South Florida Estate Planning Law

Beware of non-attorney "living trust" scammers infiltrating the web

David Shulman — Wed, 18 Apr 2012 12:25:01 -0500

While Googling for an old blog post of mine, I stumbled upon which appears to be several fairly aggressive "estate planners" hawking either overpriced "Estate Planning Organizers" or living trusts on the internet to the South Florida community. I put "estate planners" in quotes because these are not attorneys, but might be representatives of a well known trust mill that has been fined and sued, provides worthless documents to their customers, and causes real attorneys that are associated with them to get in serious trouble with the Bar.

But let me back up.

As I said, I was Googling for an old blog post of mine. When I want to find one of my previous posts, instead of using the search on my site, I go right to Google. I'll also sometimes do sample Google searches of various estate planning related terms, for example "South Florida Living Trust" just to see what pops up. This time when Googling, I saw a couple of sites listed on top of the search result page in the ads – not in the natural search. There were:

Each of the three above sites features a different "estate planner" with a little welcome video. The first two links are the exact same site except with a different name and video. The third site isn't the same template as the first two, but with the same information.

This is funny. Each of the three "estate planners" claims either in their videos or on their sites that they have "created" a "free estate planning program" which they will give you if you sign up for their mailing list.

Now the local community of estate planning attorneys is rather small. I either personally know, or have at least heard of most of the attorneys in the area. But I've never heard of any of the above three people, and looking them up on the Florida Bar's Directory of attorneys confirmed my suspicion that they were not - and never have been - lawyers. I signed up on the second site above, and it turns out that the "free estate planning program" is a PDF mini-book entitled "Estate Planning 101: Wills Vs. Living Trusts." After the title page, the book states that it was written by [Doofus in the Second Link Above], Estate Planner." I kid you not. I will not publish it on my blog for copyright reasons, but you are free to go get it yourself.

The book talks a little bit about estate planning basics, and isn't even that bad. It even ends by saying, "The next step is to locate and work with a top-quality estate planning attorney. I invite you to give my office a call so we can discuss how we can help you outline your desires, explain what you’ve learned about estate planning so far, and investigate each of the areas outlined in the report in detail." So the book tells people to get an attorney - nothing wrong with that - at least with the "attorney" part.

But I knew that there was no way that this doofus could have written this book (especially if the other two doofuses were hawking the same book), but I wasn't sure what they were actually trying to sell, and who they really represented, so I started to investigate a bit further.

Searching for "Estate Plan Center LLC" brings me to this site, in which the company is hawking an "Estate Planning Organizer." Apparently, the Estate Planning Organizer allows you to gather all of your relevant information -family, finances, etc., and put them in one organized place, supposedly, to meet with an attorney to go forward with your planning. It's actually not a bad idea, and it's probably pretty good. However, they're selling it for $197, which is way too much money, assuming that's what they're really selling.

Also on the website is the opportunity to become an affiliate, which what the above three obviously did. The site states, "Promote the Estate Planning Organizer on your site and make a commission every time someone makes a purchase! Simply put our proven advertising on your site and get a check every month for sales…It’s that simple! After you sign up, we will show you how to successfully sell the Organizer on your web site."

What's the problem though??

Here's the thing. Again, going through what they claim to be the actual Organizer itself, it looks like it may be a worthwhile product (although again, not worth $197). If I thought that they were only selling the Organizer, I wouldn't care. But there is something else going on here.

First, the Organizer comes with "bonus" material such as "Living Trust Answers - Discover how to Plan, Prepare, manage and Settle a Living Trust" and "How to Avoid Probate - Your Step-by Step Guide for Transferring Assets into a Living Trust." So I'm starting to wonder if they are selling the Organizer at all, or if it is a loss leader for their Living Trust program.

The owner of the site selling the Organizer, Jeff Radich, has at least one other site, where he is asking people to sign up for a "Free 7-Step Estate Planning Mini-Course" - a clear sign of a Living Trust scam. They get the people in for the "free" course, and then convince them to buy overpriced worthless trusts.

Second, the affiliate websites really make it sound as if the principals were lawyers. On these websites, these scammers are calling themselves "Living Trust Advisors." One website states, "I am an Estate Planner in Coral Springs. For over 10 years I have been specializing in the preparation of estate planning documents & living trusts throughout Florida. I have successfully helped over 100 families plan for the future by preparing a proper estate plan." Another states, "I am a Estate Planner in Pembroke Pines, Florida. For over 34 years I have been specializing in estate planning & living trusts throughout South Florida. I have helped close to a thousand of families set up a rock solid revocable living trust and I can help you too." They even aren't selling the Organizer on the sites. Not specifically. Instead, all of the sties talk extensively about "Living Trusts" again and again. If they are only selling a financial organizer that people can use to take to their attorneys, why are they pushing Living Trusts so hard? Living trusts are right for some people, in some states, some of the time. Anyone who tells you that everyone needs one all of the time, regardless of age, marital status, wealth, and where they live is full of it.

"But David," you may say. "What makes you so sure that these specific people are unethical scam artists looking to rip people off by peddling boilerplate revocable living trusts without knowing what the hell they are doing - or having a license to practice law?"

Good question. I'm glad you asked. On one of the sites's "About Us" page, it states that the "estate planner" "has been part of the living trust revolution in this country right from the beginning, along with the Late Henry W. Abts III, author of the classic book “Living Trust”. Together they have served thousands of families and saved them millions of dollars through proper estate planning. [Non-Attorney] has personally helped clients not only set up their trusts, but also fund their trusts and settle their estates, when necessary."

As soon as I saw the name "Henry W. Abts III," I had my "Aha!" moment. Henry Abts was the founder of "The Estate Plan," which is probably best known for using non-attorneys to sell expensive and worthless living trusts, along with other bogus financial products, to senior citizens

In the 2005 case of Cleveland Bar Association v. Sharp Estate Services, Inc. Et. Al, the Supreme Court of Ohio set forth in great detail how Abts's and his affiliates scam works. Read the case if you're interested. I'll give you the Cliff's Notes: "Scumbags rip off seniors with bogus trusts." Abts's affiliate was fined over $1 million, with the Court stating, " We impose a civil penalty in the amount of $1,027,260, determined by multiplying 468, the number of living-trust and estate plans sold by Sharp in Ohio, by $2,195, against all respondents on a joint and several basis."

In 2006, the Nebraska Supreme Court and Nebraska Bar, in Nebraska Ethics Advisory Opinion for Lawyers No. 06-10 ruled "The Committee believes it to be ethically inappropriate for a Nebraska lawyer to be contractually associated with [The Estate Plan] or similar organizations. . . Contractual associations with organizations such as TEP present Nebraska attorneys with opportunities for multiple violations of Nebraska Rules of Professional Conduct."

In 2009, a $16 million default judgment was entered against them for "masquerading as qualified financial advisers, estate planners, lawyers, and paralegals to exploit and prey upon senior citizens with the creation and selling of "unnecessary and often useless living trusts.

"Attorneys Charge too much for estate planning."

So here's the real question. Why do I care?

The scammers will make the inevitable argument, "Attorneys only criticize us because we are stealing their business and they charge too much. They are jealous and are trying to protect their turf."

I'll tell you a secret. I make a hell of a lot more money probating estates in which the planning wasn't done properly, than I do by actually doing proper planning. If I was only interested in financial gain, I would tell everyone to go out and use one of these trust mills, because I know that they would be messed up, and when the person dies, they would have to hire me to fix it.

I care because these scammers are harmful to society. They rip people off, and sell them ineffectual products. They are practicing law without a license. They don't know what they're doing. They are giving people false peace of mind.

I reported the above web sites to the Florida Bar this morning. Hopefully, they will be able to do something.

Moral of the story? It's a minefield out there, and scammers are getting even more aggressive using the internet. If someone calls themselves an "Estate Planner" but is not an attorney, run away.

Tax Court digs the knife in deeper in bad family limited partnership case

David Shulman — Fri, 30 Mar 2012 08:46:02 -0500

Today we learn from a supplemental opinion to Turner v. Commissioner, TC Memo 2011-209 Aug 30, 2011 (Estate of Turner I), that a marital deduction is not available when § 2036 is deemed to pull assets back into the estate, but the assets aren't actually there to give to the surviving spouse.

Estate of Turner I was a standard "bad facts" family limited partnership (FLP) case, in which cash and stock were contributed to a family limited partnership. The decedent then made gifts of FLP interests to his children. The Tax Court found that under Estate of Bongard v. Commissioner, 124 TC 95 (2005), there was no significant non-tax reason to form the entity, and that the decedent retained too much control under § 2036 of the Code. Therefore all of the partnership assets, including those that were transferred away by gifts to his children, were included in his gross estate - causing significant estate taxes to be owed.

"Aha!" says the estate. If the assets were included in his gross estate, then because his estate planning documents had a pecuniary marital bequest, they are distributed to his wife and therefore qualify for the marital deduction under § 2056.

Not so, says the Court.

Under § 2036, even though the decedent had in fact transferred the assets away, they were deemed to be in his estate. However the marital deduction only applies to assets "which passes or has passed from the decedent to his surviving spouse." Because no such passing took place, no marital deduction was available.

Ouch.

See Turner v. Commissioner, 138 T.C. No. 14 (March 29, 2012)

Wow, you people are really interested in the lottery

David Shulman — Thu, 29 Mar 2012 15:37:30 -0500

I'm glad that so many people are checking out the estate planning options if they win the lottery. Here is a list of recent search terms that brought people to my site.

Planning on Sharing your Lottery Winnings with your Family: Write it Down Now!

David Shulman — Thu, 29 Mar 2012 13:04:08 -0500

MegaMillions mania is sweeping the nation. With the grand prize over $500 million, people are dreaming of what they would do with the money, and how they would share it with their families and friends. One one hand, the odds of winning – 1 in 175 million – are infinitesimal. But hey, someone has to win, and it might as well be you. There is however, one guaranteed winner in the lottery–the IRS. Not only are the lottery winnings taxable income to the winner, which will be taxed at a marginal rate of 35%, if the winter tries to share them with his family, there could be substantial gift taxes imposed also.

When someone wins the lottery, what is often done is their family will claim the prize through a partnership or other business entity that is comprised of family members. With a partnership the family could have varying interests. The theory is that the family all decided before the lottery to invest in the ticket together. Mom and Dad contributed 50 cents to the investment cost of the ticket, Uncle Bob contributed 25 cents, and Cousin Rita contributed 25 cents. The family will either claim that the partnership purchased the ticket, or the ticket is then contributed to a partnership in exchange for proportionate interests in the partnership.

If this works, this helps to solve two significant tax issues -the income tax and the gift tax. Because of the marginal nature of the income tax, and because a partnership in itself does not pay taxes, but passes the taxes on to its partners, splitting the income among multiple partners saves on income taxes, because each individual partner has the opportunity to be taxed at the lower bracket rate before reaching their highest marginal rate. Of course, with a a jackpot this size, the difference might seem de minimis.

The other issue is the gift tax. As I've written about before, there is wealth transfer tax comprised of the gift tax and the estate tax. Each person can give away, during life or at death, a certain amount of property before the tax kicks in. Currently, that amount is about $5 million a person. Any property given away over that is taxed at the rate of 35%.

So by claiming the lottery winnings as a family partnership, a winner can claim that they are not making a taxable gift, because it was a family investment. This could save millions in gift taxes.

The problem is that in most cases, the IRS knows that it's baloney. While it's certainly possible to have agreements among family members (or friends, or co-workers) to enter into a lottery pool, the IRS will not look to kindly on post winning shams. If audited, they will ask for the partnership agreement that existed prior to ticket buying. They will ask when the family members contributed the money. They will ask your history of buying tickets as a family, etc.

Lesson? If you are planning on sharing the lottery with other people, make sure that there is some sort of agreement beforehand.

Or, take the winnings for yourself and flee to Tahiti.

Israel Debates Enacting an Estate Tax

David Shulman — Fri, 16 Mar 2012 12:27:23 -0500

America isn't the only place where the imposition of an estate tax is being debated. Israel is currently considering whether to impose one. The proposed exemption amount, that is the amount over which the tax would be imposed, is 15 million NIS (New Israeli Shekels) or a little less than $4 million at today's exchange rates.

For more, see Haaretz - Shelly is right (to impose an estate tax).

Columnist in one of New York's Poorest Counties Sees the Estate Tax as a "Major Issue"

David Shulman — Thu, 15 Mar 2012 09:33:27 -0500

Hi Y'all. I'm back. Sorry for the big break in posting. I'll try to do better.

In this election year, I haven't heard that much talk about the estate tax - or as the Republicans like to call it, the "Death Tax." As I've written about before, the estate tax is imposed upon your death on any property that you own over the lifetime exemption amount. That amount is currently $5,000,000 a person, or $10,000,000 a married couple. That means that unless a husband and wife have over ten million dollars in total assets, the estate tax will not apply to them. There will be no (federal) tax at all upon their deaths.

Which is why I found this column, "Estate tax is a major issue," in the Dunkirk, NY Observer so curious. After waxing philosophical about death and taxes, the columnist writes, "Of the political candidates currently running for president, besides the incumbent, there was only one candidate who spoke of removal or lessening of the estate tax. If this gentleman withdraws from the political race as a leader of the free world, so be it. If he "in for the long haul" as he says, he'll have my vote and I'll encourage all those who have a disability or know of someone who has a disabled family member to vote for this candidate."

I hadn't heard of Dunkirk, NY, but reading this column I assumed that it was a wealthy suburb of New York - somewhere where the 0.1% live. But according to Wikipedia, "The median income for a household in the city was $28,313, and the median income for a family was $35,058. Males had a median income of $29,462 versus $21,682 for females. The per capita income for the city was $15,482. About 18.5% of families and 22.3% of the population were below the poverty line, including 38.0% of those under age 18 and 11.1% of those age 65 or over."

I doubt there is a single person in the city who would be subject to the federal estate tax. I doubt the letter writer even knows anyone who would be subject to it. And yet, it's a "major issue."

I find the politics of the estate tax odd. It's interesting how the rich segment of the Republicans have convinced the poor segment of the Republicans that the "death tax" is something that they should be concerned about, as much as they should about the economy, and jobs, and social services, and national security.

If you're interested in reading more about this political battle, I recommend you read Death by A Thousand Cuts: The Fight over Taxing Inherited Wealth, by Michael Graetz.

Final (?) Update on Lottery Winners - I was right the first time

David Shulman — Mon, 12 Dec 2011 11:45:30 -0500

On November 29, I wrote a blog post about 3 Connecticut wealth managers winning $254 million in the Powerball lottery. At the time, I found it curious that all three of them were accepting the prize through a trust, known as the Putnam Avenue Family Trust.

I speculated that the "Putnam Avenue Family Trust is merely a temporary holding entity. After the trust collects the funds, it will then shortly thereafter distribute the shares among the three winners (or their newly formed legal entities)."

Then, responding to media speculation, I asked in a subsequent post whether or not they were using the trust to hide a fourth or real winner.

Now, it looks like I was right the first time.

In a New York Times Article titled, "It's Official: 3 Asset Managers Will Share Huge Jackpot," it is revealed that the beneficiary of the Putnam Avenue Family Trust "has been revealed as a second entity, called the Western Putnam Avenue Trust" and the "three men have stated in an affidavit that they are the only beneficiaries of that trust, which will receive all the assets held by the first trust when it expires on Nov. 22, 2012."

Their lawyer stated what I initially thought, that "his three clients were not hiding anything, and that the trust structure was intended for privacy and to give the trustees certain options for planning their estates."

No conspiracy, just smart planning.

Update: Connecticut Lottery Winners Give $1 Million to Veterans' Organizations

David Shulman — Sun, 04 Dec 2011 10:48:43 -0500

I have previously written about the already rich Connecticut money managers who won $254 Million in the Powerball Lottery, and joined in the speculation as to whether or not there was a hidden fourth winner.

I'm still not entirely sure as to why they chose to accept their winnings in a single trust, but I'm glad to see that they are starting to do some good.

According to the Wall Street Journal, they have given $1 million to various veterans' service organizations.

Update on the Lottery Winning Money Managers - Are They Hiding the Real Winner?

David Shulman — Wed, 30 Nov 2011 07:20:16 -0500

In my last post, I wrote about some very already rich bankers who won $254 Million in the Powerball Lottery. I expressed my confusion though, as to why three unrelated people were accepting their winnings in a single trust, instead of having the lottery split it for them. I hypothesized that the Putnam Family Trust was only a temporary holding entity, that would then subdivide the proceeds among entities of the three families.

Now, the Daily Mail, a British tabloid, has another theory.

In an article titled, Could they lose the fortune? Rich bankers who 'posed as a front for mystery client' could forfeit $254m Powerball jackpot, the Daily Mail alleges that the three bankers were not the real winers, and that they were collecting it for one of their clients who wanted to avoid the publicity.

Stay tuned.

Some Guys Have All the Luck: Greenwich Wealth Managers Win $254 Million Powerball Lottery

David Shulman — Tue, 29 Nov 2011 11:49:12 -0500

I saw this story this morning that made me shake my head in wonder, and in a little bit of jealousy. Apparently, three money managers from Greenwich, Connecticut won $254 million in the Powerball lottery. If you don't know, Greenwich is a New York City suburb and one of the richest in the country. Apparently, the three money managers are the founder and employees at an $82 million wealth management firm. So these aren't the typical lottery winners - a 63 year old married couple from Des Moines where he insists that he is not going to quit his job at the tractor factory.

According to the story, the winning numbers were drawn on November 2, but the three men didn't come forward until yesterday. Also, “the three men will accept an after-tax payment for their winnings of about $104 million and collect it through an entity that they formed called the Putnam Avenue Family Trust.”

The Putnam Avenue family trust? What the heck is that? And why did he wait so long to come forward?

Aha! An estate planning angle.

There are a number of reasons that lottery winners should elect to be paid through an entity such as an LLC or Partnership. Generally, instead of having one individual win the lottery, their entire family claims it through a partnership that they formed, with family members having varying interests in the entity. This allows for there to be lower income taxes, because each person gets to take advantage of their lower marginal rate first. Also, it can help effectuate estate planning by reducing the number of intergenerational transfers and locking up the assets in a creditor protected entity.

But there are a few things about this case that I don't know. It is a bit unusual to collect the winnings in a trust and not a limited partnership or limited liability company. A self-settled trust generally does not really provide any layer of asset protection. Furthermore, there are three separate families here. Why did all three of them have the funds distributed to one trust instead of dividing it equally between them beforehand? You would think that each person would want to have their own share for their family. Again, each of the three of them shouldn't have collected the money directly, but each through a family entity.

Here is what I suspect though, and it's actually pretty smart on their lawyer's part. I would guess that the Putnam Avenue Family Trust is merely a temporary holding entity. After the trust collects the funds, it will then shortly thereafter distribute the shares among the three winners (or their newly formed legal entities). What are the names of these new entities? Where were they formed? What do they provide? We don't know, and that's the point.

Smart planning.

Lucky bastards.

IRS Releases Publication 950: Introduction to Estate and Gift Taxes

David Shulman — Mon, 28 Nov 2011 12:57:36 -0500

The Internal Revenue Service released Publication 950: Introduction to Estate and Gift Taxes, which is fairly self-descriptive. It explains the basic estate and gift tax system, and provides the numbers of the annual exclusion, and estate and gift tax exemption for 2012.

The annual exclusion will remain at $13,000, but the lifetime exemption for estate taxes and gift taxes will increase from $5,000,000 to $5,1200,000.

Of course, no one knows what will happen when the exemptions are set to expire on December 31, 2012.

Publication 950: Introduction to Estate and Gift Taxes.

Why did Joe Paterno transfer his house to his wife for a $1?

David Shulman — Wed, 16 Nov 2011 09:52:36 -0500

According to the New York Times, "Joe Paterno transferred full ownership of his house to his wife, Sue, for $1 in July, less than four months before a sexual abuse scandal engulfed his Penn State football program and the university."

Why would he do that?

The short answer is I don't know. But it is fun to speculate.

Of course, I use the word "fun" in the loosest possible terms. This is a horrible situation that is not fun for anyone.

As we all know, there is currently a "child sex abuse" (really, child rape) scandal engulfing Penn State University. I will let the criminal law bloggers talk about the crimes that Sandusky will be accused of, and the possible criminal liability of other parties involved. Then I will let the civil litigation bloggers, the education law bloggers, and the insurance bloggers talk about the potential civil liability of Joe Paterno, and the university itself.

Me? I am a tax and trust estate blogger (at least sometimes) so I will talk about that issue.

There are a few possible reasons why Joe Paterno would transfer his house to his wife. The first, is "asset protection." The second is "elder law" or "Medicaid" planning. The third is more general estate planning and tax planning. I will take each in turn.

First, a caveat. Many of these issues are specific to state law. I am not a Pennsylvania attorney. It is possible that there are unique Pennsylvania related issues that I will completely get wrong. If so, please feel free to correct me.

The article states, "Two lawyers examined the available documents in recent days. Neither wanted to be identified because they were not directly involved in the case or the property transaction. One of the experts said it appeared to be an explicit effort to financially shield Joe Paterno. The other regarded the July transaction, at least on its face, as benign."

This kind of annoys me. If the New York Times has access to the documents, why not publish them, or link to them on its website so we can decide for ourselves? Reporters often get these issues wrong because they do not understand what they are seeing

The implication of the New York Times article is that Joe Paterno was concerned about being sued in the sex abuse scandal, and therefore is transferring his assets to his wife so that they will be protected from future creditors. Otherwise why would it even be a story?

As I have written in the past, in Florida, your house is your Homestead and is generally protected from creditors. If Joe Paterno lived in Florida, it would be very unlikely for his creditors to be able to attach the interest in this house. Furthermore, in Florida there is ownership as tenants by the entireties. Under tenancy by the entireties, if you own property with your spouse, it is not subject to attachment from the creditors of one spouse. It is only subject to attachment the creditors of both spouses. I am not a Pennsylvania lawyer. However, it appears as if Pennsylvania also has tenancy by the entirety protection. If that is so, then there would be no reason for Joe Paterno to transfer the house to his wife to protect it from creditors.

The second possible reason for Paterno to transfer the house away is for what is known as Medicaid planning. Basically there are certain circumstances in which one transfers assets away so that they will be eligible to apply for Medicaid in the future. However, the Paternos have far too much money and probably far too good insurance from the University for this to be a real possibility.

So let's talk about estate planning, and go back to the article.

The article states that "Documents filed in Centre County, Pa., show that on July 21, Paterno's house near campus was turned over to "Suzanne P. Paterno, trustee" for a dollar plus "love and affection." The key word is "trustee." The fact that it says trustee clearly shows that it was not just transferred to his wife, but to a trust in which she is the trustee. We have no idea what this trust says.

In all likelihood, it is just a revocable living trust. A revocable living trust can be used to avoid probate, because when you die, the trust owns the property and not you. Whether it is his revocable living trust, or his wife's is unclear. She can be the trustee of either, both, or neither. It's also possible that the transfer was to a special kind of tax planning trust called a QPRT, or qualified personal residence trust, which is used to transfer the house to younger generations for tax planning.

Unless I see the documents, I don't know. However, I do think it's far more likely that this was a routine estate or tax planning transaction, and has nothing to do with the ongoing scandal.

Florida Intestacy Law Changing On October 1, 2011 - Or, "Hey look, I drew a picture!"

David Shulman — Wed, 17 Aug 2011 18:32:14 -0500

Estate planning attorneys love to beat you over the head with the fact that you need a will. It's one of our favorite pastimes, after late night readings of the latest generation skipping transfer tax regulations.

But what happens if you die without a will? That is what's known as intestacy. If you die intestate, then the law governs how your property is distributed. This law is based upon your marital status and whether you have any descendants.

The law is also significantly changing on October 1, 2011. Under the new law, if the Decedent's descendants are all also descendants of the Decedent's surviving spouse, and the surviving spouse does not have any descendants who are not descendants of the decedent, then the surviving spouse receives the entire estate.

Perfectly clear, right?

Yeah, I know. Not so much.

In the past, I've written about Kelley's Homestead Paradigm, which takes Florida's notoriously complicated laws regarding the disposition of your home upon your death, and makes it understandable through an easy to follow chart. Inspired by Rohan Kelley's work, I decided to make a flow-chart showing how Florida's new intestacy law works.

It's not as fancy as Kelley's Paradigm. I always received bad grades in arts in crafts. But I think it does its job.

PDF Link here.

I Did a Webinar on Estate Planning for Digital Assets and Online Accounts

David Shulman — Wed, 27 Jul 2011 14:23:25 -0500

Today (July 27, 2011), I was part of a panel that presented an online webinar, "Estate Planning for Digital Assets and Online Financial Accounts." The materials can be downloaded for free from here.

Probate, the Rapture, and You

David Shulman — Mon, 23 May 2011 13:43:29 -0500

So May 21, 2011 came and went, and despite the prediction of Harold Camping, we're still here. The Rapture will take place another day. For those who don't know, the Rapture is a belief among some, that all worthy Christians will suddenly disappear from earth and instantly join Jesus in heaven.

The Rapture will be followed by all sorts of bad things that will happen to those of us unfortunate enough to be "Left Behind" so to speak. Earthquakes, Disease, Famine, etc. You know, just your typical end of the world scenario.

If that isn't entirely accurate please don't write in to correct me. Give me a break. I'm Jewish, and it's close enough.

The point is that there is a belief that hundreds of thousands of people will suddenly disappear at some point. Vanish. Poof. And as a probate attorney, I have a responsibility to be prepared for such an event.

Let's assume that after the Rapture, newly sworn-in President Carrot Top keeps the country together and maintains our system of laws. There are a lot of people who have disappeared, and their estates need to be probated.

Probate is the process of administering a decedent's estate after their death. The Court appoints a Personal Representative (known in some places as an Executor) to gather the decedent's assets, ascertain and pay the decedent's creditors, and to determine the beneficiaries of the estate and distribute the remaining property to them.

There's only one problem.

Section 733.209 of the Florida Statutesprovides that that any interested person may petition to administer the estate of a missing person; however, no personal representative shall be appointed until the court determines the missing person is dead. Now I don't want to get into a discussion as to whether or not someone who was Raptured is actually dead or if they are still alive but living in some other plane of existence. Let's assume that for our earthly purposes, the raptured aren't merely pining for the fjords. They've literally joined the bleedin' choir invisible.

Ok, so how do we prove it? Remember, the Raptured disappeared, body and all. If there is no body how do we know that they died?

Although I'm joking about the rapture, there are all sorts of circumstances in which people just disappear. We think that they're probably dead, but we have no way to prove it. For example, a person who goes hiking in the woods, never comes back, and their body isn't found. Or someone who goes missing from a cruise ship.

Section 731.103 provides what evidence can be used to prove that a person died so that their state may be administered.

An authenticated copy of a death certificate issued by an official or agency of the place where the death purportedly occurred is prima facie proof of the fact, place, date, and time of death and the identity of the decedent. In other words, a "Death Certificate." However, I'm assuming that official death certificates will not be available for the Raptured.
A copy of any record or report of a governmental agency, domestic or foreign that a person is alive, missing, detained, or from the facts related presumed dead is prima facie evidence of the status and of the dates, circumstances, and places disclosed by the report. Again, this does not help us either.
A person who is absent from the place of his or her last known domicile for a continuous period of five years and whose absence is not satisfactorily explained after diligent search and inquiry is presumed to be dead …

So the general rule of § 733.103(3) is that you have to wait five years after your loved one is raptured (or has otherwise gone missing) before you can probate their estate. After that period of time an interested person can petition the court to have them declared dead.

Of course, five years is just the outside number. Under § 731.103(4), if you have direct or circumstantial evidence of the person's death prior to the expiration of the five year time period, then the court may have them declared dead earlier.

But the court has to be careful, or otherwise it will end up like the scene at the end of the Hobbit where Bilbo Baggins returns from his quest with Gandalf to find the town distributing his assets to those horrible Sackville–Bagginses.

Standing With My Fellow Legal Bloggers Against an Attempt to Chill Speech

David Shulman — Fri, 20 May 2011 14:20:52 -0500

My blog is usually about estate planning, probate, asset protection, taxes, and related matters.

Usually, but not always.

Today I'm going to venture a bit into free speech, defamation, criminal law, and ethics.

I've written about Legal Marketing and Ethics Before

Last fall I wrote a number of posts on the so called "Jewish American Bar Association". You can read the links in the previous sentence for more information (or the Sun Sentinel's article here), but, in summary, I saw a bench ad that I found deceptive and offensive, both as a Jew and as a lawyer. I did some research on the nature of the company, who its owners were, what type of entity it was, and, based upon the undisputed and incontrovertible facts, I expressed my opinion. I used words like "shockingly stupid," "anti-Semitic," and "deliberately misleading."

The bench ad was taken down, and the organization's website was changed.

The person behind the so called "Jewish American Bar Association" was very upset that I didn't contact her for a comment, that I was "mean," and that I didn't write about it from "both sides." She subsequently wrote an article about me entitled "Attacked by an internet Bully? What can you do? The writer's own story."

A few of my friends thought I was crazy. They asked me, "Aren't you afraid of getting sued?" My response was - for what? There is no basis for suing me. All of the facts that I wrote were true, and my opinions were just that -- my opinions.

Which brings us to the case of Joseph Rakofsky.

For those who think that the rest of the post is too long to read, I'll give you the Cliff's Notes:

The Washington Post reports that a Judge declared a mistrial in a murder case and questioned the young defense lawyer's (Rakofsky's) competency and ethics.
Lots of bloggers write about the story, do their own research, report their additional, facts and add their own opinions.
Rakofsky sues almost everyone who wrote about the case (link to original complaint).
After people write critically about the lawsuit, he sues even more people. (link to amended complaint).

I'll try to briefly recount the facts.

Recent Law Grad who has never tried a case, inappropriately takes on a first degree murder trial and shocks the Judge with his incompetence.

According to an April 1, 2011 story in the Washington Post, entitled "D.C. Superior Court judge declares mistrial over attorney's competence in murder case," Rakofsky, 33, a New Jersey attorney a few years out of law school, was hired to be the attorney for one Dontrell Deaner in a murder trial. The article reports that Judge Jackson told Rakofsky that the judge was "'astonished at [Rakofsky's] performance and at his 'not having a good grasp of legal procedures' before dismissing him." The article further states that Rakofsky told the jury during opening statements that he had never tried a case before.

If you're like me, and not an attorney that practices criminal law, you might not know (as I did not originally know) that a mistrial isn't good. In fact, it turns out that a mistrial is bad. A mistrial for a poor defendant in a murder case who was denied bail, means that the defendant will probably have to sit in jail for almost a year before the case is retried. In fact, in April, Deaner's new trial was set for January 23.

The article further reports that the Judge was angered that Rakofsky sent an email to his investigator to, "'trick' a government witness into testifying in court that she did not see his client at the murder scene." The article states that "the judge told Rakofsky that his performance in the trial was “below what any reasonable person would expect in a murder trial.

A subsequent article in the Washington Post reported that the defendant's grandmother paid Rakofsky $7,700, which was not refunded.

An article in the Washington City Paper states, "Some lawyers might be bummed to have their first trial, a murder trial, tossed out because of incompetence. Joseph Rakofsky isn't that kind of lawyer. He bragged about it on his Facebook page. "1st-Degree Murder...MISTRIAL!" he typed in his status update. Seven of his friends clicked "like."

The Blogosphere, especially the criminal law portion of it, (rightfully) goes into overdrive.

The story was then picked up by popular legal blog, Above the Law in a piece written by Elie Mystal, "Mistrial After Judge is Astonished by Touro Grad's Incompetence." (Full disclosure: Mystal also wrote a story for Above the Law about my posts on the Jewish American Bar Association, and I have corresponded with him before).

From there, the story exploded into the legal blogosphere, especially among those lawyers who write about criminal law, marketing, and ethics. Criminal defense attorneys were shocked that someone who has never tried a case would agree to take on a murder defense. I won't rehash it here as I am not a criminal defense attorney, but see:

My fellow Brandeis alum, Carolyn Elefant, who is not a criminal law attorney but writes a blog focuses on solo practitioners wrote "From tiny ethics mishaps, do major missteps grow?"

Much was written about how Rakofsky's website (now mostly scrubbed from the internet) was full of puffery and exaggerations about his (complete and total lack of) experience. For more on this, Texas attorney's Mark Bennett's post, The Object Lesson of Joseph Rakofsky. Bennett points out the Rakofsky's blog includes fake stock pictures of gray haired lawyers who aren't Rakofsky, and statements like "We, the lawyers at the Rakofsky Law Firm, are the only people who can protect you [i.e. a criminal defendant] in this way." (Emphasis added by me).

After a bevy of of posts in April, the issue died down, at least among bloggers.

That is, until Rakofsky sued "the internet."

Rakofsky sues the internet.

Around May 11, Rakofsky, a New Jersey-only attorney who botched a trial in Washington, DC, filed a defamation lawsuit in New York against 74 different parties, including the Washington Post, Above the Law, The American Bar Association, the above mentioned bloggers (and more), law firms, blogs themselves, and email addresses. The lawsuit (linked here) was dubbed "Rakofsky v. The Internet" by Scott Greenfield.

The rambling apologia accused the judge of "slander[ing] Rakofsky's knowledge of courtroom procedure." (Paragraph 110 of the original complaint). The complaint stated that Rakofsky did not know why the judge would do such a thing, but hypothesized that the judge's "anger may have been prompted by the diligence and zeal with which Rakofsky conducted his defense in the interest of the client as much as anything else, rather than any shortcoming in Rakofsky's knowledge of court procedure."

So Rakofsky's complaint stated that the judge didn't like him because Rakofsky tried too hard, much like New Gingrich cheated on his wife because he loved America too much, or Ike beat Tina because he loved her too much.

The complaint next spends the next 50 or so pages going through each and every person who ever wrote about the case, and repeats the same mantra, that each and every defendant maliciously defamed him by truthfully reporting that the Judge thought that Rakofsky was a schmendrick. Rakofsky's point seems to be that the judge didn't declare a mistrial because Rakofsky was incompetent, but that the judge allowed Rakofsky to voluntarily withdraw from the case for reasons that had nothing to do with Rakofsky's incompetence.

In addition to asking for money, what the lawsuit really wanted was to "permanently restrain[] [the] defendants from publishing the name, portrait, or picture of plaintiff without her [sic] consent." In other words, Rakofsky wants the court to fix the internet so that when people search for him, there aren't a whole bunch of posts about him acting like a schmenrick.

The internet strikes back (and Rakofsky acts like a bigger schmendrick).

While the "big boys" like the Washington Post and the ABA Journal have been publicly silent about the lawsuit, the bloggers who have been sued have not been. Additionally, bloggers who were not included in the initial lawsuit chimed in. Various people wrote about the jurisdictional problems with the lawsuit (suing in New York?), with the underlying legal problems, with Rakofsky's attorney's similar nonsensical and puffery filled website, and how this is going to do nothing to put him on the road to restoring his reputation.

Mark Bennett has been keeping a compendium of the posts in response. Read them. They're good.

Instead of taking this universal criticism to heart and withdrawing his lawsuit, Rakofsky doubled down. He amended his complaint and sued some of the people who commented on the lawsuit (along with adding fodder from some of the original defendants), including a claim of "intentional infliction of emotional harm." The amended complaint is here.

Why I decided to chime in and pile on.

Up until now, I had refrained from writing about the case on my blog. First, I am not a criminal defense lawyer, and so writing about someone else's incompetence in that area is not something that I feel comfortable doing. Of course, I do not and will not hesitate to write about lawyers and non-lawyers incompetently engaging in estate planning. But I left the criminal law issues to the experts.

Then when the lawsuit was filed, I thought about writing about it, but I didn't have anything new or different to say about this that hasn't already been said by multiple people who know a lot more than I do. Also, I wondered if it felt like unnecessarily "piling on."

However, the amended complaint sues bloggers for criticizing a publicly filed lawsuit, demanding that their posts be taken down, and claiming that the posts were written "to cause Rakofsky to suffer sever and debilitating emotional injury and anguish, thereby making [the defendants] actors in the intentional infliction of emotional distress on Rakofsky."

In America. A lawyer (represented by another lawyer) sued other lawyers for writing articles criticizing the merits of a lawsuit?

Well as the poet and theologian Martin Niemoller might have written, "First they came for the criminal law bloggers, and I didn't speak out because I was not a criminal law blogger."

Or as an equally important 20th century philosopher said, "That's all I can stands, and I can't stand no more!"

Again, I'm only a probate and tax attorney and not a civil, first amendment, or criminal attorney. But I did go to law school and I did pass the bar. I'm also an American. Rakofsky can't keep adding as a defendant everyone who criticizes his ridiculous behavior and his frivolous lawsuit.

Otherwise, he actually will sue the entire internet.

But let me take a different tack.

Joey, bubbeleh. I know you're angry. I know you think that your career and your life are over.

They're not.

F. Scott Fitzgerald was wrong when he wrote that "there are no second acts in American Lives."

You certainly could have recovered after the initial criminal case with a sincere showing of contrition and a desire to learn and become a good attorney. Had you not filed the lawsuit, the criminal defense attorneys who most harshly criticized you are the same ones who would have been willing to offer you free advice and guidance on how to grow into the profession.

It's still not too late for you. You can fix this. Find an adult, a real adult who will give you the advice that you need to hear. Drop this ridiculous lawsuit. Disappear. Go work on a kibbutz for a year or two. Come back a new man.

Stop being a schmendrick.

Start being a mensch.

Listen to my interview on the Rocketlawyer Podcast

David Shulman — Sat, 09 Apr 2011 08:45:10 -0500

This past Friday I was interviewed on the Rocketlawyer podcast, in which I discussed estate planning, asset protection, probate, real estate, and the rules regarding Florida Homestead.

The link to a summary of the episode is here.

If you want to download the MP3 directly, click here or pick it up through iTunes here.

The whole podcast is interesting to listen to, but I come on at about the 9:00 mark.

Let me know what you think.

I've Been Voted one of the Top 25 Estate, Probate and Elder Law Blogs

David Shulman — Fri, 01 Apr 2011 20:25:54 -0500

About a month ago, I wrote that I was nominated by LexisNexis to be one of the Top 25 Estate, Probate, and Elder Law Blogs.

Well, I'm pleased to announce that with your support, I've won, and have been named one of the top 25 Estate Planning Blogs.

Now from the Top 25, the voting for #1 starts, with the winner announced on April 20. The voting page is here. I am humbled and honored to be in such company. I don't expect to win #1, and to be honest, I don't think I should.

The #1 Estate Planning blog is and continues to be Texas Tech Univ. School of Law Professor Gerry Beyer's "Wills, Trusts & Estates Prof Blog." It is, and continues to be, essential reading for anyone in the profession. It's who I'm voting for.

However, if I could have a second vote, I think special honorable mention should be given to Hani Sarji's Estate of Confusion blog, which charts the legislation and developments regarding the estate tax. Hani is a LLM student at NYU whose blog came out of nowhere, and was so good, and so thorough, that it was picked up by Forbes magazine.

If you're interested in estate planning and taxes, you should read both of them (and of course, me too!).

Sun Sentinel: Legal Battle Begins Over Radio Personality Neil Rogers's Estate

David Shulman — Thu, 24 Mar 2011 06:00:54 -0500

The South Florida Sun-Sentinel has a story today about the coming battle over local radio personality Neil Rogers's estate. According to the story, there are two competing wills filed in the probate case, and there are questions whether or not Rogers had testamentary capacity when he signed the second one.

This case is just beginning, so it will be interesting to see how it turns out.

American Bar Association's Silly Study Discovers People Use Referrals, Not Blogs To Find Lawyers -- Also that the Sky is Blue

David Shulman — Wed, 23 Mar 2011 08:32:42 -0500

This morning, the ABA Journal has a story entitled, "How People Find Lawyers: Referrals Are Popular, Blogs Not So Much, Poll Finds."

According to the story, "When potential clients do turn to online resources, they are less likely to consult social media and blogs than innovative websites. The survey question was, 'if you needed a lawyer for a personal legal matter, how likely would you be to use the following resources to find one?' Fewer than 20 percent were very or somewhat likely to consult Facebook, compared to 15 percent who would consult blogs, and 9 percent who would look at Twitter."

Despite what so many social media snake-oil salesmen would tell you, most attorneys, especially those of us who blog (and are on Twitter) know this.

My issue with the ABA Journal's story, and the officially titled, "Perspectives on Finding Personal Legal Services, The Results of a Public Opinion Poll, American Bar Association, Standing Committee on the Delivery of Legal Services, February 2011" link to report here, are the questions they asked, which of course led to the not so surprising results.

The survey of more than 1,000 adults was conducted through land line telephones. The first question was, "If you needed a lawyer for a personal legal matter, what would be the primary way you would find one?"

Forty-six percent said that they would ask a friend, family member of colleague and 34% said that they would contact a lawyer that they know or have used before. Only 7% would search online. Because the question only asked for the "primary" way, it's not surprising that people, when looking for someone to handle their divorce, or to plan their estate, or to keep them out of jail, would ask for a recommendation from a trusted friend or family member before consulting what George W. Bush called "The Google."

Next, the survey asked, "If you needed a lawyer for a personal legal matter, how likely would you be to use the following resources to find one?:

The lawyer's website;
An online directory;
A website where you can ask lawyers legal questions;
A website where people post their problems and lawyers interested in representing them follow up;
A website that rates lawyers;
Blogs;
Social network sites such as Facebook
Twitter; and
Listservs

Here, people were not asked to identify as "primary" way with only one choice, but for each were asked how likely they were to use that particular source. None of the online sources fared very well, with fifteen percent of respondents very likely or somewhat likely to use blogs to find a lawyer.

You ask a stupid question, and you get a stupid answer. What does it mean to ask people if they would use a blog as a resource to find a lawyer? Are there blogs out there about finding lawyers? Are there blogs that provide various information about specific lawyers and how one would go about finding one? I wouldn't be surprised if there were, but I'm sure they are all nonsense.

The question and answer completely miss the entire point of what attorney blogging is about. The main reason that I blog is that I enjoy writing. If you don't enjoy writing, you shouldn't have a blog.

But do I blog to market my practice? Of course I do. I don't write some of the lame articles that end with "If you need an attorney call me," but I do want people to see that I know what I'm talking about, that I'm smart and hard working, and hopefully, based upon my writing, they'd either consider hiring me, or refer me to someone else. My blog is my website, and I'll sometimes answer people's legal questions too. I think that's a lot different than asking people if they would use "blogs" as a "resource to find a lawyer for a personal matter."

Finally, the whole poll is flawed and skewed because the sample selection. They asked 1,000 adults with landline telephones what they thought of the big scary internet. Of course they are going to find serious skepticism and fear. I haven't had a landline telephone in years, and many people I know don't have one either. I'm sure if they conducted an online poll, the overall results would be quite different.

Anyway, I'm going to keep on blogging because, again, I enjoy writing. And if I get a client or two out of it, so much the better.