The Durable Power of Attorney is traditionally one of the basic documents executed when undertaking your estate planning, creating a mechanism to handle your financial affairs prior to your death.  However, because of the broad powers granted in it, you should analyze the associated risks and benefits before signing one.  In some circumstances, you are better off without it.

First, what is a “power of attorney”?  Through a power of attorney, you designate the person or persons (your “agent”) who you are legally authorizing to handle your affairs.  The designation may be limited in duration or in scope.

By designating a power of attorney as “durable” (and incorporating the appropriate language), the authority will remain in place even if you become mentally incompetent.  Therein lies the value of this document in estate planning – it creates an easy means for someone to be appointed to manage your financial affairs should you become unable to do so.  For maximum usefulness, the durable power of attorney should have no limitations or restrictions thereby allowing your agent to handle whatever may arise, whether anticipated or not.

But such broad powers are susceptible to abuse by a designated agent.  Once you deliver a validly-executed Durable Power of Attorney to your agent, you run the risk that your agent may perform acts which you do not approve or which may not be to your benefit.  You may be able to recover any funds improperly spent by your agent.  However, you not only run the risk that your agent may be judgment-proof (e.g., has no collectable assets) but also incur the costs of attorney fees to collect such funds.

If you lose your mental competency prior to executing a durable power of attorney, a court-appointed guardianship may then be the only recourse available for someone looking to oversee your affairs.  A guardianship proceeding can be both costly and time-consuming in comparison to the execution of a durable power of attorney yet both achieve the same results.

A guardianship will also require that the court first declare that you are not mentally competent to handle your affairs – a declaration which can be an emotionally unbearable consequence for many families.

In most instances, the durable power of attorney will be your best option, but the risks should first be understood.  The estate planning attorneys of Bogin, Munns  Munns are glad to consult with you on this and other matters when arranging your estate planning.

John Wright is a corporate attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Wright works out of the Melbourne and Kissimmee offices of the firm and welcomes questions and comments regarding the above and can be reached at jwright@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

There are three common types of ownership for property owned by more than one person.

1.  Tenancy by the entireties:

Only a husband and wife can own property as tenants by the entireties.  If real property is owned by a husband and wife, there is a presumption of a tenancy by the entireties.  In this form of ownership, there is a right of survivorship – if one spouse dies, the other gets the entire property.  If it is your intent to establish a right of survivorship with your spouse, make sure that title to the property indicates the right of survivorship or designates you and your spouse as husband and wife.

2.  Tenants in common:

If title to the property specifically describes the parties as tenants in common or, if there is no express indication of a right of survivorship between two unmarried persons, there is a presumption that the property is owned amongst the parties as tenants in common.  In this ownership form, each tenant in common may freely transfer his or her interest and leaves his or her share of the property to his or her heirs or beneficiaries.

3.  Joint tenancy with right of survivorship:

Two or more unmarried persons.  The surviving persons will own all of the property upon the death of others.  If it is your intent to establish a joint tenancy with the right of survivorship, you should expressly indicate on title to the property the “right of survivorship”.

– Spencer R. Munns, Esq., is a shareholder Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at smunns@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

In most situations, unfortunately, yes.

Florida Courts, traditionally, have said that the owner of a motor vehicle is responsible for accidents and injuries caused by that vehicle, even when the vehicle is driven by a friend or family member. The courts have gone so far as to state that when a vehicle is used negligently, it becomes a “dangerous instrumentality” on the roadway.

For years, rental car companies were held to that standard, and they shared in the responsibility for accidents caused by vehicles that they owned. This changed dramatically on August 10, 2005, when a new federal highway improvement law was enacted (The Safe, Accountable, Flexible, Efficient Transportation Equity Act, 49 U.S.C. sec. 30106). This is a federal law, designed, in part, to improve roadways, which also included an amendment protecting rental car companies. The rental car companies were no longer responsible for damage done by their drivers, and lawsuits were not allowed against the companies.

Of course, there was an exception to this new rule, which is currently being litigated in courts across the country, including the Florida Supreme Court. The protection of these companies was limited in certain states;  in some states, you could continue to sue the company, and in others, you could not. In the first year following this new law, the Florida trial courts were divided on whether you could still sue a rental car company in our state. Some courts allowed lawsuits, some did not.

In law school, we learn that there are 2 sides to every argument. So, here is the reasoning behind the 2 sides of the argument. Those who support the federal law are concerned about holding the vehicle owner responsible, when it is an individual driver who caused the accident. In addition, they believe that the rental and leasing industry is important, and needs to be protected.

The side that opposes the federal law believes that it is an unfair stretch of federal power, and interferes with state laws and state rights. Traditionally, concepts like negligence and responsibility for accidents have been a part of the state law system. Also, this side believes that the victim of the accident needs to be protected, and preventing lawsuits against the owner of the vehicle could result in victims suffering significant medical expenses and pain and suffering, with no adequate remedy.

Currently, the application of this law is being challenged in the Vargas case (Rafael Vargas v. Enterprise Leasing Co., 993 So. 2d 614 (Fla. 4^th DCA  2008)) which was heard by the Florida Supreme Court on March 1, 2010. This case has already been presented to a trial court and an appellate court in Florida. Both courts have agreed with Enterprise, and ruled that a lawsuit against the company was not allowed.

Now, we wait and see what the Court has to say. Unless they decide to overrule the appellate court, rental car companies, not victims, will continue to be protected in Florida.

William Galione, Esq., is an experienced personal injury attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Galione works out of the Gainesville office of the firm and welcomes questions and comments regarding the above and can be reached at wgalione@boginmunns.com .

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

The residential leasing market has been dramatically changed due to the Great Recession that has given rise to new laws and regulations promulgated by the federal government.  Now more than ever, residential rental property managers need to be aware of these new laws and regulations to avoid unintended legal consequences for themselves and their clients.

The Fair Credit Report Act was amended to include new identity theft regulations.  Officially titled “Identity Theft Red Flags and Address Discrepancies Under the Fair and Accurate Credit Transactions Act of 2003” (the “Act”), this Act was created to detect, prevent, and mitigate identity theft for all users of credit and other consumer report information.  As this type of information is routinely used by residential property managers to verify the financial ability and background of a prospective tenant, the Act imposes certain requirements on residential property managers to detect, prevent, and mitigate “Red Flags”.  The Act defines a Red Flag as a “pattern, practice, or specific activity that indicates the possible existence of identity theft.”

The Act requires that the residential rental property manager have certain reasonable policies and procedures in situations where the residential rental property manager obtains a prospective tenant’s personal identifiable information from a credit or other consumer report.  These reasonable policies must include the ability to (a) identify relevant Red Flags that may occur when the residential rental property manager obtains the personal identifiable information from the prospective tenant, (b) detect any Red Flags upon review of the provided personal identifiable information from the prospective tenant, (c) appropriately respond to any detected Red Flags, and (d) update the policy to reflect changes in risks to the rental property owner and the residential rental property manager.  It is highly recommended that you document these policies and procedures in writing.

One of the more common Red Flags is an address discrepancy.  The residential rental property manager must have reasonable verification and fraud prevention policies in place to verify a prospective tenant’s identity when there is a discrepancy in the prospective tenant’s address.  In most circumstances, the Red Flag will occur when the residential rental property manager receives a Notice of Address Discrepancy from a consumer reporting agency.  This Notice informs the residential rental property manager that there is a discrepancy between the address found in the tenant’s credit report and the address listed on the rental application.  To comply with the Act, the residential rental property manager may (a) verify the information contained in the credit report directly with the prospective tenant, or (b) compare the information contained in the credit report with other information found in other reports or sources (e.g. drivers license).  The residential property manager, however, does not have a duty to report any discovered fraud.

Fortunately, the date for mandatory compliance for this Act has been extended until June 2010 by the Federal Trade Commission.  This enables the residential rental property manager to have sufficient time to retain the services of a real estate attorney to assist them with the development of these policies to ensure compliance with this Act.

– Henry M. Cooper, Esq., is a shareholder and handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

Q.         Are there any legal ramifications if my client is not a U.S. citizen and is selling his residential property located in Florida?

A.     Yes.  Your client may be subject to the Foreign Investor in Real Property Tax Act (FIRPTA).  FIRPTA requires that the buyer involved in your transaction withhold 10 percent of the “amount realized” by your client who is a “foreign person” in connection with the subject purchase and sale transaction.  The buyer or the agent is then required to remit the 10 percent withholding tax to the I.R.S. together with the required I.R.S. forms within 20 days of the closing.

Q.        My client is a non-U.S. citizen who is selling his residential property located in Florida.  He does not want 10 percent of his net sales proceeds withheld by the buyer.  Are there any exemptions to FIRPTA?

A.   Yes.  It is important that you discuss FIRPTA with your client early in the real estate transaction to enable your client to take advantage of some of the exemptions available to foreign persons under FIRPTA.  There are three common exemptions to the act.  First, if your client is not considered a “foreign person” under FIRPTA, he is exempted from compliance with its provisions.  Your client would have to furnish a non-foreign certificate stating that the he is not a foreign person as defined under FIRPTA because he is (1) a U.S. citizen, (2) a resident alien, or (3) a domestic corporation, partnership, trust or estate.  Second, your client would be exempt from FIRPTA if the buyer meets the residency requirement.  The withholding requirement is waived if the buyer is acquiring the property for use as a primary or secondary residence (not as an investment) and the amount realized is $300,000 or less.  The buyer will be required to sign a residency certificate at closing affirming the amount realized and that the buyer has definite plans to reside in the property for at least 50 percent of the number of days that the property is in use during the first two years from the closing date.  Third, although FIRPTA requires 10 percent to be withheld, the amount withheld cannot exceed your client’s maximum tax liability.  Accordingly, although not a complete exemption, your client may request the I.R.S. to determine his maximum tax liability with respect to the sale of his property.  Your client can accomplish this by filing an IRS Form 8828-B Withholding Certificate.   This form may be filed at any time prior to closing.  Please note, however, that your client will not be able to file for the withholding certificate without a Taxpayer Identification Number.  You should inform your client to immediately apply for a Taxpayer Identification Number in case he plans to utilize this exemption.

Q.        My client is the buyer in a Florida real estate purchase and sale transaction involving a foreign seller who is subject to FIRPTA.  I have reason to believe my buyer is falsifying a Residency Certificate in order help the seller avoid the withholding tax by stating that he is purchasing the Florida property as his primary residence when I know it is for investment purposes.  What should I do?

A.        Although it is the buyer’s primary responsibility to determine the foreign person’s status and withhold the tax, you may also be held liable for the tax under certain circumstances.  If you have knowledge that the Non-Foreign Certification or Residency Certificate is false, you must provide notice of this falsity to the other party and closing agent.  If the notice is not provided, you may be held liable for the tax that should have been withheld to the extent of your compensation from the purchase and sale transaction.    If a foreign seller is involved in a residential property purchase and sale transaction, it is recommended that both the buyer and seller consult with a real estate attorney to ensure that all parties are legally protected and fully comply with the provisions of FIRPTA.

– Henry M. Cooper, Esq., is a shareholder and handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.