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  1. #1
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    Oct 2006
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    Cool Probate v. Non-Probate Estate

    Mom, age 82 and a widow, recently visted a local (FL) attorney to change her living trust. She was trustee and trust distributed all equally to my brother and I. My brother and i were successor trustees. The only asset in the trust was her house (value 220,00). She has about 800,000 in life insurance/annuities that listed my brother and I as 50/50 beneficiaries and are in her name. The trust was listed as "contingent" beneficiary. The change she wanted to make in the trust was to eliminate a bank listed as "contingent" successor trustee. The attorney had her abandon the trust, did a new will, and a quit claim deed to change her house back to her name, and changed the beneficiary on the 5 annuities/life insurances to "estate". The original attorney that set up the previous arrangement is no longer in the picture. Her new will leaves everything to my bother and I 50/50 and we are named as executor. This seems like a lot of stuff happening to simply get rid of a bank as contingent-successor trustee.....and now it is clear that her entire estate will go through probate. The intitial attorney set things up to avoid that. Mom can do what she wants, but I dont see what this new arrange ment accomplishes. Can someone give me a clue?

  2. #2
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    Oct 2006
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    Default Re: Probate v. Non-Probate Estate

    I dont know if my post went through. I will try again. I am a retired accountant and not an attorney. It appears to me that you are correct and will now have to go through probate.....NatSara

  3. #3
    Join Date
    Jan 2007
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    Default Re: Probate v. Non-Probate Estate

    Quote Quoting NatSara
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    I dont know if my post went through. I will try again. I am a retired accountant and not an attorney. It appears to me that you are correct and will now have to go through probate.....NatSara
    I'd be VERY wary of this situation. With a few exceptions, Florida mandates the use of an attorney for probate. It sounds like this attorney moved everything possible into the probate estate to increase it's probate value, and hence his fee (it's based on the value of the probate estate).

    Find another attorney QUICKLY and discuss this with him.

  4. #4
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    Default Re: Probate v. Non-Probate Estate

    Quote Quoting Jimbo
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    Mom, age 82 and a widow, recently visted a local (FL) attorney to change her living trust. She was trustee and trust distributed all equally to my brother and I. My brother and i were successor trustees. The only asset in the trust was her house (value 220,00). She has about 800,000 in life insurance/annuities that listed my brother and I as 50/50 beneficiaries and are in her name. The trust was listed as "contingent" beneficiary. The change she wanted to make in the trust was to eliminate a bank listed as "contingent" successor trustee. The attorney had her abandon the trust, did a new will, and a quit claim deed to change her house back to her name, and changed the beneficiary on the 5 annuities/life insurances to "estate". The original attorney that set up the previous arrangement is no longer in the picture. Her new will leaves everything to my bother and I 50/50 and we are named as executor. This seems like a lot of stuff happening to simply get rid of a bank as contingent-successor trustee.....and now it is clear that her entire estate will go through probate. The intitial attorney set things up to avoid that. Mom can do what she wants, but I dont see what this new arrange ment accomplishes. Can someone give me a clue?


    Do two things:

    Get another attorney to clear this up at once. (Make sure ma is still competent and that you and your sib agree on everything.)

    Next, report this guy to the disciplinary committee of the Florida state bar.

  5. #5
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    Default Re: Probate v. Non-Probate Estate

    I appreciate your reply, and will do as you suggested.

    Would you please elaborate on your suggestion to report the attorney to the disciplinary committe ? I believe my Mother is competent and did have a rational reason for eliminating the Bank from even the remote chance of acting as successor trustee and being involved in her estate. I don't see any rational for the extent of the changes in her estate plan done by the attorney, strongly suspect the $ motivation of the attorney but don't know what the "line in the sand" is that he has crossed. Is this an ethics concern, elder abuse, fraud or none of the above ? Should I just disclose the action and let them cast judgement ?

    thanks

  6. #6
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    Default Re: Probate v. Non-Probate Estate

    Quote Quoting Jimbo
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    I appreciate your reply, and will do as you suggested.

    Would you please elaborate on your suggestion to report the attorney to the disciplinary committe ? I believe my Mother is competent and did have a rational reason for eliminating the Bank from even the remote chance of acting as successor trustee and being involved in her estate. I don't see any rational for the extent of the changes in her estate plan done by the attorney, strongly suspect the $ motivation of the attorney but don't know what the "line in the sand" is that he has crossed. Is this an ethics concern, elder abuse, fraud or none of the above ? Should I just disclose the action and let them cast judgement ?

    thanks
    Jimbo, contrary to what others have suggested, it is a good thing to take the house out of the trust. The FL legislators passed a stupid law that now removes the homestead protection for homesteaded property in trust. Astute Estate Planning & Planners are well advised to have settlors remove homesteaded property from trusts.

    What would be best is for your mom, if she is competent to make estate changes, is to just change the successor trustee, do take the house out of trust, open a trust bank account, and have a Pour Over Will drafted. A Pour Over Will will afford any property not in the trust to be placed in the trust upon passing. The successor trustee can again remove the home from the trust, or sell the property, given the power to do so in a new/amended trust document.

    Furthermore, ALL probate does not require an attorney in FL. I'm a FL resident who is very familiar with FL probate, right seniorjudge? On another forum, I asked colorfastt to provide the source of the some FL Rule he/she posted. It was rule 5...something. He/she never
    did. FL probate code starts with chpt 731, not rule 5.... Colorfastt did say with a few exceptions this time. There's only one exception stated in FL Probate.

  7. #7
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    21

    Default Re: Probate v. Non-Probate Estate

    [QUOTE=BlondiePB;81268]Jimbo, contrary to what others have suggested, it is a good thing to take the house out of the trust. The FL legislators passed a stupid law that now removes the homestead protection for homesteaded property in trust. Astute Estate Planning & Planners are well advised to have settlors remove homesteaded property from trusts.

    That is not necessarily so. See, Robbins v. Wellbaum, 664 So. 2d 1 (Fla. 3d CDA 1995) which holds that if the deed is transferred to a qualified personal residence trust, then it should maintain its homestead status.

  8. #8
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    Default Re: Probate v. Non-Probate Estate

    Quote Quoting momjd
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    That is not necessarily so. See, Robbins v. Wellbaum, 664 So. 2d 1 (Fla. 3d CDA 1995) which holds that if the deed is transferred to a qualified personal residence trust, then it should maintain its homestead status.
    That is case law from 1995. Legislation passed this not too long ago.

  9. #9
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    Default Re: Probate v. Non-Probate Estate

    I'm sorry, I cited the wrong case. Try this one. Engelke v. Estate of Engelke, a Court of Appeals case in the 4th District which holds that when a residence is held in a revocable living trust, it is owned by a "natural person" for purposes of the constitutional homestead exemption. It was decided in Feb of 2006. Basically, the court held that because the decedent retained all control over his homestead during his lifetime, the homestead protections attached to his residence. You must be wary of how the trust is worded, and each specific tax accessor's office has their own specific language they want inserted into the trust for it to qualify for homestead.

  10. #10
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    Default Re: Probate v. Non-Probate Estate

    Quote Quoting momjd
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    I'm sorry, I cited the wrong case. Try this one. Engelke v. Estate of Engelke, a Court of Appeals case in the 4th District which holds that when a residence is held in a revocable living trust, it is owned by a "natural person" for purposes of the constitutional homestead exemption. It was decided in Feb of 2006. Basically, the court held that because the decedent retained all control over his homestead during his lifetime, the homestead protections attached to his residence. You must be wary of how the trust is worded, and each specific tax accessor's office has their own specific language they want inserted into the trust for it to qualify for homestead.
    Well, that's good and bad news.

    After reading that case and some other stuff, the wording of the trust is imperative to retain homestead protection, especially when designating final expenses and allowing the property to have the homestead removed to do so.

    This Engelke v. Estate of Engelke was interesting. The decedent and his wife had/have separate trusts and put their half of the property in their own trusts and homesteaded them. The wife, Judy, then waived her homestead. She also had a life estate for her husband's ownership in his trust document.

    Judy was the Personal Representative for her deceased husband's estate. She is the one who wanted her husband's homesteaded portion of the home sold. The decedent's son is the Trustee.

    The case is here

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