Probate Section Report
by
Larry E. Ciesla

According to Denise Ferrero, last month’s probate column was well received and I am therefore encouraged to continue with further submissions. In the good news/bad news department: I was unable to attend the October meeting of the probate section and am therefore without news of the issues raised (the bad news). The reason I was unable to attend is that I was in Paris with my wife, celebrating our 15th anniversary (the good news). I am happy to advise that reports of the French disliking Americans appear to be greatly exaggerated, as we uncovered no evidence of such during out entire visit. To the contrary, they seemed only too happy to take our euros.

In the travel tips department: Don’t miss out on taking the “fast” train (I don’t think it’s fast enough to qualify as a “bullet” train) from Paris, through the Chunnel, to London. It takes approximately 2 _ hours (plus you gain an hour on the time change on the way over). You can go in the morning and return the same evening. The price is approximately 100 euro per person, depending on the days and times of travel (just like the airlines).

In the related practice area department: the 2004 Florida legislature passed a new law, F.S. 689.261, requiring a disclosure regarding ad valorem taxes in all residential sale transactions, effective January 1, 2005. The disclosure must be given at or before execution of the sales contract. The statutory wording for the disclosure is as follows:

BUYER SHOULD NOT RELY ON THE SELLER’S CURRENT PROPERTY TAXES AS THE AMOUNT OF PROPERTY TAXES THAT THE BUYER MAY BE OBLIGATED PAY IN THE YEAR SUBSEQUENT TO PURCHASE. A CHANGE OF OWNERSHIP OF PROPERTY IMPROVEMENTS TRIGGERS REASSESSMENTS OF THE PROPERTY THAT COULD RESULT IN HIGHER PROPERTY TAXES. IF YOU HAVE ANY QUESTIONS CONCERNING VALUATION, CONTACT THE COUNTY PROPERTY APPRAISER’S OFFICE FOR INFORMATION.

Another item in the related practice area. Practitioners should be mindful of their obligations in representing clients in transactions involving formation of a “simple two-person corporation” (reminiscent of an “uncontested divorce”). The issue of the failure of counsel to prepare a buy-sell agreement to go along with the two person corporation is discussed by the First District Court of Appeal in the case of Lane v. Cold, 29 Fla.L.Weekly D1985 (Fla., 1st DCA, August 30, 2004). A summary judgment entered in favor of the lawyer in a malpractice action was affirmed, upon the ground that although preparation of such an agreement was discussed, neither party specificially requested the lawyer to proceed with same.

The bad news is that the lawyer was forced to defend her position at the Circuit Court level and in the DCA. Perhaps it might not be a bad idea to refuse to prepare a two-person corporation without a buy-sell agreement (if they just want to incorporate, they can do it themselves, using the forms available online from the Division of Corporations). At a minimum, it would appear necessary to have the clients sign a form acknowledging that they have been advised to obtain a buy- sell agreement and, after careful consideration, they have elected not to do so (similar to the form a buyer signs when declining to purchase an owner’s title insurance policy where a mortgagee policy is issued).

Finally, in the just when you thought you finally obtained a thorough understanding of the operation of homestead for purposes of descent and distribution purposes department, consider the following. In the recent case of Warburton v. McKean, 29 Fla.L Weekly D1411 (Fla. 4th DCA June 9, 2004), the Fourth District, sitting en banc, issued an opinion of great interest. There, the decedent died intestate. His will provided pre-residuary bequests of $20,000.00 and $150,000.00, followed by a residuary bequest (which did not specifically refer to the homestead)) to his four half-brothers (who qualify as “protected heirs” under Snyder v. Davis, 699 So.2d 1001 (Fla. 1997). The only significant asset in the estate was decedent’s Condominium homestead, which was sold for $141,000.00 and the proceeds escrowed in the estate, pending determination by the trial court as to who is entitled to the proceeds. The trial court ruled the proceeds passed to the four residuary beneficiaries, stating that the title vested in the four half-brothers, as devisees of the homestead under decedent’s will, was not a part of the estate.

On appeal by the beneficiary of the $150,000.00 pre-residuary bequest, the DCA reversed, holding that since the decedent was not survived by a spouse or a minor child, it was freely devisable. As such, it is part of the estate and subject to division among beneficiaries under the will. Since general bequests (in the case of the $20,000.00 and $150,000.00) must be satisfied before residuary bequests, the residuary beneficiaries in this case are entitled to receive nothing. The DCA also certified this issue as being one of great public importance, so we may not yet have heard the end of this story. The next probate meeting will be hold December 8, 2004 at 4:30 p.m. in the grand jury room of the old courthouse. All interested practitioners are invited to attend.

 
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