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Wills-Trust

Wills or Trusts: What Should You Use?

Wills and trusts are valuable estate planning tools that help you distribute your financial assets and possessions to your beneficiaries after you pass away. However, wills and trusts serve different purposes. In certain circumstances, having one or both of these tools as a part of your estate planning portfolio may be beneficial. Which should you choose? Below, we discuss what wills and trusts are and when each should be used.

What is a Will?

A will, formally referred to as a “Last Will and Testament,” allows you to divide your assets and personal possessions among your beneficiaries, including family, friends, and charitable organizations. In a will, you can indicate specific individuals to receive anything from real estate property to family heirlooms. You can also allocate funds for particular purposes, like donating to charity or setting aside a college fund for your grandchildren. The process of validating a will and distributing assets is a formal process called probate, which the Probate Division of the Circuit Court in Florida oversees.

When to Use a Will

Wills are best utilized when you want to list your personal possessions and give them to specific people. The assets in your will could be anything of sentimental or financial value, such as your great-grandmother’s handmade quilt, your wedding ring, or a portrait your spouse painted. If you have minor children, a will is needed to name a legal guardian for them if you pass away. You may also include a personal note to your loved ones in your will.

How to Create a Will

For a will to be legal in Florida, it must be a typed, written document that you and two witnesses sign. It is preferred if the two witnesses are not beneficiaries listed in the will. Handwritten wills are not considered valid in Florida courts. Wills only go into effect after you pass away, giving you complete control over your assets while alive. Wills are also simple to amend.

What is a Trust?

The purpose of a trust is to transfer financial assets from your estate to your beneficiaries while avoiding probate. Trusts are financial agreements that closely mimic

business partnerships. They are made between you (the trustor), a person who is in charge of overseeing the trust (a trustee), and the people who will receive the assets placed in the trust (your beneficiaries).

When to Use a Trust

Trusts may be a beneficial estate planning tool if you have many types of financial accounts. Trusts allow you to plan for services like Medicaid and avoid tax penalties for things like life insurance payouts. Another benefit of establishing a trust is that beneficiaries receive their assets in less time than with formal probate proceedings. They also cannot be challenged in court like a will can, accelerating the asset division process.

How to Create a Trust

Trusts go into effect the day they are created. Once you pass away, the assets stated in the trust are automatically transferred to the beneficiaries you list. Trusts are either revocable or irrevocable. You can control the assets inside a revocable trust while you are alive, but irrevocable trusts cannot be changed once made, and you lose access to the assets in them.

Wills or Trusts – Which Should You Use?

In many cases, having a will and a trust makes sense. Each estate planning tool has different goals and purposes, so there are benefits of having both as a part of a comprehensive estate plan. In this situation, a will would be used for you to send a personal message to your loved ones and name beneficiaries for specific assets like family heirlooms, personal possessions, and financial gifts. A will is also needed if you wish to name a guardian if you have minor children. A trust would be used to help manage the financial accounts of your estate and allow your beneficiaries to receive monetary funds in a way that avoids probate and is tax-friendly.

Boutty Law Firm – Orlando Estate Planning Attorneys

Not sure whether a will or trust is right for you? Contact the Boutty Law Firm. We will help you develop an estate plan so that all your assets are divided among your loved ones as desired when you pass away. Contact our Orlando offices at 407-710-0461 for a consultation today.

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What is Considered a Breach of Contract?

Contracts are an essential part of any business relationship, whether you are a freelancer, a small business owner, or the CEO of an international corporation. Contracts ensure both parties are on the same page regarding payment terms, conditions, and details about how a service will be provided or a product will be delivered. Breaches of contracts occur when one party fails to adhere to or perform one of the tasks listed in the contract. When this happens, you may need to go to court to recover damages caused by the breach. Below, we discuss how to determine if a breach of contract occurred and what to do about it.

Was a Valid Contract in Place?

There must be a legally binding contract in place for a breach of contract to have occurred. Legally binding contracts must be in writing and have the following elements:

  • Offer—A service or product that is exchanged for something of value.
  • Consideration—The item of value. It is important to note that not all considerations are monetary.
  • Acceptance—An action that shows both parties agree to the terms. Signing a contract or putting down a deposit are forms of acceptance.

Did a Material Breach Occur?

Material breaches occur when one party fails to perform a critical action listed in the contract. You must prove there was a significant violation of your agreement that caused harm to you or your business. You must show you attempted to follow the terms of the contract and that the defendant had everything needed to perform his or her duties. Minute details like a typo in the agreement would not be considered a material breach.

Did the Breach Cause Damage?

The other party’s failure to fulfill the contract must have caused quantifiable monetary damages. Here are the types of damages that a breach of contract may cause:

General Damages

General damages are direct monetary losses caused by the contract breach. They can include the cost of replacing a product that failed to be delivered.

Special Damages

These damages are indirect damages caused by the breach but not directly related to it. They could include profit losses due to delays in getting the product or service. To seek compensation for special damages, you will need to show you took steps to mitigate your damages as much as possible (such as finding a new vendor or doing the task yourself).

Expectation Damages

Expectation damages provide monetary compensation for the value the product or service would have provided to your business. It includes the potential profit your company could have gained if you sold the product as originally stated in the contract.

Rescission

Rescission voids the contract entirely, stating the breach was so substantial that it is no longer legally binding. When this occurs, you do not need to pay for any services. The contract is canceled, and you are entitled to a full refund.

Boutty Law Firm: Central Florida Business Attorney

Contract breaches can cost your business a significant amount of time and money. Let the Boutty Law Firm defend your rights and help your business get back on track. We help business owners in Seminole and Orange counties in all aspects of business and real estate law. Call us at 407-710-0461 or visit our office in Maitland to discuss your case.

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What Happens to Your Home After You Pass Away?

Real estate property is likely one of the biggest assets you possess. What happens to your home after you pass away depends on various factors. There are many ways to ensure your home goes to your desired beneficiaries with a comprehensive estate plan. Below, we discuss the different scenarios of what happens to your home after you pass away.

With a Will

In a will, you can name a specific beneficiary who you would like to inherit your home or other real estate property. However, the beneficiary will not be entitled to the property deed until probate proceedings conclude. During probate, the entire estate is valued, and debts are paid. As long as the home did not need to be sold to pay off estate debt, the property will go to the beneficiary you named in your will.

Without a Will

 When you pass away intestate (without a will), Florida’s intestate laws determine who is eligible to receive your assets, including any real estate property you own. The estate will go through probate just as it would if you had a will, but the intestate line of succession will specify who is entitled to the asset. The intestate line of succession is as follows:

  • Surviving spouse
  • Children and grandchildren
  •  Parents
  •  Siblings and their families (including nieces and nephews)
  • Blood relatives
  • The state

With a Mortgage

Mortgage debt is handled differently than other estate and consumer debt after you pass away. While debts from things like credit cards are paid off from the entire estate’s value, a mortgage is not required to be paid off when the person who owns it dies. Who is responsible for the mortgage varies depending on the mortgage type and what will be done with the property.

 If you had a co-signer on the mortgage, that person is responsible for making payments. If you named a beneficiary in your will to inherit your home, your beneficiary would be responsible for taking over the mortgage once the probate process is complete. If no one desires to own the house, your beneficiaries may sell it and place the profit into the estate bank account. In the meantime, your estate’s personal representative (executor) is responsible for ensuring mortgage payments are made. If the personal representative fails to make payments or no one takes over the mortgage, the bank will foreclose on the home.

When You Have Other Debts

During probate, your entire estate value is assessed (including the value of your home). After the formal notice of administration, the personal representative will notify any known creditors that the estate is in probate. Creditors have 90 days to file claims. These claims are paid from the value of the estate. If your debts equal or exceed the value of your home, it may be sold to pay off the debts.

With an Enhanced Life Estate Deed

An enhanced life estate deed (also called a Lady Bird Deed) allows you to automatically transfer property to a named beneficiary without going through probate or placing the property in a trust. These deeds give property owners complete ownership rights while alive.

With a Trust

Placing real estate assets in a trust is a common way to avoid probate. With a trust, a trustee manages the distribution of assets to named beneficiaries.

Boutty Law Firm: Central Florida Estate Planning and Real Estate Attorneys

To ensure your primary residence or other real estate property is transferred to your desired beneficiaries efficiently, you will want to create a complete estate plan. What happens to your home after you pass away depends on a well-formed estate plan. Call our office at 407-710-0461 to speak with the estate planning attorneys at the Boutty Law Firm. We handle the estate planning needs of Winter Park, Orlando, and Central Florida residents.

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Guide to Obtaining a New Commercial Building Permit

The Florida Building Code is a group of regulations specified in Florida Statute 553.79. It requires businesses, individuals, and contractors to obtain necessary permits when “constructing, erecting, altering, repairing, or demolishing” a building. These regulations are intended to keep employees, patrons, and visitors safe while on the premises and help buildings withstand natural disasters like hurricanes. While the state dictates the requirements that make up the Florida Building Code, each county has specific requirements for obtaining a building permit. In addition, different permits are needed if you are constructing a new commercial building, renovating an old one, or building a new residential property. Below, we discuss the requirements for obtaining a new construction commercial building permit in Orange County, Florida.

Required Documents for New Commercial Building Permit Application

Contractors must submit various documents online to apply for a new commercial construction permit in Orange County. In most cases, contractors must be the ones to apply for the permit and accept the issuance once it is approved. A business owner can apply for a permit if the project costs less than $75,000. Contractors must submit their application for new construction along with the appropriate documents through Orange County’s Fast Track online permit system (described in detail below). Necessary documents that are required to accompany the initial application include:

  • Site plan or survey (including dimensions and location)
  • Project scope signed and sealed by a licensed Florida architect or engineer
  • Life safety plans
  • Floor plan
  • Construction type
  • Occupancy classification
  • Energy conservation code
  • Fire flow calculation
  • Door and window installation plan and product description

 How to Apply for a New Commercial Building Permit

1. Fill out the Fast Track application.

Orange County uses an online portal called Fast Track for all permit applications. Filling out the online application and uploading the necessary documents is the first step in obtaining a new commercial construction permit.

2. Upload documents.

Follow the instructions for uploading documents carefully, including required file types and names to ensure your application is processed promptly. In addition to the documents mentioned above, you must complete a Commercial Plan Review checklist and pay a deposit fee.

3. Project and plans review.

An inspector will review the online application and ensure it complies with all elements of the Florida Building and Fire Prevention codes. Depending on the type of construction, there may be additional reviews that are required.

4. Approval or denial.

After the review process, you will receive an email with either a permit approval notice or a denial. If you are denied, you can utilize the comments within the application to resubmit your permit after revising your building plans. If your application is accepted, the permit status will change to “final issuance,” and you will be emailed a final issue letter. You will also need to sign and notarize the second page of the new building application and resubmit it to Fast Track.

5. Pay permit fees.

6. Apply for sub-permits.

Additional permits may be required depending on the type of building. You may need to apply for a sub-permit for the building’s electrical, roofing, gas, irrigation, plumbing, or mechanical elements.

7. Notice of commencement.

This notice needs to be signed with a certified copy uploaded into the Fast Track system before the first inspection.

8. Schedule the first inspection.

9. Final inspection and permit completion.

Boutty Law Firm: Business and Construction Attorney in Central Florida

 Attorney Shane Boutty, P.A., has over 20 years of experience in the construction industry and is experienced in all aspects of commercial law. If you believe your new construction project has been denied unfairly, or you have issues regarding new building inspections, we can help ensure your project stays on track and up to code. Call our office in Maitland at 407-710-0461 for a free initial consultation.

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What is a “Damage To Your Work” Exclusion?

As a general contractor, your business must have Commercial General Liability insurance (CGL). This type of insurance is required for most construction contracts. Primarily, CGL covers personal injuries and property damages to others during the job or on your completed work. Most CGL insurance policies include clauses for exclusion—specific times that insurance will not cover damages. One common exclusion in contractor policies is the “Damage to Your Work” or “Your Work” exclusion. Below, we discuss what this exclusion means, common scenarios where it is used, and how it impacts a claim against your insurance as a general contractor.

What is the “Damage to Your Work” Exclusion?

 The Damage to Your Work exclusion protects the insurance company from paying to cover the cost of replacement materials and structures resulting from faulty or defective work. The policy may word this exclusion similar to this:

“This insurance does not apply to property damage to work performed by or on behalf of the Named Insured arising out of the work or any portion thereof, or out of materials, parts, or equipment furnished in connection therewith. This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.”

Most CGL policies cover property damage and bodily injuries caused by defects or construction errors but will not cover replacement costs for fixing the damaged work. The Damage to Your Work exclusion allows insurance companies to deny covering the costs of repairs or replacement for materials for work you performed.

Why Do Insurance Companies Include Damage to Your Work Exclusions?

Insurance covers property damage and personal injuries to clients or customers caused by general business risks. These policies are not meant to act as a warranty, covering the replacement or repair of defective parts related to the claim. The Damage to Your Work exclusion prevents insured business owners from receiving funds to repair or replace the faulty work that caused the damage in the first place. It includes denying claims for building materials like shingles, flooring, drywall, and the cost of labor to repair what was damaged.

Example Scenarios

To understand how the Damage to Your Work exclusion may be utilized in the real world, here are two instances where this exclusion may come into play:

Bathroom Remodel

During a bathroom remodel, a contractor retiled the shower. Before installing the tile, the contractor placed a waterproof rubber membrane underneath the shower pan to prevent water from entering the subfloor. During installation, the membrane ripped, causing a hole that the contractor did not notice before continuing to install the shower. Several months after the remodel was complete, water began to leak and caused damage to the surrounding shower drywall and the shower’s subfloor. To fix the leak, the contractor had to remove some of their previously completed tile work and replace part of the subfloor. The contractor made a claim through his CGL insurance, which paid for the client’s property damage. He also claimed to recover the cost of labor, and for replacing the tile he had to tear out. The claim was denied under the contractor’s Damage to Your Work exclusion, citing the tile repairs were only needed due to the contractor’s poor workmanship caused by the tear in the membrane. 

Roof

A contractor oversaw a roof install for a client. However, the shingles were not installed properly. Several months later, the roof leaked during a bad thunderstorm, causing damage to the client’s belongings stored in the attic. To fix the damage, the contractor had to replace the entire roof. The contractor filed a claim with his CGL insurance, which covered damage to the homeowner’s belongings. However, the insurance denied coverage for the cost of replacing the roof, citing the Damage to Your Work clause as the roof damage was caused by faulty shingle placement.

Damage to Your Work and Subcontractors

As in the sample wording above, the Damage to Your Work exclusion often includes phrasing regarding subcontractors. In these instances, CGL may cover the cost of repairs if the damage was caused by work done on your behalf by a contractor. This is because the subcontractor should have a similar exclusion within their own CGL policy. In this instance, the subcontractor would be responsible for the costs of repairs and damages.

Appealing a Damage to Your Work Exclusion

The Damage to Your Work exclusion is common in construction contracts. However, it is often contested and regularly misinterpreted. If you believe your insurance company has unfairly denied your claim under the Damage to Your Work exclusion, contact the Boutty Law Firm. Attorney Shane Boutty is a certified contractor and former construction business owner. He understands construction law, claims, and insurance policies, fighting for your rights as a construction professional. Schedule a consultation by calling 407-710-0461 or stop by our office in Maitland for a consultation to discuss your case. 

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