Coronavirus Evictions

CORONAVIRUS EVICTIONS: Being Aware of Potential Pitfalls

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With the State of Florida enacting a mandatory stay home order in effect as of 12:01 AM, Friday morning, we have been speaking with many landlords and tenants regarding what rights they have during this trying time. The coronavirus outbreak has brought many business issues to light.

On one hand, many businesses have shut down during this time, leaving many tenants without the income source they survive on.

These tenants want to know whether they are at risk of being kicked on the street. On the other hand, landlords are still required to pay any mortgages and other expenses that they owe on the house. Many landlords cannot afford to keep their rental houses without the income they generate. What has the State of Florida said?

Attempts to Stop Coronvirus Evictions

While many politicians would like to halt evictions and have urged the Governor to impose a statewide moratorium on evictions, as of today the State of Florida has not officially issued any such order. Currently, each county is at the discretion to enter their own orders restricting court access and filings.

For example, Seminole, Brevard, and Osceola counties have suspended evictions until April 15. Orange County has suspended evictions through April 17. Without a statewide order, you need to be aware of what orders have been passed in the county you reside in. 

Meanwhile, the Florida Supreme Court has issued the following Administrative Order, “given the exigencies of the public health emergency, the requirement in Florida Rule of Civil Procedure 1.580(a) for the clerk to issue a writ of possession “forthwith” shall be suspended through the close of business on Friday, April 17, 2020, or as provided by subsequent order.” https://www.floridasupremecourt.org/content/download/632431/7186205/AOSC20-17.pdf.

What this means is that the State of Florida is not currently requiring counties to follow the eviction process under the Florida Statutes. However, this order only suspends the requirementfor a Clerk of Court to issue the Writ of Possession, it does not suspend or prohibit a county’s ability to enter such a writ.

Without a State ordered mandate, each county is left to decide what is best for their residents. If you are a tenant, should you be worried about being evicted if you are unable to pay the rent during the COVID-19 scare? Likely not, but until the State of Florida puts forth a statewide mandate, it is dependent on the county you live in and there is not a set answer at this time.

What To Do About Rent During The Coronavirus Pandemic

Even though your landlord may not be able to evict you at this time, that does not necessarily mean you will not be liable for the rent payment during this period. It is going to be interesting to see how this plays out from a landlord-tenant perspective because a situation like this has never occurred during our lifetimes. Most likely the tenant will be responsible for the missed rent because the relationship is governed by the lease between the parties.

One question that is raised is whether the landlord will be able to file for eviction immediately after the virus threat is over, or whether the tenant will have a period of leniency in which to make payments to the landlord for the back rent. Without a steady source of income, many tenants will not be able to make a lump-sum payment of past due rent, and many tenants may not be able to climb out of the hole at all.

With the uncertainty caused by the coronavirus pandemic and the risk of the virus spreading if tenants are thrown onto the street, the State of Florida will likely enter an order shortly that sets clear precedence for how the landlord/tenant relationship will be handled during this time. 

The potential pitfalls created by this virus will hopefully be addressed by an Order put forth from the State of Florida. As always, we will remain apprised to the situation in order to be your source for navigating any changes that happen.

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Lady Bird Deed

What you need to know about the Lady Bird Deed benefits

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What is a Lady Bird Deed and why is it beneficial?

Florida is one of only a handful of states that recognize a Lady Bird Deed. A person who creates a Lady Bird Deed, also known as an Enhanced Life Estate Deed, transfers property to himself for his lifetime, creating a life estate in the original owner, and names one or more people, entities, trusts, or organizations to inherit the property.

The life estate retained by the original owner of the property is enhanced, meaning that the owner retains actual ownership of the property until death, and can change the deed, mortgage, or sell the property as desired during their lifetime without permission or involvement of the remainder beneficiaries. When the owner of the property dies, the property is automatically transferred to the new owner(s) listed on the ladybird deed. A house that transfers through a life estate deed completely avoids probate because it transfers at death, and therefore does not become a part of the Grantor’s estate. 

Benefits of a Lady Bird Deed

  • Ensures that the property passes to the person or people of the Grantor’s choosing by avoiding probate of the property. 
  • Grantor maintains the right to use and profit from the property for their lifetime
  • Grantor maintains the right to sell, mortgage, or even execute a new lady bird deed to the property at any time, without having to obtain the permission or authorization of the grantee on the previously executed lady bird deed. 
  • Grantor avoids making a gift that might be subject to federal gift tax
  • Does not risk the Grantor’s Medicaid eligibility because it is not considered a “transfer” until the Grantor passes away.
  • Prevents the property from being sold upon your death to repay the Medicaid benefits conferred upon the Grantor, because the property passes to the Grantee(s) upon the death of the Grantor and does not become an asset in the estate of the Grantor.
  • You keep your homestead real estate tax exemption, and the county will not reassess the property to raise taxes. 

The Lady Bird Deed and Medicaid

Medicaid is a government program that provides Florida residents with long-term health care coverage. Medicaid benefits are intended for people who can’t otherwise pay for their medical care. To apply for Florida Medicaid, the state’s Institutional Care Program, an individual must provide the Department of Children and Families with a detailed list of all assets.

The purpose is to ensure that all available financial resources are used to pay for care before Medicaid funds are used. The value of all qualifying assets, called countable assets, is calculated and used as the basis for creating a Medicaid eligibility waiting period.

If a time should come when you require long-term care and you apply for Medicaid, the government will impose a five-year “look back” period on your eligibility. This means you cannot transfer ownership of property within five years of making the application. The extent of your eligibility depends on the value of assets you own at the time you apply.

Less is more, and many people erroneously believe they can simply give property away before applying, however, transfers are subject to this five-year period, and assets given away during this time can be pulled back into the value of your estate. Because an enhanced life estate deed allows you to retain control over the property during your lifetime, it doesn’t qualify as a transfer until the death of the Grantor. 

If you receive Medicaid benefits during your life, then after your death the State will make a claim for repayment from any assets in your estate. The State will not be able to make a claim against any property with a valid lady bird deed because the property doesn’t become part of the decedent’s estate. The property automatically transfers into the ownership of the Grantee listed on the lady bird deed. 

Tax Planning and Benefits with a Lady Bird Deed

There are a few tax benefits for a Lady Bird Deed in Florida, such as avoidance of the Federal gift tax. The Lady Bird transfer is an incomplete gift, meaning there is no requirement to file a gift tax return. There has not been an effective transfer during the owner’s lifetime. Moreover, the Florida Department of Revenue assesses minimum documentary stamp taxes on Lady Bird Deed property transfers as long as the grantor of the deed is the same person who retains the life interest. This means that your documentary stamp taxes would only be based upon a sum of $10.00 consideration, instead of the value, or sales price of the home. This can potentially save your heirs a few thousand dollars. If the deeded property is a homestead, there will be no loss of homestead tax exemption and the county will not reassess the property to raise taxes. 

Estate Planning with a Lady Bird Deed

A lady bird deed, if done correctly, can be a very useful estate planning tool. There are many advantages of using a Lady Bird deed over other types of deeds. If you feel that this type of deed may be beneficial to you, would like more information or would like to discuss other possible options, please give The Orlando Law Group, PL a call at (407) 512-4394. 

 

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Orlando Probate Law

What is Probate Law?

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How Probate Law works

People hear the words Probate Law and automatically get fearful of what they think it means.

Probate law is a court-supervised process where often the courts will appoint an administrator. They are responsible for administering the estate. This includes identifying and gathering the assets of a deceased person (decedent), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries.

An example of distributing an asset might be where a decedent has a real estate asset that is granted to a family member. That family member will take legal possession of the real estate asset.

What is the purpose of estate planning?

Estate planning organizes for the distribution of a person’s estate once they pass away. Put simply, all of the assets owned at the time of death will be distributed based on the will, trust or estate plan. Assets in a person’s estate might include real estate such as houses and investment properties. Assets might also include personal property like stocks, bonds, bank accounts, cars, jewelry, etc.

Estate planning is a complex endeavor and is most appropriately handled by a professional, like an estate planning lawyer who will work collaboratively with financial advisors, insurance specialists, accountants, and other professionals in the planning of the distribution of assets.

Why is estate planning important?

Estate planning benefits people with estates of all sizes in that it allows the individual to decide exactly how their assets will be distributed upon their death. Regarding personal property, the individual can decide who should get specific assets, like a house or bank account. This makes everything very clear and prevents unnecessary arguments between the estate’s beneficiaries.

Further, estate planning can benefit the children of the decedent. With proper planning, the children of the deceased can be taken care of to ensure they maintain their quality of life.

More about the probate process

Typical questions that our probate lawyers hear include: Does probate mean I have to wait years for the distribution of assets? Does this mean I will be responsible for debts of my loved one?  Will the courts make me do something I don’t want to do? Will this cost me even more money?  I lost my loved one why do I have to go through this?

If a will does exist it may make probate run smoother. However, if a person dies in Florida without a valid will, all assets will have to be decided by the court and state laws once heirs are established.

What are claims against the estate?

A “claim against the estate” references a claim for money, assets, or other property that an individual has against the estate of a decedent. For instance, if the deceased person owes money to a person or entity, it is the responsibility of the executors or administrators of the estate to pa that debt.

Claims against an estate must be filed with United States Court that is handling the local probate or with the estate administrator.

What is the role of a probate attorney?

The attorney will file motions, guide and advise the client (Personal Representative) how to proceed. The attorney is the communicator to the court on behalf of everyone involved.

A probate attorney will need to assist with the following as well:

1.    Collecting and managing life insurance proceeds.

2.    Getting the decedent’s property appraised.

3.    Finding and securing all of the decedent’s assets.

4.    Advising on how to pay the decedent’s bills and settle debts.

5.    Obtaining an Estate Tax id number and estate bank account.

6.    Determining whether any estate taxes are owed.

If you die without having written and signed a will, you are said to have died “intestate.”

What happens if there is no will?

When there is no will your estate is distributed according to the intestacy laws of the state where the property resides, regardless of your wishes. The law does not always follow the path you would expect especially in situations where there are blended families.

Is it possible to avoid probate?

In some situations involving probate law, a probate is not necessary when there are IRA’s, 401 K’s, Life Insurance and other investments with beneficiaries. Some people also use Lady Bird deeds, trusts, accountants that are payable on death and other vehicles to avoid probate entirely.

In short, there are many different scenarios that go into an estate plan and probate, and each circumstance has exemptions especially in situations with blended families or extended families.  It is wise to get your estate plan done by an attorney rather than getting forms on line so that you can look at all the scenarios and plan appropriately. Then at the time of probate, an attorney for the estate is required by the Court.

We highly recommend talking with a probate law and estate planning attorney to make sure the wishes you have for your estate should you pass away are fulfilled.

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Lady Bird Deed – Estate Planning’s Best Kept Secret

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What is a Lady Bird Deed?

Also known as an enhanced life estate deed or a ladybird deed, a Lady Bird Deed is a way to transfer property to someone else outside of probate. It allows the original owner to retain control of the property and pass it to exactly who he or she wants to after death.  Essentially, the original owner, referred to as the grantor, signs a deed stating when he or she dies the person who the property is deeded to, referred to as the grantee, will automatically receive the property.  In the meantime, the grantor has all right over the property including the ability to sell if he or she wants to.

The life estate retained by the original owner of the property is enhanced, meaning that the owner retains actual ownership of the property until death, and can change the deed, mortgage, or sell the property as desired during their lifetime without permission or involvement of the remainder beneficiaries. When the owner of the property dies, the property is automatically transferred to the new owner(s) listed on the ladybird deed. A house that transfers through a life estate deed completely avoids probate because it transfers at death, and therefore does not become a part of the Grantor’s estate.

Florida is one of only a handful of states that recognize a Lady Bird Deed.

Lady Bird Deed Advantages

A Lady Bird Deed has many advantages that should be considered, including:

  1. Ensures that the property passes to the person or people of the Grantor’s choosing by avoiding probate of the property.
  2. Grantor maintains the right to use and profit from the property for their lifetime, providing the Grantor with complete control of the property until they pass.
  3. Grantor maintains the right to sell, mortgage, or even execute a new lady bird deed to the property at any time, without having to obtain the permission or authorization of the grantee on the previously executed lady bird deed.
  4. Since Lady Bird Deeds are not considered a transfer of property and the property owner retains the right to use the property, the Lady Bird Deed typically does not affect or risk qualification for the Grantor’s Medicaid benefits.
  5. Prevents the property from being sold upon your death to repay the Medicaid benefits conferred upon the Grantor, because the property passes to the Grantee(s) upon the death of the Grantor and does not become an asset in the estate of the Grantor.
  6. You keep your homestead real estate tax exemption, and the county will not reassess the property to raise taxes.
  7. There are several tax benefits to a Lady Bird Deed, including the avoidance of filing a gift tax on the property transfer.

Many of the advantages of a transferring property under a living trust are similar to those achieved with a Lady Bird Deed. The advantage of the latter is that establishing a Lady Bird Deed is much less costly than creating a living trust.

The Lady Bird Deed and Medicaid

Medicaid is a government program that provides Florida residents with long-term health care coverage. Medicaid benefits are intended for people who can’t otherwise pay for their medical care. To apply for Florida Medicaid, the state’s Institutional Care Program, an individual must provide the Department of Children and Families with a detailed list of all assets.

The purpose is to ensure that all available financial resources are used to pay for care before Medicaid funds are used. The value of all qualifying assets, called countable assets, is calculated and used as the basis for creating a Medicaid eligibility waiting period.

If a time should come when you require long-term care and you apply for Medicaid, the government will impose a five-year “look back” period on your eligibility. This means you cannot transfer ownership of property within five years of making the application. The extent of your eligibility depends on the value of assets you own at the time you apply.

Less is more, and many people erroneously believe they can simply give property away before applying, however, transfers are subject to this five-year period, and assets given away during this time can be pulled back into the value of your estate. Because an enhanced life estate deed allows you to retain control over the property during your lifetime, it doesn’t qualify as a transfer until the death of the Grantor.

If you receive Medicaid benefits during your life, then after your death the State will make a claim for repayment from any assets in your estate. The State will not be able to make a claim against any property with a valid lady bird deed because the property doesn’t become part of the decedent’s estate. The property automatically transfers into the ownership of the Grantee listed on the lady bird deed.

Tax Planning and Benefits with a Lady Bird Deed

There are a few tax benefits for a Lady Bird Deed in Florida, such as avoidance of the Federal gift tax. The Lady Bird transfer is an incomplete gift, meaning there is no requirement to file a gift tax return. There has not been an effective transfer during the owner’s lifetime. Moreover, the Florida Department of Revenue assesses minimum documentary stamp taxes on Lady Bird Deed property transfers as long as the grantor of the deed is the same person who retains the life interest. This means that your documentary stamp taxes would only be based upon a sum of $10.00 consideration, instead of the value, or sales price of the home. This can potentially save your heirs a few thousand dollars. If the deeded property is a homestead, there will be no loss of homestead tax exemption and the county will not reassess the property to raise taxes.

In the state of Florida, it is also important to know that homestead or primary residence is exempt from creditors’ claims.  Not only does a Lady Bird Deed protect this aspect of Homestead property and retain the homestead exemption, it can also potentially protect the property from a divorce settlement in certain cases.  As the property remains Homestead it also retains the Homestead exemption for property tax as long as it is drafted appropriately.

While a Lady Bird Deed should not be a replacement for a full estate plan, it is a good place to start, and it often belongs as part of an estate plan unless your only heir is your spouse in which case Homestead passes directly to him or her in the event of death without the need for probate. Without this type of deed even a Homestead property will need a Judge to sign off on the transfer in a probate proceeding unless it is passing to your spouse who is still alive.

How was the Lady Bird Deed named?

You might be wondering how the Lady Bird Deed got its name. When the deed was created in Florida in the 1980s, the creator used President Lyndon Johnson’s family names in the example of how the deed works. President Johnson’s wife’s name was Lady Bird and from that example, the deed was named.

A lady bird deed, if done correctly, can be a very useful estate planning tool. There are many advantages of using a Lady Bird deed over other types of deeds. If you feel that this type of deed may be beneficial to you, would like more information or would like to discuss other possible options, please give The Orlando Law Group, PL a call at (407) 512-4394. The probate and estate planning team at The Orlando Law Group has this and many other strategies at its disposal to protect you and your family assets.

The attorneys at The Orlando Law Group represent individuals throughout Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout central Florida.

If you are dealing with a real estate or estate planning issue, are wondering if a reverse mortgage is right for you, or are looking to establish your own estate plan, please reach out to our office at 407-512-4394, or fill out our online contact form.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

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