The biggest reason you don’t want a vehicle to go through probate is because they depreciate over time. The longer the probate process drags on the less the vehicle is worth. A car worth $15,000 this year might be worth $10,000 the next. The sooner your heirs can get the vehicle transferred into their names, the more they will be able to sell it for. It only makes sense to pass your vehicles to your heirs outside of probate.
Thursday
DUI California
California DUI Laws
California DUI Laws become more complex and difficult to mitigate the more offenses a person has committed. For instance, a first offense DUI may not require any more time in jail than the time spent upon arrest. The harshest penalties assessed as a result of a first offense DUI usually deal with monetary fines and a suspension of a person's drivers license. On the other hand, a second offense DUI requires the Court to give at least a four day jail sentence or work release. The fine is increased as is the time for suspension of drivers license.
A third offense DUI requires at least four months of jail time, house arrest or rehabilitation. DUI school will also likely be required in addition to the penalties faced under a second offense DUI. Each of the first three offenses is generally deemed a misdemeanor unless there are Enhanced DUI Penalties which merit a felony charge.
A fourth offense DUI in California usually brings felony charges with it. Penalties include a three year prison sentence and license being permanently revoked.
As a practical matter, you should always consult a DUI attorney if you are charged with DUI in any state. Most prosecuting attorneys would rather work with a DUI attorney they know than someone they don't. Most prosecuting attorneys are also overburdened with heavy caseloads and the opportunity to get a case off his or her desk without spending a ton of time on it is welcomed. DUI attorneys generally know this and can use it to a client's benefit.
California DUI Laws become more complex and difficult to mitigate the more offenses a person has committed. For instance, a first offense DUI may not require any more time in jail than the time spent upon arrest. The harshest penalties assessed as a result of a first offense DUI usually deal with monetary fines and a suspension of a person's drivers license. On the other hand, a second offense DUI requires the Court to give at least a four day jail sentence or work release. The fine is increased as is the time for suspension of drivers license.
A third offense DUI requires at least four months of jail time, house arrest or rehabilitation. DUI school will also likely be required in addition to the penalties faced under a second offense DUI. Each of the first three offenses is generally deemed a misdemeanor unless there are Enhanced DUI Penalties which merit a felony charge.
A fourth offense DUI in California usually brings felony charges with it. Penalties include a three year prison sentence and license being permanently revoked.
As a practical matter, you should always consult a DUI attorney if you are charged with DUI in any state. Most prosecuting attorneys would rather work with a DUI attorney they know than someone they don't. Most prosecuting attorneys are also overburdened with heavy caseloads and the opportunity to get a case off his or her desk without spending a ton of time on it is welcomed. DUI attorneys generally know this and can use it to a client's benefit.
Monday
California Life Estate Deed
California Life Estate Deed
The California Life Estate Deed is a document that grants ownership of a parcel of real property to two separate parties: (1) the Life Tenant, and (2) the Remainderman.
The Life Tenant
As in other states, the California Life Estate Deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of a natural person; usually the Life Tenant’s. In other words, if I am the Life Tenant and the time period is measured by my life then when I pass away the “life tenancy” automatically terminates. However, if the time period is measured by the life of my wife and my wife passes away before me the Life Estate automatically terminates upon her passing and I can legally be evicted from the property.
The Remainderman
When the Life Estate owned by the Life Tenant terminates, the Life Estate Deed transfers ownership of the property to the Remainderman. The Remainderman is the person or persons whose names are listed on the Life Estate Deed as a Remainderman. To officially transfer ownership, in most states the Remainderman need only record the death certificate of the person whose life was the measure of the Life Estate.
A Life Estate is different from an Enhanced Life Estate. You can read my other articles on the Enhanced Life Estate Deed and the standard Life Estate for a greater understanding of the differences.
The California Life Estate Deed is a document that grants ownership of a parcel of real property to two separate parties: (1) the Life Tenant, and (2) the Remainderman.
The Life Tenant
As in other states, the California Life Estate Deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of a natural person; usually the Life Tenant’s. In other words, if I am the Life Tenant and the time period is measured by my life then when I pass away the “life tenancy” automatically terminates. However, if the time period is measured by the life of my wife and my wife passes away before me the Life Estate automatically terminates upon her passing and I can legally be evicted from the property.
The Remainderman
When the Life Estate owned by the Life Tenant terminates, the Life Estate Deed transfers ownership of the property to the Remainderman. The Remainderman is the person or persons whose names are listed on the Life Estate Deed as a Remainderman. To officially transfer ownership, in most states the Remainderman need only record the death certificate of the person whose life was the measure of the Life Estate.
A Life Estate is different from an Enhanced Life Estate. You can read my other articles on the Enhanced Life Estate Deed and the standard Life Estate for a greater understanding of the differences.
Thursday
California Warranty Deed
Covenant of Warranty
In contrast to the Quitclaim Deed, a Warranty Deed is a deed that contains an express covenant of warranty. A covenant of warranty is an undertaking by the grantor that he will compensate the grantee upon the failure of the grantee’s title by reason of some third party setting up a superior title. A covenant of warranty that is in the deed and made for the direct benefit of the property runs with the land and thus the grantor is liable to purchasers from his grantee as well as the grantee. A covenant of warranty is breached only when the grantee is evicted from possession of the property.
Quiet Possession
A covenant for quiet possession or enjoyment is similar to a covenant of warranty and will provide compensation to the grantee if his quiet possession of the property is disturbed. It too runs with the land and is not breached until the quiet possession is disturbed. Another similar covenant is the covenant for further assurance under which the grantor covenants to do such further acts for the purpose of perfecting the grantee’s title as the grantee may reasonably require. It too runs with the land.
Right to Convey
The final covenant is the covenant of right to convey. It is similar to the covenant of seisin but it may be used by one who does not own the property but has the right to convey it such as an attorney in fact for the owner. It does not run with the land and is breached at the time of conveyance. Warranty deeds and the other covenants discussed in this section are not used very often in California because buyers rely on title insurance to protect them if they have title problems.
In contrast to the Quitclaim Deed, a Warranty Deed is a deed that contains an express covenant of warranty. A covenant of warranty is an undertaking by the grantor that he will compensate the grantee upon the failure of the grantee’s title by reason of some third party setting up a superior title. A covenant of warranty that is in the deed and made for the direct benefit of the property runs with the land and thus the grantor is liable to purchasers from his grantee as well as the grantee. A covenant of warranty is breached only when the grantee is evicted from possession of the property.
Quiet Possession
A covenant for quiet possession or enjoyment is similar to a covenant of warranty and will provide compensation to the grantee if his quiet possession of the property is disturbed. It too runs with the land and is not breached until the quiet possession is disturbed. Another similar covenant is the covenant for further assurance under which the grantor covenants to do such further acts for the purpose of perfecting the grantee’s title as the grantee may reasonably require. It too runs with the land.
Right to Convey
The final covenant is the covenant of right to convey. It is similar to the covenant of seisin but it may be used by one who does not own the property but has the right to convey it such as an attorney in fact for the owner. It does not run with the land and is breached at the time of conveyance. Warranty deeds and the other covenants discussed in this section are not used very often in California because buyers rely on title insurance to protect them if they have title problems.
Tuesday
California Quitclaim Deed
Form and Use of Quit claim Deed
The quitclaim deed is probably the second most popular deed in California. It is often used in transfers of real property among friends and relatives, where the grantee does not seek any personal guarantees from the grantor; in transfers of real property by gift; and in transfers made for the purpose of unclouding title to real property. In this way, the Quitclaim deed differs from the Warranty Deed which grants certain warranties to the grantee.
A quitclaim deed is distinguished from a grant deed by the use of the Word "quitclaim" rather than "grant" as the operative word of the deed. In general, a quitclaim deed will not transfer after-acquired title, but where the equitable interest of the grantor has been conveyed by a quitclaim deed, a later legal title acquired by the grantor is deemed to be transferred. Unlike a grant deed, a quitclaim deed does not imply coveants. Subject to recording laws and sales made by the sheriff under execution a grantee of a quitclaim deed takes the interest of the grantor in the land subject to all defects and equities which could have been asserted against the grantor.
Recording a Quitclaim Deed
Quitclaim deeds are entitled to be recorded, and the grantee of a quitclaim deed may be a purchaser for a valuable conderation, without notice, within the recording laws, so as to be protected from unrecorded instruments, of which he or she had no notice, which affect the title to the property.
The quitclaim deed is probably the second most popular deed in California. It is often used in transfers of real property among friends and relatives, where the grantee does not seek any personal guarantees from the grantor; in transfers of real property by gift; and in transfers made for the purpose of unclouding title to real property. In this way, the Quitclaim deed differs from the Warranty Deed which grants certain warranties to the grantee.
A quitclaim deed is distinguished from a grant deed by the use of the Word "quitclaim" rather than "grant" as the operative word of the deed. In general, a quitclaim deed will not transfer after-acquired title, but where the equitable interest of the grantor has been conveyed by a quitclaim deed, a later legal title acquired by the grantor is deemed to be transferred. Unlike a grant deed, a quitclaim deed does not imply coveants. Subject to recording laws and sales made by the sheriff under execution a grantee of a quitclaim deed takes the interest of the grantor in the land subject to all defects and equities which could have been asserted against the grantor.
Recording a Quitclaim Deed
Quitclaim deeds are entitled to be recorded, and the grantee of a quitclaim deed may be a purchaser for a valuable conderation, without notice, within the recording laws, so as to be protected from unrecorded instruments, of which he or she had no notice, which affect the title to the property.
Monday
What Does It Mean to Own Property as "Tenants in Common"?
Owning property as Tenants in Common means two or more people (or businesses) own an undivided interest in a piece of property. Each property owner has the right to use the property without being able to exclude the other owner or owners from using it unless a separate written agreement states otherwise. When one of the tenants dies, his or her interest in the property passes to his or her heirs and not to the other tenants (unless the other tenants are also heirs).
There is no limit to the number of owners who can hold an interest in the property.
Tenants in Common v. Joint Tenants with Right of Survivorship
The biggest difference between a Tenancy in Common and Joint Tenancy is in the way the property is transferred when an owner dies. Under a Tenancy in Common, the deceased owner's interest passes to his or her heirs via Will, Trust, intestate, etc. Under a Joint Tenancy, the deceases owner's interest passes to the other owners (i.e. those who "survived" the deceased owner).
Other characteristics of a Tenancy in Common
(1) Ownership can be held in equal shares or unequal shares.
(2) Each owner has the right to possess the property without being able to exclude the other. Again, a separate agreement can be drafted and signed by all of the owners outlining who is to occupy the property and when. This is often the case in a time-share property.
(3) When an owner dies, that owner's interest passes to that owner's heirs.
Other Suggested PostsBefore buying property as a "Tenant in Common" check out these other related articles: Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed, Joint Tenants with Right of Survivorship.
There is no limit to the number of owners who can hold an interest in the property.
Tenants in Common v. Joint Tenants with Right of Survivorship
The biggest difference between a Tenancy in Common and Joint Tenancy is in the way the property is transferred when an owner dies. Under a Tenancy in Common, the deceased owner's interest passes to his or her heirs via Will, Trust, intestate, etc. Under a Joint Tenancy, the deceases owner's interest passes to the other owners (i.e. those who "survived" the deceased owner).
Other characteristics of a Tenancy in Common
(1) Ownership can be held in equal shares or unequal shares.
(2) Each owner has the right to possess the property without being able to exclude the other. Again, a separate agreement can be drafted and signed by all of the owners outlining who is to occupy the property and when. This is often the case in a time-share property.
(3) When an owner dies, that owner's interest passes to that owner's heirs.
Other Suggested PostsBefore buying property as a "Tenant in Common" check out these other related articles: Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed, Joint Tenants with Right of Survivorship.
Wednesday
Estate Planning: Dividing Property Amongst Heirs
"When my father died he was 85 years old and had very little property of monetary value. He did have a number of sentimental items (paintings, jewelry, photo albums,etc) some of my siblings and I had given him over the years. After the funeral we went back to his home and started sorting through his belongings. For the most part, the process was friendly and gave us a chance to reminisce happier times. For the most part that is.
We decided to divide up my father's belongings by returning each item to the giving sibling. I had given him a football signed by Johnny Unitas and some other sports related memorabilia. It became clear during the process that one of the siblings had given much less (i.e. nothing) to him than the rest. That particular sibling also received more financial assistance from my father than the others. As the night went on and we worked our way from one room to the next, that sibling started getting upset about the lack of items she had received. She started accusing me and my other siblings of being 'greedy, heartless and cold.' Our pleasant experience down memory lane was gone."
The above account is real, and indicative of what can happen if you leave the decision about who gets what until after die. You can avoid this scenario if you plan ahead and discuss it with your heirs.
Discuss Who Gets What
One way you can avoid hurt feelings when you pass away is to discuss with your heirs who gets what before you die. These discussions will allow you to explain the things contained in your will and to share precious memories with your family in the process. You may find out that your youngest son would rather have your Navy flight jacket instead of your vintage automobile (this actually happened to one of my clients) or that your daughters would rather exchange with each other the items you had left to them. The homework desk your father made you when you were 7 may need to go to your grandson instead of your son.
Make a List Once you have decided who should get which item, make a list and keep it in a safe place with your Will or other estate planning information. You may also want to send the list to your attorney. If you end up giving away items off the list before you die, be sure to update the list, so there isn't any confusion.
Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.
Discuss Who Gets What
One way you can avoid hurt feelings when you pass away is to discuss with your heirs who gets what before you die. These discussions will allow you to explain the things contained in your will and to share precious memories with your family in the process. You may find out that your youngest son would rather have your Navy flight jacket instead of your vintage automobile (this actually happened to one of my clients) or that your daughters would rather exchange with each other the items you had left to them. The homework desk your father made you when you were 7 may need to go to your grandson instead of your son.
Make a List Once you have decided who should get which item, make a list and keep it in a safe place with your Will or other estate planning information. You may also want to send the list to your attorney. If you end up giving away items off the list before you die, be sure to update the list, so there isn't any confusion.
Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.
Tuesday
Enhanced Life Estate Deed a/k/a Lady Bird Deed
One of my clients is an elderly widow. She recently contacted me with several concerns about her estate. Her primary concern was that she wanted to keep her home out of probate when she passes away. Like most people, she doesn't like the idea of her property being tied up in legal limbo for months before her beneficiaries (i.e. her daughter and two sons) take possession of the home. She was advised by another attorney to set up a trust, put her home (her only asset of real monetary value) into the trust and then manage the trust until she passes away. She brought the matter to me as she does with all of her legal concerns. I advised her that a simpler way for her to handle the matter might be to execute an "Enhanced Life Estate Deed" also known as the "Lady Bird Deed" (named in honor of former First Lady, Ladybird Johnson) or a "Transfer on Death Deed."
What is an Enhanced Life Estate Deed?
An Enhanced Life Estate Deed is a document that would deed my client's home to her children but reserve for my client a life estate coupled with the ability to sell the property at any time. This is called an "Enhanced Life Estate." In layman's terms, this means that (1) my client still owns the property; (2) my client can sell the property at any time without notifying her beneficiaries; and (3) if my client never sells the property, the house will pass directly to her beneficiaries after she passes away without going through probate.
Florida, Texas, Ohio, California, Kansas and several other states now accept this form of conveyance. In these states it is a recommended alternative to the traditional life estate deed. Of course, where a life estate can result in unwanted capital gains taxation, it should not be used, and other forms of planning should be considered (such as a living trust).
Other Benefits to a Lady Bird Deed
The Enhanced Life Estate Deed has several other benefits including:
(1) bypassing probate;
(2) it does not result in capital gains for the beneficiaries because they will not receive any value until my client passes away. When she passes away, her beneficiaries take the home at a "stepped-up basis" - not my client's original basis. A "stepped-up" basis is the value of the property on the day of my client's death;
(3) it does not open up the property to the beneficiaries' creditors during my client's lifetime because the beneficiaries have no interest until my client has passed away without selling the home;
(4) it allows my client to sell her home at any time, compared to a regular life estate where she would not be legally entitled to sell her home.
What is an Enhanced Life Estate Deed?
An Enhanced Life Estate Deed is a document that would deed my client's home to her children but reserve for my client a life estate coupled with the ability to sell the property at any time. This is called an "Enhanced Life Estate." In layman's terms, this means that (1) my client still owns the property; (2) my client can sell the property at any time without notifying her beneficiaries; and (3) if my client never sells the property, the house will pass directly to her beneficiaries after she passes away without going through probate.
Florida, Texas, Ohio, California, Kansas and several other states now accept this form of conveyance. In these states it is a recommended alternative to the traditional life estate deed. Of course, where a life estate can result in unwanted capital gains taxation, it should not be used, and other forms of planning should be considered (such as a living trust).
Other Benefits to a Lady Bird Deed
The Enhanced Life Estate Deed has several other benefits including:
(1) bypassing probate;
(2) it does not result in capital gains for the beneficiaries because they will not receive any value until my client passes away. When she passes away, her beneficiaries take the home at a "stepped-up basis" - not my client's original basis. A "stepped-up" basis is the value of the property on the day of my client's death;
(3) it does not open up the property to the beneficiaries' creditors during my client's lifetime because the beneficiaries have no interest until my client has passed away without selling the home;
(4) it allows my client to sell her home at any time, compared to a regular life estate where she would not be legally entitled to sell her home.
Monday
Estate Planning: Intervivos Trust a/k/a Living Trust
A friend of mine recently gave birth to her first (and likely only given her experience) child at the age of 35. Like most people, she executed a General Will years ago but otherwise did not spend any more significant time thinking about estate planning until her daughter was born. It seems she now spends a great deal of time changing diapers and a little more time worrying about her estate and its impact on her daughter's future. The other day the question arose as to whether she should set up an "Intervivos Trust" a/k/a "Living Trust."
What is a Living Trust?
A Living Trust is probably the most common instrument used by estate planners today for passing property upon death. A Living Trust allows an individual (the "Settlor") to put all of his or her property into a revocable living trust and name himself or herself as trustee. When the Settlor dies, the successor trustee conveys the property held in the Living Trust to the beneficiary designated by the Settlor in the Trust instrument.
A Living Trust allows the Settlor to pass his or her assets to a beneficiary quickly and inexpensively upon death of the Settlor and to revoke the Trust at any time during the life of the Settlor. A Trust may be funded by a life insurance policy even though the actual funds do not go into the trust until the Settlor passes away.
One Common Complaint About the Living Trust
One common complaint about the Living Trust is that it should be drafted by an attorney which can result in a lengthy and expensive document. You may be able to find online software to help you draft the document yourself, but doing may expose you to the risk of not crossing a "t" or dotting an "i" and having the trust declared invalid.
States that provide protections to family members such as the probate homestead found in Florida and California are unavailable to dependents of the Settlor. Also, creditors may be able to attach property of the Trust if the Settlor's estate is insufficient to cover the debts.
Trust Property Is Included in Decedent's Estate
Trust property is included in the decedent's taxable estate for estate tax purposes. The beneficiary takes the property at a "stepped up" basis.
What is a Living Trust?
A Living Trust is probably the most common instrument used by estate planners today for passing property upon death. A Living Trust allows an individual (the "Settlor") to put all of his or her property into a revocable living trust and name himself or herself as trustee. When the Settlor dies, the successor trustee conveys the property held in the Living Trust to the beneficiary designated by the Settlor in the Trust instrument.
A Living Trust allows the Settlor to pass his or her assets to a beneficiary quickly and inexpensively upon death of the Settlor and to revoke the Trust at any time during the life of the Settlor. A Trust may be funded by a life insurance policy even though the actual funds do not go into the trust until the Settlor passes away.
One Common Complaint About the Living Trust
One common complaint about the Living Trust is that it should be drafted by an attorney which can result in a lengthy and expensive document. You may be able to find online software to help you draft the document yourself, but doing may expose you to the risk of not crossing a "t" or dotting an "i" and having the trust declared invalid.
States that provide protections to family members such as the probate homestead found in Florida and California are unavailable to dependents of the Settlor. Also, creditors may be able to attach property of the Trust if the Settlor's estate is insufficient to cover the debts.
Trust Property Is Included in Decedent's Estate
Trust property is included in the decedent's taxable estate for estate tax purposes. The beneficiary takes the property at a "stepped up" basis.
Wednesday
Joint Tenancy with Right of Survivorship
What is Joint Tenancy with Right of Survivorship?
A Joint Tenancy with Right of Survivorship is a document (usually in the form of a deed) wherein two individuals (often husband and wife) own equal and undivided interests in a piece of property. When one of the individuals dies, the surviving individual acquires ownership of the entire piece of property by right of survivorship. To establish ownership, the surviving individual simply executes and records an affidavit of death.
Pros of the Joint Tenancy with Right of Survivorship
The biggest pro to a Joint Tenancy is the fact that ownership of the property is transferred outside of probate. This makes this type of transfer simple and economical. In addition, the joint tenants are not required to record the deed to create the tenancy which can provide a measure of confidentiality from those who might object to the transfer. Also, when one tenant dies the decedent's creditors lose their rights against the property.
Cons of the Joint Tenancy with Right of Survivorship
A Joint Tenancy Deed is Irrevocable and the transfer is taxable as a gift at the time the deed is executed. Also, during the life of the tenancy, the creditors of both tenants can reach the tenants' share of the property.
Recommendation
Before executing a Joint Tenancy with Right of Survivorship, check out these articles:
Monday
Transfer on Death Deed to Avoid Probate
Transfer on Death Deed. Thinking about updating your Will? You may consider removing real estate (to avoid probate) by executing a Revocable Transfer on Death Deed (TOD) instead. Often simpler to create than a Trust, a Transfer on Death Deed is similar to the Enhanced Life Estate Deed and is valid in Missouri, Kansas, Ohio, Arizona, New Mexico, Nevada, Colorado, Arkansas or Wisconsin.
Tuesday
Get A Tax Attorney Involved
Do you cringe when I mention the date April 15? If you don't its probably because you are one of the millions of Americans who give the government an interest free loan during the course of each year and then anxiously await repayment (that's what a tax refund is). But whether you owe taxes or receive a refund each year you may want to consult a tax attorney way before the taxes become due.
Most people don't think about consulting a tax attorney until they are faced with a negative IRS audit. Although this is certainly one of the biggest incentives to consult a tax attorney there are other reasons as well. For example, do you know what a 1031 like/kind exchange is? The IRS will allow you to "exchange" one piece of investment property for another, tax free.
1031 (Like/Kind) Exchange
Suppose I have a job as a traveling nurse and I am currently working in Nevada and own a beach house in California. One day I decide to relocate to a New York travel nurse job and I have to move with it. Living in Nevada allows me to stay in my California beach house every weekend. Moving to New York will make using the beach house nearly impossible. If I sell the beach house in the usual manner and buy a mountain house in New York I will be required to pay taxes on the sale (probably long term capital gains). However, the IRS allows me to "exchange" the beach house in California tax free for a mountain home in New York provided certain legal criteria are met. The sale of the California beach house would be performed in the usual manner but the proceeds from the sale would go into a special holding account until you found the mountain house you wanted to "exchange" for. A tax attorney will be able to advise you on the best method for setting up the exchange and update you on any changes to the law.
Estate Planning
Another reason to consult a tax attorney is for Estate Planning. The terms Will, Trust, Power of Attorney, Beneficiary, Life Insurance, Health Care, Enhanced Life Estate Deed and Lady Bird Deed should be somewhat familiar terms. A tax attorney can show you how to best structure your estate to minimize your current estate taxes and allow you to pass your estate onto your heirs with the least amount of tax burden.
Tax Law Constantly Changes
Remember, tax laws are constantly changing; so what may be the law in 2006 may not be the law in 2007. If you don't believe me, ask yourself why "do-it-yourself" tax companies like Turbo Tax and other online business and tax companies are able to make money selling new versions each year. A friend of mine selling nursing scrubs recently discovered the value of a tax attorney who was able to explain to her a complex tax issue that her CPA was not able to explain. Tax attorneys monitor changes to the laws and can advise you if a change affects your tax structure.
For more tax related information, you may also want to read an article about maintaining a Permanent Tax Home.
Friday
California's Revocable Deed a/k/a Enhanced Life Estate Deed
A number of people who visit this blog from California have asked me why they cannot find references to the California Enhanced Life Estate Deed in their state. The reason is a matter of semantics. You see, in California the Enhanced Life Estate Deed is called a Revocable Deed. The two deeds share essentially the same functions. Those functions are described in my posts Estate Planning and the Enhanced Life Estate Deed and The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed.
Recently there has been a movement in California to revise the state's Beneficiary Deeds laws. One reason for the movement may be that most lay persons in California are unaware of the Revocable Deed or do not understand how the Revocable Deed works.
Options for Passing Real Property Upon Death
California allows you to pass your real property to your beneficiaries in a number of different ways. Among the ways property can be passed are: (1) Life Estate Deed, (2) Will or Intestate Succession, (3) Intervivos Trust, (4) Joint Tenancy, (5) Community Property, (6) Intervivos Transfer with Reserved Life Estate, (7) Revocable Deed a/k/a Lady Bird Deed, and (8) Conveyance Pursuant to Non-Probate Transfer. This post deals specifically with the Revocable Deed a/k/a Lady Bird Deed a/k/a Enhanced Life Estate Deed.
The Validity of the Revocable Deed in California
California has recognized the validity of the Revocable Deed from as far back as 1914 (see Tennant v. John Tennant Memorial Home, 167 Cal. 570) and as recent as 2002 (see Bonta v. Burke, 8 Cal. App. 4th 788).
Before you support a change in California’s Beneficiary Deeds laws check out my posts referenced above on the Revocable Deed a/k/a Lady Bird Deed a/k/a Enhanced Life Estate Deed. You will likely find that California already recognizes the type of real property transfer you are looking for.
Recently there has been a movement in California to revise the state's Beneficiary Deeds laws. One reason for the movement may be that most lay persons in California are unaware of the Revocable Deed or do not understand how the Revocable Deed works.
Options for Passing Real Property Upon Death
California allows you to pass your real property to your beneficiaries in a number of different ways. Among the ways property can be passed are: (1) Life Estate Deed, (2) Will or Intestate Succession, (3) Intervivos Trust, (4) Joint Tenancy, (5) Community Property, (6) Intervivos Transfer with Reserved Life Estate, (7) Revocable Deed a/k/a Lady Bird Deed, and (8) Conveyance Pursuant to Non-Probate Transfer. This post deals specifically with the Revocable Deed a/k/a Lady Bird Deed a/k/a Enhanced Life Estate Deed.
The Validity of the Revocable Deed in California
California has recognized the validity of the Revocable Deed from as far back as 1914 (see Tennant v. John Tennant Memorial Home, 167 Cal. 570) and as recent as 2002 (see Bonta v. Burke, 8 Cal. App. 4th 788).
Before you support a change in California’s Beneficiary Deeds laws check out my posts referenced above on the Revocable Deed a/k/a Lady Bird Deed a/k/a Enhanced Life Estate Deed. You will likely find that California already recognizes the type of real property transfer you are looking for.
Estate Planning, Divorce and Life Insurance Proceeds
One of my clients recently experienced the death of her husband in a car accident. Her husband had been married and divorced prior to his marriage with my client. During his previous marriage he had taken out a $500,000 life insurance policy naming his former wife as the beneficiary of the policy.
According to my client, her husband's divorce from his former spouse was "long, agonizing and hateful." During the divorce proceedings the two former spouses tried all in their power to hurt the other spouse. Their actions included revealing intimate details of their married life during open Court proceedings, using their two minor children as leverage against each other and destroying certain assets that had no real monetary value but significant sentimental value. These facts are important given the life insurance policy naming the ex-wife as beneficiary.
It is clear from what my client has told me that her spouse did not intend for his ex-wife to remain the beneficiary of the policy after his death. This is evidenced by her spouse having removed his ex-wife from other legal forms like the Enhanced Life Estate Deed he had drawn up prior to his divorce. It is also clear that her husband's divorce attorney either did not know about the policy or knew and failed to advise my client's husband to change the beneficiary.
The Florida Probate Code
In Florida, divorce does not remove the ex-spouse as beneficiary under a life insurance policy. Florida takes the position that the life insurance policy is a contract and should not be interfered with unless fraud is involved. Further, if the deceased wanted to change the beneficiary he could have done so at any time but chose not to. It is not for the legislature to alter the terms of the written contract in determining the mind and will of the contracting party.
This means that my client will most likely not receive the proceeds from the life insurance policy and that my client's husband's ex-spouse will. To rub salt in the wound, the policy was primarily paid for during my client's marriage from funds that belong (at least in part) to my client. An argument might be made that since the funds used to pay for the policy were my client's as well as her husband's it would be inequitable to distribute the proceeds to my client's husband's ex-wife.
The Uniform Probate Code
In the above regard, Florida differs from states that follow the Uniform Probate Code to determine the life insurance beneficiary. States that follow the Uniform Probate Code would sever the tie between the divorced spouses and replace the beneficiary. The new beneficiary would be determined using a similar system to the intestate statute. This means that if my client's husband's insurance policy were governed by the Uniform Probate Code, my client would most likely receive the proceeds from the policy. This would also apply to ex-spouses named as beneficiaries under a Lady Bird Deed.
A word of advice, check your insurance policy today to be sure who you have named as beneficiary. Do not rely on the numerous statutory probate codes to determine who will get the insurance proceeds. If you need assistance reviewing the policy or changing your beneficiary, contact one of the attorneys above.
Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quit claim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.
According to my client, her husband's divorce from his former spouse was "long, agonizing and hateful." During the divorce proceedings the two former spouses tried all in their power to hurt the other spouse. Their actions included revealing intimate details of their married life during open Court proceedings, using their two minor children as leverage against each other and destroying certain assets that had no real monetary value but significant sentimental value. These facts are important given the life insurance policy naming the ex-wife as beneficiary.
It is clear from what my client has told me that her spouse did not intend for his ex-wife to remain the beneficiary of the policy after his death. This is evidenced by her spouse having removed his ex-wife from other legal forms like the Enhanced Life Estate Deed he had drawn up prior to his divorce. It is also clear that her husband's divorce attorney either did not know about the policy or knew and failed to advise my client's husband to change the beneficiary.
The Florida Probate Code
In Florida, divorce does not remove the ex-spouse as beneficiary under a life insurance policy. Florida takes the position that the life insurance policy is a contract and should not be interfered with unless fraud is involved. Further, if the deceased wanted to change the beneficiary he could have done so at any time but chose not to. It is not for the legislature to alter the terms of the written contract in determining the mind and will of the contracting party.
This means that my client will most likely not receive the proceeds from the life insurance policy and that my client's husband's ex-spouse will. To rub salt in the wound, the policy was primarily paid for during my client's marriage from funds that belong (at least in part) to my client. An argument might be made that since the funds used to pay for the policy were my client's as well as her husband's it would be inequitable to distribute the proceeds to my client's husband's ex-wife.
The Uniform Probate Code
In the above regard, Florida differs from states that follow the Uniform Probate Code to determine the life insurance beneficiary. States that follow the Uniform Probate Code would sever the tie between the divorced spouses and replace the beneficiary. The new beneficiary would be determined using a similar system to the intestate statute. This means that if my client's husband's insurance policy were governed by the Uniform Probate Code, my client would most likely receive the proceeds from the policy. This would also apply to ex-spouses named as beneficiaries under a Lady Bird Deed.
A word of advice, check your insurance policy today to be sure who you have named as beneficiary. Do not rely on the numerous statutory probate codes to determine who will get the insurance proceeds. If you need assistance reviewing the policy or changing your beneficiary, contact one of the attorneys above.
Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quit claim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.
Thursday
DUI Laws In All 50 States
This is a follow-up to my original DUI post on June 5, 2006. In that post I discuss several provisions contained in most state DUI statutes, including the "Per Se" Blood Alcohol Concentration (BAC) Level, Enhanced Penalty Standards and Implied Consent to DUI testing.
Monday
Enhanced Life Estate Deed, Ladybird Deed
One of my clients is an elderly widow.
She recently contacted me with several concerns about her estate. Her primary concern was that she wanted to keep her home out of probate when she passes away.
Like most people, she doesn't like the idea of her property being tied up in legal limbo for months before her beneficiaries (i.e. her daughter and two sons) take possession of the home.
Wednesday
DUI: Take The Fifth If You've Consumed A Fifth
When I was in high school we used to have seminars where police officers would visit the school to discuss underage drinking and related issues. During one such seminar, a student asked an officer whether it would be better for her when pulled over for DUI to tell the officer she had been drinking or lie to the officer. She wanted to know whether the officer would be more lenient on her for being truthful. The officer responded by telling everyone in the seminar that telling the truth to an officer was always the best thing to do.
What the officer did not tell the girl is there is actually a third option: Not To Say Anything At All. This right is based on the Fifth Amendment to the United States Constitution which grants all U.S. citizens freedom against self incriminating. A modification of an old saying might go like this: "It is better to keep your mouth shut and appear to be intoxicated than to open your mouth and remove all doubt." Of course, if you have truly not been drinking, say so.
The Fifth Amendment and Miranda
In a 1966 court case styled Miranda v. Arizona, the U.S. Supreme held that a person in police custody must be informed of the Fifth Amendment right not to make self incriminating statements before the person can be questioned by the police. This means if you are in police custody the police officer must inform you that:
1) You have the right to remain silent;
2) Anything you say can and will be used against you in a court of law;
3) You have the right to an attorney; and
4) If you cannot afford an attorney, one will be appointed for you.
If a police officer fails to give you a Miranda warning prior to questioning you for DUI any statement you make cannot be used against you in a criminal case. Further, if the police discover evidence against you (open containers, etc.) as a result of the statement the evidence will likely not be allowed against you in a criminal case. This applies not only in DUI cases, but in any case in which you may be in police custody.
My Caveat
Before I receive criticism for offering advice to assist those who drink and drive, let me state here that I do not drink and strongly discourage drinking altogether. That being said, I have seen honest individuals who have admitted to a police officer that they were DUI and received harsher penalties as a result of admitting their guilt to the officer. In admitting their guilt to an officer the lost negotiating leverage they could have held onto for when it came time to negotiate a plea agreement. At the same time, I have seen dishonest individuals lie to a police officer and retain their leverage (i.e. they can then bargain with the prosecuting attorney for a lighter sentence if they are willing to then admit guilt). I am only advocating that one exercise the Fifth Amendment privilege thereby retaining leverage while not lying to a police officer.
Penalties For DUI
The first thing you should say to a police officer who has stopped you for DUI is that you would like to consult a lawyer. Penalties for DUI vary widely from state to state. If you are a repeat offender penalties will most likely be more harsh than if you are a first time offender. Depending on the state, habitual drunk drivers may have their vehicle impounded, license revoked and much worse.
Many states have instituted minimum penalties for first time offenders including enrollment in an alcohol treatment program and license suspension. States are cracking down more harshly on first time offenders than in previous decades. First time offenders are more likely to receive a jail sentence, mandatory alcohol programs and community service well as steeper fines.
Check out this DUI blog for more information on first offenders in each of the fifty states. The blog outlines penalties for California DUI, Arizona DUI and DUI penalties in other states.
Miranda Does Not Apply to Sobriety Test
Courts have held that Miranda does not apply to chemical sobriety tests. For a discussion on chemical sobriety tests see the post titled DUI: Things You Need To Know. That being said, should you be asked any question during a sobriety test your best response might be "I choose to exercise my Fifth Amendment Rights."
What the officer did not tell the girl is there is actually a third option: Not To Say Anything At All. This right is based on the Fifth Amendment to the United States Constitution which grants all U.S. citizens freedom against self incriminating. A modification of an old saying might go like this: "It is better to keep your mouth shut and appear to be intoxicated than to open your mouth and remove all doubt." Of course, if you have truly not been drinking, say so.
The Fifth Amendment and Miranda
In a 1966 court case styled Miranda v. Arizona, the U.S. Supreme held that a person in police custody must be informed of the Fifth Amendment right not to make self incriminating statements before the person can be questioned by the police. This means if you are in police custody the police officer must inform you that:
1) You have the right to remain silent;
2) Anything you say can and will be used against you in a court of law;
3) You have the right to an attorney; and
4) If you cannot afford an attorney, one will be appointed for you.
If a police officer fails to give you a Miranda warning prior to questioning you for DUI any statement you make cannot be used against you in a criminal case. Further, if the police discover evidence against you (open containers, etc.) as a result of the statement the evidence will likely not be allowed against you in a criminal case. This applies not only in DUI cases, but in any case in which you may be in police custody.
My Caveat
Before I receive criticism for offering advice to assist those who drink and drive, let me state here that I do not drink and strongly discourage drinking altogether. That being said, I have seen honest individuals who have admitted to a police officer that they were DUI and received harsher penalties as a result of admitting their guilt to the officer. In admitting their guilt to an officer the lost negotiating leverage they could have held onto for when it came time to negotiate a plea agreement. At the same time, I have seen dishonest individuals lie to a police officer and retain their leverage (i.e. they can then bargain with the prosecuting attorney for a lighter sentence if they are willing to then admit guilt). I am only advocating that one exercise the Fifth Amendment privilege thereby retaining leverage while not lying to a police officer.
Penalties For DUI
The first thing you should say to a police officer who has stopped you for DUI is that you would like to consult a lawyer. Penalties for DUI vary widely from state to state. If you are a repeat offender penalties will most likely be more harsh than if you are a first time offender. Depending on the state, habitual drunk drivers may have their vehicle impounded, license revoked and much worse.
Many states have instituted minimum penalties for first time offenders including enrollment in an alcohol treatment program and license suspension. States are cracking down more harshly on first time offenders than in previous decades. First time offenders are more likely to receive a jail sentence, mandatory alcohol programs and community service well as steeper fines.
Check out this DUI blog for more information on first offenders in each of the fifty states. The blog outlines penalties for California DUI, Arizona DUI and DUI penalties in other states.
Miranda Does Not Apply to Sobriety Test
Courts have held that Miranda does not apply to chemical sobriety tests. For a discussion on chemical sobriety tests see the post titled DUI: Things You Need To Know. That being said, should you be asked any question during a sobriety test your best response might be "I choose to exercise my Fifth Amendment Rights."
Tuesday
Online Auction Fraud
Tips to Consider Before You Purchase From An Online Auction
The following recommendations have been made by the National Consumer League to protect consumers from online fraud:
1) Check the seller’s feedback rating if that information is available on the auction site. While a positive rating is no guarantee that you won’t have a problem, a negative rating is a danger sign;
2) Look for information about insurance and understand the terms. Some auction sites offer insurance protection, but coverage is limited to set amounts, there is usually a deductible, and there may be exclusions; for example, you may not be able to make a claim if you purchased something from a seller whose feedback rating was negative at the time of sale;
3) Pay the safest way. If you pay the seller directly with a credit card, you can dispute the charges if the item never arrives or was misrepresented. You don’t have that right if you use a third-party online payment service, even if you use your credit card to put the money into your account with the service. However, your credit card issuer may still be willing to help you;
4) Use an escrow service for purchases that aren’t covered by insurance or your credit card dispute rights. The difference between an escrow service and other online payment services is that the escrow service doesn’t pay the seller until you confirm that you got what you were promised.
The tips should prove useful to avoid being a victim of online auction fraud. A word of caution regarding online escrow services. A number of fraudulent escrow services have popped up recently. Before you open an account with an online escrow service look at the California Department of Corporations website. The website provides valuable information no matter what state you live in.
Monday
DUI: Things You Need To Know
A friend of mine is a police officer who used to work the night shift. He once told me he had arrested an old high school acquaintance of ours for DUI. The facts of the incident were interesting. My officer friend had come upon a car parked on the side of the road about 10 feet from a driveway. The car was turned off and our high school acquaintance was inside the car asleep. The smell of alcohol emanated from the car. My friend woke up our acquaintance and had him step out of the car to take a blood alcohol test. Our acquaintance refused, insisting that he was not driving the car and that the car was parked in his girlfriend's driveway. The acquaintance was arrested on charges of DUI, taken to jail and lost his license for failing to take a blood alcohol test.
What makes the account interesting is that the State Attorney eventually dropped the charges against the acquaintance on the grounds (I believe) that there was not enough evidence to prove the acquaintance had driven the car. Interesting reasoning given the car was not actually parked in the driveway. The acquaintance also had his license reinstated even though there was no dispute that he had refused a blood alcohol test. I am certain these results were achieved for our acquaintance because he hired a DUI attorney to represent him. Even though our acquaintance was able to work out a deal, he had to spend months without a license. The following are some of the things our acquaintance should have known before he was faced with the circumstances that led to his arrest:
"Per Se" Blood Alcohol Concentration (BAC) Level
All states have DUI laws that deem any driver with a blood alcohol concentration (BAC) at or above .08 percent as "per se intoxicated." This means that drivers with a BAC at or above .08 are legally intoxicated, and no additional proof of driving impairment is necessary.
Enhanced Penalty Standards
Most states impose harsher penalties on DUI offenders with a particularly high BAC at the time of the offense. The penalties usually begin when the BAC is around .15. Penalties for DUI offenders with a BAC at or above their state's enhanced penalty standards range from harsher fines and driver's license restrictions to increased jail time
Implied Consent
Most states require drivers to submit to a breath, blood, or urine test if suspected of DUI. Failure to submit to such test can result in mandatory suspension of a driver's license, usually for six months to a year. This is called the "Implied Consent Law" because when you obtain your driver's license you implied consent to being tested.
Many states also have "Zero Tolerance" for underage drinking and driving.
Wednesday
Estate Planning; You Decide Who Gets What
Most of us have heard the saying "nothing is certain but death and taxes." When it comes to estate planning these two things, death and taxes, should be at the forefront of everyone's mind. That being said, there are numerous ways to plan for the inevitablity of death. Most estate plans include creating a Will, setting up Trusts and obtaining life insurance policies.
If you do not plan your estate now a state legislature will divide it up when you die. The one size fits all approach taken by your state legislature will most likely not divide your property the way you would divide it. The legislature is not going to know that you want your musical genius nephew Jimmy to have your complete Elvis collection and not your tone deaf son Roy. More importantly, the legislature is not going to know who you want to have custody of your children or who you want to administer your estate.
Create A Will
EVERYONE SHOULD HAVE A WILL! A will is a legal document that specifies who will manage your estate and who is to receive what at your death. A will must be in writing and must meet certain specific requirements to be valid. In most states, the person making the will must sign the will at the end and the signature must be witnessed by at least two other individuals. Most states prefer that the witnessess be uninterested parties to the will. The witnessess must also sign the will in the presence of each other and the person making the will. The will must also clearly identify the property to be bequeathed, the individuals to whom the property is bequeathed (the "beneficiaries") and that the person making the will intended to leave the property to the beneficiaries at his or her death.
To obtain the specific requirements for a valid will in your state contact an estate planning attorney in your state. There are also computer programs that allow you to create your own will. The problem with these programs is they may not meet the requirements of your state.
Consider Setting Up A Trust
If your estate is large enough you may consider setting up a trust to avoid estate taxes upon your death. A trust is a property interest (money, home, car, etc.) held by one person (the trustee) at the request of another (you, the person setting up the trust) for the benefit of a third-party (the beneficiary). Most trusts allow you to name yourself as the trustee if you wish. There are several different types of trusts that can be set up including active trusts, blended trusts, blind trusts, revocable trusts, irrevocable trusts, etc. To set up a trust contact an attorney in your state who specializes in estate planning. Do not set up the trust yourself. You will most likely not meet all of the legal requisites and the trust will be declared invalid.
You may also set up a trust funded with the proceeds of a life insurance policy. Although there may not be any actual funds in the trust at the time it is set up the life insurance proceeds will activate the trust upon your death.
Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quit claim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed .
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