same documentary stamp tax, corporate income tax, and other results as a transfer of the underlying real estate interests would have.

Quite often we will establish a land trust and have the Trustee be an LLC formed and maintained in a state that does not require publication of Member or Manager information.  Then the public records will reflect ownership by the foreign LLC, and the beneficial ownership of the property does not need to be revealed on the public records, and cannot be easily discovered.  This may include homestead, and is a technique commonly used for professional athletes, celebrities, and those who wish to not have the general public be able to easily see where they live on the website of the local County Property Appraiser.

Notwithstanding the above, homestead real estate owned by a land trust may not qualify for the Florida homestead exemption unless the land trust contains special language, at least according to one Property Appraiser in house lawyer.  The language that we often use to help us confirm that homestead property held under a trust will qualify for the homestead exemption is as follows:

Notwithstanding the paragraph above, as to any real estate owned under this Trust which is held in a county in Florida where my spouse resides, and any replacement real estate thereto so designated by the Trustee, my spouse shall have all rights of occupancy, use, and possession of such real estate as would apply to the owner of a life estate, as Homestead real estate, and thus shall have all equitable rights to use of such real estate consistent with Section 6, Article VII, of the Florida Constitution and Florida Statute 196.041(2), and as required by any applicable County Property Appraiser to qualify for homestead tax exemption and applicable increase caps and portability unless said spouse elects to the contrary by a written instrument executed.

The statute can be reviewed by clicking here.

Excerpts from this analysis are set forth below, and the comparison showing what we deleted can be reviewed by clicking here:

EXCERPTS FROM SUMMARY ANALYSIS CS/CS/HB 229 passed the House on April 24, 2013, and subsequently passed the Senate on April 26, 2013.The bill codifies certain provisions already in use by practitioners regarding land trusts, and distinguishes a land trust by the limited nature of the powers of the land trustee. A land trust is a form of ownership of real property in which a trustee holds legal title to the land and a beneficiary retains the power of direction over the trustee and thus retains the power to direct the trustee to sell or mortgage the real property. A land trust is primarily defined by language in the deed to the trustee which allows third parties to rely upon the ability of the trustee to transfer the property without inquiry into the consent of the beneficiaries. Because of its singular nature, there are laws applicable to other trusts which have no usefulness in the area of land trust law. Further, the standard of practice in this area has not been codified, but rather has been pursued by reference to legal treatises and Illinois law, under which the original land trusts were established. This bill: Better defines the difference between a land trust and a general trust, defining a land trust by the largely ministerial duties of the trustee. Codifies in the Florida Land Trust Act a number of land trust practices commonly used in Florida and Illinois and derived from judicial precedents or land trust treatises. Includes improvements based on the experience of Florida land trust practitioners that are intended to facilitate and encourage the use of land trusts in Florida real property transactions. This bill does not appear to have a fiscal impact on state or local governments. Subject to the Governor’s veto powers, the bill is effective upon becoming law I. SUBSTANTIVE INFORMATION A. EFFECT OF CHANGES: Background Florida law recognizes a number of types of trusts. In most instances a trustee is obligated to use a high standard of care in investing and handling assets. There is a duty to account to the beneficiary and the assets of a trust might change. In contrast, the trustee of a land trust has legal title to a single asset for purposes of marketability, makes almost no discretionary decisions, and takes direction from the beneficiary regarding that asset. Thus, there is a distinct body of law that applies to land trusts already established, which this bill seeks to codify and standardize in Florida. Land trusts were developed first in Illinois, which remains the model for the standard arrangement in order to create a vehicle for simple transfer of title to property owned by a number of people. As opposed to other types of trusts in Florida, the land trustee is a place-holder for ease of transfer and marketability of title. The trustee of a land trust takes direction from the beneficiaries, and therefore has few if any fiduciary duties, nor any duties to account to the beneficiaries beyond sales transactions. This distinction is significant since Florida also has enacted the Florida Trust Code,[1] which imposes significant duties upon other types of trustees. These duties have no real relevance to the duties of the land trust trustee described in the Florida Land Trust Act.[2] Section 689.071, F.S., was enacted in 1963 as the Florida Land Trust Act to validate the use of Illinois land trusts in Florida and to confirm the marketability of real property titles derived through a land trustee. Accordingly, this statute has always focused primarily on the authority of the land trustee to convey good title to third parties if the prior deed to the land trustee granted to the trustee certainpowers to deal with and dispose of the property, commonly referred to as “deed powers.”[3] Acting primarily as a “title estoppel”[4] statute, s. 689.071, F.S., protects third party grantees, mortgagees and lessees who rely on the statutory authority of the trustee based on those recorded deed powers without requiring them to inquire into the identity of the beneficiaries or the terms of the unrecorded trust agreement. Effect of the Bill A. General Overview This bill clarifies the distinction between a land trust governed by s. 689.071, F.S., and other express trusts governed by the Florida Trust Code,[5] yet preserves the title estoppel benefits of the existing statute for any conveyance to a trustee where the conveying instrument contains deed powers. To accomplish this objective, this bill: Defines land trusts based on the functional scope of the land trustee’s duties, although deed powers would remain an essential element of a Florida land trust; and Relocates all the title estoppel provisions of s. 689.071, F.S., to a newly created section[6] which remains equally applicable to any conveyance to a trustee containing deed powers.[7] A transitional provision makes the new functional land trust definition apply only to trusts created on or after the effective date of the bill, and a trust existing before the effective date is classified as a land trust based on the intentions of the parties as expressed in or discerned from the existing trust agreement. The relocated title estoppel provisions in the new section apply to any real property conveyed to a trustee at any time by an instrument containing deed powers, regardless of whether the trust is a land trust or not. By separating the title estoppel statute from the land trust statute in this way, this bill does not change the results intended by the parties to any trust agreement existing on the date that the bill becomes effective. In addition to transferring the title estoppel provisions to a new section,[8] the bill also codifies in amended s. 689.071, F.S., a number of land trust practices and principles commonly used in Florida and Illinois and derived from judicial precedents or land trust treatises. B. Point-by-Point Analysis 1. Title Estoppel Provisions – Creation of s. 689.073, F.S. The marketability of title, and sometimes the anonymity of the beneficial owner, are the primary reasons for a land trust. Anyone who deals with the trustee must be assured that the trustee has legal ownership and full authority to deal with the property, and must also be assured that any claims between the land trustee and the beneficiaries will not affect the transaction or the grantee. Currently these assurance provisions, called “title estoppel” provisions are set out in ss. 689.071(3), (4), and (5), F.S. The bill relocates the title estoppel provisions to a new section entitled, “Powers conferred on trustee in recorded instrument,”[9] and creates a new subsection, s. 689.073, F.S. In moving the provisions to the new statute,[10] changes were made to: Remove language regarding the vesting of both “legal and equitable title” in the trustee; Remove the reference to real property “in this state;”[11] Relocate to s. 689.073(5), F.S., certain existing criteria for applicability; and Simplify the remaining language. The bill continues to vest in a trustee full power and authority to deal with the property as provided in the deed powers granted in the deed. The exclusion for instruments governed by s. 689.07, F.S. [existing s. 689.071(12), F.S.], is relocated to s. 689.073(4), F.S., changing only the words “this act” to “this section.” Currently, the title estoppel provisions are operative whether the conveyance deed refers to the beneficiaries or any unrecorded trust agreement.[12] The bill creates s. 689.073(5), F.S., which: Carries forward the provision that conveyance by the trustee is free of claims of beneficiaries; Expressly provides that the title estoppel provisions work regardless of the provisions of any unrecorded trust agreement and regardless of whether the trust is a land trust or an express trust; and Clarifies that the title estoppel section applies both to deeds recorded after the effective date of the proposed amendments and to deeds recorded under the present statute.[13] This provision confirms that the relocation of the title estoppel section is not intended to change the legal effect of any previous conveyances under the present statute, and for good measure all such previous conveyances are validated as vesting the trustee with the requisite deed powers. 2. Definition of “Land Trust” – Revisions to s. 689.071(2), F.S. The bill revises the remaining provisions of s. 689.071, F.S., which were not moved to the new section.[14] The revised definition of “land trust”[15] still requires a conveyance to a trustee by a recorded instrument containing deed powers, but beginning with the effective date of the bill this definition focuses on the key functional distinction between a land trust and other express trusts: that a land trustee functions almost entirely as the agent of the beneficiaries or the person holding the power of direction under the trust agreement, whereas a trustee who is subject to the Florida Trust Code in ch. 736, F.S., has more extensive fiduciary duties and responsibilities to the trust beneficiaries, along with more extensive potential liability if the trustee fails to perform the trustee’s discretionary duties prudently. A land trustee has a fiduciary relationship to the land trust beneficiaries and the persons holding the “power of direction” over the actions of the land trustee, just as any agent is bound as a fiduciary to the principal for whom the agent acts.[16] However, in practice, land trustees are rarely delegated duties under a land trust agreement beyond ministerial and administrative matters.[17] This lack of duties is a logical parallel to the exemption that land trustees enjoy from ch. 736, F.S., responsibilities and liabilities. The bill makes clear this practical distinction in the revised definition of a land trust[18] by stating that the trustee has limited duties as set out in the statute. For trusts created on or after the effective date of the bill, the revised definition will limit the duties of a trustee of a “land trust” to the following: The duty to exercise the trustee’s deed powers as directed by the beneficiary or by the holder of the power of direction (i.e., this is the agent’s fiduciary duty: to follow the principal’s directions); The duty to dispose of the trust property at the termination of the trust (i.e., the classic “active” duty that historically saved Illinois land trusts from the statute of uses); The duty to perform ministerial and administrative functions delegated to the trustee; and The duties required of certain timeshare trustees by ch. 721, F.S.[19] If the trustee’s duties exceed the foregoing limited duties and the trust is created after the effective date of the proposed amendment, then the trust will not be treated as a land trust and will not be excluded from the operation of ch. 736, F.S.[20] Because the title estoppel provisions of the statute operate on any conveyance containing deed powers, the classification of the trust as a “land trust” will have no effect on the title to any real property held by the trustee. 3. Other Definitions – Revisions to s. 689.071(2), F.S. Besides revising the definition of “land trust,” section 2 of the bill adds and clarifies some other definitions of lesser significance in s. 689.071(2), F.S: The definition for “holder of the power of direction” is revised and shortened to “power of direction” because “holder of” is not used consistently in the statute; The phrase “person or entity” is shortened to “person” in numerous places (beginning with the definition of “trustee”) because the statutory definition of “person” includes entities; New definitions are created for some basic trust concepts, such as “trust agreement,” “trust property” and “recorded instrument” (the latter being a cross-reference to the relocated deed powers provision now found in s. 689.073(1), F.S.); and “Trustee” is redefined so that the term will work in the “switchbox”[21] provision to mean the trustee of a land trust or the trustee of another trust. For this reason, numerous references to “trustee” in revised s. 689.071, F.S., will be changed to “trustee of a land trust” where that meaning is intended. 4. Vesting of “Legal and Equitable Title” Revisions to s. 689.071(3), F.S. The bill continues the existing statutory statement that a land trustee is vested with both legal and equitable title to the trust property. This vesting of “legal and equitable title” provision is a land trust characteristic imported from Illinois, and therefore it does not appear in the relocated title estoppel provisions in s. 689.073, F.S., that universally apply to any type of trust with deed powers. Although the “legal and equitable” language has been excised from a number of other subsections of s. 689.071, F.S., to avoid potential circularity, s. 689.071(3), F.S., will continue to contain the operative language regarding vesting of legal and equitable title in the land trustee. 5. Statute of Uses and Doctrine of Merger – Revisions to ss. 689.071(4) and (5), F.S. New section 689.071(5), F.S., overrides the doctrine of merger with respect to a land trust, so that a land trust will not be extinguished if the trustee is the sole beneficiary. Former s. 689.071(5), F.S., is one of the title estoppel provisions relocated verbatim to s. 689.073, F.S. 6. Personal Property Option– Revisions to s. 689.071(6), F.S. Currently, section 689.071, F.S., provides that the recorded instrument may define and declare the interests of land trust beneficiaries as personal property under Florida law.[22] The bill provides that this designation of personal property must be made in the recorded instrument or the trust agreement, or it will be considered real property. Section 689.071(6), F.S., is changed in one regard: the optional personal property declaration may be made in the recorded instrument or in the trust agreement. This change is consistent with the relocation of the title estoppel provisions to new s. 689.073, F.S., which governs title matters that depend on the contents of the recorded instrument. Whether the beneficial interests are real property or personal property does not affect the nature of the title vested in the trustee or the ability of third parties to acquire good title to the trust property from the trustee in accordance with the powers contained in the recorded instrument. 7. Beneficiary Provisions– Revisions to s. 689.071(8), F.S. Currently, customary provisions in land trusts are based upon treatises by Illinois land trust authorities, particularly Kenoe on Land Trusts.[23] The bill revises s. 689.071(8), F.S., in a number of respects to codify these land trust practices. The purpose of including these provisions directly in the Land Trust Act is to increase practitioner awareness that such techniques are available without making reference to the treatise, thereby promoting the usage of land trusts in Florida generally. The bill revises s. 689.071(8)(c), F.S., to reconcile the Land Trust Act with the Uniform Commercial Code (U.C.C.) Article 9 exclusion of interests in real property.[24] Case law[25] holds that a beneficial interest in a land trust is a general intangible within the scope of the Florida Uniform Commercial Code, and this result is codified in the present version of s. 689.071(8)(c), F.S., which provides that U.C.C. Article 9 governs the perfection of a security interest in a beneficial interest in a land trust. However, if the beneficial interest is defined as real property under s. 689.071(6), F.S., then there is a possible contradiction between the Land Trust Act (which says Article 9 applies to beneficial interests) and the U.C.C. (which says Article 9 excludes real property interests). The bill revises s. 689.071(8)(c), F.S., to resolve this apparent contradiction by clarifying that the U.C.C. governs perfection if the beneficial interest in a land trust is declared to be personal property (as was the case in Cowsert), but that a mortgage instrument recorded in the real estate records is the proper method of perfection if the beneficial interest in a land trust is declared to be real property. In the latter case, the proper county for recording the mortgage may be specified in the recorded instrument or in a declaration of trust or memorandum that is recorded in the same county as the recorded instrument; otherwise the location of the trust property determines the proper county for recording the mortgage. The bill provides a transition rule[26] to provide for the continuation of perfection for any U.C.C. financing statement that may have been filed before the effective date of this clarification. It is an abbreviated version of the transition rules that were included in Revised U.C.C. Article 9 in 2001. The bill revises the existing last sentence of s. 689.071(8)(c), F.S., to state more clearly that a lien or security interest perfected against a beneficial interest in a land trust does not affect in any way the legal or equitable title of the land trustee to the trust property. New s. 689.071(8)(d), F.S., makes explicit a concept that is inherent in a beneficiary’s ability to encumber a beneficial interest as described in existing s. 689.071(8)(c), F.S: the trustee’s legal and equitable title to the trust property is separate and distinct from the beneficiary’s beneficial interest in the land trust and the trust property. A lien, judgment, mortgage, security interest or other encumbrance against one interest does not automatically attach to the other interest. Section 689.071(8)(e), F.S., is also revised to clarify this same point: documents recorded by a beneficiary to transfer or encumber a beneficial interest do not affect the legal and equitable title of the trustee or the deed powers granted to the trustee in the recorded instrument. Sections 689.071(8)(f) and (g), F.S., as well as other parts of s. 689.071(8), F.S., have been edited for consistent usage of the defined terms “land trust,” “recorded instrument,” “trust agreement,” and “trust property.” The bill adds s. 689.071(8)(i), F.S., which is intended to end the reported occasional practice by some judges of appointing a guardian ad litem to represent the interests of land trust beneficiaries in a foreclosure or other litigation affecting title to the trust property. Because a land trustee is vested with both legal and equitable title to the trust property, joinder of the land trustee in the action is sufficient without incurring the additional expense of a guardian ad litem. 8. Successor Trustee Provisions– Revisions to s. 689.071(9), F.S. Most of the revisions to s. 689.071(9), F.S., are non-substantive edits for consistent usage of defined terms and modernization of language (e.g., replacing “office of the recorder of deeds” with “public records”). The bill deletes s. 689.071(9)(a), F.S., because the “switchbox” provision in subsection 689.071(12), F.S., globally addresses the inapplicability of chapter 736, F.S., to land trusts. The current text of s. 689.071(9), F.S., uses the expression “each successor trustee” to avoid the longer phrase “the successor trustee or trustees.” Unfortunately, it is possible to misread the shorter phrase to mean “each and every successor trustee” in a series of successors.[27] The longer expression is clearer and replaces the shorter one. Currently, s. 689.071(9)(f), F.S., provides that the beneficiaries may direct the land trustee to convey the trust property to another trustee. The bill changes this paragraph to provide that this direction to convey could also come from the person holding the power of direction. 9. Trustee as Creditor– Revisions to s. 689.071(10), F.S. The bill revises s. 689.071(10)(a), F.S., to include a conforming reference to a mortgage (as well as a security interest) against a beneficial interest in a land trust. Other non-substantive edits include consistent usage of defined terms and the deletion of “or entity” after “person.” 10. Notices to Trustee Provisions– Revisions to s. 689.071(11), F.S. The bill adds a new subsection to assure that the right parties receive any third-party notices concerning property held in a land trust by requiring that notice to a land trustee include certain identifying information if it appears in the recorded instrument. 11. Florida Trust Code – Scope Provision– Revisions to s. 736.0102, F.S. The bill includes a conforming amendment to s. 736.0102, F.S., of the Florida Trust Code. The bill divides this section into two logical subsections, and a third subsection is added to address the exclusion of land trusts from the Florida Trust Code. New s. 736.0102(3), F.S., provides that the Trust Code does not apply to land trusts under s. 689.071, F.S., except to the extent provided in subsection 689.071(7), F.S., of the Land Trust Act and in the two provisions of ch. 721, F.S., that apply parts of ch. 736, F.S., to timeshare trusts. The bill adds s. 736.0102(3), F.S., to provide that a Trust Code trust remains a Trust Code trust (and does not become a land trust) regardless of any amendment or change in asset composition or utilization of a sub trust.

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Ken Crotty’s LLC Clinic – More Information Regarding the Duty to Update Inaccurate Information in the Articles of Organization of a Florida LLC

Liability of Members and Managers for Inaccurately Filed Information

As mentioned in the July 25, 2013 issue of the Thursday Report, one of the changes made by Florida’s new LLC Act is that members (in a member-managed LLC) and managers (in a manager-managed LLC) are responsible for maintaining accurate information filed with the Department of State.  This information includes anything stated in the Articles of Organization and other records of the LLC that are filed with the Department.

In most situations it would seem that having inaccurate information on the Secretary of State website will not cause liability, but in some situations third parties might claim that they relied upon the Secretary of State website to determine the identity of individuals with authority to act on behalf of the LLC, and if they are swindled or misled by those individuals, they might have a cause of action not only against the LLC, but also against the manager or member who was responsible for making sure that the Secretary of State website had the correct information.

If any of the information stated on these filings becomes inaccurate at any point, it is the duty of managing members and/or managers, as applicable, to correct such information.  If the information filed is inaccurate and a third party relies on this inaccurate information, then the managing members and/or managers, as applicable, who had the duty to update such information could be exposed to liability to the third party.

Liability for some of the members of a member-managed LLC may be minimized by having the operating agreement of the LLC specifically state which members are responsible for maintaining accurate records with the Secretary of State.  Non-voting or non-managing members in a member-managed LLC may want to have such a provision included in the LLC’s operating agreement.

Members and/or managers responsible for maintaining accurate records of existing LLCs should be certain that the filed information for the LLC is correct by January 1, 2014.   These members and/or managers should also calendar future dates to periodically check and make sure the records have the most current information.  If any information is found to be inaccurate, corrected documents should be filed as quickly as possible.

It is important to note that duty to keep information correct and the potential liability related to incorrect information applies to both Florida and non-Florida LLCs.

1^st Annual Estate Planner’s Day at Ave Maria School of Law

Ave Maria School of Law located in Naples, Florida will be holding the 1^st Annual Estate Planner’s Day on April 25, 2014.  This is the first annual event which will feature topics relevant to attorneys, accountants, bankers, trust officers, financial advisors and life insurance advisors.  Dean Ted Afield, Donna Heiser, Jonathan Gopman, Lester Law, Chris Bray, Greg Holtz and others are helping to make this 1^st annual event a success.

Speakers include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.  The event is sponsored by Ave Maria School of Law and the Collier County Estate Planning Council.

If you would like more information on the event, have a suggested topic or would like to be a speaker at the event, please email Jonathan Gopman at jonathan.gopman@akerman.com.

Many Florida lawyers and other professionals are not familiar with Ave Maria School of Law or the other Florida law schools.   Ave Maria School of Law received ABA accreditation in 2005 and was originally located in Ann Arbor, Michigan, prior to the school being relocated to Florida in 2009. Ave Maria is described as a national law school that emphasizes the moral foundations of the law, presents insights from the Catholic intellectual tradition, and encourages a broader perspective of the law and its role in society. The Catholic institution boasts a diverse student body of approximately 500 students that represent almost every state and several other nations. With a curriculum designed to prepare students for the practice of law in any jurisdiction and employment area, Ave Maria School of Law has placed graduates in prestigious judicial clerkships, in firms of all sizes throughout the country, in positions with federal and state agencies, and in jobs with both domestic and international public-interest employers.

A chart of law schools and some information associated therewith is as follows:

In 1980, Florida had only five law schools, University of Florida, Florida State University, Stetson Law School, University of Miami, and Nova Southeastern University.

We now have 12.

Can you name them?

A Florida law school chart is as follows:

Law School	Year ABA Approved	Number of Students	Median GPA of Admissions Class	Median  LSAT of Admissions Class	Location	Tuition
Ava Maria School of Law	2002	391	3.10	148	Naples	$37,270
Barry University Dwayne O. Andreas  School of Law (FT & PT Programs)	2002	753	2.92	147	Orlando	$34,300 FT$25,900 PT
		524 FT	2.92 FT	147 FT
		229 PT	2.96 PT	147 PT
Florida A&M University College of Law (FT & PT Programs)	2004	655	3.09	146	Orlando	Resident:$13,675 FT $10,028 PT Non-Resident: $32,936 FT $24,153 PT
		473 FT	3.11 FT	146 FT
		182 PT	2.97 PT	148 PT
Florida Coastal School of Law (FT & PT Programs)	1999	1,594	3.10	146	Jacksonville	$39,370 FT$31,854 PT
		1,371 FT	3.10 FT	146 FT
		223 PT	2.96 PT	145 PT
University of Florida Fredric G. Levin College of Law	1925	960	3.59	161	Gainesville	Resident:$21,421Non-Resident:$40,786
Florida International University College of Law (FT & PT Programs)	2004	508	3.60	156	Miami	Resident:$18,841 FT $12, 886 PT Non-Resident: $33,086 FT $22,535 PT
		346 FT	3.58 FT	156 FT
		162 PT	3.61 PT	151 PT
Florida State University College of Law	1968	698	3.54	160	Tallahassee	Resident:$19,731Non-Resident:$39,744
University of Miami School of Law	1941	1,307	3.36	156	Miami	$42,938
Nova Southeastern University Shepard Broad Law Center (FT & PT Programs)	1975	1,029	3.14	150	Fort Lauderdale	$39,370 FT$31,854 PT
		829 FT	3.15 FT	150 FT
		200 PT	3.06 PT	148 PT
St. Thomas University School of Law	1988	678	3.01	148	Miami Gardens	$ 36,226
Stetson University College of Law (FT & PT Programs)	1930	1,004	3.28	155	Gulfport/ Tampa	$36,168 FT$25,068 PT
		778 FT	3.31 FT	155 FT
		226 PT	3.11 PT	153 PT
Thomas M. Cooley Law School	Has not received full ABA approval in FL yet.  Classes began in late 2012, but the school is not listed as a Florida law school on the LSAC website.				Riverview

All of the above information is from the LSAC Official Guide.  The Wikipedia page on each of these law schools can be accessed by clicking here.

For Juris Doctors looking to become experts in a particular area of law, Florida law schools offer a number of Master of Law programs:

University of Miami:

LLM in International Law

LLM in Ocean and Coastal Law

LLM in Taxation

LLM in Real Property and Development

LLM in Estate Planning

LLM in Taxation of Cross-Border Investment

University of Florida:

LLM in Comparative Law

LLM in Taxation

LLM in International Taxation

LLM in Environmental and Land Use Law

Doctor of Juridical Science (S.J.D.) in Taxation

Florida Coastal School of Law

LLM in US Law (distance learning, for international lawyers)

Additional Filing Requirements for Disregarded LLCs, Part 3

Reporting Agents for Disregarded Entities and filing Form 8655

If an LLC is a single member LLC, the entity’s classification will determine who may sign a Form 8655.  If the entity is classified as disregarded, then the Form 8655 must be signed by the owner or by an authorized representative who can demonstrate the authority to sign the form.

A filed Form 8655 is required for a reporting agent to have authorization.  Such authorization may also be submitted on a substitute form approved by the IRS (see IRS Pub No. 1167).

The Form 8865 authorizes the reporting agent to (1) sign and file certain returns on behalf of the individual or entity; (2) make deposits and payments for certain returns; (3) receive duplicate copies of tax information, notices, and other communication regarding the individual or entity; and (4) provide the IRS with information related to penalty relief determinations for any authority granted under the Form 8655.

A Form 8655 for a corporation, including an LLC treated as a corporation, may be signed by (a) any officer with authority to bind the corporation, (b) any person designated by the governing body of the corporation, (c) any officer or employee granted written authority to sign by a principal officer, and (d) any other authorized person.

For a partnership, including an LLC treated as a partnership, the Form 8655 may be signed by any person who was a member of the partnership during any part of the tax period described in the Form 8655.

For a trust or estate, the Form 8655 must be signed by the fiduciary.

Form 8858 Filing for Foreign Disregarded Single Member LLCs

Form 8858 is the information return of a U.S. person which reports activity related to foreign disregarded entities (“FDEs”).  The accompanying Schedule M reports transactions between foreign disregarded entities of a foreign tax owner and the filer or other related entities.  This form must be filed by U.S. person that is considered to be the tax owner of FDEs, or that owns certain interests in foreign tax owners of FDEs.  Form 8858 is due with the U.S. persons income tax or informational returns, and must be filed each year.

Form 8858 has three categories of “U.S. Persons” who are required to file.

Category 1.  U.S. persons who are treated as the tax owner of a foreign disregarded entity at any point during the taxable year.   A disregarded entity is not considered a U.S. person.  So if a domestic or foreign parent disregarded entity owns a subsidiary FDEs, then the owner of the parent disregarded entity has the obligation to report the foreign disregarded entity.

Category 2.  U.S. persons who must file Form 5471 may be required to file Form 8858 if the controlled foreign corporation owns a FDE.  Form 5471 deals with controlled foreign corporations and has various categories of filers.  Only those persons who are considered to be Category 4 and Category 5 filers for Form 5471 are required to file a Form 8858.  These are U.S. persons who controlled the controlled foreign corporation for at least 30 consecutive days during the taxable year, and/or a shareholders of a controlled foreign corporation who owned at least 10% of the voting stock of the controlled foreign corporation for at least 30 consecutive days.  U.S. persons who are neither Category 4 nor Category 5 filers of Form 5471 do not have to file Form 8858.

Category 3.  U.S. persons who must file Form 8865 may also be required to file Form 8858.  Form 8865 is filed to report information related to controlled foreign partnerships which are treated as the tax owners of FDEs during the taxable year.  If a U.S. person controls 50% of the foreign partnership then that U.S. person needs to file the Form 8858.  If no U.S. person controls 50% of the partnership then U.S. persons owning 10% or more of the foreign partnership must file Form 8858.

Our Recently Updated Article from Leimberg Information Systems – The Windsor Effect – Why Many Affluent Same-Sex Couples Will Be Leaving Florida and Where They Should Go

Our July 11, 2013 Thursday Report entitled “Why Many Same-Sex Couples Will Be Looking to Leave Florida and Where They May Go” was updated to disclose recent state court litigation and was published last night on the Leimberg System.

You can read Steve Leimberg’s version of the article by clicking here.

What we added from the July 11, 2013 version is as follows:

Since the Windsor decision, a number of same-sex couples that were legally married in a state that recognizes same-sex marriage, but reside in states that do not, have filed lawsuits against state and local officials in order to have their marriage recognized for various state law purposes. Specifically, a couple in Ohio (which banned same-sex marriage in 2004) sued to have their marital status be reflected as “married” on their death certificates so that they can be buried next to each other in a cemetery that only allows spouses and descendants to be buried there.  One of the spouses is dying of Lou Gehrig’s diseases, and his family has a burial plot in the cemetery in question.

A federal judge ordered that the couple’s marriage should be recognized in Ohio because, despite Ohio’s ban on same-sex marriage, it has historically recognized out-of-state marriages that were legally valid where they took place.  Many states do not recognize same-sex marriage, but have laws which recognize marriages that are legally valid in other states, including marriages that involve cousins and minors.  This brings to the forefront the new issue of whether states can refuse to recognize same-sex marriages where the state has historically recognized marriages that are legally valid in other states.

Similar lawsuits have been initiated in Illinois, Kentucky, Nevada, New Jersey and Pennsylvania.  Time will tell how these cases are received by courts across the nation, and what effect this will have on the recognition of same-sex marriage across state lines.  Many states might wish to pass legislation which singles out same-sex marriages, and the resulting constitutional law implications could form the basis for dramatic social change in this country.

We have updated our same-sex couple state selection chart to take into account that Delaware repealed the previously planned sunset of its estate tax that would have otherwise occurred on July 1, 2013.  Click here to view the chart..

Enhance your professional practice, and enjoyment thereof – an afternoon with Srikumar Rao, Ph.D.

Many lawyers, accountants, and other professionals have taken a Srikumar Rao, Ph.D. course entitled Creativity and Personal Mastery, which was developed at Columbia University and later taught at Stanford University and the London School of Business, and for private and publicly traded companies.

We are co-sponsoring a Saturday afternoon workshop with Dr. Rao entitled Enhanced Effectiveness and Enjoyment of Your Professional and Personal Life – 5 Tools You Can Start Using Immediately in Clearwater on Saturday, October 12, 2013.

Dr. Srikumar Rao is a former business school professor, and head of The Rao Institute.  He created the singularly powerful course Creativity and Personal Mastery, which he has taught at leading business schools including Columbia and the London Business School.  Hundreds of executives have been transformed by CPM, including from such companies as Google, Microsoft, Merrill Lynch, General Electric, Morgan Stanley and others.  Dr. Rao has written two books, Are You Ready to Succeed? and Happiness at Work, and writes regularly on management practices and leadership.  He has received wide media  coverage and acclaim, and has been a speaker for TED and Leading @Google talks.  He received his PhD in Marketing from Columbia University, and has worked as an executive for Warner Communications, Continental Group, Data Resources and McGraw Hill.

“Over the past year I’ve attended several of Professor Rao’s lectures and courses, including his 3 month comprehensive course on Creativity and Personal Mastery.  The techniques I learned have made a tremendous difference in my life.  I am happier, more relaxed and handle stressful situations with greater ease.  I would recommend his program to anyone seeking a happier, more tranquil lifestyle.” Rose Dean, CPA

“Dr. Rao’s Saturday 5 hour workshop was an enjoyable experience. His program combines tools and exercises that are both practical and effective in day-to-day life and that are easily implemented. I recommend this program for people who want to enhance their happiness both in their personal and professional lives.” – Mahesh Amin, M.D.

“I attended Professor Rao’s Saturday, Saturday, August 18, 2012 workshop, and it was so good that I subsequently attended part 2 on Sunday September 23, 2012. As a business manager, husband and father I strongly recommend it for anyone who wants to be more effective, enjoy life more, and have better interactions with other. It was great to have someone of Professor Rao’s stature in Clearwater and to meet such a nice person.” Daniel Sweeney, Vice President, BayCare HomeCare

You can learn more about this event by click here.

Research on Google

If you want to see a write-up of any topic that has been covered in our Thursday Reports just search “Thursday Report Gassman” and type in the topic and you will find that every Thursday Report covering that topic comes up.  Google directs you right to the page where that topic begins.  You can also search our website directly by using the search box on the top right hand side of the page.  This way you can search not only the Thursday Report but the other resources on our website.  You can view our website by clicking here.  Rumors that the Thursday Report has acquired Google are strenuously denied.

Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

Seminars and Webinars

• PLANNING FOR SNOWBIRDS: Tips, Traps and Tactics for Advisors with Clients in Florida – An Encore Presentation          

Our first presentation on this topic was so well received by Bloomberg BNA Tax & Accounting that they have asked us back for a replay of the original presentation.  There will be a live question and answer session at the end of the replay. 

Date: Wednesday, August 7, 2013 | 12:30 p.m.

Presenters: Alan Gassman, Gary Teblum, Kenneth Crotty and Christopher Denicolo

Additional Information: The cost of this webinar is $348 for the webinar and the CD, $249 for just the webinar or $249 for just the CD.  For more information and to register for this webinar please click here.

• FINANCIAL PLANNING ASSOCIATION (FPA) TAMPA BAY 2013 FLORIDA SYMPOSIUM

Alan Gassman will be joining Ken Zahn, CFP for a joint seminar on A Brief Introduction on the Art of Wealth Protection Planning. This seminar will also include a demonstration of our new EstateView Estate Planning Software.  Attendees will also receive a link to download the software to use on their own clients matters for a number of week.  For more information and to register for this webinar please click here.

Date: Monday, August 19, 2013 | Time to be determined

Speakers: Elizabeth Jetton, CFP, Linda Chamberlain, JD, CMC, Ken Zahn, CFP and Alan Gassman, JD, LL.M.

Location: Marriott Westshore Tampa, 1001 N. Westshore Blvd, Tampa, Florida

Additional Information: For more information and to register for this webinar please click here.

• THE JOINT EXEMPT STEP-UP TRUST (JEST)

Many lawyers are using our Joint Exempt Step Up Trust to enable clients in non-community property states to receive a stepped-up basis on all “joint trust assets” on the death of the first dying spouse.  Our Leimberg article on the Joint Exempt Step-Up Trust can be viewed by clicking here and the accompanying chart can be viewed by clicking here.

The Ultimate Estate Planner, Inc. is also featuring our Joint Exempt Step Up Trust forms, client explanation letter and other materials on their website.  To order the forms you can click here.

Date: Wednesday, August 21, 2013 | 12pm Eastern/9am Pacific

Sponsor: The Ultimate Estate Planner, Inc.

Additional Information:  The cost of the teleseminar is $139 for the teleseminar only or $189 if you would like to receive both the teleseminar and the accompanying PowerPoint and downloadable PDF materials.  For more information and to register  please click here.

• WHAT CLIENTS ARE AND ARE NOT SUITABLE FOR LONG TERM CARE INSURANCE

Date: Thursday, August 29, 2013 | 5:00 p.m.

Presneter: Rob Cochran

Location: Online webinar

Additional Information: To register for the webinar please click here.

• AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!

Date: Tuesday, September 10, 2013 | 5:00 p.m and Thursday, September 12, 2013 | 12:30 p.m. (Each webinar will last 30 minutes)

Presenter: Sandra Greenblatt, Board Certified Health Lawyer

Location: Online webinar.

Additional Information: To register for the Tuesday, September 10, 2013, 5pm webinar please click here.  To register for the Thursday, September 12, 2013, 12:30 p.m. webinar please click here.

NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY

Date: Wednesday, September 18, 2013

Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA

Location: Online webinar

Additional Information:  To register for the webinar please click here.

NORTH SUNCOAST FICPA MONTHLY MEETING

Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.

Speakers: Christopher Denicolo and Tom Davis will speak on the Affordable Care Act; Alan Gassman will be speaking on a topic to be determined.

Location: Chili’s in Port Richey

Additional Information: To attend this seminar please email agassman@gassmanpa.com

WEDU ESTATE PLANNING SEMINAR  

Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?

Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS

Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am

Location: TBD

Additional Information:  If you would like to sign up for this seminar please email agassman@gassmanpa.com

ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY

Gassman, Crotty & Denicolo, P.A. is co-sponsoring a half-day workshop with noted author and speaker, Dr. Srikumar Rao

Date:    Saturday, October 12, 2013 | 1:00 – 6:00 p.m with option 7:00 – 8:00 question and answer session

Location: Holiday Inn Express, U.S. 19 and Gulf-to-Bay Blvd, Clearwater, FL

Additional Information: For more information please click here or email agassman@gassmanpa.com

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council please click here or email agassman@gassmanpa.com

• 2013 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: October 25 – 27, 2013 | Times TBD

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

1^st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers:  Speakers will included Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48^th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR     

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please click here.

16^th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

For details about each event, please visit us online at gassmanlaw.com/newsandevents.html

Thank you to our law clerks that assisted us in preparing this report.