Tax, Trusts and Estate Planning Lawsuits

From the entrepreneur to the working family, it is vitally important to consider tax and estate planning to properly manage the complexities associated with the accumulation, conservation and distribution of assets.

Florida Case Law Related to Estate Planning

ROKAVIAR, INC. v. COLONY INSURANCE CO., 3D03-2737 (Fla.App. 3 Dist. 2005)
Case No. 3D03-2737.Opinion filed February 2, 2005.

As events would have it, Rokaviar, Inc.'s insurance policy with Colony Insurance Company expired by its temporal terms eight days prior to a tragic event which gave rise to a wrongful death claim against Rokaviar.[fn1] Colony declined coverage and Rokaviar then filed suit seeking coverage. The trial court entered summary final judgment in Colony's favor. USI Florida Life and Estate Planning Division, Inc., d/b/a Kolisch Insurance, Edwin Velez and Michelle Marie Velez, as Personal Representatives of the Estate of Edwin Michael Velez, deceased, joined Rokaviar, Inc. on appeal.[fn2]

Florida Case Law Related to Tax Laws

RYKIEL v. RYKIEL, 795 So.2d 90 (Fla.App. 5 Dist. 2000)
No. 5D00-793.December 8, 2000. Opinion Granting Rehearing February 9, 2001.

Further, two obvious errors were made with regard to the alimony award. First, the court ordered that the award of permanent periodic alimony be nontaxable to the receiving party, the former wife. This award cannot stand because there is no legal authority which would permit such a practice. Permanent periodic alimony (i.e., support money) is taxable to the recipient under federal income tax law. 26 U.S.C.A. § 71. Its taxability cannot be changed by a state court order.[fn1] State law creates legal interests, but federal law determines how those interests shall be taxed. Burnet v. Harmel, 287 U.S. 103, 110, 53, S.Ct. 74, 77 L.Ed. 199 (1932). See also Art. VI, cl. 2, U.S. Const., (the supremacy clause). The power of Congress to tax is not subject to state control, and in exercising its power Congress may impose its own criteria. Est. of Caswell v. Commissioner of Internal Revenue, 62 T.C. 51, 58, 1974 WL 2749 (U.S. Tax Ct. 1974).

Florida Case Law Related to Estate Planning

NOLTE v. WHITE, 784 So.2d 493 (Fla.App. 4 Dist. 2001)
No. 4D00-3079.Opinion filed March 28, 2001. Rehearing Denied May 25, 2001

The trial court granted final summary judgment in favor of appellee Rita M. White, who claimed a homestead exemption in property that she conveyed to a qualified personal residence trust (QPRT)[fn1] and in which she retained a right to reside for a term of eight years. The Property Appraiser of Indian River County and the Director of the State of Florida Department of Revenue appealed, arguing that Mrs. White does not have sufficient equitable title to claim homestead exemption because she does not hold a life estate in the property. We affirm, adopting the rationale in Robbins v. Welbaum, 664 So.2d 1 (Fla. 3d DCA 1995) (taxpayers were entitled to homestead exemption even though the qualified personal residence trust limited taxpayers' use of their residence to earlier of ten years from trust's creation or one of taxpayer's death).