Archive for the ‘Thursday Reports’ Category

The Thursday Report – 10.24.13 – Decanting, Elective Share Techniques, BP and Spicy Brownies

Posted on: October 24th, 2013

Decanting with Diane Zeydel – A FREE Webinar on Tuesday, November 5th at 12:30 p.m.

Colonel Sanders for Senate?

BP – Must Expenses Correspond to Revenue? Monday’s Judicial Order

The Lethal Weapon – Does your Child Drive? A Parent’s Guide to Teenage Driving

Physician Survey Report

Depositions – A Question and Answer Guide

New Elective Share Planning Technique, an article by Tom Ellwanger

The Estate Planner’s Guide to the Right to Die

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Decanting with Diane Zeydel – A FREE Webinar on Tuesday, November 5, 2013 at 12:30 p.m.

Zeydel

On Tuesday, November 5, 2013 at 12:30 p.m., noted attorney Diane Zeydel will be joining Alan Gassman for a webinar on Decanting Irrevocable Trusts – Giving an Old Trust a Facelift in a free 15 minute program “that will cut to the chase on what the present situation is on decanting and trust reformations in Florida”.

Diane will speak on the recent Morse v. Kraft case and how it affects decanting and reformations of irrevocable trusts in Florida.

Diane is clearly one of the most talented, well published, and influential trusts and tax lawyers in the country, and we are honored to have her time and attention in this area.  You can sign up for this free 15 to 20 minute webinar by clicking here.

Please also feel free to send any questions that you might have to agassman@gassmanpa.com and we will be sure to ask Diane to address these during her discussion.

If you would like to have any other individuals or topics on our webinars please just let us know.

Please also keep in mind that we have 2 Bloomberg BNA webinars coming up that should be of interest.

On October 30, 2013 at 12:30 we will be discussing year-end tax planning and features Alan Gassman, Ken Crotty and Chris Denicolo.

The other webinar on November 20, 2013 at 12:30 p.m. is on planning with self-cancelling installment notes and private annuities after the recent Davidson and IRS CCA, and features Jerry Hesch, Larry Katzenstein, Ed Woknaroski, (who wrote the BNA Portfolio on Self-Cancelling Installment Notes and Private Annuities), Ken Crotty and Alan Gassman.

You can receive a $100 discount on either or both of these programs by using the top secret, highly confidential and extremely complicated sign-up code of “Gassman7″.  If it was Gassman7 it would be ___ characters long.

Colonel Sanders for Senate?

Colonel Sanders for Senator

We thought we were joking a few weeks ago when we showed Colonel Sanders indicating that he would vote as an independent (click here to see).  One of our students (on the clock and without us asking) found the below photo of Colonel Sanders and his bid to run for state senate before he founded Kentucky Fried Chicken.

 We are glad that he didn’t win, or we never could have started the Thursday Report.  Since then there have been buckets of Thursday Reports read by many advisors and clients who have thereafter had to wipe grease off of their hands.  Too bad he didn’t put herbs and spices in brownies.  He would have been way ahead of his time.

BP Update – Last Friday’s Decision by the Federal District Court with Respect to Whether to Require the Accrual Method of Accounting to Be Used for All BP Claims

While the Claims Administrator and appellate proceedings have been permitting the cash method of accounting to be used for determining BP claim eligibility and payments, the recent 5th Circuit Court of Appeals order to the federal trial judge to evaluate the matching of revenue and expenses to determine an appropriate process resulted in last Friday’s order that the Claims Administrator would, within 7 days (which runs tomorrow) provide “a declaration outlining the criteria. . .to determine whether:

  1. A claim is “supported by sufficiently-matched, accrual-basis accounting”. . .
  2. The matching of revenues and expenses is or is not an issue with respect to the Business Economic Loss.

Many of us take this to mean that going forward businesses and individuals who are on the cash basis of accounting will need to show that revenues and expenses are appropriately timed in a manner that does not distort economic reporting.

This is not good news for most BP claimants, or for those of us involved in representing BP claimants, but some number of BP claimants will actually be benefited by this type of matching analysis.

The trial court judge obviously does not have a background in accounting.  The accrual method of accounting is generally considered the best way to match revenues and expenses, and the judge refers to a requirement of having “properly-matched accrual-basis records.”  It is hard to think of a situation where accrual-basis accounting would not be “sufficiently matched”, but stay tuned as we keep you posted on what the Claims Administrator comes up with.

In addition, the 5th Circuit Court of Appeal has a hearing scheduled for November 4th to hear a request that has been made to set aside the entire settlement.   We do not expect that the settlement will be set aside and we do expect that BP will continue to pay out billions of dollars in damages as businesses and individuals continue to file claims.

Claims will probably only accelerate up through the April 1, 2014 claims deadline, which we do not expect will be extended.

We thank Trenam Kemker lawyer John Goldsmith and Dean Kent for a very interesting and practical discussion of “tricks and traps for CPA’s calculating BP Claims” last night in Tampa.

This presentation will be updated and repeated in downtown Tampa at the offices of the Trenam Kemker Law Firm in mid November.

We will continue to keep you posted on developments in this area.

To view a webinar on BP Oil Spill Claims please click here.

The Lethal Weapon – Does Your Child Drive?

A Parent’s Guide to Teenage Driving

Car 

Time after time we are hired by parents whose minor child has gotten into an accident while driving the parent’s car or driving with the parent’s consent.

There is a lot of confusion over whether the liability emanates from what is signed when the learner’s permit is received or what is signed when the actual driver’s license is received.  Be very careful and make sure clients know about this.

Third Year Stetson Law student, India Ingram, has done a great job writing the following:

The best way to keep children at home is to make the home atmosphere pleasant, and let the air out of the tires.  ~Dorothy Parker

The civilized man has built a coach, but has lost the use of his feet. ~Ralph Waldo Emerson

A tree never hits an automobile except in self-defense. ~American Proverb

Two wrongs don’t make a right, but three lefts do.  ~Jason Love

Getting a driver’s license is a rite of passage into adulthood for most teens.  Many teens spend hours dreaming of all the things they will do when they can finally drive on their own, everything from taking the girlfriend to KFC to driving off to Vegas. However, this new found freedom comes with a lot of responsibility.  Although, teenagers are giddy with excitement to hit the road, parents often have mixed feelings.  Many of their concerns are warranted and pragmatic. Under Florida law, a parent may be liable for their teen’s willful or negligent misconduct behind the wheel.

In Florida, the first step to freedom is obtaining a learner’s permit.  To obtain a learner’s permit you must be at least 15 years old and have completed a Traffic Law and Substance Abuse Education course.  Once at the Department of Motor Vehicles (DMV), the teen must pass a written exam, vision, and hearing test.  The final step to the freeway is having a parent sign the Parental Consent Form in the presence of a driver license examiner.

In Aurbach v Gallina, 753 So.2d 60, 65 ( Fla. 2000), the Florida Supreme Court held, a parent can only be held vicariously liable for his or her minor child’s negligent operation of a vehicle, absent any property value in the vehicle, i.e. ownership, if the parent signed the Parental Consent for a Driver Application of a Minor form, pursuant to Florida Statute 322.09.  By signing the parental consent form, the parent or guardian permits the minor to obtain a driver’s license and assumes the obligations imposed by 322.09. Under 322.09, any negligence or willful misconduct of a minor when driving shall be imputed to the parent or guardian who signs the application of such minor for a permit or license, and the parent or guardian shall be jointly and severally liable with such minor for any damages caused by such negligence or willful misconduct.

After a year of driving with a licensed driver at least 21 years old, your teen can obtain an operator’s license. To obtain an operator’s license the teen will have to take a driving test and a parent or guardian has to certify that the teen has had 50 hours of driving experience (10 hours of which were at night). The Parental Consent form that was signed when receiving the learner’s permit remains in effect and expires when the teen turns 18 or with a written request to cancel the minor’s license.

However, a parent’s liability may not end when the child reaches the age of 18. Florida also recognizes the “dangerous instrumentality doctrine.” Under the dangerous instrumentality doctrine, an owner who gives authority to another to operate the owner’s vehicle, by either express or implied consent, has a non-delegable obligation to ensure that the vehicle is operated safely. Hertz Corp. v. Jackson, 617 So. 2d 1051, 1053 (Fla. 1993).If a child that has reached majority drives a car that is titled in the parent’s name, then the parent may be liable for the actions of his or her adult child when behind the wheel. To avoid liability once your teen has reached majority, it is best to have the vehicle your teen is driving titled in his or her own name.

Automobile ownership liability can be limited by Florida Statute Section 324.021(9)(b)(3), which basically indicates that unless the owner of a vehicle has been negligent in entrusting the car to the driver, there will not be liability for negligence of the driver as long as the driver has at least $500,000 of liability insurance.  This does not apply when an accident occurs outside of Florida, and will not shield the parent from the liability that will otherwise apply as described.

According to the Insurance Institute for Highway Safety, per mile driven, teen drivers have crash rates 3 times those of drivers 20 and older. Teen drivers are less experienced to deal with uncertainty on the road and more likely to engage in high-risk driving habits such as cell phone usage, high speeds, and having multiple passengers. Parental involvement can contribute to teenage driving awareness. Parents can limit liability by:

Not allowing their teen to obtain a driver’s license until the age of 18.

  • Investing in sufficient amounts of insurance.
  • Having their teen purchase and title his or her own vehicle.
  • Having a limit on the number of passengers allowed.
  • Discussing the dangers of cell phone use while driving.
  • Enforcing a curfew.
  • Discussing the dangers of alcohol use

New Elective Share Planning Technique, an article by Tom Ellwanger

 Ellwanger

A recent decision of Florida’s Fifth District Court of Appeal offers another alternative in planning for the Florida elective share.  The case is Dinkins v. Dinkins, 120 So.3d 601 (Fla. 5th DCA 7/26/2013).

Before getting to that case, let’s review what the elective share is and other planning devices which have existed.

The Elective Share

Florida allows individuals to disinherit a spouse, but a spouse may opt to take 30% of a deceased person’s assets—the “elective share”—unless the spouse has waived that right in a pre-marriage or post-marriage agreement.  See §§732.201 et seq., Florida Statutes.

Originally this right was limited to 30% of the probate assets—those assets in the decedent’s name alone.  It did not include joint assets, such contract rights as life insurance policies or retirement plans, assets held in a living trust, or assets gifted away shortly before death.  So, traditional planning for the client who wished to block the elective share involved transferring assets to a living trust or other form not reached by the elective share law.

The 1999 Florida legislature ended that game by broadening the elective share.  Since then, the 30% computation has included probate and non-probate assets; the cash value of life insurance policies; and even amounts gifted within one year of death.

What planning options, short of divorce, are left for the client who wishes to defeat or at least reduce a spouse’s elective share rights?

Post-Marriage Waiver

A spouse can waive elective share rights in a valid post-marriage agreement.  Under Florida law, the spouse must receive a “fair disclosure” of the client’s estate.  That and other legal requirements are set out in §732.702.

Of course, a client’s bargaining power after the marriage is likely to be considerably less than it might have been before the marriage.  Still, it might be possible to offer some incentives in such an agreement in order to secure an elective share waiver.  While Florida law does not require consideration for a post-marriage agreement to be valid (other than the mere execution of such an agreement), the law does not prohibit such consideration.

Controlling the Funding

Section 732.2075, Florida Statutes, prescribes the order in which a decedent’s assets are applied to satisfy an elective share.  However, the first sentence of that section permits the terms of a Will or a Revocable Trust Agreement to override the statutory scheme.  So, a client who cannot defeat the elective share can at least control what assets will pass to a spouse who makes the election.

Often a client is not necessarily concerned as much with defeating the elective share as making sure that the spouse does not wind up with the family business, the family farm, or the beach house which has been in the family since 1925.   Overriding the statutory scheme can help ensure that, if the client has sufficient other assets.

A client who does not have sufficient other assets may be able to at least deprive the spouse of control of an asset.  Suppose a business is recapitalized with voting and non-voting interests, and the non-voting interests are to be used to fund the elective share.

Of course, the same valuation arguments that apply for estate tax purposes are going to apply for computing the value of property for elective share purposes.  Section 732.2095(2) calls for the use of fair market value.  Because non-voting stock is worth inherently less than voting stock, a client leaving a spouse non-voting stock to satisfy the elective share is going to have to leave more of it.

Using an Elective Share Trust

Property need not pass outright to count as elective share funding.  A client can leave assets in a marital-type trust and get varying levels of credit, depending on the trust terms.

The trust must provide the spouse with all income for life (or use of the trust property); the spouse must be able to compel the trustee to make trust property productive; and no one other than the spouse can direct the payment of income or principal to anyone other than the spouse.  Id.  §732.2025(2).

Fifty per cent of the value of such a trust is credited against the elective share obligation.  If the trustee is given the power to distribute principal for the spouse’s health, support, and maintenance, 80% of the value is credited.  If the spouse is given a general power of appointment over the trust principal, the credit climbs to 100%–although in this case the general power must allow appointment to the spouse’s estate, not just the creditors of the spouse’s estate.  See id. §732.2095.

By the way, an elective share trust does not need to be created at death.  An irrevocable trust created during life can qualify.  In that case, the valuation depends upon the values when the trust was created—so, no benefit if values increase, but no detriment if they go down.

The Dinkins Approach

Yet another approach has now presented itself, courtesy of the Fifth District Court of Appeal’s opinion in Dinkins v. Dinkins, 120 So.3d 601 (Fla. 5th DCA 7/26/2013).

In that case the decedent’s revocable trust agreement offered the spouse a choice:  $5 million in cash if the spouse waived both (i) a QTIP trust established for her benefit, and (ii) her elective share right.

The spouse argued that this provision amounted to an unenforceable penalty clause for instituting trust proceedings.  The court disagreed.  The clause did not take away the spouse’s right to an elective share; it simply gave the spouse an alternative.  So, the court permitted the provision to stand.

Imagine a combination of this approach with the use of less desirable assets to fund the elective share.  One could fund the elective share with non-voting stock or other assets perhaps not readily convertible to cash which might tie the spouse to unfriendly family members for the rest of the spouse’s life.  Or one could fund the elective share by using a trust, leaving the spouse to some extent at the mercy of a trustee not tied to the spouse (subject to legal rights which, as a practical matter, the spouse may be reluctant to bring litigation to enforce).

How much cash would it take to convince a spouse in such a situation to walk away from the elective share?  Less, no doubt, than the full value of the elective share rights.

In Dinkins, the husband’s property at death was estimated to be anywhere from $24 million to $55 million.  An elective share trust was apparently created to fund the elective share, subject to the option to take $5 million in cash.  While not completely clear from the opinion, it seems that the spouse was trying to use the existence of the option as a basis for invalidating the elective share trust, presumably leading to her getting assets outright.  The court’s opinion upheld the elective share trust and thus left the spouse with the choice of taking $5 million instead or living with the trust.  We can deduce from the existence of the litigation that neither option was very appealing.

Dinkins was not an earth-shaking opinion; it’s difficult to imagine any other ruling.  Still, it does point the way to another option when the elective share poses a threat.

The Estate Planner’s Guide To The Right to Die

            Our article “The Estate Planner’s Guide To The Right To Die” has been featured in Retirees Monthly and Wealth Management.com.  We thank Rich Santos for putting our article in the next edition.  We hope that implementation of the article does not unduly harm their circulation.

Please click here to read the article.

Physician Survey Report

We sent survey forms to a few hundred physicians asking them to answer the questions enumerated below.

Any physician can take this survey by clicking here.

The results thus far are quite interesting, and are as follows:

Of 24 doctors surveyed:

  •  50% are primary care physicians; 12.5% are family practice physicians and 37.5% are internal medicine physicians;
  • The majority of the doctors surveyed have been practicing 15 or more years, most are in groups of 6 or more and practice in an around the Tampa Bay area.
  • On the question of which health care plan is the worst for authorization of procedures and testing the answers ranged between United, Freedom and Wellcare.
  • Humana and Simply were rated as some of the best plans when it comes to authorization of procedures or testing.
  • Most but not all respondents noted that patients were not harmed due to the health care plans and delays in authorization of diagnostic testing and procedures.
  • No doctors responded that they have had a patient die due to the above delays.
  • Compared to 5 years ago, all of the respondents felt that hospitals and health care plans were less doctor friendly, patients were not better served, health care plans were not better for patients and Medicare has not changed significantly.
  • Half of the respondents felt that electronic medical records have helped their practice, however, most felt that EMRs hurt patients due to such issues as increased patient fees.
  • The respondents felt that insurance companies could be less restrictive; make authorizations easier and more user friendly; increase yearly maximums; pay expected coverages and be fair

 Depositions – A Question and Answer Guide

Many good litigators indicate that the time spent with the client preparing for a depo should be at least as long as the actual scheduled depo.

Clients are normally told to say as little as possible.

The following may be considered:

From the Pink Panther –

            Question: Does your dog bite?

Answer: No.

[Dog bites him.]

Question: I thought you said your dog doesn’t bite.

Answer: That’s not my dog.

From Get Smart –

Question: Can you please answer the door Hymie?

Answer: Sure.  I’m sorry door, what was the question?

From the Hitchhikers Guide to the Galaxy –

Question:  What is the meaning of life, universe and everything?

Answer:  42.

From Monty Python and the Holy Grail –

Question:  How many times does a sparrow flap its wings?

Answer:  An English sparrow or an African sparrow?

From the Cartoon Displayed on the Desk of Maribeth Vongvenekeo, Alan Gassman’s Assistant –

Question (Boss):  Why aren’t you working?

Answer (Secretary):  I didn’t see you coming.

Working joke

Applicable Federal Rates

APPLICABLE FEDERAL RATES.October 2013

Seminars and Webinars

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO Of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the TampaBay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event, please email agassman@gassmanpa.com

Bloomberg BNA – Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar

Date: October 30, 2013

Time: 12:30 – 1:30

Location: Online Webinar

Additional Information: For more information on this event, please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location:SetonHallLawSchool, Newark, New Jersey

Additional Information:SetonHallUniversity in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: HiltonDowntownSaltLake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

ESTATE PLANNING COUNCIL OF MANATEE COUNTY SEMINAR

Alan Gassman will be speaking to the Estate Planning Council of Manatee County on “AN ESTATE AND TAX PLANNER’S YEAR END PLANNING CHECKLIST – PRACTICE SYSTEM STRATEGIES IDEAS AND TECHNIQUES”.

Date: Thursday, November 21, 2013 | 12:00 p.m – 1:00 p.m.

Location: Bradenton County Club, 4646 9th Avenue W, Bradenton, FL34209

Additional Information:  To register for this event please visit the Estate Planning Council of Manatee County website at http://www.estateplanningcouncilofmanateecounty.org/events/event/10036

MEDICAL EDUCATION RESOURCES CONTINUING EDUACTION PRIMARY CARE CONFERENCE

Alan Gassman will be speaking on the topic of LEGAL, TAX AND FINANCIAL BOOT CAMP FOR THE MEDICAL PRACTICE – A SPECIAL TAX, ESTATE PLANNING AND LAW CONFERENCE FOR PRIMARY CARE PHYSICIANS

Date: December 13, 2013 – 12:00 pm – 4:40 pm and December 14, 2013 8:00 am – 3:00 pm

Topics and Meeting Times:

Friday, December 13, 2013

  • 12:00 – 1:00 pm –  2013 Tax Changes
  • 1:00 – 2:00 pm The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm Lawsuits 101
  • 3:10 – 3:40 pm  – Essential Estate Planning
  • 3:40 – 4:40 pm  – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Location:GrandHyattTampaBay, 2900 Bayport Drive, Tampa, Florida

Additional Information:  For more information please visit www.MER.org  Please note that the program qualifies for continuing education credit for physicians.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors:AveMariaSchool of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  OrlandoWorldCenter Marriott, Orlando, Florida

Sponsor:University of MiamiSchool of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and ConferenceCenter, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thursday Report – 10/17/2013 – Welcome Back Government, Same Sex Marriage, USAA & a Manatee

Posted on: October 17th, 2013

 
 
Giving new meaning to the word Thursday, not to mention
Wednesday, Friday and all of the other days.

Single Manatee.1

An Update from the Notre Dame Tax and Estate Planning Institute

4 Dangerous Initials – USAA Does Not Allow TBE

Counseling Same Sex Couples in a Post-DOMA America, an article by Alan Gassman, J.D., LL.M., and Danielle Creech, J.D.

Catch-22

New Jersey v. Florida – Fun Facts

Phil Rarick’s Client Blog: Florida Probate Attorney Fees

Seminar Spotlights of the Week

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

An Update from the Notre Dame Tax and Estate Planning Institute

Things are tame at Notre Dame!

Alan Gassman, Ken Crotty and Christopher Denicolo joined Professor Jerry Hesch is a session last night on Interesting Interest and planning with annuity contracts. If you would like to receive our outlines, please email agassman@gassmanpa.com.

Also, our new software program now includes installment sales to Grantor trusts and self-cancelling installment sales.  Notre Dame Institute attendees are receiving free 15 month subscriptions.  Let us know if you would like to be a beta tester.

One portion of the talk spoke about income tax planning with annuities.  Another part included a nutshell on annuity taxation.

Next week we will feature the nutshell and the planning strategy section, to be followed by other portions of our materials.

The charts that we shared can be viewed by clicking here.

A splendid time was had by all!”

Those of you who are with us in Indiana are welcome to come to the Gassman Law Associates table to pick up a free 15 month subscription to our new estate tax planning software, which now covers installment sales and self-cancelling installment sales.

If you are not at the Notre Dame Tax & Estate Planning Institute, get on a plane tonight and we can see you tomorrow!

4 Dangerous Initials – USAA Does Not Allow TBE

While most banks and brokerage firms that our clients work with allow TBE accounts, USAA does not.

 USAA is headquartered in Texas, and we have received confirmation from them in the past that their accounts are not considered to qualify as Tenancy by the Entireties accounts.

 Excerpts from a letter that we wrote to a married couple last week about how to handle ownership of their USAA account is as follows:

 A tenancy by the entireties account is a joint account between a husband and a wife that has certain characteristics available for accounts opened in Florida, Delaware, and other states that recognize tenancy by the entireties.

 I would therefore either move the USAA account to John’s living trust, or set up a simple Florida limited liability partnership which costs approximately $25 a year to maintain.  I would then place the USAA account into that partnership.

 It would be a bit safer from a creditor protection standpoint to instead form a Florida limited liability company.

 A limited liability partnership would prevent creditors of one spouse from reaching into the joint asset while the other spouse is living, but would not provide any protection for the surviving spouse if one spouse dies.

 The limited liability company would provide some creditor protection for Jane if John were to die.

 If the USAA account is moved to John’s revocable trust, then it will be exposed to potential creditor claims against John, which will notably include the risk of a car accident claim.

 If you have a $5,000,000 umbrella liability insurance policy then this may not be of as much concern.

 If John were to die first and this trust owns 5% of the LLC and Jane thereafter owns 95% (the 95% that was owned jointly by TBE) then creditors of Jane would not be able to reach into the LLC, but would instead only receive what is called a “charging order” that would permit them to be paid whatever Jane owes them if and when there is a distribution from the LLC.

 The judges cannot force a distribution, so Jane would be in a “stalemate” with the creditor because she could continue to control the LLC, but would not be able to make any significant withdrawals without paying the creditor.

 

Counseling Same Sex Couples in a Post-DOMA America, an article by Alan Gassman, J.D., LL.M., and Danielle Creech, J.D.

Recognizes Same Sex Marriage

Allows Same Sex Marriage if Married Elsewhere

Prenuptial Agreements Upheld

Tenancy by the Entirety Allowed for Same Sex Couples

Prohibits Workplace Discrimination due to Sexual Orientation

Will Spouse Have Rights to Homestead

Permits Joint Adoption

California

Yes

Yes

Yes

No

Yes

Yes

Yes

Florida

No

No

No

No

No

No

No[1]

Nevada

No

No

No

No

Yes

Yes[2]

Yes

North Carolina

No

No

No

No

No

No

No

Texas

No

No

No

No

No

No

No

New Jersey

No[3]

No[4]

Yes

Yes

Yes

Yes

Yes

New York

Yes

Yes

Yes

Yes

No

Yes

Yes

 The U.S. Supreme Court’s U.S. v. Windsor and Hollingsworth v. Perry decisions, the IRS’ pronouncement of equality for income, estate and gift tax purposes, and Pope Francis’ comment that the Catholic Church should not interfere in the lives of gays and lesbians have made 2013 a banner year for gay rights and marital, tax, government and employer benefit, creditor, and estate planning for same sex couples. Individuals who are in same sex relationships must now determine whether they would like to be married if they are not married, where to live, whether to have prenuptial agreements in place, how to handle beneficiary designations, whether they can adopt, and many other things.

While these decisions have tremendously expanded gay rights in the United States, the differences between state and federal laws still hold back the gay rights movement to some degree. Thus, attorneys should prepare to start counseling their same sex clients with respect to their legal rights (or lack thereof) in various jurisdictions.[5]

Chart.2

Same-Sex Marriage Throughout the United States

About 43% of the United States population live in a state that has some sort of protection for same sex couples. Thirteen states recognize same sex marriage in the United States (Massachusetts, California, Connecticut, New York, Iowa, Vermont, New Hampshire, Maryland, Maine, Washington, Delaware, Rhode Island and Minnesota) along with the District of Columba and certain Native American tribes. Nevada, Wisconsin, and Oregon have created a limited legal same sex marriage recognition while Colorado, Hawaii, Illinois, and New Jersey recognize civil unions[6] for same sex couples.

The other 35 states either have a constitutional or statutory ban on same sex marriage. This becomes an issue when a same sex couple gets married in a state allowing same sex marriage but then moves to a state that has an outright ban on same sex marriage.

Estate Planning and Tax Advantages

On Thursday, August 29, 2013, the IRS ruled that same sex couples will be considered as married for federal income, estate and gift tax purposes. Any same sex marriage legally entered into in one of the 13 states that allow same sex marriages (see chart below) the District of Columbia, or a foreign jurisdiction having legal authority to sanction same sex marriages is covered under this ruling; notwithstanding whether the spouses live in a state or other jurisdiction that recognizes their marriage legally.

Before the IRS issued Revenue Ruling 2013-17, a same sex couple would not receive full married couple benefits under the estate and gift tax laws unless they were (1) married in a state that recognizes same sex marriages and (2) resided in a state that also recognizes same sex marriages.

The above interpretation is consistent with the Supreme Court’s decision in the United States v. Windsor case as discussed in our Leimberg Newsletter #2123, which was entitled Many Affluent Same-Sex Couples Will Be Leaving Florida and Where They Should Go. This piece was premised upon the Court’s decision that a same sex couple would not be considered married for tax purposes if the state where they resided did not recognize the marriage. That changed very quickly!

The rules and implication thereof were very thoroughly explained by George Karibjanian in Steve Leimberg’s Estate Planning Email Newsletter Archive Message #3137 that was published on September 3rd and can be viewed by clicking here.

As the result of Rev. Ruling 2013-17, affluent married couples now have the option to move to states that may not recognize same sex marriage to avoid state inheritance taxes, state estate taxes, and state income taxes. For example, a same sex couple could go to New York to get married and move to Florida to avoid income taxes and inheritance taxes. Florida does not recognize same sex marriage, however, so they would not have the advantage of the creditor protection accorded to tenancy by the entireties assets as they would if they decided to live in Delaware instead. Not to mention it is also a pretty darned neat place to live (when it is not 100 degrees outside with 100% humidity and the power is not working because of a lightning storm).

Revenue Ruling 2013-17 provides that Internal Revenue Code Section 6511 gives same sex married couples the option of amending their prior tax returns, going back 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Same sex couples may also choose to leave the prior returns in tact or to amend one or more prior tax years. This gives same sex couples some very good choices for income tax planning purposes.  Almost all affluent same sex couples (or couples where one spouse is affluent) will want to go to a good income tax advisor with the right software to help determine what years they should amend and what years they should not amend.

Any gift tax return that involved a transfer to a spouse that used up any portion of the donor spouse’s estate tax exemption should probably be amended to regain the exemption amount, unless there are other items on the gift tax return that are best not re-opened, such as large gifts with questionable values to non-spouse individuals.

Amending a gift tax return will give the IRS three years after the date of the amendment to revisit all aspects of the gift tax return amended.

An increase in federal protections also means that same sex couples residing in states that don’t recognize same sex marriage will not be as negatively impacted by the state’s lack of recognition of gay marriage.  Rev. Ruling 2013-17 will largely benefit gay and lesbian’s who are serving in the military or working for the federal government.  A spouse recognized by the military or federal government will receive benefits from the federal government, and state laws will not apply.

However, same sex couples should be mindful that some limitations still exist to the federal protections.  For example, veteran benefits do not apply in the same way as benefits to active duty service members.  If a same sex couple gets married in a recognition state and then moves to Florida, it is unlikely that the Department of Veterans Affairs will recognize the marriage.  But if a same sex couple lives in a recognition state when benefits take effect and later moves to a non-recognition state, then the VA will likely continue dispensing the benefits.  This same scenario will likely be true for both Social Security and Medicare benefits, but a further analysis of the Social Security Administration (“SSA”) rulings is provided below.

State Does the State Recognize Same Sex Marriage? Does the State Recognize Tenants by the Entireties (with pure protection?) Does the State have an estate tax or inheritance tax? Exemption Amount; Highest Estate and/or Inheritance Tax Rate (if applicable) Does the State have an Income Tax? Highest Income Tax Rate (if applicable)
California Yes No No N/A Yes 13.30%
Connecticut Yes No Estate Tax (and state Gift Tax) $2,000,000; 12% Yes 6.70%
Delaware Yes Yes No (repealed for deaths after June 30, 2013) N/A Yes 6.75%
District of Columbia Yes Yes Estate Tax $1,000,000; 16% Yes 8.95%
Iowa Yes No Inheritance Tax (but spouses and descendants are exempt) No exemption; 15% Yes 8.98%
Maine Yes No Estate Tax $2,000,000; 12% Yes 7.95%
Maryland Yes Yes Estate Tax and an Inheritance Tax (but spouses and descendants are exempt from the Inheritance Tax) $1,000,000 (estate only); 16% (estate); 10% (inheritance) Yes 5.75%
Massachusetts Yes No Estate Tax $1,000,000; 16% Yes 5.30%
Minnesota Yes No Estate Tax (and state Gift Tax) $1,000,000; 10% Yes 7.85%
New Hampshire Yes No No N/A Only on dividend or interest income 5.00%
New York Yes No Estate Tax $1,000,000; 16% Yes 8.82%
Rhode Island Yes No Estate Tax $910,725; 16%` Yes 5.99%
Vermont Yes Yes Estate Tax $2,750,000; 16% Yes 8.95%
Washington Yes No Estate Tax $2,000,000; 19% No N/A

“Pure Protection” refers to those state laws which protect Tenants by the Entireties assets from the creditors of only one spouse.

 Same sex couples who are not formally married in one of the recognition states should consider whether the estate and gift tax and income tax advantages of getting married outweigh potential disadvantages. These disadvantages can include;

  • having to leave qualified plan benefits to a surviving spouse who will not sign a waiver associated therewith,
  • having alimony and property settlement rights vest in a new spouse if the new spouse will not sign a binding prenuptial agreement as requested by the other spouse,
  • having to have the new spouse on the healthcare plan of an employed spouse whose employer requires this,
  • having to inform an employer that a same sex marriage exists in order to comply with personnel, office and associated requirements (which may occur in states that do not prevent discrimination against gays and lesbians, such as Florida. However many cities and counties in Florida have enacted ordinances prohibiting sexual orientation discrimination in the workplace),
  • having to decide who to invite to the ceremony and who is going to pay for it or,
  • whether to go to Justice Ginsberg’s house since she will probably not charge because it would have to be disclosed on her income disclosure form.

Advisors who represent one or more members of an affluent same sex couple will need to reach out to let them know that if and when they are married they can have a new estate tax plan that includes marital deduction planning, Qualified Terminable Interest Property trust planning, and associated rights and responsibilities.

Medicaid.

Many elderly Americans rely upon medicaid to pay for nursing home care after their limited Medicare benefits run out. When one spouse needs to have Medicaid nursing home benefits and the other spouse has assets, the assets have to be spent down in many cases before Medicaid will apply. The spouse whose assets have to be spent down even though he or she does not need nursing home care is called the “community spouse.”  Individuals who are concerned about Medicaid eligibility will want to think about this, and possibly purchase long term care insurance to make this issue less of a factor.

Liability for Medical and Other Expenses of a Spouse.

Some states require one spouse to be responsible for medical and other liabilities incurred by the other spouse. Other states, including Florida, do not unless there has been an explicit guarantee signed. This is another factor that many same sex couples will consider in determining whether to marry.

Sexual Orientation and Gender Identity Protection in the Workplace.

Protection of gay clients in the workplace due to sexual orientation is also an issue to consider when counseling same sex couples.

Federal law protects federal employees from discrimination due to sexual orientation, but they have not yet successfully passed a law that outlaws discrimination based on sexual orientation in private workplaces. Thus, state law continues to govern in this particular area.

However, this may all change after the Senate votes on the Employment Non-Discrimination Act later this year. If passed, this bill will provide comprehensive protections against employment discrimination on the basis of sexual orientation and gender identity to lesbian, gay, bisexual, or transgender (“LGBT”) workers in all 50 states!

While twenty-one (21) states have banned sexual orientation discrimination in the workplace, many states have failed to follow this growing trend. However, many of the cities and counties in states that don’t provide sexual orientation protection have enacted local ordinances that prohibit sexual orientation discrimination in private workplaces. This is illustrated in the chart below. These jurisdictional ordinances do vary as to degree of protection, i.e. not all permit workers to file private lawsuits against employers and some only regulate workplaces having more than a certain minimum number of employees, thus it is important to specifically look at the specific jurisdiction’s degree of protection when filing a suit for workplace discrimination.

US Counties and Cities with Sexual Orientation and Gender Identity Protection – 2013

                 USA.1

PURPLE State, county, or city protects sexual orientation and gender identity with anti–employment discrimination ordinance

BLUE   State, county, or city protects sexual orientation with anti–employment discrimination ordinance

PINK State, county, or city protects sexual orientation and gender identity solely in public employment

TEAL State, county, or city protects sexual orientation in public employment[7]

GRAY State, county, or city does not protect sexual orientation and gender identity in employment

 

Prenuptial Agreements

When a same sex couple that is validly married in another state lives in a non-friendly state, it is probably also useful to have them consider a prenuptial agreement. In some states, if a same sex married couple lives in a state that does not recognize their marriage, they are not provided the option of obtaining a divorce. Thus, if the partners have a disagreement of how to split up the marital assets the court will have no available remedy.

 However, if a couple has a prenuptial agreement, the contract between the partners may provide a court a way to divide up the marital assets. Keep in mind that there is no guarantee that a court in a state hostile to same sex marriage will uphold same sex prenuptial agreements, but it does not hurt to draft one as a safety net.

 This divorce prohibition in certain states could change in the not too distant future, and, if so, alimony and property settlement rights might date back to when the couple was originally married, as opposed to dating back to when the state legislature and governor might sign such legislation into existence.

 Powers of Attorney

Furthermore, same sex couples should carry Powers of Attorney just in case the state they are domiciled in does not recognize their marriage. Since a Power of Attorney is contractual in nature and not dependent on relationship status, a gay individual can appoint their partner to make financial and medical decisions for them in certain circumstances.

 Any hospital receiving federal funding, including Medicare/Medicaid, is required to honor any valid Powers of Attorney, even if it is between same sex partners. President Barack Obama, Presidential Memorandum – Hospital Visitation (April 15, 2010) (available at http://www.whitehouse.gov/the-press-office/presidential-memorandum-hospital-visitation). This order was the result of a Florida lawsuit, Langbehn v. Jackson Memorial Hospital, in which the hospital refused to acknowledge the Plaintiff’s valid Health Care Power of Attorney over her dying lesbian partner.

 Planning for Same Sex Couple’s Children

When planning for same sex couple’s children, more things need to be considered than just establishing a will and trust.

 For instance, it is also important to consider that in all 50 states, same sex parents who are not the birth parent MUST obtain second-parent adoptions for their children to be actually recognized as a legal parent. Dan Ebner, Roundtable, LGBT Litigator (American Bar Association, Sept. 12, 2013) (copy of transcript on file with Gassman and Associates). Neither a marriage license of the parent’s nuptials nor a birth certificate signed by the non-biological parent are enough to give a same sex partner parental rights to their child. Id. Thus, a court order of adoption is required. Id.

This was the major issue of the Ohio Supreme Court case In re Mullen. Kelly Mullen and Michelle Hobbs decided that they wanted to have a child. In re Mullen, 953 N.E.2d 302, 304 (Ohio 2011). Mullen got in contact with a male friend to be a sperm donor (he signed away any legal rights to the baby), and she gave birth in July 2005.Id. However, the couple began having problems and Mullen moved out with their child. Id. Hobbs filed an action to obtain visitation rights, but the Ohio Supreme Court ruled that Hobbs had no rights due to the fact that “Mullen did not create an agreement to permanently relinquish sole legal custody of her child in favor of shared legal custody with Hobbs.” Id at 309.

However, an issue arises in states that do not allow for second-parent adoption. In these states, same sex parents should execute a co-parenting or joint custody agreement to ensure custody if a dispute arises. It is not certain that these agreements will be upheld in every state’s court; however, having same sex parents draft and sign these agreements help prove intent to a court during a custody dispute. In “Estate Planning for Children of Same-Sex Couples”, Joan Burda encourages planners to stray away from using “joint parenting agreement” and rather title the agreement “joint custody agreement.” Joan Burda, Estate Planning for Children of Same-Sex Couples, Vol. 3, No.2 (September 2013). Furthermore, when drafting wills or trusts be careful when using the word “parent” because sometimes this can be construed to mean biological parent. Id.

 Some factors to address in a co-parenting or joint custody agreement are:

  • Who will the child live with?
  • Who will make major decision such as health care and schooling decisions for the child?
  • Will the child spend part of the week (month or year) living with one parent and part of the week (month or year) with another? And will both parents share in making major decisions?
  • How will both parents provide for their child’s medical and educational needs?
  • In what religion, if any, will the child be raised?
  • What financial, familial, or other resources will each parent offer?
  • How each parent resolve disputes?
  • What each parent will do if either parent moves?
  • What will be done if one of the parents violates the agreement?

Human Rights Campaign, Second Parent Adoption, http://www.hrc.org/resources/entry/second-parent-adoption (accessed Oct. 1, 2013).

Legal Practice Etiquette

Socially Acceptable Terminology For Same Sex Couple Conversations NOT SO Socially Acceptable Terminology for Same Sex Couple Conversations
“Partner”[8] “Husband” or “Wife”
“Special Rights” “Equal Rights”
“Gay” or “Lesbian” “Homosexual”
“Relationship” or “Couple” “Homosexual Couple”
“Sexual Orientation” “Sexual Preference”

With the prospect of more same sex couples, advisors will also want to be wary of proper etiquette.  According to the GLAAD Media Reference Guide which advises journalists on using appropriate terms, preferred terms include “gay,” “gay man,” “lesbian,” or “gay person/people” rather than “homosexual.”  In addition, “sexual orientation” or “orientation” is preferred, while “sexual preference” is considered offensive.  Steven Petrow, a New York Times contributor addressing questions on gay and straight etiquette, suggests that the most practical approach is to listen to how a couple introduces themselves or refers to each other, since this will vary from couple to couple. This is an important matter to consider, and advisors should be careful to avoid “downgrading” a couple’s status.  As Petrow explains, “[w]ith all the work that it took for [same sex couples] to make their relationship legal in New York, my pal was not about to settle for ‘friend’ to describe the man he’s been partnered with for nearly three decades.”  When in doubt, Petrow advises that you should not be shy to ask the couple directly how they would like to be referred to.  “It’s not a nosy question–it’s a respectful one,” he says.

Other Considerations

Also consider some advantages vs. disadvantages of marriage shown below.

Advantages of Marriage Disadvantages of Marriage
Savings with sharing a single health insurance plan: While the rules vary by state and employer, many health insurance companies already offer benefits to domestic partners and same-sex unions; others require marriage for shared coverage. Responsibility of health care: Depending on which state you live in, if your spouse cannot pay their health care bills, then you may be held liable for the cost.
Security benefits go to the surviving spouse: Widowed spouses are entitled to their spouses’ Social Security benefits if they are greater than their own. Loss of benefits if you get remarried: If you are a widow or widower receiving a deceased spouse’s retirement benefits or social security benefits you may lose those benefits if you get remarried before the age of 60.
No Employer Taxes: If you work for your spouse, they do not have to pay social security taxes or unemployment taxes on your behalf. Spousal debt responsibility: In community property states, most debt incurred by either spouse during marriage are owed jointly by the couple, even if only one spouse signed for the debt.
“Being Married” – Dr. Phil “Being Married” – Rodney Dangerfield

While Post-DOMA America is still not providing same sex couples with complete equality, the federal and state governments are working tirelessly to achieve this goal. One thing is for certain: as the landscape continues to grow more inclusive, lawyers can anticipate a wide array of new considerations and techniques for same sex couples.

Social Security Benefits and Taxation – We are hopeful that the Social Security Administration (“SSA”) will announce this year that same sex couples who had marriage ceremonies and registration in states that recognize same sex marriage will be treated as married for social security tax purposes, but that is not always a good thing.

Our draft language with respect to social security benefits and taxation that will be adapted once we know where the SSA is heading is as follows:

While Medicare and the IRS officials are using the “place of celebration” standard to determine if a same sex couple is eligible for benefits, the SSA is using a “place of residence” standard in determining spousal benefits. This means that for Medicare and IRS determinations as long as the couple is legally married, it doesn’t matter where they may live, but for SSA benefits a same sex married couple living in a non-recognition state will not receive benefits as a couple. For example, a same sex couple in Florida may not receive the same social security benefits as a same sex couple in Massachusetts until final determinations are made by the SSA.

 However, the SSA is working on fixing this “kink”, and there is an expectation that this will be resolved soon to ensure uniformity throughout the states. Once the Social Security Administration resolves this issue, same sex couples will be offered more financial benefit options for their spouse and family, such as surviving spouse benefits after their spouse dies.

The SSA has started processing spousal claims for same sex couples. They encourage same sex couples to start applying right away, even if they are not eligible, it will preserve the filing date used when determining the start of benefits.

It is important to note to clients that entering into a same-sex marriage may cause a loss of or a lowering of their existing social security income (“SSI”) benefits. Marriage can not only effect eligibility for SSI, but benefits can change from an individual rate to a couple rate and social security income is taxed differently. However, marriage will not affect retirement or social security disability insurance (“SSDI”) benefits.

Social security income may be taxable, depending upon the amount of other income a same sex couple receives. If a taxpayer only receives social security income or railroad retirement benefits, the benefits are generally not taxable and the taxpayer may not need to file a federal income tax return.

If a taxpayer receives income in addition to social security income, and one half of the social security benefits plus other income exceeds a “base amount,” then up to 85% of the social security income can be taxable. The 2012 base amount for single filers is $25,000 and for married taxpayers filing a joint return is $32,000.

There is a complicated sliding scale formula under Code § 86 to determine how much of social security benefits are taxable. Generally, gross income includes 50% of social security benefits but no more than 85% depending upon the amount of other income a taxpayer receives during the year.  IRS Publication 915 contains a Worksheet that is helpful in determining the amount of social security income that is subject to income tax.

Example:

John and Sam, a same sex married couple, receive annual social security income of $10,000 each, for a total of $20,000. John also receives taxable pension income of $8,000. None of the social security income is taxable because their income of $28,000 is less than the $32,000 base amount that applies for married joint filers.

If John receives taxable pension income totaling $25,000 then $1,500 of their Social Security income will be taxable.

If John receives taxable pension income totaling $50,000 then 85% of their Social Security income will be taxable.

Social Security income is included in the calculation of Modified Adjusted Gross Income for purposes of calculating the Medicare contribution tax. Therefore, taxpayers having significant net investment income will have more reason to defer Social Security benefits.

Assuming a reasonable or long life expectancy, it is generally beneficial for an individual who is eligible to receive Social Security on or after age 62, to delay receipt of payments until he or she reaches full retirement age. If an individual’s full retirement age is 65 and he or she elects to receive Social Security benefits at age 62, the benefit amount is reduced by 20%.  The reduced benefit amount decreases to 13.3% at age 63 and 6.66% at age 64. The reduction takes into account that a person is receiving benefits over a long period of time. Therefore, an individual can either receive lower monthly amounts over a longer period of time or receive higher monthly amounts over a shorter period of time.

If an individual delays receiving Social Security benefits after full retirement age, he or she may be eligible for a delayed retirement credit. The following chart, available at http://www.ssa.gov/retire2/delayret.htm shows the percentage increases when an individual delays receipt of retirement benefits.

Increase for Delayed Retirement

Year of Birth*

Yearly Rate of Increase

Monthly Rate of Increase

1933-1934

5.5%

11/24 of 1%

1935-1936

6.0%

1/2 of 1%

1937-1938

6.5%

13/24 of 1%

1939-1940

7.0%

7/12 of 1%

1941-1942

7.5%

5/8 of 1%

1943 or later

8.0%

2/3 of 1%

The chart below, available at http://www.ssa.gov/OACT/ProgData/ar_drc.html demonstrates the advantages of delaying Social Security benefits. The “Primary Insurance Amount” is the amount an individual would receive at his or her normal retirement age. As the chart shows, a person born between 1943-1954, whose normal retirement age is 66 can receive a 32% increase in benefits by delaying receipt of benefits until they reach age 70. Further information on this topic can be found on Social Security Administration website, www.ssa.gov.

YearofBirth Normal Credit for each year of Benefit, as a percentage of PIA, beginning at age
Retirement delayed retirement
Age after NRA (percent) 62 63 64 65 66 67 70
1924 65 3 80 86 23 93 13 100 103 106 115
1925-26 65 3 12 80 86 23 93 13 100 103 12 107 117 12
1927-28 65 4 80 86 23 93 13 100 104 108 120
1929-30 65 4 12 80 86 23 93 13 100 104 12 109 122 12
1931-32 65 5 80 86 23 93 13 100 105 110 125
1933-34 65 5 12 80 86 23 93 13 100 105 12 111 127 12
1935-36 65 6 80 86 23 93 13 100 106 112 130
1937 65 6 12 80 86 23 93 13 100 106 12 113 132 12
1938 65, 2 mo. 6 12 79 16 85 59 92 29 98 89 105 512 111 1112 131 512
1939 65, 4 mo. 7 78 13 84 49 91 19 97 79 104 23 111 23 132 23
1940 65, 6 mo. 7 77 12 83 13 90 96 23 103 12 110 12 131 12
1941 65, 8 mo. 7 12 76 23 82 29 88 89 95 59 102 12 110 132 12
1942 65, 10 mo. 7 12 75 56 81 19 87 79 94 49 101 14 108 34 131 14
1943-54 66 8 75 80 86 23 93 13 100 108 132
1955 66, 2 mo. 8 74 16 79 16 85 59 92 29 98 89 106 23 130 23
1956 66, 4 mo. 8 73 13 78 13 84 49 91 19 97 79 105 13 129 13
1957 66, 6 mo. 8 72 12 77 12 83 13 90 96 23 104 128
1958 66, 8 mo. 8 71 23 76 23 82 29 88 89 95 59 102 23 126 23
1959 66, 10 mo. 8 70 56 75 56 81 19 87 79 94 49 101 13 125 13
1960 and later 67 8 70 75 80 86 23 93 13 100 124

A spouse can also elect to receive one-half of his or her spouse’s benefit if they start receiving benefits at their full retirement age. A spouse who is eligible for a spousal benefit and his or her own benefit, can elect to take the spousal benefit and delay receiving his or her own benefit.  This may result in a higher benefit due to the delayed retirement credits.

 PLANNING TIP

Defer receiving Social Security benefits until reaching full retirement age. This increases the monthly benefit amount and also minimizes the Medicare 3.8% contribution tax because Social Security benefits are included in the calculation of Modified Adjusted Gross Income for purposes of the 3.8% tax calculation.

 Conclusion.

There is a tremendous opportunity for financial tax and legal advisors to help same sex couples to decide whether to marry, where to live, and how to handle their estate planning, creditor protection planning, tax planning, and other situations.

This will take a great deal of study and consideration, and will not be an “one size fits all” analysis.

The biggest social adjustment in our country so far this century is an exciting time for those of us in the counseling professions.



[1] Florida’s Third District Court of Appeals ruled that a statute from 1997 which prohibited “homosexuals” from adopting was unconstitutional. Florida Dept. of Children and Families v. Adoption of X.X.G., 45 So. 3d 79 (Fla. 3d Dist. App. 2010).

[2] Will receive rights to Homestead if registered with the state as domestic partners.

[3] Recognizes same sex civil unions. Office of the Attorney General: Formal Opinion No. 3-2007 (February 16, 2007).

[4] Recognized as having same legal force as civil union or domestic partnership.

[5]While there are some instances when joint representation of same sex couples is acceptable, it is always a good idea to suggest that one party retain separate legal representation. See your state Bar rules for applicable rules on client joint representation.

[6]The decision in Windsor made it clear that the federal government will not recognize civil union marriages. Thus, someone who has exercised their right in these states to enter a civil union or domestic partnership are in a state of limbo for federal rights. Helen Casale, Roundtable, LGBT Litigator (American Bar Association, Sept. 12, 2013) (copy of transcript on file with Gassman and Associates)

[7]http://en.wikipedia.org/wiki/File:US_counties_and_cities_with_sexual_orientation_and_gender_identity_protection.svg

[8] Steven Petrow, Is it Gay Husband? Lesbian Wife? Or What?, New York Times (November 27, 2012).

Catch-22

Many of our readers missed the opportunity to read Catch 22, which explains a lot about real life and the law.

All you have to do is turn to page 42 and read our favorite excerpt, which is as follows: and then it’s… there was only one catch and that was Catch 22 and then agreed”.

 Joseph Heller did a great job with this book, and thereafter wrote a play called “We Bombed in New Haven” and books that included Something Happened, Good as Gold, I think, and something else.

Heller was a fantastic humorist, but one of our favorite quotes, which was written down by a friend when they were visiting a billionaire’s penthouse in New York was as follows:

Heller: I have something this person doesn’t have.

Friend: What is it?

Heller: Enough.

How many of us have enough?  Read Catch 22 and see if you have enough, or if you have had enough!

There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane, he had to fly them. If he flew them, he was crazy and didn’t have to; but if he didn’t want to, he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.

“That’s some catch, that Catch-22,” he observed.

 “It’s the best there is,” Doc Daneeka agreed.

New Jersey v. Florida – Fun Facts

We are really looking forward to our talks in New Jersey on November 1st on WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW and November 2nd on WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW

It is interesting to compare the 2 states:

NJ-FL.1

Phil Rarick’s Client Blog: Florida Probate Attorney Fees

This quick guide is designed to inform lay persons who may be named the personal representative (or executor) in a will of the engagement options for a probate attorney and presumptive Florida probate attorney fees.     Click here to read the block post. 

Seminar Spotlights of the Week

Manatee with Dolphin - New

Seminar 1

Alan Gassman will be speaking at a Estate Planning Council of Manatee County Seminar on Thursday, November 21, 2013.  His topic is “AN ESTATE AND TAX PLANNER’S YEAR END PLANNING CHECKLIST – PRACTICE SYSTEM STRATEGIES IDEAS AND TECHNIQUES”.

The seminar takes place at the Bradenton Country Club from 12:00 – 1:00 p.m.  To register for this event please visit the Estate Planning Council of Manatee County’s website here.

Seminar 2

Alan Gassman and John Goldsmith will be presenting a seminar next Wednesday, October 23, 2013 on BP Calculations for CPAs – Tricks & Traps.

The seminar will be at the Holiday Inn Express at 4750 N. Dale Mabry in Tampa. To register for the event please click here.

Applicable Federal Rates

APPLICABLE FEDERAL RATES.October 2013

Seminars and Webinars

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here or email agassman@gassmanpa.com

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN

Date: Wednesday, October 23, 2013 | 6:00 p.m.

Location: Holiday Inn Express, 4750 N. Dale Mabry, Tampa, FL

Additional Information:  Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served.  To register for the event please click here.

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO Of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event, please email agassman@gassmanpa.com

Bloomberg BNA – Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar

Date: October 30, 2013

Time: 12:30 – 1:30

Location: Online Webinar

Additional Information: For more information on this event, please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

ESTATE PLANNING COUNCIL OF MANATEE COUNTY SEMINAR

Alan Gassman will be speaking to the Estate Planning Council of Manatee County on “AN ESTATE AND TAX PLANNER’S YEAR END PLANNING CHECKLIST – PRACTICE SYSTEM STRATEGIES IDEAS AND TECHNIQUES”.

Date: Thursday, November 21, 2013 | 12:00 p.m – 1:00 p.m.

Location: Bradenton County Club, 4646 9th Avenue W, Bradenton, FL 34209

Additional Information:  To register for this event please visit the Estate Planning Council of Manatee County website at http://www.estateplanningcouncilofmanateecounty.org/events/event/10036

MEDICAL EDUCATION RESOURCES CONTINUING EDUACTION PRIMARY CARE CONFERENCE

Alan Gassman will be speaking on the topic of LEGAL, TAX AND FINANCIAL BOOT CAMP FOR THE MEDICAL PRACTICE – A SPECIAL TAX, ESTATE PLANNING AND LAW CONFERENCE FOR PRIMARY CARE PHYSICIANS

Date: December 13, 2013 – 12:00 pm – 4:40 pm and December 14, 2013 8:00 am – 3:00 pm

Topics and Meeting Times:

Friday, December 13, 2013

  • 12:00 – 1:00 pm –  2013 Tax Changes
  • 1:00 – 2:00 pm The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm Lawsuits 101
  • 3:10 – 3:40 pm  – Essential Estate Planning
  • 3:40 – 4:40 pm  – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, Florida

Additional Information:  For more information please visit www.MER.org  Please note that the program qualifies for continuing education credit for physicians.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

Great Quotes, LLC Notes and Dolphins with Boats

Posted on: October 10th, 2013

Ken Crotty’s LLC Clinic – Interest Exchanges

Physician Owned Distributorships

Checker’s Chief Operating Officer Super-Sizing His Jail Time: Theft of Over $300,000 in Sales Taxes

Dan Sullivan Quotes

Questions and Answers About the Thursday Report

Phil Rarick’s Client Blog Entries: Moving to Florida: Tips on How to Avoid the Tax Traps

Seminar Spotlight – BP Calculations for CPAs – Tricks & Traps Seminar

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Political Pics.1

 

Ken Crotty’s LLC Clinic – Interest Exchanges

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The new LLC Act provides that the majority in interest of an LLC can force minority members to participate in sales.

Proper language to accommodate this statute is essential.

We thank Gary Teblum for explaining this provision to us.

Here is more detail:

If a person or entity wants to purchase 100% ownership of an LLC and this has been approved by a majority of members, then objecting members can be required to participate in the sale, and dissenting members will be entitled to be paid based upon the appraisal right procedure described below.

The new LLC Act authorizes interest exchanges in Sections 605.1031 through 605.1036.

The new Act applies the interest exchange concept from corporate law to LLCs. Under the old Act, the concept of interest exchanges did not apply to  LLCs.  In an interest exchange, the separate existence of the acquired entity is not affected and the acquiring entity receives some or  all of the interests. An interest exchange also allows for an indirect acquisition through consideration from another or related entity.

Under Section 605.1031, a domestic LLC may acquire interests of another domestic or foreign entity in exchange for interests, securities, obligations, money, other property, or rights to acquire interests or securities. Additionally,  605.1031 also allows for the acquisition obtained to be a combination of  interests, securities, obligations, money, other property, or rights to acquire interests or securities. A foreign entity may also be party to an interest exchange if authorized by the organic law in the foreign entity’s jurisdiction of formation.

Section 605.1032 provides that a plan of interest exchange must be in a record and must contain:

1. The name of the acquired entity;

2.  The name, jurisdiction of formation, and type of entity of the acquiring entity;

3. The manner and basis of converting the membership interests of each acquired LLC into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing;

4. If the acquired entity is a domestic LLC, any proposed amendments or restatements of its Articles of Organization or Operating Agreement to become effective as of the date of the interest exchange;

5.  The other terms and conditions of the interest exchange; and

6. Any other provision required by law or in the acquired and acquiring entities’ jurisdictions of formation.

In addition to the requirements above, a plan of interest exchange may contain other provisions not prohibited by law.

A plan of interest exchange is not effective unless it has been approved pursuant to the rules stated in Section 605.1033(1). Written notice of meetings must be given to all members who have a right to vote not less than 10 days and not more than 60 days before the date of the meeting.  Such notice may be waived in writing.

A domestic acquired LLC in the interest exchange must have approval by a majority-in-interest of its members and approval of each member that will have interest holder liability unless an exception applies. Such approval by each member is not necessary if the Operating Agreement of the company provides for the approval of an interest exchange in which some or all of its members become subject to interest holder liability by the vote or consent of fewer than all the members.

Amendments to a plan of exchange may be made only with consent of each party to the plan unless the rules of the LLC provide otherwise.  An amendment must be approved in the same manner the plan was approved.  A plan of interest exchange may be abandoned after it was approved as provided in Section 605.1034(3) and (4).

After a plan has been approved, articles of interest exchange must be signed and delivered for filing. When an interest exchange becomes effective, the interests in the acquired company cease to exist or are converted or exchanged, and the acquiring entity becomes the interest holder.  The members holding the acquired interests are entitled only to the rights provided under the plan and any appraisal rights under the new LLC Act.

Physician Owned Distributorships

Public Policy Prohibiting Physician Owned Distributorships

 Many physician advisors are surprised to hear that the law may permit a surgeon or other doctor to request that the hospital or surgery center order a medical implant or device from a company that the physician has an ownership interest in.

This would not be considered a referral that would be prevented under the Stark Law if the device is not considered a designated health service, and may not violate the anti-kickback statute if the purchase of the device is not considered to be a payment in consideration of the referral of the patient to the hospital, or the health care facility.

Nevertheless, these arrangements have been studied by and commented upon both legislatively and by the Office of Inspector General, and significant risk can apply.

The following memorandum by recent Stetson law school graduate, Sydney Smith, who is now an associate with Laird A. Lile, P.A., in Naples, does a great job of describing the present situation.

Typically, a manufacturer sells implantable medical devices directly to a hospital or surgical center and often provides other services such as order and delivery, stocking and re-stocking, sterilization, selection, and assistance to surgeons in the operating room.1  The creation of physician owned distributorships (PODs) has drastically changed the manner in which medical devices are supplied by allowing physicians to act as middle-men in the supply chain. These POD agreements often do not offer the extent of services offered by traditional manufacturing agreements.

A basic POD is created when a small group of investors, typically consisting of physicians, creates a company that manufactures or distributes surgical implant devices. Individuals invited to invest in the company are primarily physicians who have the ability to generate referrals for the company and will potentially use the products in their own surgeries. Because physicians operating at hospitals and surgical centers have wide discretion in determining which implants or devices will be used, legislators are concerned that physician investors, in an attempt to boost the profits of the POD, will use products of lower quality or products that are not appropriate for the procedure. [senate report].  Hough investors will their ability to generate referrals for hospitals or surgical centers to induce hospitals or surgical centers to use medical devices from their PODs.2

Because physicians have wide discretion in selecting medical devices for their patients, and because physicians participating in PODs are often acting as manufacturers, buyers, and sellers of their own medical devices, these POD arrangements have been called into question under the federal kick-back laws governing payments made under federal health care programs, such as Medicare or Medicaid.

Indicia of a Suspect Contract

The Office of the Inspector General has issued numerous Special Fraud Alerts regarding the legitimacy of physician owned distributorships, and has also issued numerous guidance documents on the general subject of physician investments in referral entities, including the 1989 Special Fraud Alert on Joint Venture Arrangements. According to the OIG’s 1989 report, “a joint venture may take a variety of forms: it may be a contractual arrangement between two or more parties to cooperate in providing services, or it may involve the creation of a new legal entity by the parties, such as a limited partnership or closely held corporation, to provide such services.” [Emphasis added.]3

The 1989 Special Fraud Alert on Joint Ventures, was amplified by a 2006 advisory opinion from the Department of Health and Human Services, gives a non-exhaustive list of suspect features of joint ventures tending to show a violation of federal Law. According to the 2006 opinion, these features, as applied to “joint ventures” in the 1989 report, are currently applicable to physician investments in medical device manufacturing and distribution entities, such as PODs.4

Accordingly, the following arrangements should be avoided when creating a POD:5

I. Choice of Investors:

a. Physicians who are expected to make a large number of referrals are offered a greater investment opportunity in the joint venture than those anticipated to make fewer referrals.
b. Physician investors are actively encouraged to make referrals to the joint venture, and are encouraged to divest their ownership interest if they fail to sustain an “acceptable” level of referrals.
c. The joint venture tracks its sources of referrals, and distributes this information to the investors.
d. Investors are required to divest their ownership interest if they cease to practice in the service area, for example, if they move, become disabled or retire.
e. Investment interests are nontransferable.

II. Financing and Profit Distribution

a. The amount of capital invested by the physician is disproportionately small and the returns on investment are disproportionately large when compared to a typical investment in a new business enterprise.
b. Physician investors invest only a nominal amount, such as $500 to $1500.
c. Physician investors are permitted to “borrow” the amount of the “investment” from the entity, and pay it back through deductions from profit distributions, thus eliminating even the need to contribute cash to the partnership.
d. Investors are paid extraordinary returns on the investment in comparison with the risk involved, often well over 50 to 100 percent per year

In 2003, the OIG issued a Special Advisory bulletin addressing the legitimacy of joint ventures between physicians and physician owed entities. According to this report, a joint venture typically exists when the owner of a business expands into a related line of business, which is dependent on referrals from the owner’s original business.6 Although this report specifically addresses joint ventures and does not mention PODs, the suspect characteristics applicable to joint ventures should be considered when considering investment in a POD. According to this report, captive referral bases, where the newly created business predominantly or exclusively serves the owner’s existing patient base, are inherently suspect. Further, scrutiny is heightened when the owner does not intend to expand the newly created business to serve new customers, and makes no bona fide efforts to do so.7 Additionally, where there the owner’s primary contribution to the joint venture is referrals and the owner makes very little financial investment, there is indicium of a suspect relationship.8

The most recent Special Fraud Alert, issued March 26, 2013, emphasizes that PODs are “inherently suspect” and should be strictly construed under the anti-kickback law, 1128B(b)(1 – 2).9  According to 1128B(b)(1 – 2):

(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. [Emphasis added]

(2) Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person—

(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. [Emphasis added]

The Office of the Inspector General began to closely scrutinize physician owned distributorships specifically after the June 2011 report from the U.S. Senate Finance Committee entitled “Physician Owned Distributors (PODs): An Overview of Key Issues and Potential Areas for Congressional Oversight. This report heavily criticizes PODs and states that “the very nature of PODs seem to create financial incentives for physician investors to use those devices that give them the greatest financial return and that, in the process, patient treatment decisions may be based on personal financial gain.”10

In its 2013 report, the OIG specifically lists questionable features in physician investment contracts. These are as follows:11

I. Selecting investors because they are in a position to generate substantial business for the entity;
II. Requiring investors who cease practicing in the service area to divest their ownership interests;
III. Distributing extraordinary returns on investment compared to the level of risk involved;
IV. The size of the investment offered varies with the expected or actual volume of value of devices used by the physician;
V. Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians;
VI. Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD’s devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD;
VII. Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD or, conversely, are threatened with, or experience, negative repercussions (e.g., decreased distributions, required divestiture) for failing to use the POD’s devices for their patients;
VIII. The POD retains the right to repurchase a physician-owner’s interest for the physician’s failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD’s devices;
IX. The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations;
X. The POD does not maintain continuous oversight of all distribution functions; and
XI. When a hospital or an ASC requires physicians to disclose conflicts of interest, the POD’s physician-owners either fail to inform the hospital or ASC of, or actively conceal through misrepresentations, their ownership interest in the POD.

It is important to note that the factors above create a non-exhaustive list of considerations that should be analyzed on a case-by-case basis, and should not be used as a blueprint for how to structure a lawful POD. Because federal law requires that a physician knowingly or willingly solicit or receive remuneration, intent may be found using the above factors.

The OIG has also indicated that disclosures to patients regarding the physician’s financial interest in a POD may not be sufficient to avoid liability. The OIG states that the following preamble to the safe harbor provision relating to ASC referrals is applicable to PODs:

“…disclosure in and of itself does not provide sufficient assurance against fraud and abuse…[because] disclosure of financial interest is often part of a testimonial, i.e., a reason why the patient should patronize that facility. Thus, often patients are not put on guard against the potential conflict of interest, i.e., the possible effect of financial considerations on the physician’s medical judgment.”12

Conclusion

This appears to be a very risky area for physicians who are in small arrangements that appear exposed under the factors enumerated by the OIG.


1 Physician Owned Distributors (PODs): An Overview of Key Issues and Potential Areas for Congressional Oversight (April 2011).

2 Id.

3 The 1989 Special Fraud Alert was reprinted in the Federal Register in 1994. See 59 FR 65372 (December 19, 1994). The Special Fraud Alert available at: http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html.

4 Letter from Vicki Robinson, Chief, Industry Guidance Branch, Department of Health and Human Services, OIG, Response to Request for Guidance Regarding Certain Physician Investments in the Medical Device Industries (Oct. 6, 2006).

5 The 1989 Special Fraud Alert, 59 FR 65372 (December 19, 1994).

7 Id.

8 Id.

9 42 C.F.R. 1128B(b)(1 – 2).

10 Physician Owned Distributors (PODs): An Overview of Key Issues and Potential Areas for Congressional Oversight (April 2011).

11 Special Fraud Alert: Physician-Owned Entities (March 26, 2013). http://oig.hhs.gov/fraud/docs/alertsandbulletins/2013/POD_Special_Fraud_Alert.pdf

12 See 64 Fed. Reg. 63,518, 63,536 (Nov. 19, 1999).

Checker’s Chief Operating Officer Super-Sizing His Jail Time: Theft of Over $300,000 in Sales Taxes

By: Danielle Creech, J.D.

What are you doing to help make sure that your clients are not having monies embezzled by financial officers?  Quite likely if this company had had a good checks and balances arrangement with their CPA firm this would have never happened.

Mark Williams, the Chief Operating Officer of Jaxchex, Inc., was arrested on September 5, 2013. He has been charged with the theft of over $300,000 in sales taxes owed to the state of Florida from 2010 to 2011.

Jaxchex, Inc. owns and operates nine Florida Checkers in Clay, Duval, and Flagler counties.  According to investigators, Williams failed to send the state any sales taxes collected from these locations during the past two years. If convicted, Williams will face up to 30 years in prison and $10,000 worth of fines plus repayment of tax, interest, and penalty costs.

Theft of sales tax in Florida is an ongoing problem faced by the Florida Department of Revenue. Marshall Stranburg, Executive Director of the Florida Department of Revenue, commented, “It is an honor to serve the vast majority of Florida business who comply with state tax requirements. For those that don’t, it is our job to enforce the law and ensure honest businesses are not placed at a competitive disadvantage by those who ignore the law or intentionally collect and steal taxpayer dollars.”

Under Florida law, sales tax is the property of the state the moment it is collected and is due the beginning of each month. Fla. Stat. Ann. § 212.15 (West). A person that intentionally deprives or defrauds the state by failing to remit these tax funds is criminally punishable. The severity of the crime charged is based on the amount of stolen revenue. See Fla. Stat. Ann.§§ 775.082-775.084 (West). Furthermore, the Florida Department of Revenue is entitled to issue a warrant for the full amount of the taxes due.

It seems that Florida Checkers’ Franchise Chief Operating Officer has successfully super-sized his order of criminal sanctions with a side of fines.

Click here to see the Florida Department of Revenue’s news release.

Dan Sullivan Quotes

Many professionals and entrepreneurs are well aware of entrepreneurial coaching guru Dan Sullivan, who is the founder and leader of the Strategic Coach program.

Dan has some fantastic original thoughts and techniques for developing professional and personal achievement and enjoyment of the experience.

Some of our favorite Dan Sullivan quotes, and brief commentary thereon, are as follows:

  • Always make your future brighter than your past.

It is very easy to get caught up in things from the past that may disappoint or be of concern, but what good does that do you?  We live to make the most of the now and the future.  Exciting and feasible goals, and taking the proper steps to achieve them will bring a much better peace of mind.

Can clients be nudged that way in the conference room? Absolutely!

  • The problem is never the problem.  The problem is that you don’t know how to think about the problem.

“Problems analysis” is a process that many people are completely unaware of.  The “problem” itself is usually not the real issue.

If you take a few minutes to write down the obstacles that have caused the problem, and possible solutions to each obstacle you might be amazed at how quickly the problem can be solved.

Taking this brief written analysis to someone uninvolved with the situation will often provide a quick solution.

Oftentimes the problem is not the problem – the way the person looks at the situation is the problem.

Dan Sullivan also says that “if you can afford to pay for the problem to go away then you don’t have a problem – you just have an expense.”

  • Frank Sinatra did not move pianos.

Are you doing what you do best and what you really like to do 80% of the time?  If not, how can you increase that ratio?

If you write down 4 things that you love to do and 4 things that you do a lot but should not be doing you can then begin to think through how to change your interactions with others to enhance the enjoyability and productivity of your work and personal life.

Dan Sullivan has also said that “if you like to make messes you will find someone who likes to clean them up.”  While modern computers, cell phones and other devices allow us to become a “one-man band”, we have to try to be very cognizant of what we are spending our time and energy on, and whether that is in the best interest of all concerned.

Dan has dozens of great quotes and amazing thoughts.  A super book that he has written is called The Dan Sullivan Question.  You can buy it on Amazon by clicking here.

Questions and Answers About the Thursday Report

1. Why Thursday?
This was going to be the Tuesday Report but the first edition was not ready until Thursday of the following week.

2. Where do you buy your content from?
Our content is 100% original, unless otherwise indicated.

3. How do you send the Thursday Report?
We use Constant Contact, which is a web-based contact system that gives us feedback on how many of these reports are opened and how many people click on which items. The humor items always get the most clicks, followed by recent developments.

4. How long does it take to produce the Thursday Report each week?
Don’t ask! But 90% of our content either comes directly from a client letter or memorandum, something we are adding to a chapter of one of the books or articles that we publish, or something we enjoy working on.

5. Where does this humor come from?
You call this humor?

6. Why all the Kentucky Fried Chicken jokes?
Why not?

7. What do you like best about the Thursday Report?
The great comments we get and the positive energy that is obviously radiated by this report – please keep those letters, cards and expensive gifts coming.

Phil Rarick’s Client Blog Entries: Moving to Florida: Tips on How to Avoid the Tax Traps

A common over-sight of persons moving to Florida is failing to take their trust.  They may have packed their trust and taken it with them, but the trust situs remains in their original state.  This is usually a mistake because . . . .

Read More:  Moving To Florida: Tips On How To Avoid The Tax Traps

Seminar Spotlight

Dolphins.1

On Wednesday, October 23, 2013 at 6pm John Goldsmith, Dean Kent and Alan Gassman are hosting a free seminar for CPAs on BP Calculations for CPAs – Tricks and Traps for the Unwary.

            Each attendee will receive written materials.

            There will be a wine tasting and light hors d’oeuvres.

            To attend the seminar please email Janine Gunyan at Janine@gassmanpa.com

Compliments from last night’s Meet & Greet Cocktail Hour with Dr. Srikumar Rao

We had a party last night at the Meet & Greet with Dr. Rao.  Cynthia Touchton of Stifel Investment Services wrote us this email today:

Alan, so nice having a chance to speak with you and being able to attend your event! Dr. Rao will change many lives… thanks to you. I can’t wait to begin change with his book and workbook! Again, thank you for sharing Dr. Rao with others.

Warmest Regards
Cynthia V. Touchton

Join us and Dr. Rao this Saturday for an interactive workshop on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY at the Holiday Inn Express in Clearwater from 1:00pm – 6:00pm, with an optional question and answer session from 7:00pm – 8:00pm.

Please click here to register for this event.

Applicable Federal Rates

APPLICABLE FEDERAL RATES.October 2013

Seminars and Webinars

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here or email agassman@gassmanpa.com

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN

Date: Wednesday, October 23, 2013 | 6:00 p.m.

Location: Holiday Inn Express, 4750 N. Dale Mabry, Tampa, FL

Additional Information:  Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served.  To register for the event please email Janine Gunyan at Janine@gassmanpa.com.

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO Of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

Bloomberg BNA – Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar

 

Date: October 30, 2013

 

Time: 12:30 – 1:30

 

Location: Online webinar

 

Additional Information: This new practical webinar from Bloomberg BNA, presented by Alan S. Gassman, Kenneth J. Crotty and Christopher J. Denicolo, concentrates on year-end planning techniques which practitioners need to consider for their clients.  This includes techniques that are available to utilize the clients’ lifetime gift exemption, to structure clients’ planning to reduce or eliminate possible income tax exposure, and the potential pitfalls and traps that need to be considered.  Practitioners should not miss this program. For more information on this event, please email agassman@gassmanpa.com

 

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

 

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

 

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

 

Location: Seton Hall Law School, Newark, New Jersey

 

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

 

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

 

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

 

Date: Saturday, November 2, 2013

 

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

MEDICAL EDUCATION RESOURCES CONTINUING EDUACTION PRIMARY CARE CONFERENCE

Alan Gassman will be speaking on the topic of LEGAL, TAX AND FINANCIAL BOOT CAMP FOR THE MEDICAL PRACTICE – A SPECIAL TAX, ESTATE PLANNING AND LAW CONFERENCE FOR PRIMARY CARE PHYSICIANS

Date: December 13, 2013 – 12:00 pm – 4:40 pm and December 14, 2013 8:00 am – 3:00 pm

Topics and Meeting Times:

Friday, December 13, 2013

  • 12:00 – 1:00 pm –  2013 Tax Changes
  • 1:00 – 2:00 pm The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm Lawsuits 101
  • 3:10 – 3:40 pm  – Essential Estate Planning
  • 3:40 – 4:40 pm  – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, Florida

Additional Information:  For more information please visit www.MER.org  Please note that the program qualifies for continuing education credit for physicians.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

 

Thank you to our law clerks that assisted us in preparing this report.

The $800,000 Mistake, Addicted Beneficiaries, and the Lawyer/Dolphin

Posted on: October 3rd, 2013

5th Circuit Court of Appeals BP Opinion Issued Last Night

Why a Married Couple with $4,500,000 in Assets and $2,000,000 of Life Insurance Needs an Irrevocable Life Insurance Trust – Do Not Make an $800,000 Mistake

Our Article: Trust Planning for the Addicted Beneficiary – What the Mental Health Counselor Needs to Know About Trust Law with an Incentive Trust System designed by Alan Gassman and Mental Health Counselors (Not his mental health counselors!)

Dolphins in the News! – Part 1 – Rest In Peace Panama and Part 2 – Clearwater Marine Science Center Replaces Dolphin with Lawyer

Lawyers in History: The Impact of Law Practice on Their Lives and Careers – Mark Twain’s Father was a Lawyer

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

BP 5th Circuit Court Decision

The Fifth Circuit Court of Appeal released an Opinion just last night which is not good for the claims of professional service companies, farming, or construction entities.  The Opinion holds that a preliminary injunction should be in place to prevent adjudication and payment of claims for farmers, professional service firms, and construction companies while the Court sorts out the apparent new requirement imposed in this opinion that financial statements must be on an accrual basis of accounting, meaning that profits and losses have to be measured based upon when earned and owed, not when cash is received or paid.

The Opinion also holds that revenue and expenses must be matched. This will increase the amount of some claims but decrease other claims.  It will also prevent some claims from being calculated for individuals and businesses that have inadequate accounting records.

Please email us at agassman@gassmanpa.com for a copy of this shocking 67 page decision, which may be reviewed by the full Fifth Circuit Court of Appeals in New Orleans and, perhaps, the U.S. Supreme Court.

John Goldsmith of the Trenam Kemker law firm has promised us an analysis of this new case in the next day or two.

We will send it as soon as it is available.

Tampa BP Seminar Announcement: BP Calculations for CPAs – Tricks & Traps Seminar

On Wednesday, October 23, 2013 at 6:00 pm, Alan Gassman  and  John Goldsmith and Dean Kent of Trenam Kemker law firm will be presenting a seminar in Tampa at a presently secret location where both dolphins and Dick Cheney can attend and enjoy this informative program.  Our feedback from the Clearwater BP Seminar was excellent.  One participate even left her spouse as the result of this seminar.

Why a Married Couple with $4,500,000 in Assets and $2,000,000 of Life Insurance Needs an Irrevocable Life Insurance Trust – Do Not Make an $800,000 Mistake

Chart 1a

Chart 2a

Chart 3a

 

John and Mary are both 40 years old and have a $4,500,000 net worth, consisting of a $500,000 home and $4,000,000 of joint investment assets.  They each have $2,000,000 worth of life insurance payable to their respective revocable trusts.  The surviving spouse will save $80,000 per year after the first spouse dies in 2014.

If one of them dies and the proceeds from one life insurance policy and half of the joint investment assets pass into a credit shelter trust that will not be subject to estate tax on the second death, then the credit shelter trust will be funded with $4,000,000 worth of assets.  The surviving spouse will have a $5,250,000 estate tax exemption that will grow with the Consumer Price Index, and another $1,250,000 portability allowance that will not grow with inflation.

If one of them dies the survivor will drop the life insurance on the survivor because the purpose of the life insurance is to help enhance the well-being of the surviving spouse.

The surviving spouse will therefore have an estate of $2,500,000 ($2,000,000 worth of investment assets + $500,000 home = $2,500,000) and $4,000,000 in a credit shelter trust, so it would not seem that a life insurance trust would have been necessary for the first dying spouse.

But what about the time value of money?  If the surviving spouse lives to his or her life expectancy of 38 years, the investments grow at a compounded net rate of six percent (6%) (which is well under the 50-year average for an appropriately managed portfolio), the surviving spouse adds $80,000 a year in year 1 and thereafter an inflation-adjusted amount and this is added to the $2,000,000 of investments, and if the surviving spouse’s $5,250,000 allowance grows by three percent (3%) a year, then here are the results in 38 years:

1.  The $4,000,000 credit shelter trust will have grown to $36,617,009 that will pass estate tax free.

2.  The surviving spouse’s estate tax exemption will have grown to $16,140,000.

3.  The $1,250,000 portability allowance will have stayed stationary (or would disappear if the surviving spouse remarried and the new spouse predeceases the surviving spouse and has used their entire estate tax exemption).

Assuming that the portability allowance remains, the estate tax on the surviving spouse’s $36,074,921 estate would be $7,473,968, assuming a forty percent (40%) estate tax.

Let’s go back now and assume that the $2,000,000 life insurance policy on the first spouse’s death was in an irrevocable life insurance trust.  As the result of this, the surviving spouse’s portability allowance would have been $3,250,000 instead of $1,250,000.

Assuming that the portability allowance remains, the estate tax on the surviving spouse’s $36,074,921 estate would be $6,673,968, assuming a forty percent (40%) estate tax.

Going back to the first death, if the couple had had the entire $4,500,000 estate pass into a credit shelter trust on the first death (by reason of their living in a community property state and using a joint trust, or living in a non-community property state and using a JEST trust or other mechanism that allowed for having the entire $4,500,000 pass into a credit shelter trust on the first death and utilized an irrevocable life insurance trust on the first death, then the surviving spouse’s estate would be $13,189,290, and there would be no estate tax owed on the second death.

As a consequence of the above, planners should more strongly consider irrevocable life insurance trusts and full credit shelter trust funding strategies.

Our Article: Trust Planning for the Addicted Beneficiary – What the Mental Health Counselor Needs to Know About Trust Law with an Incentive Trust System designed by Alan Gassman and Mental Health Counselors (Not his mental health counselors!)

We have divided the article into 3 parts and part 1 is below:

Many successful families have one or more members who at some point deal with addictions to drugs, alcohol, or gambling. Illicit drug use continues to rise in the United States, and millions of Americans meet criteria for either dependence or abuse of alcohol or other substances (Substance Abuse and Mental Health Services Administration, 2011). Gambling addiction is thought to occur in a small percentage of the American population, yet these individuals are believed to account for a large percentage of the revenue acquired in parts of the gambling business (Dizikes, 2012). This information indicates that those with gambling addictions are spending significant monies to support their addictions.  Along with the emotional distress addiction creates in families, there are also important issues concerning finances and inheritance.

The natural desire of parents to treat their children equally, with respect to their inheritance and the management of inheritance, however, is often outweighed by the problems associated with providing outright gifts to an addicted beneficiary-child.  The issue of gifting to the “addicted beneficiary” is the primary focus of this article, but many of the issues and concepts are equally applicable to passing wealth to beneficiaries who function at a high level but whom display emotional and other psychological challenges such as impulsivity, anger and bi-polar issues.

Wealthy families often provide living accommodations, a stream of income, and gifts to an addicted individual, which tends to result in the individual receiving such benefits having little work experience, and may lead to diminished motivation or desire to work. The process of “enabling” the addicted family member often exacerbates the dependency problem, because the well-meaning support of family for the addicted loved one inhibits development of a sense of self esteem and pursuit of personal or professional goals.  They do not dedicate the necessary time to ensure successful employment or develop meaningful relationships that are commonly helpful to working professionals, business owners, and gainfully employed individuals. Although in most circumstances the road to recovery will need to include firm boundaries and a discontinuation of the enabling process, many times parents are not willing to leave their children on their own, regardless of their age.  Ultimately, the best case scenario for the addicted personality is treatment and continuing care that potentially involve such things as abstinence monitoring and community support (McKay et al., 2009).  Research on individuals who remained abstinent over a period of three years were shown to have self-esteem levels comparable to college students, indicating that a sober life may increase goal-directed behavior (Christo & Sutton, 1994).  Several treatment options are available, especially to those with available funds, but relapse is likely when treatment plans are not followed (National Institute on Drug Abuse, 2012).  If the addicted family member is not willing to commit to follow the medically prescribed road to recovery, the best case scenario is to have the estate plan control the flow of money to the addicted person.  Families and estate planners should bear in mind that money is often recognized as a trigger for relapse, and that many addicted individuals have not developed the life skills sufficient to handle money in a responsible manner.  Although families may desire their loved one continue the status quo financially, addicted individuals should also receive counseling and advice regarding how to manage money while in recovery.

Commonly the family head wishes to continue the status quo of “enabling,” but must address the addicted family member specifically in their estate plan. The estate planner may therefore occupy a pivotal role in helping the family determine how to handle not only the inheritance of the addicted individual and his or her family, but also with respect to how to handle the addicted individual’s support and applicable issues while the family matriarch and/or patriarch is still alive and well.

The estate planner will often find that a significant degree of denial among one or both of the clients concerning the severity of the problem.  They will deny their role in what has caused or is causing the problem, and what type of approach is best taken to help both the addicted person and the immediate family members realize the best outcome for the situation. In most cases the addiction has already created a significant amount of family strain, so some family members will have very strong ideas and opinions about the estate plan.  In most family systems there are enablers and members who are more willing to discontinue support, both emotional and financial.

The problem with waiting to address the problem is the often unforeseen danger that as the family head ages, he or she becomes more exposed to pressure, both mentally and physically, from the addicted individual for money, attention, and inheritance rights. This can exacerbate conflicts already present, including relationships with siblings and other family members who are commonly resented and made fearful by the addicted individual.

The welfare of the addicted child’s spouse and/or significant other is also a common concern, which is made even more difficult as they will often have the same or a similar addiction, co-dependence, and a substantial investment in denial of the problem, as well as the children and/or stepchildren of the impaired individual and other family members, all of whom are gravely affected by the decisions ultimately made on how the inheritance will be handled.

Recovery of the addicted individual is the paramount objective. Unfortunately, however, family dynamics and the potential for a large inheritance process create a significant stressor for the addicted beneficiary and those around them.  Financial support has the possibility of promoting their recovery process or destroying it.  This article will provide some suggested structures and forms to address the inheritance of the impaired beneficiary with their best interests and the interests of their family in mind, and will also offer suggestions on how an estate planner may best interact with the family and allied health care professionals in the process.

 Next week we will cover part 2 of this article, which will provide language and suggestions for structuring support guidelines and associated trust planning concepts.

Dolphins in the News!

Part 1 – Rest in Peace Panama the Dolphin

Beloved Clearwater Marine Aquarium (CMA) dolphin Panama died on September 25, 2013. Rescued from a Panama City beach on October 21, 2000, Panama found her permanent home at CMA in 2001.  She was an Atlantic bottlenose dolphin and is widely recognized as the adoptive mother to Winter, the dolphin with the prosthetic tail and star of the feature film Dolphin Tale.  Panama, who was believed to be deaf, also played a special role at the aquarium, encouraging hearing-impaired children to live their lives to the fullest.

Panama was the oldest dolphin at CMA. Though dolphins have an expected lifespan of about 25 years, Panama was estimated to be in her late 30s to early 40s at the time of her death. As such, it is expected that she died of natural causes. Panama has been entertaining families and guests to the CMA for over a decade, so she will surely be missed!

Panama was well loved by many people who watched her play games with rafts and with the other dolphins. The dolphins wrestle over rafts like dogs pull toys from each other.  Go see this! Panama  would have also probably played cards but they never gave her a waterproof deck.

Part 2 – Clearwater Marine Science Center Replaces Dolphin with Lawyer

Linda Dolphin 2

Tax lawyer Linda Griffin, of Linda Suzzanne Griffin, P.A., is a long-time volunteer with the Clearwater Marine Aquarium and a member of the rescue and release agency’s dive team.  After leaving her law practice for the day, Linda, an advocate for oceanic and environmental preservation, often heads over to the CMA to care for, rehabilitate, and work with the aquatic animals.  Now, Linda has decided to take her volunteer status to the next level.

Linda has agreed to become a dolphin and will be putting her dolphin skills on display at the Clearwater Marine Science Center.  She can swim through 9 hoops with a blind fold, and her hobbies include cleaning fish, snorkeling, and making clicking sounds in elevators.  She will be swimming at the Clearwater Marine Science Center from 2 pm to 5 pm Monday – Thursday. Any charitable organization would be pleased to have Linda. Very few lawyers will work for fish.

She is finn-nominal.

Lawyers in History: The Impact of Law Practice on Their Lives and Careers – Mark Twain’s Father Was a Lawyer

Mark Twain: A Son of a Lawyer

American author and humorist Samuel Langhorne Clemens, better known under his pen name Mark Twain, was born in 1835. During his lifetime, he served as a printer’s apprentice, piloted a riverboat, and became known as the father of American literature. While Twain himself was not a lawyer, Twain’s father, John Marshall Clemens, became a licensed attorney at the age of 21. Named for the fourth Chief Justice of the United States, John Marshall Clemens went on to practice law in three states and serve as a county commissioner, county clerk of a probate court, acting attorney general, and county justice of the peace throughout his lengthy legal career.

 It seems that his father’s knowledge of the legal field and business practices passed to his son, for most of Twain’s novels use humor to criticize the economy, government, and, quite often, lawyers. Through both his personal experience with and knowledge of the law, Twain has been praised as “the most faithful delineator of courts and lawyers that we have had among us,” in the 2003 Connecticut Law Review article, “Things are Seldom What They Seem: Judges and Lawyers in the Tales of Mark Twain,” by Lucia A. Silecchia.

For a fun article on Mark Twain’s Guide for Lawyers please click here.

Some of our favorite Mark Twain Jokes & Quotes are as follows:

“October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” – Pudd’nhead Wilson’s Calendar (1894)

“Suppose you were an idiot, and suppose you were a member of Congress, but then I repeat myself.” – Mark Twain, a Biography (1912)

“Patriot: The person who can holler the loudest without knowing what he is hollering about.” – More Maxims of Mark (1927)

“The political and commercial morals of the United States are not merely food for laughter, they are an entire banquet.” – Mark Twain in Eruption (1940)

“They all laid their heads together like as many lawyers when they are gettin’ ready to prove that a man’s heirs ain’t got any right to his property.” – Thomas Jefferson Snodgrass letter, Keokuk Saturday Post (Nov. 1, 1856)

BLOOMBERG BNA YEAR END PLANNING WEBINAR 

  Making the Most of Year-End Planning Opportunities with Checklists, Forms, and Client Letters

Date: Wednesday, October 30, 2013, from 12:30 pm to 2:00 pm

Presenters: Alan S. Gassman, Esq., Kenneth J. Crotty, Esquire, and Christopher J. Denicolo, Esquire

This new practical webinar from Bloomberg BNA, presented by Alan S. Gassman, Kenneth J. Crotty and Christopher J. Denicolo, concentrates on year-end planning techniques which practitioners need to consider for their clients. This includes techniques that are available to utilize the clients’ lifetime gift exemption, to structure clients’ planning to reduce or eliminate possible income tax exposure, and the potential pitfalls and traps that need to be considered. Practitioners should not miss this program.

During this live webinar, Gassman, Crotty and Denicolo will cover:

-Stepped-up basis planning – considering the use of a JEST trust, Alaska community property trusts, and similar techniques

-Income tax planning as a result of the higher income tax rates and the 3.8% Medicare tax

-Mechanizing office correspondence client interaction and drafting systems to facilitate annual gifting to make use of annual exclusions and lifetime gift tax exemptions

-Utilizing split gifts and common mistakes related to same

-Reforming irrevocable trusts to facilitate a stepped-up basis upon the Grantor’s death

-How asset growth and savings can make a currently non-estate taxable client subject to possible estate tax in years to come

-Designing valuation adjustment and assignment clauses to maximize the value of the gifts while using valuation discounts

-Application of the Step Transaction Doctrine to year-end gifts

-Utilizing LLCs or LLLPs when making gifts

-Establishing Dynasty Trusts for the benefit of spouses and descendants

-Using Intentionally Defective Grantor Trusts (IDGT)

-Forgiving loans or reducing debt and using Swap-Back SCINs to utilize the increased lifetime gift exemption

-Analysis of CCA 201330033, and how this may impact utilizing SCINs

-Accelerating income, and planning to “spray” income to trust beneficiaries in lieu of using Grantor Trusts

-Reconsidering the use of irrevocable life insurance trusts because of the 40% Rule

-Discussion of a planner’s checklist which can be reviewed by practitioners with their clients to help discover additional planning opportunities

 Learning Objectives: 

- Understanding the traps which may apply to year-end planning

- Facilitating a stepped-up income tax basis on assets on death to eliminate possible future capital gains

- Recognizing that planning for possible estate tax is important for currently non-estate taxable clients because of future assets growth and savings

- Structuring clients’ planning to plan for income tax avoidance

- Maximizing the use of clients’ increased lifetime gift exemption

- Implementing and annual gifting system that is easily communicated to clients

- Reviewing a checklist of important items to review with clients

Designed For: Any tax practitioner who wants to understand various strategies to utilize a client’s lifetime gift exemption before the end of the year, structure clients’ planning to reduce income tax exposure, and avoid adverse consequences.

EMAIL US AT agassman@gassmanpa.com FOR A TOP SECRET VERY VERY UNIQUE SPECIAL CODE FOR DISCOUNTS FOR ATTENDEES, OR FOR A SPECIAL RECIPE FOR MAKING TUNA FISH TASTE LIKE KENTUCKY FRIED CHICKEN WHEN EATEN BY DOLPHINS.

Applicable Federal Rates

APPLICABLE FEDERAL RATES.October 2013

 

Seminars and Webinars

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information: To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6 pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

PLANNED GIVING CONSORTIUM LUNCHEON

Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER

Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.

Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey

Additional Information: For more information or to attend this event please email agassman@gassmanpa.com

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION) Breakfast and networking opportunities starting at 7:15 am.

Location: Ruth Eckerd Hall

Additional Information: To attend the meeting or to receive information on joining the Council please click here or email agassman@gassmanpa.com. To see a flyer of the event with more detailed information, please click here.

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND DEAN KENT

Date: Wednesday, October 23, 2013 | 6:00 p.m.

Location: a presently secret location in Tampa where both dolphins and Dick Cheney can attend and enjoy this informative program.

Additional Information:.  Our feedback from the Clearwater BP Seminar was excellent.  One participate even left her spouse as the result of this seminar

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

Bloomberg BNA – Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar

Date: October 30, 2013

Time: 12:30 – 1:30

Location: Online Webinar

Additional Information: This new practical webinar from Bloomberg BNA, presented by Alan S. Gassman, Kenneth J. Crotty and Christopher J. Denicolo, concentrates on year-end planning techniques which practitioners need to consider for their clients.  This includes techniques that are available to utilize the clients’ lifetime gift exemption, to structure clients’ planning to reduce or eliminate possible income tax exposure, and the potential pitfalls and traps that need to be considered.  Practitioners should not miss this program. For more information on this event, please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

MEDICAL EDUCATION RESOURCES CONTINUING EDUACTION PRIMARY CARE CONFERENCE

Alan Gassman will be speaking on the topic of LEGAL, TAX AND FINANCIAL BOOT CAMP FOR THE MEDICAL PRACTICE – A SPECIAL TAX, ESTATE PLANNING AND LAW CONFERENCE FOR PRIMARY CARE PHYSICIANS

Date: December 13, 2013 – 12:00 pm – 4:40 pm and December 14, 2013 8:00 am – 3:00 pm

Topics and Meeting Times:

Friday, December 13, 2013

  • 12:00 – 1:00 pm – 2013 Tax Changes
  • 1:00 – 2:00 pm – The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm – Lawsuits 101
  • 3:10 – 3:40 pm – Essential Estate Planning
  • 3:40 – 4:40 pm – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, Florida

Additional Information:  For more information please visit www.MER.org  Please note that the program qualifies for continuing education credit for physicians.  Attendees will receive books and other comprehensive materials.

Discount Information: Clients of our firm will receive their choice of a $150 discount or the ability to bring one non-physical guest to this comprehensive program at a discounted rate.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

 

The Thursday Report 9.26.13 – Trusts, SCINs and Rin Tin Tin

Posted on: September 26th, 2013

Happy Simchat Torah to all of our Jewish friends.

Simchat Torah is related to the Jewish New Year and marks the end of the annual cycle of reading the entire Torah.  It is a part of the Jewish holiday of Shemini Atzeret which is the Eighth Day of Assembly which follows after the festival of Sukkot.

It is not related to the movie Tora, Tora, Tora which came out in 1970 and involved a group of Rabii’s that attempted to take over Pearl Harbor*.  The attack on Pearl Harbor occurred on December 7, 1941, so many historians do not believe that it was related to Simchat Torah.

*Management apologizes for the Pearl Harbor jokes.  We were unable to catch them before this report was published.

Comedy

Married Couples without Estate Tax Concerns – Choosing Separate Revocable Trusts, Tenancy by the Entireties, or a JEST Trust – A Recent Client Letter with Primary Considerations

Publications of the Week

Ken Crotty’s LLC Clinic – Appraisal Rights

Phil Rarick’s Client Blog: Settlement Claims for Florida Minor Children: When Is Court Approval Required?

Profiled Seminar of the Week – Medical Education Resources Continuing Education 2 Day Bootcamp for Physicians

Corporations Green Paper Scam

Michael Jackson’s Likeness Being Taxed

Bloomberg BNA Webinar Announcements: Making the Most of Year-End Planning Opportunities with Checklists, Forms, and Client Letters

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Married Couples without Estate Tax Concerns – Choosing Separate Revocable Trusts, Tenancy by the Entireties, or a JEST Trust – A Recent Client Letter with Primary Considerations

 Many clients have separate revocable trusts that were set up when the estate tax situation called for these, substantially appreciated assets, and a desire to hold the assets in the optimum way possible for tax and inheritance protection.

A letter to a client explaining the choices of a joint and survivor revocable trust, separate revocable trusts, or the JEST trust is as follows.  The client is a retired CPA who can understand the concepts.  For the non-professional clients a more thorough explanation is probably called for.

To follow our meeting where you asked about whether to title assets under your revocable trusts, or jointly. I have three alternatives for you, with discussion of each:

1.         For creditor protection purposes, clients who are concerned that one spouse might get sued often place their assets jointly as tenants by the entireties.  Then if one of you was in a horrendous car accident, or had another liability-attracting event, the assets could not be taken by a creditor as long as you are both alive.  The consequence of this is that the surviving spouse will own all assets if one of you dies.  This would be less protective for the surviving spouse going forward than the two alternatives described below.

On the death of one of you, appreciated joint assets take one half of a stepped up basis.  If the surviving spouse sells the assets, they can expect to pay a capital gains tax as high as 23.8% on one half of the appreciation that occurred between the time of purchase and the death of the first dying spouse.

It is possible for the surviving spouse to disclaim (refuse to accept) the 50% of the first dying spouse’s one half of the joint accounts, and any portion thereby disclaimed would pass into the revocable trust of the first dying spouse to be held for the health, education and maintenance of the surviving spouse.  This type of disclaimer cannot be made if the surviving spouse is not solvent, and the surviving spouse loses any ability to redirect how the assets in the first dying spouse’s trust would pass on the surviving spouse’s death if a disclaimer is used.

2.         The traditional approach would be to have half of the assets held under each revocable trust.

If one spouse is sued, the assets in his or her revocable trust would be accessible to creditors.

On the death of one of you, the assets held in the revocable trust of whoever dies first can “lock up” to be held for the surviving spouse’s protection (from creditors, from subsequent spouses, and if there are co-Trustees or a corporate Trustee, then from undue influence or possible bad mistakes).

Under the two trust plan, the assets held under the revocable trust of whoever dies first get a step up in basis, and can then be sold without any capital gains tax on the appreciation, up to the value of those assets as of the date of the first dying spouse’s death.

Oftentimes we place the assets that have gone up the most in value under the revocable trust of the spouse who is believed to be more likely to die first.

3.         A new third alternative is to form a joint trust, or to amend your present separate revocable trusts to be considered a joint trust.  There are two different kinds of joint trusts that can be used:

1.         A TBE Joint Trust.  This type of joint trust can avoid probate on the second death, or if you both die in a common accident.  It will also be protected from creditors who sue only one of you, assuming that the other one of you is still alive but there is no separate irrevocable trust for the surviving spouse on the first death, so creditor protection and protection against undue influence and similar issues does not apply, although special somewhat complicated disclaimer provisions could be included to generate an effect similar to what is described under Section 1 above if a disclaimer occurs.

2.         Joint Exempt Step Up Trust.  A newer type of joint revocable trust is the JEST (“Joint Exempt Step Up Trust”).  This type of trust was recently developed to try to give clients the advantages of having a full step up in basis for all assets held in the trust (as opposed to only half, as would apply to a TBE trust), and also to fund an irrevocable trust for the surviving spouse on the surviving spouse’s death.

Under a JEST trust, half or all of the trust assets can be held under an irrevocable trust after the first death to provide the protections described above, and there may be a full step up in basis for all JEST trust assets.

When we review these alternatives with clients in your situation, they will often choose the one that they feel most comfortable with, or the one that gives the best tax savings or protection.

We have a bias toward the JEST trust, because we believe that it gives the best chance for tax avoidance and protection of the surviving spouse, but the two trust plan that you have now, tenancy by the entireties, or a combination thereof can be fine.

We welcome any questions, comments or suggestions you might have with respect to the above.

Publications of the Week

MORE JESTING

The October 2013 issue of Estate Planning Magazine leads off with “JEST Offers Serious Estate Planning Plus for Spouses – Part 1” by Alan S. Gassman, Esq., Christopher J. Denicolo, Esq., and former Gassman Law Associates, P.A. law clerk Kacie Hohnadell, Esq. If you would like to receive a copy of this new article, please email agassman@gassmanpa.com. This is part 1 of a 2 part series. In December, our article entitled “Planning for the Addicted Beneficiary” will be published, and in January, a new article on Self Cancelling Installment Notes Planning and Issues is scheduled.  Thank you so much to Estate Planning Magazine and Bob Scharin, the wonderful Executive Editor, for working with us on these exciting pieces.

SCIN IN THE GAME

Ken Crotty and Alan S. Gassman worked with Jerry Hesch to publish LISI newsletter #2147 Tuesday night entitled “Chief Counsel Advice 201330033: IRS Puts SCINs in the Sunlight, Will Taxpayers Get Burned?”  To view a copy of the article, please click here (If you are a dolphin use multiple clicks). Thanks to Jerry Hesch for providing significant guidance and insight for this piece. We welcome any and all questions, comments, and suggestions as we ramp up for the January 2014 Estate Planning Magazine article referred to above.

Rin Tin Tin

Ken Crotty’s LLC Clinic – Appraisal Rights

Ken

The new LLC Act has modified appraisal rights for members of LLCs.  It is important to note that the appraisal rights discussed below are default rules.  The organic documents of the LLC may restrict, modify, or eliminate these rights, so long as the members whose rights are being restricted, modified, or eliminated authorize such change. If there is an express waiver of appraisal rights by the members, then such waiver will constitute a waiver of appraisal rights by the members to the extent so provided in the documents of the LLC. In addition, the organic documents of the LLC may expand on the appraisal rights provided below by listing additional events that would trigger such rights. As a result, members of LLCs should consult with their legal advisors to be certain that the operating agreement and other documents related to the governance of the LLC accurately reflect their intentions related to the appraisal rights of members.

Under the old Act, members of LLCs were entitled to appraisal rights only when a merger or conversion involving the LLC was completed and only provided the right to members who were entitled to vote on the transaction. The new LLC Act has kept the appraisal rights that were allowed under the old Act and has also specified additional events that trigger appraisal rights and clarified the procedural aspects of appraisal rights provisions for LLCs in Section 605.1006.

One new appraisal right that is provided to members is when an interest exchange is completed if the member had the right to vote on the interest exchange and the member’s interest was subject to exchange in the interest exchange. The new Act authorizes interest exchanges in Sections 605.1031 through 605.1036 which will be discussed in greater detail in the future. Generally interest exchanges occur when (1) a domestic LLC acquires one or more classes or series of interests in another domestic LLC or foreign entity or the rights to acquire such classes or series of interests or (2) one or more classes or series of interests in a domestic LLC or the rights to acquire such interests and classes are given to another domestic LLC or foreign entity.

A second new appraisal right is provided to members when substantially all of the assets of the LLC are sold. This appraisal right is only provided to members who had the right to vote on the sale. Further, this right is not available to any member if the sale is pursuant to a court order or if the sale is pursuant to a plan whereby substantially all of the net proceeds will be distributed to the members within one year of the date of sale.

The new Act also adds three other additional appraisal rights related to amendments to the LLC’s documents. A member will have an appraisal right if the amendment (1) reduces the interest of the member to a fraction of an interest; (2) the LLC will be required to purchase the fractional interest so created or will have the right to purchase such fractional interest; and (3) abolishes or alters adversely the appraisal rights of the member.

A member may also have an appraisal right if an amendment to the organic rules of the LLC alters or abolishes the voting rights of a member or adversely impacts the other rights of a member. A member will not have an appraisal right in such a situation if the change was the result of the voting or other rights of new interests then being authorized of a new class or series of interests.

Phil Rarick’s Client Blog: Settlement Claims for Florida Minor Children: When Is Court Approval Required?

 Rarick

Failure to obtain court approval under Florida guardianship law of a pre-suit structured settlement exceeding $15,000 on behalf of a Florida minor child could result in the settlement being disaffirmed by the minor on reaching majority or within a reasonable time thereafter. See F.S. 744.387(3)(a).

Click here to read the blog.

Profiled Seminar of the Week – Medical Education Resources Continuing Education Bootcamp for Physicians

 On Friday, December 13 and Saturday, December 14, 2013 Alan Gassman will be speaking at a Medical Education Resources 2 day boot camp for physicians that qualifies for continuing education credit.  The conference will take place at the Grand Hyatt Tampa Bay in Tampa, Florida.  Participating faculty includes Alan Gassman and Kevin Bassett, CPA.  The agenda for the conference is as follows:

Friday, December 13, 2013

  • 12:00 – 1:00 pm –  2013 Tax Changes
  • 1:00 – 2:00 pm The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm Lawsuits 101
  • 3:10 – 3:40 pm  – Essential Estate Planning
  • 3:40 – 4:40 pm  – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Corporations Green Paper Scam

ALERT – CORPORATIONS SCAM

Many clients recently received a mailing in a green envelope from Corporate Records Service.  The front of the envelope says “IMPORTANT – Annual Records Requirement Statement – Business Mail – Time Sensitive” and “THIS IS NOT A GOVERNMENT DOCUMENT.”  The envelope encloses an official-looking form entitled “2013 – ANNUAL CORPORATE RECORDS FORM” with a request that you complete and return the form with a $125 payment to Corporate Records Service by either check, money order or credit card.

This is a scam mailing and should be destroyed.

Corporate Records Service and another company called Florida Center of Corporations use deceptive practices to elicit payments by sending forms that appear to be from a government agency to Florida entities.  These forms often  promise to “file Annual Minutes” or “obtain your Certificate of Status” for a fee.

The Florida Division of Corporations has no requirement that any entity obtain a Certificate of Status, file Annual Minutes, etc.  Florida entities need only file an Annual Report and pay the Annual Report Fee to the Florida Division of Corporations, which is handled only through their website (www.sunbiz.org). 

The Florida Division of Corporations and the Florida Attorney General’s Office are aware of these scams.

Michael Jackson’s Likeness Being Taxed

 Estate tax planners throughout the country are expressing great surprise that the IRS attempt to tax the Michael Jackson estate for the value of his “image and likeness.”  The IRS came up with a value of $430,000,000 for this, and is seeking more than $700,000,000 in taxes and penalties from the estate which it valued at over $1.1 billion according to Bloomberg BNA.

 For more information on this interesting and important estate tax development please click here.  What would Colonel Sanders say?

Bloomberg BNA Webinar Announcements: Making the Most of Year-End Planning Opportunities with Checklists, Forms, and Client Letters

 On Wednesday, October 30, 2013 from 12:30 pm to 1:00 pm, Alan Gassman, Kenneth Crotty, and Christopher Denicolo will be presenting a webinar entitled “An Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar”.

On Wednesday, November 20, 2013 from 12:30 pm to 2:00 pm, Professor Jerry Hesch, Lawrence Katzenstein, BNA Portfolio author Ed Wojnaroski, Alan Gassman and Kenneth J. Crotty will speak on Planning with Self-Cancelling Installment Notes.

Please put these two webinars on your calendar.  All proceeds will go to Bloomberg BNA Tax & Accounting to support its noble causes.  Special discounts will be announced in the future.

Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

Seminars and Webinars

THE 444 SHOW – STAND YOUR GROUND LAWS – GUN LAW IN FLORIDA

Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)

Location: Online webinar.

Presenters: Kym Rivellini and Denis deVlaming

Additional Information:  This webinar qualifies for 1 hour of continuing education credit and costs $30.00.  To register please visit www.clearwaterbar.org

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information:To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6 pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

PLANNED GIVING CONSORTIUM LUNCHEON

Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER

Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.

Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey

Additional Information: For more information or to attend this event please email agassman@gassmanpa.com

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO Of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

Bloomberg BNA – Estate, Estate and Gift Tax, and Trust Year-End Planning Webinar

Date: October 30, 2013

Time: 12:30 – 1:30

Location:

Additional Information:

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

MEDICAL EDUCATION RESOURCES CONTINUING EDUACTION PRIMARY CARE CONFERENCE

Alan Gassman will be speaking on the topic of LEGAL, TAX AND FINANCIAL BOOT CAMP FOR THE MEDICAL PRACTICE – A SPECIAL TAX, ESTATE PLANNING AND LAW CONFERENCE FOR PRIMARY CARE PHYSICIANS

Date: December 13, 2013 – 12:00 pm – 4:40 pm and December 14, 2013 8:00 am – 3:00 pm

Topics and Meeting Times:

Friday, December 13, 2013

  • 12:00 – 1:00 pm –  2013 Tax Changes
  • 1:00 – 2:00 pm The 10 Biggest Mistakes that Physicians Make in their Investments and Business Planning
  • 2:10 – 3:10 pm Lawsuits 101
  • 3:10 – 3:40 pm  – Essential Estate Planning
  • 3:40 – 4:40 pm  – Deductions for Physicians

Saturday, December 14, 2013

  • 8:00 – 9:00 am – Medical Practice Financial Management
  • 9:00 – 10:00 am – Physician Compensation
  • 10:10 – 11:10 am – Asset Entity Planning for Creditor Protection and Buy/Sell Arrangements
  • 11:10 – 11:40 am – Tax Structures for Medical Practices
  • 12:00 – 1:00 pm – 50 Ways to Leave Your Overhead
  • 1:00 – 2:00 pm – Retirement Plan Options for Physicians
  • 2:00 – 3:00 pm – Stark Naked or Well Prepared? (Please do not come to this session naked.)

Location: Grand Hyatt Tampa Bay, 2900 Bayport Drive, Tampa, Florida

Additional Information:  For more information please visit www.MER.org  Please note that the program qualifies for continuing education credit for physicians.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

The Thursday Report – 9.19.2013 – Internet Traps, BP Claims and Drafting EP Docs

Posted on: September 19th, 2013

“As a member of the Joe Kempe Law firm, I get to read a lot of your articles.  Thank you for your very self.  First of all, you are a riot and more importantly you are so very generous with your considerable knowledge and insights.  You rock… as my grand kids say.”

Best, Marnie Poncy

Internet Trap of the Week: LinkedIn – Remove Areas of Practice if You Are Not Board Certified in the Area Mentioned.

BP Claims – Unauthorized Practice of Law Issues

Personal Observations About the Craft of Drafting Estate Planning Documents, Part 2 of a 2 Part Article by Tom Ellwanger

Phil Rarick’s Informative Client Blog Entries: Fast Track Florida Probate: Summary Administration

Ken Crotty’s LLC Clinic – Service of Process

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 7 of a 7 Part Series

Alan Gassman’s Article Entitled Why Same Sex Couples Will Be Moving to Florida and Other Low Tax Cost States

Profiled Seminar of the Week

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Internet Trap of the Week: LinkedIn – Remove Areas of Practice if You Are Not Board Certified in the Area Mentioned.

By: Danielle Creech, J.D.

The Florida Bar advertising rules now specifically address LinkedIn and the vast majority of law firms need to delete certain parts of the profile.

With 59% of law firms reportedly utilizing social networking, it is extremely important to remain in compliance with the Florida Bar’s Advertisement Rules.

On September 11th, 2013, the Florida Bar released an Advisory Advertising Opinion stating that a lawyer may not list their areas of practice under the LinkedIn header “Skills and Expertise” unless they are board certified. Furthermore, a law firm may not list any area of practice on their firm profile due to the fact that board certification is specific to individual lawyers. The Florida Bar reported that they based this opinion on The Florida Bar Rule 4-7.14(a)(4) and Rule 6-3.4(c).

While the Florida Bar will make a formal determination on this issue in their October 8th, 2013 meeting, attorneys should comply with this opinion to avoid any unneeded Florida Bar standing issues. They have not yet ruled on if an attorney must also be board certified in other listed skills or areas of experience such as “dolphins”, “puns”, or “competitive curling”.

Follow these easy steps to edit your LinkedIn profile:

1. Place cursor on “Profile” on top of the LinkedIn homepage

2. Click “Edit Profile”

3. Scroll down to Skills & Expertise section and click “Edit”

4. Delete all legal areas of practice you are not board certified in by clicking the “X”

5. Click “Save”

To view the entire Florida Bar Opinion click here.

Danielle Creech graduated from Stetson University College of Law in May 2013. While at Stetson, Danielle was an executive board member of the legal fraternity Phi Alpha Delta, a judicial intern for the Thirteenth Judicial Circuit’s Elder Justice Center, and is currently seeking admission to the Florida Bar. Danielle received a B.A., with honors, in English from the University of North Florida. Danielle’s email address is danielle@gassmanpa.com.

BP Claims – Unauthorized Practice of Law Issues

The Florida Bar Ethics Hotline is advising lawyers not to “co-counsel” BP Claims with non-lawyers who  are paid on a percentage basis.  Is the filing of a BP Claim the unauthorized practice of law?  Most Florida lawyers thought not, but the Florida Bar Ethics Hotline (800-235-8619) thinks otherwise.

In August the Alabama Bar Association issued an advisory opinion to the effect that the filing of a BP Claim constitutes the practice of law, and that non lawyer individuals and firms filing BP claims for others are violating Alabama law.  By the same token, lawyers who are assisting such firms or individuals in Alabama are apparently breaking the Alabama law.

A class action lawsuit has been filed on behalf of thousands of Alabama individuals and businesses who have signed fee agreements with non law firms.  You can review a copy of the Alabama Bar Advisory Opinion and the class action lawsuit by clicking here.

It had been the impression of a great many lawyers and other advisors that the filing of a BP claim in Florida would not be considered the unauthorized practice of law.  Realtors are able to fill out real estate contracts, business brokers routinely fill out business broker contracts, pension companies prepare pension plans and submit them to the IRS and the Department of Labor, and other exceptions to the practice of law apply.  Further, certified public accountants prepare tax returns and regularly negotiate with the IRS and attend and conduct appellate hearings with the IRS without being of issue, and a great many certified public accountants are more sophisticated and know more about business and other information than most lawyers, so why not allow them to file BP claims?

Most lawyers that we have talked to believe that handling the appeal of a BP administrative adjudication will be considered the unauthorized practice of law, but this ruling puts hundreds if not thousands of non-lawyers (and a great many lawyers who are co-counseling cases with them) in a precarious situation where claimants are paying for claims representation on a percentage basis.

Personal Observations About the Craft of Drafting Estate Planning Documents – Part 2 of a 2 Part Series by Tom Ellwanger

Ellwanger

In the first part of this Article, I noted that an estate planner never really has enough information to properly plan an estate, while clients never make enough good decisions to convey what they want (because they don’t have the money, and neither of you has the patience, for the education needed to make those decisions).

So how do you draft documents which work well enough to accomplish what needs to happen, have enough foresight to handle probable future contingencies, and are not so long that the client’s email box will not accept them by email — we favor keeping the documents in our vault – and do not overload the lawyer’s vault while physical original storage is still the norm for our protection.

So, I repeat, how do you draft good documents under these circumstances?  Sadly, the answer comes down to “judgment.”  By the time you’ve drafted 1000 sets of documents and probated 500 estates, you have a pretty good idea what needs to be (or needs to not be) in the documents to avoid problems.  That’s particularly true if, like the rest of us, you have gotten in trouble over the years because of something you drafted.

Maybe you had the second spouse and a child of the first marriage serve as co-trustees on a trust for the benefit of the spouse.   Maybe you foolishly agreed with the logic of the client who wanted to have her responsible child be the trustee for her irresponsible child. (On behalf of all responsible children, I will beg you, if you MUST do this, to put in a successor so that the responsible child can escape, because 9 times out of 10 the responsible child will want to escape.  In fact, if the responsible child doesn’t want to escape, it’s almost certainly because the responsible child is too sadistic to be a good trustee.).

Maybe you got worn down by the client who insisted that all eight of his children serve as personal representatives.  Don’t think it doesn’t happen, but I assure you—it will only happen to you once.

These decisions may work out for any given client.  But, as in Las Vegas, the odds are stacked against you, and after the first one blows up on you, you’ll vow never to do that again.  A hundred or so similar situations and you’ll start to feel more comfortable with the documents you draft.

As for the wheelbarrow—yes, it’s theoretically nice to include every possible provision which might ever come into play for any client.  After all, renowned tax lawyer, Sherwin Simmons had in his standard corporate bylaws a provision which explained how to reconstitute the board of directors after a nuclear holocaust, which so far as I know never was put into action, and yet people justifiably think of him as a great lawyer.  But, you do quickly get to the point of overload.   For most of Sherwin Simmons’ career, the world stood on a nuclear precipice; you couldn’t fault a lawyer for thinking about it.   These days our current concerns (global warming, terrorism, the possible birth of even more Kardashians) are different.

The best thing that can happen to a young estate planning lawyer is to be confronted with a client who insists on an explanation of every single provision in his trust agreement.   Nothing else will adequately convey how pointless many “standard” provisions are in the usual situations we face.  Unfortunately, the draftsperson needs both the judgment and memory to know when something special is required . . . and, alas, as judgment grows, memory tends to shrink.

It’s not unusual to see the prejudices of individual lawyers reflected in their typical documents.  As a young lawyer, I drafted documents for one partner whose clients always terminated a surviving spouse’s interest in the credit shelter trust when the spouse remarried, and for another partner whose clients never did so.  How did these two partners manage to attract such distinctly different groups of clients?  They didn’t, of course.  One made a point of recommending a termination provision to every new client; the other usually didn’t bring the subject up, unless something suggested it.

We are told that the testator’s intention should guide what we do.  We probably can’t entirely avoid shaping that intention; many clients appreciate the help.  Still, I think we remain aware of the distinction between what the client wants and what we want.

Phil Rarick’s Informative Client Blog Entries: Fast Track Florida Probate: Summary Administration

Rarick

Florida has a fast track procedure for small estates; it is called Summary Administration. F.S. 735.201(2) provides that Summary Administration may be used for either a resident or non-resident decedent’s estate if   . . . .

Learn More:  Click here: Florida Summary Administration.  

Ken Crotty’s LLC Clinic – Service of Process

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Service of Process for Limited Liability Companies.  The new Florida LLC Act has refined the rules on serving notices on LLCs.  The Act accomplishes this by providing details regarding Service of Process in Section 605.0117 of the Act and also creates Florida Statute Section 48.062 which deals specifically with Service of Process on a limited liability company. Chapter 48 of Florida Statues is the chapter of Title VI Civil Practice and Procedure which deals with Process and the Service of Process.

As stated in Section 605.0117, an LLC may be served with process, notice, or demand that is required or authorized by the law, by serving its registered agent.  In the event that the LLC does not have a registered agent or the registered agent cannot be located after reasonable diligence, then Service of Process is permitted on a Member of a member managed LLC or on a Manager of a manager-managed LLC.  In the unlikely event that the registered agent cannot be served and either a member or manager as applicable also cannot be served, then notice can be served on the Secretary of State.

The last listed registered agent of an LLC that has been dissolved can be served on behalf of the LLC under Section 605.0714(6).

Section 48.0621 states that a person attempting to serve process on a registered agent may serve process on any employee of the registered agent on his first attempt to serve such process, even if the registered agent is temporarily away from the registered agent’s office.  Section 48.0621(2) mirrors 605.0117 in that if the LLC does not have a registered agent or the LLC’s registered agent cannot be found after reasonable diligence, then Service of Process may be made on  a Member of a member-managed LLC or a Manager of a manager-managed LLC.  If a member or manager is not available, he or she may designate an employee of the LLC to accept such Service of Process.  If a person attempts to make such Service of Process and on the first attempt, the member, manager, or designated employee is not available, then on the second attempt process may be served on the person in charge of the LLC during regular business hours.  Section 48.0621(3) provides that in the event that Service of Process cannot be made as described, then service may be made on the Secretary of State.

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 7 of a 7 Part Series

Koch

The seventh and final section of the interview deals with how to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.

Alan Gassman: What about for clients who want to keep their marital and asset information confidential?  Is an arbitration clause a solution? Does the court still have the jurisdiction over temporary support and attorney’s fees or does an arbitration- how does that work?

Ky Koch: I don’t know what the answer is on the temporary attorney’s fees and alimony. I do think you could contract away to go to arbitration on those issues.  I don’t think you could contract away arbitration on the issues of child support and custody.

Judge Jirotka: Correct. I’m not aware of a case in particular, but I would imagine once again we’re heading into public policy area.

Ky Koch: You know we were talking about holes and prenuptial agreements, and one of the holes that Judge Jirotka and myself and everybody else that practices in this room has seen a lot recently is an issue called Doig, D-O-I-G.  The doig hole occurred in many prenuptial agreements that were drafted prior to 1998, 1999, when Mr. and Mr. Doig got divorced down in Sarasota and Mr. and Mrs. Doig’s prenuptial agreement said that Mr. Doig would keep the business and that all increases in value of the business would be his and she would have no claim to it.

The trial court said Mr. Doig gets the business and all the increase in the value during the course of the marriage and Mrs. Doig appealed.  Judge Altenbernd in the 2nd District opined and found in the Doig case that unless there is a specific waiver of the active appreciation in value of an asset, then there is no waiver on that subject and a general reader applies on a passive appreciation – market forces.

Judge Jirotka: Stocks and bonds.

Ky Koch: Exactly.

Alan Gassman: I’ll bet a lot of people disagree with that opinion.

Ky Koch: Yes, well think about every prenuptial agreement that was drawn prior to the Doig case, who could envision that this law would come out this way?  Ain’t no way you could envision that.

Alan Gassman: No, and is that still the law of the land?

Ky Koch: With the new statute I don’t know, but it’s not been set aside and there has been a lot of litigation over it.

Judge Jirotka: Which would be primarily family that wasn’t… who would call say the wealthy spouse’s family business.

Ky Koch: Correct, that is what you see a lot in the case law – definitely so.  Then you get into the argument of was it active or was it passive, and in the famous Roddy v Roddy case.  Mr. Roddy suggested in his divorce that the increase in value of the Miami Dolphins was caused not by his actions because he was a simple potted plant- and that’s a quote from that case.

Alan Gassman: I didn’t realize that.

Judge Jirotka: He did not wait the appropriate number of days, which he doesn’t have to, to veto and he actually took the action to veto it.

Ky Koch: I would have bet my net worth that he was going to sign that statute.

Alan Gassman: Why didn’t he sign it?

Ky Koch: He had a very good reason in my opinion, and that is this statute had a retroactive application.

Judge Jirotka: That is correct.

Ky Koch: And the retroactive application would have not withstood constitutional muster, because it provided for people that have entered into contracts to get out of that contract only as to that moment in aspect.  I respected the reason, but it did surprise me.

Alan Gassman: Ky and Judge Jirotka, thanks for spending the time with me to facilitate completion of this interview.  I hope that we can get together again in the not so distant future to talk about other family law issues.

Alan Gassman’s Article Entitled Why Same Sex Couples Will Be Moving to Florida and Other Low Tax Cost States

Alan Gassman’s article on Same Sex Couples was published Tuesday night on the Leimberg Information Services.  If you would like to read the article to learn about orange flavored twizzlers, alligator repellant key chains, and other important Florida factors, please click here.

Profiled Seminar of the Week

The annual Florida Representing the Physician one-day conference will be held on Friday, January 17, 2014, at the Peabody Hotel, near International Drive in Orlando.

We thank co-chairman Lester Perling for helping put together a great group of speakers and topics.  We hope that all tax and health law attorneys, and CPAs who do significant physician work will consider attending this great conference.

The times, topics, and speakers for this year=s conference are as follows:

8:15 a.m. – 8:30 a.m. Welcoming Remarks

Alan S. Gassman, Esq. and Lester J. Perling, Esq.

Program Co-Chairs

8:30 a.m. – 9:20 a.m. The Do’s and Don’ts of Representing Physicians Before the Florida Board of Medicine

Edward A. Tellechea, Esq.

Chief Assistant Attorney General, Administrative Law Bureau, Office of the Attorney General

Tallahassee, FL

9:20 a.m. – 10:10 a.m. Physician Compensation:  Lessons Learned and Those Yet To Be Learned

Donald H. Romano, Esq.

Foley & Lardner, LLP

Washington, DC

10:10 a.m. – 10:20 a.m. Break

10:20 a.m. – 10:45 a.m. New Tax Law Developments

D. Michael O’Leary, Esq.

Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis

Tampa, FL

10:45 a.m. – 11:10 a.m. The Medicare Tax and Planning Related Thereto – Health Law and Tax Law Issues

Alan H. Daniels, Esq.

Roetzel & Andress

Orlando, FL

11:10 p.m. – 11:35 a.m.  Mediation and Arbitration Clauses and Dispute Resolution

Louise B. Zeuli, Esq.

Louise B. Zeuli, PA

Maitland, FL

11:35 a.m. – 12:00 p.m. Midlevels, Extenders or Non-Physician Providers:  Manage the Relationship Properly Whatever You Call Them

Cynthia A. Mikos, Esq

Allen Dell, P.A.

Tampa, FL

12:00 p.m. – 1:00 p.m. – Lunch

1:00 p.m. – 1:50 p.m. Congress: What Can Physicians Expect in 2014?

Kimberly Brandt, Esq.,

Chief Oversight Counsel, U.S. Senate Finance Committee, Minority Staff

Washington, D.C.

1:50 p.m. – 2:15 p.m. Investment and Financial Planning and Investment Considerations for Physicians and Their Practices  – What the Non-Investment Advisor Needs to Know. 

Michael H. Davis, JD, LLM, CFP

Resource Consulting Group, Inc.

Orlando, FL

2:15 p.m. – 2:40 p.m. Keeping Asset Protection Simple

Joel D. Bronstein, Esq.

Bronstein, Carlson, Gleim & Smith

St. Petersburg, FL

2:40 p.m. – 2:50 p.m. – Break

2:50 p.m. – 3:40 p.m. Income Tax and Financial Strategies for Doctors, Medical Practices and Their Professional Advisors

Kevin J. Bassett, C.P.A.

Bassett & Associates, PA

Raleigh, NC 27607

3:40 p.m. – 4:30 p.m. The Future of Payer/Physician Integration:  Where Do We Go From Here

Jonathan Gavras, M.D.

Senior Vice President and Chief Medical Officer, Blue Cross Blue Shield of Florida, Inc.

Jacksonville, FL

4:30 p.m. – 4:55 p.m. Shareholder Agreement and Structuring Mistakes

Don B. Weinbren, Esquire

Trenam Kemker

Tampa, FL

Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

Seminars and Webinars

THE 444 SHOW – STAND YOUR GROUND LAWS – GUN LAW IN FLORIDA

Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)

Location: Online webinar.

Presenters: Kym Rivellini and Denis deVlaming

Additional Information:  This webinar qualifies for 1 hour of continuing education credit and costs $30.00.  To register please visit www.clearwaterbar.org

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information:To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

PLANNED GIVING CONSORTIUM LUNCHEON

Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER

Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.

Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey

Additional Information: For more information or to attend this event please email agassman@gassmanpa.com

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Alan Gassman is speaking on Sunday, October 27, 2013

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SYMPOSIUM IN TAMPA

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include Jason Altmire, Senior Vice President of Public Policy, Government and Community Affairs, Florida Blue, Coretha Rushing, Chief Human Resources Officer, Equifax, Inc., Stephen Mason, CEO Of BayCare Health System and Dr. Jay Wolfson, DrPH, JD, Associate Vice President of USF Health.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PROJECTION PLANNING, AND WHY DENTISTS ARE DIFFERENT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.

On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes ecocentric living, social justice and personal development is providing a 3 hour workshop on Meditation.  The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.

Date: Saturday, September 28, 2013 | 10am – 1pm

Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa

Additional Details: The cost for attending this workshop is $45 and you can register by clicking here or call 813-416-3069 for more information.

THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND

Date: September 27, 2013

Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut

Sponsor: Connecticut Bar Institute

Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children.  For more information or to register please visit the Institute’s site here.

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

Phil Rarick’s Informative Client Blog Entries: Fast Track Florida Probate: Summary Administration

The Thursday Report – Right to Die/FL Gun Laws – Dolphin Edition

Posted on: September 12th, 2013

Dolphins with Colonel Sanders - all

 

The Estate Planner’s Guide to the Right to Die

Are We the Gunshine State? Justifiable Use of Force in Florida in Chapter 776 –Or Did They Mean Section 1776?

Phil Rarick’s Informative Client Blog Entries: Autism: What Every Parent Should Know About Special Needs Trusts

LLM Writing Award of the Century

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 6 of a 7 Part Series

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

LL.M. Writing Award of the Century

The LL.M. Writing Award of the Century is awarded to Nathan A. West, J.D., LL.M.  This award is only awarded by our law firm every 100 years on the second Thursday of September and requires a recent LL.M. in taxation graduate to work on one tedious project for 8 solid weeks before being so glad to get into the workforce.  Nathan is a co-author of our outline on Commercial Annuity Contract Planning that will be presented at the Notre Dame Tax Institute on Wednesday, October 16, 2013.  Click, click, click here to sign up for the Institute and win 2 buckets of Kentucky Fried Chicken delivered to you by a chicken dressed up like Colonel Sanders!

Nathan will be joining the Raleigh, North Carolina office of KPMG in their International Corporate Tax department.  He earned his LL.M. in taxation from Northwestern University School of Law in 2013, a J.D. from Stetson University College of Law in 2012, and a B.S. in Accounting and Sport Management from Florida State University in 2009.  His email address is naw04c@hotmail.com.  He would like to represent people from China who are getting divorced and need a lawyer to help enforce their divorce decree, especially if it involves putting his own money into an account that he can later receive compensation from.

The next time this award will be given will be September 2113!  We will begin taking applications beginning September 2112!  All entries can be sent to agassman@gassmanpa.com.  Maybe Colonel Sanders and J. Edgar Hoover can review the entries for us!

We would also like to say thank you and good luck to another one of our law clerks, Sydney Smith, who is going to be joining renowned tax and estate planning attorney Laird A. Lile, P.A. (or is it Lile A. Laird?) in Naples, Florida this month.  Sydney is a graduate of Stetson College of Law and helped to draft multiple articles during her clerkship at Gassman Law Associates, P.A. (that we were glad to take credit for).  She took a concentration of Elder Law courses while receiving her J.D. at Stetson Law School and will practice in the fields of estate planning, probate administration, and associated fields of interest.  Laird Lile’s email address is LLile@LairdALile.com if you would like to congratulate him on this excellent choice of a new associate and the continuing prosperity of his practice.  Time to hit him up for a donation also!

The Estate Planner’s Guide to the Right to Die

By: Alan S. Gassman, J.D., LL.M., Nathan West, J.D., LL.M. and Sydney Smith, J.D.

Compassionate Killing: An Inevitable Controversy?

Clients who face terminal illnesses are often surprised to discover that it is illegal in most states to assist in expediting the “natural death” process.  A number of physician clients have confided that they had to “commit murder” on their parents to relieve them from a brutally torturous dying process.  Some clients have shot themselves to avoid having to go through the traditional hospitalization dying process.

Some jurisdictions have been progressive enough to allow the prescription of lethal self-administered medications under limited circumstances. This has become a recent topic of political dialogue. Proponents claim that individuals should have the freedom to choose to end their lives without the inevitable pain and suffering associated with terminal and incurable illnesses, while opponents argue that terminally ill individuals may be pressured into choosing this option, due to the high cost of health care. This hotly debated issue, replete with moral controversy, has been supported by a handful of states, which have codified specific regulations for conducting physician assisted suicide. This article discusses these requirements and safeguards of these statutes, while highlighting the differences in American and International Law.

Physician Assisted Suicide and the Freedom of Choice

Currently, physician facilitated suicide is only available in Montana, Washington, Vermont and Oregon.  It is important to note the use of the word facilitated in the above sentence because it denotes something different from both active and passive euthanasia.  While active euthanasia is illegal in all jurisdictions of the United States, passive euthanasia is not.  Passive euthanasia occurs when a physician “omits treatment and permits the patient to succumb to the disease”1, while active euthanasia refers to when a physician takes steps to end the patient’s life.

In contrast to euthanasia, physician facilitated suicide occurs “when a licensed physician supplies lethal medication to a patient so that the patient can use the medication to end his or her own life.”2  For example, in Oregon, doctors may prescribe the medication, but they may not administer the medication to patients to end their own lives.

The Current State of Regulation: Too Far for Some, Not Nearly Far Enough for Others

The Oregon legislature passed the Death with Dignity Act in 1997.  Under this statute, “[a]n adult who is capable, is a resident of Oregon, and has been determined by the attending physician and consulting physician to be suffering from a terminal disease, and who has voluntarily expressed his or her wish to die, may make a written request for medication for the purpose of ending his or her life in a humane and dignified manner”3  In order to meet the statute’s requirements, a person must prove their residency by showing a connection with the state of Oregon.  For example, this can be accomplished by showing proof of:

(1) a state driver’s license;

(2) a state voter’s registration card;

(3) ownership or rental of real estate in the state; or

(4) a recent state income tax return.4

These methods of proving residency consist of only a few of the many ways residency may be shown in Oregon, as it has been held that any connection to the state will be an acceptable form of proof.  This liberal interpretation of the statute seems to create a daunting state concern, due to the ease in mobility of American citizens. As such, it is believed that the existence of such statutes will result in “domestic death tourism,” a term aptly coined by author, Browne C. Lewis.5

As the residency requirements currently stand, there are very limited regulations by the state legislatures. Surprisingly, physicians generally need not have a long standing relationship or even a previously existing relationship with a patient in order to administer the medication.

It seems as if the only restrictions on obtaining physician assisted suicide relate to the patient’s physical and mental health conditions. In order to meet the requirements, a patient seeking physician aided suicide must have a terminal disease or incurable disease and their condition must be irreversible. A terminal disease has been defined by the states of Oregon and Washington as a disease which will likely result in death within six months following the diagnosis of the patient.6

Patients must also be able to competently understand the repercussions of their decisions. Under Oregon Statute §127.800(3),patients must have the ability to “make and communicate health care decisions to health care providers, including communication through persons familiar with the patient’s manner of communicating if those persons are available.”7  As such, individuals suffering from depression or other psychiatric or psychological disorders must be deemed competent through counseling before they will be able to receive the medication.8

Most importantly, patients must be given all material facts before distribution of the life-ending medication. This allows patients to make informed decisions after communicating with a physician regarding their diagnosis and prognosis, the potential risks and results of the lethal medication, and any other alternatives that may be used. This informed consent is similar to the consent required from a patient before a physician performs a medical procedure.

In addition to the health and psychiatric related requirements, physicians and patients must comply with strictly implemented administrative procedures, in order to obtain the medication. Under Oregon and Washington law,  in the presence of the patient, “at least two persons must attest that ‘to the best of their knowledge and belief the patient is capable, acting voluntarily, and is not being coerced to sign the request.’”9  One of the witnesses must be a disinterested party, and the doctor who is caring for the patient may not act as a witness. Further, patients residing in long-term care facilities must have a witness designated by the facility. Following this process, the medical records of the patient must be examined by another doctor, and the patient’s diagnosis confirmed.

These comprehensive regulations are strictly enforced and allow the patient an opportunity to make an informed decision after an adequate period of reflection. So long as the statutes are followed, the treating physician is granted statutory immunity from civil or criminal liability.

Physician assisted suicide is not entirely a new concept. European laws, as outlined in the charts following this article, have provided a basis for American law on the topics of physician assisted suicide and euthanasia. The Netherlands, in particular has made the practice of physician assisted suicide available to minors, with parental consent until the age of 16.10 At the age of 16 and 17, parents must be involved within the decision-making process, but parental consent is not needed.

A Breakdown of American and International Law on Physician Assisted Suicide

The following charts highlight applicable statutes and case law in both the United States and European nations.

States Allowing Physician Facilitated Suicide

State Date What is allowed?
Oregon November 8, 1994 Death with Dignity Act – allows a capable adult resident of Oregon, who has been determined to be terminally ill, to voluntarily make a written request for medication, which will be administered by the patient, for the purpose of ending his or her life.  Other requirements and procedures must be followed by both patient, and attending and concurring physician.
Washington November 4, 2008 Death With Dignity Act – allows for a competent adult resident of Washington, who has been determined to be suffering from a terminal illness, to voluntarily make a written request for medication, which will be administered by the patient, to end their life.  Other requirements and procedures must be followed by both patient, and attending and concurring physician.
Vermont May 20, 2013 Act Relating to Patient Choice and Control at End of Life – prohibits civil or criminal liability for physicians that prescribe life ending self-administered medication to a terminally ill patient, and  states that a patient who self-administers the medicine for the purpose of ending their life will not be considered exposed to grave physical harm.  This regulation also limits liability for those present when a patient administers the medication.
Montana December 31, 2009 Baxter v. Montana – the Supreme Court of Montana ruled that terminally ill and competent patients have a legal right to die with dignity under the Montana Constitution, which allows physicians to prescribe the medication for self-administration. The ruling also protects physicians who prescribe the medication.  A Death with Dignity Act, introduced on January 31, 2013 was tabled by the Judiciary Committee on February 13, 2013.

States Considering Physician Assisted Suicide

States Bill Number Bill Summary Bill Status
Hawaii House Bill 606 House Bill 606 allows a terminally ill, competent adult, 50 years of age or older, to obtain the medication. House Bill 606 was referred to the Health, Judicial and Financial Committees on January 22, 2013.
Kansas House Bill 2068 House Bill 2068 mirrors the Oregon and Washington statutes, allowing for a competent adult resident of Kansas diagnosed with a terminal disease to make a written request for the medication. House Bill 2068 was introduced on January 23, 2013 and was referred to the Committee on Health and Human Services on January 24, 2013.
Massachusetts House Bill 1998 A Death with Dignity Act allows a competent adult resident of Massachusetts, diagnosed with a terminal illness, to make a written request for the medication. House Bill 1998 was introduced on January 22, 2013 and referred to the Judiciary Committee.
NewHampshire House Bill 403 House Bill 403 establishes a committee who will study the Death with Dignity legislation for individuals suffering from terminal illness/condition. House Bill 403 was approved by the House on February 21, 2013 and was referred to the Health, Education and Human Services Committee, who reported on May 23, 2013 that the Bill should pass.  The House concurred on June 5, 2013.  The Governor vetoed the Bill.
New Jersey Assembly Bill 3328 and Senate Bill 2259 Both Bills contain similar language to the laws of Washington and Oregon and provide terminally ill competent residents of New Jersey the right to make written request for the medication. Assembly Bill 3328 and Senate Bill 2259 were introduced on September 27, 2012 in the Assembly, and on October 15, 2012 in the Senate.  The Assembly Health and Senior Services moved for a vote on February 7, 2013, while the Senate referred the bill to the Senate Health, Human Services and Senior Citizens Committee.

 

                                     Countries allowing Physician Assistance in Suicide
Country Date What is allowed?
Belgium 2002 Both euthanasia and physician assisted suicide are legal in Belgium. Euthanasia was legalized by the Euthanasia Act of 2002.  Currently the law is only available to competent adults who suffer from unbearable physical or mental pain.
Germany 1751 Although the act of euthanasia is illegal in Germany, physician assisted suicide is not expressly made illegal.
Luxembourg 2008 Luxembourg’s law requires consultation among physicians and is only available for patients suffering from incurable conditions.
Netherlands 2001 The Termination of Life on Request and Assisted Suicide Act allows for both euthanasia and physician assisted suicide so long as the following conditions are met: the patient’s pain is unbearable and there are no signs of improvement; the patient must voluntarily request to end their life; and the patient must be fully aware of their condition and options available to them.

Opening the Dialogue for a Better Solution

Planners and their clients should be aware of physician aided suicide as an option for those suffering from end-stage illnesses. Powers of Attorney and related documents may specifically request and authorize the movement and treatment described above. Clients have the right to know what their rights are and to make intelligent choices for themselves, however, because this right is inherently controversial, it is often ignored. We must open this dialogue and ask ourselves why it is considered inhumane to allow a dog or other pet to suffer without euthanasia, while a different standard applies to our loved ones.  Estate planners and physicians should educate their clients on the issue and allow them to make educated choices regarding their health care plans. 


1Browne C. Lewis, Graceful Exit: Redefining Terminal to Expand the Availability of Physician-Facilitated Suicide, 91 Or. L. Rev. 457, 462 (2012).

2Id. at 463.

3 Or. Rev. Stat. 127.805 § 2.01.

4  Or. Rev. Stat. 127.860 § 3.10.

5 Id. at 479.

6 Or. Rev. Stat. § 127.800(12) (2011); Wash. Rev. Code Ann. § 70.245.010(13) (2011).

 

Dolphin Mortgage

Are We the Gunshine State? Justifiable Use of Force in Florida in Chapter 776 –Or Did They Mean Section 1776?

Florigun

By Sydney Smith, J.D.

Clients who move here from highly regulated weapon states are surprised to learn that thousands of Floridians are carrying guns in their cars, and even on their persons, and that concealed weapons permits can be received based upon 4 hours of classroom and 4 hours of range work.  Sydney Smith, Esq. has done a great job preparing this article for our Thursday Report and your protection.

I. Florida’s Law and the Right to Bear Arms

The U.S. Constitution’s Second Amendment right to bear arms has deeply rooted historical significance in our young nation. According to the Second Amendment, “[a] well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”

many, this right represents the freedoms gained by our newly founded nation following the Revolutionary War. As such, many states, such as Florida, have adopted similar amendments within their constitutions as an attempt to further solidify this individual right.

However, like most rights, the Second Amendment right is not without its limits and does not give individuals the unbridled ability to carry any type of weapon in any manner for any purpose. Despite the amendment’s language allowing individuals to “bear arms,” state statutes restricting the carrying of concealed weapons have been held constitutional. Further, state statutes may validly restrict the type of weapons owned, so long as the restrictions allow individuals to own weapons “in common use at the time.” U.S. v. Miller, 307 U.S. 174, 181 (1939). This sentiment was reaffirmed, as applied to the ownership of handguns, in the landmark case District of Columbia v. Heller in which Justice Scalia held:

“Some have made the argument, bordering on the frivolous, that only those arms in existence in the 18th century are protected by the Second Amendment. We do not interpret constitutional rights that way. Just as the First Amendment protects modern forms of communications…and the Fourth Amendment applies to modern forms of search…the Second Amendment extends, prima facie, to all instruments that constitute bearable arms, even those that were not in existence at the time of the founding.” Dist. of Columbia v. Heller, 554 U.S. 570, 582 (2008).

Beyond the above national debate of where the right to bear arms should be drawn, the State of Florida, commonly known as the Gunshine State, is recognized for having liberal laws regarding the purchase and use of firearms. The right to bear arms is specifically protected within Florida’s constitution which states, “[t]he right of the people to keep and bear arms in defense of themselves and of the lawful authority of the state shall not be infringed, except that the manner of bearing arms may be regulated by law” Fla. Const. Art. I, § 8.  In Florida, no permit or registration is required for the purchase of a firearm. However, Florida’s Constitution states that, “[t]here shall be a mandatory period of three days, excluding weekends and legal holidays, between the purchase and delivery at retail of any handgun.” Fla. Const. Art. I,  § 8.

In Florida, it is generally illegal to openly carry a weapon. F.S. §  790.053.  However, a person may openly carry, for legal self defense purposes, a self defense chemical spray, non‑lethal stun gun, dart‑firing stun gun or other non‑lethal electric weapon designed for defensive purposes only. F.S. § 790.053(2). Florida is unusual in that it allows a variety of concealed weapons, not just handguns, to be carried with a license. Unlike the majority of states, which limit concealed weapons permits to handguns, Florida extends these protections to  electronic weapons or devices, tear gas guns, knives, and billie clubs. F.S. § 790.06. Additionally, Florida has codified a few exceptions that allow individuals to carry concealed weapons without possessing a permit.

II. How to Obtain a Concealed Weapons Permit in Florida

In order to carry a concealed weapon, an individual must apply for a permit through the Department of Agriculture and Consumer Services. In general, in order to obtain a permit, one must be 21 years of age or older, a citizen or a permanent resident alien of the U.S., without physical infirmity, which could prevent the safe handling of a firearm, has not been committed for the abuse of a controlled substance within a three year period preceding application, has not committed a felony, does not chronically use alcohol or other substances to the extent that this use would impair the applicant=s ability to safely operate a firearm, is not adjudicated incapacitated, and has not been issued an injunction that is currently in force and restrains the applicant from committing acts of domestic violence or acts of repeat violence. F.S. § 790.06(2).

Additionally, the applicant must complete a hunter education or hunter safety course approved by the Fish and wildlife Conservation Commission, a National Rifle Association firearms safety or training course, or a firearms safety or training course available to the general public and approved by the National Rifle Association, the Criminal Justice Standards and Training Commission, or the Department of Agriculture and Consumer Services. F.S. § 790.06(2)(h).

This certification will be valid in Florida for up to 7 years. In addition, the applicant must obtain finger prints, a passport sized photograph not older than 30 days, and must complete and notarize a Florida concealed weapons permit application.  If the applicant is a previous military service member and can provide a Department of Defense Form DD-214, with an honorable discharge, showing weapons training, it can be accepted in lieu of safety training.

III. Concealed Weapons Permit Restrictions

However, Florida places restrictions on the places where a concealed weapon may be carried. These locations include, but are not limited to, any police, sheriff, or highway patrol station, detention facility, jail, or prison, any courthouse or courtroom except that a judge may carry and determine who may carry within his or her courtroom, any polling place, any meeting of the governing body of a county, public school district, municipality, special district or meeting of the Legislature or a Legislative Committee, any public or private school, college, or professional athletic event not relating to firearms, any  public or private preschool, elementary, or secondary school, any college or university facility, any portion of an establishment licensed to dispense alcoholic beverages for consumption on the premises, which portion of the establishment is primarily devoted to such purpose, and  the inside passenger terminal of an airport. F.S. § 790.06(12).

Unfortunately, the law applying to locations serving alcoholic beverages, is ambiguous and appears to be subject to dispute with regard to restaurants with bars or other places licensed to serve alcohol which serve other purposes, such as casinos and concert arenas. In an informal statement regarding the interpretation of this law, the Florida Department of Agriculture stated that an individual holding a concealed weapons permit may legally enter into a business that serves alcohol, but may not enter into the areas of the business of which the primary purpose is devoted to serving alcohol. For example, this restriction would apply to the bar area of a restaurant.

IV. Possession of Firearm without Concealed Weapons Permit

Under Florida law, an individual may keep a concealed firearm in his “private conveyance” without possessing a concealed weapons permit so long as he is 18 years of age or older and the firearm or other weapon is “securely encased or is otherwise not readily accessible for immediate use.” F.S. § 790.251(5). “Securely encased” means in a glove compartment, whether or not locked, snapped in a holster, in a gun case, whether or not locked, in a zippered gun case, or in a closed box or container which requires a lid or cover to be opened for access. F.S. § 790.001(17).   This statute is commonly misunderstood as requiring an individual to keep the firearm  in a locked container. However, there is no requirement that the container be locked, so long as the firearm is not “readily accessible for immediate use”. “Readily accessible for immediate use” means that “a firearm or other weapon is carried on the person or within such close proximity and in such a manner that it can be retrieved and used as easily and quickly as if carried on the person. F.S. § 790.001(16).

Additionally, Florida specifically exempts certain individuals from the requirement of obtaining a concealed weapons permit. These exceptions apply to persons engaged in fishing, camping, or lawful hunting or returning from a fishing, camping, or lawful hunting expedition, persons firing weapons in a safe and secure indoor range, and persons possessing firearms at their home or place of business. F.S.  § 790.25(3).

V. Florida’s “Stand Your Ground Law” Eliminating the Duty to Retreat

Florida=s Stand Your Ground Law gives individuals the right to use deadly force to defend themselves without any requirement to retreat where the individual reasonably believes that his conduct is necessary to defend himself or another against another=s imminent use of unlawful force.  Under Florida law, an individual who is not engaged in unlawful activity and who is attacked in a place where he or she has a right to be has no duty to retreat and “has the right to stand his or her ground and meet force with force, including deadly force if he or she reasonably believes it is necessary to do so to prevent death or great bodily harm to himself or herself or another or to prevent commission of a forcible felony.” F.S. § 776.013(3).  This right to stand one=s ground is strengthened by the codified presumption under F.S. § 776.013(1) stating that a person is presumed to have a reasonable belief of impending death or great bodily injury where his home or occupied vehicle  is unlawfully entered.

Therefore, under this law, coined the “castle doctrine,” an individual need not retreat from his own home to avoid using deadly force against an assailant.

VII. The Truth About the Saturday Night Special: Do Stricter Gun Laws Affect the Rate of Crime?

Proponents of “right-to-carry” laws often cite to John Lott’s groundbreaking 2000 publication entitled “More Guns, Less Crime: Understanding Crime and Gun Control Laws,” in which he asserts that liberal restrictions on concealed weapons laws lead to lower national crime rates. However, in 2004 the National Research Council of the National Academies published a report reviewing the research of Lott and Mustard and concluded that there was no meaningful link between right-to-carry laws and crime rates, considering that crime rates have generally been dropping for the past two decades.

However, despite the staunch opposition to “shall-issue” laws, it is hard to ignore the multitude of statistics showing that they directly result in lower crime rates. When Florida passed its “shall-issue” law in 1987, requiring the provision of concealed weapons permits to all qualified citizens, many predicted the rate of gun-related crime to skyrocket. However, just the opposite occurred, as shown by Gary Kleck’s report stating that though 1997, only one permit holder issued out of 350,000 was convicted of homicide. According to a recent 2013 report from ABC, this trend has continued, as gun-related crimes in Florida dropped by 33% from 2007 and 2011 while the number of concealed weapons permits grew during that period by 90%. However, critics assert that the overall drop in Florida’s violent crime rate to 26% renders Florida’s drop in gun-related crime a less convincing statistic.

Phil Rarick’s Informative Client Blog Entries: Autism: What Every Parent Should Know About Special Needs Trusts

Rarick

Parents of children with autism have many daunting tasks.  One task that is often put off until it is too late is making sure you have a back-up plan if you can no longer care for your child.

You are the primary care giver for your child.  If you become disabled or die, do you have a plan?  Do you have instructions to care for your child?  Have you designated persons whom you trust and who could care for your child if you cannot provide such care?

If you have not had time to consider these critical questions, now is the time.  Click, click, click here to read the blog post.

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 6 of a 7 Part Series

Jirotka Koch

This week we cover the important topics of how much disclosure is enough disclosure, whether both parties need to have lawyers, and questions to ask the lawyer or spouse you are not representing to document appropriate disclosure and circumstances by videotaped interview or written correspondence.

  • Part 1 presented on Thursday, August 8, 2013, the reader was introduced to the present overall status of prenuptial agreement statutory law and case law, and talks about prominent malpractice traps and how to get clients prepared for what they can encounter in the prenuptial agreement universe.  Click, click, click here to be directed to the Thursday Report for August 8, 2013.
  • Part 2 on Thursday, August 15, 2013, discussed the important topics of how much disclosure is enough disclosure and whether or not both parties need to have lawyers.  Click, click, click here to be directed to the Thursday Report for August 15, 2013.
  • Part 3, on Thursday, August 22, 2013, Questions to ask the lawyer or spouse you are not representing to document appropriate disclosure circumstances by video-taped interview or written correspondence. Click, click, click here to be directed to the Thursday Report for August 22, 2013.
  • Part 4 on Thursday, August 29, 2013, discussed Castro v. Castro and Belcher v. Belcher, and what they mean for clients and lawyers who are involved in the pre and post nuptial agreement planning. Click, click, click here to be directed to the Thursday Report for August 29, 2013.
  • Part 5 on Thursday, September 5, 2013, discussed alimony and lawyer fee obligations that may not be waivable in pre-nuptial or post nuptial agreements, and offset clauses and other ways to handle these. Click, click, click here to be directed to the Thursday Report for September 5, 2013.
  • Part 6, Today, September 12, 2013, Bifurcation – whether you can require the validity of the pre-nuptial or post-nuptial agreement be litigated or also before having to also litigate what the result could be if it is or is not enforceable.
  • Part 7, On Thursday, September 19, 2013, How to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.

The sixth portion of the interview, Judge Jirotka and Ky will discuss an important point – whether you can require that the validity of the pre-nuptial or post-nuptial agreement be litigated before having to also litigate what the result could be if it is enforceable.

Judge Jirotka: Ky, what has been your experience in the following situation: We have a dissolution of marriage with either a postnuptial or a prenuptial agreement, and one party or the other wants to determine the validity of the agreement.  How have you been in terms of deciding whether to in what we largely call bifurcate, or just litigate the whole issue once and for all?  You would litigate the validity of the agreement as part of the dissolution or do sort of a mini trial beforehand?

Ky Koch: A great question – and in my standard prenuptial agreement I have a bifurcation provision that says we the parties agree that if we’re getting divorced there will be a bifurcation first in the discovery.  Discovery will be limited to the issue of an interpretation of the validity of the agreement if somebody challenges it, and second, as to the issue of whether or not it’s enforceable.  My opinion is that most of these should go the way of a bifurcation.

I think there ought to be a bifurcation whether or not that provision’s in the prenup, because it simplifies the issues later to be addressed to the court.  First if the agreement is found to be valid, the divorce could be over with. Second if the prenuptial agreement is found to be valid, but there are holes in it, it limits the number of issues in the divorce.  The third possibility is the prenuptial is invalid and then you go forward with litigating the divorce.  In my opinion it is very wise for courts to bifurcate prenuptial agreements for that reason.

Alan Gassman: Will the bifurcation provision be enforceable?

Ky Koch: Yes, the case law on that subject says that that’s within the sound discretion of the trial court.

Judge Jirotka: That is correct, yes.

Alan Gassman: Well the court should want to keep it simple, right?

Ky Koch: Yes, but that issue comes up a lot.  There are lawyers out there that disagree with me surprisingly, and would prefer to address this all at once for the prenuptial.

Alan Gassman: I can think of 5,000,000 reasons for that.

Judge Jirotka: I would assume that the biggest issue would be if the prenuptial agreement is upheld, then there is very limited discovery going forward as to valuation of assets.

Ky Koch: Assuming that the prenuptial agreement didn’t have any holes in it.  If you have an agreement that’s pretty tight and it’s got all the issues resolved then that’s true, but there are agreements that are drawn with holes in them.  There are agreements that are drawn specifically with holes and that is our agreement is not going to govern the issue of for instance alimony.  Everything else is resolved.  Alimony’s still open and we’ll address that if and when we get divorced.  That happens a lot when drafting prenuptial agreements.

APPLICABLE FEDERAL RATES.September 2013

Seminars and Webinars

NEW SEMINAR ANNOUNCEMENT:

Thank you to the Sandspur Chapter of the FICPA for inviting Alan S. Gassman to get the heck out of our way in the office to go talk on the topic of The CPA’s Guide to Florida Creditor Protection Planning – More Services Your Clients Need, and Traps for the Unwary” at 5pm on Monday, October 21, 2013 at TGI Friday’s on Fowler Avenue in Tampa.  For more information please contact Rosa Quintela, CPA at rosa@vantagepointtampa.com.

There are 10 available spots for non-member attendees at $25 each, and each attendee will receive dinner, an enjoyable 50 minute talk, and a copy of Gassman & Markham on Florida & Federal Asset Protection Law, which can alternatively be ordered on Amazon.com (click, click, click, click – the dolphins loved it!).

AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!

Date: Thursday, September 12, 2013 | 12:30 p.m.

Presenter: Sandra Greenblatt, Board Certified Health Lawyer

Location: Online webinar.

Additional Information: To register for the Thursday, September 12, 2013, 12:30 p.m. webinar please click, click, click here

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN

Date: Monday, September 16, 2013 | 6:00 p.m.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater

Additional Information:  Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served.  To register for the event please click, click, click here.

NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY

Date: Wednesday, September 18, 2013

Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA, PhD, SOB

Location: Online webinar

Additional Information:  To register for the webinar please click, click, click here.

NORTH SUNCOAST FICPA MONTHLY MEETING

Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.

Speakers: Alan Gassman and Christopher Denicolo will speak on The Florida CPA’s Guide to Planning with Physicians and Medical Practices

Location: Chili’s in Port Richey

Additional Information: To attend this seminar please email agassman@gassmanpa.com

WEDU ESTATE PLANNING SEMINAR

Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?

Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS

Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am

Location: WEDU PBS Berman Family Broadcast Center

Additional Information:  If you would like to sign up for this seminar please click, click, click here

THE 444 SHOW – STAND YOUR GROUND LAWS

Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)

Location: Online webinar.

Presenters: Kym Rivellini and Denis deVlaming

Additional Information:  This webinar qualifies for 1 hour of continuing education credit and costs $30.00.  To register please visit www.clearwaterbar.org

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information:To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click, click, click here.

PLANNED GIVING CONSORTIUM LUNCHEON

Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER

Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.

Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey

Additional Information: For more information or to attend this event please email agassman@gassmanpa.com

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click, click, click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

SANDSPUR CHAPTER OF THE FICPA MONTHLY MEETING

Alan Gassman will be speaking to the Tampa Chapter of the FICPA on Monday, October 21, 2013.  The topic is “The CPA’s Guide to Florida Creditor Protection Planning – More Services Your Clients Need, and Traps for the Unwary.”

Date:  Monday, October 21, 2013

Location: TGI Friday’s on Fowler Avenue in Tampa

Additional Information: To attend this event please email agassman@gassmanpa.com

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click, click, click here or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Times TBD

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SEMINAR

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include John Harding, President and CEO of Adventist Healthcare Systems, Stephen Klasko, Dean and President of USF Health College of Medicine, David Lewis, CEO of United Healthcare of Florida, Nancy Templin, CFO of All Children’s Hospital and a mystery speaker (other than Colonel Sanders) to be identified.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of “WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW”

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of “WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW” – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of “PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT”

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.

On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes exocentric living, social justice and personal development is providing a 3 hour workshop on Meditation.  The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.

Date: Saturday, September 28, 2013 | 10am – 1pm

Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa

Additional Details: The cost for attending this workshop is $45 and you can register by click, click, clicking here.  or call 813-416-3069 for more information.

THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND

Date: September 27, 2013

Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut

Sponsor: Connecticut Bar Institute

Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children.  For more information or to register please visit the Institute’s site here.

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

WEDU 1 PAGE ANNOUNCEMENT

 

 

The Thursday Report – 9.5.13 – Same Sex Couple Planning for Floridians and They Skinny on SCINs

Posted on: September 5th, 2013

Header for website

 

Same Sex Couple Planning for Floridians

The Skinny on SCINs

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 5 of a 7 Part Series

Phil Rarick’s Informative Client Blog Entries: Standby Elective Share Trusts

Thursday Report Jokes

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

 This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Why Same Sex Couples Will Be Moving to Florida

By Alan S. Gassman, J.D., LL.M. and Nathan West, J.D., LL.M.

Before the IRS issued Revenue Ruling 2013-17 last Thursday, a same sex couple would not receive full married couple benefits under the estate and gift tax laws unless they were (1) married in a state that recognizes same sex marriages and (2) resided in a state that also recognizes same sex marriages.

The above interpretation is consistent with the Supreme Court’s decision in the United States v. Windsor case as discussed in our Leimberg Newsletter #2123, which was entitled Many Affluent Same-Sex Couples Will Be Leaving Florida and Where They Should Go. This piece was premised upon the court’s decision to the effect that a same-sex couple would not be considered as married for tax purposes if the state where they resided did not recognize the marriage. That changed very quickly!

On Thursday, August 29, 2013, the IRS took a very big step forward in ruling that same sex couples will be considered as married for federal income, estate and gift tax purposes. Any same sex marriage legally entered into in one of the 13 states that allow same sex marriages, click here to see the chart, the District of Columbia, or a foreign jurisdiction having legal authority to sanction same sex marriages is covered under this ruling; notwithstanding whether the spouses live in a state or other jurisdiction that recognizes their marriage legally.

The rules and implication thereof were very thoroughly explained by George Karibjanian in Steve Leimberg’s Estate Planning Email Newsletter Archive Message #3137 that was published on September 3rd and can be viewed by clicking here.

As the result of this, affluent married couples can move to Florida to avoid state inheritance taxes, state estate taxes, and state income taxes, because Florida has none of these taxes and is also a pretty darned neat place to live (when it is not 100 degrees outside with 100% humidity and the power is not working because of a lightning storm).

In addition to the above, same sex couples can bring their guns to Florida and use them almost any time they want, as described in our “Are We the Gunshine State? Justifiable Use of Force in Florida in Chapter 776 – Or Did They Mean Section 1776?” article that begins in next week’s issue of the Thursday Report.

Revenue Ruling 2013-17 provides that Internal Revenue Code Section 6511 gives same sex married couples the option of amending their prior tax returns, going back 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Same sex couples may also choose to leave the prior returns in tact or to amend one or more prior tax years.

This gives same sex couples some very good choices for income tax planning purposes.  Almost all affluent same sex couples (or couples where one spouse is affluent) will want to go to a good income tax advisor with the right software to help determine what years they should amend and what years they should not amend.

Any gift tax return that involved a transfer to a spouse that used up any portion of the donor spouse’s estate tax exemption should probably be amended to regain the exemption amount, unless there are other items on the gift tax return that are best not re-opened, such as large gifts with questionable values to non-spouse individuals.

Amending a gift tax return will give the IRS three years after the date of the amendment to revisit all aspects of the gift tax return amended.

Same sex couples who are not formally married in one of the recognition states should consider whether the estate and gift tax and income tax advantages of getting married outweigh potential disadvantages. These disadvantages can include;

  • having to leave qualified plan benefits to a surviving spouse who will not sign a waiver associated therewith,
  • having alimony and property settlement right vest in a new spouse if the new spouse will not sign a binding prenuptial agreement as requested by the other spouse,
  • having to have the new spouse on the healthcare plan of an employed spouse whose employer requires this,
  • having to inform an employer that a same sex marriage exists in order to comply with personnel, office and associated requirements (which may occur in states that do not prevent discrimination against homosexual individuals, such as Florida, however many cities and counties in Florida have enacted ordinances prohibiting sexual orientation discrimination in the workplace),
  • having to decide who to invite to the ceremony and who is going to pay for it or,
  • whether to go to Justice Ginsberg’s house since she will probably not charge because it would have to be disclosed on her income disclosure form.

Advisors who represent one or more members of an affluent same sex couple will need to reach out to let them know that if and when they are married they can have a new estate tax plan that includes marital deduction planning, QTIP trust planning, and associated rights and responsibilities.

When the couple resides in Florida it is probably also useful to have them consider a prenuptial agreement, even though Florida law will not give either spouse “marital rights or responsibilities” in the event of a divorce at the present time.  This could change in the not too distant future, and if so alimony and property settlement rights might date back to when the couple was originally married, as opposed to dating back to when the Florida legislature and a future governor might sign such legislation into existence.

Also consider some advantages vs. disadvantages of marriage shown below.

Advantages of Marriage

Disadvantages of Marriage

  • Savings with sharing a single health insurance plan: While the rules vary by state and employer, many health insurance companies already offer benefits to domestic partners and same-sex unions; others require marriage for shared coverage.
  • Responsibility of health care: Depending on which state you live in, if your spouse cannot pay their health care bills, then you may be held liable for the cost.
  • Security benefits go to the surviving spouse: Widowed spouses are entitled to their spouses’ Social Security benefits if they are greater than their own.
  • Loss of benefits if you get remarried: If you are a widow or widower receiving a deceased spouse=s retirement benefits or social security benefits you may lose those benefits if you get remarried
  • No Employer Taxes: If you work for your spouse they do not have to pay social security taxes or unemployment taxes on your behalf..
  • Spousal debt responsibility: In community property states, most debt incurred by either spouse during marriage are owed jointly by the couple, even if only one spouse signed for the debt.                             
  • “Being Married” – Dr. Phil
  • “Being Married” – Rodney Dangerfield

The Skinny on SCINs – IRS PUTS SCINS IN THE SUNLIGHT. WILL TAXPAYERS GET BURNED?

By Alan S. Gassman, J.D., LL.M. and Kenneth J. Crotty, J.D., LL.M.

Chief Counsel Advice (CCA) 201330033 was issued recently in what came as a surprise and disappointment to a great many planners and commentators. In this pronouncement the IRS Chief Counsel’s Office rejected the traditional practice of using the § 7520 mortality tables to value a self-cancelling installment note (SCIN) where the note holder had a better than 50% chance of living longer than one year. Instead, the office announced that in their view the valuation of a SCIN would have to take into account a manual review of what a willing buyer would pay a willing seller, after assessing the note holder’s specific life expectancy based on the note holder’s medical history and such other factors as arm’s-length parties would consider under Treas. Reg. §25.2512-8. Departing from the established system of using actuarial tables would lead to uncertainty as to how to properly value a SCIN, as well as dramatically increasing litigation. Hopefully the IRS will read its own regulations and recall this seemingly erroneous pronouncement. As Howard Zaritsky and others have pointed out, § 7520 states that it must be used to value “an interest for life or a term of years,” which precisely describes the payments scheduled to be made under a SCIN. Before this CCA was issued, the IRS had never indicated to the contrary after decades of literature and many cases have been decided. To change the way of looking at this now would be inappropriate, to say the least. Others have called for use of the § 7820 tables, which are even more taxpayer friendly than the § 7520 tables, as discussed below.

The case addressed in the CCA memo involved five separate transfers that a decedent entered into in the final year of his life. While all personal information had been redacted from the CCA, subsequent reports have indicated that the case involved William M. Davidson, a successful businessman and most notably the owner of the Detroit Pistons NBA basketball team. The stakes here are very large. According to Mitchell Gans and Jonathan Blattmachr in LISI Estate Planning Newsletter #2135, the proposed deficiency claimed by the IRS could reach close to one billion dollars. Specifically at issue were two transfers of closely held stock to grantor trusts in exchange for SCINs. Shortly after these transactions were made, the decedent was diagnosed with a health issue. He died within six months of this diagnosis.

One of the main issues of the CCA—and the focus of this article, was how the fair market value of the SCINs should be determined. The notes had been valued based on § 7520 mortality tables. The Chief Counsel’s Office determined that the § 7520 tables should not be used to value the notes in this situation, explaining that “[b]y its terms, § 7520 applies only to value an annuity, any interest for life or term of years, or any remainder.” Without any further explanation, the memo hastily cites to General Counsel Memorandum 39503 concluding that the notes should be valued based on a method that takes into account the willing-buyer willing-seller standard.

A SCIN differs from a regular installment note in that the remaining balance owed is cancelled on the death of the obligee. Thus, the noteholder can receive higher payments during his or her lifetime in exchange for there being no payments after his or her death. SCINs are frequently used in intra-family transfers of property, and on many occasions will cause avoidance of estate taxes. These transactions are of course most beneficial when the seller dies before his or her actuarial life expectancy, but in many situations the noteholder will live longer than his or her life expectancy and receive back payments that exceed what he or she would have otherwise received. If a noteholder dies before the note’s term, the self-cancelling provision cancels the remaining balance on the note, and the entire value is transferred to the buyer without any transfer taxes. Thus, the ideal candidate is said to be “someone in poor health, but whose death is not imminent, or someone with a very poor family health history.” Commentators will often refer to this as a “bet-to-die” technique because the sooner that the seller dies after the sale the greater the beneficial estate tax consequences will be. Because the note may never be repaid, a risk premium is added to either the interest rate, principal amount, or both, and the note must be set to be paid in full or scheduled to balloon before the life expectancy of the note holder, as of the date that the note is made.

Howard Zaritsky explains the importance of the premium that is derived from the IRC § 7520 tables:

All of the cases upholding SCINs stress that the self-canceling feature was a bargained-for consideration between the parties and that the buyers paid a distinct premium for that features. This is a critical feature for transfer tax purposes. The failure to pay a premium for a self-canceling feature in a SCIN strongly suggests that the transaction is, at least in part, a gift with a retained life estate includable in the decedent’s gross estate under Section 2036(a).

In the past, the IRS has acquiesced in court decisions upholding the cancellation provision as part of the bargained-for consideration, and to some extent, have even recognized the principle. As long as the transaction is bona fide, a SCIN sale should not be subject to a gift tax. To be bona fide, a reasonable expectation of repayment should exist along with an established payment schedule. In cases where no evidence of repayment exists, the court has upheld IRS challenges.

The issue at the heart the of the CCA turns on how SCINs are classified and the applicable valuation method to apply. Traditionally, practitioners use § 7520 to value SCINs. In fact, much of the basic software used to value SCINs is based on the § 7520 rate. Practitioners Robert Held and Charles Newlin support this approach explaining that “[w]hile Section 7520, by its terms, applies only to the value of an annuity, term interest, remainder or reversion, there seems little reason (beyond semantics) not to apply its rationale and consistency to the SCIN.” Additionally, Howard Zaritsky has advocated for the application of § 7520 rates. Zaritsky states:

Section 7520 states that it must be used to value ‘an interest for life or a term of years,’ which precisely describes the payments under a SCIN. Furthermore, the IRS publication ‘Actuarial Values, Alpha Volume,’ which implements the IRS actuarial tables under Section 7520, includes an example that uses the tables to determine ‘the present worth of a temporary annuity of $1.00 per annum payable annually for 10 years or until the prior death of a person aged 65….’ This, too, appears to describe precisely the calculation of the premium for a SCIN. Thus, Section 7520 appears to apply by its terms to the valuation of a SCIN premium.

Treasury Reg. § 20.7520-3 places restrictions on the use of § 7520. Of particular interest in the SCIN context, the section sets forth a twelve-month rule for a person that is terminally ill:

the mortality component prescribed under Section 7520 may not be used to determine the present value of an annuity, income interest, remainder interest, or reversionary interest if an individual who is a measuring life is terminally ill at the time of the decedent’s death. For purposes of this paragraph (b)(3), an individual who is known to have an incurable illness or other deteriorating physical condition is considered terminally ill if there is at least a 50 percent probability that the individual will die within 1 year.

The section then goes on to establish an eighteen-month rebuttable presumption, often referred to as the safe-harbor provision:

[i]f the individual survives for eighteen months or longer after the [effective date of the note], that individual shall be presumed to have not been terminally ill at the date of death unless the contrary is established by clear and convincing evidence.

Therefore in situations where the noteholder has survived the sale by eighteen months or longer, the IRS may still challenge the use of the § 7520 mortality tables but would have the tougher burden of establishing by clear and convincing evidence that these tables should not apply. The practical consequences of the terminal illness restrictions on SCIN holders means that they should first get a doctor’s letter. To be safe, the letter could state that there is more than a 50% chance that the holder will be alive on the maturity date of the note.

However, not every commentator agrees with using § 7520 valuation, and it seems that more recently, what rate to apply has been a point of contention for some commentators. The problem is that § 7520 rules explicitly apply to annuities, life estates, remainders, and term interests and estate planners have differing views on how SCINs fit into this spectrum. According to Steve Akers and Philip Hayes from the 2013 Heckerling Institute on Estate Planning:

[t]here is not universal agreement on how payments under a SCIN are properly valued, for there is no clear answer concerning which mortality tables should be used and which discount rate should be applied to value these payments Some commentators use the life expectancies in Table 90 CM for May 1999-April 2009 and Table 2000CM from May 2009 forward and a rate equal to the greater of 120% of the mid-term AFR, assuming annual payments, as prescribed by Section 7520, or the AFR for the actual term of the note, as prescribed by Section 7872. Others use the annuity tables under Section 72 and the AFR as prescribed by 7872. Additionally, some commentators have recommended that the actual life expectancy be used.

Elliott Manning and Jerome Hesch argue that for a SCIN taxable as an installment sale, the AFR prescribed in §§ 1274 and 7872 should apply—not the § 7520 rate. They base this argument on the idea that a SCIN is not a term interest under § 7520, stating that the “same considerations that lead to the conclusion that an installment note is not a retained life estate also lead to the conclusion that it is not a term interest.” Manning and Hesch explain that their argument is consistent with “(i) the analysis in Reg. § 1.1275-1(j) that a SCIN is treated as a debt obligation subject to the OID rules, including the provisions of § 1274, and (ii) the similar conclusion in G.C.M. 39503 for a SCIN with a maximum term less than the seller’s life expectancy is treated under the installment sale rules of § 453.” They also claim that the Tax Court’s decision in Frazee v. Commissioner, employing § 7872 to determine the interest rate for the value of a note for both income tax purposes and gift tax purposes, further supports their position.

Manning and Hesch further suggest that the unintended gift issue should be eliminated. They explain:

[t]reating all SCINs and private annuity sales as installment sales means that the AFR determines the discount rate. If the same valuation principles are used for both income and transfer tax purposes, valuation disparities for the same transaction can be avoided. Therefore, § 7520 does not apply. Consequently, the unintended gift problem and other distortions can be avoided.

The best answer may be case-specific. Akers and Hayes suggest:

AFRs should not be used by the faint of heart. A conservative planner probably should use the higher of the § 7520 rate or the AFR for the actual term of the note, as recommended by Covey. Clearly, many if not most, practitioners are using the higher of the § 7520 rate or the AFR for the actual term of the note; the estate tax risk of using a rate that is too low is simply too great.

Despite these differences of opinion over what actuarial tables to apply, the IRS flat out rejects the use of any of these practices in this latest CCA memo and uses a new approach: the “method that takes into account the willing-buyer willing-seller standard in Treas. Reg. 25.2512-8” which is the method typically applied to gift taxes. The IRS further states that the medical history of the decedent should be considered. The IRS fails to provide further guidance as to how to apply the valuation standard, which would make the process very subjective, to say the least. Some have speculated that a combination of actuarial, medical, and investment risk factors would need to be considered–a process that would undoubtedly be more difficult and imprecise than relying on § 7520 tables. With no certainty in procedures and what seems like a greater potential for challenge, the IRS is stripping away the biggest advantage of establishing a SCIN in the first place which is that there should be no gift tax consequence.

A well-known authority in the area has criticized the CCA memo, stating that it should not be given much credence and that the IRS is simply trying to take the best position that it can in light of the Davidson case. The CCA appears to assume that the payment was supposed to be within the decedent’s actuarial life expectancy, but we are not provided his actuarial life expectancy at the time of the transaction. Although it might seem odd that the health issue suddenly came to light not long after the transaction, no information is provided as to the decedent’s health at the time of the transaction.

After acquiescing for years to the use of the § 7520 tables, the IRS suddenly seems to want to no longer use these tables to value a SCIN. The CCA provides a quick cite to General Counsel Memorandum (GCM) 39503 for this proposition–a non-binding memo issued by the IRS in 1986. This Memorandum stated as follows:

Under an installment sale, a gift tax will not be imposed if the sale price and length of payment are reasonable in light of the facts and circumstances of the case. The value of the installment obligation and the property sold must be substantially equal. However, unlike the private annuity, there is no requirement that the actuarial tables are to be used in determining the gift taxation of an installment sale. Thus, the taxpayer’s particular health status may be considered, and there is more room to establish that the terms of the sale are reasonable (emphasis added).

As the language clearly shows, the GCM is not rejecting the use of the mortality tables at all. The memo simply acknowledged that Revenue Ruling 80-80 required taxpayers to use the mortality tables in Treasury Regulation § 20.2031-10 to value private annuities, and reiterated that no such requirement existed for SCINS. The fact that the use of the § 7520 tables is not required, does not mean that these tables do not offer the most practical valuation system for SCINs as well. And again, this memo was released in 1986. The subsequent Rev. Rul. 96-3 deemed Rev. Rul. 80-80 to be obsolete. Yet the CCA characterizes the GCM for the proposition that mortality tables should not be used and the willing-buyer willing-seller standard should be used instead. Simply put, the CCA mischaracterizes the GCM for standing for a much broader principle than it actually does. The 2013 Tax Management Estates, Gifts, and Trusts Portfolios, Edward Wojnaroski reflects on the 1986 GCM Memo:

While GCM 39503 may give planners substantially more flexibility in structuring SCIN Transactions, the reasonableness of the SCINs terms relative to a private annuity involve a subjective interpretation. In addition to evaluating the seller’s health, it is crucial to obtain a realistic value for the property being transferred. To the extent that the property sold is difficult to value, this will compound the probabilities of scrutiny by the IRS.

And despite the fact that this GCM was released over twenty-five years ago, we have not seen significant changes in the valuation process from the IRS–until now. With no real precedent to resort to, the issue really seems to come down to semantics. By changing the valuation of a SCIN, the IRS is abandoning a mechanical valuation system for a system that practitioners can only speculate about. Although Hesch and Manning have cited to the GCM memo previously, they have still advocated the use of § 7282 tables, which at least provide clarity. Prior to the release of the CCA, Wojnaroski also recommended using the tables in Tax Management Estates, Gifts, and Trusts Portfolios, arguing that the IRS should have greater respect for the use of the tables:

The risk premium for a SCIN does not have to be obtained by reference to the actuarial tables. The planner or client may engage an actuary for this purpose. However, it would appear that relying on the tables provides a greater degree of certainty that the IRS will respect the terms of a SCIN if the assumption about the seller’s life expectancy are reasonable and reflect recent mortality data. If the taxpayer chooses to set the terms of a SCIN by looking outside of the tables, it is advisable to consider the amount of the down payment being made, the length of the contract, and the seller’s actual health (assuming the measuring life used is the seller’s). The IRS has indicated it will not require the value of the consideration paid for the property being transferred pursuant to a SCIN to be identical, but the consideration and transferred property must be substantially equal. The subjective valuation of a SCIN makes the job of satisfying this “substantially equal” test a difficult and perhaps expensive hurdle for the taxpayer with respect to intra-family transactions if the seller’s life expectancy is substantially less than what his or her life expectancy would be under standard actuarial tables. It would appear that there may be a greater risk of a gift tax when working with a SCIN than there would be with a private annuity.

Regardless of how the face value of the SCIN is determined, the only winner is likely to be the IRS, while practitioners are left uncertain on the use of the SCIN, and clients are forced to litigate the potential gift tax trend.

Is the CCA memo binding? The IRS explains that CCA memos “are legal advice, signed by executives in the National Office of the Office of Chief Counsel and issued to Internal Revenue Service personnel who are national program executives and managers. They are issued to assist Service personnel in administering their programs by providing authoritative legal opinions on certain matters, such as industry-wide issues.” But most importantly, the IRS states that “these documents cannot be used or cited as precedent.” While the memo might not be binding, it does appear that the IRS is suggesting that the willing-buyer, willing-seller standard should apply to every SCIN. And these memos frequently serve as announcements of the litigation position that the IRS will take. Based on the memo, caution might suggest that a client get additional appraisals beyond that of the underlying assets to include an appraisal of the actual note, as well as a determination of a reasonable interest rate that should be used. The CCA seems to indicate that when the SCIN holder dies before the end of the term, the estate better prepare for litigation. As one authority put it, clients need to “have an appraiser bless the rate, and then the Service has to have their appraiser tell you why it’s wrong.” This prospect may make many estate planners opt for an alternative, safer technique such as a private annuity.

Going forward, estate planners can look forward to seeing whether the IRS provides clarification on its expectations for the valuation process, takes a stronger stance toward the willing-buyer willing-seller standard, or allows the working system to remain intact. In the meantime, private annuities will be more popular and more widely used by planners who do not want to cross the line in the sand that may be moved by waves, tides, and sand kicking bullies in years to come. 

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 5 of a 7 Part Series

Koch and Jirotka

This week we cover the important topics of how much disclosure is enough disclosure, whether both parties need to have lawyers, and questions to ask the lawyer or spouse you are not representing to document appropriate disclosure and circumstances by video taped interview or written correspondence.

  • Part 1 presented on Thursday, August 8, 2013, the reader was introduced to the present overall status of prenuptial agreement statutory law and case law, and talks about prominent malpractice traps and how to get clients prepared for what they can encounter in the prenuptial agreement universe.  Click here to be directed to the Thursday Report for August 8, 2013.
  • Part 2 on Thursday, August 15, 2013, discussed the important topics of how much disclosure is enough disclosure and whether or not both parties need to have lawyers.  Click here to be directed to the Thursday Report for August 15, 2013.
  • Part 3, on Thursday, August 22, 2013, Questions to ask the lawyer or spouse you are not representing to document appropriate disclosure circumstances by video-taped interview or written correspondence.  Click here to be directed to the Thursday Report for August 22, 2013.
  • Part 4 on Thursday, August 29, 2013, discussed Castro v. Castro and Belcher v. Belcher, and what they mean for clients and lawyers who are involved in the pre and post nuptial agreement planning.  Click here to be directed to the Thursday Report for August 29, 2013.
  • Part 5, Today, September 5, 2013, Today we have a discussion of alimony and lawyer fee obligations that may not be waivable in pre-nuptial or post nuptial agreements, and offset clauses and other ways to handle these.
  • Part 6, On Thursday, September 12, 2013, Bifurcation – whether you can require the validity of the pre-nuptial or post-nuptial agreement be litigated or also before having to also litigate what the result could be if it is or is not enforceable.
  • Part 7, On Thursday, September 19, 2013, How to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.

Our fifth part of the interview will cover temporary alimony and lawyer fee obligations that may not be waiveable in a pre-nuptial or post-nuptial agreement, and offset clauses and other ways to handle these.

Alan Gassman: Well for the tax lawyers who are listening here, and we don’t know much about this, how long would you expect to pay temporary alimony in the pendency of one of these types of actions?  So this would be a reason for the less monied spouse to object to the enforceability of the agreement so that there could be a long time for him or her to receive temporary support?

Judge Jirotka: That’s correct.  I am going to take a guess. I don’t have the exact figures in front of me, but in general a dissolution of marriage case in Pinellas County runs very short or very long.  There’s really no way you can tell.  If there are no assets and it’s what’s called a simple or simplified dissolution of marriage, that can go very quickly.  In fact, those are even handled in county court as opposed to circuit court.  Once you get into lengthy arguments as to assets, which of course is why you’d have this prenup agreement, it can go on for a number of years.  Ky has that been your experience?

Ky Koch: Absolutely, you know I don’t want to generalize Alan, but I would think 8 to 12 months is probably an average.  You would see some that go quicker.  You’d see some that go longer.  A case that Judge Jirotka and I are both intimately familiar with ran for five years and cost approximately $500,000 in lawyer and expert fees during that five years, in addition to having the husband be required to pay a significant amount of temporary support.

Judge Jirotka: Cases also can have appeals going on at the same time, or certain aspects of the case will grind to a halt at the trial level while a particular issue is appealed.

Ky Koch: You know Alan, another subject the Judge and I should talk about today is in my opinion, a lot of us are missing out on something that’s very important to consider in these prenuptial agreement drafting issues and that is this isn’t just a divorce lawyer issue.  It’s not just an estate planning lawyer issue.  I think the two disciplines have got to merge and deal together on drafting an appropriate agreement for people going through these prenuptials.

Alan Gassman: I agree with that. That’s a great point.

Ky Koch: There are so many death implications in a divorce.  I won’t deal with it because I don’t know how to, but I feel like it’s a must for those two disciplines to come together in drafting a prenup because there are so many ramifications that go both directions.

Alan Gassman: Yeah that’s a very good point.

Ky Koch: You all don’t know what goes on in the courtroom in a divorce.  We don’t know what goes on in the estate planning side of it and both of them are severely impacted, dramatically impacted by every prenup.  I think it’s nearing mistake if you don’t engage both lawyers, estate planning and divorce, to become involved in a prenuptial agreement.

Alan Gassman: That makes good sense – absolutely.  Of course, then you deal with the clients saying I need two lawyers.  It’s going to cost more than $600 now.

Ky Koch: And that’s a whole other problem because most people come into your office and say you know look at that computer there.  Can you push the prenuptial button and just put my name and my spouse’s name there?  Then we’ll be in tomorrow morning to sign it.  That is a misconception.  It’s difficult for me to convey to a client because they’re sitting there looking at you thinking gee, you’re just talking up fees here.  In fact, these things are not cheap.

Phil Rarick’s Informative Client Blog Entries: Standby Elective Share Trusts

 Rarick

 

Our friend Phil Rarick of Rarick, Beskin & Garcia Vega, P.A. in Miami has been kind enough to allow us to provide one of his excellent client communications articles each week until you have read all of them.

Phil has 30 years of experience in both private and public legal work. He is a past President of the Miami Lakes Bar Association and formerly counsel to the National Association of Attorneys General.

This week’s topic is Standby Elective Share Trusts.

Florida’s elective share statute allows attorneys to draft standby elective share trusts.  (For a summary of Florida’s elective share see the post: Florida’s Sweeping Elective Share.) Trusts that create property  interests contingent upon an election being  made are qualified to fund the spouse’s elective share interests.

Click here to read the blog

Thursday Report Jokes

An important conversation between Colonel Sanders and Professor Jerry Hesch:

Hesch Sanders

I would tell another Chemistry joke, but all the good ones Argon

What do you call an alligator in a vest?

– An investigator

Did you hear about the hungry clock?

– It went back four seconds

What do you call a dinosaur with an extensive vocabulary?

– A thesaurus

Where did the computer go to dance?

– To a disc-o

What did the keyboard say to the other keyboard?

-You’re not my type.

 Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

SEMINARS AND WEBINARS

AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!

Date: Tuesday, September 10, 2013 | 5:00 p.m. and Thursday, September 12, 2013 | 12:30 p.m. (Each webinar will last 30 minutes)

Presenter: Sandra Greenblatt, Board Certified Health Lawyer

Location: Online webinar.

Additional Information: To register for the Tuesday, September 10, 2013, 5pm webinar please click here.  To register for the Thursday, September 12, 2013, 12:30 p.m. webinar please click here.

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN

Date: Monday, September 16, 2013 | 6:00 p.m.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater

Additional Information:  Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served.  To register for the event please click here.

NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY

Date: Wednesday, September 18, 2013

Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA, PhD, SOB

Location: Online webinar

Additional Information:  To register for the webinar please click here.

NORTH SUNCOAST FICPA MONTHLY MEETING

Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.

Speakers: Alan Gassman and Christopher Denicolo will speak on The Florida CPA’s Guide to Planning with Physicians and Medical Practices

Location: Chili’s in Port Richey

Additional Information: To attend this seminar please email agassman@gassmanpa.com

WEDU ESTATE PLANNING SEMINAR

Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?

Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS

Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am

Location: WEDU PBS Berman Family Broadcast Center

Additional Information:  If you would like to sign up for this seminar please click here.

THE 444 SHOW – STAND YOUR GROUND LAWS

Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)

Location: Online webinar.

Presenters: Kym Rivellini and Denis deVlaming

Additional Information:  This webinar qualifies for 1 hour of continuing education credit and costs $30.00.  To register please visit www.clearwaterbar.org

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information:To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

PLANNED GIVING CONSORTIUM LUNCHEON

Kenneth J. Crotty, Esq. and Christopher J. Denicolo, Esq. will be speaking at the Planned Giving Consortium Luncheon on the topic of FLORIDA LAW FOR THE ESTATE AND FINANCIAL PLANNER

Date: Thursday, October 10, 2013 | 12:00 – 1:00 p.m.

Location: Spartan Manor, 6121 Massachusetts Avenue, New Port Richey

Additional Information: For more information or to attend this event please email agassman@gassmanpa.com

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

Please click here to view the brochure and to register.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Times TBD

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SEMINAR

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include John Harding, President and CEO of Adventist Healthcare Systems, Stephen Klasko, Dean and President of USF Health College of Medicine, David Lewis, CEO of United Healthcare of Florida, Nancy Templin, CFO of All Children’s Hospital and a mystery speaker (other than Colonel Sanders) to be identified.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.

On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes ecocentric living, social justice and personal development is providing a 3 hour workshop on Meditation.  The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.

Date: Saturday, September 28, 2013 | 10am – 1pm

Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa

Additional Details: The cost for attending this workshop is $45 and you can register by clicking here. [LINK: http://www.thebridgetampa.org/compenent/registrationpro] or call 813-416-3069 for more information.

THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND

Date: September 27, 2013

Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut

Sponsor: Connecticut Bar Institute

Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children.  For more information or to register please visit the Institute’s site here.

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please click here.

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

The Thursday Report – 8.29.13 – The Power to Disassociate, Essential Trust Drafting and a Probate Quick Reference Guide

Posted on: August 29th, 2013

Legal and tax journalism at its worst.

 3 days until Labor Day.  Time to catch up on your Thursday Report reading.

Ken Crotty’s LLC Clinic – The Power to Disassociate

Phil Rarick’s Fantastic and Informative Client Blog Entries: Florida Probate Quick Reference Guide

12 Personal Finance Lessons, Broken Down, In Woody Allen’s ‘Blue Jasmine’ a Forbes Blog by Deborah Jacobs

Essential Trust Drafting Considerations – Let’s Not Forget What We Learned in Elementary School, Part 1 of a 2 part article by Tom Ellwanger

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 4 of a 7 Part Series

Seminar Spotlight: Sandra Diamond Shines as a Speaker for the Pinellas County Estate Planning Council

Internet Tip of the Week: How to Help Your Clients Get Free Credit Reports

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Ken Crotty’s LLC Clinic – The Power to Disassociate

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Practitioners need to be aware of the changes the new Florida LLC Act makes to the ability of a member to dissociate from an LLC.  In many cases, Operating Agreements will need to be revised to take these changes into account to better protect the LLC and its remaining members.  Although an LLC’s Operating Agreement may not prevent a member from dissociating, the Operating Agreement may contain provisions that cause the dissolution to be wrongful and provisions that govern the obligations owed by the dissociated member to the LLC.

Current Florida LLC law does not allow a member to dissociate from an LLC prior to dissolution of the company unless the Articles of Organization or the Operating Agreement allow the member to dissociate.  This default provision has been changed under Section 605.0601 of the new Florida LLC Act which provides that a member may dissociate from an LLC.

A member that expresses the intent to dissociate as provided under F.S. 605.0602(1) may do so even if the dissociation was wrongful.  In addition to willful dissolution, F.S. 605.0602 lists several other instances in which a dissociation occurs, including, but not limited to: (1) an event stated in the Operating Agreement, (2) the expulsion of a person as a member, (3) the death of an individual, and (4) the incapacity of a member in a member-managed LLC.

A member’s dissociation is considered  wrongful if: (1) the dissociation is in breach of an express provision of the Operating Agreement; or (2) the member dissociates before the LLC is wound down and the dissociation occurs by (1) the person’s express will, (2) a judicial order pursuant to F.S. 605.0602(6), (3) pursuant to F.S. 605.0602(8) (dealing with the bankruptcy of a member in a member-managed LLC), or (4) dissociation of the member by willful dissolution  F.S. 605.0602(2).

If a member wrongfully dissociates, the member remains liable to the LLC and other members for any liabilities owed by the member before dissociation. F.S. 605.0601(3) The member is also liable for any damages caused to the LLC as a result of the dissociation and may be liable for damages caused to other members as a result of the dissociation subject to the provisions of F.S. 605.0801.

A dissociated member is no longer a member of the LLC.  F.S.  605.0102(40)(b).  F.S. 605.0603 also lists additional effects of dissociation on the member.  If a managing member of an LLC resigns or otherwise ceases to be a manager, he or she will continue to be a member and will not be deemed to have dissociated from the LLC simply by reason of no longer serving as a manager.  F.S. 605.04072(6).  It is important to note that if a member transfers some or all of the member’s LLC interest to a third party, then the person who transferred the interest may still vote on LLC matters as if the person was a member of the LLC unless the person has dissociated in accordance with F.S. 605.0602(5)(b).

Pursuant to Section 605.0105(3)(i) of the new Act, the Operating Agreement of an LLC may not limit the ability of a member to dissociate.  Section 605.0105(3)(i) of the new Act provides that the Operating Agreement may require that the dissociating member give notice to the LLC as described in Section 605.0602(1).  If a member dissociates, the Operating Agreement or Articles of Organization of the LLC may still provide that the membership interest may not be assigned before the affairs of the LLC are wound up and the LLC is dissolved.  F.S. 605.0601(4).

The obligations of the LLC to a person who has dissociated governed by the Operating Agreement.  F.S. 605.0107(2).  If the continuing members of an LLC amend the Operating Agreement after a person has dissociated, then such amendment will be binding on the dissociated member with respect to a debt, obligation or other liability owed by the LLC or its members to the dissociated person.  F.S. 605.0107(2)(a). The amendment will not be binding on the dissociated person if the amendment imposes a new debt, obligation or liability on the dissociated person.  F.S. 605.0107(2)(b).

A dissociated person is still entitled to receive distributions from the LLC in proportion to those received by the members on the basis of the agreed value stated in the LLC’s records until the company dissolves and winds up its affairs.  F.S. 605.0404(1).  Similarly, the profits and losses of the LLC must continue to be allocated between the members and the dissociated person on the basis of the agreed value. F.S. 605.0404(5).  A person who has dissociated may still be entitled to receive information about the LLC.  See F.S. 605.0410.  Such person may exercise such right through an agent or legal representative.

Phil Rarick’s Fantastic and Informative Client Blog Entries: Florida Probate Quick Reference Guide

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Our friend Phil Rarick of Rarick, Beskin & Garcia Vega, P.A. in Miami has been kind enough to allow us to provide one of his excellent client communications articles each week until you have read all of them.

Phil has 30 years of experience in both private and public legal work. He is a past President of the Miami Lakes Bar Association and formerly counsel to the National Association of Attorneys General.

This week’s entry is entitled Florida Probate Quick Reference Guide.

This guide has several helpful checklists and discusses:

  • The three types of Florida proceedings
  • The time frames and attorney fees connected to each proceeding
  • Six Critical Deadlines
  • Ancillary Probate for non-Florida decedents who own Florida property
  • Homestead: the most confusing issue for many

Read More by clicking here: Florida Probate Quick Reference Guide

Have you considered writing articles like this for your clients and for those in your community?

Phil sets a great example for this.

Visit his website at www.rbgvlaw.com

12 Personal Finance Lessons, Broken Down, in Woody Allen’s ‘Blue Jasmine’ a Forbes Blog by Deborah Jacobs

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Deborah Jacobs

Deborah L. Jacobs is a lawyer and award-winning journalist specializing in legal topics. In her best-selling book, Estate Planning Smarts, she draws on more than 15 years of writing about the stressful issues that surround estate planning. Her articles have appeared in The New York Times, Bloomberg Wealth Manager, BusinessWeek and many other publications. She is currently a senior editor at Forbes, where she writes a popular blog about personal finance for baby boomers.

Jasmine needs a good shrink (and better medication than just xanex), but some financial planning and legal representation would not have hurt either.  She could have moved to Florida and been a retired millionaire instead of sticking it out in New York and losing everything.  Check out Deborah Jacob’s great Forbes blog article on this interesting and educational story.  Click here for the blog.

We thank Deborah Jacobs for sharing her insightful piece with us.  Deborah’s contact information is as follows:

Deborah L. Jacobs

579 Fourth Street

Brooklyn, NY 11215-3008

djworking@nyc.rr.com

 Essential Trust Drafting Considerations – Let’s Not Forget What We Learned in Elementary School, Part 1 of a 2 part article by Tom Ellwanger

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Trusts and estates lawyers are virtually all different in the form documents from which they work, but they are all similar in the pride they take in those documents and the hostility with which they greet any attempt to force them to use alternative forms.

This attachment is understandable.  A lawyer’s forms often reflect the lawyer’s deepest feelings about how his or her job should be done.  No two lawyers approach the law exactly the same way.  So, no two lawyers are likely to use exactly the same forms.

This is true even within the same law firm.  The notion of efficiency suggests that trusts and estates lawyers within the same firm should use the same forms.  Firms have spent thousands of attorney hours, representing millions of dollars in unbillable time, developing forms for everyone to use.

Sometimes the powers that be can, by sheer force of personality, extract universal promises to use the identical forms.  But, it doesn’t matter.  Starting immediately, changes will creep in, little by little, until within 30 days no two lawyers will be using the same forms.  (If you need confirmation on this point, check with any associate or paralegal who has the misfortune of drafting estate planning documents for different partners.)

The disagreements rarely arise because somebody’s forms are “wrong.”  We are not talking about Will forms which neglect to include a residuary clause.  Instead, we are seeing the effects of a psychological truth:  obsessive-compulsive disorder selects for success in most of the learned professions, nowhere more so than in the law, and nowhere more in the law than in the estate planning arena.

Background

I became a tax lawyer despite a somewhat unusual background:  virtually useless English degree; low-paid small-town journalism job; well-paid but dead-end legal writing job; comparatively low-paid entry-level position in insurance defense.

All of this, followed by 30+ years of practice in the trusts and estates area, has led me to some general theories about drafting estate planning documents.  In this article I will set them out, followed (if my strength holds out) by examples of how I have applied them to revise my own standard forms.

Some of my theories will seem pretty obvious.  Some of them will no doubt seem a little odd, or even more than a little odd.  Although 30-plus years of practice does have a way of destroying one’s health, optimism, and youthful exuberance, the flip side is that it can alleviate to some extent the fear of appearing stupid.  So, here we are.

One caveat about this article:

I learned two things in my first week of practice.  One was that my job required, at all costs, sounding like I knew what I was talking about.  I have not yet shaken this bad habit.  Therefore, do not confuse my forcefulness in expressing a conclusion with the amount of confidence I have in it.

(The other thing I learned my first week in practice?  That people would lie to get money.)

These are my principles.  If you don’t like them, I have others.

Groucho Marx

What I want my documents to do

I hope that my documents help keep me from getting sued.  So, I hope that my forms do what my clients want them to do; I hope that they produce valid trusts, enforceable anywhere in the country outside of Louisiana; and I hope that they do not produce horrendous tax consequences of the unanticipated variety.

I further hope that my forms will not hinder the achievement of my desire to live a reasonably profligate lifestyle—something which requires turning a profit on estate planning work.

We lawyers can only charge so much for estate planning work, and there are only so many hours in a year when we feel like doing it.  Which means that I hope my documents can help overcome two serious limitations I face:  (i) the amount of time I can spend extracting information from clients, and (ii) the amount of time I can spend imparting knowledge to clients and dragging decisions out of them.

Problem 1:  not enough information

Ideally my documents will work relatively well even if I don’t have every piece of information which I would need to have to do a comprehensive job of estate planning.  This is important, because I will never have that much information.

Yes, I could have my clients fill out a questionnaire designed to elicit the date I need.  I have traditionally used such a questionnaire.  Unfortunately, a questionnaire designed to get me even 75% of the information I need would run 20 pages or more, far past my own attention span, not to mention the attention span of a typical client.

Even a 20-page questionnaire might not be enough.  A recent case permitted the reformation of estate planning documents because the attorney thought the client’s grandchildren would be included in the phrase “lineal descendants.”  Which they normally are; but not where they have been adopted away from the client’s child, who was a natural parent, which is precisely what had happened.  Who would think to ask a client if any of her descendants have been adopted away?  Not me.  Getting to that level would probably require a 50-page questionnaire.

And, however I obtain it, the little bit of information I do obtain could easily be outdated within the week–when an S election is made for the family business, the triplets are born, old granddad finally drowns in his Old Granddad, or one spouse finally figures out how to read the other spouse’s email.

This means that my documents need to carry out the wishes of my clients even if I don’t know nearly enough about those wishes.  This is important, because with clients of ordinary means, I will never know anywhere near enough about those wishes.  Time is money.  If they don’t want to spend the money—and they don’t—then I don’t want to spend the time.  Under the circumstances, the best I can do is guess what is likely to be important and focus on that.

Problem 2 “Not Enough Education” will be discussed next week.

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 4 of a 7 Part Series

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This week we cover the important topics of how much disclosure is enough disclosure, whether both parties need to have lawyers, and questions to ask the lawyer or spouse you are not representing to document appropriate disclosure and circumstances by video taped interview or written correspondence.

  • Part 1 presented on Thursday, August 8, 2013, the reader was introduced to the present overall status of prenuptial agreement statutory law and case law, and talks about prominent malpractice traps and how to get clients prepared for what they can encounter in the prenuptial agreement universe.  Click here to be directed to the Thursday Report for August 8, 2013.
  • Part 2 on Thursday, August 15, 2013, discussed the important topics of how much disclosure is enough disclosure and whether or not both parties need to have lawyers.  Click here to be directed to the Thursday Report for August 15, 2013.
  • Part 3, on Thursday, August 22, 2013, discussed questions to ask the lawyer or spouse you are not representing to document appropriate disclosure circumstances by video-taped interview or written correspondence.  Click here to be directed to the Thursday Report for August 22, 2013.
  • Part 4, Today, August 29, 2013, the article discusses Castro v. Castro and Belcher v. Belcher, and what they mean for clients and lawyers who are involved in the pre and post nuptial agreement planning.
  • Part 5, On Thursday, September 5, 2013, a discussion of alimony and lawyer fee obligations that may not be waivable in pre-nuptial or post nuptial agreements, and offset clauses and other ways to handle these.
  • Part 6, On Thursday, September 12, 2013, Bifurcation – whether you can require the validity of the pre-nuptial or post-nuptial agreement be litigated or also before having to also litigate what the result could be if it is or is not enforceable.
  • Part 7, On Thursday, September 19, 2013, How to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.

Below is the next part of the interview:

The fourth part of this interview will cover the vitally important cases of Castro v. Castro and Belcher v. Belcher, and what these cases mean for clients and lawyers who are involved in pre and post nuptial agreement planning.

Alan Gassman: That’s really useful – thank you very much.  Can we discuss Casto v Casto?

Judge Jirotka: Casto v. Casto was a case that was decided in 1987.  In other words, it predates the current statute.  It was an interesting case in the sense that it dealt with a version of a premarital agreement called a “postnuptial agreement.”  For our purposes, I think we can consider them both to be the same.  Both spouses had been married before.

In fact, one could say that one or the other was a serial marryer.  There were no children born of the marriage.  That’s an important fact to keep in mind because another issue that you cannot preclude in a premarital agreement is anything to do with children’s finances, specifically  child support.

Ky probably wouldn’t put it in there.  Good lawyers would not put it in there.  You can put it in there but it’s not going to be enforceable.  We have a situation where this couple had married in 1964.  They divorced in 1966.  Remarried in 1967.

Ky Koch: Obviously a marriage made in heaven.

Judge Jirotka: Right, and the husband was a fairly well-to-do shopping center developer if I understand the story correctly.  The wife was a stay-at-home wife, and there were no children of the marriage.  Approximately 10 years after the remarriage, in 1977, they entered into a postnuptial agreement.  Probably we can ascertain that something was wrong to begin with because the petition for dissolution of marriage came about 12 months later.

Ky Koch: There was an agenda going on.

Judge Jirotka: The postnuptial agreement, much like a prenuptial agreement, attempted to lay out what each spouse would get to keep if the marriage went awry.  The wife would get to keep the parties’ Fort Lauderdale home.  She’d get a $100,000 cash settlement.

The husband would make mortgage payments for a certain period of time..  The wife would receive certain what we would call incidental benefits.  Most importantly, each party would waive any right to alimony, support or further distributions.  If the parties had any property in their individual ownership, they would continue to own that separately and each party would pay their own attorney’s fees in any divorce proceeding.

As I mentioned, about 12 months later the husband filed for divorce.  Tried to claim in a very short form filing petition for dissolution of marriage because of the postnuptial agreement and that the matter could be very readily settled.  Like any case, the wife was allowed to respond, and lo and behold she did, seeking among other things the ability to invalidate the agreement.  She also counterclaimed for attorney’s fees, costs, alimony, etc.

Her grounds for asking that the agreement be set aside were not unusual grounds – duress, overreaching, unfamiliarity with husband’s assets and income, etc.  It went to an evidentiary hearing.

Ky Koch: This litigation went on for quite a long while, and Justice Overton wrote this opinion after almost four years of litigation and various appeals. Ms. Casto was no stranger to this process.  This was actually divorce number five for her.

The evidence was very clear that Ms. Casto had knowledge of the assets possessed by her husband, but that she had no knowledge, nor was there reasonably available to her information, to establish the value of those assets.

Lack of disclosure is what caused the agreement to be set aside.  During the prenuptial agreement she had talked to two different lawyers, but she was never told the value of the assets.  As you might imagine for a five-time divorcee, she was quite depressed the week before signing this postnuptial agreement.

Judge Jirotka: And I think also in the postnuptial agreement there may have been very generic reference to the properties owned by husband.  There was the ranch in Idaho statement.

Alan Gassman: Oh, very vague.

Ky Koch: Now the two lawyers that Mrs. Casto had been to see both told her “Don’t sign the agreement.”  Mr. Casto was not happy about this, and keep in mind now this was a postnuptial agreement so they were married about 10 years.  According to Mrs. Casto, her husband told her that she would lose the home, lose all the furniture if she did not sign the agreement.

He would never give her a complete financial affidavit.  She better find a lawyer who would let her sign the agreement or else. In my opinion this gets Mr. Casto into the divorce hall of fame.  The husband was suggesting that he would blow up the house and  and perhaps threatened her in a Mafia manner.

Alan Gassman: Beautiful.

Ky Koch: The trial court invalidated the agreement, saying that Mrs. Casto was not adequately advised as to her husband’s assets and income, that she did not have competent assistance in counsel, and that the agreement was unfair and inequitable to the wife.  Now those three things are real important as we’ll get to Justice Overton’s opinion in just a minute.  We’ll see that item A was and still is a valid basis to set aside an agreement.  Items B and C not so much.

The trial court awarded to Mrs. Casto about $1,500,000, paid in installments.  Then we get to the appeal and Justice Overton’s ruling that a spouse may set aside or modify an agreement by establishing that it was reached under fraud, deceit, duress, coercion, misrepresentation or over reaching.  They found in this situation that those aspects apply in terms of the postnupital agreement arrived at in the Casto case.

Regarding ground 2B, that the challenging spouse must present in evidence the parties’ relative situations, including their ages and educational opportunities- things of that nature.  The trial court must find that the agreement is disproportionate to the means of a defending spouse.

Judge Jirotka: And then the burden shifts.

Ky Koch: And once that burden shifts, the rebuttal must show that there was full and frank disclosure at the time of the signing of the agreement as to the assets, and in determining debts of the parties, or that the other spouse had a general and approximate knowledge of the reasonable means of the other spouse.  Now why you would ever draft an agreement relying solely on general and proximate knowledge by the challenging spouse is beyond me.  There’s no reason that should ever appear in an agreement as the basis for financial disclosure.  Certainly I think if you are drafting an agreement you want to say that we’ve attached all the disclosure.  There has been actual disclosure here and in addition there’s been a general and proximate knowledge of the terms of the relationship.  They’ve lived together. They’ve known each other’s circumstances for quite some time.

Judge Jirotka: In other words, your advice is to travel under the first bullet not the second one?

Ky Koch: Absolutely.  Okay, so what all of this means, and what Justice Overton’s opinion in Casto means and what our new Statute says to everybody in the State of Florida is still able to make a bad deal for themselves and just because this is a bad deal, whether a bad deal at the time you sign it or a bad deal at the time you’re going through the divorce – doesn’t matter.  A bad deal is not a ground by itself to vacate or modify the prenuptial agreement.

Number two, if an unreasonable agreement is freely entered into, it is enforceable, period.  And by the way this is a very well written opinion so if you’re ever in a situation where you are defending the validity of a pre- or postnuptial agreement, I highly recommend to you a very careful read of this.  It’s very specific and will be very instructive.  Justice Overton also said that erring in not having a lawyer at all is not on its own a basis to set aside an agreement.  Judge, is there anything you would add on the Casto case?

Alan Gassman: So we go to Belcher v Belcher?

Judge Jirotka:  There is no way that you can cut off a spouse when you are still married to that spouse from support or alimony, etc. is the different issue.  Spouses are supposed to support each other.  Therefore, you cannot specify in a prenuptial agreement that if the rubber hits the road, that you cannot cut off your then current spouse from support and alimony.  Likewise in the support category, you cannot cut off your current spouse from access to temporary attorney’s fees.  What the Lasconi case deals with, the issue of whether the agreement is enforceable or not, is being litigated.

And also as we mentioned, I do not believe this is particularly in Belcher, but it might be. I don’t have that case in front of me exactly.  As I mentioned before, child support also is addressed in there.

Seminar Spotlight: Sandra Diamond Shines as a Speaker for the Pinellas County Estate Planning Council on New Florida Law Coverage for Estate Planners and The Bottom Line on Decanting or Amending Irrevocable Trusts – A Hard Act to Follow!

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On Wednesday, October 23, 2013 Sandra Diamond will be speaking at the Pinellas County Estate Planning Council Half-Day Seminar.

Sandra will be speaking on the new Florida laws that impact estate planning, amending or decanting existing irrevocable trust, and other recent Florida law developments.  Most people do not know that Sandra’s father was a U.S. Congressman, and that Sandra is a long-time member of the Florida Board of Governors.  Go to the dictionary and look for the word pillar and you will find Sandra’s picture.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Alan Gassman will be speaking on the topic of hot topics for estate planners, including same sex marriage, the new IRS SCIN position, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Please come out and support the Pinellas County Estate Planning Council.  The event will be held from 8am until 12pm.  To register for the event or more information please click here or email agassman@gassmanpa.com

Internet Tip of the Week: How to Help Your Clients Get Free Credit Reports

When clients come to you for estate planning are you telling them how to get a free credit report? Or, better yet, are you getting one for them?

Think about making this part of the suite of services you offer.  It should take your secretary no more than ten minutes to print out a credit report on your client if you have their information and their consent.

The three national credit reporting agencies, TransUnion, Experian, and Equifax, are required to provide one free credit report upon request every twelve months, though these free reports do not include a credit score.

To access the credit reports, visit https://www.annualcreditreport.com/cra/index and select your state.  Information such as current address, previous address, social security number, and birth date will be required.  Once you are ready to go into each credit reporter’s portal, you will need some personal information in order to advance to the reports.  This can differ per reporter and per visit, but the questions will always be culled from a person’s credit, banking, and residence history.  Once a person’s identity is confirmed you can view all three reports for free.

 Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

Seminars and Webinars

WHAT CLIENTS ARE AND ARE NOT SUITABLE FOR LONG TERM CARE INSURANCE

Date: Thursday, August 29, 2013 | 5:00 p.m.

Presenter: Rob Cochran

Location: Online webinar

Additional Information: To register for the webinar please click here.

NEW STANDARDS FOR EXPERT WITNESSES

Date: Wednesday, September 4, 2013 | 5pm (30 minute webinar)

Presenters: Briggs P. Stahl, CPA and Diane Womack, CPA

Location: Online webinar

Additional Information: To register for the webinar please click here.

AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!

Date: Tuesday, September 10, 2013 | 5:00 p.m. and Thursday, September 12, 2013 | 12:30 p.m. (Each webinar will last 30 minutes)

Presenter: Sandra Greenblatt, Board Certified Health Lawyer

Location: Online webinar.

Additional Information: To register for the Tuesday, September 10, 2013, 5pm webinar please click here.  To register for the Thursday, September 12, 2013, 12:30 p.m. webinar please click here.

BP CALCULATIONS FOR CPAS: TRICKS & TRAPS SEMINAR WITH JOHN GOLDSMITH AND ALAN GASSAMAN

Date: Monday, September 16, 2013 | 6:00 p.m.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater

Additional Information:  Each attendee will receive written materials and a wine tasting and light hors d’ oeuvres will be served.  To register for the event please click here.

NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY

Date: Wednesday, September 18, 2013

Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA, PhD, SOB

Location: Online webinar

Additional Information:  To register for the webinar please click here.

NORTH SUNCOAST FICPA MONTHLY MEETING

Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.

Speakers: Alan Gassman and Christopher Denicolo will speak on The Florida CPA’s Guide to Planning with Physicians and Medical Practices

Location: Chili’s in Port Richey

Additional Information: To attend this seminar please email agassman@gassmanpa.com

WEDU ESTATE PLANNING SEMINAR

Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?

Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS

Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am

Location: WEDU PBS Berman Family Broadcast Center

Additional Information:  If you would like to sign up for this seminar please click here.

THE 444 SHOW – STAND YOUR GROUND LAWS

Date: Thursday, September 26, 2013 | 4:00 p.m. (50 minute webinar)

Location: Online webinar.

Presenters: Kym Rivellini and Denis deVlaming

Additional Information:  This webinar qualifies for 1 hour of continuing education credit and costs $30.00.  To register please visit www.clearwaterbar.org

LUNCH TALK – THE POWER OF POSITION MARKETING FOR ATTORNEYS

Date: Monday, October 7, 2013 | 12:30 p.m.

Location: Online webinar

Presenter: John Graden

Additional Information:To register please visit www.clearwaterbar.org

MEET & GREET COCKTAIL HOUR WITH DR. SRIKUMAR RAO

Noted author and nationally recognized speaker, Dr. Srikumar Rao will be joining us for a cocktail party on Wednesday, October 9, 2013 at 6pm in the evening.  We will begin with light hors d’ oeuvres followed by a talk by Dr. Rao on GOOD THING – BAD THING – WHO KNOWS? CHANGING YOUR IMMEDIATE AND LONG-TERM RESPONSES TO EVENTS AND CHALLENGES.

DATE: Wednesday, October 9, 2013

Location:  Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

INTERACTIVE HALF-DAY WORKSHOP WITH DR. SRIKUMAR RAO

On Saturday, October 12, 2013 we are co-hosting an interactive workshop with Dr. Srikumar Rao on the subject of ENHANCED EFFECTIVENESS AND ENJOYMENT OF YOUR PROFESSIONAL AND PERSONAL LIFE – 5 TOOLS YOU CAN START USING IMMEDIATELY.

Date: Saturday, October 12, 2013 | 1:00 – 6:00 pm with an optional 7:00 – 8:00 p.m. question and answer session.

Location: Holiday Inn Express, U.S. 19 & Gulf-to-Bay Blvd, Clearwater, Florida

Additional Information:  To register for the event please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

Please click here to register for the event and for more information.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS, including same sex marriage, estate tax planning software (with all attendees to receive a free beta version of our new software), and other important topics.

Sandra Diamond will speak on the new Florida laws that impact estate planning, amending of decanting existing irrevocable trusts, and other recent Florida law developments.

Barry Flagg will speak on insurance and estate planning.

Sean Casey of Fifth-Third Bank will give an economic update.

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Additional Information: To attend the meeting or to receive information on joining the Council  please click here  or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Times TBD

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SEMINAR

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include John Harding, President and CEO of Adventist Healthcare Systems, Stephen Klasko, Dean and President of USF Health College of Medicine, David Lewis, CEO of United Healthcare of Florida, Nancy Templin, CFO of All Children’s Hospital and a mystery speaker (other than Colonel Sanders) to be identified.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topic of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.

On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes ecocentric living, social justice and personal development is providing a 3 hour workshop on Meditation.  The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.

Date: Saturday, September 28, 2013 | 10am – 1pm

Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa

Additional Details: The cost for attending this workshop is $45 and you can register by clicking here or call 813-416-3069 for more information.

THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND

Date: September 27, 2013

Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut

Sponsor: Connecticut Bar Institute

Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children.  For more information or to register please visit the Institute’s site here.

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please visit: http://www.law.miami.edu/heckerling/

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

Thank you to our law clerks that assisted us in preparing this report.

The Thursday Report – 8.22.13 – Annuities, Statement of Authority and ICS

Posted on: August 22nd, 2013

First Part for Website

 

Could ketchup be considered a vegetable for school lunch programs? From Wikipedia:

 The ketchup is a vegetable controversy refers to proposed United States Department of Agriculture (USDA) Food and Nutrition Service (FNS) regulations, early in the presidency of Ronald Reagan, that intended to provide more flexibility in meal planning to local school lunch administrators coping with National School Lunch Plan subsidy cuts enacted by the Omnibus Regulation Acts of 1980 and 1981.[1][2] The regulations allowed administrators the opportunity to credit items not explicitly listed that met nutritional requirements. While ketchup was not mentioned in the original regulations, pickle relish was used as an example of an item that could count as a vegetable.[3]  Click here to keep reading

Tax and Practical Planning with Commercial Annuities

Ken Crotty’s LLC Clinic – Statement of Authority – How to Prevent Theft or Having Unauthorized Managers or Officers Invade Real Estate, Borrow Money or Take Other Actions That Should Not Be Permitted

Insured Cash Sweeps: Insuring Your Peace of Mind for Large Deposits

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 3 of a 7 Part Series

Dali’s The Persistence of Memory:  Persistently Memorable

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Janine Gunyan at Janine@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlawassociates.com.

Tax and Practical Planning with Commercial Annuities

This is the first of a multi-part series on planning with commercial, variable and fixed annuity products from a tax and business advisors standpoint.

The contents of this series will become the basis of the Notre Dame tax institute outline that we are preparing to be presented on Wednesday, October 16, 2013 at 3:30 p.m. at Notre Dame in South Bend, Indiana.

Questions, comments and suggestions are always appreciated.

The opinions expressed in this article do not necessarily reflect all of the input that has been given to us by a great many advisors, carriers, and agents.

If you have clients that are involved with variable or fixed annuity products we urge you to become very familiar with the issues discussed in this series, and to express your own conclusions and opinions as appropriate.

INTRODUCTION

The financial services industry has caused variable and fixed commercial annuity products to proliferate despite tax and expense issues discussed in this article.  In some cases these issues can be overcome with strategies and advantages, as herein discussed. In other cases the client comes to the advisors with the contract already in place and sometimes already laden with income that will be taxed upon eventual withdrawal.  This article discusses several often overlooked strategies for handling those and other common situations. Furthermore, there is a diverse landscape across the United States in relation to creditor protection for annuity proceeds.  The vast majority of states provide an exemption of some form relating to annuity proceeds against creditor claims, whether that is a full exemption or some maximum allowed exemption.  However, six states, Colorado, Massachusetts, Montana, New Hampshire, Virginia, and West Virginia provide no exemption for creditor claims for annuity proceeds.

The vast majority of annuity contracts are with nationally recognized carriers and are regulated by state insurance commissioners and Federal law, but there is also an active offshore and “private placement” community that can provide more flexible and in some cases very creative planning opportunities for large investment portfolios or single purpose family or personal investments.

Separate and apart from tax and investment asset planning considerations are the asset protection and financial guarantee features of annuity contracts, which can be unique and attractive.  Many states, including Florida have statutes that provide that annuity contracts are exempt from creditor claims, and many countries have such laws as well.  The federal bankruptcy law will permit a debtor residing in these states to keep an annuity contract as an exempt asset while eliminating judgments against the debtor, unless fraudulent transfer statutes or other common exemption exceptions apply (such as the IRS and the Federal Trade Commission as “super creditors”).

A great many state registered carriers provide “minimum withdrawal right guarantees” that can give investors a degree of comfort with respect to the risk of losing investment value in underlying mutual fund investments if there is another stock market crash that is not recovered from, but these guarantees are commonly misunderstood, even by those who sell them, so great care must be taken to be sure that the “guarantees” are understood and not exaggerated or overused.

What we are referring to in this series are annuity contracts held by individuals and trusts, and not contracts that may be held as “IRA Annuities” or under pension or other qualified retirement plans or IRC 412(I) plans.  Those annuities are subject to separate rules, and typically not deemed to be appropriate because of the lack of any tax benefit provided by an annuity product held under an IRA or pension arrangement that already offers tax deferral.  A brief discussion of Section 412(I) plans will also be included in a later edition.

Separate and apart from annuities is the related world of cash value, universal, variable and whole life insurance, which can be structured similar to annuities in many ways, and can also be used (and misused) as an income tax planning tool, a creditor exempt investment, subject to certain maximum allowance limitations and other provisions, in all states, and an investment product with guarantees.  The main differences between an annuity and a life policy are that life policies have large death benefits, life policies have large “mortality risk expenses,” and permanent life insurance often costs more and results in much larger commissions to agents who sell it, life insurance policy loans do not normally trigger tax to the policy holder, and if the policy holder is lucky enough to die while the policy is in place there will be no income tax imposed on growth within the policy.

Fixed annuities typically consist of contracts that are set to pay a fixed annual or more frequent amount to the owner for a period of time or life, or which in some cases pay an interest rate based on rate of return that may be fixed for a period of years or variable and based on what the investment results of funds will be and industry decision making is.

Variable annuities consist of contractual agreements between an insurance company and an individual, individuals, or other owners that meet certain requirements discussed in this article.  The financial performance and payment rights under a typical variable annuity will be based solely upon the performance of underlying mutual funds that can be chosen and changed by the annuity owner or investment advisor, although usually the owner is guaranteed that on death the value passing to beneficiaries will at minimum be based upon the amounts invested less the policy expenses and withdrawals.

The owner contributes money to the insurance company, and these are placed into a contractual account, and invested in one or more money market and/or mutual funds that will perform based upon the market or markets in which they are invested. The law prevents creditors of the insurance carrier from reaching the invested funds or monies held under the policy.  For offshore arrangements special account structuring can be used to assure that the financial institutions holding the assets for the carrier will not permit the carrier to draw upon the assets without consent from an independent appointed professional advisor to prevent theft by a family Carrier.  It is of course very important to work with a reputable carrier that has signed legal opinions from U.S. based law firms who do comparable work for United States based nationally known carriers.

The annuity contract and company is required to be registered in each state where it does business, and to follow applicable disclosure and benefit laws that apply under state and federal law.

Insurance carriers registered only outside of the United States are subject to varying degrees of supervision and regulation.  For example, a Cayman Islands, Bermuda, or Bahamas insurance carrier can invest annuity monies into private companies, individual stocks, or even real estate, subject to diversification rules that apply if the contract is to qualify as an annuity under the Internal Revenue Code.

Offshore annuity contract planning may include allowing the client or family members to sell appreciated assets to the variable annuity contract or other entity that it might own in exchange for an installment note or annuity payment in order to defer gain on the asset, and allow future appreciation thereon to be realized income tax free in the case of a life insurance policy or income tax deferred in the case of an annuity policy.  For example, an individual owning stock with an income tax basis of $10,000 and a fair market value of $100,000 might sell that stock to a life insurance policy in exchange for a $100,000 annuity payable $10,000 a year for 11 years.  The income tax on the $90,000 of gain would therefore be deferred but recognized over 10 years.  If the life insurance policy later sells the stock for $1,000,000 it would pay no tax and if the insured dies while the policy is intact all of the policy proceeds will go to the beneficiaries tax free.  These techniques are also used in the offshore life insurance arena with the goal being complete avoidance of federal income tax by maintaining the policy through the lifetime of the insured and permitting loans as allowed under the Internal Revenue Code Section 7872 and minimum corridor requirements for a non-MEC (modified endowment contract) policy.

As also described in greater detail in this series, an annuity can be “annuitized” whereby the tax basis of the annuity is applied to each post-annuitization withdrawal to be ratably credited over the expected life expectancy of the annuitant, which is an additional tax advantage.  The annuitization usually means that the policyholder will only receive a fixed annual rate of return, and cannot have the contract invested in equities that might yield a greater rate of return, but the private letter rulings that will be discussed in this series may be structured to allow for what the author calls “synthetic annuitization,” which may be of interest to tax planners.

This article will provide a summary of annuity taxation rules, highlighting some of the important subsections of Internal Revenue Code Section 72.  This section will also examine, from a planner perspective, the importance of certain subsections of Section 72 and many strategies that can be used, and traps to be avoided.

The items of tax discussion will include the following:

  1. Section 1035 exchange rules, exchanging for long-term care insurance and related issues.
  2. The i4LIFE private letter rulings obtained by Lincoln Financial Group with respect to “synthetic annuitization,” that allow periodic payments that have basis applied to each of them and nevertheless can be fueled by market based mutual funds.  The article will examine how that rider works, the private letter rulings that made it permissible, and then examine the application of the i4LIFE Advantage technique and other approaches to handling the following situations:
    1. Inheritance rules, including where trusts are annuity beneficiaries;
    2. Non-married domestic partners application;
    3. Trusts as original owners; and
    4. Lifetime gifts of annuity contract ownership.
    5. Taxation of annuity contracts held under irrevocable trusts and the 10% excise tax issue.
    6. Anti-abuse rules.
    7. How to avoid annuity tax treatment while retaining contractual and state law creditor protection rights.

Third, we will review the primary features of a number of presently available annuity products in order to assist the reader in developing fluidity and a sense of how to compare various products and opportunities and issues associated therewith.  Additionally, within this section we will include a recent letter to a client along with charts to illustrate the practical implications that application of these different contract features can have on the decision making process and annuity performance.

ANNUITY TRIVIA

  1. When annuity monies are transferred to a long-term care policy does it carry out only income or ratable income and principal from the annuity contract?
  2. Does the “guaranteed income feature” guarantee minimum income to be earned on the annuity account principal, or minimum payments that will reduce the annuity account as low as zero?
  3. How does the new Florida law impact variable annuity sales, commissions, and surrender charges?
  4. How do the anti-abuse rules under Internal Revenue Code Section 72 affect multiple owned annuities?
  5. What is a flexible private placement variable annuity?
  6. Do the minimum death benefit provisions under Internal Revenue Code Section 72 allow for any designated beneficiary to be treated as the contract holder upon the death of the initial contract holder?
  7. Does Internal Revenue Code Section 1035 allow taxpayers to make a partial exchange of only part of an existing annuity contract for a new annuity contract, resulting in two annuities?
  8. When an annuity contract is “annuitized” normally, how much of the income payments are considered gross income for income tax purposes?
  9. Do same sex couples face any issues when entering variable annuity contracts in dealing with application of the Internal Revenue Code?

The above questions and many more will be answered in our newest series entitled Planning with Annuities.

Ken Crotty’s LLC Clinic – Statement of Authority – How to Prevent Theft or Having Unauthorized Managers or Officers Invade Real Estate, Borrow Money or Take Other Actions That Should Not Be Permitted

OLYMPUS DIGITAL CAMERA

As discussed in the August 8th Thursday Report, the new Florida LLC Act introduces the concept of a Statement of Authority.  Beginning January 1, 2014 an LLC will be able to file a Statement of Authority with the Secretary of State which can either empower or restrict the ability of the listed individuals or a class of individuals to take certain actions.  For example, if the LLC owns real estate, it can file a certified copy of an appropriate Statement of Authority naming the only manager or managers who would be able to mortgage or transfer that real estate.  The properly filed certified copy of the Statement of Authority will be deemed to have been provided to any third party with respect to the authority to deal with the real estate.

Some states have Statements of Authority available online which can be filed.  Currently, Florida has not developed a Statement of Authority form.  We have drafted a Statement of Authority that we believe will be sufficient until the Florida Secretary of State provides a standard form.  You can see our sample Statement of Authority by clicking here.

Any LLC formed on or after January 1, 2014 will be governed by the new Act.  Any LLC established before January 1, 2014 may elect to have the new Act apply on or after January 1, 2014, and the new Act will apply to such LLCs no later than January 1, 2015.  To protect the LLC, it’s Managers, and it’s Members, practitioners may want to consider sending correspondence to their clients encouraging their clients to elect into the new Act, filing a Statement of Authority, and recording the Statement in the appropriate counties where applicable.  Practitioners could draft Minutes for the Manager or Members of the LLC to elect into the new Act and also provide a Statement of Authority for signature.  The documents could be signed effective as of January 1, 2014 and filed immediately after the end of 2013.

Insured Cash Sweeps: Insuring Your Peace of Mind

Insured Cash Sweeps: Insuring Your Peace of Mind

“It’s not return on my money I’m interested in, it’s return of my money” – Mark Twain

Like Mark Twain, bank customers are extremely interested in return of their money and how to insure against any losses. Many clients have much more than $250,000 in one bank, and this concerns them about bank failure and the FDIC $250,000 limit.

But what does a client who needs immediate access to cash and wants FDIC coverage do?

Here comes the ICS.

ICS does not stand for Intensely Complicated Stuff!  It stands for INSURED CASH SWEEP, and it was developed by Promontory Interfinancial Network, LLC in order to allow large depositors to have the benefit of a small but positive rate of return and complete access without delay to monies deposited.

The ICS system basically works like this: Dave Depositor signs an ICS agreement and deposits a cash balance with a participating bank, referred to as a “relationship bank”. The relationship bank keeps up to $250,000 in this original transaction account, and the remaining balance is divided into portions of less than the FDIC-insured maximum of $250,000. Each of these portions are transferred to a different FDIC-insured banking institution and are then eligible for FDIC insurance.

Through its network of banks, Promontory offers customers participating in the ICS program, such as Dave, two deposit options: a savings option and a demand option. Click here to find a  participating bank. The savings option sends the funds to money market deposit accounts and allows customers to make up to six withdrawals every month from the invested funds.  The demand option places the funds into demand deposit accounts and provides customers with unlimited withdrawals. Either or both of these options can be utilized by depositors.

To keep Dave informed about where his money is located, he will provided a statement listing the various banks which house each portion of his ICS account and the balances at those locations. Depositors are also able to utilize a Promontory website for online access to his account information.

For the investor of excess cash who values yield over liquidity, Promontory also offers a program called CDARS. This program is similar to ICS in that it uses a network of multiple FDIC-insured institutions to guarantee the security of a gross balance far greater than the $250,000 cap. However, unlike a ICS which deposits funds into money market accounts, the CDARS program utilizes time deposits such as CDs.  Futhermore, whereas ICS offers almost complete liquidity, CDARS offers different holding periods corresponding to different yields.

For a further discussion on CDARS see our Thursday Report dated April 24, 2013 where we reviewed the CDARS program which allows banks to participate out CDs and other time required deposits with a system of participating banks.

Pre-Nuptial and Post-Nuptial Agreements: An Interview with noted divorce attorney, Ky Koch and Judge George Jirotka – Part 3 of a 7 Part Series

Koch and Jirotka

This week we cover the important topics of how much disclosure is enough disclosure, whether both parties need to have lawyers, and questions to ask the lawyer or spouse you are not representing to document appropriate disclosure and circumstances by video taped interview or written correspondence.

  • Part 1 presented on Thursday, August 8, 2013, the reader was introduced to the present overall status of prenuptial agreement statutory law and case law, and talks about prominent malpractice traps and how to get clients prepared for what they can encounter in the prenuptial agreement universe.  Click here to be directed to the Thursday Report for August 8, 2013.
  • Part 2 presented on Thursday, August 15, 2013, discussed the important topics of how much disclosure is enough disclosure and whether or not both parties need to have lawyers.  Click here to be directed to the Thursday Report for August 15, 2013.
  • Part 3, This week, Thursday, August 22, 2013, Questions to ask the lawyer or spouse you are not representing to document appropriate disclosure circumstances by video-taped interview or written correspondence.
  • Part 4, On Thursday, August 29, 2013, the article discusses Castro v. Castro and Belcher v. Belcher, and what they mean for clients and lawyers who are involved in the pre and post nuptial agreement planning.
  • Part 5, On Thursday, September 5, 2013, a discussion of alimony and lawyer fee obligations that may not be waivable in pre-nuptial or post nuptial agreements, and offset clauses and other ways to handle these.
  • Part 6, On Thursday, September 12, 2013, Bifurcation – whether you can require the validity of the pre-nuptial or post-nuptial agreement be litigated or also before having to also litigate what the result could be if it is or is not enforceable.
  • Part 7, On Thursday, September 19, 2013, How to keep marital and asset information confidential in a divorce scenario, arbitration, and the Roddy v. Roddy case.

Below is the next part of the interview:

Ky Koch: That brings up another point in drafting prenuptial agreements that I think lawyers miss out on sometimes, and that is you don’t necessarily need to have a videotaped signing ceremony every time you do one of these.  Although I think that’s probably the preferred method, spouses typically don’t want to go through that. They hate that process and I can see why.  It’s very sterile, it’s very distrustful, it’s very everything you don’t want to be thinking about as you’re preparing for a wedding.

What I recommend is whether I’m doing a signed videotape signing of a prenuptial or not, I do a list of questions that I want the other spouse to answer, and I send them to the other lawyer saying these are questions I’m going to ask your client at the videotaped signing.  I just want you to be prepared for it, have a chance to go through it with him or her because this is what I’m going to ask on the record.

You don’t need to do that. You can do that same thing in the form of an interrogatory and send it to them.  They have 10/12/15 days to answer it.  They respond with all the appropriate answers and you got some additional corroboratory evidence in terms of supporting this agreement that you wouldn’t otherwise have.

Alan Gassman: What are some of those questions?

Ky Koch: Well, I’ve had this come up in a situation where there was no lawyer on the other side.  One of those questions is: Do you understand that I’ve never met you before?  I’m not your lawyer.  Never have given you advice.  Any communication between you and I is not my legal advice.  If you think it is you’re wrong.  You need to get yourself a lawyer.  Do you understand all these things?  That’s one of them.

The other is: Have we had fair negotiations back and forth. Have you had a chance to review this?  Have you talked to your lawyer about it?  Have you contemplated the possibility of alimony in a setting where you’re married for 7, 10, 15, 20 years, but recognize that you’re giving it up here.  Do you understand that the waiver of alimony can never be changed, and you can’t come back to court later and say well I didn’t understand that I was giving that up?  Another series of questions I’ve got in there relate to our prenuptial agreement by definition.

Judge Jirotka: So you’re sort of explaining to the other side…

Ky Koch: Explaining to the other side with the idea that this is going to be presented to you when he or she comes in and tries to contest this agreement.

Another series of questions that I ask in there relates to the definition of what a prenuptial agreement is, and that is it’s a contract that alters Florida law.  As to this marriage, as to this couple this is now Florida Statute 61 as opposed to Florida Statute 61.

This prenuptial agreement is replacing Florida law and it’s an agreement between these folks and do they understand that.  There’s a bunch of different areas.

Please email Ky Koch at kkoch@kh-pa.com for a list of questions he promised to share!

Ending the Patient-Physician Relationship

An excellent summary of rights, responsibilities, and strategies that we reprint with permission of the American Medical Association, Copyright © 2013

Erosion of the Physician-Patient Relationship: What to Do When a “Breakup” is Needed?

The patient-physician relationship is one based on trust and continuity in care. Because this is a fiduciary relationship, where a physician-patient relationship has been formed, a physician must ethically place a patient’s welfare above his own. However, a physician is free to terminate a relationship so long as his withdrawal is effectively communicated to the patient. Where a physician-patient relationship becomes too burdensome, the physician must follow specific protocol to minimize his exposure to litigation based on claims of patient abandonment. As shown by multiple reports, communication is key when attempting to avoid litigation. A lack of communication demonstrates a lack of concern for the patient’s welfare and causes erosion of the physician-patient relationship.  As such, poor communication unsurprisingly increases the chance that a patient with adverse outcomes will file a malpractice suit.

Where the existence of a physician-patient relationship has become so difficult that termination must occur, the physician must take steps to communicate this termination to the patient in order to minimize his liability.1 However, there are some notable exceptions to this rule. Where a physician does not have a relationship with a patient, he cannot be held liable for abandonment. For example, where a specialist treats a patient, he will not be held responsible for all subsequent treatment, unless specifically agreed to. In other words, a physician may limit the scope of treatment by clearly communicating to the patient that no relationship exists. It is important to note that although the physician is under no duty to inform the patient of the specific reasons for withdrawal, he must always give the patient sufficient time to find a new treating physician before terminating the relationship. The following article outlines the specific protocol, based upon the A.M.A.’s Code of Medical Ethics, which should be followed when terminating a physician-patient relationship.

Ending the Patient-Physician Relationship

Once a patient-physician relationship is begun, a physician generally is under both an ethical and legal obligation to provide services as long as the patient needs them. There may be times, however, when you may no longer be able to provide care.  It may be that the patient is noncompliant, unreasonably demanding, threatening to you and/or your staff, or otherwise contributing to a breakdown in the patient-physician relationship.  Or, it may be necessary to end the relationship simply due to relocation, retirement, or unanticipated termination by a managed care plan and/or employer.

Regardless of the situation, to avoid a claim of “patient abandonment,” a physician must follow appropriate steps to terminate the patient-physician relationship.  Abandonment is defined as the termination of a professional relationship between physician and patient at an unreasonable time and without giving the patient the chance to find an equally qualified replacement. To prove abandonment, the patient must show more than a simple termination of a patient-physician relationship.  The plaintiff must prove that the physician ended the relationship at a critical stage of the patient’s treatment without good reason or sufficient notice to allow the patient to find another physician, and the patient was injured as a result.  Usually, expert evidence is required to establish whether termination in fact happened at a critical stage of treatment.

A physician who does not terminate the patient-physician relationship properly may also run afoul of ethical requirements. According to the AMA’s Council on Ethical and Judicial Affairs, a physician may not discontinue treatment of a patient as long as further treatment is medically indicated, without giving the patient reasonable notice and sufficient opportunity to make alternative arrangements for care.  Further, the patient’s failure to pay a bill does not end the relationship, as the relationship is based on fiduciary, rather than a financial responsibility. According to the AMA’s Code of Medical Ethics, Opinion 8.115, physicians have the option of terminating the patient-physician relationship, but they must give sufficient notice of withdrawal to the relatives, or responsible friends and guardians to allow another physician to be secured.

Appropriate steps to terminate the patient-physician relationship typically include:

  1. Giving the patient written notice, preferably by certified mail, return receipt requested;
  2. Providing the patient with a brief explanation for terminating the relationship (this should be a valid reason, for instance non-compliance, failure to keep appointments.);
  3. Agreeing to continue to provide treatment and access to services for a reasonable period of time, such as 30 days, to allow a patient to secure care from another person (a physician may want to extend the period for emergency services);
  4. Providing resources and/or recommendations to help a patient locate another physician of like specialty; and
  5. Offering to transfer records to a newly-designated physician upon signed patient authorization to do so.

Following this protocol may be easier in some situations than others. For example, if a physician has signed a covenant-not-to-compete, chances are the employer will not hand over the patient list upon notice of departure.  In instances such as these, you (in consultation with your attorney) may want to provide a model patient termination letter to the party withholding your patients’ addresses, and request that the addresses and letter be merged for distribution to your patients. Ideally, you should not be in a contractual arrangement that makes contacting your patients difficult.  However, if you find yourself in this situation, work with an attorney to ensure that appropriate steps are taken.

Dali’s The Persistence of Memory:  Persistently Memorable

Dali

If you want to stretch your imagination and also enjoy a world away from our own spend a few hours at the Salvador Dali Museum in St. Petersburg, Florida with a good docent, or someone who knows Dali’s art and is willing to describe it.

The term for the style seen in Salvador Dali’s The Persistence of Memory, “paranoiac-critical,” seems a particularly apt description of the scene, even if you know neither the definition of paranoiac-critical nor meaning behind the painting.  The primary facet of this Dali-pioneered technique is to link objects to completely disassociated qualities or elements. Does your mind try to find some link between the soft watches and your billable hours?  The result of this elegant precursor to the modern mash-up can be haunting, humorous, disturbing, fantastic, or, most likely, all of the above.

The 1931 painting’s setting is actually from Port Lligat (or Portlligat), a small fishing village on Spain’s Mediterranean coast near the French border that today houses a Dali museum (and in 1931, housed his house).  The inspiration for the rest of the elements is less straightforward:  take a little “horrible traumatism of birth,” temper it with prenatal “feelings of timelessness,” toss in a pinch of anxiety about when your wife will return from a night out, add a healthy slice of smooth, creamy camembert cheese, and finish with an amorphous self-portrait “abandoned on the beach.”  Waa-la – masterpiece!  (quotes from Dali, by Paul Moorhouse)

Applicable Federal Rates

Please click here to view a chart of this month’s, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

Seminars and Webinars

LEGISLATIVE UPDATE – AUGUST 444 SHOW

Join us later today at 4pm for The 444 Show.  This month we will be speaking on the new legislative update with Sandra Diamond, Aimee Diaz Lyon and Jim Daughton.  The webinar qualifies for 1 hour of continuing education credit.

Date: Thursday, August 22, 2013 | 4:00 p.m (50 Minutes)

Speakers: Sandra Diamond, Aimee Diazlyon and Jim Daughton

Sponsor: The Clearwater Bar Association.

Additional Information: To register for this webinar please click here or email Janine Gunyan at Janine@gassmanpa.com

WHAT CLIENTS ARE AND ARE NOT SUITABLE FOR LONG TERM CARE INSURANCE

Date: Thursday, August 29, 2013 | 5:00 p.m.

Presenter: Rob Cochran

Location: Online webinar

Additional Information: To register for the webinar please click here.

AVOIDING THE TRAPS IN EMR/TECH CONTRACTS….NOW YOU TELL ME I’M STUCK WITH THIS FOR 5 YEARS!

Date: Tuesday, September 10, 2013 | 5:00 p.m. and Thursday, September 12, 2013 | 12:30 p.m. (Each webinar will last 30 minutes)

Presenter: Sandra Greenblatt, Board Certified Health Lawyer

Location: Online webinar.

Additional Information: To register for the Tuesday, September 10, 2013, 5pm webinar please click here .  To register for the Thursday, September 12, 2013, 12:30 p.m. webinar please click here.

NIP & TUCK: MAKING THE CALL ON OFFICE-BASED SURGERY

Date: Wednesday, September 18, 2013

Presenter: Cheryl White, RN, BS, MSHL, LHRM, LNCC, MSCC, DFHRMPS and Lester Perling, J.D., MHA

Location: Online webinar

Additional Information:  To register for the webinar please click here.

NORTH SUNCOAST FICPA MONTHLY MEETING

Date: Wednesday, September 18, 2013, 4:30 – 6:30 p.m.

Topic: Alan Gassman will be speaking on Estate and Asset Protection

Location: Chili’s in Port Richey

Additional Information: To attend this seminar please email agassman@gassmanpa.com

WEDU ESTATE PLANNING SEMINAR  

Gassman Law Associates meets Big Bird – Sesame Street vs. Wall Street?

Alan Gassman will be speaking on the topic of ASSET PROTECTION – ESSENTIAL KNOWLEDGE AND HOT TOPICS

Date: Thursday, September 19, 2013 | 7:30 am – 11:30 am

Location: WEDU PBS Berman Family Broadcast Center

Additional Information:  If you would like to sign up for this seminar please click here.

NOTRE DAME TAX INSTITUTE

Jerry Hesch and Alan Gassman will be speaking on the topic of INTERESTING INTEREST QUESTIONS, PLANNING WITH LOW INTEREST LOANS, PRIVATE ANNUITIES, DEFECTIVE GRANTOR TRUSTS, AND PRIVATE AND COMMERCIAL ANNUITIES

Date: Wednesday, October 16 through Friday, October 18, 2013

Location: Notre Dame College, South Bend, Indiana

Additional Information: Professor Jerry Hesch’s Notre Dame Tax Institute will once again emphasize the importance of income tax planning and implications in addition to estate, estate tax, and related concepts.  Also Paul and attorney Barry will be discussing stepped-up basis tools and techniques, including our JEST Trust.  Please click here to register.

We welcome questions, comments and suggestions for the presentation that we are assisting Jerry in preparing and presenting.

PINELLAS COUNTY ESTATE PLANNING COUNCIL HALF-DAY SEMINAR

Alan Gassman will be speaking on the topic of HOT TOPICS FOR ESTATE PLANNERS

Date: Wednesday, October 23, 2013 | 8:00 am – 12:00 p.m. (60 MINUTE PRESENTATION)

Location: TBD

Other Speakers: Other speakers include Barry Flagg on Insurance and Estate Planning; Sean Casey, SR. VP Fifth Third Bank on an Economic Update, and Sandra Diamond on a topic to be determined.

Additional Information: To attend the meeting or to receive information on joining the Council please click here  or email agassman@gassmanpa.com

2013 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START THE SOONER YOU WILL BE SECURE

Date: October 25 – 27, 2013 | Times TBD

Location: TBD

Additional Information: Please contact agassman@gassmanpa.com for additional information.

DECODING HEALTHCARE SEMINAR

Alan Gassman will be moderating the Decoding Healthcare Seminar hosted by Fifth Third Bank.

Speakers will include John Harding, President and CEO of Adventist Healthcare Systems, Stephen Klasko, Dean and President of USF Health College of Medicine, David Lewis, CEO of United Healthcare of Florida, Nancy Templin, CFO of All Children’s Hospital and a mystery speaker (other than Colonel Sanders) to be identified.

We sincerely thank Fifth-Third Bank, President Brian Lamb, Ryan Sloan and the Tampa Bay Business Journal for hosting this important public “town hall” discussion that will hopefully lead to improvement of our healthcare systems in the Tampa Bay area.

Date: Tuesday, October 29, 2013

Location: Grand Hyatt, 2900 Bayport Drive, Tampa, Florida

Additional Information: For more information on this event please email agassman@gassmanpa.com

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE) HEALTH LAW SYMPOSIUM – AN ALL DAY SEMINAR

Alan Gassman will be speaking on the topic of WHAT HEALTH LAWYERS NEED TO KNOW ABOUT FLORIDA LAW

Date: Friday, November 1, 2013 | 9am – 5pm (Mr. Gassman speaks from 1:10 pm until 2:10 p.m.)

Location: Seton Hall Law School, Newark, New Jersey

Additional Information: Seton Hall University in South Orange, New Jersey was founded in 1856, and they have remodeled since.  Today, Seton Hall has over 10,000 students in its undergraduate, graduate and law school programs and is in close proximity to several Kentucky Fried Chicken locations.

NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION (ICLE)_SPECIAL 3 HOUR SESSION

Alan Gassman will be speaking on the topic of WHAT NEW JERSEY LAWYERS NEED TO KNOW ABOUT FLORIDA LAW – A 3 HOUR OVERVIEW BY ALAN S. GASSMAN

Date: Saturday, November 2, 2013

Location: Wilshire Grand Hotel, West Orange, New Jersey | 9am – 12pm

Additional Information: Please tell all of your friends, neighbors and enemies in New Jersey to come out to support this important presentation for the New Jersey Bar Association.  We will include discussions of airboats, how to get an alligator off of your driveway, how to peel a navel orange and what collard greens and grits are. For additional information please email agassman@gassmanpa.com

SALT LAKE CITY ESTATE PLANNING COUNCIL’S FALL ONE DAY “TAX AND DEDUCTIBILITY OF YOUR SKI TRIP” INSTITUTE

Alan Gassman will be speaking on the topics of PRACTICAL ESTATE PLANNING, WITH A $5.25 MILLION EXEMPTION AMOUNT, ESTATE TAX PLANNING SOFTWARE AND HOW TO USE IT, CREDITOR PROTECTION FOR THE ESTATE PLANNER, and other topics to be determined.

Date: Thursday, November 7, 2013

Location: Hilton Downtown Salt Lake City, Utah

Additional Information:  Please support this one day annual seminar conveniently located near skiing and tourism opportunities.  If you would like to attend this event or receive the materials please email agassman@gassmanpa.com

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Peabody Hotel, Orlando, Florida

Additional Information: The annual Florida Bar conference entitled Representing the Physician is designed especially for health care, tax, and business lawyers, CPAs and physician office managers and physicians to cover practical legal, medical law, and tax planning matters that affect physicians and physician practices.

This year our 1 day seminar will be held in the Peabody Hotel near Walt Disney World, which is world famous for its daily “march of the ducks” through the lobby (wear easy to clean shoes) and maybe we will have peking duck for dinner.

A dinner for the Executive Committee of the Health Law Section of The Florida Bar and our speakers will be held on Thursday, January 16, 2013, whether formally or informally.  Anyone who would like to attend (dutch treat or bring wooden shoes) will be welcomed.  Your tax deductible hotel room to start a fantastic week near Disney, Universal, Sea World and most importantly Gatorland can include a room at the fantastic Peabody Hotel for a discounted rate per night, single occupancy.

1st ANNUAL ESTATE PLANNER’S DAY AT AVE MARIA SCHOOL OF LAW

Speakers: Speakers will include Professor Jerry Hesch, Jonathan Gopman, Alan Gassman and others.

Date: April 25, 2014

Location: Ave Maria School of Law, Naples, Florida

Sponsors: Ave Maria School of Law, Collier County Estate Planning Council and more to be announced.

Additional Information: For more information on this event please contact agassman@gassmanpa.com.

NOTABLE SEMINARS PRESENTED BY OTHERS:

THIRD ANNUAL FEDERAL TAX INSTITUTE OF NEW ENGLAND

Date: September 27, 2013

Location: Hartford Marriot Farmington Hotel, Farmington, Connecticut

Sponsor: Connecticut Bar Institute

Additional Information: Chairman Frank Berall will be using part of an earlier Thursday Report article on same-sex planning in his presentation. You can also catch an early dose of Jerry Hesch’s talk on Income Tax Ideas for Estate Planning here before the Notre Dame Tax Institute in October, and Bruce Stone will be speaking on Assisted Reproductive Technology Children.  For more information or to register please visit the Institute’s site here.

MEDITATION, Science, Spirituality, Sustainability – An Experimental Workshop by the Bridge and Maulik K. Trivedi, M.D.

On Saturday, September 28, 2013 from 10 am to 1pm the Bridge, a not-for-profit organization that promotes ecocentric living, social justice and personal development is providing a 3 hour workshop on Meditation.  The session will be administered by integral psychiatrist and Yogi, Dr. Maulik K. Trivedi and will be accompanied by accomplished sitar player, Douglas Werner.

Date: Saturday, September 28, 2013 | 10am – 1pm

Location: Carrollwood Cultural Center, 4537 Lowell Road, Tampa

Additional Details: The cost for attending this workshop is $45 and you can register by clicking here.  or call 813-416-3069 for more information.

48th ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING SEMINAR

Date: January 13 – 17, 2014

Location:  Orlando World Center Marriott, Orlando, Florida

Sponsor: University of Miami School of Law

Additional Information: For more information please click here.

16th ANNUAL ALL CHILDREN’S HOSPITAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

Date: Wednesday, February 12, 2014

Location: All Children’s Hospital Education and Conference Center, St. Petersburg, Florida with remote location live interactive viewings in Tampa, Sarasota, New Port Richey, Lakeland, and Bangkok, Thailand

Sponsor: All Children’s Hospital

THE UNIVERSITY OF FLORIDA TAX INSTITUTE

Date: February 19 – 21, 2014

Location: Grand Hyatt, Tampa, Florida

Sponsor:  UF Law alumni and UF Graduate Tax Program

Additional Information:  Here is what UF is saying about the program on its website: “The UF Tax Institute will provide tax practitioners and other leading tax, business and estate planning professionals with a program that covers the most current issues and planning ideas with a practical, informative, state-of-the-art approach.  The Institute’s schedule will devote separate days or half days to individual income tax issues, entity tax issues and estate planning issues.  Speakers and presentations will be announced as the program date nears to ensure coverage of the most timely and significant topics.  UF Law alumni have formed the Florida Tax Education Foundation, Inc., a nonprofit corporation, to organize the conference.”

For details about each event, please visit us online at gassmanlawassociates.com/newsandevents.html

Thank you to our law clerks that assisted us in preparing this report.

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