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A Cautionary Tale of Fill-in-the-Blank Wills: Not So E-Z After All

April 9, 2014/in Estate Planning /by Michael Lonich

Online platforms like Legal Zoom and Rocket Lawyer, as well as form wills marketed by companies like E-Z Legal Forms, are gaining popularity in the estate planning world. However, a recent Florida decision* serves as a fresh reminder that using one of these one-size-fits all approaches to estate planning could land your family in court despite your wishes.**

In a recent case, a Florida woman created a will through E-Z Legal Forms, leaving all of her property to her sister and finally to her brother if her sister predeceased her. The sister died first, so the brother claimed the entire estate. That would have been the result that fit with the deceased woman’s wishes. However, because the document was made without attorney oversight, the document lacked a residuary clause (important in Florida) and opened the door to disagreement over the interpretation of the will. Two of the woman’s nieces sued for a share of the estate.

The nieces, who were born to another brother who had already passed away and who were not mentioned in the will, walked away with a portion of the estate because they argued that they should receive part of any property that the deceased earned after signing the original will. The Florida Supreme Court agreed, determining that all property earned after the will was signed must go through probate and be distributed based upon the State’s intestacy laws. (Intestacy laws govern who will receive property when a person dies without a will). Because she had a will, this was clearly not what the deceased woman intended, and one Justice shared a word of caution:

“I therefore take this opportunity to highlight a cautionary tale of the potential dangers of utilizing pre-printed forms and drafting a will without legal assistance. As this case illustrates, that decision can ultimately result in the frustration of the testator’s intent, in addition to the payment of extensive attorney’s fees—the precise results the testator sought to avoid in the first place.”

The court also acknowledged that people want to avoid dealing with lawyers and spending additional money, but sometimes making an investment in legal counsel will help the party and their family avoid even greater legal feels and turmoil in the future.

Creating a will doesn’t always have to be complicated. Nevertheless, it is best to create yours with the aid of an experienced estate planning attorney if you wish to avoid probate and future disputes over your estate. If you need estate planning advice, call Lonich Patton Erlich 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 need a will or would like to review the will you currently have, contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.

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 detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*FlascBlog: The Florida Supreme Court Blog reports on the opinion (PDF).

**To see the original article that inspired this post: http://www.abajournal.com/news/article/e-z_legal_form_proved_to_be_complicated_in_litigation_over_wills_missing_re/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email

Judge Grants Restraining Order against School-Aged Boy

April 8, 2014/in Family Law /by Gina Policastri

In a potentially precedent-setting move, a father from San Francisco has asked a judge for a restraining order – against an alleged nine-year-old bully. Generally, restraining orders are routinely issued against adult abusers, stalkers, significant others, and the like. However, as most parents presumably would, Stephen Feudner wanted answers after learning his 9-year-old son told him he’d been bullied, pushed, and punched at Rolling Hills Elementary School. When the public school claimed its hands were tied and refused to help, Feudner turned to the law.

Feudner’s temporary restraining order (TRO) from a Solano County judge stipulates that the alleged bully must remain 2 yards away from his son at all times and have no contact with him whatsoever. Daryl Snedeker of the Solano County Sheriff’s Department says he’s never heard of a restraining order against a grade-school student. However, the boy’s mother points out that there is no law against filing a restraining order against a child – and she’s right.

There are different kinds of restraining orders available through the court system, and each order has different eligibility requirements. For a restraining order against a child similar to the Feudners’ situation, a Civil Harassment Restraining Order would likely be the most appropriate. Civil Harassment Restraining Orders can be filed in Santa Clara County if the filing party and the other party do not have a familial or dating relationship (married, divorced, separated, dating or used to date, live together or used to live together) or are not related (parent, child, brother, sister, grandmother, grandfather, in-laws).

As for the Feudners, there’s a small but possibly determinative glitch in their case: the Solano County Sheriff’s Office officials had to serve the TRO within five days for it to go into effect. However, in order to serve the TRO, officials needed the alleged bully’s first and last name and full address. As of now, the school district still remains unwilling to release the information.

Although the Feudners’ restraining order against a school-aged child is unique, temporary restraining orders are very common, particularly in domestic violence situations. If you have any questions about restraining orders or are contemplating filing one, please contact our California Certified Family Law Specialists (as certified by the State Bar of California Board of Legal Specialization) at Lonich Patton Erlich Policastri. Our attorneys have decades of experience handling complex family law proceedings and offer a free half-hour 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.

Source: http://abcnews.go.com/US/father-files-restraining-order-year-allegedly-bullying-son/story?id=23040537

Trust Administration: The Basics

April 3, 2014/in Estate Planning /by Michael Lonich

Trust administration is the process used to ensure that a trustee complies with California law and is carrying out the mandates of the trust as written. For example, a common task in trust administration is ensuring that the title to assets held in the trust is properly transferred. Trust administration also includes the process by which a trust creator’s (also known as the “trustor” or “settlor”) estate is distributed following his or her death. Following the creator’s death, the successor trustee(s) takes over management of the trust. The trustee must take multiple steps to properly administer the trust assets.

After the death of the trustor, the trustee of any trust has a number of fiduciary duties with regard to the trust and its assets. Here are some important examples:

Locate the deceased’s important documents, including the will, trusts, tax papers, and funeral directives.
If deceased was living alone, change locks and secure the house.
Check on insurance for the property and any cars the deceased owned to be certain the assets within the trust are protected.
Arrange to have certified copies of the deceased’s death certificate from the city or county where the death occurred.
Take an inventory of all assets and the value of those assets, because the value will affect the new tax basis of the items going forward. The value of all these items at death may need to be considered when evaluating federal state tax liability (if any).
Make a list of any household items that will be distributed to beneficiaries, and consider photographing the items to help with organization.
Take an inventory of bank accounts and the like. It may help to streamline the accounts and consolidate them into one place so that it is easier to keep a record of all trust activity, including bills paid and deposits made.
As trustee, you are responsible for paying any remaining debts or bills. If these are not paid you, and not the estate, may be personally liable.
You may need to obtain a Tax ID number for the trust if the trust will generate more than a few hundred dollars between the date of decedent’s death and when all of the assets are distributed. This step can be complicated and you may want to refer to an attorney or a tax professional for advice.
Make sure that all tax returns are filed in a timely fashion.
File any claims for life insurance, IRA’s or other assets that require claims. Also be sure to liquidate any assets that need liquidating, but get advice before you act because there may be serious tax consequences.
Accounting is required of trustees by law. Keep a record of all assets in existence at death and show all additions to the trust, subtract all expenses, and be prepared to show current assets within the trust. Place the assets into a non-interest bearing account to make sure the value does not change after the final accounting is complete.
Distribute the trust assets. Have a lawyer or other professional create a receipt and release form for each beneficiary, memorializing that each person received their inheritance and that the trustee is released from further liability.

While trust administration is generally handled outside the court system, breach of any of the trustee’s fiduciary duties can result in a court action being brought by a beneficiary. For this reason, it is important that a trustee seek out the help of a qualified trust attorney for guidance as needed.

The attorneys at Lonich Patton Erlich Policastri are experienced in the area of trust administration and can advise the trustee regarding their duties and responsibilities while guiding them through the trust administration process. In addition, our attorneys have experience assisting beneficiaries who believe the trustee is not acting properly. We invite you to contact our office to schedule a free consultation, with no obligation, to discuss your trust administration needs.

Mediation: Because Litigation Isn’t Always The Answer

April 2, 2014/in Family Law /by Gretchen Boger

Divorce is rarely fun. Nevertheless, divorce and painful litigation don’t always go hand-in-hand. For many couples, divorce mediation could be the best way to dissolve your marriage, protect your children, and maintain a mature relationship with your spouse.

In family law mediation, a neutral mediator works with a divorcing couple to creatively reach an agreement on some or all of the issues in their divorce. Experienced family law mediators are typically attorneys that understand the legal landscape. A well-versed mediator can help you and your spouse reach a settlement on all aspects of your marriage—financial distribution, child custody, and even child and spousal support.

The mediator does not represent either spouse, but is instead an unbiased facilitator who uses unique strategies that will result in an agreement that meets the needs of both parties. Once all of the issues are covered, the mediator will help the parties create a marital settlement agreement to memorialize their arrangement. At this stage, each party should consult their own attorney to ensure that the agreement is fair and in each party’s best interest. Finally, the agreement is sent to the family court where the agreement will be signed off as an enforceable court order.

Here are just a few reasons why you and your spouse should consider mediating your divorce:

The non-adversarial aspect of mediation can help your and your ex maintain a better, more mature relationship.
Mediation will allow you to keep your “dirty laundry” private, while family law litigation requires parties to discuss their personal issues on the public record.
Because mediation doesn’t require several filings, voluminous court costs, or extensive attorney’s fees, you may be able to reduce your expenses.
Mediation can be much easier on children than family law litigation.
You and your spouse are in charge of the results of your divorce instead of a family law judge.
Mediation may enable you and your spouse to reach an agreement much faster than in typical litigation.

Remember, divorce does not have to involve litigation. At Lonich Patton Erlich Policastri, we provide divorce mediation services to clients throughout the Silicon Valley. Michael E. Lonich facilitates all family law mediations handled by the firm, and he is widely regarded as one of Silicon Valley’s most effective mediators. Michael works closely with parties to help them shape the decisions that will be drafted into the marital settlement agreement. In addition to handling divorce mediations, he has extensive experience in handling business law litigation. He draws on his business background when mediating divorce matters for business owners, executives, foreign nationals and their spouses.

Please note that family law mediation is not recommended for couples with domestic violence issues. If you have any questions about divorce mediation, or divorce in general, and would like to speak to an attorney, please contact Lonich Patton Erlich Policastri for a free initial consultation. Our attorneys can be reached by phone at (408) 553-0801 or through the intake form on our Contact Us page.

Estate Tax Portability: A Valuable Asset You May Not Know You Had

March 27, 2014/in Estate Planning, Probate /by Michael Lonich

Have you heard about the “portability provision?” Believe it or not, your estate (or your spouse’s estate, if you were to pass first) could benefit tremendously if the executor of your estate elects this provision. In short, the portability election allows the transfer of any unused estate tax exclusion amount of the first spouse to die (commonly referred to as the “deceased spouse’s unused exemption” or “DSUE”) to the surviving spouse, who can then utilize the remaining amount to benefit his or her gift or estate tax purposes. Essentially, this provision operates as a safety net for couples with joint assets exceeding the exemption amount for the estate of the first spouse to die because the surviving spouse can reduce his or her estate or gift tax liability. Depending on the size of the estate, electing this provision can mean saving a significant amount on estate taxes.

Although this portability provision technically expired after 2012, Congress passed the American Tax Relief Act of 2012 (“ATRA”), which made the “portability” of the applicable exclusion amount between spouses permanent. This favorable estate tax rule should be incorporated into estate plans because as previously mentioned, the potential impact of the portability provision can be quite substantial.

For example, suppose the following: A husband and wife each own $2 million individually and $3 million jointly with rights of survivorship, bringing their estate to a total of $7 million in assets. Suppose their wills instruct that all assets pass first to the surviving spouse and then to the couple’s children. If the husband dies in 2014, his $2 million in assets is covered by the unlimited marital deduction. His $5.34 million exemption remains unused (his DSUE). When the wife dies, her estate can use that leftover DSUE amount, in addition to the exemption for the year in which she dies, to shelter the remaining $7 million of assets from tax. ATRA has permanently set the top estate tax rate at 40 percent. As such, if the wife died later in 2014, $1.66 million in assets would have been subject to estate tax without the portability provision. Therefore, the family saves $664,000 in federal estate tax (40% of $1.66 million).

Not only is the portability provision an excellent tool to use for estate and gift planning considerations, the provision can also be used as a negotiation tool during marital agreement negotiations. The portability provision can be viewed as a highly valuable asset that attorneys and their clients should consider when drafting marital agreements. However, there are also certain limitations to be aware of. For example, the executor of a deceased spouse’s estate must elect portability for the provision to take effect, and the election must be made on an estate tax return filed within nine months of death.*

If you or your loved ones are in the planning stages of creating an estate plan, take the necessary steps to ensure that you and your family members are maximizing the benefits available to you by an experienced, knowledgeable estate planning attorney guide you through the process. Estate planning laws are constantly evolving and having a trusted estate planning attorney by your side can prove to be invaluable. The attorneys at Lonich Patton Erlich Policastri have decades of experience handling complex estate planning matters, including wills and living trusts, and we are happy to offer you a free consultation.

Sources: http://www.bizactions.com/n.cfm/page/e120/key/259853661G1005J3585631N0P0P2268T2/;http://www.forbes.com/sites/lewissaret/2014/02/25/estate-tax-portability-and-marital-agreements-a-new-consideration/

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LONICH PATTON EHRLICH POLICASTRI

1871 The Alameda, Suite 400, San Jose, CA 95126
Phone: (408) 553-0801 | Fax: (408) 553-0807 | Email: contact@lpeplaw.com

LONICH PATTON EHRLICH POLICASTRI

Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com

1871 The Alameda, Suite 400
San Jose, CA 95126

Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.

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