July 2023 - Lonich Patton Ehrlich Policastri

What Happens to Your Mortgage After A Divorce?

July 20, 2023/in Family Law /by Mitchell Ehrlich

When a marriage ends in divorce there are a number of financial decisions that must be made. Spousal support, child support, and division of assets and debts are all important considerations that must be hashed out to the satisfaction of both parties.

One of the most pressing questions that many divorcing couples face is “Who gets the house?” Since California is a community property state, in most cases, California law will treat the house as community property and split the debt and value evenly between you and your spouse. Although your shared home likely has sentimental value to you both, the court can only consider its financial value when deciding issues related to property. You and your spouse will be responsible for deciding what to do with your home.

Community vs separate property

Generally speaking, community property encompasses everything you own or owe while married. In cases of divorce in California, the court divides all assets and debts that are deemed community property equally between spouses.

Separate property, on the other hand, includes both assets and debts that one spouse had individually before marriage. Financial gifts, property, or inheritance given to one spouse specifically are also considered separate property, even if the spouse received them during the marriage. Each spouse is entitled to retain the full amount of their separate property in a divorce.

Is a mortgage community or separate property?

Determining whether your mortgage is community or separate property can sometimes be tricky. Your mortgage is community property if you bought a house together after you were married or bought a house with money you earned during your marriage.

If you bought the house with your own money before you were married, the mortgage would be considered separate property. However, any mortgage payments made jointly after marriage would be considered a community interest in the property and would be split evenly.

Can I stop paying the mortgage if I move out?

Although you and your spouse will still be jointly responsible for paying the mortgage, you have several options moving forward. The following are some common scenarios:

Sell the home and split the profits. If neither spouse is willing or able to maintain the home separately, this option can help ease the financial burden.

Buy out. If one spouse wants to remain in the home, they can pay the other spouse half the value of the house. Usually, the spouse who is leaving removes themselves from the mortgage, and the remaining spouse will refinance the loan.

Deferred sale. If one spouse wants to maintain the home, especially in cases where couples share minor children, the spouses can choose to stay joint owners of the home for a set amount of time. Once the children have moved out, or the custodial parent decides to move, the former spouses would then sell the home and split the profits.

Our experienced family law attorneys can help!

Working through the financial implications of divorce can be overwhelming. Determining community versus separate property and debt, assessing the value of your shared home and belongings, deciding on fair spousal and child support, and more is both mentally and emotionally taxing. You don’t have to do it alone.

At Lonich Patton Ehrlich Policastri, we take the time to listen to you and work hard to protect your interests. We can help you understand property division issues and also ensure a fair distribution of your marital estate. Call us today at 408-553-0801 to schedule your free, 30-minute consultation.

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

What to consider when designating a Beneficiary

July 13, 2023/in Estate Planning /by Michael Lonich

When it comes to financial planning, ensuring the smooth transfer of assets and wealth to your loved ones after your passing is crucial. One way to accomplish this is by designating a beneficiary for your various accounts and assets. Although it may seem simple, this task holds significant importance and requires careful thought and consideration.

In this article, we’ll explore the things to keep in mind when designating a beneficiary. We’ll discuss the significance of thoughtful planning, the legal and financial implications, and how to navigate potential complexities that may arise as you designate your beneficiary.

What is a Beneficiary?

A beneficiary is an individual or entity designated to receive the assets or benefits of a particular account, policy, trust, or estate upon the death of the account holder, policyholder, or grantor. The designation of a beneficiary ensures that the assets are transferred according to the wishes of the account holder or grantor.

Beneficiaries can be named for various types of accounts and assets, including retirement accounts, life insurance policies, investment accounts, bank accounts, real estate properties, and trusts. The process of designating a beneficiary involves specifying who will inherit or receive the proceeds or assets associated with these accounts or policies.

Why is it Important to Choose a Beneficiary?

The designation of a beneficiary ensures that your assets and benefits are distributed according to your wishes. Choosing your beneficiary is a very important decision to make, for several reasons:

You retain control over who will receive your assets upon your passing
It may bypass the probate process for your assets, which can be slow and costly
It minimizes potential conflicts among family members or other potential claimants
It lets you provide financial security and support for your loved ones
If desired, you can contribute to a charitable legacy to leave a positive impact on society

Selecting a beneficiary is crucial in ensuring that your assets and benefits are distributed according to your wishes.

What to Consider when Designating a Beneficiary

Choosing a beneficiary isn’t a decision that can be made lightly. Here are a few things to keep in mind as you work towards designating your beneficiary:

Carefully consider your financial goals and the needs of your loved ones
Have open and honest conversations about your intentions for beneficiary designations
Review your will, trust, and other relevant documents to ensure consistency
Familiarize yourself with the legal implications of beneficiary designations
Consult with legal professionals to ensure compliance and minimize potential challenges
In addition to primary beneficiaries, designate contingent (secondary) beneficiaries
Regularly review and update your beneficiary designations to reflect any life changes
Become familiar with the tax implications associated with beneficiary designations

As you can see, there’s a lot to think about when it comes to choosing your beneficiary. That’s why it’s always best to discuss your personal scenario with legal experts who can guide you in the right direction.

Seek Professional Consultations Before Designating Your Beneficiary

The estate law attorneys at Lonich Patton Ehrlich Policastri have decades of experience in designating beneficiaries for accounts, assets, policies, and trusts. A consultation with an experienced lawyer can give you the peace of mind that your affairs are in order, on your terms.

Call LPEP today on 408-553-0801 or complete this form for a free, 30-minute consultation.

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

How Do I Appoint a Guardian For My Child If I Die?

July 6, 2023/in Estate Planning /by Michael Lonich

As a parent, ensuring the well-being, safety, and future of your child is one of your biggest concerns. Although it can be an uncomfortable subject to think about, it’s very important to plan for unforeseen circumstances and make sure that your children are taken care of in the event of your untimely demise.

Appointing a guardian for your child is a vital aspect of comprehensive estate planning, offering peace of mind and a sense of security. The process of appointing a guardian involves careful consideration and legal procedures. In this article, we’ll take a look at how to appoint a guardian for your child to give yourself the peace of mind that their future is in safe hands.

What is a legal guardian?

A legal guardian is someone who is entrusted with the responsibility of caring for and making decisions on behalf of a minor in the absence of their parents or when the parents are unable to fulfill their parental duties.

A legal guardian assumes all the rights and responsibilities typically held by a parent, including making decisions about the child’s healthcare, education, religious upbringing, and general welfare. They act as a surrogate caregiver, stepping into the parental role to ensure that the child’s best interests are prioritized and protected.

How to choose a legal guardian for your child

Choosing a legal guardian for your child is a weighty decision that requires thoughtful consideration. Here are some key steps to help guide you through the process:

Assess your values and parenting priorities: Understanding your own priorities will help you identify a guardian who aligns with your vision for your child’s upbringing.
Consider your child’s best interests: Consider their relationship with potential guardians and evaluate how well the guardian would be able to care for your child.
Evaluate the potential guardian’s qualities: Look for individuals with a genuine love for your child. Can they provide a stable and nurturing environment?
Seek legal advice: An attorney specializing in estate planning and family law can help you draft a testamentary guardian designation or include the appointment in your will.
Remember that circumstances change over time: Regularly review your choice of guardian and make updates as needed.

Choosing a legal guardian for your child is a deeply personal decision. Take the time to carefully evaluate potential candidates, seek advice when needed, and communicate your intentions clearly with both the chosen guardian and other relevant family members.

How to appoint a guardian in case of death

The first step in appointing a guardian is to draft a testamentary guardian designation. Work with an attorney to prepare a legally binding document that clearly states your choice of guardian. This document, often referred to as a testamentary guardian designation, will outline your wishes regarding the care and custody of your child in the event of your death.

From the initial consultation to drafting legal documents and providing ongoing assistance, the law attorneys at Lonich Polich Ehrlich Policastri we aim to make the process as smooth and stress-free as possible. We will work closely with you to ensure that your child’s future is secured and that their well-being is prioritized.

Contact LPEP today at 408-553-0801 for a free, 30-minute consultation.