Probate Section Report
by
Larry E. Ciesla

The probate section held its regular monthly meeting on October 10, 2009.

A new member was introduced, Lula Dawit. She is a member of the Georgia Bar and recent graduate of the LLM program at UF. Lula plans on remaining in Gainesville to practice probate and estate planning. The meeting proceeded with an announcement that long-time section member Jay Donohoe was absent from the meeting due to a recent medical illness. The section sends its best wishes to Jay for a complete and speedy recovery.

Richard White next led a discussion regarding current efforts by the RPPTL Section to revise portions of Chapter 765 regarding the health care surrogate laws. As presently worded, Section 765.204 provides that a designation of a health care surrogate does not become effective until a finding of incapacity by the attending physician. Some practitioners avoid this problem by including in their durable power of attorney a provision granting to the agent the power to make medical decisions, including all matters set forth in Chapter 765, as is permitted by Section 709.08(7)(c). This strategy will of course only work where the power of attorney is of the type which is effective upon signing, as opposed to the type whose effectiveness is contingent upon a finding of incapacity by a physician in the future, as is required under Chapter 765. The bottom line is that these statutes are in conflict. The proposed change would bring Ch 765 in line with FS 709.08 in not requiring a finding of incapacity as a precondition to use of a health care surrogate. Another proposal would create a new section in Ch 765 so as to authorize the designation of a health care surrogate for a minor. As we are all aware, there is no specific law which allows a parent or legal guardian to designate another person to make medical decisions on behalf of a child in the absence of the parent or guardian. The new statute would be numbered 765.2035, to be followed by a form for same in 765.2038. Keep your eyes open for these changes in the law during the next legislative session.

Susan Mikolaitis then led a discussion highlighting some of the more interesting topics covered during the recent annual FLEA seminar. First up: e-filing is on the way. In fact, non-mandatory e-filing is already in effect commencing July 1, 2009. Probate has been selected to lead the charge, due to its alleged simplicity in types of cases filed. All clerks of court are required to submit their plans for implementing e-filing by October 1, 2009. Initial reports are that the e-filing program may not be as simple as scanning and sending a pdf to your local clerk. What is being looked at is a statewide plan whereby all filings would be submitted to a central portal, which would likely require practitioners to acquire specialized software. In another area of possible legislative change, there is a movement afoot (led by creditor types?) to change the law in various ways to expand the reach of what is included within the scope of a probate estate (expanded probate), including, but not limited to, pulling the proceeds of pay on death and JTWROS accounts into the probate estate. This would, in essence, shift the burden to the account beneficiary to initiate litigation to remove the funds out of the probate, based on the clear intent of the decedent that the funds pass to the beneficiary outside of probate. Apparently the current thinking (by the creditor types?) is that personal representatives are not properly fulfilling their fiduciary duties (to creditors), in that they rarely make any effort to challenge pay on death or JTWROS accounts, thereby allowing estates in many cases to avoid paying what could otherwise be considered legitimate debts of the decedent. This appears to be an issue of great significance as regards the potentially enormous effect this would have on estate planning.

For many years now a very large part of the advice we as estate planners have been giving to clients is on how to avoid probate. The simplest way is of course by use of pay on death and JTWROS accounts. If this proposal gains traction and is passed, it could become famous as the lawyer’s relief act of 2010, as there would certainly be thousands of cases that would require probate administration under the proposed law, for which no probate is presently required. In addition, the account beneficiaries would be required to institute litigation against the estate to remove the funds from the estate, thereby providing more opportunities for additional fees for personal representatives and their counsel.

Another topic coming up for discussion was the drafting of non-dispositive will clauses. Given the current real estate market, it was suggested that it might not be a bad idea to include some extra language in the powers of the personal representative so as to grant discretion to allow the personal representative to abandon assets having no value, such as the not uncommon situation where the amount owing on a mortgage exceeds the fair market value of the property if sold. Although under FS 733.612(9) this right currently exists for assets considered “valueless”, or “of no benefit to the estate”, the thinking is that it would be a good idea to bolster the power by broadening the statutory language to make it clear that it applies to a parcel of real estate which could have some “value”, but the debt owing exceeds the value, so as to make it “of no benefit to the estate”.

Bruce Hoffman proceeded with a discussion regarding the current state of affairs regarding proceedings for determination of incapacity/appointment of a guardian or appointment of a guardian advocate in cases involving an indigent ward. In such cases, the court, by statute, is required to appoint the newly created office of conflict counsel to represent the indigent ward. The problem is that the conflict counsel’s office does not have anyone on its staff with knowledge or experience in handling these cases. Apparently the standard procedure is for the conflict office to then file a motion to withdraw from the case. Once a withdrawal has been entered, the court will then appoint someone from the guardianship rotation list. According to Bruce, it can take up to four months from the time the initial petition is file to the time a rotation lawyer is appointed. My suggestion would be as follows. Check with the conflict counsel’s office in advance and work with them to prepare a motion and proposed order for withdrawal and present that paperwork to the court, along with a proposed order appointing a rotation attorney (leave the name blank or check to see who is up next on the rotation list and check to see whether he or she is able to take the case). Wait until the original petition has been scanned by the clerk and entered into their system. Then hand deliver the additional documents directly to the judge’s chambers, with a friendly reminder that prompt entry of an order would be appreciated and is required within five days of the original filing in an incapacity case.

The meeting concluded with a discussion regarding the current status of the procedure whereby some practitioners elect to publish a Notice to Creditors following entry of an Order of Summary Administration. During the meeting I indicated that I thought that this option had been deleted from the probate code. I stand corrected. This provision still exists in FS 735.2063. The statute has been amended a few times in recent years. The old related FLSSI probate forms have been deleted and a new form (2.0355) has been promulgated to conform to the statutory amendments. The statute and the form provide a disclosure as to the total value of the estate and the names and addresses of the recipients of the assets. Creditors then must file their claims within the time limits set forth in the probate code for formal administration. If not timely filed, the statute provides a bar as to claimants who were not known and not reasonably ascertainable. If a claim is filed, the statute does not say what happens next. There is no procedure for objecting to the claim. One practitioner I contacted stated he recalls an occasion where he published after obtaining an order of summary administration and order of homestead, only to have Florida Medicaid file a claim and request a copy of the probate Inventory. In any event, each practitioner can make his or her own determination as to whether it makes any sense to publish a notice to creditors following an order of summary administration.

The probate section continues to meet on the second Wednesday of each month at 4:30p.m. in the fourth floor meeting room in the civil courthouse. All interested practitioners are welcome to attend. If you would like to join the mailing list for notices of the monthly meetings, you may do so by sending an email to lciesla@larryciesla-law.com.

 
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