Florida Domicile

In Florida, domicile is generally regarded as the place where a person has a fixed abode with the present intention of making it his permanent home. One established, a domicile continues until it is superseded by a new one.

A person's intentions may be proved by his expressions of intent and by overt acts proving intent. Intent may be shown by ones testimony or that of another. Courts though tend to focus on nonsubjective evidence to infer intent such as the following:

• executing a new will reciting Florida as the state of domicile
• filing of a declaration of domicile with the clerk of court
• obtaining of a Florida driver license
• obtaining a Florida library card
• registering to vote in Florida
• owning a Florida residence and filing a Florida homestead exemption for the property
• sale of residence in former state of domicile
• ceasing employment in former state of domicile
• activity in community in Florida
• moving medical, dental, legal, and accounting relationships to Florida professionals
  

Homesteads Held in Trust

The status of real property held in trust as homestead has been questioned in recent cases. Often a person will convey his homestead to a revocable trust of which he remains trustee and beneficiary.

Some courts uphold the claim of homestead status if the trust is freely revocable and the debtor is the sole beneficiary and thereby the grantor maintains a legal or equitable interest in the real estate. The courts note that the Florida Constitution does not distinguish the different types of ownership interests that may qualify for the homestead exemption.

Constructive Trusts in Florida

A constructive trust is a remedy imposed by a court to return property to its rightful owner and to prevent unjust enrichment of one person at the expense of another. Equity holds that although the possessor holds "bare legal title" to the property, the beneficial interest is held by the person entitled to the property. The property may have been acquired by another by fraud or even without fraud if it is against equity that is should be retained by the person who holds it.

For the imposition of a constructive trust, there must be generally be clear and convincing evidence of

• a promise, express or implied
• a transfer of property and reliance thereon
• a confidential relationship (legal, moral, social, domestic or personal)
  
• unjust enrichment (by fraud or benefit of the mistake of another)
  

Totten Trusts in Florida

A Totten trust is merely a tentative trust that is revocable at will until the depositor completes the gift during his lifetime by some unequivocal act or declaration or subsequently dies. Since the depositor has complete control over the funds during his lifetime, he is regarded as the owner of the account.

The Totten trust doctrine has been accepted in Florida. It has been held that the deposit by one person of his money in his own name as trustee for another is not a irrevocable trust during the lifetime of the depositor. "It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary." Where the depositor dies before the beneficiary without revocation, it is presumed that an absolute trust is created as to the balance on hand at the death of the depositor.

Totten trusts may be revoked. There are no specific formalities required to evidence the revocation of a Totten trust. Any decisive act or declaration of disaffirmance during the lifetime of the owner will generally suffice.

Exemption of Wages in Florida

Florida statute 222.11 generally provides for certain exemptions of "disposable earnings" of a head of family and non-head of family in three different situations as follows:

• All of the disposable earnings of a head of a family of $500.00 or less a week are exempt.
• Disposable earnings of a head of family greater than $500.00 are exempt unless the person has agreed otherwise in writing (also cannot exceed 15 USC 1673)
• Disposable earnings of a person that is not a head of family is exempt to the extent of 15 USC 1673
  

15 USC 1673 generally limits the amount that can be garnished to 25% of the individual's disposable earnings per week. Exempt earnings that are deposited into a bank are exempt for six months if the funds can be traced to and identified as earnings.

The determination of whether a person is the "head of family" is based on the totality of the circumstances.

"Earnings" is defined to include compensation paid in money for personal services or labor whether denominated as wages, salary, commission, or bonus. Disbursements from a family owned business may not constitute "earnings" unless there is a formal arms length employment agreement and if the disbursements are characterized as "profits." Commissions and bonuses may constitute earnings even if the person is labeled an independent contractor if his activities are essentially a job, he is supervised, and not in the nature of running a business. But commissions have been held not to constitute earnings if the person is free to make his own business decisions and solely responsible for expenses incurred in the operation of his business. A return on an equity investment is not earnings.

Lost wages have been held to consitute earnings where the settlement properly identified them as earnings.

According to the Federal Rules of Bankruptcy Procedure, the party objecting to exemptions has the burden to prove by a preponderance of the evidence that a debtor is not entitled to the claimed exemption. If the objecting party establishes prima facie evidence that the exemption should be denied, the burden shifts to the debtor to establish that the exemptions are legally valid.

Exemption of Workers' Compensation Benefits in Florida

Florida Statutes section 440.02 provides for a certain exemption of worker's compensation claims in Florida. It generally provides for the exemption of "compensation or benefits due or payable" under chapter 440. The exemption though does not extend to creditors with claims based on an award of child support or alimony.

The Florida Supreme Court held in Broward v. Jacksonville Medical Center that "workers' compensation benefits received by the beneficiary and deposited in a bank account" remain exempt "so long as the funds are traceable to the workers' compensation benefits." Florida courts also hold that publicly traded stocks, bonds, and mutual funds purchased with worker's compensation benefits remain exempt.

The In re Mix case held that this exemption for worker's compensation benefits applies whether the benefits are payable to compensate for lost wages or for present or future medical expenses.

Florida Exemption of Life Insurance

Florida Statutes provide for certain limited exemptions of life insurance.

Cash Surrender Value

Florida Statutes section 222.14 provides that the "cash surrender value" of life insurance "issued" upon the lives of citizens or resident of Florida is exempt from the claims of

• creditors of the person whose life is so insured (some courts hold insured must also be the owner of policy)
• creditors of the beneficiary

unless the policy was effected for the creditor's benefit.

Florida courts broadly construe the required nature of the "form" of the "cash surrender value" to include any cash value that may be obtained either by means of negotiation or pursuant to an agreement for surrendering the policy. One court held that this exemption applied to a certificate of deposit purchased with the cash surrender proceeds of the life insurance policy.

This statutory exemption is subject to disallowance if created by the conversion of non-exempt funds into exempt assets in contravention of Florida Statute sections 222.29 and 222.30.

Proceeds of Life Insurance - Exempt from Claims of Insured but Not Claims of Beneficiary

Florida Statutes section 222.13 provides for the exemption of the proceeds of life insurance from the creditors of the "insured" upon the death of a person residing in Florida. Courts hold that this statute provides for the exemption from the claims of creditors of the insured but not from the claims of the creditors of the beneficiary. This means that the proceeds are available to the claims of the beneficiary's creditors.