October 2022 - Lonich Patton Ehrlich Policastri

What to Know Before Signing a Prenup

October 26, 2022/in Family Law /by David Patton

When two people fall in love and decide to get married, everyone tends to focus only on the exciting events to follow. While marriage is definitely something to celebrate, it is nothing to be taken lightly. It is a lifelong commitment that unfortunately is becoming increasingly likely to end in divorce. A prenuptial agreement can go a long way in ensuring the safety of both partners’ assets, business interests, and family trusts.

What is a prenuptial agreement?

Prenuptial agreements, also known as a “prenup”, is a private agreement between the two spouses-to-be. It sets out the stipulations of your marriage and outlines the provisions for what will happen in the event of a divorce or the untimely death of either spouse. Prenups most commonly outline who will receive property and other assets, including property owned by each spouse prior to getting married and whatever they might acquire together after getting married. In the state of California, this legal document declares the assets and debts of each individual before marriage and how those will be separated after a divorce. A prenup can also dictate how much alimony a spouse is entitled to. It is also becoming more common for pets to be included in prenuptial agreements.

Why get a prenup?

There are many, many reasons to have a prenuptial agreement in place prior to getting married. A few of these are:

To protect assets and property owned before getting married.
To establish a plan for paying expenses during the marriage.
To protect children, parents, or other family members from the fear of a new spouse taking advantage of assets or property.
To designate ownership and distribution of benefits from a life insurance policy.
To protect a business or estate.

Prenuptial agreements can’t include anything that goes against public policy or that is downright illegal. For example, a prenup that contains anything that will adversely affect the rights of a child will be deemed unenforceable. The courts will always act in the best interest of a child. However, prenups can go above and beyond in making provisions for children. They can dictate the responsibility of each parent for future college expenses and other financial needs of the child. California Family Code Section 1612 specifically states what is legally able to be included and enforced in a prenuptial agreement.

Consult with an expert on whether a prenuptial agreement is right for you.

Having a prenup in place before getting married can give both you and your partner peace of mind. Hopefully it is something you don’t ever need, but in the unfortunate event that a divorce does happen, it is better to know that your assets are protected. Here at Lonich Patton Ehrlich Policastri, we specialize in Family Law and Estate Planning. We have significant experience in drafting prenuptial agreements that can withstand a court challenge. We have combined litigation experience of over 100 years and we know just how messy and complex a divorce can be. Call us today at 408-553-0801 or click here to schedule a free 30-minute consultation.

How Does An Affair Impact Custody Agreements?

October 18, 2022/in Family Law /by Virginia Lively

An affair is a life-altering event. The repercussions of infidelity affect far more people than just the spouse who was cheated on. Often, the party who suffers the most is the most innocent – the children. In addition to their family structure being shaken up, they will now have to split time between both parents. Before this happens, a custody agreement must be arranged in court. So, how does an affair affect custody agreements?

California is a no-fault divorce state.

Here in California, the court system does not need to know the specific reasons why a marriage is being dissolved. Even though an affair might be the reason why a couple is seeking a divorce, the court will rule it as “irreconcilable differences” without determining which party is at fault.

With that being said, infidelity typically has little to no impact on determining child custody. The spouse who was spurned by the affair cannot use being cheated on as a reason to deprive the other parent of custody. The best interest of the child is what the court bases custody rights off of, and a parent’s romantic interests usually don’t have much effect on that.

There are exceptions to every rule.

Although infidelity alone will not have an impact on the custody agreement, other factors which stem from an affair might. For example, if there was domestic violence or substance abuse in the home, that would certainly impact child custody. If the spouse having the affair was neglectful to the children and left them unattended and unsupervised to meet up with their romantic interest, that would also impact custody.

Likewise, if the parent who was cheated on proves to be vindictive and is going to create a negative environment for the children, the court would take that into consideration. The safety and well-being of the children should be the forefront concern for both parents. If either parent is not capable of providing a safe and nurturing environment for their children, that will become a factor in the custody proceedings.

How do I know if an affair will affect my custody agreement?

Every case is different, and there is no “one size fits all” advice when it comes to topics as complex as child custody. Here at Lonich Patton Ehrlich Policastri, we specialize in family law and estate planning. We are located in San Jose, CA, and serve the greater Bay Area. We are one of the largest practices in the Bay Area and we are Board Certified Family Law Specialists. We have been serving the community since 1994. Our attorneys genuinely care about each individual client and we want to take the time necessary to understand your objectives and meet your needs. We have the proper resources, training, and experience to serve your family with the best expertise in the area.

Please give us a call at 408-553-0801 or fill out our contact form for a free consultation. You deserve to know your rights and the best way to proceed with a divorce and custody agreement.

What Happens When You Inherit an IRA?

October 12, 2022/in Estate Planning /by Michael Lonich

The short answer is: it depends. Navigating what happens after inheriting an IRA (individual retirement) account can seem overwhelming, but we at Lonich Patton Ehrlich Policastri are here to help you know your options and determine your next steps. Estate planning is one of our areas of expertise, and we are more than happy to help you make decisions regarding your new inheritance.

Know what kind of IRA you have inherited.

The very first thing to do upon finding out you have inherited an IRA is to figure out important details such as what type of account it is. There are multiple types of IRAs, but the most common two are a traditional IRA and a Roth IRA.

With a traditional IRA, you contribute money before you are taxed on it. The money contributed might be able to be deducted from your taxes, and the money invested grows tax-deferred until withdrawing the money. Oftentimes retirees are in a lower tax bracket when they were working, the money might be taxed at a lower rate when they do begin withdrawing funds.
With a Roth IRA, you are taxed in your contributions before investing them. This means that when you do begin withdrawing money, you will not pay taxes on it, as long as you meet certain requirements.

Knowing the account type is significant because the tax treatment remains the same for the heir as it was with the original owner. The beneficiary will typically have to move the assets from the original account over to a newly opened inherited IRA in their name.

What type of beneficiary are you?

Anyone is able to inherit an IRA, but the rules for what they can do with it differ depending on whether the heir is the spouse of the deceased or not. Due to the passage of the SECURE Act of 2019, non-spousal heirs who inherit an IRA on or after January 1, 2020, now have even more limited options than before. Funds must be spent within 10 years of the original account owner’s passing, regardless of account type. Spouses tend to have more freedom with how they manage their inherited IRA.

Other factors that come into play include when the account was opened and if the original investor had begun taking out their required minimum distributions (RMD) for a traditional IRA.

There is no one-size-fits-all explanation for inheriting an IRA.

Each situation is different, and every heir faces different circumstances. Here at LPEP Law, we have highly qualified trust and estate lawyers on staff who are eager to help you determine your next steps once you inherit an IRA. Click here to schedule a free 30-minute consultation with us, or give us a call at 408-553-0801. We are more than happy to equip you with the knowledge of how to proceed as a beneficiary. We are committed to treating every individual client with the utmost respect and professionalism, and to making this journey as easy as possible for you.

What Is the Difference Between Uncontested and Contested Divorce?

October 5, 2022/in Family Law /by Gretchen Boger

When most people think of divorce, they imagine a long and arduous process full of conflict and bitterness. However, this is not always the case. In some instances, divorces can be relatively smooth and amicable.

But what is the difference between a contested and uncontested divorce? Let’s take a closer look.

Contested vs. Uncontested Divorce

When both parties can’t agree on one or more issues, such as division of assets and debt, child custody, child support, and spousal support, it is considered a contested divorce.

In contrast, If parties have already agreed on all issues, then the divorce is considered uncontested. To file for an uncontested divorce, both parties must sign and file a marital settlement agreement with the court. If the court finds it is fair and equitable, it will approve the agreement and issue a final divorce decree. However, if the court finds that the agreement is unacceptable, it will send the parties back to negotiations to reach a resolution.

An uncontested divorce saves time, money, and stress for both parties involved. In addition, uncontested divorces tend to have a lower level of conflict, which can benefit any children involved. If the parties can communicate and cooperate with each other, they may be more likely to reach an agreement that is fair and agreeable to both sides.

While uncontested divorces are often cheaper and faster, there are certain benefits to a contested divorce.

It helps to ensure that both parties are fairly represented. If one party feels they are not receiving fair treatment, they can hire an attorney and take their case to court.
The judge will make sure that all assets are appropriately divided. In an uncontested divorce, both parties may be tempted to overlook certain assets to save time and money. However, in a contested divorce, both parties are required to list all of their assets and negotiate a fair distribution.
A contested divorce can also help to protect the rights of both parties. For example, if one spouse is asking for alimony or child support, a court will review the case and make an unbiased ruling based on what is just.
It allows the court to consider all of the evidence before making a decision. This can provide peace of mind for both parties knowing that the court has considered all relevant factors before ruling.

While no one likes the idea of going to court, a contested divorce can sometimes be the best option for ensuring an equitable outcome.

Whether you are considering a contested or uncontested divorce, the legal process is complex. If you live in San Jose or the greater Bay Area, our attorneys at Lonich Patton Ehrlich Policastri can help you with your case. Our team of lawyers has years of experience in family law and divorce litigation.

Contact us for a free consultation by filling out our contact form or calling 408-553-0801. We will make sure you receive a fair settlement.

October 2022 LPEP Spotlight: Emily Vander Lans

October 3, 2022/in Spotlight /by Lonich Patton Ehrlich Policastri