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A recent Kiplinger article asks: “Is Your Beneficiary Ready to Receive Money?” In fact, not everyone will be mentally or emotionally prepared for the money you wish to leave them. Are your beneficiaries ready to handle an inheritance? Here are some things to consider:
The Beneficiary’s Age. Children under 18 years old cannot sign legal contracts. Without some planning, the court will take custody of the funds on the child’s behalf. This could occur via custody accounts or guardianships. If this happens, there’s little control over how the money will be used. The guardianship will usually end and the funds will be paid to the child when they become a legal adult. Giving significant financial resources to a young adult who’s not ready to handle an inheritance often ends in disaster. Consider working with an estate planning attorney to avoid this result.
The Beneficiary’s Lifestyle. There are many other circumstances which you need to consider when creating your estate plan. These include planning for a beneficiary who:
Has a substance abuse or gambling problem;
Winds up in an abusive relationship;
Is going through a divorce;
Has a disability; or
Who’s unable to manage assets.
All of these issues can be addressed with the aid of an estate planning attorney. A trust can be created to make certain that minors (and adults who just may not be ready) don’t get money too soon, while also making sure funds are available to help with school, health care, and life expenses.
Who Will Manage the Trust? Every trust must have a trustee. Find a person who is willing to do the work. You can also engage a professional trust company for larger trusts. The trustee will distribute funds according to the instructions you specify in your trust document. You can even add conditions to your bequests; these conditions could include getting an education, or using the money for a home or for substance abuse rehab.
Estate Plan Review. Review your estate plan after major life events or every few years. Talk to a qualified estate planning attorney to make the process easier and to be certain that your money goes to the right people at the right time – when they’re ready to handle an inheritance.
People who have loved ones with special needs have heard horror stories about a well-meaning grandparent who left a modest inheritance to a disabled grandchild. The grandchild promptly loses her government benefits and has to struggle to regain them again once the money runs out. The disabled person didn’t really benefit – she ended up in the same near-poverty situation she was in before the gift.
Or, what about the loving single father who intentionally disinherits his disabled son to preserve his benefits – leaving everything to his daughter who promises to care for her brother. Two years after Dad dies, daughter has spent most of “her” inheritance. In many cases, a special needs trust could have prevent these types of scenarios.
What is a special needs trust?
A special needs or supplemental needs trust (SNT) is a legal document that allows a trusted individual or institution to distribute the trust’s funds in a way that improves and enhances the life of a special needs individual while preserving eligibility for means-tested government programs, such as SSI and Medicaid.
Why would I consider creating an SNT?
A disabled person might receive money from an inheritance or a personal injury award, and may need help managing that money. Or he could be disqualified from receiving certain means-tested government benefits because of the windfall. Or a family member may want to help a disabled person now, but doesn’t want to run afoul of government rules. A properly drafted SNT can help in these situations.
I’ve heard people talk about self-settled SNTs, first-party SNTs, and third-party SNTs. What are those?
A self-settled SNT and a first-party SNT are different terms for the same thing. I prefer the term “first-party SNT.” A first-party SNT is funded with the disabled person’s own money and can be created by the disabled person himself or by somebody else on behalf of the disabled person. A first-party SNT must be created before the disabled beneficiary turns age 65 and must be irrevocable (cannot be changed). Also, any assets remaining in a first-party SNT at death must be used to reimburse Medicaid.
A third-party SNT is funded with other people’s money. The money might belong to a parent, grandparent, friends, or even a stranger. A third-party SNT can be set up even if the disabled person is over age 65, and can be revocable or irrevocable. When the disabled person dies, there is no Medicaid payback requirement – the money can go to any beneficiaries the trust creator named in the trust document.
Okay. So what is a pooled trust?
Many people prefer to have a lawyer create a SNT specifically for their own family situation. But lawyers aren’t inexpensive, and sometimes the amount of the funds potentially being put into the trust may not seem to justify the expense of a creating a customized SNT. Plus, then the trustee has to decide how to invest the money, how and when to distribute it, etc.
So some non-profit institutions came up with an easier and less expensive alternative to customized SNTs – a pooled SNT. Every person in the pool uses the exact same master SNT, so no custom trust needs to be created. This allows the institution to administer all the trusts efficiently. The institution then pools all the money for investment purposes (which keeps those costs low) but keeps separate accounting statements for each individual disabled beneficiary – kind of like how your employer handles your 401(k)!
Pooled SNTs are first-party trusts, but they can be created even if the beneficiary is over age 65. When the disabled beneficiary dies, the remaining funds will either remain in the pool to help other disabled beneficiaries or will be used to pay back Medicaid.
Who should be the trustee of a special needs trust?
In many cases, people creating SNTs name themselves or other family members as the trustees. Sometimes this is fine. Other times … not so much. The laws regarding means means-tested government programs are complex and ever-changing. Generally, it may be better to name a professional trustee – someone who has experience administering SNTs. Alternatively, naming a family member and a professional trustee as co-trustees may provide the best of both worlds: The professional trustee can handle the administrative details while the family member provides the personal care and compassion.
So if a grandparent leaves money directly to her disabled grandchild in her Will, what happens?
If the Will named the disabled grandchild individually and did not name that disabled person’s SNT, then the only way to protect the disabled person would be to set up a first-party SNT – which would be subject to the Medicaid payback requirement. It has to be a first-party SNT rather than a third-party SNT because the grandparent left it to the child directly. If the grandparent named the actual SNT instead, the money could have been deposited directly to a third-party SNT – which would have no Medicaid pay back requirement.
So, how do I create a special needs trust for a disabled loved one?
Just sit down with an estate planning or elder law attorney. Make sure to bring all necessary documents such as any existing state planning documents, guardianship documents, and proof of where the disabled person’s income is coming from. Together, you’ll craft a plan that’s just right for you.
“I want to disinherit a child.” Disinheriting family members – especially children – comes up in estate planning conversations more often than you might think. There can be many reasons for doing so, and, ultimately, it’s your money and you have the right to do what you want with it…sort of.
Disinheriting a spouse
Florida won’t allow you to completely disinherit your spouse. Our state made a public policy decision long ago not to support a surviving spouse or minor children with taxpayer dollars just because the deceased spouse didn’t want to – or didn’t take the proper steps to ensure their financial security. So, if you’re married and you don’t leave your spouse at least 30% of everything you own in your Will or Trust, the court will step in give your spouse at least 30%.
If you die without a Will or Trust, your spouse will automatically receive either 50% or 100%, depending on whether either of you have children from other marriages. If you try to leave your Florida homestead (held in your individual name or in the name of your revocable living trust) to anyone except your spouse, that produces an even harsher result because you violated a Florida law.
The only way to disinherit a spouse completely in Florida is to execute a valid prenuptial or postnuptial agreement where you both give up all your spousal rights under Florida law.
Disinheriting a child
Under Florida law, a parent has no legal obligation to leave anything to an adult child. But you’d have to execute a Will or Trust actually disinherit a child. If you die without a Will or Trust, then Florida law kicks in and all of your natural and adopted children will be entitled to a share of your estate.
As I mentioned earlier, Florida won’t let you leave your minor children homeless. If you die with your homestead held in your individual name, your minor children and/or their mother could end up owning your home despite your wishes.
Myths about disinheriting family members
I can’t tell you how many times I’ve heard “I want to disinherit my child, so let’s just leave him $1 so he can’t contest the Will.” Nope. It doesn’t work like that in Florida. Anyone can contest a Will if they’re not happy with their inheritance, as long as they can find a lawyer willing to take the case.
Another one I’ve heard: “I want to disinherit Child X, so don’t even put his name in my Will.” Wrong. If you don’t acknowledge the existence of a child, he can contest the Will by claiming the omission was a mistake.
If you want to disinherit a child, you need to make your intention very clear. The best way to do that is to name the child in your Will or Trust and state in that document that you are specifically disinheriting that person (and her descendants, if that’s the case). You can state the reason if you wish, but it’s generally not necessary unless the disinheritance was really out of the blue and the child won’t have a clue as to why she was disinherited.
And finally, some people still think that the only way to make sure a disabled child or sibling can continue to qualify for much-needed government benefits is to disinherit that person. To keep them in poverty. That may have been the case decades ago, but today we can create Supplemental Needs Trusts (also known as Special Needs Trusts) that will allow a disabled person to continue to receive needed benefits while enjoying a somewhat better standard of living.
Creating an estate plan that actually works takes some thought, time, and knowledge of the laws.
“Can I keep my guns if I have a medical marijuana card in Florida?” “Can I get or keep a Florida concealed carry license if I have a medical marijuana card?”
I’ve been getting these questions a lot lately. There seems to be an inclination for people to try to find some wiggle room in the laws… “But, medical marijuana (MMJ) is legal in Florida,” or “But, if my neighbor can use opioids and have a gun, why can’t someone who is prescribed medical marijuana have a gun?” or, my favorite, “But what if no one finds out?”
That’s the sound of my eyes rolling.
The law about any kind of marijuana and firearms is cut and dried. There is no wiggle room. If you use medicinal or recreational marijuana, you cannot legally possess, buy or use firearms or ammunition. Period. End of discussion. It’s a choice you have to make – pot or guns. You can’t legally have both.
State laws don’t matter much when it comes to firearms; the federal laws preempt them, and the federal laws make all marijuana an illegal Schedule 1 drug. Doctors can’t prescribe Schedule 1 drugs and keep their DEA licenses. (The states got around that by having doctors merely “recommend” MMJ). And federal laws prohibit users of illegal drugs from buying or possessing firearms.
The ATF sent a letter to all federally-licensed firearms dealers back in 2011 making it very clear that anyone using (or reasonably believed to be using) marijuana – even if their state “legalized” it – isprohibited from “shipping, transporting, receiving, or possessing firearms or ammunition.” The ATF has not changed its stance since that time. And there’s a legal presumption under current federal law that a state medical marijuana card holder is an illegal marijuana user for the purposes of firearms possession, purchase, etc. (see Wilson v. Lynch).
Of course, I hear people say all the time, “It’s only illegal if I get caught.” Well, yeah. That’s true of all laws. We weigh the costs and benefits of complying with laws every day. We may choose to speed because when we weigh the chance of getting caught and the potential cost of a $100 ticket versus the endorphin rush, we’re willing to take the risk. But fooling around with federal firearms laws isn’t like gambling against getting a $100 ticket – if you get caught it can result in felonies, large fines, and federal prison time.
If you own guns and are considering getting a medical marijuana card (or already have one), and you have any concerns about breaking laws, you need to get rid of them. Sell them. Give them away to your spouse, your adult children, your friends and family. You don’t necessarily have to go to an FFL – private gifts and transfers are legal in Florida (as of today). But I’d recommend that you have some sort of proof that you don’t own them – even a handwritten, signed bill of sale.
If you have a good gun trust, you could resign as trustee and physically transfer all your guns to your successor trustee. While you cannot possess or use those guns as long as you have a MMJ card, at least your family can still use and inherit them (see a gun trust lawyer to ensure it’s done properly).
Currently, we don’t have gun or MMJ registration lists in FL, but as our state becomes bluer, that could change. Hawaii had a big problem when they cross-referenced their MMJ list against their gun registration list and demanded that MMJ users give up their guns. The uproar made them back off – no government agency was willing to go door-to-door to confiscate guns. But now, with a definite trend toward anti-gun political policies and a proliferation of so-called “red flag” laws, we’re getting closer and closer to government confiscation for “safety” reasons. And, as any first-year law student could tell you, safety is whatever the government says it is.
As for the Florida concealed carry license, some people (including myself) have pointed out that the application never specifically asks about medical marijuana use. Even the Possible Reasons for Ineligibility section of the Dept. of Agriculture’s website says nothing about marijuana use of any kind. Both are careless oversights that could easily be corrected. But if you read the website and application carefully, you’ll notice several disclaimers that indicate that you’re responsible for reading and complying with Fla. Stat. 790.06. Fla. Stat. 790.06(2)(n) essentially says “Hey, in addition to this really long list of reasons why you wouldn’t qualify for a Florida concealed carry license, you also can’t be prohibited from buying or possessing a firearm under any other Florida or federal law.” Oops. As you know, ignorance of the law is no excuse. Carelessness on the part of the Dept. Of Agriculture is also no excuse. If you use any marijuana or have a MMJ card (remember the ATF letter and the court’s “presumption” ruling), you can’t legally obtain or keep a FL concealed carry license because you’re breaking federal firearms laws.
And don’t rely on the people in the MMJ dispensaries, on the MMJ blogs and websites, or the MMJ doctors to provide accurate legal advice regarding firearms law. They have a financial agenda and they aren’t lawyers. One local doctor has been known to tell people that as long as a patient gets his concealed carry license before he gets his MMJ card, he can legally keep his guns and concealed carry license. Um, no.
Naturally, the most common question I get after I explain the current state of firearms and MMJ laws, is “How will they catch me?” I don’t know. Maybe you won’t ever get caught. Maybe a vindictive ex or neighbor will rat you out. Maybe you’ll get pulled over for something and a drug dog will find a trace in the car where your gun is. How do the police and FBI catch people all the time? If that’s a risk you’re willing to take, I know a good criminal defense attorney you can call from jail.
Nearly everyone I talk to about MMJ and firearms laws asks me what I think about these laws: “Aren’t they stupid?” “Don’t you think they should be changed?” While that’s a fun exercise for personal conversations, what I think has no bearing on the laws. As a lawyer, my job is to educate people about the laws as they currently stand.
I realize the Constitution has been warped almost beyond recognition, but as of today, it mandates that the only way to change these laws is at the federal level. Either marijuana would have to be removed from Schedule 1, or the federal gun laws would have to provide an exemption for marijuana users. I don’t see either happening any time soon. There’s no indication that Congress feels any urgency to change the classification of marijuana. They know the media will portray them as advocating that “potheads” be legally allowed to use evil, “child-killing” guns. Those optics aren’t something on which most politicians are willing to risk their careers. But, as always, if it’s important to you that certain laws change, let your representatives know your thoughts and reasoning, and use your money and your vote carefully.
So, the short answer to “Can I keep my guns and Florida concealed carry license if I have a medical marijuana card?” is… no, not legally.
making sure your surviving spouse has sufficient money to live on while protecting the inheritance of your children from a previous marriage,
protecting your children from losing their inheritance to creditors or divorcing spouses, and
keeping the government’s nose out of your private business.
But the document you signed in your lawyer’s office does nothing all by itself; you have to do a little bit of work to make sure your assets will actually be controlled by the terms of your trust. We in the estate planning business call that “funding” your trust.
When you executed your trust, you essentially created a lovely, expensive box. The box is magical, but completely empty.
So you have to pick up all the assets you have laying around in your individual name (such as real estate, bank accounts, investment accounts, oil & mineral interests, savings bonds, etc.) and put them into your magical trust box. Once those assets are in your trust box, they transform from unruly individually-owned assets that want to wreak havoc on your estate plan into well-behaved trust assets that will avoid probate and do exactly what you told them to do in your trust document.
So, how do you get those assets into your magical trust box? Generally, by doing a bunch of paperwork.
Funding your trust means that new deeds will need to be executed transferring your real estate and oil & mineral interests into your trust. Banks and investment firms will need a copy of your trust and additional paperwork to change the ownership on your accounts. In some cases, you might get new account numbers. Annoying, I know.
Sometimes a bank or credit union won’t allow you to put your account into your magical trust box and you may have to move your account elsewhere. Your HOA or condo association may require that you get its approval before transferring your deed into your magical trust box. And some county property tax appraisers require you to complete their form when you transfer the ownership of your property into to your trust.
So, it takes a little bit of work to corral those rowdy assets, but it’s much easier for you to do it now than it is for your loved ones to do it later.
On July 13, 2016, the ATF changed the Rules that had been in place for decades regarding the transfers of NFA/Title II weapons. The new Rules eliminated the requirement that a chief law enforcement officer (CLEO) sign off on an individual’s ATF application before it could be submitted to the ATF. Many people saw that as a win, as it makes it much easier to buy or sell NFA weapons without a gun trust. But things aren’t always as cut and dried as they seem.
NFA and gun trusts before July 13, 2016
Since most CLEOs in Florida wouldn’t sign off on the ATF application, individuals who wished to transfer an NFA weapon created gun trusts to legally bypass that requirement. While using a gun trust expedited the transfer of NFA weapons, it didn’t allow prohibited persons to access such weapons since NICS instant background checks were still done before the weapon left the dealer’s store. Also, the trustee was legally responsible for making sure all persons associated with the trust (grantor, trustees, beneficiaries) were not prohibited by federal or state laws from possessing firearms.
NFA and gun trusts now
Today, an individual can transfer an NFA weapon by completing the ATF application, submitting a copy by mail to her CLEO (although Florida has a law prohibiting government officials from creating lists of any sort pertaining to gun ownership), and then submitting the ATF application, fingerprint cards, and a passport photo to the ATF.
A trustee of a gun trust must complete the ATF application, but will also need to have every “Responsible Person” associated with the trust complete a new ATF form. The trustee must submit a copy of all the ATF forms by mail to her CLEO, and then submit a copy of the entire gun trust, all that ATF paperwork, PLUS fingerprint cards and passport photos for every Responsible Person to the ATF.
Whoa! That’s potentially a lot of paperwork, time, and money.
Why a gun trust is still valuable
So, you’re probably thinking, “Hell, it’ll be easier to just buy a suppressor as an individual. Forget the trust.” Yes, in some cases, it may be appropriate. If you can say “yes” toevery one of the following, you may want to buy, sell, or manufacture as an individual:
I would never allow my spouse, a friend or other family member to use my suppressor or other NFA weapon without me being right next to them (illegal possession = felony).
No one except me has access to the gun safe where I store the NFA weapons I own as an individual – that includes my spouse and adult children (illegal constructive possession = felony).
My spouse or significant live-in other will never need to use my suppressed weapon for self-defense when I’m not home (illegal possession = felony).
I have a current, valid Durable Power of Attorney, and all of my named Agents can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know what to do with them if I become incapacitated (illegal possession= felony, contraband weapons confiscated by ATF).
Or, if I don’t have a current, valid Durable Power of Attorney, I understand that if I become incapacitated, someone will have to go to court ($$) to be named my guardian so my NFA weapons can be legally transferred or sold.
I have a current, valid Will, and all of my named Personal Representatives can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know how to legally transfer them when I die (illegal possession = felony, contraband weapons confiscated by ATF).
Or, if I don’t have a current, valid Will, I understand that a judge will name a Personal Representative to handle my estate, in accordance with Florida law: spouse, then children, then parents, then siblings, etc. All of these people can recognize which of my weapons are highly-regulated NFA weapons and which ones aren’t, and will know how to legally transfer them when I die (illegal possession = felony, contraband weapons confiscated by ATF).
I am not a veteran, so there’s no chance that the VA could someday unilaterally decide that I’m not capable of handling my finances and assign me VA Fiduciary (automatic addition to NICS database as a mental defective = prohibited person = illegal possession = felony; contraband weapons confiscated by ATF).
I will not use medical marijuana as long as it’s federally regulated under the Controlled Substances Act (illegal drug use = prohibited person = illegal possession = felony; contraband weapons confiscated by ATF).
I understand that any NFA weapons I own as an individual will be subject to probate ($$), and will be distributed under the terms of my valid Will, or, if I have no valid Will, per Florida law.
I have no concerns about privacy when I die. I understand that my Will – which may designate who will receive certain weapons – shall become a public court record and will be available to virtually anyone.
I have complete faith that the Supreme Court and politicians will continue to defend my constitutional right to own guns.
Okay, I threw that last one in there for fun – none of us believe that!
But if you can’t say “yes” to the other items on the list, consider speaking with a gun trust attorney. And if you currently have just a basic $100 NFA gun trust, consider upgrading it as it may not offer all the protection you need.
Gun trusts can be valuable estate planning tools, and there are ways a knowledgeable trust attorney can draft gun trusts to maximize sharing, privacy, and control while minimizing the onerous requirements of the new Rules. Gun trusts can include all your weapons or only your NFA weapons. They may help keep your guns in your family’s hands when things go terribly wrong for you (incapacity, legal problems, death, etc.). They can be revocable or irrevocable, depending on your situation. They can end at your death or continue for generations.
Your gun trust – just like the rest of your estate plan – should fit your particular needs just as your favorite holster fits your carry gun.
While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently used, which means the estate generally goes to the child when he reaches age 18. However, few teens can manage major property, such as a farm or a business, at that age. A trust can help, by directing that the property will be held for him by a trustee until a certain age, such as 25 or 30.
Probate is the default process for administering an estate after someone’s death. A Will or other documents are presented in court and a Personal Representative (Executor) is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.
Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. The person who owns the farm, business, home, or other assets, can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.
The title of the property is transferred to the trust. With a trust, it’s easier to avoid probate, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid guardianship. It can also help to decrease capital gains taxes, since the property transfers before their death.
If you have several children, but only a couple of them work with you on the farm or in your business, an attorney can help you decide how to divide your estate equitably.
Last night, while most of the media were sleeping, the ATF changed NFA rules that have been in force since 1934, and issued its final ruling on its proposal (41-P) to close the so-called “gun trust loophole.”
As originally proposed, the ATF would make transfers (purchases and sales) of National Firearms Act (NFA) weapons by trusts and corporations subject to the same archaic rules that burden individuals – namely CLEO certification, FBI fingerprints, and passport-type photos. Currently, the trustee or corporate officer preparing the paperwork and picking up the weapon is subject to a NICS background check – like any other gun buyer – and is held legally responsible under hefty federal penalties for ensuring that no prohibited person has access to the weapon.
I haven’t had time to digest the entire 240+ page ruling yet, but it appears the ATF backed away from requiring CLEO certification for trusts and corporations, and instead will require CLEO “notification” as well as fingerprints, photos, and NICS background check of all persons having control of the weapons. Generally, for trusts, that would be the trustees but may also include some beneficiaries.
This change will become effective in about 6 months.
As I currently understand it, if this ruling stands, neither individuals nor trusts will need CLEO certification (CLEO approval) before they can buy a suppressor or SBR. Instead, the CLEO must be “notified” that a transfer is taking place. And, it appears that all trustees will have to submit fingerprints and photos, and be physically present for the NICS background check.
This appears to be an unconstitutional overreach by the Obama administration, and pro-Second Amendment legal organizations are already preparing for battle. Be sure to support them to preserve your rights.
I’ll be reviewing the ruling in more depth and consulting with other gun trust lawyers to see how this may play out with existing and new gun trusts and will keep you posted.