May 2023 - Lonich Patton Ehrlich Policastri

How to Set Up a Trust

May 30, 2023/in Family Law /by Michael Lonich

A trust is a legal arrangement that grants a third party the power to manage your assets on behalf of the beneficiary—the person who will receive the assets. The main objective of a trust is to protect and eventually transfer assets from a grantor to an inheritor.

To set up a trust, first decide on what assets you want to distribute. Common assets protected by trusts include real estate properties, bank accounts, and other investment assets. Choose who will be the beneficiary, and determine the conditions of your trust.

When arranging your trust, you can identify more than one beneficiary if you have multiple inheritors. You’ll then need to find a trustee, typically an unbiased third party, to manage the trust. The final step will be to draft your trust document with an attorney.

What are the Benefits of a Trust?

Trusts are a flexible way to preserve your assets and customize how your wealth is distributed. The main advantage of creating a trust is maintaining control of how your assets are distributed. You’ll be able to specify the precise terms of the trust and decide when the assets will be available to the beneficiaries.

By setting up a trust, you can avoid probate—the judicial process in which a court reviews the assets of the deceased and determines inheritors. The trustee will follow the specific terms of the trust and distribute the assets without court involvement. There’s also a possibility of saving money that would’ve been spent on court fees and taxes.

Other benefits of setting up a trust include:

Creating flexible terms
Protecting your assets
Maintaining privacy
Minimizing estate taxes

Types of Trusts

There are two main types of trust: revocable and irrevocable. Revocable trusts can be altered at any time during the grantor’s lifetime as long as they are competent. These types of trusts can be modified or even canceled until the grantor’s death, at which point the trust becomes irrevocable.

On the other hand, irrevocable trusts can’t be changed once the papers are signed. If a modification is requested, all of the beneficiaries must be in agreement, and any changes to the terms will need to go through a lengthy court approval process.

Although they are more permanent, irrevocable trusts can help minimize estate taxes. When you transfer the ownership of your assets through an irrevocable trust, you may be able to protect them from estate tax. If the value of your estate is at or above the federal tax exemption requirements and you’re confident about the terms of the trust, then an irrevocable trust could be a beneficial option.

At Lonich Patton Ehrlich Policastri, we have decades of experience with family law and estate planning. Having assisted families in San Jose and the greater Bay Area, we can help you determine which type of trust will work best for your situation. Contact us for a free 30-minute consultation at 408-553-0801, and one of our attorneys will guide you through how to set up a trust.

Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

How to Start a Legal Separation

May 18, 2023/in Family Law /by Mitchell Ehrlich

Marriage is a legal, long-term partnership between two people who love each other and share their lives. Unfortunately, marriage might not always be the happy ending you imagined. Sometimes spouses realize that they want to live independently of each other, but there are compelling reasons to avoid divorce. A legal separation agreement might be an option in these cases.

What is Legal Separation?

As with divorce, legal separation is legally binding. Spouses live separately and maintain independent personal lives, but remain eligible to receive the financial and insurance benefits of a married couple because the legal ties of marriage remain intact. Both spouses sign a legal separation agreement that sets out the details of important issues like:

Division of property and debt
Child custody and visitation rights
Child and spousal support
Business ownership interests
Legal fees

When to Choose Legal Separation

If you are considering divorce, when might you pursue legal separation instead? There are several situations or reasons that lead couples to choose legal separation, including:

Residency requirements – California requires that at least one of the spouses be a resident of the state for 6 months and in the United States for at least 3 months before divorcing. Legal separation requires only one spouse to live in California with no time requirement.
Personal beliefs – Some people or families are personally opposed to divorce, so alternative options are preferable.
Religious beliefs – Many religions view marriage as sacred, so divorce is discouraged.
No waiting period – In divorce, couples must wait 6 months from the time divorce papers were first served. Legal separation has no waiting period.
Insurance benefits – If one spouse is covered on the other spouse’s health care plan, they can continue to receive benefits.
Convenience – Legal separation can sometimes be simpler, quicker, and more cost effective than divorce.

Starting the Process of Legal Separation

Once you’ve decided on legal separation, what steps should you take?

File a petition for legal separation. This court document is a legal document that begins the process in family court. You will pay a filing fee and serve the petition to your spouse, similar to divorce papers.
Develop a separation agreement. You and your spouse should make decisions and outline the responsibilities of each party with regard to assets, debts, living expenses, custody and visitation of children, living arrangements, etc. Although this process can be done informally or through a mediator, it’s usually a good idea to get legal advice, especially if communication with your spouse is poor. If you cannot come to an agreement, the judge will step in and make decisions for you.
Accept the family court’s final judgment of legal separation.

It’s important to remember that just living separately is not the same as legal separation.

Helping Spouses Establish Legal Separation

Because the legal separation agreement sometimes serves as the basis for a later divorce settlement, it’s vital to develop this document carefully. An experienced lawyer can help you consider the future impact of both your personal and financial decisions.

The family law attorneys at Lonich Patton Ehrlich Policastri have a great deal of experience with clients who choose legal separation whether because of religious, financial, or business considerations. Contact us today at 408-553-0801 for a free, 30-minute consultation to discuss your goals and options. We can walk you through the process and make sure your best interests are protected.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

5 Tips for Navigating Child Custody

May 11, 2023/in Family Law /by Virginia Lively

Separation and divorce are difficult, emotionally wrenching situations. When your children are involved, it can become even more stressful. You want the best for your children, and you also want to be as involved in their lives as possible. The following tips can help with navigating child custody issues with your co-parent.

1. Educate yourself about the child custody process and your rights

It’s important to have access to reliable information about child custody and parental rights in California. To help you make sense of this complex issue, the attorneys at Lonich Patton Ehrlich Policastri (LPEP Law) offer a free download entitled, “Child Custody Myths vs. Facts.” Some of the most helpful information includes:

How child support works in joint custody situations
How your child’s preference affects a court’s custody decisions
Your rights if your co-parent is alienating your child’s affection toward you
How to obtain delinquent child support payments

2. Make a good case for yourself

When determining custody issues, a judge will consider specific criteria with regard to the children’s living environment. It’s a good idea to be proactive and present yourself in the best light possible.

Make sure your home is safe, clean, and comfortable.
Be ready to demonstrate your ability to care for your children’s basic needs – food, shelter, clothing, transportation, and school supplies.
Keep yourself healthy both physically and mentally.
Maintain a good working relationship with your co-parent.
Stay involved in your children’s activities and education.

3. Stay organized and document as much as possible

Depending on your relationship with your co-parent, you may be required to prove that you are dependable, responsible, and able to care for your children well. Keeping detailed notes about the visitation schedule you have established, your children’s calendar (e.g., doctor’s appointments, school events, holidays, etc.) and child support payments will help demonstrate in court that you are a capable and involved parent.

Although the involvement of both parents is usually preferable, if your former spouse is abusive in any way, puts your children at-risk in an unsafe environment, or does not have appropriate living arrangements to host your children, it’s vital to document any of those negative situations and present them in court.

4. Maintain positive communication

Do your best to keep all communication with your ex-partner, especially written communication like emails and texts, as civil as possible. Fighting with your former spouse in public or in front of your children is clearly not in your children’s best interests and can make an already tense situation worse. Even if you feel that they are being unreasonable, it’s important to stay constructive and polite on your end. If your child custody negotiations become contentious, your former spouse will not be able to use your words and actions against you.

5. Hire an experienced family law attorney

Nothing is more important than being in your child’s life. Working out child custody and parental visitation issues can be daunting, especially when emotions are high. The experienced and compassionate family law attorneys at Lonich Patton Ehrlich Policastri understand the importance of family and can walk with you through the stresses of child custody litigation. Having experts on your side can help protect your parental rights and work toward the best possible outcome for your family. Call us today at 408-553-0801 to schedule a free 30-minute consultation.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

What is a Lifetime Transfer Strategy?

May 5, 2023/in Estate Planning /by Michael Lonich

Are you seeking ways to manage and protect your family’s wealth and assets? A lifetime transfer strategy is an invaluable tool that allows for the planned process of transferring your assets throughout your life instead of upon your death.

What is involved in this comprehensive approach, and how is it crucial for preserving generational wealth?

What Can Be Transferred?

Lifetime transfers are a method of transferring and distributing assets to your designated beneficiaries during your lifetime rather than leaving them as part of an estate after death.

Assets that can be transferred during one’s lifetime typically include tangible items such as real estate, cars, jewelry, and furniture and intangible items such as stocks, bonds and company shares. Additionally, lifetime transfers can also involve the transferring of intellectual property, such as patents, trademarks, and copyrights.

What Are The Advantages and Disadvantages?

The primary advantage of a lifetime transfer is that it allows you to distribute your assets as desired during your lifetime, allowing you to control who will receive them and when. This helps to ensure that your estate planning goals are achieved in the most efficient way possible. Transferring assets during your lifetime often allows for more flexibility than a traditional estate plan.

On the other hand, there can be some drawbacks associated with a lifetime transfer strategy. One of the main drawbacks is that it may involve complex legal documents, which can be challenging to navigate without proper guidance. Additionally, applicable taxes or fees may vary depending on the value or type of assets being transferred.

It should also be noted that transferring assets during one’s lifetime often means relinquishing control over them and, therefore, can limit your ability to change your estate plan if you choose to do so at a later date.

Is There a Limit on the Amount You Can Transfer?

Generally speaking, there are no limits on the amount of assets you can transfer during your lifetime. But, any transfers over a specific monetary value may be subject to taxes.

As of 2023, you can transfer up to $12.92 million during your lifetime without incurring a gift tax. However, you can gift any individual $17,000 annually without incurring taxes or affecting the lifetime exception.

Can You Do a Lifetime Transfer Into a Trust?

When doing a lifetime transfer into a trust, it’s essential to understand the different types of trusts available and how they work. Revocable trusts allow the grantor (the person who creates the trust) to make changes or revoke the trust at any time. Irrevocable trusts cannot be changed once they have been created.

Is a Lifetime Transfer Strategy Right For You?

A good lifetime transfer strategy maximizes the benefits of transferring assets during life while minimizing future tax liabilities and ensuring adequate provision for dependants and other beneficiaries over time.

Because of the legal requirements and various regulations, it is essential to seek professional advice before proceeding with a transfer. Our attorneys at Lonich Patton Ehrlich Policastri have the expertise you need to create an estate plan that meets your specific needs. Call us today at 408-553-0801 or fill out our online form here to schedule a free 30-minute consultation. By making strategic decisions now rather than later, you can ensure peace of mind knowing that all matters relating to inheritance will be handled smoothly both during and after one’s lifetime.