FLORIDA UPDATES 

It is the goal of EAGLE PUBLISHING COMPANY to keep our publications fresh and up to date. To do so we will print changes in the law and corrections to the book that have come to our attention after the book has gone to print. The following are updates to:
A Will Is Not Enough In Florida and
When Someone Dies In Florida

Update to both books
RIGHTS FOR DOMESTIC PARTNERS
The state of Florida bans same sex marriages, however certain county governments such as Broward County, Key West, Miami Beach, and West Palm Beach offer a Domestic Partnership Registry. Once registered, Domestic Partner have certain rights within that county such as the right to visit each other in hospitals or jail, decide on the partners funeral arrangements, participate in the partner’s health plan, etc. Contact the county commissioner for specific information about whether your county has a Domestic Partner Registry, and if so, what are the rights and responsibilities of registered Domestic Partners within that county.

NO MORE FLORIDA ESTATE TAXES UNTIL 2011
 The Florida Estate Tax is called a "pick-up" tax, because the state collects the tax that would have gone to the federal government had it not been for a credit allowed on the federal Estate Tax return for death taxes paid to the state (FS 198.02). The Economic Growth and Tax Relief Reconciliation Act of 2001 amended the Internal Revenue Code to provide that an Estate cannot claim a credit for state death taxes for those who die after December 31, 2004. Because no credit is allowed for state death taxes on the federal Estate Tax return, there is no Florida Estate Tax for the years 2005 through 2010. In the year 2011 and beyond, the federal Estate Tax exclusion is scheduled to be $1,000,000, with the state credit for federal Estate Tax restored. If there are no changes to the law, Florida will, once again collect a portion of the federal Estate Tax.

CHAPTER 7 TRANSFERS TO MINORS
Florida statute 710.108 has been increased to $15,000. Now up to $15,000 may be transferred to an adult member of the minor’s family, or to a trust company, without asking court permission.

Update to: A Will Is Not Enough In Florida

Correction to 2005 Edition - Page 83
 The surviving spouse is not responsible to pay for the necessities of the decedent spouse, so his hospital and nursing home bills are debts of his Estate. They are not the debts of the surviving spouse unless (s)he agreed to pay them.

PAGE 36: Correction
Real property owned jointly in Florida has no rights of survivorship unless the deed to the property indicates that there are rights of survivorship.

CHAPTER 9: MEDICARE UPDATE
The 2006 figures for a stay in a skilled nursing facility (i.e., a nursing home) under the Original Medicare Plan are as follows:
You pay nothing for the first 20 days of skilled nursing care and $119 for days 21-100; i.e., you pay up to $9,520 for the next 80 days of a stay in a skilled nursing facility.
You are responsible for all costs thereafter.

The 2007 Medicare value for a stay in a skilled nursing facility for days 21 through 100 is $124 per day.

In 2008, those on the original Medicare plan will pay:

$128 per day for days 21-100 in a skilled nursing facility for each benefit period. This is $4 higher than the 2007 value.

CHAPTER 10: MEDICAID UPDATE - Effective 1/1/06
The federal and state governments have increased the Community Spousal Resource Allowance to a maximum of $99,540.  They increased the Minimum Monthly Maintenance Needs Allowance to $2,488.50.

CHANGES MADE BY CONGRESS IN 2006
Congress passed the following changes to the Medicaid law:
FIVE YEAR LOOK BACK
The Look-back period is extended from three years to five years.

PENALTY PERIOD STARTS WHEN YOU APPLY
Under the prior Medicaid law the Penalty Period started from the day the transfer was made. Under the new law the Penalty Period begins on the day the Applicant applies for Medicaid, meaning that the Penalty clock doesn’t start ticking till the Applicant is otherwise eligible and actually applies. For example, if a person makes an uncompensated transfer during the five year period before he applies for Medicaid, the Penalty Period will begin as of the day he applies for Medicaid.

HOMESTEAD WITH EQUITY OF $500,000 OR MORE
 If the equity in the Applicant’s home (current market value less mortgages and liens) is equal to $500,000 or more, he will not be eligible to receive Medicaid benefits. States are given the option of increasing this value to $750,000 or more.

 These changes need to be adopted by the states, so it may take several months before these laws are put into effect.

Check with an Elder Law attorney to determine the status of the Medicaid law in Florida.

FAMILY ADMINISTRATION REPEALED The Florida legislature has eliminated Family Administration.

SUMMARY ADMINISTRATION The Florida legislature has increased the amount that can be transferred using a Summary Administration to $75,000. (FL 735.201)

LOST POLICY The American Council of Life Insurers will not assist in locating lost insurance policies,but they do offers suggestions about how to find a policy at the Missing Policy Inquiry page of their Web site http://www.acli.com

MEDICARE AND YOU (Publication No. CMS-11007) is now published by the Centers for Medicare and Medicaid Services. You can get the publication from the Medicare Web site or by writing to: 

U.S. Dept. of Health and Human Services

Centers for Medicare and Medicaid Services

Baltimore, MD 21244-1850

THE WRONGFUL DEATH; MEDICAL MALPRACTICE

Under Florida statute 768.21 if the decedent died from a wrongful death; i.e., the death was caused by the wrongful or negligent act of another, then the decedent’s survivors can sue for lost support, medical and funeral expenses. These awards are relatively small. Large awards result from losses suffered for lost companionship and pain and suffering caused by the loss. But under this law, if the wrongful death was caused by medical malpractice by a doctor, nurse, hospital, nursing home, etc., no one other than the surviving spouse, or the decedent’s minor children can recover for lost companionship and pain and suffering. This means that no matter how wrongfully or negligently the medical community behaved, there can be no award for these losses unless there is a surviving spouse or minor child. The adult child of a deceased parent and the parent of an adult child who died because of medical malpractice cannot be compensated for such losses. 

 

Updates to:  When Someone Dies in Florida
NOTE: UPDATES ARE CURRENT ONLY UP TO 2004. IN 2005,
GUIDING THOSE LEFT BEHIND IN FLORIDA
will replace When Someone Dies In Florida.
VITAL STATISTICS: CHAPTER 1
To order a death certificate you can call the Florida State Vital Records Office (904)359-6900 or you can write to them at: Office of Vital Statistics
Attn: Customer Services
P.O. Box 210
Jacksonville, FL 32231-0042

You cannot order a death certificate via the Internet, but you can get information about how to order vital records from Florida’s Department of Health Web site: http://www.doh.state.fl.us

IRS REFUND Florida statute 735.302 now allows federal income tax refunds of $2,500 OR LESS to be given directly to the surviving spouse, provided all of the decedent’s debts have been paid, or provision has been made for payment. If there is no surviving spouse, then the refund can be given to one of his children provided all children over the age of 14, agree.

FAMILY ADMINISTRATION REPEALED The Florida legislature has eliminated Family Administration.

SUMMARY ADMINISTRATION The Florida legislature has increased the amount that can be transferred using a Summary Administration to $75,000. (FL 735.201)

FLORIDA’S INTESTATE LAW
 Under a recent revision to Florida’s Laws of Intestate Succession (FL 732.102), if the a person dies without a Will, and is married and all of his children are also those of the surviving spouse, then the spouse gets $60,000 plus half of the balance. The children inherit the other half.

FLORIDA TRUSTS DRAFTED AFTER 1/1/01 CAN BE CHANGED BY THE TRUSTEE AND BENEFICIARIES
 The Florida legislature passed a law (FL 737.4032) that effectively gives the Successor Trustee and the beneficiaries of the Trust, the power to do whatever they wish with Trust property once the Grantor dies. Specifically, for Trusts created after January 1, 2001, regardless of what the Trust says, and regardless of the fact that upon the death of the Grantor, the Trust becomes irrevocable, the Trustee, with the unanimous agreement of all of the beneficiaries, can do any of the following:

- Change any of the terms on the Trust, including changing the beneficiaries of the Trust and/or the income or principal each beneficiary is to receive.
- Terminate the Trust altogether
- Stop the Trustee from doing things required by the Trust Agreement
- Allow the Trustee to do things strictly prohibited by the Trust Agreement.

Used to be once the Grantor died the Trust could be changed only if there was good reason to do so, and only if a Court gave permission for the change. With this new law, the Successor Trustee and beneficiaries can agree do whatever they wish, regardless of what the Trust says, and without asking Court permission to do so.

THE WRONGFUL DEATH; MEDICAL MALPRACTICE
Under Florida statute 768.21 if the decedent died from a wrongful death; i.e., the death was caused by the wrongful or negligent act of another, then the decedent’s survivors can sue for lost support, medical and funeral expenses. These awards are relatively small. Large awards result from losses suffered for lost companionship and pain and suffering caused by the loss. But under this law, if the wrongful death was caused by medical malpractice by a doctor, nurse, hospital, nursing home, etc., no one other than the surviving spouse, or the decedent’s minor children can recover for lost companionship and pain and suffering. This means that no matter how wrongfully or negligently the medical community behaved, there can be no award for these losses unless there is a surviving spouse or minor child. The adult child of a deceased parent and the parent of an adult child who died because of medical malpractice cannot be compensated for such losses.

LOST POLICIES (Page 36)
The American Council of Life Insurers does not assist in locating lost insurance policies, but they do offers suggestions about how to find a policy at the Missing Policy Inquiry page of their Web site     http://www.acli.com

LONG TERM CARE INSURANCE FOR FEDERAL EMPLOYEES
The Long Term Care Security Act (Public Law 106-265) was passed by Congress to take effect in October 2002.  The law is designed to make long-term care insurance available to Federal employees, members of the uniformed services, and civilian and military retirees.  You can download a copy of the law from their Web site: 
OFFICE OF PERSONNEL MANAGEMENT
http://www.opm.gov/insure/ltc

CHAPTER 1: VA Pamphlet 051-000-00228-8 FEDERAL BENEFITS FOR VETERANS AND DEPENDENTS now costs $7, however you can download it without charge: http://www.va.gov.

CHAPTER 1: The telephone number for the Arlington National Cemetery is (703) 607-8585. 

Chapter 2: The number for information about COBRA has been changed to (866) 444-3272

CHAPTER 3: The Web site for the FAA is http://www.faa.gov.
The telephone number to call is (866) 835-5322.

CHAPTER 4 MEDICARE UP-DATE
There are many new changes in the Medicare system.

MEDICAL BILLS COVERED BY INSURANCE
If the decedent had health insurance you may receive an invoice stamped "THIS IS NOT A BILL." This means the health care provider has submitted the bill to the decedent’s health insurance company and expects to be paid by them. If the decedent was receiving Medicare, you will receive a Medicare Summary Notice listing all of the services or supplies that were billed to Medicare for the prior 30 days. In some areas of the country, you can get a copy of the decedent’s Medicare Summary Notice from the Internet: http://www.medicare.gov

HOW TO CHECK MEDICARE BILLING
The structure of Medicare has been changed giving people in some parts of the country, the option of staying with the Original Medicare Plan or choosing one of the Medicare + Choice Plans. Coverage differs depending on which plan is chosen. If the decedent was covered by Medicare, you need to determine whether he was covered under the Original Medicare Plan, or whether he chose a Medicare + Choice Plan. The publication Medicare and You explains coverage under the different options. See Chapter 2 to obtain a copy of the booklet.

An important billing question is whether the health care provider agreed to accept Medicare assignment, meaning that they agreed to accept the Medicare-approved amount. If so, the patient is responsible for the coinsurance (usually 20% of the approved amount) and any deductible amount. Doctors and health care providers who do not accept assignment, are limited in the amount they can charge for a Medicare covered service. The highest they can charge is 15% over the Medicare-approved amount. This Limiting Charge applies only to certain services and does not apply to supplies and equipment.
If all of this appears confusing, it is.

To check the decedent’s Medicare billing, you first need to determine whether he was in the Original Medicare Plan or in one of the Medicare + Choice Plans. The Medicare and You booklet explains what is covered under the Original Medicare Plan. You will need a copy of the contract for the Medicare + Choice Plans to determine what is covered under that plan.  If the decedent was in the Original Medicare Plan, you need to determine whether the health care provider accepted assignment; and if not whether the Limiting Charge applies to the services provided. Finally if assignment is accepted or the Limiting Charge applies, you need to determine the Medicare-approved amount.

NOTE: A doctor or supplier can give the patient an Advance Beneficiary Notice that says Medicare probably will not pay for a service. If the decedent received such notice and signed an agreement saying he wants the service and agrees to pay for it, then if he received the service, his estate is now liable to pay that debt.

COST OF NURSING CARE IN ORIGINAL MEDICARE PLAN
Medicare pays for the first 20 days of nursing care.
For days 21 to 100, the patient pays up to $109.50/day.
Medicare does not pay for nursing care beyond 100 days.

CHANGE IN FEDERAL TAX (Page 32)
Both the federal and state government have the right to impose an Estate Tax on property transferred to a beneficiary as a result of the death. All the property owned as of the date of death becomes the decedent’s Taxable Estate. This includes real property (homestead, vacant lots, etc.) and personal property (cars, life insurance policies, business interests, securities, IRA accounts, etc.). It includes property held in the decedent’s name alone, as well as property that he held jointly or in Trust. It also includes gifts given by the decedent during his lifetime that exceeded $10,000 per person, per year. That value (the Annual Gift Tax Exclusion) is now based on the cost of living index and for 2002 is increased to $11,000. For most of us, this is not a concern because no federal Estate Tax need be paid unless the decedent’s Taxable Estate exceeds the federal Estate Tax Exclusion Amount as set by the federal government. That value is currently one million dollars and is scheduled to go even higher:

       YEAR      

EXCLUSION  AMOUNT
2004-2005 $1,500,000
2006-2008 $2,000,000
2009 $3,500,000

There is an unlimited marital tax deduction for property transferred to the surviving spouse; so in most cases, no Estate tax need be paid if the decedent was married. Regardless of whether taxes are due, federal and state Estate tax returns must be filed whenever the decedent’s Estate exceeds the Exclusion Amount in effect as of his date of death. The law as passed in May, 2001 phases out Estate taxes for the year 2010, but the law is effective only until December 31, 2010. If lawmakers do nothing, then in 2011, the Federal Estate Tax goes back into effect; and estates that exceed one million dollars will once again be subject to Estate taxes. And that is not the only uncertainty. Each state has its own Estate Tax structure. It remains to be seen how each state will react to the Federal change. Some states may follow the lead of the Federal government and increase the Exclusion amount in the same manner. Other states may see this as an opportunity to "pick up the slack" i.e., to have a lesser Exclusion value, so that Estate taxes will now be paid to the state instead of the Federal government.

THE UN-UNIFIED GIFT TAX
 Up until the year 2002, if you gave someone more than $10,000 in any given year you had to report that gift to the IRS. The Annual Gift Tax Exclusion is now adjusted for the cost of living and is $11,000 for the year 2002. The IRS keeps a running count of amounts that you give over the Annual Gift Tax Exclusion. Although you are required to report the gift, no tax need be paid unless that running total is more than the federal Estate Tax Exclusion amount. If your running total does not exceed that amount during your lifetime, once you die, the cumulative value of gifts reported to the IRS will be added to your Taxable Estate. Up until the change in the tax law in 2001, the Gift and Estate tax were unified. No Gift Tax needed to be paid unless the total value of the taxable gifts exceeded the federal Estate Tax Exclusion amount. That changes in 2004. In 2004, the Estate Tax Exclusion amount goes up to $1,500,000, but the amount for the Gift Tax Exclusion remains at $1,000,000, so they are no longer unified.

To summarize: If you make a gift to anyone that is greater than the Annual Gift Tax Exclusion for that year, you must report that gift the IRS. The IRS will keep count of values that you gave in excess of the Annual Gift Tax Exclusion. In 2004, if that sum exceeds $1,000,000, you will pay a Gift Tax on any amount that you give that is over the Annual Gift Tax Exclusion.

The Estate Tax is scheduled to be repealed in 2010, but not the Gift Tax.

GIVING WITH ONE HAND — TAKING WITH THE OTHER
 The current federal Estate Tax is scheduled to be phased out in the year 2010, but a new Capital Gains Tax is scheduled to be phased in that may prove to be even more costly than the Estate Tax. The new Capital Gains Tax is related to the how inherited property is evaluated by the federal government. Real and personal property inherited by a beneficiary is inherited at a "stepped up" in basis. This means that if the decedent purchased some item now worth more than when he purchased it, the beneficiary will inherit the property at its fair market value as of the decedent’s date of death. For example, suppose the decedent bought stock for $20,000 and it is now worth $50,000, the beneficiary takes a step-up in basis of $30,000; i.e., he inherits the stock at the $50,000 value. If the beneficiary sells the stock for $50,000, he pays no Capital Gains tax. If the beneficiary holds onto the stock and later sells it for $60,000, the beneficiary will pay a Capital Gains tax only on the $10,000 increase in value since the decedent’s death.

Up to 2009, there is no limit to amount you can take as a step-up in basis. But in 2010 caps are set in place. The surviving spouse is allowed to take a step-up in basis of up to 4.3 million dollars. Property inherited by anyone else is allowed a 1.3 million dollar step-up in basis. Significant Capital Gains taxes could result. For example, suppose in 2010 you inherit a business from your father that he purchased for $100,000 and it is now worth 2 million dollars. There is a capital gains of 1.9 million dollars, but you are allowed a step-up in basis of only 1.3 million. $600,000 of your inheritance is subject to a Capital Gains tax. No one knows how the new law will be applied in 2010, but it could well be that the Capital Gains tax turns out to be the same as, if not more than, what you would have paid in Estate Taxes, before they were "phased out."

  Store Front  Basket Contents  Checkout  Home Page