Spouse Not Removed from Will by Reason of Divorce

This is an interesting case, although the issue probably does not come up that often.

While unmarried, Mr. Priever executed a will leaving his property to his then fiancée, Ms. Gordon. The two then married, and later divorced. Mr. Priever then died.

Mr. Priever’s father, through his guardian,  petitioned to have the will construed as if Ms. Gordon predeceased Mr. Priever pursuant to Fla.Stats. §732.507(2). This statute reads:

Any provision of a will executed by a married person that affects the spouse of that person shall become void upon the divorce of that person or upon the dissolution or annulment of the marriage. After the dissolution, divorce, or annulment, the will shall be administered and construed as if the former spouse had died at the time of the dissolution, divorce, or annulment of the marriage, unless the will or the dissolution or divorce judgment expressly provides otherwise.

Clearly, if Mr. Priever executed this will AFTER he married Ms. Gordon, she would be removed as a beneficiary. Mr. Priever signed the will BEFORE marriage, however.

The trial court held that the statute removed Ms. Gordon as a beneficiary. The appellate court reversed the decision, and held the statute did not apply and she should not be removed as a beneficiary by the statute.

The court relied on the “married person” language of the statute (“Any provision of a will executed by a married person that affects the spouse. . .). Since Mr. Priever was not a married person when he signed his will, that was enough for the appellate court to find the statute did not apply.

Policy-wise, the statute exists based on a legislative judgment that a spouse who divorces but does not change his or her will did so because of inadvertence and not an intent to leave the ex-spouse in the will. While this reasoning probably holds to a pre-marriage will, one can come up with circumstances where it shouldn’t. Perhaps the Florida Bar or the Florida legislature might take on a project to expand the statute to also cover pre-marriage wills.

SILVIA GORDON, Appellant, v. ROBERT FISHMAN, as personal representative of the Estate of Ron Priever, deceased; ROBERT FISHMAN, as Guardian of Bernard Priever; SAMUEL GORDON; and REBECCA GORDON, Appellees. 2nd District. Case No. 2D17-1488. August 24, 2018

GOT HOMESTEAD? www.rubinonfloridahomestead.com

August 2018 Applicable Federal Rates

Revisions to Partnership Representative Rules

The IRS has issued final regulations under the new centralized partnership audit regime. This audit regime was enacted in 2015. The rules provide for a partnership to appoint a “partnership representative” to participate in the audit process.

The final regulations generally adopt previously temporary and proposed regulations. Some of the key changes made in the final regulations from the temporary and proposed regulations relating to the partnership representative include:

• According to the Preamble, a partnership that has elected out of the centralized partnership audit regime is not required to designate a representative – if it does, that representative has no authority with respect to the partnership.
• A partnership may designate itself as the representative if it meets the substantial presence in the U.S. requirement and designates an individual that has such substantial presence to act on behalf of the partnership.
• A disregarded entity can serve as partnership representative. The entity must comply with the general entity representative rules to appoint a designated individual to act on its behalf. Both the entity and the designated individual must meet the U.S. substantial presence requirements.
• The representative need not be an employee of the entity, per the Preamble. Similarly, an entity representative need not have employees.
• Numerous modifications were made in regard to the changing the the partnership representative, including resignations and appointment of successors.

Remember that LLC’s taxable as partnerships (i.e., most multi-member LLC’s other than those electing to be taxed as a corporation or deemed to be corporations) must also comply with these rules.

T.D. 9839

GOT HOMESTEAD? www.rubinonfloridahomestead.com

Final Charitable Contribution Reporting Regulations Issued

The Code imposes various reporting and substantiation requirements in order for a donor to claim a charitable contribution. More than once I have seen the IRS adopt a strict approach with taxpayers and have sought to disallow deductions for substantial contributions due to technical failures to comply with the rules.

The IRS has promulgated revisions to the rules, which in large part adopt the 2008 proposed regulations. Some key modifications include:

• All donors must keep records of their contributions. Code §170(f)(17). For money contributions, the donor must retain a canceled check, or other reliable written records showing the name of the donee, the date of contribution and the amount. Some organizations provide a blank pledge card to their donors. The Preamble to the new regulations provide that such a card is insufficient for these record keeping requirements since they it will not include all the information required.
• For contributions over $250, the donee organization must provide a contemporaneous written acknowledgment of the gift. Code §170(f)(8). A donor may be required to complete and submit a Form 8283, depending on the type of gift and the amount. The Preamble to the new rules provide that the Form 8283 itself does not meet the contemporaneous written acknowledgment requirement - a separate written acknowledgment is required.
• Appraisals are required for non-money contributions over $5,000. The new rules provide some technical modifications on what appraisers are qualified to issue the appraiser. For example, an appraiser can meet the requisite education and experience requirements by successfully completing professional or college-level coursework. The Preamble notes that mere attendance is not sufficient, and evidence of successful completion is required.
• If the contributed property is over $500,000 in value, the appraisal must be attached to the donor’s income tax return. Under the new rules, the appraisal is not attached just for the return of the contribution year, but must also be attached for future carryover years.

TD 9836. Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution Deductions

GOT HOMESTEAD? www. rubinonfloridahomestead.com