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Simple Ways to Avoid a Florida Probate

         Probate is the legal process that kicks in when someone passes away owning assets in their name alone. It involves the court overseeing the distribution of those assets and payment of debts.

           But here's the thing—probate can be time-consuming, expensive, and public.  In Florida, attorney’s fees and court costs can easily run several thousand dollars, even for simple estates. According to Florida Statutes § 733.6171, attorney fees are often based on the value of the estate. And the process itself can take anywhere from six months to a year or more.

         Avoiding probate not only reduces costs, but  maintains privacy and streamlines the transfer of property to your loved ones.

 Fortunately, Florida law offers several low-cost ways to avoid probate:

Ladybird Deed (Enhanced Life Estate Deed)

      A 'ladybird deed' is a special type of deed that lets you keep full control of your property during your lifetime, while naming someone to inherit it when you die. Since the property passes directly to the beneficiary, it skips probate entirely. Also, you reserve the right in the ladybird deed to sell, refinance, or change the beneficiary any time you want.

Life Insurance

       Life insurance policies with named beneficiaries are another easy way to avoid probate. When the insured person passes away, the insurance company pays the proceeds directly to the beneficiaries—no court involvement required. Just make sure your estate isn’t listed as the beneficiary, or else the policy will go through probate.

Pay-on-Death (POD) Accounts / Totten Trusts

        Bank and investment accounts can be set up with a pay-on-death (POD) designation. This means the account will transfer directly to the named beneficiary upon your death, bypassing probate. These are sometimes referred to as 'Totten trusts,' where the bank acts as a sort of trustee to pass your money to the right person when the time comes. POD designated bank accounts are authorized by Florida Statute § 655.82.

Joint Ownership with Right of Survivorship

          Adding a co-owner to your property with rights of survivorship is another way to ensure it passes outside of probate. If two or more people hold title as 'joint tenants with right of survivorship,' the surviving owner automatically inherits the deceased owner’s share. In Florida, married couples who own property together are typically considered 'tenants by the entireties,' which includes survivorship rights.

Revocable Living Trust

         For more complex estates—or for those who want maximum flexibility—a revocable living trust is often the best way to avoid probate. You transfer your assets into the trust while you’re alive, and name a successor trustee to manage and distribute them after your death. Because the trust—not you—owns the assets, there’s no property that needs to pass through probate upon your death. This method also provides privacy and a way to manage assets if you become incapacitated.

Summary

          In summary, Florida law provides several cost-effective ways to avoid probate of real property as well as financial assets.  If you would like to explore ways of avoiding a Florida probate,  give us a call at Clarke Law at (305)467-5560. We offer a free 10-minute consultation to help you get started.

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Florida Living Trusts

DEFINITION OF A TRUST

A trust is a legal arrangement where a person (the settlor) transfers assets to a trustee, who holds and manages those assets for designated beneficiaries. Trusts can be revocable or irrevocable, and serve a variety of purposes in estate planning, asset protection, and wealth distribution.

Florida Living Trust

A revocable living trust allows the settlor to maintain control over their assets during their lifetime while simplifying the transfer of assets upon death. Key benefits include: - Avoidance of probate - Flexibility to specify how and when beneficiaries receive distributions - Ability to provide for multiple generations Because the trust bypasses probate, it ensures privacy and a faster distribution process compared to a will.

How a Living Trust Works

Once the trust settlor executes a living trust, he transfers his assets into the trust. During the settlor's lifetime, the trust is fully revocable and amendable, and the settlor typically serves as both trustee and beneficiary. The trust's assets remain under the settlor’s control while he is alive.    Upon the settlor’s death, the trust becomes irrevocable, and a successor trustee (who is designated in the trust) distributes trust assets and income to the beneficiaries. Since assets are titled in the name of the trust, no probate is needed to transfer ownership at death.

THE DIFFERENCE BETWEEN Living Trust AND LAST Will

While both documents serve to distribute assets after death, they have different features: - A will must go through probate; a trust avoids probate entirely. - A will becomes public record; a trust remains private. - A will takes effect at death; a trust can manage assets during life and after death.

Living Trusts and Asset Protection

Living trusts do not protect the settlor’s assets from creditors during his lifetime. However, a trust may hold membership interests in limited liability companies (LLCs) which offer asset protection, which can own real estate or other assets. This structure allows the settlor to direct post-death distributions through the LLC’s operating agreement, avoiding probate and protecting his assets.

Trust Duration Under Florida Law

Under Florida Statutes, a trust can generally last up to 360 years under the rule against perpetuities. This extended duration allows for long-term planning and legacy wealth management. (See Florida Statutes § 689.225)

Beneficiary Rights and Trust Enforcement in Florida

Beneficiaries of a trust have legal rights under the Florida Trust Code, including the right to: - Receive annual accountings - Be informed of the trust’s existence and their interest in it - Enforce proper administration of the trust         If a trustee fails to meet their duties, beneficiaries may file a petition in probate court to compel accountings, remove the trustee, or seek distributions. These rights are protected under Florida Statutes Chapter 736. (See Florida Statutes § 736.0813 and  § 736.1001.) 

If you would like to set up a trust or need advice on how trusts work, call Fort Lauderdale Wills and Trusts Attorney John Clarke at (305)467-5560!

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FLORIDA LIVING TRUST

DEFINITION OF A TRUST

A trust is a legal arrangement where a person (the settlor) transfers assets to a trustee, who holds and manages those assets for designated beneficiaries. Trusts can be revocable or irrevocable, and serve a variety of purposes in estate planning, asset protection, and wealth distribution.

Florida Living Trust

A revocable living trust allows the settlor to maintain control over their assets during their lifetime while simplifying the transfer of assets upon death. Key benefits include: - Avoidance of probate - Flexibility to specify how and when beneficiaries receive distributions - Ability to provide for multiple generations Because the trust bypasses probate, it ensures privacy and a faster distribution process compared to a will.

How a Living Trust Works

Once the trust settlor executes a living trust, he transfers his assets into the trust. During the settlor's lifetime, the trust is fully revocable and amendable, and the settlor typically serves as both trustee and beneficiary. The trust's assets remain under the settlor’s control while he is alive.    Upon the settlor’s death, the trust becomes irrevocable, and a successor trustee (who is designated in the trust) distributes trust assets and income to the beneficiaries. Since assets are titled in the name of the trust, no probate is needed to transfer ownership at death.

Living Trust vs. Will: What’s the Difference?

While both documents serve to distribute assets after death, they have different features: - A will must go through probate; a trust avoids probate entirely. - A will becomes public record; a trust remains private. - A will takes effect at death; a trust can manage assets during life and after death.

Living Trusts and Asset Protection

Living trusts do not protect the settlor’s assets from creditors during his lifetime. However, a trust may hold membership interests in limited liability companies (LLCs) which offer asset protection, which can own real estate or other assets. This structure allows the settlor to direct post-death distributions through the LLC’s operating agreement, avoiding probate and protecting his assets.

Trust Duration Under Florida Law

Under Florida Statutes, a trust can generally last up to 360 years under the rule against perpetuities. This extended duration allows for long-term planning and legacy wealth management. (See Florida Statutes § 689.225)

Beneficiary Rights and Trust Enforcement in Florida

Beneficiaries of a trust have legal rights under the Florida Trust Code, including the right to: - Receive annual accountings - Be informed of the trust’s existence and their interest in it - Enforce proper administration of the trust         If a trustee fails to meet their duties, beneficiaries may file a petition in probate court to compel accountings, remove the trustee, or seek distributions. These rights are protected under Florida Statutes Chapter 736. (See Florida Statutes § 736.0813 and  § 736.1001.) 

If you would like to set up a trust or need advice on how trusts work, call Fort Lauderdale Wills and Trusts Attorney John Clarke at (305)467-5560!

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Florida Living Trusts

What Is a Trust?

A trust is a legal arrangement where a person (the settlor) transfers assets to a trustee, who holds and manages those assets for designated beneficiaries. Trusts can be revocable or irrevocable, and serve a variety of purposes in estate planning, asset protection, and wealth distribution.

Florida Living Trust

A revocable living trust allows the settlor to maintain control over their assets during their lifetime while simplifying the transfer of assets upon death. Key benefits include: - Avoidance of probate - Flexibility to specify how and when beneficiaries receive distributions - Ability to provide for multiple generations Because the trust bypasses probate, it ensures privacy and a faster distribution process compared to a will.

How a Living Trust Works

Once the trust settlor executes a living trust, he transfers his assets into the trust. During the settlor's lifetime, the trust is fully revocable and amendable, and the settlor typically serves as both trustee and beneficiary. The trust's assets remain under the settlor’s control while he is alive.    Upon the settlor’s death, the trust becomes irrevocable, and a successor trustee (who is designated in the trust) distributes trust assets and income to the beneficiaries. Since assets are titled in the name of the trust, no probate is needed to transfer ownership at death.

Living Trust vs. Will: What’s the Difference?

While both documents serve to distribute assets after death, they have different features: - A will must go through probate; a trust avoids probate entirely. - A will becomes public record; a trust remains private. - A will takes effect at death; a trust can manage assets during life and after death.

Living Trusts and Asset Protection

Living trusts do not protect the settlor’s assets from creditors during his lifetime. However, a trust may hold membership interests in limited liability companies (LLCs) which offer asset protection, which can own real estate or other assets. This structure allows the settlor to direct post-death distributions through the LLC’s operating agreement, avoiding probate and protecting his assets.

Trust Duration Under Florida Law

Under Florida Statutes, a trust can generally last up to 360 years under the rule against perpetuities. This extended duration allows for long-term planning and legacy wealth management. (See Florida Statutes § 689.225)

Beneficiary Rights and Trust Enforcement in Florida

Beneficiaries of a trust have legal rights under the Florida Trust Code, including the right to: - Receive annual accountings - Be informed of the trust’s existence and their interest in it - Enforce proper administration of the trust         If a trustee fails to meet their duties, beneficiaries may file a petition in probate court to compel accountings, remove the trustee, or seek distributions. These rights are protected under Florida Statutes Chapter 736. (See Florida Statutes § 736.0813 and  § 736.1001.) 

If you would like to set up a trust or need advice on how trusts work, call Fort Lauderdale Wills and Trusts Attorney John Clarke at (305)467-5560!

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Counting Assets for Medicaid Long-Term Care

At Clarke Law, we specialize in helping Florida residents qualify for Medicaid while preserving as many assets as possible.

If you are applying for Medicaid long-term care or Medicaid waiver (care in a nursing home, ALF, or the provision of aides to your home), be aware that there are limits to the amount and type of assets that you may own.  If you exceed those limits, you will need to spend the assets  down or restructure them.

Florida Medicaid’s 2025 Asset Limits for Long-Term Care :

·       Asset Limit for a Single Applicant: $2,000 in countable assets

·       Asset Limit for a Married Couple (both applying): $3,000 in countable assets

·       Asset Limit for a Community Spouse (non-applicant spouse): $154,140 (in protected resources)

To qualify, applicants must ensure their assets fall within these limits. However, Medicaid exempts certain assets, allowing individuals to retain some property and financial resources while still qualifying for benefits (see below). A summary of the relevant financial eligibility criteria for Florida Medicaid can be found here: Florida Medicaid Fact Sheet

What Assets Does Florida Medicaid Exempt?

Certain assets are not counted toward the Medicaid asset limit, meaning you can keep them while still qualifying for benefits. These exempt assets include:

       Primary Residence: If the applicant or a spouse lives in the home, it is exempt (up to an equity value of $713,000 in 2024). If the applicant is single and moves into a nursing home, Medicaid may place a lien on the home unless proper planning is done.

       One Vehicle: Any vehicle is exempt, regardless of its value. A second vehicle may also be exempt if it is over seven years old but under twenty-five years old.

       Personal Belongings & Household Goods: Clothing, furniture, appliances, and other household items are exempt.

     Prepaid Funeral and Burial Plans: Irrevocable funeral contracts and burial spaces for immediate family members are exempt.

     Term Life Insurance: Since these policies have no cash value, they are not considered assets.

   How Florida Medicaid Treats Common Assets 

Beyond exempt assets, Medicaid considers most other financial resources as countable assets.

1. Retirement Accounts (IRAs, 401(k)s, Pensions): If the applicant is not withdrawing required minimum distributions (RMDs), the full value of the account is counted as an asset.

If RMDs are being taken, Medicaid exempts the balance and counts only the monthly distributions as income. For spouses, the non-applicant spouse’s retirement accounts are fully exempt.

2. Stocks, Bonds, and Investment Accounts: Stocks, mutual funds, and brokerage accounts are countable assets, even if they generate income.

Dividends or interest from these investments count as income, but the assets themselves still count toward Medicaid’s asset limit.

3. Cash and Bank Accounts: Checking, savings, and money market accounts are countable assets.

4. Jointly Owned Assets:  Medicaid typically assumes that the applicant owns 100% of any jointly held assets unless evidence shows otherwise.

If an asset is jointly owned with a non-spouse, the applicant may need to prove they do not have full control over the funds.

5. Gifts and Transfers (Look-Back Period): Medicaid has a five-year look-back rule, meaning that any gifts or transfers for less than fair market value within five years of applying could result in a penalty period of ineligibility.

How Can You Protect Your Assets and Qualify for Medicaid?

Medicaid planning strategies help individuals legally protect assets while ensuring they qualify for long-term care benefits. Some common techniques include:

        Spending Down Assets: Paying off debts, home improvements, or purchasing exempt assets (such as a vehicle or funeral plan).

       Medicaid Asset Protection Trusts: These irrevocable trusts remove assets from an applicant’s ownership while preserving them for heirs.

     Caregiver Agreements: Paying a family member for care services in a way that Medicaid recognizes as a valid expense.

Need Help with Medicaid Planning? Clarke Law Can Assist! At Clarke Law, we specialize in Medicaid planning strategies that ensure you or your loved one qualifies for benefits without unnecessary financial loss.

📞 Contact John Clarke today for a consultation at (305)467-5560 to discuss your Medicaid planning needs!

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Offshore Asset Protection Trusts

Offshore Asset Protection Trusts (OAPTs) are among the most powerful tools for safeguarding your wealth from potential creditors. These trusts are established in foreign jurisdictions known for their superior asset protection laws, making it extremely difficult for judgment creditors to pursue claims against trust assets.

Book an asset protection consultation online , or call asset protection attorney John Clarke at (305) 467-5560 to explore your options!

Key Benefits of Offshore Asset Protection Trusts

Enhanced Asset Protection: Jurisdictions like the Cook Islands, Nevis, and Belize have strong asset protection laws that make it challenging for creditors to access assets held in these trusts.

Control and Privacy: Unlike many U.S.-based trusts, self-settled offshore trusts allow you to retain control and enjoy confidentiality, as foreign jurisdictions often don’t require public disclosure.

Diversification: Placing assets in a foreign jurisdiction creates additional legal barriers, making it more costly and complex for creditors to pursue claims.

How Offshore Asset Protection Trusts Work

Setup: The individual (settlor) transfers assets into an OAPT, where they are managed by an offshore trustee.

Management: The offshore trustee, typically a professional licensed entity, oversees the assets according to the laws of the chosen jurisdiction.

Asset Protection: Offshore jurisdictions generally do not recognize U.S. judgments, so creditors would need to start a new legal action offshore—a costly and difficult process.

Foreign Jurisdictions for Asset Protection

Offshore trusts are established in certain foreign countries, with each jurisdiction offering unique advantages. The Cook Islands, Nevis, and Belize are particularly renowned for their asset protection trust laws:

Key Features of these Jurisdictions:

Short statutes of limitations

Favorable asset protection laws

High privacy standards and limited public disclosure

Types of Offshore Asset Protection Trusts

When it comes to offshore asset protection trusts, there are a few different types to consider:

Self-Settled Trust: In this type of trust, the person setting up the trust (the "settlor") is also a beneficiary, meaning they retain some control and access to the assets. It’s ideal for individuals who want robust asset protection but aren’t ready to completely relinquish access to their wealth.

Irrevocable Offshore Trust: This trust is more rigid—once assets are transferred, the settlor can’t reclaim them. The trust creates powerful legal barriers to collection of judgments. It is often an excellent choice for long-term estate planning and asset protection.

Hybrid Offshore Trust: A hybrid trust blends the self-settled and irrevocable models. It allows flexibility for the settlor to retain some influence over the assets while still providing the protective benefits of an offshore structure.

Setting Up an Offshore Asset Protection Trust

Choose the Jurisdiction: Select a country with asset protection laws suited to your needs.

Select the Right Trust Structure: Decide whether a self-settled, irrevocable, or hybrid structure best fits your goals.

Select a Trustee: The offshore trustee manages the assets and should be a trusted professional entity with a good track record.

Define Trust Terms: Establish detailed instructions for how assets will be managed and distributed to maximize protection.

Fund the Trust: Transfer assets such as cash, real estate, or stocks into the trust. Once transferred, they are held by the trustee for your benefit.

Offshore vs. Domestic Asset Protection Trusts: Key Differences

When deciding between offshore and domestic asset protection trusts, consider these important distinctions:

Privacy: Offshore trusts provide high levels of privacy, often with no public disclosure requirements. In contrast, domestic trusts are governed by U.S. state regulations, which generally offer less privacy.

Protection Against U.S. Judgments: Foreign jurisdictions generally do not recognize U.S. court judgments. A creditor would instead need to initiate a costly and uncertain lawsuit in the foreign jurisdiction to collect such a judgment. . Domestic trusts, on the other hand, are more vulnerable to enforcement of U.S. judgments.

Costs: Offshore trusts tend to have higher setup and maintenance costs compared to domestic trusts.

Complexity: Offshore trusts are more complex due to multiple jurisdictions and international regulations. Domestic trusts, meanwhile, are simpler and easier to manage within U.S. legal frameworks.

Costs of Offshore Asset Protection Trusts

Setup Costs: $12,000 to $30,000 depending on jurisdiction and trust complexity.

Annual Maintenance: $3,500 to $7,500, covering trustee fees, administration, and compliance.

Final Thoughts

OAPTs offer robust protection, privacy, and estate planning benefits that domestic options often cannot match. Choosing the right type of trust, jurisdiction, and structure, with guidance from a professional, is essential to maximize your protective benefits and maintain compliance with U.S. tax obligations.

If you are interested in protecting your assets, check out our other articles on asset protection. Request a consultation with attorney John Clarke.

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Cryptocurrency: Asset Protection Guide

Cryptocurrency has become a mainstream topic of conversation and investment in 2024. According to Techopedia, 20% of Americans currently own some form of cryptocurrency. While Bitcoin and Ethereum constitute the bulk of cryptocurrencies by value, more than 23,000 different cryptocurrencies are in circulation globally. Because cryptocurrency is a digital asset protected by cryptography, it attracts many who are in search of safety from their creditors. In this article, I will discuss the pros and cons of owning cryptocurrency from an asset protection standpoint.

What Is Cryptocurrency?

Cryptocurrencies operate on decentralized computer networks that use cryptography for security, offering a level of privacy and anonymity that other asset classes do not. Transactions are recorded on a blockchain, a decentralized ledger that ensures the integrity of the data by making it extremely difficult to alter any past entries.

Because the blockchain is protected by cryptography, it is highly resistant to fraud. Provided that a cryptocurrency owner safely stores their private and public keys, their holdings should be secure from theft. However, security hinges heavily on how these keys are managed.

Cryptocurrency IS VolATILE

By definition, cryptocurrency has no intrinsic value. It is merely entries on a digital ledger, so its value is determined by supply and demand. For this reason, cryptocurrency markets tend to experience extreme volatility. For example, Bitcoin has seen tremendous fluctuations in value since its creation in 2009—from as low as a few cents to as high as over $68,000 in 2021. This volatility makes cryptocurrency a risky asset to hold, especially for those using it as a primary investment vehicle.

Cryptocurrency values tend to increase during periods of excess liquidity in the economy and contract during financial downturns. Moreover, most cryptocurrencies rise and fall together due to the speculative nature of the market. This means that investing in cryptocurrency exposes your wealth to a significant risk of value collapse.

Is Cryptocurrency Treated as Currency or Personal Property in Florida?

In the state of Florida, cryptocurrency is generally treated as personal property rather than as legal currency. While it can be used as a medium of exchange, it is not considered legal tender under Florida law or U.S. federal law. For purposes of taxes, estate planning, and legal disputes, cryptocurrency is classified similarly to stocks or other investments—an asset rather than currency. The IRS also treats cryptocurrency as property for federal tax purposes, which influences its handling in legal matters. In the event of a divorce or dispute over asset division, cryptocurrency is likely to be treated as personal property, subject to valuation and division like other investments.

Taxes on Cryptocurrency Appreciation

Like other capital assets, cryptocurrency is subject to capital gains tax on appreciation. When you sell or exchange cryptocurrency for a higher value than you initially paid, you are responsible for reporting the gain and paying taxes on it. The amount of tax due is calculated by subtracting the initial purchase price (your cost basis) from the sale price (the fair market value at the time of sale).

If you hold cryptocurrency for less than a year before selling it, the profit is taxed as short-term capital gains, which are taxed at ordinary income rates. However, if you hold it for more than a year, you qualify for long-term capital gains rates, which are generally lower.

For example, if you buy 1 Bitcoin for $10,000 and later sell it for $15,000, you will owe taxes on the $5,000 gain. Understanding the tax implications of cryptocurrency transactions is crucial, as failure to report gains can result in penalties and interest.

When is Cryptocurrency Exposed to Creditors

Some cryptocurrency transactions are more private than others. Most cryptocurrency sales occur on public exchanges like Coinbase or Binance, which record these transactions in databases that could be accessed by creditors through legal means. In Florida, garnishment laws may allow a judgment creditor to garnish cryptocurrency held on an exchange, although the specific application of these laws to crypto is still developing.

Does a Florida Debtor Have to Disclose Cryptocurrency to Creditors?

In Florida, debtors are required to disclose their assets to creditors during post-judgment discovery. This process allows a judgment creditor to uncover a debtor’s financial accounts and other holdings in order to satisfy a court-awarded judgment. Cryptocurrency, like any other asset, falls under the scope of this discovery.

During post-judgment discovery, a creditor may force a debtor to testify under oath about the nature, value, and location of all their assets. This includes traditional assets like bank accounts and securities, but also extends to cryptocurrency holdings. During questioning, a creditor may directly ask the debtor whether they own cryptocurrency, the value of those holdings, and where the cryptocurrency is stored (e.g., on an exchange or in a private wallet).

If a debtor fails to truthfully disclose their cryptocurrency holdings in the discovery process, they could be held in contempt of court. Florida courts have the authority to enforce discovery orders through the imposition of fines and jail time.

 Can a Florida Creditor Garnish Cryptocurrency?

Yes, a Florida creditor can potentially garnish cryptocurrency holdings, but the process can be complicated due to the decentralized and encrypted nature of these assets. To garnish cryptocurrency, a creditor would need to obtain a writ of garnishment from the court that identifies the debtor’s cryptocurrency and the third party that is holding it.

Enforcing Garnishment: The creditor must first identify where the cryptocurrency is held. If the debtor holds an account on a centralized exchange, such as Coinbase or Binance, the creditor can serve the garnishment order to the exchange. The exchange would then be legally required to freeze the assets and turn over the funds to the creditor.

Challenges: If the cryptocurrency is stored in a private wallet or in cold storage (an offline wallet), garnishment becomes much more difficult. The debtor has control over the private keys, and without those keys, the assets are effectively inaccessible. In such cases, the creditor would need to obtain a court order forcing the debtor to provide the creditor the device that contained the wallet along with the access codes.  Even if a creditor obtained such an order, there would be obvious challenges in enforcing it.

Strategies for Protecting Cryptocurrency from Florida Creditors

Avoid Centralized Exchanges: Centralized exchanges must comply with U.S. financial regulations, including "Know Your Customer" (KYC) laws, which require identity verification. Instead of purchasing cryptocurrency on centralized exchanges, you can use decentralized platforms such as LocalBitcoins or Paxful to buy crypto directly from individuals or exchange it for cash in person. This reduces the chances of your transaction being traced.

Do Not Store Cryptocurrency on Exchanges: When you store cryptocurrency on an exchange, you are trusting the platform with your private and public keys. This means your assets could be at risk if the exchange experiences a security breach or internal fraud. Additionally, if the exchange receives a writ of garnishment, it may be legally compelled to hand over your assets to creditors. Instead, store your cryptocurrency in a hardware wallet, like a Ledger Nano X, which you control and keep offline.

Use Privacy Coins: Some cryptocurrencies, like Monero (XMR) and Zcash (ZEC), are designed with privacy in mind. They use cryptographic techniques such as ring signatures to obscure the transaction details, making them nearly impossible to trace. Using privacy coins can enhance your anonymity and reduce the risk of creditors tracing your transactions.

Use Offshore Entities: You may consider using an offshore trust or LLC to purchase and hold your cryptocurrency. Offshore jurisdictions like the Cook Islands and Nevis offer strong asset protection, putting your cryptocurrency beyond the reach of U.S. courts in most cases. This strategy can provide an additional layer of protection, but it requires careful planning to comply with tax and reporting obligations.

Pros and Cons of Cryptocurrency for Asset Protection

Pros:

Decentralization: Cryptocurrencies operate on decentralized networks, making them harder to seize than traditional assets held in banks or investment accounts.

Privacy: With proper steps, cryptocurrency transactions can be made with a high level of privacy, especially when using privacy coins or decentralized exchanges.

Portability: Cryptocurrency is easily transferable across borders, offering a fluid and adaptable way to protect wealth.

Cons:

Volatility: Cryptocurrency is highly speculative and prone to extreme price swings, which may erode the value of your holdings rapidly.

Regulatory Uncertainty: Cryptocurrencies face evolving regulations, and future legal changes could affect their ability to be used for asset protection.

Exposure on Centralized Exchanges: If your cryptocurrency is stored on a centralized exchange, it may be vulnerable to garnishment or seizure by creditors.

Conclusion

Cryptocurrency offers some unique advantages as an asset protection tool such as cryptography and partial or complete anonymity.  However, these benefits are offset by significant risks. Investors considering cryptocurrency for asset protection should consult with legal and financial advisors to help evaluate the risks and rewards.

 If you need assistance protecting your assets, call Florida attorney John Clarke at (305)467-5560 today!

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Florida Lady Bird Deed

Highlights:

-A Florida lady bird deed is an easy and cheap way of passing property to your heir while avoiding probate.

-The lady bird deed gives the homeowner a life estate in their property and names their heir to succeed them as owner.

-The lady bird deed is also known as an enhanced life estate deed because the life tenant retains the ability to sell or mortgage the property.  

 Definition of a Florida Lady Bird Deed

A lady bird deed conveys a property that someone owns outright to the same person as life tenant, then to his heirs upon his death.   The transfer of property interests takes place before the life tenant’s death, so there is no need for a probate after his death.

An owner who becomes a life tenant under a lady bird deed retains control over his property.  If the property is his homestead, it will retain the Florida homestead protection against creditors after the deed is recorded.  

A lady bird deed is much more flexible than a life estate deed.  An ordinary life tenant only retains the right to live in the property (he can not sell or mortgage it without the consent of his heirs).  An enhanced life tenant under a lady bird deed, however, retains control over his property.  He can mortgage or sell the property without the consent of his heirs. 

The  interests of the heirs (remaindermen) who inherit under a lady bird deed vest when the life tenant dies.  This means that the heris’ creditors can not place a lien against their interests in the property until they actually become owners.

Florida common law principles of life estates and property conveyance support the use of a lady bird deed.

Drafting and Recording a Lady Bird Deed

A valid Florida Lady Bird Deed must meet certain requirements to be effective:

Parties: The deed must clearly identify the grantor (the homeowner transferring the property), the life tenant (usually the same as the grantor), and the remaindermen (those who will inherit the property).

Legal Description: The deed must contain the precise legal description of the property, which can be found in the original deed or title documents.

Execution: The deed must be signed by the grantor in the presence of two witnesses and a notary.

Recording: After being properly executed, the deed must be recorded in the county public records where the property is located.

Many Florida attorneys charge between $350 and $450 to draft and record a Lady Bird Deed, making it an affordable estate planning tool.

Advantages of a Lady Bird Deed

Avoids Probate: The most significant benefit of a Lady Bird Deed is that it avoids the need for probate, allowing the property to transfer directly to heirs without court involvement. 

Low Cost: Compared to setting up a living trust or going through probate, the cost of creating and recording a Lady Bird Deed is minimal.  

Retains Flexibility: The homeowner can change their estate plan at any time by selling, mortgaging, or re-deeding the property without the consent of the remaindermen.

Protects Assets from Medicaid Recovery: If the deed is executed before applying for Medicaid, the property can be shielded from Medicaid estate recovery, preserving it for heirs.

No Gift Tax: The transfer does not trigger any immediate gift tax liability, as the homeowner retains full control over the property during their lifetime.  

Asset Protection: a lady bird deed protects the property from the creditors of the heirs until they inherit it.

 Disadvantages of a Lady Bird Deed

1. May Not Be Suitable for Multiple Heirs: If the property is being passed to several heirs, a Lady Bird Deed can lead to conflicts and complicate future decisions about the property.

 2. No Contingent Beneficiaries: The deed is not designed for use in situations where a series of contingent beneficiaries is desired (for example, leaving property first to a spouse and then to children if the spouse dies first).  In that situation, you should use a trust instead.

3.     Objections from Mortgage and Title Companies (Rare):   As stated above, lady bird deeds have been recognized as valid by Florida courts.  However, sometimes title companies and mortgage lenders who have not previously dealt with a lady bird deed have questions as to their validity.

 Examples of a Lady Bird Deed in Estate Planning

Example 1: Protecting the Family Home for a Surviving Child Sarah, an elderly widow, owns her home in Florida. She wants to ensure that her only daughter, Lisa, inherits the house without having to go through probate. Sarah executes a lady bird deed that transfers the home to herself as a life tenant and names Lisa as the heir. Sarah lives in the house the rest of her life. Upon Sarah's death, the home automatically passes to Lisa, avoiding probate.

Example 2: Preserving a Vacation Property from Medicaid Recovery John owns a vacation home in Florida that he wants to leave to his two adult sons. John is concerned about needing long-term care through Medicaid and Medicaid then taking his property as reimbursement  after he dies. John creates a Lady Bird Deed naming himself as life tenant and his sons as heirs. This allows him to retain control over the property during his lifetime while ensuring it passes to his sons directly upon his death, without being subject to Medicaid recovery.

 In summary, a Florida lady bird deed is a convenient estate planning tool where you convey your property to your heir before you die to avoid probate.

Call Florida Estate Planning Attorney John Clarke at (954)556-8952 to schedule an estate planning consultation today!

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Protecting Assets with a Florida LLC

Introduction

A Florida LLC (Limited Liability Company)  protects assets in several ways.  First, an LLC. like a corporation, protects its members' personal assets from the LLC's debts.  If, for example, a creditor obtains a judgment against the LLC, it can only recover against the amount that each member of the LLC has invested.  The LLC members’ personal assets are not exposed.

Another asset protection advantage of a multi-member LLC is that it is a "charging order protected entity." This means that a judgment creditor of an LLC member can only receive a charging order—a lien on distributions the member might receive from the LLC—rather than forcing the sale of the member’s interest.  If the LLC members agree in advance that all of them must consent to distribute profits to a member, they can frustrate the efforts of a creditor to collect on a  charging order.   Note that charging order protection does not apply to a single-member LLC.

What is a Florida Limited Liability Company?

Florida LLCs are flexible corporate entities.  One or more members invest assets into the LLC and then receive profits or losses from the LLC’s business operations.  The LLC can be managed by its members, or the members can designate a manager to run the LLC (the manager may or may not be a member of the LLC).

LLCs are governed by the Florida Revised Limited Liability Company Act (Chapter 605, Florida Statutes). An LLC must be registered as either member-managed or manager-managed. Chapter 605 sets forth default rules on the rights and duties of the LLCs members and managers. 

The LLC members may but do not need to  execute an operating agreement to precisely define how the LLC will function. The operating agreement typically addresses: how the business will be run, rights and duties of members, and how profits are distributed.  In order to take advantage of the asset protection benefits of an LLC, it is crucial to have a properly-drafted operating agreement in place.

How to Form a Florida LLC

Forming a Florida LLC requires filing Articles of Organization with the Florida Division of Corporations, paying a filing fee (currently $125), and appointing a registered agent.  You can file Articles of Organization electronically, and the turnaround time is rapid.

Pursuant to Florida law, an LLC must file a report annually and pay the applicable fee (currently $140) in order to remain in good standing.

Transferring Assets to an LLC

When deciding which assets to transfer to an LLC, distinguish between safe (exempt) and unsafe (non-exempt) assets. Homestead property for example, is considered an exempt asset in Florida.  Your judgment creditors can not impose a lien on your homestead property, so it is already protected, and should not be transferred into an LLC. Check out our article on Florida homestead creditor protection here.

Instead, businesses, investment real estate, and other non-exempt properties should be placed in LLCs. To reduce collection risks, it’s advisable to place each unsafe asset in its own LLC.  

Collections of  Florida LLC

 Generally, creditors have limited ability to collect against a debtor’s Florida LLC interest. A creditor cannot seize or garnish an LLC membership interest, nor garnish the LLC’s financial accounts or real estate.  

Florida Statute 605.0503 provides that a judgment creditor’s sole remedy against a debtor member of a multi-member LLC is a "charging order.”   This charging order allows the creditor to receive any distributions that the LLC makes to the debtor. However, if the LLC does not make any distributions, the creditor receives nothing. A well-drafted operating agreement can give the debtor the ability to veto distributions and otherwise prevent creditors from participating in management.  

It is important to note that single-member LLCs do not enjoy the same level of protection as do multi-member LLCs.  In Olmstead v. F.T.C, 44 So. 3d 76 (Fla. 2010), the Florida Supreme Court held that a creditor may foreclose on a debtor’s interest in a single-member LLC.  The court determined that the purpose of Florida’s statutory charging order protection for LLCs was to protect the interests of the non-debtor members of an LLC from debtor-members’ creditors. It therefore held that a creditor could foreclose on a debtor’s entire interest in a single-member LLC if a charging order did not prove to be an adequate remedy.

A member’s interest in a Florida Limited Liability Company (LLC) is considered personal property. This is true regardless of where the LLC was established.  This means that, if a creditor obtains a judgment against a member of a foreign LLC who resides in Florida, it may collect against his LLC interest in a Florida court. For this reason, forming an LLC in another state or country is not usually an effective strategy to avoid your creditors.

 Protecting Assets When You Are the Only Member of the LLC

One strategy to get charging order protection while maintaining exclusive control over your LLC is as follows: Create a Florida Limited Liability Limited Partnership (LLLP), which also has charging order protection, alongside your LLC. In this structure, you would be one member of the LLC, and the LLLP would serve as the second member. You would then get enhanced asset protection while maintaining dominion over your assets. The only drawback is that you would be responsible for the fees and paperwork of two entities on an annual basis.

LLCs in Estate Planning

An LLC can also be an effective estate planning tool. You can avoid probate of your LLC interest by putting it into a trust or putting inheritance language in the LLC’s operating agreement. If you die without a succession plan for your LLC interest, that interest will become part of your probate estate.

In summary, a Florida LLC offers robust protection for personal assets and is a vital tool in both asset protection and estate planning. Proper structuring and careful management of the LLC are key to maximizing these protections.

Examples of LLC Asset Protection

Real Estate Investment Protected by Multi-Member LLC Jane owns an investment property in Florida, which she places in a multi-member LLC with her husband, who holds a 1% interest. After a tenant slips and falls on the property and sues for damages, the LLC is named in the lawsuit. Because the property is owned by the LLC, only the LLC’s assets—specifically, the investment property—are at risk. Jane’s personal assets, including her home, savings, and car, are protected from the lawsuit.

LLC Protecting Rental Income from Personal Judgment Sarah and her business partner, Mike, own a rental property through a multi-member LLC. The LLC’s operating agreement states that both members need to approve LLC distributions of profits to the members. Sarah is involved in a car accident unrelated to the business, and the injured party wins a judgment against her personally. The creditor obtains a charging order against Sarah’s distributions from the LLC but cannot force a sale of the rental property or seize the LLC’s assets. As long as the LLC decides not to distribute profits, Sarah’s investment remains protected.

Improperly Commingled Personal and LLC Assets Tom owns a small retail store through his LLC but fails to maintain a clear distinction between his personal and business finances. He regularly uses the LLC’s bank account to pay personal bills. When the business faces a lawsuit, the court “pierces the corporate veil” because Tom did not treat the LLC as a separate entity. As a result, the LLC’s limited liability protection is lost, and Tom’s personal assets are now at risk to satisfy the judgment.

In summary, the protections afforded by charging orders, particularly in multi-member LLCs, offer robust defenses. By structuring your LLC strategically, you can maximize asset protection and minimize the risk of a creditor collecting against your LLC interest.

 Call asset protection attorney John Clarke at (954)556-8952 for assistance with protecting your assets!

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Protecting Florida Property With Joint Ownership

Joint ownership of property can be a powerful tool for protecting assets from creditors in Florida. Florida law provides various forms of joint ownership, each with distinct benefits. This article explores how property can be shielded from creditors through joint ownership, particularly by using tenants by the entirety (TBE) for married couples, and compares joint tenants with right of survivorship (JTROS) with tenants in common (TIC) for estate planning purposes.

Tenants by the Entirety: Strong Protection for Married Couples

For married couples in Florida, titling property as tenants by the entirety (TBE) provides one of the most powerful forms of asset protection. Under TBE, both spouses are considered to own the entire property as a single legal entity, rather than owning distinct shares. This structure provides two key benefits:

Creditor Protection: In Florida, property owned as TBE is generally shielded from creditors of just one spouse. This means that if one spouse has debts or faces a lawsuit, creditors cannot place a lien on property held as TBE to satisfy those claims. Only creditors of both spouses can reach TBE property.

Automatic Survivorship: Upon the death of one spouse, full ownership of the property passes automatically to the surviving spouse, without the need for probate. This ensures that the property remains within the family and can help avoid delays in transferring ownership.

However, it is important to note that TBE is only available to married couples, and both spouses must be named on the title for the property to qualify for this protection.

Estate Planning: JTROS vs. Tenants in Common

When considering joint ownership of property, individuals (both married and unmarried) often have the option of titling the property as joint tenants with right of survivorship (JTROS) or tenants in common (TIC). These forms of ownership come with different benefits and implications for estate planning.

Joint Tenants with Right of Survivorship (JTROS): Under JTROS, each co-owner has an equal share in the property, and upon the death of one co-owner, the deceased's share automatically passes to the surviving co-owner(s). This is similar to TBE in that it allows for a seamless transfer of ownership without going through probate. JTROS can be beneficial for estate planning purposes, as it ensures that the property is inherited by the surviving co-owner without the need for a will or trust.

Tenants in Common (TIC): In contrast to JTROS, TIC allows co-owners to hold unequal shares in the property. Each co-owner's interest is treated as a separate, distinct portion of the property, which they can sell, transfer, or leave to heirs in a will. Unlike JTROS, there is no automatic right of survivorship—when one co-owner dies, their share passes to their heirs or beneficiaries, rather than the surviving co-owners.

Estate planning Implications of TIC: TIC is often useful when co-owners want the flexibility to designate specific heirs to receive their portion of the property. However, the downside is that the deceased co-owner's interest may need to go through probate, potentially delaying the transfer of ownership and increasing costs.

Creditor implications: Because each owner holds a distinct interest in the property, a creditor of one co-owner may be able to place a lien on that co-owner’s interest in the property, potentially leading to forced sale or partition. This is a less protective option than JTROS or TBE for shielding property from creditors.

Joint Ownership of Limited Liability Company and Limited Partnerships

In addition to real estate, individuals can hold interests in business entities like Florida limited liability companies (LLCs) and limited partnerships (LPs) as JTROS or TBE. This strategy provides an additional layer of asset protection. This is because applicable laws (Florida Statutes, chapters 605 and 620) prevent  a creditor of a member  of  either of these entities from directly levying his interest.  Instead, a creditor’s remedy is limited to a charging order against any distributions that the entity makes to the member.

·         LLC/LP Ownership as TBE: If a married couple owns an interest in an LLC as TBE, Florida law protects that interest from creditors of just one spouse, just as it does with real estate titled as TBE. In the event of one spouse’s death, the surviving spouse automatically inherits the entire ownership interest, bypassing probate.

·         Joint LLC/LP Ownership by unmarried people: LLC membership interests can be held as JTROS, allowing the surviving member(s) to automatically inherit the deceased member's interest without the need for probate. However, JTROS does not offer the same creditor protection as TBE, especially against creditors of an individual member.

 ·   Asset Protection for Business Interests: Holding a business interest in an LLC or limited partnership as TBE is particularly effective for asset protection, as it shields the business interest from the creditors of a spouse who is sole owner of a business. Additionally, owning these interests as JTROS can ensure a smooth transition of ownership without involving probate courts. 

Conclusion

Joint ownership can be a valuable tool for both asset protection and estate planning in Florida. For married couples, tenants by the entirety provides a strong defense against creditors and an easy transfer of ownership upon the death of one spouse. For other co-owners, joint tenants with right of survivorship (JTROS) can offer some creditor protection and avoid probate, while tenants in common (TIC) gives flexibility in estate planning but may expose the property to more risk from creditors.

When combined with careful planning, joint ownership can also extend to LLCs and LPs. Whether you own real estate, business interests, or other assets, joint ownership strategies can help you protect  your assets and pass them to your chosen  heirs with minimal cost.

 If you want to protect your Florida assets from creditors, call asset protection attorney John Clarke at (954)556-8952 for a free consultation!

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Florida Quit Claim Deed

 Definition of Quit Claim Deed

A quitclaim deed is the simplest way to transfer an interest in real property in Florida. This type of deed is often used between parties s that have an existing relationship, such as family members, divorcing spouses, or business partners.

A key feature of a quitclaim deed is that it does not guarantee a property’s title is free of liens. The grantor simply transfers whatever interest they have in the property to the grantee and no title search is performed. Therefore, the  grantee receives whatever interest the grantor has at the time of the transfer, which could be nothing at all.

For this reason, quitclaim deeds are not typically used in arm’s length real estate purchases. Instead, a title search is performed and the seller then  executes a warranty deed, in which he guarantees clear title to the buyer.

 Requirements for a Quitclaim Deed

To be valid in Florida, a quitclaim deed must meet certain requirements:

Wording of the Deed: The deed must identify the property being conveyed, the grantor (the person transferring the property), and the grantee (the person receiving the property). It should include a clear legal description of the property, not just a street address.

Formalities:

The grantor must sign the deed in the presence of two disinterested witnesses.

The deed must also be notarized with the notary’s stamp and signature. The notary can also act as a witness.

Consideration (the amount paid for the property, even if nominal) must be stated on the deed, though the grantee does not need to sign the document.

Delivery of the Deed: The deed must be delivered to the grantee to be effective. Physical delivery, along with the intent to transfer ownership, is key to completing the transfer.

Recording of the Deed: Recording the deed with the clerk of court in the county where the property is located is highly recommended, though not required. Recording gives public notice of the change in ownership.

Florida Quit Claim Deed Statutes:

Section 689.025, Florida Statutes prescribes the specific language that should appear in a quitclaim deed.

Section 689.01, Florida Statutes requires that deeds conveying real property be signed by the grantor in the presence of two witnesses.

 When Does the Deed Become Effective?

A quitclaim deed becomes effective upon delivery to the grantee, meaning the grantor has physically or constructively delivered the deed with the intention of transferring ownership. However, while the deed is effective once delivered, recording the deed with the county clerk is critical for protecting the grantee’s interest.

Without recording the deed, the grantee may face difficulties in obtaining a mortgage or selling the property. Recording ensures that third parties, such as creditors or potential buyers, are aware of the ownership transfer.

 How to Record a Quitclaim Deed

To record a quitclaim deed, the original signed and notarized document must be taken to the clerk of court in the county where the property is located. The clerk will charge a small fee for recording the deed, which varies by county.  The deed then gets recorded in the chain of title for the property, letting the public know that a change in ownership has occurred.

If there is a mortgage on the property, a documentary stamp tax will usually be assessed on the transfer. Florida’s documentary tax on mortgages is currently  $0.35 per $100 of the mortgage amount. This tax must be paid when recording the deed.

 Quitclaim Deed After Divorce

In divorce proceedings, quitclaim deeds are often used to transfer one spouse’s interest in the marital home to the other spouse. Its important to note that a quit claim deed trasnfer does not affect any mortgage obligations tied to the property.

If both spouses are jointly liable on the mortgage, both remain liable even after the transfer. To fully release a spouse from the mortgage, refinancing or other arrangements with the lender must be made.

Be mindful that many mortgages contain a "due on sale" clause, which may allow the lender to call the loan due upon transfer of ownership. However, in practice, lenders rarely enforce this clause unless the mortgage is in default.

 Quitclaim Deed in Estate Planning

Quitclaim deeds can be a useful tool in estate planning. For example, a property owner can transfer their real estate to a living trust using a quitclaim deed. This allows the property to be held in trust for the benefit of beneficiaries and avoids probate upon the grantor’s death.

Additionally, quitclaim deeds can be used to transfer property into a Florida LLC as part of an asset protection strategy. The owner may then devise their LLC interest to heirs through an operating agreement, keeping the property within the family while potentially shielding it from creditors.

 Contact Florida attorney John Clarke at (954)556-8952 for a free estate planning consultation.

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FUTMA Accounts and Transfers

FUTMA ACCOUNTS

The Florida Uniform Transfers to Minors Act (FUTMA) (Florida Statutes Sections 710.101-710.126) provides an easy way to transfer property to minor beneficiaries. It allows for the transfer of assets, including money and real estate, to a custodial account for a minor beneficiary.

Pursuant to FUTMA, an adult can open a custodial account for a minor by titling the account in their name as “custodian for (designated minor) under the Florida Uniform Transfers to Minors Act.”

The designated custodian has the duty to manage the assets in the FUTMA account for the benefit of the minor beneficiary until he reaches adulthood (either age 18 or 21, depending on how the designation is worded).  Once the beneficiary reaches the age of majority, he  becomes owner of the account.

FUTMA accounts are simple alternative to setting up a trust, which typically involves considerable time and expense.

FUTMA Asset Protection

Property in a FUTMA account is legally considered to belong to the minor beneficiary.  FUTMA assets are not available to satisfy debts of the custodian of the account. Therefore, by setting up a FUTMA account for a minor, a custodian can ensure that those assets pass to the designated beneficiary free of any creditor claims against the custodian that arise later.

An important caveat is that a custodian’s transfer to a FUTMA account could be challenged if the custodian sets up the account after a creditor has already sued him.   Under Florida’s Fraudulent transfer law (Chapter 726 of the Florida Statutes), a transfer will be held to be fraudulent if it is proven that it was made with the actual intent to avoid paying a creditor.

FUTMA Examples:

1)  Bob Blackmon transfers an investment house to his grandson, Todd, by executing a deed that conveys the property to “my son John Blackmon as custodian for Todd Blackmon under the Florida Uniform Transfers to Minors Act.”

The property is now held by John  for the benefit of his son Todd.   John can mortgage or sell the property, but only for Todd’s benefit. John’s  creditors can not seize the property to satisfy his debts.  Once Todd reaches the age of majority, he automatically becomes its legal owner.

2) Teresa Alvarez wants to give $50,000 to Melissa Cruz, her 6 year old granddaughter, when she dies. So she places $50,000 into a savings account and writes the following beneficiary designation on the account: “ to my daughter Maria Cruz as custodian for Melissa Cruz under the Florida Uniform Transfers to Minors Act.”

When Teresa dies, the account passes to Maria, as custodian for her daughter Melissa.  When Melissa reaches the age of majority, she becomes the record owner of the account.

 FUTMA vs. POD and TOD Accounts

FUTMA accounts offer specific protection from creditors not not found in Payable on Death (POD) or Transfer on Death (TOD) accounts. Unlike FUTMA accounts, POD and TOD accounts are owned by the transferor until his death, at which point ownership passes directly to the named beneficiary. For this reason, POD and TOD accounts are vulnerable to seizure by the transferor’s creditors until the transferor’s death.

By contrast, a FUTMA account is considered to be beneficially owned by the designated minor beneficiary. Therefore, the custodian’s creditors can not levy against it to collect the custodian’s debts.

Estate Planning with FUTMA Accounts

FUTMA accounts are a handy way leave assets to your minor children and grandchildren.  Instead of setting up a complicated trust, you can simply state in your will that you are leaving property “to (custodian name) as custodian for (minor beneficiary name) under the  Florida Uniform Transfers to Minors Act.”

Florida attorney John Clarke specializes in asset protection, probate, and estate planning. Check out our other articles on these topics.

Contact Florida asset protection attorney John Clarke at (954)556-8952 if you would like assistance with asset protection or estate planning!

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FUTMA ACCOUNTS

FUTMA ACCOUNTS

The Florida Uniform Transfers to Minors Act (FUTMA) (Florida Statutes Sections 710.101-710.126) provides an easy way to transfer property to minor beneficiaries. It allows for the transfer of assets, including money and real estate, to a custodial account for a minor beneficiary.

Pursuant to FUTMA, an adult can open a custodial account for a minor by titling the account in their name as “custodian for (designated minor) under the Florida Uniform Transfers to Minors Act.”

The designated custodian has the duty to manage the assets in the FUTMA account for the benefit of the minor beneficiary until he reaches adulthood (either age 18 or 21, depending on how the designation is worded).  Once the beneficiary reaches the age of majority, he  becomes owner of the account.

FUTMA accounts are simple alternative to setting up a trust, which typically involves considerable time and expense.

FUTMA Asset Protection

Property in a FUTMA account is legally considered to belong to the minor beneficiary.  FUTMA assets are not available to satisfy debts of the custodian of the account. Therefore, by setting up a FUTMA account for a minor, a custodian can ensure that those assets pass to the designated beneficiary free of any creditor claims against the custodian that arise later.

An important caveat is that a custodian’s transfer to a FUTMA account could be challenged if the custodian sets up the account after a creditor has already sued him.   Under Florida’s Fraudulent transfer law (Chapter 726 of the Florida Statutes), a transfer will be held to be fraudulent if it is proven that it was made with the actual intent to avoid paying a creditor.

FUTMA Examples:

1)  Bob Blackmon transfers an investment house to his grandson, Todd, by executing a deed that conveys the property to “my son John Blackmon as custodian for Todd Blackmon under the Florida Uniform Transfers to Minors Act.”

The property is now held by John  for the benefit of his son Todd.   John can mortgage or sell the property, but only for Todd’s benefit. John’s  creditors can not seize the property to satisfy his debts.  Once Todd reaches the age of majority, he automatically becomes its legal owner.

2) Teresa Alvarez wants to give $50,000 to Melissa Cruz, her 6 year old granddaughter, when she dies. So she places $50,000 into a savings account and writes the following beneficiary designation on the account: “ to my daughter Maria Cruz as custodian for Melissa Cruz under the Florida Uniform Transfers to Minors Act.”

When Teresa dies, the account passes to Maria, as custodian for her daughter Melissa.  When Melissa reaches the age of majority, she becomes the record owner of the account.

 FUTMA vs. POD and TOD Accounts

FUTMA accounts offer specific protection from creditors not not found in Payable on Death (POD) or Transfer on Death (TOD) accounts. Unlike FUTMA accounts, POD and TOD accounts are owned by the transferor until his death, at which point ownership passes directly to the named beneficiary. For this reason, POD and TOD accounts are vulnerable to seizure by the transferor’s creditors until the transferor’s death.

By contrast, a FUTMA account is considered to be beneficially owned by the designated minor beneficiary. Therefore, the custodian’s creditors can not levy against it to collect the custodian’s debts.

Estate Planning with FUTMA Accounts

FUTMA accounts are a handy way leave assets to your minor children and grandchildren.  Instead of setting up a complicated trust, you can simply state in your will that you are leaving property “to (custodian name) as custodian for (minor beneficiary name) under the  Florida Uniform Transfers to Minors Act.”

Contact Florida asset protection attorney John Clarke at (954)556-8952 if you would like assistance with asset protection or estate planning!

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Florida Uniform Heirs Property Act

          In 2020, the Florida legislature passed a new law called the Florida Uniform Partition of Property Heirs Act (“the Act”).  The purpose of this law is to allow heirs of property to buy out the shares of other heirs in a court-supervised sale.

 In the past, if one of a group of heirs wanted to keep an inherited property but the others wanted to sell, and the heirs couldn’t agree on a sales price, then the only legal remedy that the heirs had was a partition sale under Florida Statute Section 64.041.  The Act allows the heir that wants to buy another heir’s property share the ability to purchase it for its appraised value.  The intent of the new law is to facilitate preservation of real estate within a family.

When Does the Florida Uniform Heirs Property Act Apply

Heirs who inherit a property share may avail themselves of the Act when the following conditions apply:

-the heir holds his property interest as a tenant in common

-there is no prior agreement among all the heirs governing partition of the property

-one of more of the cotenants acquired title from a relative, whether living, or deceased

AND, any of the following applies:

1.       Twenty percent or more of the interests are held by co-tenants who are relatives;

 2.      . Twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or

  3.       Twenty percent or more of the cotenants are relatives.

 Buyout Process Under the Act

 The process is initiated when an heir who wants to sell his portion of the property  files  a partition action under Florida Statute Section 64.041. In his partition complaint, he asks the court to apportion and sell the property.  The court then determines whether the property is heirs’ property under the criteria stated above.  If the property meets these criteria, the court then orders an appraisal to determine the fair market value of the property.  Once the court notices all parties of the results of the appraisal, it holds a hearing at which it decides whether to adopt the results of the appraisal as the fair market value of the property.

      The next step that the court takes under the Act is to send notice to all the other co-tenants that they have the right to buy out the cotenant who requested partition at a purchase price based on the appraised value of the property multiplied by the co-tenant’s fractional ownership share.  The cotenants then have 45 days to exercise their purchase rights under the Act.

      What happens next depends on whether one or more cotenants elect to purchase the property interest of the co-tenant who sought partition.    If no cotenant exercises his purchase rights, the court orders a physical partition or partition by sale of the property.  If one or more cotenant exercises his purchase rights, the court notices the other co-tenants of this fact and then issues a judgment of partition that reallocates the co-tenants’ respective shares in the property.

       In keeping with the purpose of the act, a court-ordered buyout is only available when a relative of the decedent owns a portion of the property (so, if decedent’s heirs are not relatives, the Act will not apply).  The Act defines a relative broadly as “ an ascendant, descendant, or collateral or an individual otherwise related to another individual by blood, marriage, adoption, or law of this state other than this part.”  However, an heir who is not a relative may exercise buyout rights under the Act as long as 20% or more of the other cotenants are relatives (or 20% of shares belong to a relative).  Thus, the act has broad applicability in situations where heirs inherit a decedent’s real property.

 If you need legal assistance with devising or inheriting property, call John Clarke Esq. at (305) 467-5560!

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Suing for Kratom Overdose and Death (Copy) (Copy)

Kratom is an extract from the leaves of a plant, mitragyna speciosa, that is native to Southeast Asia. In recent years, kratom  has become quite popular in the United States as a dietary supplement.   Kratom has several psychoactive compounds and acts as a stimulant at low doses and a sedative agent at higher doses.  Its distributors ascribe many extraordinary health benefits to the plant : curing opioid addiction, easing withdrawal from opiods, and alleviating depression and anxiety.  The limited studies on kratom’s physiologic effects indicate that it may provide analgesia and improvements in mood, but it can also cause addiction, dependence, and death.

Regulation of Kratom in the United States

       Due to the paucity of research on kratom’s physiologic effects, The FDA has discouraged the sale and consumption of kratom.  It has also stated that it is illegal to market kratom as a dietary supplement.   Due to concerns regarding kratom’s adverse health effects, import of kratom into the United States for medical purposes has been banned.  Nonetheless, it is legal to buy kratom as a botanical extract. A burgeoning industry of kratom growers and distributors has emerged in the last 15 years that generates billions of dollars in revenue yearly.  The FDA estimates that there are now over 5 million people who regularly consume kratom products in the United States.  The FDA has initiated a few enforcement actions against kratom manufacturers who were marketing kratom products to treat opioid use disorders and withdrawal symptoms.  However, the FDA has thus far failed to enforce its ban against kratom manufacturers who market their products as extracts rather than supplements (though all of these products are in fact  designed to be consumed like drugs).

A Tide of Kratom related Overdoses and Deaths

A 2019 report from the American Association of Poison Control Centers (AAPCC) noted that there was a 52-fold increase in kratom use, based on reports of intoxication,  between the years 2011 to 2017.  As kratom use has increased,  many consumers have paid the ultimate price.  Over 18 months in 2016 and 2017, 152 overdose deaths involving kratom were reported in the United States, with kratom as the primary overdose agent in 91 of the deaths.

 Wrongful Death Litigation Against Kratom Manufacturers

 There have been an increasing number of wrongful death cases filed against kratom manufacturers in recent years as kratom overdose deaths have risen.  These cases tend to assert claims that the relevant manufacturers and retailers are negligent in how they market their products, and/or are strictly liable for failure to warn consumers of their dangers.

- In 2022, the Estate of Krystal Talavera won a judgment of $11,000,000 against Sean Michael Harder, owner and operator of the Kratom Distro after Krystal died from a kratom overdose on Father’s Day 2021.

 In August 2023, a Seattle jury awarded $2.5 million to a Castle Rock family in a wrongful death lawsuit after a man with back pain died after ingesting kratom. 

 If you or a family member have been injured by the use of kratom products, call personal injury attorney John Clarke at (305)467-5560 for a free consultation!

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Privacy Policies for Florida Websites (New)

        In this digital age, web commerce and marketing are essential for many small businesses.  Customers increasingly shop as well as research businesses on the internet in order to decide who to hire.  Whether you are a lawyer or an online boutique, having an interactive website that collects consumer information is very useful.  

        If a business collect consumer information, it should have a privacy policy that spells out the type of data it collect and how it uses it.   A privacy policy serves two purposes. First, it informs the consumer about how his or her data will be used, and ideally inspires trust.  Secondly, a privacy policy can be a tool that brings the website into compliance with applicable privacy laws.

          Governments around the world have recently placed increased importance on safeguarding data by enacting laws such as the GDPR (European Union) and the CCPA (California).  These  laws give consumers an increased ability to control how their information is used.   As more business moves online, the trend seems to be for more government regulation in this area and more protection of consumer data.  

Florida’s Digital Privacy Law

Florida recently enacted the “Florida Digital Bill of Rights” (Chapter 501.701-501.722, Florida Statutes),  which goes into effect on  July 1, 2024.  An important distinction is drawn in this law between large businesses (defined as “controllers”) and smaller businesses. Most of the restrictions in this law apply only to controllers, which represent a  small group of large tech companies.  A controller is defined as an entity that does business in the state of Florida, collects personal data from consumers, that has an annual global revenue of more than $1 billion and meets one of the following criteria:

Derives 50 percent of its global gross annual revenue from the sale of advertisements online;

Operates a consumer smart speaker and voice command service with an integrated virtual assistant connected to a cloud computing service that uses hands-free verbal activation; or

Operates an app store or digital distribution platform with at least 250,000 different software applications for consumers to download and install.

A consumer has the right under the FDBR to opt out of the collection and sale of her personal data (defined below) by the controller.  The consumer can also enforce these provisions against entities that handle her information on behalf of the controller.

  A.    Definition of Personal Information

         The definition of personal information  in Florida’s data breach law, Section 501.171, is expanded in the FDBR to include biometric information as well as information regarding a person’s geolocation (if in combination with the individual’s first name or first initial and last name). This is an important development for all businesses to consider in reviewing their breach notification obligations.

 B.     Sensitive Information

 “Sensitive data” means a category of personal data which includes any of the following:

(a) Personal data revealing an individual’s racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, or citizenship or immigration status.

(b) Genetic or biometric data processed for the purpose of uniquely identifying an individual.

(c) Personal data collected from a known child.

(d) Precise geolocation data.

 The FDBR requires that a controller that sells a customer’s sensitive information must  display a prominent notice on the controller’s website to notify the customer of this practice.

C.     Data Processors

An entity that processes data for a controller also has obligations under the FDBR to safeguard consumer data.  In order to ensure compliance with the FDBR, a data processor should ensure its contract with the controller has provisions that ensure the safeguarding of consumer data.

 D.    Enforcement

 The FDBR lacks a private right of action.   Instead, the Florida’s Attorney General is tasked with enforcing the law (therefore, a consumer who believes his rights have been violated should file a complaint with Florida’s AG).  A 45 day cure period is at the discretion of the attorney general and civil penalties authorized by the FDBR run as high as $50,000 per violation.  

 Summary

       In conclusion, the collection of consumer data is becoming more highly regulated in many jurisdictions.  It is essential that all businesses that collect customer information through a website or app have robust privacy policies in place that disclose how they use customer data.  A privacy policy builds customer trust and may also be required to comply with applicable privacy laws.  Florida’s FDBR gives consumers rights to restrict collection of their data against a limited set of entities. 

        Contact John Clarke Esq. today at (9540 556-8952 for assistance in drafting a privacy policy or complying with Florida’s privacy laws!

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Privacy Policies for Florida Websites

        In this digital age, web commerce and marketing are essential for many small businesses.  Customers increasingly shop as well as research businesses on the internet in order to decide who to hire.  Whether you are a lawyer or an online boutique, having an interactive website that collects consumer information is very useful.  

        If a business collect consumer information, it should have a privacy policy that spells out the type of data it collect and how it uses it.   A privacy policy serves two purposes. First, it informs the consumer about how his or her data will be used, and ideally inspires trust.  Secondly, a privacy policy can be a tool that brings the website into compliance with applicable privacy laws.

          Governments around the world have recently placed increased importance on safeguarding data by enacting laws such as the GDPR (European Union) and the CCPA (California).  These  laws give consumers an increased ability to control how their information is used.   As more business moves online, the trend seems to be for more government regulation in this area and more protection of consumer data.  

Florida’s Digital Privacy Law

Florida recently enacted the “Florida Digital Bill of Rights” (Chapter 501.701-501.722, Florida Statutes),  which goes into effect on  July 1, 2024.  An important distinction is drawn in this law between large businesses (defined as “controllers”) and smaller businesses. Most of the restrictions in this law apply only to controllers, which represent a  small group of large tech companies.  A controller is defined as an entity that does business in the state of Florida, collects personal data from consumers, that has an annual global revenue of more than $1 billion and meets one of the following criteria:

Derives 50 percent of its global gross annual revenue from the sale of advertisements online;

Operates a consumer smart speaker and voice command service with an integrated virtual assistant connected to a cloud computing service that uses hands-free verbal activation; or

Operates an app store or digital distribution platform with at least 250,000 different software applications for consumers to download and install.

A consumer has the right under the FDBR to opt out of the collection and sale of her personal data (defined below) by the controller.  The consumer can also enforce these provisions against entities that handle her information on behalf of the controller.

  A.    Definition of Personal Information

         The definition of personal information  in Florida’s data breach law, Section 501.171, is expanded in the FDBR to include biometric information as well as information regarding a person’s geolocation (if in combination with the individual’s first name or first initial and last name). This is an important development for all businesses to consider in reviewing their breach notification obligations.

 B.     Sensitive Information

 “Sensitive data” means a category of personal data which includes any of the following:

(a) Personal data revealing an individual’s racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, or citizenship or immigration status.

(b) Genetic or biometric data processed for the purpose of uniquely identifying an individual.

(c) Personal data collected from a known child.

(d) Precise geolocation data.

 The FDBR requires that a controller that sells a customer’s sensitive information must  display a prominent notice on the controller’s website to notify the customer of this practice.

C.     Data Processors

An entity that processes data for a controller also has obligations under the FDBR to safeguard consumer data.  In order to ensure compliance with the FDBR, a data processor should ensure its contract with the controller has provisions that ensure the safeguarding of consumer data.

 D.    Enforcement

 The FDBR lacks a private right of action.   Instead, the Florida’s Attorney General is tasked with enforcing the law (therefore, a consumer who believes his rights have been violated should file a complaint with Florida’s AG).  A 45 day cure period is at the discretion of the attorney general and civil penalties authorized by the FDBR run as high as $50,000 per violation.  

 Summary

       In conclusion, the collection of consumer data is becoming more highly regulated in many jurisdictions.  It is essential that all businesses that collect customer information through a website or app have robust privacy policies in place that disclose how they use customer data.  A privacy policy builds customer trust and may also be required to comply with applicable privacy laws.  Florida’s FDBR gives consumers rights to restrict collection of their data against a limited set of entities. 

        Contact John Clarke Esq. today for assistance in drafting a privacy policy or complying with Florida’s privacy laws.