August 2014 - Lonich Patton Ehrlich Policastri

Estate Planning Lessons from Robin Williams

August 22, 2014/0 Comments/in Estate Planning, In the Community, Probate /by Lonich Patton Ehrlich Policastri

As many of us mourn the loss of this great comedic genius, new information is still coming forward about Robin Williams. According to ABC News, with more than half of his movies portraying Williams as the leading man, his movies grossed over $6 billion throughout his career. While he was paid $165,000 per episode for his one season of The Crazy Ones, it is unclear whether he returned to television because of alleged “bills he had to pay” following his two divorces.

Robin Williams is survived by his third wife, Susan Schneider, who was married to him for 3 years, and his three adult children from his prior two marriages whose ages range from 22 to 31. The question for them now is what was the state of his financial affairs when he passed away?

While it appears from public record that Williams left real estate with equity of around $25 million behind, it is unclear what else he left for his heirs. What is clear, however, is that Williams appeared to have several estate planning documents which will be invaluable to his family. These include two different trusts. The first is the “Domus Dulcis Domus Holding Trust” (Latin for “home sweet home”). TMZ also reported that someone had leaked a copy of a different trust, which Williams created in 2009. This would have been while Williams was in the middle of his divorce from his second wife, Marsha Garces.

This trust reportedly named his three children as beneficiaries, splitting their trust funds into three equal distributions for each of them, set to pay out when they reach ages 21, 25, and 30. While the Domus Dulcis Domus Holding Trust appears to have been done to minimize estate taxes, this second trust accomplishes the goals of safeguarding privacy for Williams and his family since trusts avoid probate, keeping his affairs private (as long as they are not leaked to the media).

If you would like to learn more about trusts or avoiding probate in general, call Lonich Patton Ehrlich Policastri to schedule a free half-hour consultation. Our attorneys are passionate about estate planning and have decades of experience handling complex estate planning matters, including wills and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich Patton Ehrlich Policastri for further information.

The Ways to End Your Marriage

August 8, 2014/0 Comments/in Family Law /by Lonich Patton Ehrlich Policastri

In California, a marriage is dissolved by (1) the death of a spouse, (2) a final judgment of divorce, or (3) an annulment. Alternatively, if spouses do not want to completely end their marriage but do want to terminate their marital rights, they can (4) file for legal separation. Here is a look into each one:

(1) Death of a Spouse

When a spouse dies, dissolution occurs automatically, as a matter of law. This can be significant in family law proceedings if the spouse dies after divorce proceedings have begun, but before a final judgment of dissolution. In this scenario, spousal status is not officially terminated and the surviving spouse will still be considered “married” for inheritance purposes. Additionally, any pending dissolution proceeding is rendered moot at the death of a spouse and the court has no power to hear any remaining unresolved issues.

(2) Divorce

Divorce is the proceeding that legally ends the marriage or domestic partnership. Under Family Code section 2310, the grounds for divorce may be either “irreconcilable differences” or “incurable insanity.” Most marriages are dissolved on the ground of “irreconcilable differences.” A dissolution granted on the grounds of “incurable insanity” requires evidence – including competent medical or psychiatric testimony – that your spouse is incurably insane. In fact, this ground is so uncommon that there are no known reported decisions defining “incurable insanity” in the dissolution context. Further, it offers no tactical advantage so even if your spouse is incurably insane, pleading irreconcilable differences is much easier.

The determination of whether “irreconcilable differences” exist is essentially a ministerial function and is rarely a matter of contention. California is a no-fault divorce state, which means that any evidence of specific acts of misconduct (such as cheating, gambling, or heavy drinking) is improper. Courts recognize that ending a marriage is an intensely personal decision and only need to be convinced that the marital differences are substantial. Thus, direct proof of objective reasons supporting the divorce is not required.

(3) Annulment

An annulment declares the marriage was not legally valid – it was never entered into – and like other defenses to contracts, an annulment can occur if one party was not of sound-mind at the time of the marriage or if the marriage was procured by fraud.

A famous example of an annulment due to lack of capacity is Ms. Britney Spears’ 55-hour marriage to her high school friend, Jason Alexander, in Las Vegas. Ms. Spears sought an annulment stating that she “lacked understanding of her actions to the extent that she was incapable of agreeing to the marriage because she and Alexander did not know each other’s likes and dislikes, each other’s desires to have or not have children, and each other’s desires as to State of residency.” In other words, she was drunk and this was a joke that went too far.

Marriages can be annulled for fraud, if the fraud relates to a matter that California deems vital to the marriage relationship and the fraud directly affects the purpose of the party deceived entering the marital contract. Usually, annulments based on fraud involve the sexual and procreative aspects of marriage, such as a secret intention not to live with the other spouse or a concealment of sterility. False representations about earning capacity, wealth, or social status are not the type of fraud that will warrant a nullity. Nor will a failure to fulfill wedding vows or commonly understood spousal obligations, such as being a loving and supporting partner.

(4) Legal Separation

The grounds for legal separation are the same as those for a divorce but it does not end the marriage. Legal separation is an alternative to divorce, where the spouses do not want to completely sever the legal status of the marriage. Otherwise, a legal separation operates similarly to a divorce, separating all finances and property.

Spouses often seek a legal separation for religious or other personal reasons, or to retain eligibility for medical insurance, veteran’s benefits, or social security benefits that would have otherwise been lost by a divorce.

If you have any questions about the proper way to end your marriage, please contact our California Certified Family Law Specialists. Our attorneys have decades of experience handling complex family law proceeds and offer a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Tax and Estate Planning for Same-Sex Couples

August 1, 2014/0 Comments/in Estate Planning, In the Community, Probate /by Lonich Patton Ehrlich Policastri

Earlier this week, the U.S. Court of Appeals for the 4th Circuit struck down Virginia’s same-sex marriage ban, saying that withholding the fundamental right to marry from same-sex couples is a form of segregation that the Constitution cannot tolerate.

In June 2013, the Supreme Court of the United States in United States v. Windsor, held that the federal government must recognize same-sex marriages and that it is up to state Legislatures to define marriage within state boundaries. Since then, numerous law-suits challenging the constitutionality of state DOMAs on equal protection and due process grounds have prevailed in various federal and state courts. Currently, 19 states, including California, plus the District of Columbia recognize same-sex marriage (recognition states), while 40 states prohibit it (non-recognition states).

The prevailing prediction is that a Supreme Court guarantee of a right to marriage is on its way. American support for same-sex marriage is at a new high of 55 percent, and California support is at 61 percent and increasing, if the trends continue. It is important for all couples to create an estate plan. Additionally, it is important for same-sex couples to be aware of the potentially complicated issues that arise when they move across state lines.

Same-Sex Couples Living in California

Same-sex married couples now living in California enjoy the same benefits and burdens under state and federal law as married opposite-sex couples. Before Windsor and IRS Revenue Ruling 2013-17 (which extended federal tax benefits to married same-sex couples, regardless of their state of residency), many married opposite-sex couples likely took this preferential treatment for granted.

Some of these benefits include:

Property transferred between spouses incident to a divorce is not subject to income or gift tax;
Spousal support (alimony) payments are tax deductible to the paying spouse;
Child support payments are not subject to income tax;
Spouses receive a community interest in 401(k) accounts and other retirement plans; and
Spouses receive all community property and anywhere from one-third to all of the deceased spouse’s separate property for intestate (when a person dies without a will or other non-probate instrument) inheritance purposes.

All couples should be aware of their legal rights at marriage, divorce, and death. It is important for both same-sex couples and opposite-sex couples to consider pre-marital agreements, estate plans, and any tax consequences that arise from marriage or divorce.

The Marital Status of Migrating Same-Sex Couples

When a same-sex couple moves out of California, their marital status will depend on the other state’s law with regards to various issues including, state tax filing status, intestate succession, guardianship and conservatorship appointments, and adoption and artificial reproductive technologies. In other words, a non-recognition state may not recognize the otherwise valid same-sex marriage.

If and when the Supreme Court guarantees a right to marriage, moving across state lines will no longer be an issue for same-sex couples. However, in the interim, it is important to be aware of the possible legal consequences.

For example, under Florida law, the definition of “heir” does not include same-sex spouses for intestate inheritance purposes. This means that a same-sex couple that was married in California, but permanently living in Florida, will not inherit from each other under the Florida intestate system. Some courts in non-recognition states are willing to recognize same-sex marriage in certain contexts through the doctrine of comity, which is where a court gives deference to another state’s laws. However, most surviving spouses want to avoid litigation because it can be a headache, requiring time, money, and mental energy.

In some cases, it might be worthwhile for same-sex spouses to opt out of the intestate system with non-probate instruments, such as estate plans. A same-sex couple’s estate plan needs to be drafted with precision, specifically naming beneficiaries, rather than using general terms such as “spouse.” This becomes especially important if a same-sex couple moves to a non-recognition state, where the court may not interpret a same-sex spouse to qualify as a spouse or heir. If any other blood related heirs of the deceased spouse were to contest the non-probate instrument, they could end up inheriting property that would have gone to the same-sex spouse in California or another recognition state.

If you are a same-sex couple and are considering marriage, or need to create or update an estate plan, please contact our California Certified Family Law Specialists. Our attorneys have decades of experience handling complex family law and estate planning matters and offer a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Estate Planning Lessons from Robin Williams

The Ways to End Your Marriage

Tax and Estate Planning for Same-Sex Couples

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