The Thursday Report – May 9, 2013 – Revised Limited Liability Act, Annuities to Hold Homestead Proceeds, Avoiding Estate Tax and Hertz Worldwide Headquarters is Moving to South Florida!
Special May 9th Collector’s Edition – with a poem from the Sgt. Pepper’s Album about kites and a Special Guest Announcement for next week’s Florida Bar Annual Wealth Protection Seminar in Miami about the guy with the convertible and the motorcycle.
FLORIDA’S REVISED LIMITED LIABILITY ACT PASSED! – THREE THINGS YOU NEED TO KNOW ABOUT THE REVISED ACT
USING ANNUITIES TO HOLD HOMESTEAD PROCEEDS FOR A REPLACEMENT HOMESTEAD
FLY A KITE – AVOIDING ESTATE TAX WITH A ONE YEAR OR LONGER LIFE EXPECTANCY, PART I
HERTZ WORLD HEADQUARTERS IS COMING TO SOUTHWEST FLORIDA!
We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Ruggiero at Janine@gassmanpa.com.
This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.
FLORIDA’S REVISED LIMITED LIABILITY ACT PASSED! – THREE THINGS YOU NEED TO KNOW ABOUT THE REVISED ACT
Hats off to the Business Law Section of the Florida Bar for modernizing Florida’s LLC statutes! The Business Law Section’s Revised LLC Statute was unanimously passed by Florida’s House and Senate and is now on the way to be signed into law by Governor Rick Scott. Once again, Florida is leading the country in a number of areas and is no longer a laggard or spectacle.
We at the Thursday Report have begun our in-depth analysis of the Revised Act and how it affects Florida advisors and their clients. A detailed article on our analysis is in the works and will be coming out soon. In the meantime, we have identified three key areas that Florida LLCs should be aware of now: (1) Charging order protection remains the same; (2) The addition of “co-domestication” provisions; and (3) The new ability to backdate LLC filings up to five days.
Charging Order Protection. The Revised LLC creates a new section, Section 605.0503, which is entitled “Charging Order.” Despite some changes in the structure and numbering, the Revised LLC Act remains the same by retaining the “Olmstead Patch.” Charging orders are still the exclusive creditor remedy against a multi-member LLC. Creditors may still reach a single-member LLC through any other remedies available.
Here is the new Charging Order Statute in its entirety:
605.0503 Charging order.
(1) On application to a court of competent jurisdiction by a judgment creditor of a member or a transferee, the court may enter a charging order against the transferable interest of the member or transferee for payment of the unsatisfied amount of the judgment with interest. Except as provided in subsection (5), a charging order constitutes a lien upon a judgment debtor’s transferable interest and requires the limited liability company to pay over to the judgment creditor a distribution that would otherwise be paid to the judgment debtor.
(2) This chapter does not deprive a member or transferee of the benefit of any exemption law applicable to the transferable interest of the member or transferee.
(3) Except as provided in subsections (4) and (5), a charging order is the sole and exclusive remedy by which a judgment creditor of a member or member’s transferee may satisfy a judgment from the judgment debtor’s interest in a limited liability company or rights to distributions from the limited liability company.
(4) In the case of a limited liability company that has only one member, if a judgment creditor of a member or member’s transferee establishes to the satisfaction of a court of competent jurisdiction that distributions under a charging order will not satisfy the judgment within a reasonable time, a charging order is not the sole and exclusive remedy by which the judgment creditor may satisfy the judgment against a judgment debtor who is the sole member of a limited liability company or the transferee of the sole member, and upon such showing, the court may order the sale of that interest in the limited liability company pursuant to a foreclosure sale. A judgment creditor may make a showing to the court that distributions under a charging order will not satisfy the judgment within a reasonable time at any time after the entry of the judgment and may do so at the same time that the judgment creditor applies for the entry of a charging order.
(5) If a limited liability company has only one member and the court orders a foreclosure sale of a judgment debtor’s interest in the limited liability company or of a charging order lien against the sole member of the limited liability company pursuant to subsection (4):
(a) The purchaser at the court-ordered foreclosure sale obtains the member’s entire limited liability company interest, not merely the rights of a transferee; (b) The purchaser at the sale becomes the member of the limited liability company; and
(c) The person whose limited liability company interest is sold pursuant to the foreclosure sale or is the subject of the foreclosed charging order ceases to be a member of the limited liability company.
(6) In the case of a limited liability company that has more than one member, the remedy of foreclosure on a judgment debtor’s interest in the limited liability company or against rights to distribution from the limited liability company is not available to a judgment creditor attempting to satisfy the judgment and may not be ordered by a court.
(7) This section does not limit any of the following:
(a) The rights of a creditor who has been granted a consensual security interest in a limited liability company interest to pursue the remedies available to the secured creditor under other law applicable to secured creditors.
(b) The principles of law and equity which affect fraudulent transfers.
(c) The availability of the equitable principles of alter ego, equitable lien, or constructive trust or other equitable principles not inconsistent with this section.
(d) The continuing jurisdiction of the court to enforce its charging order in a manner consistent with this section.
We compared the old charging order protection language contained in Florida Statutes, Section 608.433(4) to the new charging order protection in the Revised LLC Act, Section 605.0503. Here are the differences in language (old statute is struck-out):
On application to a court of competent jurisdiction by a judgment creditor of a member or a transferee, the court may enter a charging order against the transferable interest of the member or transferee for payment of the unsatisfied amount of the judgment with interest. Except as provided in subsection (5), a charging order constitutes a lien upon a judgment debtor’s transferable interest and requires the limited liability company to pay over to the judgment creditor a distribution that would otherwise be paid to the judgment debtor.
The subsection referred to in the new statute, subsection (5), only applies to single-member LLCs. The new subsection (5) tracks the language in the old LLC statute subsection (7), which allows a court to foreclose a single-member’s LLC interest.
Except as provided in subsections (4) and (5), a charging order is the sole and exclusive remedy by which a judgment creditor of a member or member’s transferee may satisfy a judgment from the judgment debtor’s interest in a limited liability company or rights to distributions from the limited liability company.
Subsection (4) of the Revised Act also only applies to single member LLCs. The new subsection (4) tracks the language in the old LLC subsection (6), which states that a charging order is not the only remedy available to a judgment creditor of a single-member LLC when the creditor could prove that a charging order could not sufficiently satisfy a lien
This chapter does not deprive a member or transferee of the benefit of any exemption law applicable to the transferable interest of the member or transferee.
This new section also appears to be just cosmetic changes. As of right now, we do not think that this revised subsection makes any substantive changes to the law.
“Co-Domestication.” The revised statute permits a non-US entity to become a domesticated LLC in Florida if such a domestication is authorized by the foreign entity’s jurisdiction of formation. We are very excited that this new section will help to create new jobs in Florida, but exactly how this process will work is a bit unclear. Our initial thought is that this will enable the foreign entity to make an S-election for federal income tax purposes if its documents and governance are consistent with the S-corporation rules. This election may also allow the foreign corporation to avoid certain aspects of foreign tax reporting, including the F-BAR. Again, these are our initial thoughts. We are looking further into this part of the Revised Act. An article with an in-depth analysis is forthcoming.
Ability to Backdate Incorporations and other Activities. The revised statute also allows LLCs to file documents with the Department of State that specify the date the document takes effect. Documents filed may be dated retroactively for up to five days. We think this enables advisors to see whether a given transaction or event will occur before having to file a charter. We are also looking into this topic further and will cover it in detail in forthcoming articles.
USING ANNUITIES TO HOLD HOMESTEAD PROCEEDS FOR A REPLACEMENT HOMESTEAD
It is well-established law in Florida that the proceeds from the sale of a homestead will only maintain their exempt status when they are reinvested in a new homestead. To qualify for this protection, the seller must have “an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time,” and the proceeds “must be kept separate and apart and held for the sole purpose of acquiring another home.” Orange Brevard Plumbing & Heating Co v. La Croix, 137 So. 2d 201, 206 (Fla. 1962). Further, “only so much of the proceeds of the sale as are intended to be reinvested in another homestead may be exempt . . . . Any surplus over and above that amount should be treated as general assets of the debtor.” Id.
In light of these stringent requirements, many clients sell their homesteads and open a new bank account for the sole purpose of holding their homestead proceeds until they purchase a new homestead. However, we believe that it may be more beneficial for clients to hold their homestead proceeds in an annuity rather than simply placing these proceeds into a bank account. So long as the proceeds are not commingled with any other funds, holding the proceeds into an annuity should not affect the homestead exemption but may provide increased creditor protection.
It may also be possible for the proceeds to be protected under Florida’s annuity exemption (Florida Statute Section 222.14) even if the proceeds are not ultimately reinvested in a new homestead. The case law has not yet specifically addressed this issue, but at least one case indicates that this strategy could work, although it would not be without risk.
In the case of In re Simms, 243 B.R. 156 (Bankr. S.D. Fla. 2000), the Bankruptcy Court for the Southern District of Florida overruled the Bankruptcy Trustee’s objections to a debtor’s annuity exemption under Florida law. In this case, the debtors voluntarily sold their homestead and used the proceeds check to purchase an annuity. Instead of using the annuity funds to purchase a new home, however, the debtors simply moved into their summer home and established a permanent residence there, leaving the annuity funds as an investment.
Because the debtors did not have an intent to reinvest in a new homestead, the court found that the homestead proceeds constituted a non-exempt asset. Specifically, the court stated that “[p]ursuant to Orange Brevard, the $65,467.57 net sale proceeds of the Lake Worth property constituted a non-exempt asset because the Debtors had no intention of reinvesting the proceeds in another homestead.” Id. at 159.
The court then looked to whether transferring the homestead proceeds (a non-exempt asset) into the annuity (an exempt asset) was a fraudulent transfer. The court determined that the debtors had legitimate reasons for purchasing the annuity, namely that the “[d]ebtors were concerned about their advancing ages and about Mrs. Simms’ illness and were therefore interested in a long-term investment.” Id. at 159–160. Interestingly, the court noted that although the debtors “could have used the $65,467.57 to substantially pay their accumulated unsecured debts of $89,213.28,” “such an apparently unwise financial decision can hardly justify an inference of fraud.” Id. at 160. Therefore, the court allowed the debtor to exempt the annuity in the bankruptcy proceeding.
Based on Simms, it seems that merely holding homestead proceeds in an annuity account will not affect the homestead exemption, so long as the debtor has the intent to reinvest the proceeds in another homestead within a reasonable time and the proceeds are not commingled with any other funds.
It is not as clear, however, whether the annuity will be protected under Florida Statute Section 222.14 if the debtor ultimately decides not to use the proceeds to purchase a new homestead. In this situation, there is a substantial risk that a court would determine that the proceeds lost their homestead exemption once the debtor decided not to reinvest in a new homestead. Multiple cases have determined that sale proceeds lost their homestead exemption when they were not actually used to purchase a new homestead within a reasonable time.
In the case of In re Delson, 247 B.R. 873 (Bankr. S.D. Fla. 2000), the Bankruptcy Court for the Southern District of Florida determined that homestead proceeds were not exempt when the debtor transferred the proceeds to his wife, who then used them to purchase mutual fund investments, and then secured a business loan by pledging her investment accounts. The court noted that the subsequent action of using the proceeds to “purchase collateral for a business loan” and the fact that the funds had not been invested in a new homestead in four years precluded the assets from retaining their exempt status. The court then looked to whether the transfer was fraudulent under both Florida and federal law, but did not rule on this issue because the case was remanded to decide issues of fact.
Further, in the case of In re Castro, 2006 WL 4005571 (Bankr. S.D. Fla. Oct. 24, 2006), the Bankruptcy Court for the Southern District of Florida found that a portion of the debtor’s homestead proceeds lost their exempt status because the debtor did not have an intent to reinvest these funds. In this case, the debtor quit-claimed his interest in his homestead to his former spouse for $37,000. He then placed these funds into a separate bank account but spent nearly $10,000 of the proceeds on other things. The debtor argued that he intended to reinvest the remaining proceeds in a new homestead, and the court allowed the homestead exemption for the remaining, unused funds but determined that the $10,000 he already spent was not exempt.
As demonstrated in Simms and Delson, if the court ultimately determines that the sale proceeds lost their homestead exemption, the court will then look to whether the debtor fraudulently transferred the sale proceeds (now a non-exempt asset) into the exempt asset. In a fraudulent transfer analysis, the party challenging the transaction must prove that the debtor transferred the property with the intent to hinder, delay, or defraud creditors. Further,“‘[t]he conversion of non-exempt assets into exempt assets is not fraudulent per se; however, when the conversion is done with intent to defeat the interests of creditors, it may be sufficient to deny a debtor’s claim of exemption.’” Simms, 243 B.R. at 159 (quoting In re Wilbur, 206 B.R. 1002, 1008 (Bankr. M.D. Fla. 1997).
As in Simms, if the court finds that the debtor had legitimate reasons for placing the homestead proceeds into the annuity and did not have an intent to defraud his or her creditors, it is likely that the annuity will be protected under Florida law, despite the fact that the debtor never used the funds to purchase a new homestead.
Therefore, it may be wise for clients to place homestead proceeds into an annuity rather than a bank account. Placing proceeds into an annuity should not jeopardize the homestead exemption so long as the debtor has an intent to reinvest in a new homestead and does not commingle or otherwise use the funds. Additionally, an annuity may provide increased creditor protection in the event that the debtor ultimately chooses not to purchase a new homestead, so long as the debtor did not fund the annuity with the intent to defraud creditors.
FLY A KITE – MARY POPPINS vs. THE SGT. PEPPER ALBUM AND AVOIDING ESTATE TAX FOR CLIENTS WITH A ONE YEAR OR LONGER LIFE EXPECTANCY, PART I
Many clients, and even other advisors, give us disbelieving looks when we explain that an individual with a serious health condition who is expected to live longer than one year can completely avoid federal estate tax by making a legitimate sale of assets to an irrevocable trust in exchange for a promissory note or annuity that cancels on death.
The Treasury Regulations and case law permit this estate planning technique, as confirmed by the February 2013 Tax Court case of Kite v. Commissioner, T.C. Memo 2013-43. In addition to the private annuity agreements described below, the Kite case also discussed complex issues involving Section 2519 and the step transaction doctrine. These issues will be addressed in Part II of this Article, which will be covered in next week’s Thursday Report.
In this case, Mrs. Virginia Kite, aged 74, entered into private annuity agreements with each of her three children, under which she would not receive any payments for 10 years. In exchange for the annuities, Mrs. Kite gave her children partnership interests worth over $10,000,000.
Under the terms of the annuity agreements, each of Mrs. Kite’s children would begin making annual payments of $1,900,679 on March 30th of each year if Mrs. Kite was alive when the payments became due, beginning 10 years after the sale of the limited partnership interests. If Mrs. Kite died within this 10-year period, her annuity interest would terminate and the transferred partnership interests would be removed from her gross estate. However, if Mrs. Kite survived this 10-year period, her children would be personally liable for the annual payments.
When Mrs. Kite entered into these private annuity agreements, the applicable life expectancy for someone her age under the then current actuarial tables was 12.5 years. Before the transaction, Mrs. Kite’s physician presented a letter stating that, in his opinion, she was not terminally ill and did not have an incurable illness that would cause her to die within one year. The physician further concluded that there was at least a 50% chance that she would survive for 18 months or longer. However, Mrs. Kite’s health was in decline and she was receiving 24-hour home medical care.
Mrs. Kite passed away approximately three years after entering into the private annuity agreements without receiving any payments. After her death, the executors of her estate filed a federal estate tax return which did not include the partnership interests (worth over $10,000,000) that were transferred in exchange for the annuities. The IRS issued two notices of deficiency: the first claiming a $6,053,752 deficiency for federal gift tax, and the second claiming a $5,100,493 deficiency for federal estate tax.
The IRS first argued that Mrs. Kite’s transfer of the partnership interests to her children was not made for “adequate and full consideration” under Section 2512(b) because the annuity agreements were structured so that Mrs. Kite would never actually receive any payments. The court, however, rejected the IRS’ argument, finding that the parties did in fact intend to comply with the terms of the agreement.
The court emphasized that the parties correctly used the standard actuarial tables to value the annuities. The IRS argued that the parties should not have relied on the actuarial tables to value a 10-year deferred annuity because Mrs. Kite’s deteriorating health made it foreseeable that she would die within 10 years. Again, the court rejected this argument and noted that the actuarial tables may be used to determine the value of an annuity so long as the individual who is the measuring life is not “terminally ill.” Treasury Regulation Section 1.7520-3(b)(3) defines an individual as “terminally ill” if such individual is known to have an “incurable illness or other deteriorating physical condition” and has at least a 50% chance of death within a year. If the individual survives for 18 months or longer after the date of the transaction, such individual shall be presumed to not have been terminally ill at the time of the transaction unless the contrary is established by clear and convincing evidence.
The court determined that Mrs. Kite was not terminally ill, despite signs that her health was deteriorating and the fact that she had 24-hour home medical care. In making this decision, the court relied heavily on the letter from Mrs. Kite’s physician, which indicated that she was not suffering from any incurable illness that would cause her to die within one year. Specifically, the court stated as follows:
Although the increased medical costs and home health care indicate that Mrs. Kite’s health was in decline, they alone do not suggest, let alone prove, that Mrs. Kite had a terminal illness or incurable disease. Rather, Mrs. Kite’s increased medical costs merely demonstrate that Mrs. Kite was a wealthy, 75-year-old woman, who, when faced with certain health problems, decided to employ health care aids at her home. Her decision to hire home health care was not unusual for a woman who was accustomed to hiring personal assistants.
The IRS further argued that the annuity transaction was “illusory.” The court distinguished this case from Estate of Hurford v. Commissioner, T.C. Memo 2008-278, in which the court found that a surviving spouse’s transfer of an FLP interest to her children in exchange for private annuity agreements was illusory when the surviving spouse had stage 3 liver cancer and the children used the underlying FLP assets to transfer income back to the surviving spouse after the transaction.
Here, Mrs. Kite’s children did not transfer any income back to her following the transaction, and all parties demonstrated intent to comply with the annuity agreements. The court focused on the fact that the children had transferred approximately $14,000,000 to the partnership before Mrs. Kite transferred her remaining partnership interest, noting that the children had the ability to make payments without relying on the underlying partnership assets. The court further focused on the fact that Mrs. Kite “actively participated in her finances” and “demonstrated an immense business acumen,” noting that it was unlikely for a woman with her financial background to enter into an agreement that was not enforceable or profitable. Finally, the court determined that “Mrs. Kite’s profit motive is further underscored by her access to other financial assets, making her interests [in the transferred partnership] dispensable and available for a potentially risky investment.”
Although the Kite case confirms that private annuity agreements can be a successful estate planning tool, more in-depth knowledge is required to avoid disaster in private annuity or self-cancelling installment note (SCIN) planning.
When a private annuity transaction is entered into with a trust, the “probability of exhaustion test” under Treasury Regulation Section 25.7520-3(b)(2) must be considered. This test requires the trust purchasing assets from an individual to have a significant independent net worth, so as to fund annuity payments back to such individual as if such individual lived to be 110 years old. However, it is possible to have third parties make guarantees to satisfy this requirement. The guarantees bring forth new issues in question that have not been completely resolved. These questions include whether the guarantors are making a gift to the trust, and if so, what is the impact of such a gift for federal estate tax purposes?
For self-cancelling installment notes, the normal applicable federal rates cannot be used unless the principal amount is increased to account for the risk that the seller may die before the self-cancelling installment note has completely matured.
These concepts and others are covered in a number of articles. Click here for two articles on the topic from Jerry Hesch and Elliott Manning.
In other words, when clients call with bad news about their health, we can explain that there may be a silver lining where their planning is concerned.
In fact, when we prepare intra-family installment loan documents, we often include the following explanation:
In case you ever decide to change a Promissory Note to become self-cancelling, I have also provided an Agreement to make a Note Self-Cancelling that can be “ready to go” in case you ever decide to change a Promissory Note to become self-cancelling (a “SCIN”), which might be appropriate if the Client were to have a health set-back. I can discuss this with you if you would like.
Click here for an example of the note amendment form we use. We also ask the family to call us if there is a health reversal that would make conversion to a self-cancelling installment note worthwhile.
For a copy of the Kite case click here. Please ask your staff to sing the following to the tune of Being for the Benefit of Mr. Kite! from the Sgt. Pepper’s album:
For the benefit of Mr. Kite,
there will be a SCIN tonight, watch it trampoline.
The lawyers and CPA’s all were there,
The doctor wrote a scary letter
What a scene!
Mrs Kite was sure that she would live
A solid 18 months- to see it all,
And she actually waited 3 years for the call!
The celebrated Mrs. K didn’t want to give it all away- not at one time.
So she created annuities,
To give her children a little more ease,
It’s not a crime!
There was an arrangement made whereby the kids would pay back Mrs. Kite,
The lawyers drafted until it was airtight.
The IRS said this is wrong, you owed us money all along- they did protest!
The judge held out for Mrs. K,
She was not terminally ill they say,
Give it a rest!
The children had the funds to pay, the lawyers and the CPA are champs,
As long as they don’t forget to pay doc stamps!
Ok, not a perfect poem but amusing – none of us are quitting our day jobs anytime soon! The actual lyrics for Being for the Benefit of Mr. Kite! by Lennon and McCartney are as follows:
For the benefit of Mr. Kite
There will be a show tonight on trampoline
The Hendersons will all be there
Late of Pablo Fanque’s Fair, what a scene
Over men and horses hoops and garters
Lastly through a hogshead of real fire!
In this way Mr. K. will challenge the world!
The celebrated Mr. K.
Performs his feat on Saturday at Bishopsgate
The Hendersons will dance and sing
As Mr. Kite flies through the ring don’t be late
Messrs. K. and H. assure the public
Their production will be second to none
And of course Henry The Horse dances the waltz!
The band begins at ten to six
When Mr. K. performs his tricks without a sound
And Mr. H. will demonstrate
Ten somersets he’ll undertake on solid ground
Having been some days in preparation
A splendid time is guaranteed for all
And tonight Mr. Kite is topping the bill.
Speaking of Pepper, do not forget to enjoy a bucket of Kentucky Grilled Chicken with pepper on it if you attend the Speaker’s Dinner (dutch treat) with Jerry Hesch this Wednesday night preceding the Florida Bar Annual Wealth Protection Seminar in Miami and mention the Thursday Report. Contact agassman@gassmanpa.com for more information.
HERTZ WORLD HEADQUARTERS IS COMING TO SOUTHWEST FLORIDA!
Great news for Southwest Florida! The Hertz Corporation announced on May 7th that it plans to relocate its worldwide headquarters to Estero, Florida in Lee County. Hertz will be building a new 300,000 square foot, $50 million headquarters in Estero. The move is intended to consolidate Hertz’s headquarters with the headquarters of Hertz’s recent acquisition, Dollar Thrifty. Hertz’s current headquarters are located in Park Ridge, New Jersey.
The move is expected to create about 700 new jobs over the next two years in Southwest Florida. Hertz’s transition will make it the 15th Florida-based company on the 2013 Fortune 500 list.
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
SEMINARS:
- MONDAY, MAY 13 – WEDNESDAY, MAY 15, 2013. The 2013 Florida MGMA Conference – Uncover the Hidden Treasure in Your Practice. Alan Gassman will be speaking with Fred Simmons on Wednesday, May 15 at the conference on the topic of – Keeping Your Practice Independent. The conference will take place at the Caribe Royale Resort in Orlando, Florida. Please click here for the brochure and to register. And let us know if you would like to have a copy of the recent article we have written for doctors called “50 Ways to Leave Your Overhead.” A lot of this applies to lawyers, accountants, and financial professionals as well. Please email agassman@gassmanpa.com for a copy of the article.
- THURSDAY, MAY 16, 2013. The Florida Bar Annual Wealth Protection Seminar: “How a Lawyer Can Protect a Client’s Wealth.” Mark your calendars for this exciting event in Miami, Florida. Speakers include Jonathan Alper, Esq. on Where Does Florida Law Stand on Fraudulent Transfers“; Mitchell Fuerst, Esq. on Introduction to Professional Privilege in Wealth Protection Cases – Civil v Criminal; Tax v Non-Tax; When to Claim the Fifth; How to Do it Right; Michael Markham, Esq. on Recent Asset Protection Case Decisions, Legislation, and Their Importance in Protection Planning; Denis Kleinfeld, Esq. on Where to Situs a Trust – An Analysis of U.S. Asset Protection States; and Alan Gassman, Esq. on Using Estate Planning Techniques to Optimize Family Wealth Preservation, with a special guest appearance by Jerry Hesch. For more information please email agassman@gassmanpa.com.
- TUESDAY, MAY 28, 2013. Bloomberg/BNA Webinar: Valuable Planning for Snowbirds: Tips, Traps and Tactics for Advisors with Clients in Florida: Gassman Law Associates is happy to announce our upcoming webinar with BNA on May 28. You can register by clicking here. Thursday Report Readers can use the top secret, very confidential promotional code “GASSMAN” to receive a $100 discount off the price of the webinar or the webinar and CD package. Please don’t tell anyone who attended Florida State University. Details for the webinar are as follows. We hope you can join us!
Most advisors with Florida clients are unaware of the myriad of unique rules and planning considerations that affect Florida estate, tax and business planning. It is therefore vitally important for advisors to be aware of pertinent tricks and traps for the unwary. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act, and have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.
BNA authors Alan S. Gassman and Christopher J. Denicolo have completed a 200 plus page easy to read outline with forms on major Florida law considerations, and will present this outline and powerpoint slides to share techniques and opportunities, new practical ideas, and very useful client explanation charts, sample clauses, and checklists.
In 90 minutes, Gassman and Denicolo will cover:
- Business and tax law anomalies and planning opportunities.
- Creditor protection considerations and Florida’s statutory creditor exemptions.
- Unique aspects of the Florida Trust and Probate Codes.
- Florida medical practice rules and regulations.
- Documentary stamp taxes, sales taxes, rent taxes, property taxes and how to avoid them.
- Traps and tricks associated with Florida’s Homestead law, and Elective Share.
- The new Florida Power of Attorney Act.
- The current status of Florida charging order protection for limited partnerships and LLCs.
Educational Objectives:
- Become conversant with the primary rules, opportunities and limitations with respect to Florida creditor exemptions.
- Discuss various key considerations with respect to the design and implementation of estate plans and Trusts in Florida.
- Understand the scope and application of Florida’s tax system and primary tax avoidance techniques and issues.
- Review unique aspects of Florida law, including its new Power of Attorney Act, Homestead laws, and medical practice rules and regulations.
MAKE NOTE OF NOTRE DAME! PLAN FOR AN EXCITING OCTOBER 16 – 19 WEEKEND TO INCLUDE THE NOTRE DAME – USC GAME ON OCTOBER 19 AND FRIED CHICKEN FOR ALL THURSDAY REPORT READERS WHO ATTEND!
- Wednesday, October 16 to Friday, October 18, 2013. 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. The Institute is held in South Bend, Indiana each fall. This year the dates are Wednesday, October 16 to Friday, October 18, 2013.
Book now to get your football tickets to the Notre Dame-USC game on October 19.
We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting – Interesting Interest Questions, Planning with Low Interest Loans, Self-Cancelling Installment Notes, Private Annuities, Defective Grantor Trusts, and Similar Issues That Arise in a Low Interest Rate Environment.
For details about each event, please visit us online at gassmanlaw.com/newsandevents.html
Alan S. Gassman, J.D., LL.M. is a practicing lawyer and author based in Clearwater, Florida. Mr. Gassman is the founder of the firm Gassman, Crotty & Denicolo, P.A., which focuses on the representation of physicians, high net worth individuals, and business owners in estate planning, taxation, and business and personal matters. He is the lead author on Bloomberg BNA’s Estate Tax Planning and 2011 and 2012, Creditor Protection for Florida Physicians, Gassman & Markham on Florida and Federal Asset Protection Law, A Practical Guide to Kickback and Self-Referral Laws for Florida Physicians, The Florida Physician Advertising Handbook and The Florida Guide to Prescription, Controlled Substance and Pain Medicine Laws, among others. Mr. Gassman is a frequent speaker for continuing education programs, publishes regularly for Bloomberg BNA Tax & Accounting, Estates and Trusts Magazine, Estate Planning Magazine and Leimberg Estate Planning Network (LISI). He holds a law degree and a Masters of Law degree (LL.M.) in Taxation from the University of Florida, and a business degree from Rollins College. Mr. Gassman is board certified by the Florida Bar Association in Estate Planning and Trust Law, and has the Accredited Estate Planner designation for the National Association of Estate Planners & Councils. Mr. Gassman’s email is Agassman@gassmanpa.com.
Thomas J. Ellwanger, J.D., is a lawyer practicing at the Clearwater, Florida firm of Gassman, Crotty & Denicolo, P.A. Mr. Ellwanger received his B.A. in 1970 from Northwestern University and his J.D. with honors in 1974 from the University of Florida College of Law. His practice areas include estate planning, trust and estate administration, personal tax planning and charitable tax planning. Mr. Ellwanger is a member of the American College of Trusts and Estates Counsel (ACTEC). His email address is tom@gassmanpa.com.
Christopher Denicolo, J.D., LL.M. is a partner at the Clearwater, Florida law firm of Gassman, Crotty & Denicolo, P.A., where he practices in the areas of estate tax and trust planning, taxation, physician representation, and corporate and business law. He has co-authored several handbooks that have been featured in Bloomberg BNA Tax & Accounting, Steve Leimberg’s Estate Planning and Asset Protection Planning Newsletters, and the Florida Bar Journal. He is also the author of the Federal Income Taxation of the Business Entity Chapter of the Florida Bar’s Florida Small Business Practice, Seventh Edition. Mr. Denicolo received his B.A. and B.S. degrees from Florida State University, his J.D. from Stetson University College of Law, and his LL.M. (Estate Planning) from the University of Miami. His email address is Christopher@gassmanpa.com.
Kenneth J. Crotty, J.D., LL.M., is a partner at the Clearwater, Florida law firm of Gassman, Crotty & Denicolo, P.A., where he practices in the areas of estate tax and trust planning, taxation, physician representation, and corporate and business law. Mr. Crotty has co-authored several handbooks that have been published in BNA Tax & Accounting, Estate Planning, Steve Leimberg’s Estate Planning and Asset Protection Planning Newsletters, Estate Planning magazine, and Practical Tax Strategies. Mr. Crotty is also the author of the Limited Liability Company Chapter of the Florida Bar’s Florida Small Business Practice, Seventh Edition. He, Alan Gassman and Christopher Denicolo are the co-authors of the BNA book Estate Tax Planning in 2011 & 2012. His email address is Ken@gassmanpa.com.
Thank you to our law clerks that assisted us in preparing this report:
Kacie Hohnadell is a third-year law student at Stetson University College of Law and is considering pursuing an LL.M. in taxation upon graduation. Kacie is also the Executive Editor of Stetson Law Review and is actively involved in Stetson’s chapter of the Student Animal Legal Defense Fund. In 2010, she received her B.A. from the University of Central Florida in Advertising and Public Relations with a minor in Marketing, and moved to St. Petersburg shortly after graduation to pursue her Juris Doctor. Her email address is Kacie@gassmanpa.com.
Eric Moody graduated from Stetson University College of Law in December 2012 and was recently admitted to the Florida Bar. While at Stetson, Eric was an Articles and Symposia Editor for the Stetson Law Review. In 2009, Eric received a B.S. in Business Management from the University of South Florida. Eric’s email address is Eric@gassmanpa.com.