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Tuesday
Jul032012

Will Contests & Estate Disputes – Five Ways to Avoid a Family Feud 

Trusts & Estate Planning

 

by Kira S. Masteller
818.907.3244

 

Even in the most complacent of families, estate disputes can sometimes arise under the added strain of bereavement and emotional loss.

When family members don't get along (which is more common than not) family feuds can take on a costly aspect in terms of time and money spent in litigation. Estate disputes can drain all of the resources you've worked hard for, and leave the ones you love most feeling bitter, neglected and without the gifts you intended to leave them. 

 

Avoiding a Contest

 

First, you'll need to take some common sense measures.

The most common argument a family member will make when disputing a will or trust is that the writer, or testator, was not of sound mind. Based upon your age or medical condition, consider having your doctor and a psychologist evaluate your physical and mental health just before finalizing your will, so that you can avoid this allegation.

Seek your own legal counsel, separate from other family members to protect your interests and the interests of those you wish to give gifts to.  

Consider hiring a corporate trustee to serve instead of family members. Corporate trustees are less likely to be seen as abusing their trustee powers; whereas a stepparent or favored child may unwittingly cause suspicion or jealousy among your other heirs.

Last, make sure you own the property you plan to bequeath outright. Jointly owned property such as business interests, real estate, time shares, etc., may revert to other owners.

Once you've done all of these things, you're ready to put your intentions in black and white. Here are five simple steps you can take to avoid inheritance disputes when you pass: 

1. Equal and Unequal Distribution of Property:

Try not to play favorites. The general rule here is to ensure that all of your children and/or your spouse are treated equally. There's not much room for argument when three children each get 1/3 of the house, business, or other property. 

Even better, if you can distribute property while you're still living – make sure you have legal documentation reflecting what you gave or sold to your heirs – you may avoid a contest altogether. 

But how should you handle distribution of your estate if you absolutely don't want to treat all of your family members equally?  

2. Disinheritance:

Make your intentions clear by defining which people will not inherit property, or which will get smaller shares of your estate. Avoid the whys and wherefores – these only encourage bad feelings and potential contests.  

3. Family Financial Obligations:

Seed money for an heir to buy a house or start a business should be thought out carefully. Is the money an outright gift? Is it a loan that needs to be paid back to your estate? Or is it an advancement on your estate? Clearly define your intentions here, to avoid family arguments and litigation.  

4. Business & Property Contracts:

Your business is thriving and all of your children want a share, but one in particular devoted a career to nurturing and running it while the others pursued other interests. Consider selling it to your heir of choice outright, while you're still alive.  

5. No Contest Clauses:

Make your heirs forfeit their interests in your estate should they contest your trust. This can make the more disgruntled members of your family think twice before raising disputes.

 

Kira S. Masteller is a Trusts and Estate Planning Attorney who helps family members avoid will and estate disputes and probate proceedings. Contact her via e-mail: kmasteller@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Jun202012

Tax & Estate Planning - Small Win for Same Sex Couples?

Trusts & Estate Planning

by Kira S. Masteller
818.907.3244

 

The Defense of Marriage Act, or DOMA, was enacted in 1996 to "define and protect the institution of marriage." It defined marriage as a legal union between one man and one woman – and defined spouse as a person of the opposite sex who is a husband or wife.

The Act also says that states, territories, possessions or Indian tribes of the U.S. are not required to recognize public acts and judicial proceedings regarding relationships between persons of the same sex that occur within other states, territories or tribes.

These definitions and directives have been under fire for a long time, but recently, a district court in New York ruled parts of DOMA unconstitutional.

In Edith Schlain Windsor v. The United States of America, the question revolves around tax obligations for estates passing to same-sex spouses.

 

Trust and Estate Planning for Same Sex Couples Under DOMA

 

For context: Windsor and Thea Spyer met in 1963, entered into a committed relationship and lived together. In 1993, Windsor and Spyer registered as domestic partners in New York. They married in Canada in 2007.

Spyer's estate passed to Windsor in 2009 when she died. But Windsor paid over $350k in taxes on the estate because under DOMA, she did not qualify for an unlimited marital deduction.

Windsor sought a refund, claiming DOMA violates the Equal Protection Clause of the Constitution of the United States' Fifth Amendment. Windsor had to prove that:

  1. She suffered an "injury in fact," in this case, her interests were legally unprotected;
  2. There was a causal connection between the injury and the Defendant's actions, not between the injury and a third party; and,
  3. It is "likely" the injury will be remedied with a favorable decision

The defense, the Bipartisan Legal Advisory Group (BLAG) of the U.S. House of Representatives, alleged among other things, that Windsor did not meet the second condition. The group claimed that the State of New York did not recognize Windsor's marriage to Spyer in the year that Spyer died. Defense cited the 2006 decision Hernandez v. Robles, which said "New York Constitution does not compel recognition of marriages between members of the same sex."

The District Court disagreed. According to Justice Barbara S. Jones:

In 2009, all three statewide elected executive officials – the Governor, the Attorney General, and the Comptroller – had endorsed the recognition of Windsor's marriage [Justice Jones cited two other court decisions, Godfrey v. Spano, and Dickerson v. Thompson]. In addition, every New York State appellate court to have addressed the issues in the years following Hernandez has upheld the recognition of same-sex marriages from other jurisdictions.

There were other claims and defenses made. But the Court granted summary judgment for Windsor, and declared Section 3 of DOMA unconstitutional in this case. Though a victory for Windsor and same-sex couples for the moment, we can only wait and see what happens next.

Kira S. Masteller is a Trust & Estate Planning and Probate Attorney. If you have questions about your own estate planning, contact her at kmasteller@lewitthackman.com .

 

 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

Thursday
Jun142012

Texting and Driving - Teen Gets Jail Time for Deadly Accident

Injury AttorneyPersonal Injury Attorney 

 

by David B. Bobrosky
(818) 907-3254

Over the last year or so, there have been several reports citing statistics about the dangers of texting and driving.

Based on the amount of people still texting and driving, those numbers have not meant much to anyone. Recently, those statistics became a reality for a couple of Massachusetts families.

Distracted Driver Accident LawyerThis stems from a crash that occurred in February of 2011. Aaron Deveau, 17 years old at the time, drove his car over the center line and struck another vehicle driven by Donald Bowley, Jr.

Bowley, a father of three, died as a result of the motor vehicle accident. His passenger and girlfriend, received significant injuries.

Deveau was accused of texting and driving at the time of the accident. Although Deveau denied it, prosecutors said he sent 193 text messages the day of the accident, including some within a minute of the crash.

Deveau was charged with motor vehicle homicide and negligent operation while texting. He was among the first people convicted under a Massachusetts law that took effect in September 2010, which made texting while driving and causing injury a crime.

Last week, Deveau was sentenced to 2 ½ years in prison, with 1 ½ years suspended---leaving one full year behind bars for the now 18 year old.

 

Driving While Distracted - Current Legal Consequences

 

Massachusetts is one of 39 states, plus the District of Columbia, which bans texting and driving for all drivers. Ten other states – including California  and the District of Columbia – ban all handheld cell phone use for all drivers.

While these laws are on the books, ticketing, arrests and convictions are inconsistent and infrequent. Certainly, convictions with jail time are rare.

Just last April, a 23 year old woman in Minnesota only received 10 years of probation after pleading guilty to texting and driving while she crashed into and killed a 58 year old motorcyclist. The sentencing of Deveau may start a trend that really starts to significantly punish cell phone users while driving.

Stiffer punishments may be what we need as drivers are not getting the message. A new survey, released last week by the Centers for Disease Control and Prevention, exposed just how severe the problem still is among all drivers, especially teens. In the survey, approximately 58 percent of high school seniors admitted to texting or e-mailing while driving during the previous month. And about 43 percent of high school juniors admitted to the same actions.

National Transportation Secretary Ray LaHood is leading the charge against what he calls a “national epidemic.”  Secretary LaHood is in favor of a national ban on all cell phone use while driving. The Federal Motor Carrier Safety Administration did just that for commercial drivers when it banned all hand-held cell phone use in November, 2011. However, laws for passenger vehicles have been left up to the States.

The Transportation Department is attempting to increase enforcement of State laws. It’s awarding $2.4 Million to Delaware and California for pilot projects to combine more police enforcement with publicity campaigns against distracted driving. Similar projects in Syracuse, N.Y. and Hartford, CT., according to Secretary LaHood, are successfully reducing distracted driving in those States.

Over the last few years a lot has been done to try to raise awareness of the dangers of distracted driving. Much of this has centered around the victims of such accidents. Based on the statistics above, this has not been too successful. Perhaps cases like Deveau, where the offender feels the pain also will do more to finally curb distracted driving.

David B. Bobrosky is a personal injury attorney and safe driving proponent. You may reach him via e-mail: dbobrosky@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

Wednesday
Jun062012

Municipal Bankruptcies - When Local Governments Go Belly-Up

 

Los Angeles Litigation AttorneyEnvironmental Law & Civil Litigation AttorneyJune 6, 2012
by Stephen T. Holzer

Los Angeles Environmental Attorney

When an individual opts to declare bankruptcy, he or she generally qualifies for either Chapter 7 Bankruptcy, in which the individual's property is sold to pay some, or all of the debts; or Chapter 13 Bankruptcy, in which options for payment of these debts are offered over a fixed period of time.

Creditors may be notified and may contest the process, as they want to recover as much of the loan and interest as possible.

It's much more complex for local governments under Chapter 9 of the Bankruptcy Code because:

  1. Municipal debts are usually much larger.
  2. Local government employees don't want to have their contracts abolished or reduced. They stand to lose their benefits, pensions and other compensation when a municipality files bankruptcy.
  3. Bonds and other means of financing municipal projects completely complicate the process.

State Assemblyman Bob Wieckowsky attempted to alleviate some of the confusion for municipalities, their employees and their creditors by introducing a bill that became law this year. In a compromise between the unions and the governments, AB 506 requires cities, towns, counties and villages to engage in mediation with creditors in an attempt to stave off bankruptcy proceedings.

Though only enacted several months ago, the Assemblyman wants to amend the law to broaden the powers of the mediators.

The new bill, AB 1692, will subject local governments to an evaluation, or force them to declare a state of fiscal emergency before they can declare bankruptcy. Several state organizations such as the California Professional Firefighters, the California Labor Federation and the California Nurses Association back this new bill.

Many local government officials oppose AB 1692 though, citing as a reason that the process gives the mediators too much power and allows more time for financial resources to be drained.

The new bill limits a neutral evaluation to 60 days following the appointment of the evaluator, unless participating interests elect to extend the process by another 90 days (or longer if the parties agree).


Insolvent Cities – A Look at Stockton, Mammoth Lakes and Vallejo


The gold rush city of Stockton currently stands to be the most populous in America to declare bankruptcy. The municipality projects a deficit of $20-38 million over the next fiscal year, due partly to overgenerous pension packages for city employees, an over-aggressive development plan, and the nosedive of the real estate market in the current recession.

The parties involved in the bankruptcy proceedings just recently voted to extend the mediation period another 30 days, giving offices until June 27th to come to an agreement with creditors.

Mammoth Lakes has a different reason for facing Chapter 9 bankruptcy proceedings: A legal judgment of $43 million stemming from a lawsuit first brought six years ago against the town by a developer. The plaintiff refuses to participate in the mediation process.

Before the Stockton financial crisis, and even before ABs 1692 and 506, Vallejo was one of the first and largest cities to go bankrupt.

Vallejo did so in the spring of 2008, and the move gave the city protection from creditors, as well as time to renegotiate employee contracts and find new sources of revenue, according to an article in the San Francisco Chronicle. Last November, the city came out of bankruptcy status, released from the stigma by a federal judge.

The Vallejo's City Manager says bankruptcy should be a last resort option. Whether or not ABs 506 and 1692 provide other means of deliverance, only time will tell.

Stephen T. Holzer is a business litigation attorney and Chair of our Environmental  Law Practice Group. Contact him via e-mail: sholzer@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

Thursday
May312012

Inheritance Interference - A New Cause of Action

by Stephan Mihalovits

 

Hark! Manna for litigants! Passed down from the California Court of Appeal this month, Beckwith v. Dahl recognizes a new civil claim: Intentional Interference with an Expected Inheritance (“IIEI”).

Recognized in half the states, IIEI provides a remedy for certain prospective legatees.  Guided by policy, the Court stated:

 “For every wrong there is a remedy … we cannot let the difficulties of adjudication frustrate the principle that there be a remedy for every substantial wrong.” Thus, the Court held that, if a defendant, by wrongful means over the person whose property is devised by the will, interferes with plaintiff’s expected inheritance so that plaintiff is not able to contest the interference in probate court, the plaintiff is now afforded a civil claim for this interference.

The facts in the case sound like TV drama. Marc MacGinnis and Brent Beckwith were in a long-time relationship before MacGinnis was diagnosed with lung cancer. MacGinnis prepared a will splitting his property equally between Beckwith and MacGinnis’s sister Susan Dahl, but never printed or signed the will. In the hospital, MacGinnis asked Beckwith to bring him the will to sign, but Beckwith couldn’t find it. MacGinnis told him to create a new will with the same terms to sign.

Beckwith told Dahl the plan, who told Beckwith not to have her brother sign, and that she would prepare an estate instead. Beckwith followed her instructions, but MacGinnis then died without any will or estate in place.

Dahl opened the case in probate and was made administrator. Beckwith was ruled to have no standing to contest in probate court, and Dahl received the entire inheritance. Beckwith brought civil claims against Dahl for inheritance interference and fraud. After recognizing the new tort, the Court remanded the case to allow Beckwith to plead the tort’s five elements.

To state a cause of action for intentional interference with an expected inheritance, the Court stated the plaintiff must prove five elements:

  1. The plaintiff had some expectation of receiving an inheritance;
  2. It is reasonably certain he would have received the inheritance if not for the defendant’s interference;
  3. The defendant had knowledge of the plaintiff’s expectancy and took deliberate action to interfere;
  4. The defendant interfered through independently tortious means, such as by fraud, duress, or undue influence against the testator (not the plaintiff);
  5. The plaintiff was damaged by the interference.

 

The Narrow Scope of the IIEI Claim

 

The Court emphasized limitations of the claim.

The plaintiff must show a reasonable certainty he would have received the inheritance. The expectancy cannot be speculative, as shown by case law dismissing claims for interference with sports betting or acquiring government permits.

The Court also emphasized its concern for undercutting the probate courts, noting the probate system was created to protect a decedent’s testamentary intent by imposing stringent requirements on a will contest. A party with standing should contest there and should not be permitted a second challenge in civil court.

A party without standing in probate court may be permitted to state a claim for inheritance interference, but the plaintiff must show he lacks an adequate probate remedy because of the defendant’s interference.

Finally, the Court emphasized the limitation that the plaintiff must show the defendant committed a tortious act against the testator (in this case MacGinnis), not the plaintiff.

The plaintiff already has claims for torts committed against him. For example, in Beckwith, the Court held Beckwith adequately stated a claim for fraud against Dahl, based on the claim she told him she would prepare an estate and instructed him not to have MacGinnis sign the will. The Court stated that providing an additional claim (IIEI) for this same conduct would be “unnecessary and superfluous.”

In sum, the new tort provides that a plaintiff may recover where a defendant’s wrongful conduct induced or caused the testator to take some action that deprived the plaintiff of his expected inheritance. However the Court in Beckwith only remanded the case to allow Beckwith the opportunity to state a claim. The elements were made clear. The next step is for the Court to illustrate how the claim can be adequately pleaded.

Stephan Mihalovits is a Business and Civil Litigation Attorney. Contact him via e-mail: smihalovits@lewitthackman.com.

 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

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