Tuesday, July 23, 2019

Notarization Steps Into the 21st Century in Florida

In early June 2019, Florida Gov. Ron DeSantis signed into law HB 409, the Electronic Legal Document bill (also known as the e-will bill). With this new law, the use of video technology and remote notarization for the online execution of wills, powers of attorney and other legal documents is now approved. Under the provisions of this law, an electronic will is validly executed if it is in compliance with the provisions applicable to written wills.
In a nutshell, the e-will law allows notaries to affix their seals and signatures to legal documents that are not signed in their physical presence if they witness the signature via live, two-way video links.
According to the law, “A notary public may not notarize a signature on a document if the person whose signature is being notarized does not appear before the notary public either by means of physical presence or by means of audio-video communication technology as authorized under part II of this chapter is not in the presence of the notary public at the time the signature is notarized.” Witnesses needed for wills and other documents also can appear remotely as long as they can answer certain questions probed by the notary pertaining to the document holder’s identity.
Supporters of the law, including the Elder Law Section of the Florida Bar, say it will increase access to legal services, such as wills or estate plans, for all Floridians. The new law allows the signing of documents to be conducted entirely electronically in accordance with the strict notary standards that remain in existence.
Critics of the law contend that it puts certain older Floridians at risk by making it too easy for adult children to sell an incapacitated parent’s home without permission or for others to take advantage of elders in nursing homes or long-term care facilities. The law addresses these concerns by excluding those seniors and others who are considered to be “vulnerable adults” from electronic notarization.
A previous attempt by congressional democrats to add an amendment that would have removed wills and powers of attorney from the e-will bill failed. However, the law’s sponsors agreed to prohibit the use of video technology to execute super powers of attorney, preventing the amending of wills, trusts, estates and other documents electronically, at the request of the Real Property, Probate and Trust Law Section of the Florida Bar.
This e-will bill is not without controversy. In fact, two years ago, Gov. Rick Scott vetoed the similar Electronic Wills Act, saying it failed to strike the proper balance between convenience and safety. At the time, Gov. Scott claimed the bill didn’t “adequately ensure authentication of the identity of parties to the transaction.”
The latest version of the law contains several safeguards, such as requiring notaries to question witnesses directly and to demand standard forms of identification that can be confirmed through various online platforms.
Contact us if you have questions about the new e-will law. To update your will or estate plan, request a consultation today with Morris Law Group’s experienced attorneys.

SECURE Act Would Affect Retirement Planning

By: Joe D. Lieberman, J.D., LL.M., Law Clerk, Morris Law Group - June 27, 2019

On May 23, 2019, the U.S. House of Representatives passed The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). H.R. 1994.The SECURE Act would make significant changes to the U.S. retirement system. The SECURE Act passed with nearly unanimous support across party lines, in a vote of 417-3. The legislation now goes to the U.S. Senate for consideration in
that chamber.

The SECURE Act would make a number of changes to employer-sponsored retirement plans and individual retirement accounts (IRAs), including, among others:

  • Raising the minimum age for required minimum distributions from retirement savings plans from 70½ to 72;
  • Increasing the cap on the default contribution rate for employers with automatic enrollment plans from 10 percent to 15 percent after the first year of an employee’s enrollment;
  • Eliminating a requirement for employers to share a common industry in order to form a multiple employer plan (MEP);
  • Eliminating a provision in current law disqualifying MEPs in which one employer fails to meet requirements;
  • Providing for the distribution of assets from terminated 403(b) plans;
  • Allowing part-time workers to become eligible for enrollment in 401(k) plans following one year of service with at least 1,000 hours worked or at least 3 years of service with at least 500 hours;
  • Allowing participants to withdraw up to $5,000 without penalty from any employer-sponsored plan or IRA, and exempting repayment of the withdrawn funds from taxation;
  • Providing pension funding relief to qualified family-owned, independent newspapers;
  • Allowing home health care workers with tax-exempt "difficulty of care" compensation to contribute to employer-sponsored plans or IRAs; and
  • Requiring designated beneficiaries of IRAs to withdraw all plan assets within 10 years of the death of the account holder (within five years for nondesignated beneficiaries).
  • For purposes of this article, only modifications of required distribution rules for designated beneficiaries under Title IV-Revenue Provisions, Section 401, of the SECURE Act, will be addressed.

The SECURE Act would significantly modify the required distribution rules for designated beneficiaries. In the case of a defined contribution plan, if an employee dies before the distribution of the employee’s entire interest, nonspouse designated beneficiaries of IRAs would be required to withdraw all plan assets within 10 years of the death of the account holder (within five years for nondesignated beneficiaries). This limitation does not apply to: (i) the surviving spouse of the employee; (ii) a child of the employee who has not reached majority (a child will cease to be an eligible designated beneficiary as of the date the child reaches majority and any remainder of the portion of the individual’s interest shall be distributed within 10 years after such date); (iii) disabled (within the meaning of section 72(m)(7)); (iv) a chronically ill individual (within the meaning of section 7702B(c)(2)); or (v) an individual not described in any of the preceding subclauses who is not more than 10 years younger than the employee.

The determination of whether a designated beneficiary is an eligible designated beneficiary will be made as of the date of death of the employee. If an eligible designated beneficiary dies before the portion of the employee’s interest is entirely distributed, the remainder of such portion will be distributed within 10 years after the death of such eligible designated beneficiary.

In general, except as provided below, the above amendments apply to distributions with respect to employees who die after Dec. 31, 2019. In the case of a governmental plan, the above amendments apply to employees who die after Dec. 31, 2021.

The above amendments will not apply to a qualified annuity, which is a binding annuity contract in effect on the date of enactment of the SECURE Act and at all times thereafter.

This rule would essentially eliminate stretch IRAs for certain nonspouse beneficiaries whereby, under prior rules, nonspouse beneficiaries were permitted to grow their inherited IRAs tax deferred for an extended period after the death of the employee. A significant consequence of this new rule would require income tax to be immediately paid by a nonspouse beneficiary upon the 10th withdrawal year.

If you have a retirement account and would like to discuss it with us, or, if you believe that your beneficiaries may be subject to income tax upon your death and are interested in learning more about retirement planning, please do not hesitate to contact the Morris Law Group to discuss how our attorneys may be helpful to achieve such estate planning goals.

** Disclaimer Required by IRS Circular 230** Unless otherwise expressly approved in advance by the undersigned, any discussion of federal tax matters herein is not intended and cannot be used 1) to avoid penalties under the Federal tax laws, or 2) to promote, market or recommend to another party any transaction or tax-related matter addressed.