Terri Schiavo was a young woman who had a heart attack which severely damaged her brain, including her cerebral cortex which controls her conscious thought.  Many doctors concluded that Terri’s condition was a persistent vegetative state and she was institutionalized for 15 years until her death.

            In 1988, her husband and court appointed guardian, Michael Schiavo, petitioned the Pinellas County Circuit Court to remove her feeding tube.  He claimed that she had confided to him verbally that she would not want to be kept alive by artificial means.  Terri’s parents, Robert and Mary Schindler opposed this, saying that such a statement would be completely out of character for her and that she believed in the sanctity of life.

            The court battle continued for 7 years and included 14 appeals in the Florida courts and 5 actions in Federal District Court.  The Florida legislature passed a law, called “Terri’s Law,” which allowed Governor Jeb Bush to order her feeding tube reinserted.  The Florida Supreme Court overturned the law and the United States Supreme Court four times refused to consider the case.  Congress even tried to call for hearings on the matter under which they subpoenaed Terri and Michael Schiavo to testify.

            Celebrities, politicians and advocacy groups publicly argued the issues of the case.  The saga was played out on television and radio talk shows across the nation and it seemed everyone had an opinion about how Terri Schiavo should be treated medically.

            Finally, on March 18, 2005, Circuit Court judge ordered Terri’s feeding tube removed.  After a flurry of last minute petitions and appeals, Terri Schiavo died on March 25, 2005, 15 years and one month after collapsing in her home.  The debate still rages.

            A sad but interesting fact is that all of this could have been avoided had Terri Schiavo made and executed a valid living will.

National Healthcare Decisions Day.

                That is the purpose behind National Healthcare Decisions Day.  On Monday, April 16, national, state and community organizations, will be part a massive effort to highlight the importance of advance healthcare decision-making—an effort that has culminated in the formal designation of April 16 as National Healthcare Decisions Day (NHDD).

NHDD organizers are asking interested organizations and individuals throughout the country to help raise awareness about the importance of advance care planning on this special day—and throughout the year. To help realize this goal, they have created a Web site (www.nhdd.org) with information and tools for the public to talk about future healthcare decisions and execute written advance directives (designations of healthcare surrogate and living wills) in accordance with their applicable state laws.

The two types of Advanced Directives in Florida are the Designation of Health Care Surrogate and the Living Will.

Designation of Health Care Surrogate. 

Simply speaking, a Designation of Health Care Surrogate is a written document designating a person or surrogate to make health care decisions on your behalf.  The document must be signed by the you (or you must direct someone to sign for you) in the presence of two separate witnesses who must also sign the document.   The surrogate named in the document cannot serve as a witness.

            The surrogate does not have any authority to make decisions on your behalf until it has been determined by your attending physician that you are physically or mentally unable to communicate a willful and knowing health care decision.  This determination must then be corroborated by a second physician.  If both physicians find that you cannot make health care decisions, they record that fact in your medical record and notify the surrogate in writing that he or she has authority to make the decisions.

            Once the surrogate obtains authority to act, he or she is responsible to act for you and make all health care decisions during your incapacity in accordance with your instructions.  The last phrase is why it is important that you carefully consider your wishes, put them in writing and discuss them with the surrogate and with your family.

Living Will. 

A Living Will in Florida is a written declaration which states your intentions if you should be in a terminal condition, have an end-stage condition or are in a persistent vegetative state with no hope of recovery.  Using this document you would direct whether you wanted life-prolonging procedures provided, withheld or withdrawn.

            A “terminal condition” is defined under the Florida Statutes as a condition caused by injury, disease or illness from which there is no reasonable medical probability of recovery and which, without treatment, can be expected to cause death.

            An “end-stage condition” means an irreversible condition that is caused by injury, disease or illness which has resulted in progressively severe and permanent deterioration, and which treatment, to a reasonable degree of medical probability, would be ineffective.

            A “persistent vegetative state” is a permanent and irreversible condition of unconsciousness in which there is (a) the absence of voluntary action or cognitive behavior of any kind and (b) an inability to communicate or interact purposefully with the environment.

            In determining your condition, your attending or treating physician and at least one other consulting physician must separately examine you.  Both physicians must find that you suffer from one of the above conditions before life-prolonging procedures may be withheld or withdrawn.

            A Living Will must be signed by you, or someone else at your direction, in the presence of two witnesses who must also sign the document.  One of the witnesses has to be someone other than your spouse or blood relative.  You may designate a surrogate to carry out your wishes, but the failure to do so will not make the Living Will invalid.

            The law makes it your responsibility to notify your attending physician that the Living Will has been signed.  For this reason, it is important that you bring the signed Living Will to your doctor as soon as possible after you have signed it.  The doctor can make a copy to put into your medical records.

            No one wants to be in the position Terri Schiavo and her family found themselves.  Make it a point to speak to your attorney or health care provider about advanced directives and healthcare decision making.  Visit www.NHDD.org for more information.

However, foreign buyers face a whole set of issues that U.S. Citizens don’t.  The first issue is probate and estate planning.  The United Kingdom doesn’t recognize Florida property in its will and probate proceedings.  As a result, British citizens must have a Florida will in addition to their estate planning documents in the U.K.  Canadian citizens may not need a separate Florida will, but their real estate here will be subject to Florida probate – even if their estate is already probated in Canada.

In Florida, probate is expensive (it can cost between 4% and 8% of the value of the Florida property) and is time consuming.  Many foreign property owners wish to avoid Florida probate if at all possible.  Some add their children’s names on the title of the property.  While this may create a right of survivorship, meaning the property automatically passes to the remaining owners on the death of one;  it can create other problems.  All owners are required to sign a deed transferring title or a mortgage.  This could be cumbersome and difficult to arrange.  If one of the children is involved in a lawsuit and a judgment is entered against him, it could become a lien against the Florida property.  And in the event of a divorce, the child’s spouse may obtain an interest in the property.

Another issue is incapacity.  If one of the owners of the property becomes incapacitated, the property cannot be sold or mortgaged without a costly, emotionally painful and time consuming guardianship proceeding.

Finally, the foreign property owner must deal with U.S. Federal Estate Tax.  Upon the death of a foreign owner of Florida property, that owner’s estate (or the portion located in the United States) would be subject to Estate Tax beginning at 35%.

For Canadians, this means if the deceased Canadian owns more than $60,000 of U.S. assets, his estate would be subject to U.S. estate tax.  U.S. citizens get a $5 million exemption meaning they do not pay any estate tax on the first $5 million of their estate.  Foreign property owners get a pro-rated exemption based on the value of their worldwide assets.  A Canadian dying with worldwide assets of $2 million who owns a home in Florida worth $200,000 would receive an estate tax exemption of $500,000 under the current estate tax law ($200,000 is 10% of $2 million so the Canadian would get 10% of the $5 million exemption granted a U.S. citizen).

For U. K. citizens, transfers to a non-U.S. citizen, even a spouse, will result in estate tax unless advance planning is done.  U.S. citizens can pass an unlimited amount to a spouse at death – called the marital deduction.  Transfers to non-U.S. citizen spouses are subject to Estate Tax unless the transfer is made to a Qualified Domestic Trust, a special trust that requires that the property or its proceeds always remains within the jurisdiction of the IRS.

Corporations are one way to avoid the negative effects of the issues above.  However, a corporation is subject to a capital gains rate of 40.5% as opposed to 15% for individuals and most trusts.

All of the issues mentioned above, probate, incapacity, estate taxes and capital gains taxes, can be successfully addressed by a revocable trust.  Because of the unique issues involved, this revocable trust will be different from one prepared for a U.S. citizen.

Click on the link below to watch it and please use the comments to let us know what you think.

However, becoming a Florida resident may not completely relieve you from payment of state income tax.  The state you left may not be as accommodating to your desire to live a tax-free life.  It may still subject you to income tax there if you continue to have certain connections to that state.

For example, New York is a poor loser when it comes to your taxes.  If you move to Florida and become a resident but still earn income generated from property situated in New York or from a business located in New York, you will still be subject to New York state income tax as a non-resident for that income.

If you remember from The Official Snowbird's Guide To Becoming A Florida Resident, Florida residency from Florida's point of view is determined by your intention.  If you come to Florida with the intention of making it your primary residence, then you are a Florida resident and entitled to the benefits that go along with it.  Of course you must provide clear evidence of that intention, such as obtaining a Florida driver's license, registering to vote in Florida, etc.

However, the state you departed may not look at it that way.  It usually has different criteria to determine whether or not you are no longer subject to its taxes.  This is often confusing to new Florida residents.  Even though you are considered a Florida resident by the State of Florida and entitled to the homestead exemption and other benefits, your prior state may also consider you a resident for the purpose of taxation.  New York will consider you a "statutory resident" for income tax purposes if you spend more than 183 days in New York and have a residence (even secondary residence) there.

A few of the tax-happy states of the Northeast have created the North Eastern States Tax Officials Association Cooperative Agreement on Determination of Domicile.  The name of the agreement alone makes you want to get out and move to Florida.  Under this agreement, the participating states will apply the same criteria to determine what your domicile is for tax purposes.  The factors they use are:

1. How you use your Northeastern home as compared to your Florida home.  Which one appears to be your primary residence?
2. Are you involved in a business (employment, participation in management, compensation, and ownership) in the Northeastern state?
3. In which state do you spend most of your time?
4. Where do you keep your valuables - items that you hold "near and dear" to your heart?
5. Family connections.

If the state auditor cannot determine your residency for tax purposes from the criteria above, he or she will look to other factors such as: What address do your bank statements and bills get sent to? Where are your vehicles and boats registered?  Where do you have safe deposit boxes? Where are you registered to vote?  What does your will or other legal documents say is your residence?  Some states will even analyze your phone services to see which looks more like your primary residence.

OK former New York residents, what have we learned?   If you want to escape state income tax in New York,  1) Don't spend more than 183 days in New York in a calendar year, 2) move all of your assets and connections to Florida, if possible, and 3) sever all ties to businesses and property in New York that will generate New York income.

Initial applications for the homestead exemption must be made within January 1 and March 1 at the Property Appraiser's Office in the county where the property is located.  Many counties allow you to file by mail.  You should visit your county's Property Appraiser website to print out forms and to get further instructions.  Please remember that you can qualify for the homestead exemption only if you were a Florida resident residing in the property as your primary residence on January 1 of this year.

For more information regarding the advantages of the homestead exemption, read my earlier posts, here and here.

This is my view on my ride into work this morning.

Per Weather.com -

New York City - 32 degrees, Light Snow.

Chicago - Cloudy, 17 degrees, feels like 8 degrees.

Detroit - 19 degrees, Light Snow

The article sites several examples.  Riverfront Cruise recently added an open bar for guests and is reaching out to hotel concierges to tout their cruise. The W Fort Lauderdale plans to more aggressively trim rates on slow days and charge more on busier ones to boost income on its 517 rooms.

Even though the growth rate is slow, there has been an increase in tourism revenues and this year's revenues should get a boost from several factors: 

Port Everglades will host more and bigger cruise ships, including the newly arrived Allure of the Seas. Flights are being added at Fort Lauderdale and West Palm Beach airports. International tourism is growing, thanks to the weak dollar and surging economies of Latin America. Plus, corporate travel is picking up after its 2009 nosedive.

Each year, every Florida county assesses the taxable value of all real property on its tax rolls. As a result of the Amendment, the taxable value of property that qualifies for the homestead tax exemption may increase no more than 3 percent of the prior year’s assessment or the percentage change in the Consumer Price Index, which ever is less. Of course, the taxable value can never exceed the just valuation (or market value) of the property.

The Market Value of your property increases based on the economic conditions and sales prices of other properties in your area. In some areas of Florida in the years between 2002 and 2006, the market value of some properties increased 20% or more each year for consecutive years. As a result, properties that were originally valued at $300,000 were worth almost $450,000 a couple of years later. You can imagine the increase in property taxes resulting from this.

However, if the $300,000 property was the owner’s homestead, the increase in taxable value was limited to 3% per year. As a result, the taxable value of the property 2 years later would not be greater than $318,270, even though its Market Value was $450,000. This translates into a huge savings in property tax.

Today we are at historical lows in the Market Value of real estate in Florida.  We don't know when values will begin to increase, but by applying for the homestead exemption today, you can lock in the low Taxable Value and save thousands of dollars in property taxes in the years after the Market Value begins to rise.

The amendment provides that after any change in ownership or any new qualification for homestead tax exemption, the homestead property shall be taxed at the just value (or Market Value) as of January 1 of the year following the change in ownership. The amendments limits will apply each year following. So if you move to Florida, become a resident and qualify for homestead status, your property will be re-assessed on the first day of the year after you qualify for homestead at its just value with no limitations on the increase. Each year thereafter, the increase in taxable value will be limited by the amendment.

For this reason, you should move into a new home and apply for the homestead exemption prior to the end of the year so the initial reassessment takes place earlier. This causes the 3 percent cap to take effect a year earlier than if you waited until after the first of the year to apply.

The remaining owners, trapped by a now almost unheard of devotion to their integrity and financial obligations, feel more helpless as the days go by. What had started out as their long-awaited retirement in Paradise was rapidly becoming a prison sentence.

The parasite was invisible to them, yet it relentlessly and without remorse choked out the life of the community. By now, almost 2/3 of the 400 plus units were in default of their condominium assessments.

Condominium life in many Florida communities was beginning to look like a scene from an Edgar Allen Poe story.  But recently, struggling condominium associations have been given a new weapon to help collect delinquent assessments and remain solvent.

Before I discuss this weapon, let's take a look at one of the problems that has plagued condominium associations and their unit owners. Investors have taken advantage of the bottomed-out prices of condominium units in Florida markets and have bought large blocks of units as investments. There are reported cases of some investors owning over 100 units in a single project.

The combination of low purchase prices and low interest rates leads to low mortgage payments and makes it feasible to rent the units and make a nice return.

Condominiums have traditionally been a tough market for landlords because the condominium maintenance fee is usually higher than monthly maintenance expenses for non-condominium properties and, together with the mortgage expenses, makes it difficult to generate a net profit. Now, because of the market conditions I described above, condominium investment has become more popular.

However, it seems that in some cases the investors have not been able to meet their financing obligations. They have quit paying the mortgage and the loan has gone into default.  In most cases the bank has begun foreclosure proceedings. Since these investors are in default of their mortgages, they see no reason to pay the condominium maintenance fee. Now keep in mind that during this time, the investors continue to rent the units and collect the rent payments, all of which go into their pockets. The lender and condominium association get nothing.

A classic example of this phenomenon is the Village at Dadeland Condominium in Dade County, a 410 unit project. According to court records, at one point last year 267 of those units were 60 days or more delinquent in the payment of their share of maintenance fees, with the delinquency totaling $863,063.82. The association’s budgeted monthly expenses were $127,573, but the monthly revenue which was being collected averaged only approximately $70,000. As a result of the delinquencies, the association had not been able to maintain the common property: elevators were nonfunctioning, security garden lawn care services had been discontinued, the roofs were in a state of disrepair and the condominium pool had been closed. In addition, Miami-Dade County officials have cited the association with 63 code violations including failure to maintain portable fire extinguishers, failure to maintain smoke detectors, and failure to have fire alarms inspected.

The banks are hesitant to foreclose on the units because they would then become liable for the condo assessments as they come due. This leaves the units in a kind of financial limbo with owners raking in cash and neglecting their legal duties to pay expenses.

What is the new weapon that associations are now using? It's called a blanket receivership. A receiver is a person appointed by the court in foreclosure actions to collect rents and revenue from the property currently under foreclosure. The income collected by the receiver is used to maintain the property and may be applied against the mortgage payments.

Usually, receivers are appointed for individual properties. However, in the Village at Dadeland case, as well as others around Florida, the courts are granting blanket receivership's.  This gives associations the right to rent out abandoned units and collect rent from tenants paying owners under foreclosure or who are delinquent in association fees. The blanket receiverships only apply to units occupied by tenants and not owners. Further, the units must already be under foreclosure by the Association.

Will this solve the associations’ financial dilemmas? It may serve as a short-term solution, but the only solid answer will come from a vastly improved real estate market.

Florida's economy has long depended upon its visitors and new residents.  In most areas of the state, real estate and construction are the engines that make the economy go.  By educating our new residents and informing them of strategies to break free from the tax bondage of the state they moved away from, to use the homestead exemption to reduce property taxes, and to take advantage of other money saving opportunities, we free up more money to bolster the Florida economy.  With 200,000 new residents, these savings can total tens of millions of dollars each year.

These tips and strategies are presented in detail in The Official Snowbird's Guide To Becoming A Florida Resident.  It is the only book available that addresses these issues and is designed to save a new Florida resident thousands of dollars.

It is my goal to get The Official Snowbird's Guide To Becoming A Florida Resident into the hands of at least 10% of the people moving to Florida in the next four months.  You can help by forwarding this message to anyone you know who is thinking about moving to Florida, anyone whose business is positively impacted by the new residents and any visitor who is getting tired of shoveling snow and paying taxes.

Please click the "Share Article" link below, the "E-Mail to a Friend" link at the very bottom of the article, or forward using your e-mail service (Outlook, G-Mail, etc.)

I thank you for helping to spread the word.