Summer 2003
Fisher's Law Office

Welcome to the NEWSLETTER of Fisher’s Law Office, providing you with legal information you can use in your everyday life. If you have questions about what you read in this newsletter, please call us today.

1. How can you sell your house if you have judgments against you?

Answer: Florida Statutes, Section 222.01, allows clients to file a "Notice of Homestead" with the clerk of the court. A copy of the notice is then sent to the holder of the Final Judgment. The holder of the Final Judgment has 45 days to sue to ask for a declaration that the property is not homestead. If no lawsuit is filed within 45 days, you are allowed to sell your property and not pay the judgment from the sale proceeds. Moral to the story? Don't ever be afraid to sell for fear that the title insurance company will force you to pay off all your judgments first. Take advantage of Florida's constitutional exemption under Section 4, Article X, and Florida Statutes, Section 222.01.

2. Florida's Constitution and laws protect your property from seizure to pay debts.

Here is a short list of the items that a creditor can never take away from you even if the creditor has a judgment against you:

(a) Article X, Section 4, of the Florida Constitution prohibits the seizure of your homestead (except for taxes and mortgages on the property).
(b) The cash value of life insurance policies cannot be seized by a creditor (see Florida Statutes, Section 222.14).
(c) The value of an annuity contract cannot be seized by a creditor (see Florida Statutes, Section 222.14).
(d) Wages of the head of a household cannot be seized by a creditor. Under Florida law, the head of a family includes any person who is providing more than one-half of the support for a child or other dependent.
(e) Earnings from wages that are put into a bank are exempt from garnishment for six months. Always keep proof of the source of all deposits to your bank account to prove to the judge that your wages were the source of all deposits into your account (see Florida Statutes, Section 222.11).
(f) Disability income benefits may not be seized to pay a creditor under Florida law (see Florida Statutes, Section 222.18).
(g) Money kept in 401K plans and other retirement plans such as individual retirement arrangements may not be seized by creditors under Florida Statutes, Section 222.21.
(h) Money placed into prepaid college tuition plans and medical savings accounts may not be seized by creditors and may not be garnished or be subject to legal process in favor of any creditor under Florida Statues, Section 222.22.
(i) A creditor may not seize $1,000.00 worth of value in a car (see Florida Statutes, Section 222.25).
(j) Any professionally prescribed health aids such as walkers, special beds or other items are exempt from seizure by creditors (see Florida Statutes, Section 222.25(2)).
(k) "Earned income credit" described in 26 U.S.C., Section 32 of the Internal Revenue Code, may not be seized by a creditor even after the amount of the credit has been placed into a bank account (see Florida Statutes, Section 222.25).
(l) Florida's constitutional protections are so powerful that even a criminal who purchases a homestead with the specific intent of defrauding a creditor cannot lose his house (see Havoco of America, Ltd. Vs. Elmer C. Hill, (790 So.2d 1018 Fla. Sup. Ct., 2001).

3. What constitutes gross income for income tax purposes?

Under 26 U.S.C., Section 61, gross income means all income from whatever source derived. It would seem that every type of money or benefit received is subject to income tax but there are exceptions to the rule. The Internal Revenue Code has a long list of items that are not considered taxable and which are specifically excluded from gross income. These include the following:

(a) Gifts and inheritances are not considered gross income (see Section 102).
(b) Interest on state and local bonds are not part of gross income (see Section 103).
(c) Compensation for injuries or sickness (see Section 104).
(d) Amounts received from accident and health plans (see Section 105).
(e) Rental value of parsonages-living space for ministers is not considered gross income (see Section 107).
(f) Improvements to property by tenants are not income to the landlord (see Section 109).
(g) Certain combat pay of members of the military are not included in gross income (see Section 112).
(h) Meals or lodging furnished for the convenience of the employer are not included in gross income (see Section 119).

Moral to the story? If you receive an unusual type of income such as a personal injury settlement or a gift or inheritance, do not automatically assume it is taxable. See a competent lawyer or CPA to help you before you complete your tax return.

4. Do you own stocks or bonds? Watch out for Florida's intangible tax.

Be careful. You may owe a tax on the value of your stocks and bonds if you are a Florida resident. Under Florida Statutes, Chapter 199, the state of Florida charges a tax on the value of all stocks and bonds owned by Floridians. If you have not been paying this tax, you should begin paying the tax as soon as possible as there are severe penalties for failure to pay by June 30th of each year. Although Florida does not have an income tax, it does have the "intangible tax." See us today if you need help clearing up intangible tax issues.

5. Speaking of tax obligations, did you know that you owe a tax to the state of Florida every time you order something over the Internet?

It's true. Florida Statutes, Section 212.05(b) states that every person must pay a tax of 6% of the cost price of each item or article of tangible personal property when the same is used or consumed in Florida. The Department of Revenue has a special form you can use (Form DR-15CS) to report the tax. You must complete Form DR-15CS every time you order on the Internet if the vendor does not collect sales tax.

6. Interesting facts . . .

How many illegal aliens work in the United States? According to the Wall Street Journal, over 5,000,000 illegal aliens are working in the United States. How many of these illegal workers were arrested by the INS (Immigration and Naturalization Service) in 2002? 416. No wonder so many Americans are out of work: illegal aliens have taken their jobs!

7. Tax credits that might benefit you.

Effective in 2003, there are a number of new tax credits that might be beneficial to taxpayers. These include the following:

(a) The child and dependent care credit up to $1,050.00 for expenses you paid for the care of a qualified person or $2,100.00 if you pay for the care of two or more qualifying persons.
(b) The lifetime learning credit. The maximum lifetime learning credit for 2003 is $2,000.00.
(c) The adoption credit. The maximum credit allowed is $10,160.00 per child. If you adopt a child with special needs and the adoption becomes final in 2003, you may be able to take the maximum credit regardless of your actual expenses.
(d) Business property deduction credit. Under Section 179 of Title 26 of the United States Code, you can deduct up to $25,000.00 for the cost of business equipment purchased in 2003.
(e) If your income is less than $50,000.00, you can take an IRA deduction even if you are a part of a retirement plan at work such as a 401K plan.
(f) If you are self employed, you can deduct 100% of your health insurance expenses in 2003.
(g) The standard mileage rate for 2003 for business use of a vehicle is now 36 cents a mile. If you drive your car for medical care, you can deduct 12 cents a mile towards this.
(h) For 2003, the standard deduction for a head of household is $7,000.00. for a single person, it is $4,750.00 and for a married person filing jointly, it is $7,950.00. Note that under current law, it is still better to file as a single person or head of household than it is to be married.

8. Hints on planning your estate.

(a) The Florida legislature has passed laws that state who gets your property when you die.
(b) If you want to give property to stepchildren or others not covered by the statute, then you need to write a Will. All adults in Florida should have a Will written and properly executed.
(c) Once you write your Will, tell you heirs where you keep your Will. Consider giving a copy of your Will to give to your personal representative.
(d) A Will does not need to be recorded or filed with the clerk of the court before your death.
(e) Make an inventory of what you own (accounts, deeds, etc.) and keep it with your Will.
(f) When you are writing a Will, consider writing a Durable Family Power of Attorney, a Health Care Surrogate and a Living Will. See Fisher's Law Office for details.

9. Here are the do's and don'ts of powers of attorney.

(a) Do see a lawyer before signing a Durable Family Power of Attorney.
(b) If there is a questions in your mind as to whether you should write a Power of Attorney, don't do it.
(c) Do keep a copy of your Power of Attorney.
(d) Do find out why a loved one wants you to give him a Power of Attorney before you write sign one.
(e) Do know that you can revoke the Power of Attorney. (See Fisher's Law Office for assistance in revoking your Power of Attorney.)
(f) Don't use a Power of Attorney as an estate planning device without a Will. Powers of Attorney are only good during your lifetime. After you die, the Power of Attorney is void.
(g) Don't create family fights. It's probably not a good idea to have one of your children as your Power of Attorney if your children don't get along well.
(h) Do remember, a little bit of planning can save a lot of grief to your heirs and loved ones. Plan carefully before you give anyone legal authority over your assets or give anyone your property.
(i) Don't worry to much about Powers of Attorney. Even without a Power of Attorney, the court can appoint someone to take care of you or your money through a guardianship.

10. What if you die and you accepted Medicaid benefits during your lifetime, do you owe the money back to the state?

Answer: Yes. Under Florida Statutes, Section 409.9101, anyone who accepts Medicaid benefits after age 55 must pay the benefits back when they die. Here's how it works:

(a) After you die, your personal representative is required to notify the Medicaid Program that you have passed away and that you have an estate.
(b) The state of Florida's Medicaid Program is required to then file a Statement of Claim in the probate court.
(c) The Agency (also called The Agency for Health Care Administration or HICFA) is allowed to amend the claim for up to one year after the last medical services were rendered.
(d) The state will not enforce its Medicaid claim against your estate if your heirs include a spouse or a child under age 21 or an adult child who is blind or disabled.
(e) Generally, the Medicaid Program cannot recover against your house. (Your house passes to your heirs without repayment of the Medicaid debt.)
(f) The Medicaid Program is not allowed to collect a Medicaid obligation if doing so would cause an undue hardship to your heirs. An example of hardship would if an heir has no place to live or would be deprived of food, clothing and shelter if the repayment to the Medicaid Program was made.

11. What is domestic violence?

Domestic violence means any assault, battery, stalking, kidnapping, false imprisonment or any criminal offense resulting in physical injury of one family or household member by another family or household member. A person who is a victim of domestic violence may file a petition in the court for an injunction. It is a crime to violate the injunction. An injunction is good for 15 days after which time the court must conduct a hearing to decide whether the injunction should be extended or even made permanent. The court, in the injunction, can require child support, decide custody on a temporary basis, establish visitation and award a home to the victim of the domestic violence. The court can also order the violent person to participate in treatment or counseling services.

12. What factors does the court consider in deciding to continue an injunction and keep it in force?

The court applies a list of actors contained under the law which include the history of the victim and the perpetrator, past threats, harassment, stalking and physical abuse. The court can also consider attempts to harm family members or attempts to kill a family or injure a family pet such as a dog or a cat. The court can also consider whether the violent person has ever used knives or guns or threatened to use these weapons. The court can also consider the criminal history involving the violence or threat of violence and whether the violent person has destroyed personal property including, but not limited to, cell phones, clothing or other items belonging to the victim. Injunctions can be entered for an unlimited amount of time but the court retains jurisdiction to modify or dissolve the injunction upon hearing. Domestic violence victims often blame themselves for creating the situation that gave rise to the violence. Do not fall into this trap. If you are a victim of domestic violence, seek help from the court immediately.

13. Who receives custody of children in a divorce?

Under the law, the court applies a list of factors to decide primary residential responsibility (custody). Some of the factors include:

  • Who will most likely allow visitation?
  • Who has the strongest emotional tie to the child?
  • Who can best care for the child?
  • Which parent's home provides a stable environment for the child and how long has the child lived there?
  • Who is more moral and what is the permanence as a unit where the child can live?
  • Which parent is in the best physical and emotional health?
  • Has either parent lied to the court about a domestic violence?

14. What about relocation of children out of state? How do family law courts decide whether to allow children of divorced parents to move away?

Florida law requires a judge to consider the following:

(a) Whether the move would be likely to improve the general quality of life for both the residential parent and the child.
(b) The extent to which visitation rights have been allowed and exercised.
(c) Whether the primary residential parent, once out of the jurisdiction, will be likely to comply with any substitute visitation arrangements.
(d) Whether the substitute visitation will be adequate to foster a continuing meaningful relationship between the child and the secondary residential parent.
(e) Whether the cost of transportation is financially affordable by one or both parties.
(f) Whether the move is in the best interests of the child.