When it comes to planning for a dual residence client, many issues arise that are handled most effectively by an attorney knowledgeable of the legal particulars of both states. For instance, estate planning documents prepared for the dual-residence client must address issues indigenous to both jurisdictions. Elder Law's Member Howard S. Krooks, CELA, CAP, utilizes his elder law, special needs, and estate planning experience in New York and Florida when preparing these documents to suggest the most appropriate plan for the dual-residence client.
Often, snowbirds are not sure whether to plan for governmental benefits eligibility in New York or Florida. Howard's dual-state planning provides dual-residence clients access to all the information needed to make an informed decision as to which of the states will offer greater services and planning opportunities.
It is no surprise that many people choose to move from their long-time home in New York to the warmth and sunshine of Florida in their later years. For those placed under guardianship, additional issues arise that are not encountered by people who retain their independence when it comes to the relocation process. These wards, with their guardians, must transfer their guardianship appointment from one state to another, which can ultimately delay, or in some cases, thwart the ward’s ability to move altogether. While many states are moving toward a uniform system to allow for a quick and simple guardianship transfer, Florida is not one of those states.
A person placed under New York guardianship may only gain control over New York real property, requiring the appointment of an additional guardian to attend to any Florida real property the individual may own. Fortunately, we at Elder Law are well-versed in New York and Florida guardianship requirements and are ready, willing, and able to assist you and your clients. With Howard S. Krooks, CELA, CAP, admitted to both bars and actively practicing in both New York and Florida, no one else understands more than us the most effective way to assist you with a variety of foreign guardianship concerns.
In certain circumstances, residents and non-residents alike may serve as guardians in the state of Florida. Much like the requirements to serve as a Personal Representative, Florida residents must only be 18 years of age or older to qualify to act as a guardian, while non-residents must also be an acceptable non-resident family member of the ward in question. Certain otherwise eligible people may be disqualified due to felony convictions, incapacity, illness, or if the person has been found by the court to have committed specified acts that demonstrate an inability to act as a guardian. These restrictions also apply to out-of-state, or foreign, guardians. As such, even long-time guardians may find themselves suddenly disqualified and precluded from acting on behalf of their ward upon relocation to Florida. Once qualified to act as a guardian in Florida, individuals may be required by the court to receive education covering their duties and responsibilities, their ward’s rights, and the availability of resources. Additionally, every guardian, foreign or not, must have legal representation by an attorney admitted to practice in Florida. However, a guardian may represent himself/herself if the guardian is a Florida attorney. There are no obstacles precluding a foreign guardian bringing or defending any action in Florida on behalf of his/her ward.
Guardians of New York wards do not automatically obtain authority over their ward’s Florida property. If a foreign guardian wishes to manage the non-resident’s Florida property, not only must the foreign guardian be qualified to act in his or her role (see above), but he or she must file a petition with the Florida court to do so. The foreign guardian’s petition must include his or her appointment as the ward’s guardian, a description and estimated value of the property, and any indebtedness existing against the ward in Florida. The foreign guardian also must designate a resident agent and file an oath in accordance with the Florida Probate Rules, and file his or her New York Guardian Commission and security bond. The court will then determine whether this information is sufficient to guarantee faithful management of the ward’s Florida property. If the bond is determined insufficient, the court may require a new guardian’s bond in the amount it deems necessary.
If a New York guardian does not meet the Florida Guardianship requirements, or does not wish to manage out-of-state property, he or she may alternatively petition the Florida courts to appoint a Florida guardian of the New York ward’s Florida property. This petition also may be brought by the ward’s next of kin or a creditor of the ward, regardless of the existence of a foreign guardian. If said petition alleges a mental or physical incapacity, the court must be provided an authenticated copy of the incapacity adjudication as well as the name and address of any custodian of the ward and notice must be served upon the ward, his or her next of kin, and any legal custodian at least 20 days before the petition hearing. If the ward is temporarily residing in Florida, the ward has not been adjudicated incapacitated in New York, and the petition alleges incapacity, then the appointment of a Florida guardian of the ward’s Florida property will proceed as if the ward were a resident of the state.
What if the New York ward wanted to move to Florida? In order for this to occur, the New York Guardianship Court would need to issue an order approving the transfer of the ward. This transfer would require two separate and simultaneous proceedings. The process begins with the guardian’s petition to the New York court to allow the transfer to Florida. Upon provisionally granting the petition, the guardian must then petition the Florida court for a determination of incapacity and appointment of guardianship. Once the petition is granted by the Florida court, the New York court will grant a final order approving the transfer of the guardianship to Florida.
If you have questions about Florida or foreign guardianship, please don’t hesitate to contact us at (561) 750-3850.
The New York State Department of Health issued the following rates to be used for calculating penalty periods for uncompensated transfers by institutionalized individuals applying for Medicaid coverage on or after January 1, 2021, and for home care and community-based individuals who submit applications on or after April 1, 2021. Note: The rates have increased in all regions. This will result in shorter waiting periods for Medicaid eligibility.
The following are some examples of how to use these rates. If a New York City nursing home applicant gifted $130,037 in January 2021, he/she would be ineligible for Medicaid benefits for 10 months ($130,037/$13,037). If a Long Island home care applicant gifted $83,004 in July 2021, he/she would be ineligible for six months ($83,004/$13,834). The above assumes the recipient is not an exempt individual such as a spouse or disabled child. For nursing home applicants, the penalty period will not commence until the applicant is in a nursing home, has assets of no more than the allowable resource limit (plus other exempt assets), and has applied for nursing home benefits. Medicaid districts will use the rate for the region in which the facility is located.
For more information about the Medicaid Regional Rates for Calculating Transfer Penalty Periods for 2021, please download the recent memorandum from the New York Office of Health Insurance Programs here.
New York State recently announced new Medicaid income and resource levels for the new year, effective Jan. 1, 2021. In 2021, the monthly income limit increased to $884 per person (from $875 in 2020) and $1,300 per couple (from $1,284 in 2020).
Only certified blind and disabled people and people over age 65 have a resource test. Resources include cash or assets that can be converted to cash like bank accounts, life insurance policies, stocks, bonds, mutual funds, and promissory notes, as well as real property. The resource limit also increased in 2021 to $15,900 per person (from $15,750 in 2020) and $23,400 per couple (from $23,100 in 2020).
In 2021, the spouse of an institutionalized spouse is entitled to keep $3,259.50 of monthly income and $130,380 in non-exempt resources. The limit on a Medicaid recipient’s home equity is $906,000.
For more information about 2021 Medicaid levels and other updates, please download the recent memorandum from the New York Office of Health Insurance Programs here.
As you know, the New York-Florida connection is alive and well, and stronger than ever. With so many of your clients owning second homes/vacation homes in Florida, they likely come to you for their estate planning, elder law, and special needs planning solutions involving these properties. When it comes to preparing your client’s Florida deeds, you want to make sure you are considering everything that may affect your client and avoid exposing yourself to potential liability. Nobody understands that more than Elder Law, with Howard admitted to and actively practicing in both New York and Florida. Elder Law is here to help assist with New York/Florida planning issues, and to prepare your client’s Florida deeds; whether it involves transferring property into a revocable trust, an irrevocable trust, intra-family transfers, or the use of Florida-specific lady bird (also known as enhanced life estate) deeds.
We all know that a person can avoid probate through the use of a revocable trust. But Florida has specific rules for property being transferred into a revocable trust and one must be especially cautious when dealing with real property in Florida. If your clients seek homestead protection in Florida, then proper homestead language must be in the deed. In addition, existing mortgages on the property have an impact on how the Florida deed is prepared and the existence of a mortgage is likely to result in the payment of document stamp taxes in Florida. For these reasons, it is critically important that careful analysis be performed before a deed is signed transferring the property into a revocable trust. Elder Law is here to assist you and your client with all of these issues.
Many of your clients seek asset protection through the use of an irrevocable trust. All of the same issues described above apply to irrevocable trusts as well. You may be surprised that the homestead exemption may also be preserved in an irrevocable trust as long as the proper language is included in the trust. The language must satisfy Florida statutes and the Florida Constitution in order to fully protect homestead rights. When real property is transferred into an irrevocable trust, trust the attorneys at Elder Law to handle this all-important asset protection planning strategy. Your clients will thank you for preserving their home, and their Florida Homestead Exemption!
Sometimes your client may want to gift his/her interest in real property to a family member (i.e., addition of a new spouse to a deed, a transfer of an interest to a child or sibling, etc.), or she or he may require a transfer of property after dissolution of marriage. In such cases, a Florida deed is required to effectuate the transfer. We handle all types of intra-family transfers at Elder Law and we’d be happy to help your clients with this type of transfer.
Florida has a unique type of deed referred to as the “ladybird” deed. A ladybird deed, also known as an enhanced life estate deed, allows property to pass automatically to one or more designated recipients at the death of the grantor, eliminating the need for probate and the need for an estate or trust administration. In this deed, the grantor retains the right to sell, use, mortgage, and/or otherwise deal with the property during his/her lifetime, without the consent of the remaindermen (notice how this differs from a traditional life estate deed in New York, where the consent of the remainder persons is required before any transfer can occur). Upon the death of the grantor, the remainder persons simply file the grantor’s death certificate in the land records, allowing the property to be transferred to the remainder persons without the need for probate. The benefits of a ladybird deed are as follows:
New York attorneys should be aware that ladybird deeds are foreign to the New York Department of Social Services and will create problems for Medicaid eligibility in New York. Although created validly under Florida law, New York Medicaid will consider most properties conveyed by ladybird deed as an available resource.
When it comes to Florida real estate, one of the commonly known benefits is Florida’s Homestead Exemption (available for property used as one’s principal place of residence). If an individual owns Florida property and makes it his/her permanent residence (or the permanent residence of his/her dependent), then she or he may be eligible to receive a homestead tax exemption of up to $50,000 for property tax purposes. Further, having one’s property “homesteaded” exempts the property from levy and execution by judgment creditors. Exceptions to creditor protection include tax liens, mechanics’ liens associated with labor or materials to repair or improve the homestead property, and voluntary liens including mortgages and homeowners’ association liens.
The caveat to the Florida Homestead Exemption is that only a “natural person” qualifies for the protection; therefore, properties titled in the name of irrevocable trusts, corporations, limited liability companies or partnerships will not qualify unless certain language referenced above is included in the trust document or other legal document depending on the form of legal entity assuring that equitable title to the property remains with the individual/natural person. The same issue does not apply regarding properties owned by a revocable trust.
Finally, the “Save Our Homes” Amendment to the Florida Constitution provides that the assessed value of one’s homestead property cannot increase by more than 3% per year or the percent change in the Consumer Price Index, whichever is less. How does one qualify a property as “homestead” property in order to obtain all of the above benefits? The protections attach the day your client first occupies the property with the intent to make it his/her permanent Florida homestead. Co-ownership of the property may jeopardize the exemption if one of the co-owners does not reside on the property.
The Florida Homestead Exemption requires that an individual be a U.S. citizen or U.S. permanent resident, a Florida resident, does not have an exemption from any other state on another property, occupy his/her home on January 1, and files papers with the county tax assessor or property appraiser to claim homestead by March 1. Even a Snowbird who lives in his/her homestead property during the cold months and who heads up north during the warmer months could rent his/her home during those warmer months without losing the homestead exemption, provided that the property remains the primary residence of the individual.
Many people are aware of the importance of having up-to-date advance directives, such as a durable power of attorney, designation of health care surrogate and a living will. But what many do not know is that if a client has one of these documents prepared in one state, such as New York, a doctor or health care facility treating that client in another state, such as Florida, may not honor it. Rather, the doctor or health care facility may use its discretion in deciding whether to honor the document. Statutes regulating advance directives vary from state to state and the out-of-state form may not be familiar to that facility. As an attorney with experience and credentials in both Florida and New York, Howard advises his clients with dual residencies on the appropriate documents for both locales. Medicaid planning options also vary from state to state, particularly between Florida and New York. We will be happy to discuss the differences with you and will counsel your clients on the proper way forward when moving or residing in Florida.
For more information, contact us to make an appointment with Howard or one of our other attorneys today. At Elder Law, we give families (New York and Florida attorneys!) peace of mind.