Archive for the ‘Thursday Reports’ Category

The Thursday Report – 3D, Bloomberg Florida Law Summary, New SCIN Charts, and Hobby Losses

Posted on: November 21st, 2013

Abraham Lincoln Edition

 

The Hanukkah Solution – There are only 6 days before Hanukkah.  Buy one of our books at Amazon.com to allow plenty of time for re-gifting at Christmas.  It is better to re-gift than to not receive twice.  Click here to go to our Amazon.com page.

Dr. Who?

Doctors as Ranchers – Hobby Losses

Part III of our article “What You Need to Know About Florida Law to Advise Your Clients Who Live Here”

More Charts on SCIN-ing a GRAT

Phil Rarick’s Informative Blog: Autism: What Every Parent Should Know About Special Needs Trusts

Seminar of the Week: The Tampa February 19-21 University of Florida Tax Program Seminar – Weller, Detzel & Pratt

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.

Abe Lincoln

November 19th marked the 150th anniversary of the Gettysburg Address.  It is regarded as one of the most influential and greatest speeches in American history.  The speech was only 2 minutes long, during which time he spoke of our rights as human beings and Americans dictated by the Declaration of Independence.  Given during the Civil War, Lincoln spoke of the founding principles of our nation in terms of his time and struggles felt during the Civil War.

Actor Gregory Peck reciting the Gettysburg Address can be seen on youtube.com by clicking here.  The actual speech is below:

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate — we can not consecrate — we can not hallow — this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion — that we here highly resolve that these dead shall not have died in vain — that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth, or run out of Kentucky Fried Chicken.

Dr. Who Part 1

Dr. Who Part 2

On November 25th, science fiction fans can go to local movie theaters to see the 50th anniversary extravaganza of the Dr. Who show.

Dr. Who was first aired on the British Broadcasting Company (BBC) on the evening that John F. Kennedy died.  Dr. Who is an extra-terrestrial alien in human form who uses a small blue police public call box to transport him and his friends through time and space.  When he goes forward in time the future is revealed, and when he goes back in time, history and interaction occur.

This has been one of the most popular television series in British history, and is also very popular with U.S. audiences that are aware of it.

Douglas Adams wrote for Dr. Who and went on to adapt its ideas for the Hitchhikers Guide to the Galaxy.

The November 25th theater extravaganza will certainly be as entertaining as the show.

Try it, you’ll like it!

You can also see the Dr. Who BBC new version that is currently on.  Check your local listings or watch it free on Amazon.

Dr. Who quotes:

“The universe is big.  It’s vast and complicated and ridiculous.  And sometimes, very rarely, impossible things just happen and we call them miracles.” – The Doctor

“You want weapons?”  We’re in a library!  Books!  The best weapons in the world!” – The Doctor

“Do what I do. Hold tight and pretend it’s a plan!” —The Doctor

“In 900 years of time and space, I’ve never met anyone who wasn’t important” – The Doctor

“Letting it get to you. You know what that’s called? Being alive. Best thing there is. Being alive right now is all that counts.”  – The Doctor ignore coincidence. Unless, of course, you’re busy. In which case, always ignore coincidence.”— The Doctor

Doctors as Ranchers – Hobby Losses

Many clients engage in ranching or farm related activities and have a great passion for this, notwithstanding constant financial losses.

In this situation it is almost always best to continue taking the losses, notwithstanding the “hobby loss” rules.  Our write-up on the hobby loss rules as would apply to a physician who maintains a cattle farm that has recreational features such as skeet shooting, a swimming pool, and a guest house (where his or her legal and financial and tax advisors should be able to stay periodically and have productive meetings) is as follows:

If the taxpayer can show a bona fide profit motive and runs his activity in the manner of a business, can he overcome the “hobby” presumption caused by repetitive annual losses?

Yes.  Though an activity may be presumed to be a “hobby” if it does not make a profit in three of the past five years, “profits” are not necessary to prove an activity is “for-profit.”

If Dr. Smith keeps detailed records of his ranch’s finances, and also on the bloodlines of his herd, his herd’s breeding statistics, medication schedules, and any effort and expense at obtaining well-bred bulls, he improves the chances that his cattle operation will be deemed a for-profit enterprise.

An activity is engaged in for profit if the taxpayer entertained an actual and honest, even though unreasonable or unrealistic profit objective in engaging in the activity.  Stromatt v. CIR. U.S. Tax Ct. Summary Opinion 2011-42, No. 5339-07S (emphasis added).

Furthermore, if one objective of the operation was to have agricultural tax treatment, and an important motive here was to earn money on the appreciation of the ranch land and to be able to pay the taxes and insurances associated therewith, then the chances of success notwithstanding years of consecutive losses are significantly enhanced.

Factors that have proved successful in convincing a tax court of a cattle operation’s profit motive include:

  •         significant growth of herd during period being examined especially if in the operation‘s early stages
  •         record-keeping that documents breeding goals and outcomes
  •         the motive to earn money on the appreciation of real estate as an investment.

The Smith case and the Burrus case both support the proposition that “land banking” by farming, ranching, or other means is a legitimate business, as opposed to being a hobby. In the Smith case, the Court stated that the land appreciation and the cow and dairy farm were not considered a single entity. However, it recognized that the taxpayer’s investment in the land and buildings had the potential for appreciation and profit and considered that to be favorable to the taxpayer.

  See Burrus v. CIR, T.C. Memo. 2003-285 (Tax Court held that petitioner’s breeding documentation, bull sales records, considerable investment of personal time, and hiring of an experienced rancher to manage the operation in petitioner’s absence demonstrated a sufficient profit motive, overcoming the hobby presumption caused by the operation’s monetary losses in all six years under review).

Alternatively, large losses paired with substantial income from other sources will likely lead to a determination that farm/ranch is a hobby.  See Zuckerman v. CIR, T.C. Memo. 1984-192.

The head of cattle on Dr. Smith’s ranch, 35, may be important depending on the size of the ranch.  The ideal ratio varies based on the quality of the pasture, so I would like to know more about the property.  Size of herd could be used to demonstrate profit motive in two ways: 1) if the herd steadily increased in size over time, or 2) if the size of the herd during the time period in question represented the ideal cow-per-acre ratio for the particular property.

Page 3 – 4 of the M-5840 – Carrying on Hobby in a Manner Similar to a Profitable Activity – Hobby Losses, gives some good examples of cattle ranching activities that have, and have not, been successful in proving genuine profit motive.  It would be good to compare them to Dr. Smith’s operation.

Appreciation of the assets used in the activity can also be a factor favoring the taxpayer, but the appreciation needs to be likely to occur.  If such appreciation is “expected,” this increase in value may indicate a profit motive.  See Income Tax Regulations _ 1.183-2(b)(4).

Below is a quick overview of the nine factors the IRS uses to help determine if an activity is engaged in for profit or as a hobby:

  1. Does the time and effort put in to the activity indicate an intention to make a profit?
  2. Do you depend on income from the activity?
  3. If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
  4. Have you changed methods of operation to improve profitability?
  5. Do you have the knowledge needed to carry on the activity as a successful business?
  6. Have you made a profit in similar activities in the past?
  7. Does the activity make a profit in some years?
  8. Do you expect to make a profit in the future from the appreciation of assets used in the activity?
  9. Are elements of pleasure or recreation involved?

Part III of our article “What You Need to Know About Florida Law to Advise Your Clients Who Live Here”

Our Bloomberg BNA Tax Estates, Gifts and Trusts Journal entitled “What You Need to Know About Florida to Advise Your Clients Who Live Here – Part III” concentrates on estate planning and creditor protection trust aspects for Floridians and those interested in asset protection trusts.  You can view the article by clicking here.

If you would like copies of parts I and II please email Janine Gunyan and Janine@gassmanpa.com.

Lou Mezzullo also has an excellent article entitled “Using Life Insurance to Satisfy Support Obligations in a Divorce”.  The article is so good that several tax lawyers have considered getting divorced so that they can use this technique.

If you would like a copy of Lou Mezzullo’s article contact Aen Webster at Bloomberg BNA at aen.webster@bipc.com.

More Charts on SCIN-ing a GRAT

Yesterday, we participated in a Bloomberg BNA Webinar entitled “Planning with Self-Cancelling Installment Notes and Private Annuities: Don’t Get Burned.”  We updated our materials on the SCGRAT and also have a chart on the SCGRAT – Self Cancelling Grantor Retained Annuity Trust technique.  You can view our chart and two new pages of text by clicking here.    We thank Stacy Eastland for his ideas and writing on the use of a leveraged LLC that can be contributed to a Grantor Retained Annuity Trust.  Be owed a SCIN by your LLC and see how good things could be.

Our webinar also discussed the Kite case.  The number one American tax musical video on youtube discussed the Kite case and can be viewed by clicking here.

Phil Rarick’s Informative Blog: Autism: What Every Parent Should Know About Special Needs Trusts

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.

To read more about this please click here.

Seminar of the Week: The Tampa February 19-21 University of Florida Tax Program Seminar

Weller, Detzel & Pratt

(Not to be confused with Crosby, Stills & Nash)

 The Florida Tax Institute at the Levin College of Law at UF is scheduled for February 19 – 21, 2014.

Weller Pic

 

On Thursday, February 20, 2014, Louis S. Weller of Bryan Cave, LLP in San Francisco will speak on Current Issues in Section 1031 Exchange.

We are pleased to see real estate prices going up and clients who are being rewarded for having bought real estate “at the bottom” in 2008 or shortly thereafter.

Louis is uniquely qualified to give this presentation because of his 35 years of experience as a transactional and real estate lawyer, not to mention that he is the Real Estate Department Editor for the Journal of Taxation, past Chair of the Real Estate Committee of the American Bar Association, and of the Subcommittee on Like-Kind Realty Exchanges for the ABA.

Detzel Pratt

We are also very much looking forward to the presentation entitled Formula Clauses A-Z which will be given on Friday, February 21, 2014 at 10:30 am by Lauren Detzel and David Pratt.

This will be a very practical presentation.

Lauren received her J.D. from the University of Florida and has been named as one of Orlando’s Best Lawyers, as Trusts & Estates Litigator of the Year for 2013, and is Chair of the Wills, Trusts Committee of the RPPTL Section of The Florida Bar.

David is Florida Board Certified in both Taxation and Wills, Trusts and Estates.  He was a CPA with Arthur Anderson in New York City and served as Chair of the Florida Bar’s Tax Section.

He is an adjunct professor at the University of Florida College of Law (as is Lauren Detzel).

Please make sure you join us for their interesting presentation and visit our booth.

Booth Pic

Our booth will feature the special chair that we have funded for Professor Dennis Calfee.  We bought it at Walgreens and it has a 3 year warranty.

Calfee

 

Professor Calfee thanks so much for not changing my partnership tax grade.

APPLICABLE FEDERAL RATES

Federal Rates

Seminars and Webinars

BP CLAIM INCOME AND DEDUCTION CORRELATION – WHERE ARE WE NOW?

The BP Federal hearing to determine what methods of matching income to expenses for BP claims is scheduled for December 2nd, and we expect that there will be valuable feedback, and possibly definitive guidance issued by the next week.  Please therefore, mark your calendars for 12:30 pm or 5pm on Monday, December 9th for a complimentary 30 minute webinar with John Goldsmith and Dean Kent of the Trenam Kemker law firm.

Date:    Monday, December 9, 2013 | Two Sessions: 12:30 pm or 5pm

Location: Online Webinar

Additional Information: To register for the 12:30pm session please click here.  To register for the 5pm session please click here.

THE FLORIDA BAR – REPRESENTING THE PHYSICIAN

Date: Friday, January 17, 2013

Location:  The Hyatt 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 Hyatt Hotel near Walt Disney World.

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 Hyatt Hotel for a discounted rate per night, single occupancy.

FLORIDA BAR HEALTH LAW REVIEW 2014

Alan Gassman will be speaking on What Healthcare Lawyers Need to Know About Tax Law and Business Entities at this excellent annual Florida Bar conference that is attended not only for those who are taking the Board Certification exam but also healthcare lawyers and other advisors.

Other speakers will include Lester Perling who is the co-author of A Practical Guide to Kickback and Self-Referral Laws for Florida Physicians and a number of other books and publications.

Date:    March 7 – 8, 2014

Location: Hyatt, Orlando, Florida

Additional Information: We thank Jodi Laurence for all of her hard work in making this conference as successful as it is.  For more information please contact Jodi at jl@flhealthlaw.com.

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

Presenters:       Martin McMahon, Jr., C. Wells Hall, III, Abraham N.M. Shashy, Karen L. Hawkins, Lawrence Lokken, Stephen F. Gertzman, James B. Sowell, John J. Rooney, Louis Weller, Ronald Aucutt, Karen Gilbreath Sowell, Herbert N. Beller, Peter J. Genz, Stephan R. Leimberg, John J. Scroggin, Lauren Y. Detzel, David Pratt and Samuel A. Donaldson

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.”

 

 

The Thursday Report – 11.14.2013 – Don’t “Hesch-itate” To Read This!

Posted on: November 14th, 2013

The Estate Tax Fight of the Decade – What To Do For A Client With A Short Life Expectancy – Don’t “Hesch-itate” to see this poster!

Jonathan Blattmachr & Alan Gassman:Stepping Up Efforts to Step-Up Basis for Married Couples, a Leimberg Information Services Article

Materially Participate to Avoid the 3.8% Tax on Business Entity Ownership

Individual Health Care Penalties

Phil Rarick’s Informative Blog: Unclaimed Property in Florida: You May Be Pleasantly Surprised!

Item of Interest – Pilates, Yoga, Free Food, Drinks and Good Health on McMullen Booth Road this Saturday Evening

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.

To register for this Bloomberg BNA Tax & Accounting webinar please CLICK HERE and use the top secret code of LWJHAGEW to receive $100 off the cost of the webinar.

If you are unable to attend the webinar but would like a copy of the materials please email Janine Gunyan at Janine@gassmanpa.com

The Estate Tax Fight of the Decade – What To Do For A Client With A Short Life Expectancy –
Don’t “Hesch-itate” to see this poster!

BNA WEBINAR AD.4

*The above poster was not endorsed by Bloomberg BNA Tax & Accounting, the IRS, KFC, AARP, Ed Wojnaroski, Larry Katzenstein or Moe or Curly. Please display it with great caution. Sarah Palin does not approve this message.

The $1 Billion Dollar Davidson Prize Fight – Coming to a Tax Court Near YOU!

Don’t miss Larry Katzenstein’s discussion with Ed Wojnaroski on whether the IRS has a chance to prevail in the Davidson case.

To register for this Bloomberg BNA Tax & Accounting webinar please CLICK HERE and use the top secret code of LWJHAGEW to receive $100 off the cost of the webinar.

If you are unable to attend the webinar but would like a copy of the materials please email Janine Gunyan at Janine@gassmanpa.com.

Blattmachr Cartoon Final

Our article “Stepping Up Efforts to Step-Up Basis for Married Couples” was published last night in the Leimberg Information Systems Estate Planning Newsletter.  The chart from the article is as follows:

No Planning

JEST or Special Power of Appointment Trust Arrangements

Alaska Community Property Trust

Drafting and Design Time to Implement None. Requires sophisticated drafting and implementation. Can be simple to install.
Creditor Protection Attributes No effect. Will typically expose assets to creditors to each owner spouse unless further planning is effectuated. Alaska creditor protection law applies.
Annual Maintenance Costs None beyond what client is already paying. None but best to review assets and allocation within JEST trust periodically. $3,000 per year payment to Alaska trust company and requiring that the clients follow appropriate formalities if they want to have creditor protection attributes.
Administration After Death of First Spouse No special provisions needed. Must meet with qualified planner to decide how to allocate assets between one or two credit shelter trusts and administration issues. Can simply dissolve trust or maintain trust and step up has occurred.
Degree of Tax Certainty Non-applicable. The Service may challenge the stepped up basis and funding of a credit shelter trust from the assets of the first dying spouse. Statutory support and over decades of community property case law eliminates stepped up basis and full credit shelter trust funding issues.

Jonathan G. Blattmachr is one of the country’s most well recognized estate planning authors and lawyers and has developed many priceless concepts and strategies that the profession uses every day.  He was a practicing attorney for approximately 40 years at Simpson Thacher & Bartlett and Milbank, Tweed, Hadley & McCloy.  Jonathan continues to be extremely active, being a director of Pioneer Wealth Partners, LLC, a boutique wealth advisor firm in New York, Director of Estate Planning for the Alaska Trust Company, co-developer with Dallas Attorney Michael L. Graham of Wealth Transfer Planning, a computerized drafting and advice system for lawyers, the author of many books (including Income Taxation of Estates and Trusts with Professor Ladson Boyle and The Circular 230 Deskbook with Professor Mitchell Gans, both published by the Practising Law Institute) and articles, trustee for many wealthy families and a frequent lecturer across the country.  Mr. Blattmachr can be contacted at jblattmachr@hotmail.com

To view a copy of the article please click here.

Materially Participate to Avoid the 3.8% Tax on Business Entity Ownership

 There may be 50 ways to leave your lover, but there are only 7 ways to materially participate in an active business owned by an S corporation or partnership in order to avoid the 3.8% Medicare tax under Internal Revenue Code Section 1411.  The 3.8% Medicare tax applies to net investment income. Net investment income includes interest, dividends, capital gains, rental and royalty income, non-qualified annuities, income from businesses involved in trading of financial instruments or commodities, and passive business activities. However, income from an active  trade or business that is owned by an S corporation or a partnership is exempt from the 3.8% Medicare tax, if the activities of the taxpayer are not “passive activities” under the passive loss rules of Internal Revenue Code Section 469.

An activity is not a “passive activity” if the activity involves a trade or business in which the taxpayer materially participates. Internal Revenue Code Section 469 and the Treasury Regulations thereunder define material participation as regular, continuous, and substantial involvement in the operations of the activity.

Under the Regulations, the following 7 tests are used to establish whether a taxpayer materially participates in an activity:[1]

1.  If the taxpayer participates in the activity for at least 500 hours during the taxable year, then the taxpayer materially participates in the activity.

The taxpayer’s participation must be done while the taxpayer owns an interest in the activity. Further, the participation must be “in connection with the activity,” which is not necessarily limited to direct involvement in the main operations of the activity.[2]

2.  It is sufficient if the taxpayer does substantially all of the work in the activity, even when considering the work of non-owners of the activity.  However, the taxpayer=s participation includes that of his or her spouse for the purposes of this test.  The amount of hours that the taxpayer spends on the activity does not matter.[3]

3.  The taxpayer materially participates if he or she works more than 100 hours in the activity during the year, and no one else (including individuals who do not have any ownership in the activity) works more than the taxpayer.

This test includes work done by individuals that do not own an interest in the activity. For example, if the taxpayer=s employee, who does not own an interest in the activity, participates more than the taxpayer, then the taxpayer cannot satisfy this test.[4]

4.  If the activity is a significant participation activity (SPA), and the taxpayer participated in all SPA=s for more than 500 hours for the year, then the taxpayer is considered to be materially participating in the activity.

An SPA is an activity, other than a rental activity, that the taxpayer would not be treated as materially participating under any of the other tests, but in which he or she participates for at least 100 hours. The aggregate participation of the taxpayer in all of his or her SPAs must exceed 500 hours.[5]  Any participation by the taxpayer=s spouse is considered as participation by the taxpayer for the purposes of this test.

5.  The taxpayer is considered to materially participate in an activity for a particular taxable year if he or she materially participated in such activity in any 5 of the prior 10 years. This test only applies to years in which the taxpayer owned an interest in the activity.[6]

6.  If the activity is a personal service activity and the taxpayer materially participated in that activity in any 3 prior years, then the taxpayer is considered to be materially participating in the activity.  Personal service activities include services performed in health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting. It also includes any other trade or business in which capital is not a material income-producing factor.[7]

7.  The taxpayer materially participates in an activity if, based on all of the facts and circumstances, the taxpayer participates in the activity on a regular, continuous, and substantial basis during such year. However, this test only applies if the taxpayer works at least 100 hours in the activity, no one else works more hours than the taxpayer in the activity, and no one else receives compensation for managing the activity.[8]

What if the taxpayer’s spouse participates in the business? The taxpayer’s spouse’s participation is included when determining whether the taxpayer materially participated.[9] The taxpayer and his spouse are viewed as one person, regardless of whether they file joint income tax returns.  This applies to all 7 tests.

An estate or a trust is treated as materially participating in an activity if the executor or fiduciary is materially participating in the activity.[10]  Participation of a beneficiary of an estate or trust does not matter.[11] However, a trust that is materially participating in an activity generally will not be considered a trust for tax purposes.[12] Instead, the trust will be taxed as a corporation under Treasury Regulation Section 301.7701-4.[13]

 Individual Health Care Penalties

At the end of August, the IRS finalized the rules for the individual mandate portion of the Affordable Care Act.  Since the Supreme Court has ruled that the individual mandate constitutes a tax, the IRS will be responsible for collecting it.  CNN describes the penalty implications as follows: “Under the new rules, individuals choosing not to carry insurance are subject to a penalty of $95 per person each year, or 1% of household income, whichever is greater, beginning in 2014.  Over time, the penalty increases, so that by 2016 the penalty is $695 per person, or 2.5% of household income.  Subsequent years will be calculated based on a cost-of-living formula.”

The graphic below illustrates the application of the mandate:

Health Care Penalty Box FINAL

 Phil Rarick’s Informative Blog: Unclaimed Property in Florida: You May Be Pleasantly Surprised!

 You may think it is not possible that you or a family member have any “unclaimed” property held by the State of Florida – and you could be wrong!

Click here to read more about this interesting topic.

Item of Interest – Pilates, Yoga, Free Food, Drinks and Good Health on McMullen Booth this Saturday Evening

Kapok Pilates & Wellness (located across the street from Sam Ash music in Clearwater) is a fully equipped Pilates studio including private sessions, small group classes, Pilates mat, yoga, Tai Chi, Aerial Yoga and more.

Their Grand Opening Celebration is this Saturday, November 16, 2013 at 7pm.

Kapok Pilates & Wellness

908 North McMullen Booth Road

Clearwater, FL 33759

727-365-8574

Enrich your body and mind with exercise, movements, positive thoughts, visions and colorful foods, but not Kentucky Fried Chicken.

Applicable Federal Rates

Federal Rates

Seminars and Webinars

BP APPELLATE & TRIAL JUDGE MATCHING OF INCOME & EXPENSE DECISIONS

Date: Thursday, November 14, 2013 | Two sessions to choose from: Breakfast 7:30 – 8:20 or dinner 6:00 – 6:50 p.m.

Location: Trenam Kemker, 101 E. Kennedy Blvd, Suite 2700, Tampa, FL 33602

Additional Information: To register for the breakfast session please click here.  To register for the dinner session please click here.

CREDITOR PROTECTION FOR FLORIDA PHYSICIANS & BP CLAIMS SEMINAR – SANDSPUR FICPA MONTHLY MEETING

Date: Monday, November 18, 2013 | 5:00 – 7:00 p.m.

Location: TGIFridays, Fowler Avenue, Tampa, FL

Additional Information: If you are interested in attending this seminar please email agassman@gassmanpa.com

PLANNING WITH SELF-CANCELLING INSTALLMENT NOTES AND PRIVATE ANNUITIES: DON’T GET BURNED

Date:    Wednesday, November 20, 2013 | 12:30 pm – 2:00 pm

Speakers: Professor Jerry Hesch, Lawrence Katzenstein, Edward P. Wojnaroski, Alan S. Gassman and Kenneth J. Crotty

Additional Information: To register for this webinar please click here.  If you would like to receive a copy of the materials for this webinar please email Janine Gunyan and Janine@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 EDUCATION 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 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 Hyatt 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 Hyatt Hotel near Walt Disney World.

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 Hyatt Hotel for a discounted rate per night, single occupancy.

FLORIDA BAR HEALTH LAW REVIEW 2014

Alan Gassman will be speaking on What Healthcare Lawyers Need to Know About Tax Law and Business Entities at this excellent annual Florida Bar conference that is attended not only for those who are taking the Board Certification exam but also healthcare lawyers and other advisors.

Other speakers will include Lester Perling who is the co-author of A Practical Guide to Kickback and Self-Referral Laws for Florida Physicians and a number of other books and publications.

Date:    March 7 – 8, 2014

Location: Hyatt, Orlando, Florida

Additional Information: We thank Jodi Laurence for all of her hard work in making this conference as successful as it is.  For more information please contact Jodi at jl@flhealthlaw.com.

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:  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 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

Presenters:       Martin McMahon, Jr., C. Wells Hall, III, Abraham N.M. Shashy, Karen L. Hawkins, Lawrence Lokken, Stephen F. Gertzman, James B. Sowell, John J. Rooney, Louis Weller, Ronald Aucutt, Karen Gilbreath Sowell, Herbert N. Beller, Peter J. Genz, Stephan R. Leimberg, John J. Scroggin, Lauren Y. Detzel, David Pratt and Samuel A. Donaldson

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.”


[1]IRS Publication 925 (2012).

[2]IRS Regs.’ 1.469-5(f)(1).

[3]Bloomberg BNA, U.S. Income Portfolios: Real Estate Portfolio 549-2nd: Passive Loss Rules.

[4]Id.

[5]IRS Regs.’ 1.469-5T(c); IRS Regs.’ 1.469-5T(a)(4).

[6]Bloomberg BNA, U.S. Income Portfolios: Real Estate Portfolio 549-2nd: Passive Loss Rules.

[7]Id.

[8]Id.

[9]26 U.S.C. ‘ 469(h)(5).

[10]Bloomberg BNA, U.S. Income Portfolios: Real Estate Portfolio 549-2nd: Passive Loss Rules.

[11]Id.

[12]Id.

[13]Id.

The Thursday Report – November 7, 2013 – $5.34m/$14k/UF LLM 2.21.14 TPA Conference

Posted on: November 7th, 2013

Updated Estate Tax Charts including the new $5,340,000 Exemption Amount

Seminar Spotlight of the Week – UF LL.M. Tax Institute Program Details – Attend One or More of Wednesday, Thursday and/or Friday, February 19 – 21, 2014 in Tampa and Win a Bucket of Kentucky Fried Chicken to Share with 5 of your Favorite Friends.

HIPAA Changes 2013 by Anita Ramirez

Phil Rarick’s Informative Blog – Florida Guardianship Quick Reference Guide

Lemmings to the Sea

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.

Updated Estate Tax Charts including the new $5,340,000 Exemption Amount and the new FICA/FUTA Limit of $117,000

We now know formally that the estate tax exemption will increase from $5,250,000 to $5,340,000 on January 1, 2014.  Gifting next year can therefore be based upon $14,000 per recipient plus $90,000 plus whatever the client has left of their exemption amount.

Also, set your calendar to get with clients three years after they have filed their 2012 gift tax return if you did not use all of their exemption amount but reported discounts that would do so.  If you do not know what the above means and you have wealthy clients call someone who does!  The client will appreciate it and the someone who does will really appreciate it.

Please let us know if you would like a Microsoft Excel version of any of the below charts.  Please feel free to use them in your practice.

New Estate Tax Law Summary

2013 Tax Rates Chart.1a

Protective Trust Logistical Chart

Revised Protective Trust Logistical Chart

The below chart is an updated version of our SCGRAT chart which describes an idea that can be used if you want to use a self-cancelling installment note and are concerned about whether the service would require it to be valued based upon a willing buyer/willing seller standard.  This is derived from materials and lectures in the past by Stacy Eastland.  We welcome any and all questions, comments and suggestions with respect to this.

Please join Jerry Hesch, Larry Katzenstein, Ed Wojarnoski, Alan Gassman and Kenneth Crotty for the Bloomberg BNA Webinar Planning with Self-Cancelling Installment Notes and Private Annuities: Don’t Get Burned and give us your questions, comments and suggestions on planning with self-cancelling installment notes and private annuities.

If you would like to attend the webinar please click here to register.  If you are unable to attend but would like a copy of the materials please email Janine@gassmanpa.com

Be there or be a quadrilateral!

Cube and Squire with text

 

SCGRAT Chart

 Seminar Spotlight of the Week – University of Florida Tax Institute Announced – Make Sure to Mark Your Calendar for One or More of Wednesday, Thursday and/or Friday, February 19 – 21, 2014 and Win a Bucket of Kentucky Fried Chicken to Share with 5 of your Favorite Friends

The long awaited announcement of details about the University of Florida Tax Institute that will be held in Tampa, Florida on the above dates was transmitted by the announcement that you can review by clicking here.

Estate Planners can attend the Friday morning half-day session which will include talks by Steve Leimberg of Leimberg Information Services who will speak on Marketing an Estate Planning Practice, Conference Chair Lauren Detzel and David Pratt who will speak on Formula Clauses: A-Z, and the number one tax and estate planning humorist Professor Samuel A. Donaldson from the University of Georgia who will provide an estate planning tax law update and jokes far superior to anything you will ever read in a Thursday Report.  Vests optional – lets chip in a buy this guy a jacket!

Donaldson with text

Many of us will also attend the Wednesday and Thursday sessions which will include UF Tax Law Professor Martin J. McMahon, Jr. on Current Developments in Income Taxation, a panel discussion on Current Developments in International Taxation led by Professor Lawrence Lokken, Louis S. Weller of BryanCave, LLP on Current Issues in Section 1031 Exchanges and Peter J. Genz of King & Spaulding, LLP on Debt Workouts.

There is a welcome reception on Wednesday evening and a University of Florida Foundation reception also open to all attendees on Thursday evening.

The program will be held at the Grand Hyatt Tampa Bay and rooms can be reserved now at the very reasonable rate of $219.  This is the Hyatt that has the wonderful Armani’s restaurant on the top floor with a spectacular sunset view from the bar and outdoor observatory.  Nothing could go better with fried chicken!

Best of all, we will have a booth at the program and will be giving out buckets of Kentucky Fried Chicken to lucky Thursday Report readers who win our contest by (1) contributing to the Thursday Report between now and February 19, 2014, (2) attending this conference, and (3) to be determined.

We will also be providing complimentary training sessions and free 15 month software subscriptions to our ever improving estate tax and installment sale software calculation and illustration program.  Further details on the software and an immediate download can be obtained by emailing estateview@gassmanpa.com.  An instructional webinar entitled Estate Trek: The Next Generation of our EstateView Planning Software that lasts only 20 minutes can be viewed by clicking here.

If you have a dual screen computer please consider putting the software on the left side and watching the webinar on the right side.  If you are left handed only or only read Hebrew you can reverse that.  We have a federal grant under which we are studying this possibility.

You can be adept at using this software at under 15 minutes (which is .3 of an hour if you are counting billable time).

We applaud Lauren Detzel and the members of her committee for all of their hard work in making this tax conference a new and successful part of estate planning and tax education in Florida and for their support of the University of Florida LL.M. in taxation program.  Lauren can be reached at LDetzel@deanmead.com.

Detzel with text

 HIPAA CHANGES 2013
By Anita Ramirez

Anita Ramirez.1

Anita Ramirez is the president of AER Consulting, Inc. and has over 35 years experience in health care management.  She has provided services to physicians in analyzing existing practices, identifying and rectifying problem areas, and new practice start-ups.  Ms. Ramirez has also functioned in the trenches as a clinic administrator overseeing marking, personnel, finance and administrative operations.  She has been featured in several local and national publications and has appeared on many local television programs.  She was on the adjunct faculty of Hillsborough Community College from 1976 to 2000 teaching courses on medical office practices and procedures; office automation, supervision, leadership training and customer service.  She can be reached at aerconsulting.aer@verizon.net.

Below is her article.

In March 2013, many changes were done to HIPAA (The Health Insurance Portability and Accountability Act).  These changes are to be implemented and made effective by all providers by September 23, 2013.  It is imperative that all providers update their HIPAA materials which include policies, procedures and forms.  HIPAA is conducting on site visits to ensure that all providers are compliant with HIPAA.

Business Associate Agreements (BA):

New BA Agreements are required.  Under the rule, the definition of a BA is broadened to generally include all entities that create, receive, maintain, or transmit PHI (Protected Health Information) on behalf of a covered entity.  This expanded definition will now cover a number of organizations that previously might not have been subject to the regulations.  This now also includes sub contractors of BAs (defined as a person to whom a BA delegates a function, activity or service); patient safety organizations, health information organizations, e-prescribing gateways and personal health record vendors.  The rule makes BAs directly liable for compliance with many of the same HIPAA privacy and security standards and requirement that practices must abide by.  BAs are also now subject to the same enforcement actions and fines as practices.

Common BAs are:  billing service, transcription services, off-site record storage and retrieval, record disposal service (shredding company), practice management software vendor, electronic medical record software vendor & ITA company.

The manual and HIPAA CD provided by AER Consulting, Inc. includes the BA agreement, the BA questionnaire, that you need to have the BA complete and return to you so that you show that you have done your due diligence in ensuring that your BA is HIPAA compliance, as well as a cover letter to use to send the new BA Agreement and Questionnaire to your BAs.

Breach Notification:

The new rule significantly revises the definition of a PHI “breach.”  This revised definition makes it more likely that an inappropriate disclosure will be considered a breach and trigger notification requirements   Practices are required to notify affected patients and in cases affecting 500 or more individuals, the local media when a breach occurs.  However, this interim final rule stated that practice professionals did not have to initiate the notification process if they could demonstrate that the breach would not result in any “significant risk of harm” to the patient (reputation, financial or other harm).  This “harm standard” was modified in the omnibus rule to create what HHS calls “a more objective process for assessing whether PHI has been compromised.”

Practice professionals must now assume that an impermissible acquisition, access, use or disclosure of PHI is a breach unless there is a low probability that the PHI was compromised.  To demonstrate low probability, practice professionals must conduct a risk assessment that includes the following:

•           The nature and extent of the PHI involved

•           The unauthorized person who used the PHI or to whom the disclosure was made

•           Whether the PHI was acquired or viewed

•           The extent to which the risk to the PHI has been mitigated

HHS also removed the previous breach exception for PHU in a “limited data set” that did not include patient birth dates or zip codes.

Patient Rights:

HITECH granted patients the right to a copy of their medical records in an electronic format if they were stored electronically.  Patients also have the right to ask for a list of whom their records have been given; therefore, practices must keep a log of all persons or entities that have received a patient record.

Security:

You must perform a complete Risk Assessment on a yearly basis with the report showing what needs to be corrected and a plan showing the corrections required and done.

The HIPAA manuals must have a complete set of policies and procedures for Privacy and for Security.  The one P & P that has been added and expanded is “Information system Activity Review.”   This is the random audits of staff using the PHI.  The purpose of the P & P is to implement procedures that review system activity to determine if any EPHI is accessed, used or disclosed in an inappropriate manner.  Be sure to discuss this with your IT people and set up a process and logs to do this.

Job Descriptions:

Job descriptions must now include the access level of each employee for the practice software access.  There are sample job descriptions included in the material.

Yearly Training and Education:

It is recommend that providers have yearly HIPAA education retreats with the compliance officer, committee and Department Heads.  In turn the department heads can then meet with their staff and do education with their staff and document this education.  All new staff can have their HIPAA education during their orientation and training by viewing the training portion of the HIPAA CD along with the rest of their orientation.

Anita was also kind enough to provide us with the actual law she is referring to, which can be accessed by clicking here.

Lemmings to the Sea

Lemon Cartoon

 “People are what they wanna be, they’re not lemmings to the sea” - Blink 182

This lyric from Blink 182’s song “Lemmings” refers to the popular saying “like lemmings to the sea” or “don’t be a lemming.” This saying is a metaphor for people who blindly follow others. Many people believe this saying originated from the 1958 Disney documentary “White Wilderness.” In the film, lemmings were shown jumping off a cliff into the Arctic Ocean.1 This gave the premise that lemmings will literally jump off a cliff if the lemming in front of them jumps. The film won an Academy Award for Best Documentary Feature.2

However, in 1982, the CBC program “The Fifth Estate” found that the lemmings in White Wilderness did not jump off the cliff, but were pushed off by a rotating platform operated by the Disney film crew.3 Also, the scene was not shot at the Arctic Ocean, but at the Bow River near Calgary, Canada.4 The show also discovered that a scene showing a polar bear cub falling down an ice slope was actually shot in a film studio in Calgary.5

Although Disney’s lemming scene was fake, there is some truth to the lemming’s behavior. Lemmings have strong biological urges to migrate when the population is too large.6 Lemmings can swim so when the lemmings come across a body of water they will try to cross it.7 If the body of water is too large for the lemmings, then many lemmings become exhausted and drown.8 This migratory behavior is the premise for the misconception of the lemming’s “mass suicide.”

While Disney popularized the idea of lemmings committing mass suicide, lemmings have fallen into misconceptions for centuries. In the 1530’s, Zeigler of Strasbourg, a geographer, claimed that lemmings fell from the sky in stormy weather and would die out when the grass grew back in the spring.9  In the 19th century, Intuits believed that the lemmings lived in the stars and would descend to the earth during snow storms.10

The first popular culture reference to lemmings committing mass suicide is in Cyril M. Kornbluth’s 1951 short story “The Marching Morons.”11 In the short story, the main character uses his knowledge of lemmings migrating into the sea to save the day.12  In 1955, Carl Banks, a Disney Studio illustrator, created an Uncle Scrooge comic titled “The Lemming with the Locket.”13 This comic showed a mass of lemmings jumping over cliffs.14  Three years after the Disney illustrator’s comic, White Wilderness was released.

Since the Disney documentary was released, lemmings references have been dropped all over popular culture. A video game and a board game have been made in reference to falling lemmings.15 In the 2008 U.S. Senate race, the lemmings scene from White Wilderness was used in a campaign ad for Andrew Monroe Rice.16 In the music world, the lemming scene was the inspiration for Dead Kennedy’s 1988 song “Potshot Heard Round the World.”17 In addition to Blink 182’s “Lemmings,” Graham Parker makes the same reference in his 1978 hit “Don’t Ask Me Questions.”18 Also, the lemmings starred in a 1985 Super Bowl commercial.19
________________________
1  “White Wilderness (film)”, http://en.wikipedia.org/wiki/White_Wilderness_%28film%29. (Last updated June 8, 2013).
2  “White Wilderness”, http://www.imdb.com/title/tt0052389/awards?ref_=tt_awd.
3  “White Wilderness”,  http://www.snopes.com/disney/films/lemmings.asp. (Last updated Aug. 19, 2007).
4  “White Wilderness (film)”, http://en.wikipedia.org/wiki/White_Wilderness_%28film%29.
5  Id.
6  “Lemming”, http://en.wikipedia.org/wiki/Lemming. (Last updated Oct. 7, 2013).
7  Id.
8  Id.
9  Dr. Karl S. Kruszelnicki, “Lemmings Suicide Myth”, http://www.abc.net.au/science/articles/2004/04/27/1081903.htm?site=science/greatmomentsinscience, (Published Apr. 27, 2004).
10  Id.
11  “Lemming”, http://en.wikipedia.org/wiki/Lemming#cite_note-13
12  “The Marching Morons”, http://en.wikipedia.org/wiki/The_Marching_Morons
13  “Lemming”, http://en.wikipedia.com/wiki/Lemming#9cite_note-13
14  Id.
15  “Lemmings,” http://en.wikipedia.org/wiki/Lemming#cite_note-13.
16  “White Wilderness,” http://en.wikipedia.org/White_Wilderness_%28film%29
17  Id.
18  Id.
19  “Lemmings,” http://en.wikipedia.org/wiki/Lemming#cite_note-13

Phil Rarick’s Informative Blog – Florida Guardianship

Florida guardianship is typically used in two situations – either when a person may be incapacitated or when a minor receives assets in excess of $15,000.

If a guardianship is sought because someone may be incapacitated, then typically the court sets two hearings. At the first hearing, the court determines whether the person is incapacitated; at the second, the court appoints a guardian if the person is determined to be incapacitated.

To read more on this interesting topic, please click here.

Applicable Federal Rates

Federal Rates

Seminars and Webinars

Would you like a copy of our Salt Lake City Estate Planning Council materials?

Alan Gassman’s lectures today at the Salt Lake City Estate Planning Council seminar are as follows:

  1. Practical Estate Planning With A $5.25 Million Exemption
  2. Why Dentists are Different Than Doctors
  3. Interest Free Loans

If you would like to see the materials for any of these lectures please let us know.

If you would like for Alan to speak to your group and are willing to provide 2 buckets of Kentucky Fried Chicken, a podium, a microphone, 7 cough drops and a glass of water please contact us.

Alan’s auto response if you email him today is as follows:

I’m speaking on Thursday in Salt Lake City,
The content is dry yet I’ll try to be witty.
The subject is taxes and planning for dentists;
I doubt that I’ll see even seven Adventists.
In case I’m unable to hold you in thrall
Remember you do have the option to call (727.442.1200)
For laughing gas in case I don’t let you sleep.
I’m warning you now, that it’s going to get deep.
I hope that you drill me with questions all day
And yet far away from my mouth you do stay.
A mouth is a tax lawyer’s weapon of choice,
His shoulders are puny, his biceps are woise,
And so pettifoggery can come in handy.
My thanks to the planners who chose this resort
I’m happier here than I would be in court.
And Florida boys ski from the time we can float,
(Though it’s strange that I haven’t seen even one boat).
Well, time to get going, I’ve plenty to say
Enough you’ll have heard by the end of the day.
So much you’ll have heard, and my voice you’ll admire,
I’m sure I’ll be picked for the Tabernacle Choir.
Or else I’ll be dumped in the lake in this town
The only thing being, at least I won’t drown.

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

BP APPELLATE & TRIAL JUDGE MATCHING OF INCOME & EXPENSE DECISIONS

Date: Thursday, November 14, 2013 | Two sessions to choose from: Breakfast 7:30 – 8:20 or dinner 6:00 – 6:50 p.m.

Location: Trenam Kemker, 101 E. Kennedy Blvd, Suite 2700, Tampa, FL 33602

Additional Information: To register for the breakfast session please click here.  To register for the dinner session please click here.

CREDITOR PROTECTION FOR FLORIDA PHYSICIANS & BP CLAIMS SEMINAR – SANDSPUR FICPA MONTHLY MEETING

Date: Monday, November 18, 2013 | 5:00 – 7:00 p.m.

Location: TGI Fridays, Fowler Avenue, Tampa, FL

Additional Information: If you are interested in attending this seminar please email agassman@gassmanpa.com

PLANNING WITH SELF-CANCELLING INSTALLMENT NOTES AND PRIVATE ANNUITIES: DON’T GET BURNED

Date:    Wednesday, November 20, 2013 | 12:30 pm – 2:00 pm

Speakers: Professor Jerry Hesch, Lawrence Katzenstein, Edward P. Wojnaroski, Alan S. Gassman and Kenneth J. Crotty

Additional Information: To register for this webinar please click here. If you would like to receive a copy of the materials for this webinar please email Janine Gunyan at janine@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 EDUCATION 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 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.”

The Thursday Report – 10.31.13 Tax-a-ween, SCIN-a-GRAT, Deaf Interpreters

Posted on: October 31st, 2013

header

 

cartoon

 

next set of cartoon and picture of office

 

Our article “Re-Tooling Estate Plans After ATRA 2012 for Married Couples with Estates Over $10.5 Million”

Seminar Spotlight of the Week – The Florida Bar Advanced Health Law Topics and Certification Review Course 2014

Accommodations for Hearing Impaired Patients Under ADA Title III

SCIN-ing the GRAT

Phil Rarick’s Informative Blog: Dying Without a Will in Florida: Who Gets What

2013 Trust Nexus Survey by Steven Roll and Lauren Colandreo 

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.

Our article “Re-Tooling Estate Plans After ATRA 2012 for Married Couples with Estates Over $10.5 Million”

We realized this week that we did not make our June 2013 Probate Practice Reporter article entitled “Re-Tooling Estate Plans After ATRA 2012 for Married Couples with Estates Over $10.5 Million” by Howard Zaritsky and Alan Gassman available to our readers.

This article is still current and can be viewed by clicking here.

We thank Howard Zaritsky for teaching us so much and giving us the opportunity to write with him.

Seminar Spotlight of the Week – The Florida Bar

Advanced Health Law Topics and Certification Review 2014

Alan Gassman will be speaking at The Florida Bar’s Advanced Health Law Topics and Certification Review course which takes place March 7th and 8th in Orlando, Florida.  Alan will be speaking on Tax Aspects of Healthcare Entities.  Please support this important event.  Contact Jodi Laurence at jl@flhealthlaw.com for more information.

Accommodations for Hearing Impaired Patients Under ADA Title III

Under Title III of the ADA “[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.”

A private medical office is an example of a place of public accommodation that must comply with Title III. Therefore, the client has a duty “to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden (i.e. significant difficulty or expense).” 28 CFR §36.303(a).

Under Title III, the physician, not the hearing impaired person, chooses the appropriate accommodation and if an interpreter is needed, the physician chooses the interpreter. Tucker, Bonnie Access to Health Care for Individuals with Hearing Impairments, 37 Hous. L. Rev. 1101, 1115-1116 (2000). Therefore, although the physician may exercise broad discretion in choosing the type of aid, she must assure that it complies with Title III.

II. What Types of Aids are Required?

The ADA requires places of public accommodation to have “appropriate  auxiliary aids and services where necessary to ensure effective communication with individuals with disabilities.” 28 CFR §36.303(c).

The following sections (A, B and C) are excerpts from the DOJ’s publication entitled The Americans with Disabilities Act: Title III Technical Assistance Manual 27, III-4 320 (1993). According to the DOJ, there is no requirement for a certified interpreter. The patient must only be provided a qualified interpreter who is capable of understanding the patient’s method of communication and is able to  communicate specialized medical vocabulary from the physician to the patient. In other words, “[t]he interpreter must be able to interpret both receptively and expressively”.

In the case at hand, the client must make sure that her employee will be able to communicate specialized vocabulary to the patient. It is also important that the employee be able to understand the dialect of sign language or method of communication  used by the particular patient (e.g. fingerspelling, lip reading, American Sign Language, Signed English, etc).

Further, the requirement of a qualified interpreter is not required in all scenarios, and can be supplemented with another alternative. The appropriateness of an accommodation depends on the nature and extent of the relationship. For example, according to the DOJ publication The Americans with Disabilities Act: Title III Technical Assistance Manual 27 , III-4.3200 (1994 Supplement), where a hearing impaired patient must go to his doctor for a bi-weekly check up, during which the nurse records the patient’s blood pressure and weight, “[e]xchanging notes and using gestures are likely to provide an effective means of communication at this type of check-up.” This accommodation is deemed appropriate due to the length of the visit and the nature of the communication.

In the case at hand, the client’s patient requires 12 sessions of physical therapy. Due to the length and nature of the relationship, the client should air on the side of caution and use a qualified  (but not certified) interpreter.

The following excerpts can be found at: http://www.ada.gov/taman3.html

            A. III-4.3100 General

Who decides what type of auxiliary aid should be provided? Public accommodations should consult with individuals with disabilities wherever possible to determine what type of auxiliary aid is needed to ensure effective communication. In many cases, more than one type of auxiliary aid or service may make effective communication possible. While consultation is strongly encouraged, the ultimate decision as to what measures to take to ensure effective communication rests in the hands of the public accommodation, provided that the method chosen results in effective communication.

ILLUSTRATION: A patient who is deaf brings his own sign language interpreter for an office visit without prior consultation and bills the physician for the cost of the interpreter. The physician is not obligated to comply with the unilateral determination by the patient that an interpreter is necessary. The physician must be given an opportunity to consult with the patient and make an independent assessment of what type of auxiliary aid, if any, is necessary to ensure effective communication. If the patient believes that the physician’s decision will not lead to effective communication, then the patient may challenge that decision under title III by initiating litigation or filing a complaint with the Department of Justice (see III-8.0000).

Who is a qualified interpreter? There are a number of sign language systems in use by persons who use sign language. (The most common systems of sign language are American Sign Language and signed English.) Individuals who use a particular system may not communicate effectively through an interpreter who uses another system. When an interpreter is required, the public accommodation should provide a qualified interpreter, that is, an interpreter who is able to sign to the individual who is deaf what is being said by the hearing person and who can voice to the hearing person what is being signed by the individual who is deaf. This communication must be conveyed effectively, accurately, and impartially, through the use of any necessary specialized vocabulary.

Can a public accommodation use a staff member who signs “pretty well” as an interpreter for meetings with individuals who use sign language to communicate? Signing and interpreting are not the same thing. Being able to sign does not mean that a person can process spoken communication into the proper signs, nor does it mean that he or she possesses the proper skills to observe someone signing and change their signed or fingerspelled communication into spoken words. The interpreter must be able to interpret both receptively and expressively.

If a sign language interpreter is required for effective communication, must only a certified interpreter be provided? No. The key question in determining whether effective communication will result is whether the interpreter is “qualified,” not whether he or she has been actually certified by an official licensing body. A qualified interpreter is one “who is able to interpret effectively, accurately and impartially, both receptively and expressively, using any necessary specialized vocabulary.” An individual does not have to be certified in order to meet this standard. A certified interpreter may not meet this standard in all situations, e.g. , where the interpreter is not familiar with the specialized vocabulary involved in the communication at issue.

            B. III-4.3200 Effective communication.

In order to provide equal access, a public accommodation is required to make available appropriate auxiliary aids and services where necessary to ensure effective communication. The type of auxiliary aid or service necessary to ensure effective communication will vary in accordance with the length and complexity of the communication involved.

            C. III-4.3300 Examples of auxiliary aids and services

Auxiliary aids and services include a wide range of services and devices that promote effective communication. Examples of auxiliary aids and services for individuals who are deaf or hard of hearing include qualified interpreters, notetakers, computer-aided transcription services, written materials, telephone handset amplifiers, assistive listening systems, telephones compatible with hearing aids, closed caption decoders, open and closed captioning, telecommunications devices for deaf persons (TDD’s), videotext displays, and exchange of written notes.

SCIN-ing the GRAT

Are you planning to use a SCIN?

If your client has a short life expectancy and estate tax exposure the SCIN may still be the best instrument around, despite the IRS’s challenges in the Davidson case and CCA 201330033.

We might have a solution to insulate clients from potential estate tax issues if it turns out that SCINs have to be valued based upon what a willing buyer would pay a willing seller as opposed to using the standard tables. See our SCIN the GRAT Chart below.

An article we wrote with Jerry Hesch on this subject for Leimberg Information Services can be viewed by clicking here.

If you are interested in commenting the galleys for the article that we are presently working on for Estate Planning Magazine with Jerry Hesch and Ed Wojnaroski (who is the author of the BNA Portfolio on SCINs and Private Annuities) please clicking here.

A tentative chart that outlines the discussion that we will have with Jerry Hesch, Larry Katzenstein and Ed Wojnaroski at the Bloomberg BNA webinar scheduled for November 20, 2013 at 12:30 p.m. is shown below.  To register for the webinar please click here.  To receive a copy of the materials that will be used during the Webinar please email Janine Gunyan at Janine@gassmanpa.com.

SCIN PRIVATE ANNUITY GRAT (not good if Grantor dies early)
Can be valued based upon standard life expectancy tables, if taxpayer has better than 50% chance of living one year. This is being contested by the IRS. Safe, under Treasury Regulation Sections 20.2031-7(d); 20.7520-3(b) Safe, under Internal Revenue Code Section 2702(a)(2)(B); 20.7520-3(b).
Must pass the “probability of exhaustion test” (significant minimum value held under trust and/or by guarantors). No. Yes- According to Treasury Regulation Section 1.7520-3(b)(2)(i); 20.7520-3(b)(2)(i); 25.7520-3(b)(2)(I), but is the IRS’s position under the Regulation incorrect? – See Katzenstein, Turning the Tables: When do the IRS Actuarial Tables Not Apply?, Thirty-Seventh Univ.of Miami Inst. On Est. Planning, Ch. 3 (2003). No, if structured as a Walton-style GRAT.
Must make annual payments. Probably, interest only until it balloons. No- The Kite case allowed no payments for the first 9 years. Yes.
Compatible with defective grantor trust. Yes. Subject to probability of exhaustion test. Yes, it is a Grantor Trust.
Payments must include principal. Not until it balloons. Probably not- as in the Kite case. Equal or increasing payments would represent income and principal conceptually.
Explainable to the client. Yes. Yes. Slightly more complicated.
Income tax imposed upon death. Possibly not, but IRS may not agree.  (See Zaritsky, Tax Planning for Family Wealth Transfers §12.04[h], (4th ed. 2002)) No. No- but on death, there is a negative estate tax impact.
Stepped up basis on death of seller if assets are sold or transferred to individuals or non-grantor trusts. Only to the extent of payments made before the death of the seller.  The purchaser only gets basis to the extent of payment actually made. Only to the extent of payments made before the death of the seller.  The purchaser only gets basis to the extent of payment actually made. Non-applicable–  GRATs do not involve sales of assets.
Stepped up basis if assets are sold or transferred to grantor trusts. Yes, hopefully. (See Blattmachr, Gans and Jacobson, Income Tax Effects of Termination of Grantor Trust Status by Reason of the Grantor’s Death, Journal of Taxation, September 2002) Yes, hopefully.  (See Blattmachr, Gans and Jacobson, Income Tax Effects of Termination of Grantor Trust Status by Reason of the Grantor’s Death, Journal of Taxation, September 2002) Yes, hopefully.  Depending upon structuring.
Possible usury issues for older taxpayer. Yes, unless the risk premium is applied to the note principal. No. No.
Are Payment Rights Creditor Protected? Generally not, but can be held by family limited partnership or other entities that provide charging order or creditor protection. Yes, in several states. Yes, in several states.

We welcome all questions, comments and suggestions on the above.

Today we will be SCIN-ing black cats with our GRATS!

black cat.2

 

Maybe next week we will talk about a fox in sox!

Fox in Socks

 

SCIN CHART

 

Phil Rarick’s Informative Blog: Dying Without a

Will in Florida: Who Gets What

Phil Rarick is back with another great blog entry on the subject of dying without a Will in Florida.

“A common question we get from relatives of family members who die without a Will is who gets what.  The answer depends on Florida’s laws of interstate succession.”  – Phil Rarick.

For more information on this interesting topic please click here.

2013 Trust Nexus Survey by Steven Roll and Lauren Colandreo

Bloomberg BNA Tax & Accounting authors Steven Roll and Lauren Colandreo have just published an excellent special report on multi-state trust taxation and planning in the August 23 edition of Tax Management Weekly State Report.  This is the first edition of a report that will be published annually.  It should get better every year.

 You can read the report in its entirety by clicking here.

If you have any questions on state taxation of irrevocable trusts, you can email Steven Roll at sroll@bna.com

We thank Steven and Lauren for their excellent article.

Applicable Federal Rates

SHORT TERM AFRs

MID TERM AFRs

LONG TERM AFRs

November 2013 Annual 0.27% Annual 1.73% Annual 3.37%
Semi-Annual 0.27% Semi-Annual 1.72% Semi-Annual 3.34%
Quarterly 0.27% Quarterly 1.72% Quarterly 3.33%
Monthly 0.27% Monthly 1.71% Monthly 3.32%
October 2013 Annual 0.32% Annual 1.93% Annual 3.50%
Semi-Annual 0.32% Semi-Annual 1.92% Semi-Annual 3.47%
Quarterly 0.32% Quarterly 1.92% Quarterly 3.46%
Monthly 0.32% Monthly 1.91% Monthly 3.45%
September 2013 Annual 0.25% Annual 1.66% Annual 3.28%
Semi-Annual 0.25% Semi-Annual 1.65% Semi-Annual 3.25%
Quarterly 0.25% Quarterly 1.65% Quarterly 3.24%
Monthly 0.25% Monthly 1.64% Monthly 3.23%

 Seminars and Webinars

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

BP CALCULATIONS FOR CPAs: TRICKS & TRAPS

Date:    Thursday, November 14, 2013 | 8:00 am and 6:00 p.m.

Location: Trenam Kemker, 101 E. Kennedy Boulevard, Suite 2700, Tampa, FL 33602

Additional Information:  We will be holding two seminars on Thursday, November 14, 2013.  To register for either seminar please email Janine Gunyan at Janine@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.

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.

THE FLORIDA BAR ADVANCED HEALTH LAW TOPICS AND CERTIFICATION REVIEW 2013

Date:    March 7-8, 2014

Location: Orlando, Florida – More Information to Follow

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

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.”

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.

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