CEO 78-37 -- June 13, 1978

FULL AND PUBLIC DISCLOSURE OF FINANCIAL INTERESTS

VALUATION AND DISCLOSURE OF ASSETS

To: (Name withheld at the person's request.)

Prepared by: Phil Claypool

SUMMARY:

Section 8(a) and (h), Art. II of the State Constitution (the Sunshine Amendment) requires, in part, disclosure of each asset valued in excess of $1,000 held by the reporting official. The cash surrender value of an insurance policy on the official's life, which policy is wholly owned by the official's spouse, is not deemed to constitute an asset personally held by the official in the absence of an adjudication by a court that he has a legally recognized property interest in such policy. Accordingly, the cash surrender value of such policy need not be disclosed as an asset even though the official makes the premium payments.

Section 8, Art. II, strictly read, requires the disclosure of a particular item of personal property only if its value exceeds $1,000; the amendment does not speak in terms of categories of personal effects such as household furnishings or jewelry. Therefore, each asset should be valued to determine whether it exceeds the $1,000 threshold and therefore must be disclosed. However, since the purpose of s. 8, Art. II, is disclosure, it is permissible to disclose and value categories of personal property in which no single item is worth in excess of $1,000.

Section 8(h) of the amendment requires the filing of a "sworn statement showing net worth and identifying each asset and liability in excess of $1,000 and its value." Because "net worth" is listed first, it appears that only the assets and liabilities included in calculating one's net worth are meant to be disclosable. Further, since one's net worth will have meaning and be accurately capable of being calculated only as to a certain date, each asset and liability will have to be valued as of the same date.

Savings accounts maintained by the reporting official in his own name but established in trust for his children constitute assets of the official where he is authorized to make withdrawals. Reference is made to Seymour v. Seymour, 85 So.2d 726 (Fla. 1956). Because the trust is tentative and revocable at will by the depositor, it is deemed to constitute an asset belonging to him and, if in excess of $1,000, is subject to disclosure.

QUESTIONS:

1. In making full and public disclosure of my financial interests pursuant to s. 8, Art. II of the State Constitution, am I required to disclose as an asset the cash surrender value of life insurance policies which are owned by my spouse, under which my spouse is the sole beneficiary, where I make the premium payments for the policies?

2. In making full and public disclosure of my financial interests, am I required to list and value as assets items of personal property by categories?

3. In making full and public disclosure, should each asset be valued as of the same date?

4. In making full and public disclosure of my financial interests, am I required to disclose as assets savings accounts which are in my name in trust for my children where I am authorized to make withdrawals, even though I would not do so except for their benefit?

Question 1 is answered in the negative.

In a previous opinion, we have advised that in our opinion s. 8(a) and (h), Art. II of the State Constitution requires disclosure of a public officer's personal net worth, assets, and liabilities and that disclosure of assets which may be owned by a member of the officer's family but in which the officer holds no property interest is not required. Commission on Ethics Opinions 78-19 and 77-158. While you may be said to have an interest in a life insurance policy which is owned by your spouse and for which you have made premium payments, the policy nevertheless is owned by and is the property of your spouse. Under these circumstances, in the absence of an adjudication by a court that you have a legally recognized property interest in such a policy, it appears that the policy is not one of your assets. Fugassi v. Fugassi, 332 So.2d 695 (4 D.C.A. Fla., 1976).

Accordingly, we are of the opinion that in making full and public disclosure of your financial interests, you are not required to disclose as an asset the cash surrender value of life insurance policies which are owned by your spouse, under which your spouse is the sole beneficiary, where you have made the premium payments for the policies.

Question 2 is answered in the negative.

The Sunshine Amendment requires the

filing [of] . . . a sworn statement showing net worth and identifying each asset and liability in excess of $1,000 and its value . . . . [Section 8(h), Art. II, State Const.; emphasis supplied.]

Strictly read, then, the amendment requires the disclosure of a particular item of personal property only if its value exceeds $1,000. The amendment does not speak in terms of categories of personal effects, such as household furnishings or jewelry; nor does it authorize this commission to alter its express language. In this respect, we are of the opinion that each particular asset should be valued to determine whether it exceeds the $1,000 threshold and therefore must be disclosed. Commission on Ethics Opinion 77-139. However, since the purpose of s. 8(a), Art. II is disclosure, we think it would be permissible to disclose and value categories of personal property in which no single item is worth in excess of $1,000. If this is done, in order to avoid confusion we would suggest your noting on the form that no single item of the listed category exceeds $1,000.

The Sunshine Amendment requires the filing of a "sworn statement showing net worth and identifying each asset and liability in excess of $1,000 and its value." Section 8(h), Art. II, State Const. Because "net worth" is listed first, it appears that only the assets and liabilities which were included in calculating one's net worth are meant to be disclosable. Since one's net worth will have meaning and be accurately capable of being calculated only as to a certain date, each asset and liability will have to be valued as of the same date. It was partly for that reason that Form 6, the form we have promulgated for full and public disclosure, allows one's net worth to be stated as of December 31 of the previous tax year or a more current date. Accordingly, question 3 is answered in the affirmative.

Question 4 is answered in the affirmative.

In your letter of inquiry you advise that you have established savings accounts for your children, which accounts are in your name but are in trust for your children. You also advise that the money in the accounts belongs solely to your children but that you are authorized to make withdrawals, which you would not do except for their benefit.

Under these circumstances, it appears that you have created several "Totten trusts" for your children. 5 Fla. Jur.2d Banks s. 158 (1978). The doctrine of the tentative or "Totten" trust has been adopted by the Florida courts and has been described as follows:

A deposit by one person of his own money in his own name as trustee for another, standing alone, does not establish an 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. In case the depositor dies before the beneficiary without revocation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor. [Seymour v. Seymour, 85 So.2d 726 (Fla. 1956); emphasis supplied.]

Because the trust is tentative and revocable at will, the original depositor legally is entitled to withdraw some or all of the funds in the account. Accordingly, since you still have access to the accounts which are in your name in trust for your children, we are of the opinion that each account constitutes an "asset" which must be disclosed in making full and public disclosure if it exceeds the $1,000 threshold.

Please be advised that opinions of this commission which relate to s. 8, Art. II of the State Constitution are strictly advisory in nature; such opinions lack the legally binding effect of our opinions relating to the Code of Ethics for Public Officers and Employees under s. 112.322(3)(b), F. S.