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General Assignments Effectively Transfer Shares of Stock to a Trust

January 17, 2012/in Estate Planning /by Michael Lonich

Recall that in order to ensure the creation of a valid trust, there must be trust property. See Ensuring the Creation of a Valid Trust blog. Written declarations and general assignments generally are not the best ways to create trust property; however, they can be sufficient to transfer shares of stock, but not real property, to a trust, according to a recent California Appellate case.

In Kucker v. Kucker, 192 Cal. App. 4th 90 (2011), Trustor signed a declaration creating a revocable inter vivos trust, a general property assignment, and a pour-over will. Later, Trustor signed an amendment to the general property assignment transferring all of her shares of stock in eleven specified corporations and funds. However, Trustor did not include her 3,017 shares of stock in Medco Health Solutions, Inc. At the time the amendment was signed, the Medco stock certificate was lost and the issue before the court became whether the Trustor intended to include all the stock she owned when she amended the general assignment.

The lower court denied the petition to attach the Medco stock for failing to meet the writing requirement under the California Civil Code (which required a writing for contracts that granted credit for over $100,000). The Second District California Court of Appeal reversed and held that a general assignment of assets was sufficient to transfer shares of stock to a trust, even if the assignment failed to specifically identify the stock. The court further elucidated that, “There is no California authority invalidating a transfer of shares of stock to a trust because a general assignment of personal property did not identify the shares. Nor should there be.” The Civil Code section used by the lower court applied to agreements to loan money or extends credit made by persons in the business of loaning money, not to transfers of shares of stock to a trust.

There are many intricacies involved in the creations of trusts, and estate planning in general. To ensure your affairs are in order, or if you are interested in learning more about how to ensure the validity of your trust, please contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. 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.

Ensuring Your Child’s Safety

January 13, 2012/1 Comment/in Family Law /by Mitchell Ehrlich

George Molho, a kidnapping survivor, has recently shared his experiences from when his father abducted him in 1978 and moved them to Greece from his home in Texas. In sharing his story, Molho (for more information on his new memoir, Scarred, see www.georgemolho.com), a passionate advocate for child kidnapping and abuse victims, is trying to bring awareness to the problem and efforts to develop solutions that protect children.

As a seven-year-old in 1978, Molho was taken from his home in Houston by his father, a man with a bad temper, obsessive need for control, and desire to inflict pain. At the time, no one, not even his mother, believed Molho when he predicted his father’s plan and tried to warn them. When young children express fear or concern about even a close friend or family member, adults tend to chalk it up to shyness, a ploy for attention, or fantasy, Molho said. “Trust your child’s instincts,” he says. “If they act uncomfortable around someone because they can’t verbalize their feelings, or if they tell you they’re uncomfortable, trust them. No matter who it is, if they tell you a person scares them, protect them.”

Molho also offers these lesser-known tips for protecting children from kidnappers, whether they’re friends or family:

Teach children how to fib on the phone. If they’re home alone, for instance, and someone calls asking to speak to their mother or father, they might say, “My mother’s busy in the kitchen right now and asked me to answer the phone and take a message.” Put them to the test by having someone they don’t know, one of your friends or co-workers, call.
Make approved lists of people who will deliver any important news to them. If Mom or Dad is in trouble or hurt, only these people will know and will tell the child. Even if Uncle Bob tells them Mom is in the hospital and the child needs to go with Uncle Bob, if he’s not on the approved list, the child should not go. This is a common ploy.
Teach them, train them and give them permission to defend themselves. This is very important and it saves lives. Most children are taught to be polite and respect adults; it’s far safer to risk offending an adult – even if it turns out the adult meant no harm. Screaming, kicking and running away are perfectly acceptable if a stranger grabs your arm – even if the stranger is smiling sweetly.

Family law proceedings can be contentious. Emotions tend to run high for all those involved; sometimes this leads to actions that endanger the safety of the children caught in the middle. George Molho’s tips may help ensure the safety of your children. The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling complex and heavily disputed child custody issues. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri, who can provide you with an in depth analysis of your issues. 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.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Estate Planning Considerations for Family Business Owners

January 12, 2012/in Estate Planning /by Michael Lonich

Family business owners should take extra care to ensure that their interests are protected. Most business owners’ shares represent a large part of their estate’s value. However, few take the time to lock in valuable estate planning benefits that come in the form of a buy-sell agreement.

A buy-sell agreement can help protect an owner’s business interest by ensuring they do not lose control of their ventures and protect their heirs by restricting shareholders, partners, or members of a business from unilaterally transferring an ownership interest to anyone outside the group. Further, since the death of a co-owner could have a disastrous effect on the finances of a business, life insurance policies covering the lives of co-owners generally form the financial backbone of any buy-sell agreement. A buy-sell agreement that is not covered by life insurance death benefits should specify that a buyout should be made under a multi-year installment payment arrangement, which provides remaining co-owners with the flexibility to fund the buyout.

Without a buy-sell agreement, the result on the deceased co-owner’s estate could be drastic. First, there may be no market for the remaining business ownership interest left by the deceased co-owner—the proceeds of which might be necessary to pay estate taxes. Second, heirs of the deceased co-owner will be left to work with the IRS to value the deceased’s share of the business for estate tax purposes, an expensive and time-consuming affair. With a buy-sell agreement, however, a business ownership interest can be sold under pre-approved financial terms and the price set also establishes the (realistic) value of the business ownership interest for estate tax purposes.

If not drafted carefully, the IRS can disregard the buy-sell agreement. To ensure that your buy-sell agreement will withstand IRS scrutiny, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information on these types of transactions. 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.

Loss of Parental Rights = Loss of Standing in Proceedings Concerning the Child

January 4, 2012/in Family Law /by Gina Policastri

Once a parent has acquiesced to a termination of parental rights, he or she has no remaining legal interest in the child’s affairs. This means the parent also does not have standing to appeal orders relating to the child’s placement. A recent California Supreme Case affirmed this rule.

In In re K.C., 52 Cal. 4th 231 (2011), K.C. was one of eight siblings, two of whom were deceased and the other five of whom were placed with grandparents after separate juvenile dependency proceedings resulting in the termination of Mother’s and Father’s parental rights as to the five siblings. While an infant, K.C. was removed from his mother’s custody and placed with a foster family who wished to adopt him. K.C.’s grandparents petitioned for K.C. to be placed with them, however, the child services agency doubted their ability to care for a sixth child and was concerned with the parents’ continued access to the kids. Father did not object to the termination of his parental rights and supported Grandparent’s request. The trial court denied Grandparents’ petition and they failed to timely appeal. Instead, Father appealed the order. However, he did not object to the judgment terminating his parental rights but limited his argument to the issue of K.C.’s placement.

On appeal, the Fifth District Court of Appeal dismissed Father’s appeal and held that Father could not show that the placement decision affected his parental rights and he thus was not aggrieved by the decision. The California Supreme Court affirmed this decision. Only an aggrieved person has standing to appeal, otherwise the party does not have rights or interests injuriously affected by the decision in an immediate and substantial way. Since Father acquiesced to the termination of his parental rights, he relinquished the only interest in K.C. that could render him an aggrieved party.

Throughout child custody or parental termination proceedings, proper objections must be made if a parent does not want to risk losing standing to appeal judgments concerning the child. The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling complex child custody and divorce issues. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri, who can provide you with an in depth analysis of your issues. 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.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Connecticut Judge Orders Divorcing Couple to Exchange Facebook Passwords

December 6, 2011/in Family Law /by David Patton

Evidence from social networking websites is used more and more often in lawsuits and divorces these days. This information is typically obtained by visiting a party’s page or requesting information from the party personally, not from obtaining a party’s password and signing into their account on your own accord. However, judges are beginning to force parties to surrender passwords to their Facebook accounts.

On September 30, 2011, a Superior Court of Connecticut issued an order requiring “[c]ounsel for each party [] exchange the password(s) of their client’s Facebook and dating website passwords. The parties themselves shall not be given the passwords of the other.” Stephen Gallion v. Courtney Gallion, Clarification of Order. Courtney and Stephen are in a custody battle, and Stephen is seeking full custody of the parties’ children. To bolster his position, he sought access to Courtney’s Facebook and online dating accounts because he and his attorney suspected that they would find evidence of how Courtney feels about her children and her ability to care for them. They requested that the court order Courtney to provide her password; the court ordered the attorneys to exchange the parties’ passwords, and also issued an injunction prohibiting Courtney from deleting any information from these websites. (Summary from Forbes).

As social networking becomes a larger part of our lives, it will play a larger role in our lawsuits. Typically, if a party is ordered to provide social networking data, he or she will be required to produce responsive material (e.g. printouts of a party’s profile page), not the passwords, which would allow the other side to gain unfettered access to more content. However, recent cases show a different pattern. Lawyer and tech blogger Venkat Balasubramani has written about several other civil cases 1) where judges have issued similar orders, including a personal injury case, 2) where judges have taken it upon themselves to sign into someone’s Facebook account and look for evidence, 3) as well as cases where judges have rejected lawyers requesting opposing litigants’ passwords, as in an insurance case involving State Farm (Summary from Forbes).

The Certified Family Law Specialists* at Lonich Patton Erlich Policastri have decades of experience handling complex and heavily disputed divorce and support issues. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Erlich Policastri, who can provide you with an in depth analysis of your issues. 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.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

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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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