Ann Aldrich had an "E-Z Legal Form" Will and she specifically distributed certain specific property to her sister, Mary Jane Eaton, if she survived her, and, if not, then such specific property would be distributed to James Michael Aldrich. Ms. Aldrich's Will did not have a residuary clause, which names beneficiaries who would receive the balance of the decedent's estate after specific devises. Ms. Aldrich had inherited money and investments from her sister, Mary Jane, who had predeceased her and did not amend her Will to reflect who would receive such property.
The trial court relied on Section 732.6005(2), Florida Statues, which provides a will is to be construed to pass all property that a testator owns at his death including property acquired after the execution of the will. The trial court relied on Section 732.6005(1), Florida Statues, which states that the rules of construction shall apply to a will unless a contrary intention is indicated by the will, to determine that Ms. Aldrich clear intent was to leave all of her property to James Michael Aldrich, even though there was no residuary clause.
The 1st DCA reasoned, however, that Ms. Aldrich's clear intent was to leave only the specifically devised property to James Michael Aldrich, if Mary Jane predeceased her. The court could not come to the conclusion that she wanted to leave all property she acquired after the execution of the will to him, even though there was no indication that Ms. Aldrich's intent was to leave her property to anyone other than her sister and brother. Thus, the 1st DCA reversed the summary judgment and remanded to the lower court because if the will fails to dispose of all of a decedent's property "partial intestacy" results and the property would pass to the decedent's heirs as provided in Section 732.101-11, Florida Statutes.
The 1st DCA certified the following question to the Supreme Court: WHETHER SECTION 732.6005, FLORIDA STATUTES (2004), REQUIRES CONSTRUING A WILL AS DISPOSING OF PROPERTY NOT NAMED OR IN ANY WAY DESCRIBED IN THE WILL, DESPITE THE ABSENCE OF ANY RESIDUARY CLAUSE, OR ANY OTHER CLAUSE DISPOSING OF THE PROPERTY, WHERE THE DECEDENT ACQUIRED THE PROPERTY IN QUESTION AFTER THE WILL WAS EXECUTED?
Obviously you should always include a residuary clause in a Last Will and Testament. Most attorneys know that (even those who don't practice in this area!) So why does it happen? PROOF READ your documents and reward the associate or assistant who finds you inadvertently left out the clause!
IRS Tempts
Employers Who Misclassify Employees
Most
employers have strong withholding tax incentives to classify their
workers as independent contractors instead of regular employees. Such
classification allows employers to avoid income tax, FICA, FUTA, and
Medicare withholdings. This classification shifts these responsibilities
to the workers. Accordingly, employers have aggressively and/or
inappropriately classified employees as independent contractors.
An IRS settlement program known as the "Voluntary Classification
Settlement Program" or VCSP provides a way for employers to correct
their classifications and become compliant taxpayers. All businesses,
tax-exempt organizations and government entities are eligible for VCSP.
To be eligible, the employer must: 1) have consistently treated the
workers as nonemployees, 2) have filed all required Forms 1099 for the
workers for the previous 3 years, and 3) not be under audit by IRS or
under audit by the Department of Labor or another state agency regarding
the classification of employees.
If the employer qualifies for VCSP, then the employer will: 1) owe 10
percent of the employment tax liability that may have been due on
compensation applying the rates of section Code Section 3509, 2) safety
from an employment tax audit for prior years, and 3) must agree to
extend the period of limitations on assessment of employment taxes for
three years for the first, second and third calendar years after the
taxpayer agrees to VCSP.
Advice:
If you or your client has misclassified an
employee as an independent contractor, then you should consider applying
for VCSP. In an example on the VCSP, a taxpayer who paid $1,500,000 to
workers in the subject tax year owed only $16,020 for the 10 percent
payment.
Inflation-Adjusted 2012 Figures For
Transfer Tax Items
RIA calculated and reported
a number of tax figures that are adjusted each year for inflation. The
following are important for 2012 transfer tax items:
1) Unified estate and gift tax exclusion amount for
gifts made and estates of decedents dying in 2012 will be $5,120,000 (up
from $5,000,000);
2) Generation-skipping transfer (GST) tax exemption
for gifts made and estates of decedents dying in 2012 will be $5,120,000
(up from $5,000,000);
3) Gift tax annual exclusion for gifts made in 2012
will remain at $13,000; and
4) For gifts made in 2012, the annual exclusion for
gifts to noncitizen spouses will be $139,000 (up from $136,000 for
2011).
Advice:
When
advising clients in their gifting or estate planning strategies do not
forget these increases.
