Does the other side have to pay my attorney’s fees?

By: J. Matthew Kelly, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

One of the most common questions I receive as a litigation attorney is: “Does the opposing party have to pay my attorney’s fees if I win?” The general answer of “no” often surprises people, however, there exists many exceptions to this general rule.

The American Rule

Florida, and the majority of states and jurisdictions in the United States of America follow the American Rule. The American rules provides that attorney’s fees can only be awarded to a party if authorized by the contract of the parties or authorized by statute.

Attorney’s Fees Provisions by Agreement

One of the most common ways a prevailing party can recover its attorney’s fees is if the agreement or contract which is being disputed has an attorney’s fees provision. As previously mentioned, an exception to the American Rule is when the parties expressly agree that a prevailing party will be entitled to fees.

It is very important when entering, drafting, or creating contracts to consider whether an attorney’s fee provision will best suit your objectives. If you are a party to a contract and a lawsuit results from an alleged breach of that contract you will be paying your own fees, even if you prevail, if the contract is silent as to attorney’s fees. Having an attorney’s fee provision in the contract can deter frivolous litigation as a party is less likely to bring a baseless lawsuit if it will be responsible for the other party’s attorney’s fees. On the other hand, not having an attorney’s fee provision can also help deter litigation in certain situations as litigation can be costly and without the ability to recover their fees a party may refrain from filing a lawsuit.

It is not uncommon to see contract with a one-sided attorney’s fee provision. A one-sided attorney’s fee provision is an attorney’s fee provision which only allows one party to the contract to recover its attorney’s fees in the event of legal action on the contract. In Florida, if the contract only provides that one party will be entitled to attorney’s fees the court may also allow the other party to recover attorney’s fees if the other party prevails in the legal action.

Statutory Authorization to Attorney’s Fees

The other way a party in a legal action can seek to recover its attorney’s fees is if a statute authorizes attorney’s fees.

Some common proceedings where a statue authorizes attorney’s fees are as follows: landlord tenant disputes relating to non-payment of rent, many disputes relating to homeowners’ associations, disputes relating to the Florida Deceptive and Unfair Trade Practices Act, disputes where an insured prevails against an insurer, and in many family law proceedings including dissolution of marriage.

Two other common statutory mechanisms for seeking attorney’s fees are Florida Statutes Section 57.105 and Florida Statutes Section 768.79.

Florida Statutes Section 57.105 allows for a party to seek to recover its attorney’s fees in relation to unsupported claims or defenses. When a litigant is met with a frivolous claim he or she can use Section 57.105 as a mechanism to attempt to recover attorney’s fees. In certain circumstances under Section 57.105 the attorney who filed the frivolous motion can be forced to pay a portion of the attorney’s fees. Section 57.105 has many requirements that need to be followed before a court will consider awarding fees. One such requirement is that the party seeking to use Section 57.105 against a frivolous claim must serve the other party with the proposed motion, and typically a letter, allowing a twenty-one (21) day window for the offending party to withdraw or correct its claim.

Florida Statutes Section 768.79 governs “offers of judgment” which are offers from one party to another to settle the case for a certain amount. Any such offer must also comply with Florida Rules of Civil Procedure 1.442. Generally, this works by allowing a plaintiff to present an offer to the defendant. If, the defendant accepts the offer of judgment the case ends at the point. However, if the defendant rejects the offer of judgment and the plaintiff ends up prevailing and receiving a judgment in an amount which as at least twenty-five (25) percent greater than the offer of judgment, then the Plaintiff will be entitled to recover attorney’s fees that were incurred from the date of filling the offer forward. Defendants can also make offers under this provision but will only be entitled to fees if the plaintiff’s judgment is at least twenty-five (25) percent less than the defendant’s offer.

It is important to have an attorney review and draft contracts when possible to help determine whether an attorney’s fee provision is right for your situation. It is equally as important to have an attorney handle the bringing or defending of any claim to make the determination of whether or not you will be able to recover your attorney’s fees if you prevail. Importantly, litigants must request attorney’s fees in the initial pleadings or they waive the ability to recover such fees. Once a party prevails that party must move for its attorney’s fees within thirty days or again it will lose the ability to seek them. Many of these mechanisms involve significant judicial discretion as to entitlement and amount.

J. Matthew Kelly is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Alternative Ways for Charitable Giving After the Tax Cuts and Jobs Act of 2017

BY: Kevin R. Albaum, ESQ.
Clark, Campbell, Lancaster & Munson, P.A.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (TCJA) into law.  Most of the changes went into effect on January 1, 2018, and do not impact 2017 taxes. The individual tax changes are favorable to many with the standard deductions being raised in 2018 ($12,000 for an individual. $13,600 for 65+ individual; $24,000 for married couple; and $26,600 for married 65+ couple) and most individual income tax rates being lowered a few percentage points. Further, the child tax credit is doubled from $1,000 to $2,000 and the estate tax threshold was raised ($11.2 Million for an individual or $22.4 Million for a married couple).

Some believe that because of TCJA that the number of households claiming a Charitable deduction for an itemized gift to non-profits organizations will shrink. As result of the increased standard deductions, many taxpayers may not be able to claim an itemized deduction for their charitable gifts.  Although the standard deduction has been increased, there are planning opportunities to still receive a tax benefit for gifts to charities.

The question becomes should you stop donating to your favorite charities that depend on your donations for their day-to-day operations just because it may no longer be as tax-advantageous? No, as many people give to help benefit the charitable organizations they care about and not just for potential tax benefits. However, you may consider other alternative charitable giving opportunities.

An individual over age 70 ½ can transfer up to $100,000 per year from their traditional IRA (not Roth) to charity (the distribution can count as the Required Minimum Distribution) and if they follow the rules for a qualified charitable distribution, the gift will not count as taxable income to the individual.  However, the distribution must go directly from the individual’s IRA to the charity to be transferred income tax-free.  For example, if your RMD is $50,000 in a given year, you may direct all of the RMD, a portion of it or up to $100,000 from your IRA be distributed to a charity.  If you direct $5,000 of the $50,000 RMD payment to a charity, you will recognize only $45,000 of income.

If you are interested in using your IRA to give to a charity, contact your plan administrator that manages your IRA and explain to them that you would like to make a qualified charitable distribution and they will help assist you in the transaction.  It is very important not to receive your distribution first and then give the money to the charity (after you received it) as this will not qualify as a qualified charitable distribution of your IRA to a charity and will make the distribution subject to individual income tax.  You can give up to $100,000 of your IRA to the charitable organization and name as many organizations you wish to receive the qualified charitable distributions (For example, you may give $50,000 from IRA to 5 different charities).

An individual may also bundle their contributions all at once, so they can benefit from a larger itemized deduction in certain years instead of making smaller gifts each year.  If you do not wish for a charity to receive a lump sum gift in a given year, you may give the large sum to a donor advised fund (DAF).  Often this large charitable gift is not given to the charity directly but instead given to a DAF.  By using a DAF, you claim a large itemized deduction in one year, and the DAF will distribute the money to your favorites charities over time as you direct them.  There are numerous charitable organizations and financial companies that can assist to establish and manage the DAF for you.   DAFs are a good option for those that want to continue to make charitable donations but also obtain the income tax benefits while doing so.

Before setting up a DAF or planning IRA distributions to your favored charities, it is recommended that you contact either a qualified tax professional or an attorney to advise you on obtaining the tax benefits that you are seeking.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.

Wrap-Up of 2018 Legislative Changes for Community Associations

By Dan Rich

On March 23, 2018, Governor Rick Scott signed House Bill 841 into law. House Bill 841, which shall take effect on July 1, 2018, makes numerous alterations to a number of statutes regulating certain community associations (i.e. cooperatives, condominiums and homeowners associations; however, House Bill 841 does not amend Chapter 723, which relates to mobile home parks). Below are some of the highlights of House Bill 841:

Fines and Suspensions: A fine approved by the fining committee of a homeowner, condominium or cooperative association is due five (5) days after the date of said committee meeting at which the fine was approved. Sections 718.303(3)(b), 719.303(3)(b) and 720.305(2)(b), Florida Statutes. If the fine is not paid after the five (5) days said fine can be assessed for each day the violator continues to not comply with the association’s governing documents. Once the fine reaches a total of one thousand dollars ($1,000), the association can then proceed to place a lien on the violator’s property in accordance with Florida law.

Notice of Meetings: A homeowners association, or HOA, is allowed to give notice by email to any parcel owner who has previously provided written consent and an email address to the HOA for the purpose of receiving notices. Section 720.303(2)(c)1., Florida Statutes. Condominium and cooperative associations were previously permitted to do so.

Official Records: A condominium association must permanently maintain the following documents since inception of the association (as opposed to the general requirement of seven (7) years of retention): (i) a copy of the articles of incorporation, declaration of covenants, bylaws and rules and regulations, if any, of the association; (ii) meeting minutes; and (iii) a copy of all plans, permits, warranties and other items provided by the developer at turnover. Section 718.111(12), Florida Statutes.

Board Member Communication: Members of the board of directors for cooperative associations and HOAs are permitted to utilize email as a means of communication; but, a director may not cast a vote on an association matter via email. Sections 719.106(1)(c) and 720.303(2)(a), Florida Statutes.

Term Limits: The provision that a condominium board member may not serve more than four consecutive 2-year terms was repealed by House Bill 841. Now, condominium board members may not serve more than eight (8) consecutive years, unless approved by a two-thirds (2/3) vote of unit owners or there are not enough eligible candidates to fill said vacancy. Section 718.112(2)(d)2., Florida Statutes.

Electric Vehicles: Condominium associations are now permitted to authorize the installation of charging stations for electric vehicles in limited common element parking spaces at the expense of the unit owner to which the parking space is assigned. Additionally, condominium associations may not prohibit unit owners from installing electric vehicle charging stations within limited common element parking spaces, provided that such installations must comply with Section 718.113(8), Florida Statutes.

HOA Elections: If an election is not required by the association’s by-laws because there are fewer or an equal number of candidates than the number of vacancies on the board to be filled, and nominations from the floor are not mandated by the association’s by-laws, then write-in nominations are not permitted and the candidates will commence service on the board regardless of whether a quorum is attained at the meeting in which the directors are elected. Section 720.306(9)(a), Florida Statutes.

Modifications: If a condominium declaration does not outline a procedure to approve material alterations to condominium property, then approval by seventy-five percent (75%) of the voting interests must be obtained prior to the material alterations to the property may begin. Section 718.113(2), Florida Statutes.

In addition to the provisions highlighted above, House Bill 841 contains other changes to Florida’s community association statutes.  Persons who reside or own property within a homeowners, condominium or cooperative association should take time to review House Bill 841. The full text of this Bill is available for free on the Florida Legislature’s website (Link: https://www.flsenate.gov/Session/Bill/2018/00841).  If you have questions about the new laws or how they may impact you or your community, you should consider consulting an attorney who is knowledgeable in Florida community association law for guidance.

What Employers Need to Know about the Family & Medical Leave Act

By: J. Matthew Kelly, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

The Family & Medical Leave Act (FMLA) is a federal law which seeks to balance the demands of the workplace with the needs of the family by entitling employees to take reasonable leave for medical reasons, birth or adoption of children, and to care for family members with a serious health condition.

Not all employers are subject to the requirements of the FMLA. For a private employer to be a covered employer under the FMLA the employer must employ 50 or more employees in 20 or more workweeks in the current or previous calendar year. Different requirements apply to public employers and schools.

For an employee to be eligible for leave under the FMLA the employee must (1) work for a covered employer, (2) have worked for the employer for at least 12 months as of the date that the employee is to take leave under the FMLA, (3) have worked at least 1,250 hours for the employer in the preceding 12-month period from the date the employee is to take leave under the FMLA, and (4) work at a location where the employer employs at least 50 people within 75 miles of the employee’s worksite.

Once it is determined that an employee is entitled to leave under the FMLA, an eligible employee may take up to 12 workweeks of leave within a 12-month period. An employee is entitled to take leave in the following situations: (1) the birth or adoption of child, (2) to care for a family member who has a serious health condition, (3) for an employee’s own serious health condition, and (4) for certain circumstances relating to a family members military service. In some circumstances, leave can be extended for military caregivers.

Important Considerations for Employers

  • Covered employers are required to post and keep posted, in conspicuous places, a poster setting forth excerpts from, or summaries of, the pertinent parts of the FMLA. Additionally, a general notice regarding the FMLA must be included in employee handbooks or provided to new hires.
  • If an employee requests leave under the FMLA the employer must provide the employee with notice concerning his or her eligibility for FMLA leave and his or her rights and responsibilities under the FMLA.
  • If an employee’s leave is designated as FMLA leave the employer must provide to the employee a designation notice stating that the leave qualifies as FMLA leave, outline the requirements of the employee while on leave, and, if known, the amount of leave that will be deducted from the employee’s entitlement to FMLA leave.
  • In certain situations, an employer is entitled to request a certification from the employee which supports the employee’s need for leave under the FMLA. The certification process allows the employer to obtain information regarding the employee’s request for leave.
  • In certain situations, employers may require employee to take accrued paid leave like sick or vacation leave to cover the requested FMLA leave.
  • Employers must maintain the employee’s coverage in group health plan when on FMLA leave in the same manner as when the employee was not on FMLA leave.
  • When an employee returns from FMLA leave the employee must be put back in to the same position as when the leave commenced or be placed in an equivalent position with equivalent payments and benefits.
  • Importantly, an employer can be liable for various damages, including wages, salary, employment benefits, costs, and attorney’s fees, if the employer interferes, restrains, or denies rights provided for under the FMLA.

If your company is facing an issue related to the FMLA or wants to ensure compliance with the standards set forth in the FMLA, contact an attorney immediately to protect your rights as the FMLA is a complex federal law with many nuances.

J. Matthew Kelly is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

HOW TO AFFORD LONG TERM CARE

By Kevin R. Albaum, Esq.
A transition from a senior’s home to an assisted living facility or nursing home is never easy for a family. What makes matters even more difficult is for the senior’s spouse or children to have to bear this new large monthly expense for an unknown amount of time. My best advice is to explore your options to help pay for care immediately before continuing to cut check after check to pay for the senior’s care. Alternative options to pay for care are as follows: Long Term Care Insurance, Medicare, Medicaid, and Veteran’s benefits.

Long Term Care Insurance: Ask the Senior if they have long-term care insurance. If they say no, then ask about life insurance (as sometimes life insurance policies have a rider added to them which can cover long-term care needs). Be sure to review all such policies in depth to see if benefits are available and if so, what the triggering event is for the insurance company to begin paying out the benefits. Long Term Care benefits usually do not begin to pay out until a person can prove with medical records that they are in need of assistance with activities of daily living (“ADLs”). ADLs are used to gauge a person’s level of functioning and generally include the following: bathing, getting dressed, transferring, eating, continence and toileting. If assistance is needed with enough ADLs, an insurance company will then begin paying out benefits in accordance with the insurance policy guidelines. The benefits can often be used to pay for home care, assisted living care, or nursing home care.

Medicare: Medicare does not generally pay for assisted living care. However, if a person requires skilled nursing care, Medicare part A generally covers up to 100 days of skilled nursing care for any new benefit period (A person gets a new benefit period if at least 60 days has passed since the person last received care in hospital or skilled nursing facility). For a person to receive the full 100 days of Medicare coverage, they also must be able and willing to participate in the prescribed therapies and must be progressing in treatment. The first 20 days (of the 100 total days) are paid by Medicare in full. Days 21-100 will require a co-pay around $165 daily and Medicare will pay the rest (the co-pay amount varies if a person has a Medicare Advantage plan or supplemental plan). After day 100, Medicare skilled nursing care benefits end and the senior (or their family) will have to pay the entire cost of skilled nursing care with no further help from Medicare. Therefore, Medicare is not a long term solution to paying for long term care.

Medicaid: Medicaid benefits can help to pay for home care, assisted living, and nursing home benefits in Florida. An applicant must be assessed and determined to be disabled and in need for the benefits they are requesting. To become financially eligible for benefits, generally, a person must have countable assets under $2,000 and a monthly income under $2,250. Some assets are non-countable for Medicaid purposes such as the applicant’s home, one (1) car, and prepaid burial arrangements. There are restrictions on the applicant’s spouse’s assets as well. If a person has questions regarding their eligibility or how to apply for the different Medicaid programs, an elder law attorney should be consulted.

There is usually a waiting list before a person can apply for home care and assisted living benefits in Florida, however, there is no wait if a person needs to apply for nursing home benefits.

Medicaid benefits are only retroactive for up to a maximum of three (3) months before application date, so it is important to move quickly to apply for benefits if a person expects to reside in assisted living or nursing home indefinitely. All nursing homes take Medicaid nursing home benefits, however, only about fifty percent (50%) of home care companies and assisted living facilities in Polk County, take Medicaid benefits. Applying for and being granted benefits for either Medicaid program often leads to substantial monthly saving for the senior.

Veterans Benefits: A Veteran, their spouse, or surviving spouse may be eligible to receive Aid & Attendance through the Department of Veterans Affairs (“VA”). To be eligible for this pension program, a person must have limited assets and income, and be permanently or completely disabled according to the VA’s disability requirements. To be eligible for this pension, the veteran must also have been discharged under a condition that was non-dishonorable and served ninety (90) days of service with at least one (1) day in one of the following wars: WWI, WWII, Korean War, Vietnam War, or Persian Gulf War.

The pension comes in the form of additional income each month to the senior and is direct deposited into the recipient’s bank account and can be used to pay a caregiver in the home, assisted living facility, or for skilled nursing care. There are also State Veterans Home that provide nursing home and other services to Veterans. It is important to contact the VA to determine eligibility and availability for such programs.

If you or a family member wants to further explore options to pay for long-term care, it is recommended to discuss your options with an elder law attorney who can help identify possible housing options and benefit programs that may be available in your specific situation.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.

What happens when nobody wants to serve on an association’s board of directors?

By. Dan Rich

Serving on a homeowner association, or HOA, board of directors is a thankless job that often fails to receive the recognition it rightfully deserves. Sadly, communities sometimes experience a dilemma where the old board members have served to their term limit and no other volunteers are interested in stepping up to the plate to volunteer their time and effort as a replacement board member. This creates two legal issues, the first is whether the old “termed out” board members can stay on the board as well as what happens if nobody is willing to serve on the HOA board moving forward.

Under Florida law, HOA directors are entitled to serve for their term and until their successor is duly elected (Emphasis added). Essentially, what this means is that if no new directors are willing to volunteer Florida law permits those people who are already on the board to continue to serve until a replacement steps forward to take their position. With that being said, you may be asking yourself whether that means that an existing board member is ever able to resign or step down from their position as a board member? The answer is yes, any board member at any time can express their intent to resign as a director and/or an officer but said resignation may not be without consequences because a HOA board needs officers and a quorum to conduct day-to-day business.

The definition of a “quorum” will change depending on the language of your governing documents, but the most common quorum definition is generally fifty-one percent (51%) director participation. For example, if an association is made up of a five-member board, a quorum would only be established after three of the board members decided to act. Failure to have enough directors to meet the definition of a quorum under your governing documents will prevent the HOA from being able to hold meetings and conduct meaningful business; however, resignations can also have a grave impact if the person stepping down is not only a director, but also an officer.

Officers of the board include the President, Secretary, Treasurer and sometimes Vice-President. The roles and duties of those offices are generally outlined in your association’s governing documents and provide each officer with certain abilities and powers. If a director, who is also an officer, decides to resign from the board not only will said resignation impact the ability to establish a quorum, but the vacancy may also impact the association’s ability to sign checks to pay third parties, access the HOA’s bank account or to enter into contracts with vendors and other providers.

Up to this point all scenarios have assumed that at least one director is willing to serve on the board, but what happens when all directors have resigned and nobody is willing to replace them? Section 720.3053, Florida Statutes, provides that “if an association fails to fill vacancies on the board of directors sufficient to constitute a quorum in accordance with the bylaws, any member may give notice of the member’s intent to apply to the circuit court within whose jurisdiction the association lies for the appointment of a receiver to manage the affairs of the association.”

There is a particular form for the notice, which is provided in Section 720.3053, that states that the petition to the court will not be filed if the necessary vacancies to establish a quorum are filled with thirty (30) days after the notice is posted or transmitted to all owners. The Florida legislature added this provision in hopes that the notice will conjure up enough volunteers willing to serve on the board to prevent the appointment of a receiver. If the 30 day window expires and nobody steps forward, the member who transmitted the notice can then petition the court for a receiver to run the association.

Unlike customary directors who take the position without compensation, Section 720.3053, provides that the receiver is entitled to receive a salary and reimbursement of all costs and attorneys’ fees payable from association funds. It also goes on to say that the “association shall be responsible for the salary of the receiver, court costs and attorneys’ fees.”

The difference between “free” volunteer directors and paid receivers with their accompanying fees can be a large number that has a drastic impact on the reserves of an HOA. Monies reserved for common area maintenance, repairs and just general upkeep could be directed to pay the receiver’s salary to run your community. Using association funds to pay a receiver is never a good idea as funds being diverted away from general upkeep and repairs will inevitably take a visible toll on your community. To prevent receivership from happening, I would encourage everyone who lives in a HOA and is even slightly pondering volunteering as a director to strongly consider stepping up and serving as a director the next time your community has an election. Your participation may have a greater impact than you ever realized before!

Dan Rich is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Harassment in the Workplace

Title VII is a federal law which seeks to address discrimination and harassment in workplaces. Title VII regulates employers with 15 or more employees. Title VII prohibits harassment of individuals based on the following protected characteristics: race, color, national origin, sex, religion, and some other factors.

What constitutes harassment?

For an employee to bring a harassment claim under Title VII, the employee must possess a protected characteristic as identified above, be subject to harassment, the harassment must be related to a protected characteristic as identified above, and the harassment must be severe enough that it resulted in a change in the terms or conditions of the employee’s employment or created a “hostile” work environment. Finally, there must be a basis for holding the employer liable.

A “hostile” work environment exists where harassment unreasonably interferes with the employee’s performance or creates an intimidating, hostile, or offensive environment for the employee. The conduct of the harasser must be severe and pervasive in order for an employee to establish a hostile work environment. The factors that courts analyze to determine if conduct amounts to a hostile work environment are the frequency of the conduct, the severity of the conduct, whether the conduct was physically threatening or humiliating, and whether the conduct unreasonably interfered with the employee’s job performance. The factors are analyzed through a mixed objective and subjective approach. The conduct must be subjectively perceived by the employee and the conduct must be judged objectively under a reasonable person standard.

It is important to note that employees are not protected by Title VII against general rudeness, horseplay, or even workplace flirtation. Title VII is not a general civility code and is meant to protect employees against conduct that involves patterns or allegations of extensive, long lasting, unaddressed, and uninhibited threats or conduct.

 

How should employers handle harassment?

 To limit liability for harassment claims, employers should take reasonable care to prevent harassment through training and written policies, diligently investigate any claims of harassment, and correct any reported harassment or harassment about which the employer becomes aware. An employer can minimize liability for harassment committed by a supervisor if it implements and takes the above steps in a reasonable manner. It is also important to have written policies in place and to have the policies reviewed periodically by an attorney ensure that the policies comply with current law. If you are an employer that has a written policy it is recommended to have an employee sign and acknowledge receipt of the policy.

Employers become liable for non-supervisor harassment if they knew or should have known of the harassing conduct, but failed to take prompt remedial action.

Both instances of harassment, whether supervisory or non-supervisory, require that the employer quickly and reasonably respond to any allegations of harassment. Employers can limit their liability by taking corrective action that is immediate, appropriate, and reasonably likely to stop the harassment. Examples of actions to limit liability include, confronting and counseling the alleged harasser in a prompt manner, disciplining the alleged harasser if warranted, adjusting schedules or transferring the alleged harasser to end the alleged harassment, and by being committed to training and policies which prevent harassment.

If an allegation of harassment has been brought against you as an employer, contact an attorney immediately to protect your rights.

Is Your Minor Child Protected if Something Happens to You?

By Kevin R. Albaum

My wife and I had our first child in November of last year (Nina). Our first order of business, like many others, was to purchase more life insurance coverage. We thought that by purchasing more life insurance, Nina would be provided for financially and thus protected if we were to unexpectedly die. However, in order to adequately provide for and protect a minor child in the event of both parents dying, purchasing life insurance should be just the first piece of a puzzle.

Who Gets Custody of the Minor Child?
If both parents are incapacitated and/or deceased, under Florida law, any family member or other person interested in the welfare of the minor child can petition the local probate court to become the guardian of the person and guardian of the property for the minor child. This often leads to legal fights (with a minor child caught in the middle) between aunts, uncles, godparents, and grandparents regarding who the court will choose to raise the child and manage their inheritance until the minor child turns eighteen (18).
If avoiding that potential family feud is desired, parents can proactively name a preneed guardian for their minor child in either their last will and testament or in a declaration of preneed guardian document that is filed with the local clerk of court during the parent’s lifetime. Not only can parents name the preneed guardian but they can also expressly bar someone from ever becoming the guardian of the minor child. By naming a preneed guardian, if a guardianship case is ever initiated, a rebuttable presumption arises that the person nominated by the parents as the preneed guardian is entitled to serve as the guardian for the minor child.

Don’t Accidentally Give The Minor Their Inheritance at Eighteen 
Under Florida law, a minor child cannot have more than $15,000 (in most situations) unless those funds are held in a guardianship of the property. When a guardianship of the property is in existence, there are legal expenses, court oversight of the spending, and the funds are often required to be held in restricted depositories. Additionally, a guardianship of the property terminates when a minor child turns eighteen (18). This means the minor child receives their entire inheritance on her 18th birthday.

Many parents plan to avoid the expense of a guardianship of the property and/or want to protect their children from accessing large amounts of money at age eighteen (18). This can be accomplished by crafting a last will or revocable trust to have an additional testamentary trust built into it that would hold the minor child’s funds in trust for a longer period of time. The parents also name a trustee (individual, professional, trust company) to manage the funds and make distributions to the minor child. If assets are structured to enter a trust for a minor child, they will not be subject to guardianship. The trust can be set up to hold the funds well beyond the time the minor child reaches the age of majority and the trustee will not have to distribute the funds to the minor child until the age the parents desire. I often draft testamentary trusts that terminate at age 25, 30, or 35 to avoid an 18-year-old receiving their entire inheritance too young.

If you desire to name a preneed guardian or set up your estate plan to protect your minor child, it is recommended to discuss your options with an estate planning attorney to determine the best way to structure the estate plan to meet your specific goals.

Adverse Possession & Squatter’s Rights

By: Clark, Campbell, Lancaster & Munson, P.A.

 Q: A few years ago my neighbor put up a fence, and I think it encroaches onto my property by a few inches.  Does my neighbor have a claim for adverse possession for part of my land?

 A:  There is an old saying that possession is 9/10ths of the law, but oh what a difference 1/10th can make.  Before proceeding you should obtain an updated survey of your property by a licensed surveyor to confirm your neighbor’s fence is indeed encroaching onto your property.

In order for your neighbor to claim adverse possession of part of your land, certain requirements must be satisfied.  Adverse possession may be claimed with color of title, such as pursuant to a defective deed, or without color of title, such as with a substantial enclosure like a fence.  Moreover, the person claiming adverse possession bears the burden of proof, and adverse possession must be proven by clear and convincing evidence.

For your neighbor to claim adverse possession, your neighbor’s possession of your property must be open, notorious, exclusive, and continuous.  What constitutes open and notorious is fact intensive.  The use must be with the owner’s knowledge or so open, notorious, and visible that knowledge of the use by the neighbor is imputed to the owner.  For example, your neighbor put up a fence, started using part of your land for a garden, and tends to that garden every day.

To have a claim for adverse possession, the possession must be exclusive such that your neighbor cannot possess the property with you or the public.  However, two or more people may claim title by adverse possession of another’s property and, if successful, would take title as tenants in common.

Your neighbor would also have to show that your neighbor’s possession has been continuous, consecutive, and unbroken for a period of 7 years.  Any break in the 7-year period is fatal to the adverse possession claim.  However, in Florida, under the doctrine of tacking, an adverse possessor may add his or her period of possession to that of a prior adverse possessor to establish continuous possession for the 7-year period.   Therefore, if you had a previous neighbor who initiated the adverse possession, your current neighbor may benefit from the earlier period of adverse possession as long as the periods are consecutive, continuous, and unbroken.

However, even if your neighbor satisfies the requirements above, an adverse possessor must also pay all outstanding taxes on the portion of the property being adversely possessed for 7 years and notify the property appraiser of the adverse possession pursuant to statute, and this is usually that 1/10th difference where an adverse possession claim fails.  Once the property appraiser receives notice of adverse possession, the property appraiser is then required by law to notify the property owner of record that the property is subject to an adverse possession claim.

Therefore, if you’re concerned your neighbor might have a claim for adverse possession, you may want to be a good neighbor and kindly ask your neighbor to move his fence if your survey indicates it encroaches onto your property.  If your neighbor still refuses to move his fence, then you should consider contacting an attorney and taking legal action if you suspect your neighbor may have a claim for adverse possession.

What If A Deceased Person Owes You Money?

By Kevin R. Albaum, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

When a person owes you money and dies, all is not necessary lost and the funds can still be recovered at times from the deceased person’s probate estate if proper procedure is timely followed by you as the creditor.  If a person dies and has assets that are subject to probate administration, any creditor of the deceased person may prepare a written “Statement of Claim” in an attempt to recover from the deceased person’s estate.  The Statement of Claim is then filed in the probate case of the deceased person. The Statement of Claim should include the following information: the basis of the claim; the name and address of the Claimant (and their attorney, if any); the amount of the claim; when the amount is due or will become due; if the debt is contingent or unliquidated; and if the debt is/is not secured.

When a Statement of Claim is timely filed in a probate case, the person administering the probate case (or their attorney) will have to resolve the claim by either: paying the claim, objecting to the claim, paying a portion of the claim, or not paying any of the claim if the estate has insufficient assets to pay the claim. If a Statement of Claim is not timely filed, the claim will be forever barred. Therefore, it is very important to understand the legal deadlines of when creditor claims are time barred and to act fast to file a Statement of Claim when a person who owes you money dies.

What If There Is No Probate, Can I Still File A Statement of Claim?

If no one comes forward to start a probate case, a Statement of Claim cannot be filed as there is no one in place to resolve the deceased person’s debts.  However, a document known as a “Caveat” can be filed with the probate court in the county where the deceased person resided at the time of their death.  The Caveat is a written notice to the court that acts as a bookmark so that the person who filed the Caveat, known as the “Caveator”, is notified if any probate case is filed in the deceased person’s name. When a creditor files a Caveat, the Clerk of Court is required to notify the creditor if a probate case is initiated and to provide the creditor with contact information for the person who initiated the probate proceedings.  Generally, after a creditor is notified of a probate case being opened, at that time, the Statement of Claim would then be prepared and filed in the probate case by the Caveator.

A Caveat is not just for creditors but also can be used by any interested person who is apprehensive that a probate case will be administered without their knowledge or any family member of the deceased person who is concerned they will not be notified by the rest of the family when a probate proceeding occurs.

If a deceased person owes you money, it is recommended to discuss your options with a probate attorney to determine whether it makes sense to file a Statement of Claim or Caveat and whether it is likely you would be able to recover from the deceased person’s estate.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.