Take Care of Your Legal Needs

It’s more than half way through the year so this is a great time to take care of some essential legal planning responsibilities – and you’ll feel much better when you do.

Estate planning

Many people mistakenly think of an estate plan as something that matters only when they die, but there’s really much more to it than that. With a thorough and carefully prepared plan in place, your loved ones won’t have to experience the additional stress of wondering about your final wishes (health, financial, etc.) should you become physically incapacitated and unable to share those wishes during a highly emotional time.

If you already have an existing estate plan, take the opportunity to review the plan so it reflects any changes that took place prior to now. Such changes might have included:

• Got divorced or remarried
• Blessed with the birth or adoption of an additional child in the family
• Need to remove or replace an agent or beneficiary who passed away
• New wishes for how you want to have your medical needs addressed

It’s also important to note that, depending on when you first created your estate plan, California law may have changed in ways that invalidate some provisions (or at least affected them so they’re no longer practical). In my legal practice, for example, I’ve come across very old estate plans that haven’t been modified to accommodate requirements under HIPAA (Health Insurance Portability and Accountability Act) and/or the California Probate Code. Without being updated, such plans could run into serious legal problems at a later date; the same problems you have sought to avoid by creating your estate plan in the first place.

Now’s a good time to check with an experienced lawyer to make sure your estate plan is still legally valid and will carry out your wishes, and, if you do not have an estate plan in place, get to it!

Debt relief

Are you one of the many, many Americans who have been accumulating considerable debt lately? Rather than wallow in this predicament, take advantage of free consultation offered by many debt relief attorneys (including myself)!

We can help you design proactive ways to resolve your debt and gain control of your financial situation, so you can actually move forward without this enormous weight on your shoulders. Don’t wait for debt collectors to start coming after you!

Take action

Stop procrastinating! It’s understandable that people put off their legal planning—after all, approaching a lawyer about estate planning or debt relief or any other legal matter seems like a severely negative thing, and most of us naturally drag our feet on these issues, sometimes until it is too late. But think how much better you’ll feel after you address and resolve these matters directly.

For families and individuals who have enrolled in legal insurance plans, such as Hyatt Legal Plans, ARAG, Workplace Options or Legal Access/LegalEASE and Legal Resources, I suggest you take a closer look at what these plans have to offer. Many plans provide full-service benefits for legal matters like estate planning and debt relief. They’re also very helpful for general legal advice on a wide range of legal matters.

Remember—you don’t have to wait until you’re facing a lawsuit (or initiating one) to get in touch with an attorney. We can help you cope with many of life’s challenges and free you up for other important goals in the coming year.

Are you in need of legal counseling or have any questions about the above topics? The Law Offices of Ian S. Topf, APC offer a free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.

A Policy You Didn’t Know You Needed – Legal Insurance Policy

Ever had an unexpected legal matter come up and you didn’t know what to do or who to turn to? Legal services have increased during the pandemic. Coping with a legal issue can be expensive, time-consuming, and emotionally overwhelming. Many employers offer a legal insurance plan as part of their employment benefits but those who sign up tend to forget they have it.

A legal insurance plan is similar to a health insurance plan. (Keep in mind this is not liability insurance either.) By enrolling with an employer’s plan, a small monthly amount is deducted from their paycheck. Employees then can gain access to a nationwide network of high quality legal services, attorneys, and legal resources without the costly legal fees. The legal plan provides a list of approved attorneys for you to choose from. When an attorney accepts your case, they submit a claim to the legal insurance plan provider, usually with little to no further expense to you (beyond minor out-of-pocket costs). Some policies may reimburse you for seeking out-of-network services or offer a discount to their legal services.

Every legal insurance plan provider has its own policies and procedures, but in general they cover a full range of personal legal matters such as the following:

• Family law
• Debt matters
• Wills and estate planning
• Defense of civil lawsuits 
• Traffic violations
• Juvenile court issues
• Real estate law
• Identity theft
• Personal injury

Depending upon which legal insurance plan your employer subscribes to, you may have access to these benefits:

Advice and office consultations. Call an attorney for free advice and/or office consultation. Get guidance on your legal rights in a given situation, as well as access to various online tools and resources. This benefit could lead to preventing a serious legal situation from occurring in the first place.

A resource in times of legal trouble. Should you need a lawyer for any of the cases mentioned above (or others), through your insurance plan, you’ll be in a great position to find the right person for your needs. 

Financial benefits: Review the policy’s coverage for services, rates, discounts that are offered. If you’re unsure what legal benefits your employer provides, I urge you to review the policy with your boss or HR representative. Knowing this ahead of time will have you prepared to know your options.

This employer-provided benefit can reduce the stress of anyone with a legal issue, as well as the time and expense involved. You will feel more in control of the situation and closer to resolving the issue and moving on with your life. Legal insurance coverage is a valuable resource to have access to.

The Law Offices of Ian S. Topf belong to a variety of employer-provided legal insurance plans. Contact us for more information about getting a free consultation .

What You Need To Know About Wills and Trusts

Many have experienced anxiety by reminding themselves of their own mortality with the COVID-19 pandemic. As a result of this, people are reaching out to me for estate planning. They ask if they need a Will or a Trust? Would they be able to get by with just a Will? As an attorney, I will advise if one needs either a Will, a Trust, or both.

What is a Will?
A Will is a document that states the wishes of a person after his/her death. It is a document that can contain provisions for guardianship over minor children as well as distribution of one’s estate after their death. However, a Will on its own has very little power or authority; a person who is responsible for handling another person’s estate, the “Executor”, cannot just take a copy
of a Will to a financial institution, hand it over to the bank representative and obtain the funds of the deceased. The Executor can only act out the terms of the Will after the Will is submitted to the Court (a.k.a. Probate). The Court will then consider the terms set out in the Will to create Orders authorizing the Executor to act. (A Will is generally only words on a paper until it’s
submitted to Probate and the Court takes action on it.) A Will sets up an estate for Probate… so, is a Trust the only means to avoid the expenses and consumption of time (Probate)? Not necessarily…

Do I need a Trust?
A living revocable trust is a legal instrument that sets out ownership of assets, guidelines for the management of those assets while you are still alive, and distribution of assets after you pass away. Generally when you have a living trust created, you still maintain full control over the assets. In California, the extent and value of your assets determine whether a trust is needed or not.

If the value of your estate is $166,250 or more, or if you own real estate, it is strongly recommended to have a living trust to avoid possible probate when you pass away. It allows the designated agent (Successor Trustee) to act/corral assets and distribute them without court intervention.

When is a Trust not needed? Small Estate Petition/Probate Code 13100
In California, if a person’s estate is under $166,250 and does NOT have an ownership interest in real estate, there is an administrative action that can be taken without going to court to corral and distribute one’s assets. One can obtain a Small Estate Petition (Probate Code 13100). This declaration will be presented to the entity (i.e. financial institution, plan administrator, agency)
who currently has control of the assets being sought, under California law, the declaration will give the entity the authority to release the assets to the deceased’s next of kin/legal heir(s).

Example:
A person has three bank accounts and a car in their name. The total assets are $100,000. The personal representative of the estate may be set out in the person’s Will, or, if there is not a Will, the next of kin/legal heir(s) can sign a Small Estate Petition under Probate Code 13100 to collect personal property of a small estate.

Another consideration when making a decision on whether you need a Will or a Trust or both is that a person cannot just focus on the here and now – a Trust will serve as the depository for current and future assets. Anticipate how your estate will look in the foreseeable future before making the decision.

Unsure if you have sufficient estate planning? Check with a lawyer to verify that your estate is in order. Take control of your estate rather than having your state control your assets when you pass. 

If you have any questions about a new estate plan or in need of updating your existing estate plan, contact the Law Offices of Ian S. Topf, APC by calling (619) 546-9777 or by email: ian@topf-law.com.

Time To Review Your Estate Plan

Here we go again… Another year has passed and with it came life events that may have affected your estate plan, if you in fact have one.

The overwhelming truth is that far too many people don’t plan ahead and if they at one time did have the wherewithal to do so, they forget to update as time goes on. If you don’t have an estate plan, now is the time to get started to give yourself peace of mind. Depending on what you want and what your overall situation is, (financial, family, etc.), there are various ways you can go about it.

Estate planning is not just having a trust or a will to plan for what happens after you pass away. It’s also preparing for having someone act when you cannot due to illness (e.g. Alzheimer’s) or other incapacity. If you just have the shirt on your back, you may be able to get away with a durable power of attorney (for your finances) and advance health care directive (medical), but don’t limit yourself to the here and now. Estate planning goes much further than that; the future you – the one with the family of four and a house in the suburbs – will thank you. It’s on you to reach out to a legal professional to see what you really need.

Over the last couple of weeks, I have had individuals come in and want to discuss recent deaths in their family. They want to know how to take care of their recently departed loved one’s estate. In some cases, there was no estate plan in place and others have old estate plan documents, (circa 1980’s), that were never reviewed and updated. I’m seeing more and more situations where trusts were created but only partially funded, (meaning assets actually transferred to the name of the trust), and others not funded at all. By maintaining an account or property in an individual’s name, the third party who controls the asset (e.g. bank, county recorder) will not recognize the trust and, in many cases, the intended beneficiary will need a court order, (e.g. probate), to receive the asset(s). Again, a properly prepared estate plan and some good advice and guidance from an estate planning attorney now will avoid the hassle of probate.

Do You Have An Estate Plan?

Myth: Estate plans are only for the retired or rich so I don’t need one.

Truth: Everyone has an estate. Have a bank account? How about a car? Everyone needs a way to handle their affairs should they get sick or worse.

There are many reasons for creating your estate plan. In my opinion, the two main ones are as follows:

1. To ensure your wishes are carried out during your lifetime and beyond with as little complication, (cost, time, court involvement), as possible.

2. To organize your life by identifying your assets and obligations, as well as making sure you have a plan in place for both. By creating an estate plan, securing your assets, and having your financial obligations inventoried, you are avoiding a scavenger hunt for your loved ones who would have to figure out what you had and what needs to happen.

Depending on the overall value of your estate, not just now but in the anticipated future, you may only need a basic estate plan (Living Trust, Will, Power of Attorney, and Advance Health Care Directive (including a Living Will)).

When Was The Last Time You Looked Over Your Estate Plan?

For those of you who already have had an estate plan prepared, do not think you’re done. Many people take their estate planning documents, thank their attorney, and then stick it away, (hopefully in a fire safe, safe deposit box, or other secure container), and forget about it. Others may bring it out only when their financial advisor or other third party members need to see it.

Estate planning attorneys recommend that you review your estate plan at least every five to seven years but the reality is that there may be life events that may require updates sooner. These include:

-Additional child to the family

-Purchasing a property or other large asset

-Marriage or divorce

-When a child becomes an adult

-When you move to a different state

-When you want to update beneficiaries

-Family member passes away or is disabled

-Changes in your financial goals

-Changes in federal or state laws involving taxes or investments

-Update your medical needs

Check with an estate planning attorney to make sure that your estate is in order and your actual current wishes are documented. Take control of your estate rather than having your state control your assets when you pass away.

If you have any questions about a new estate plan or are in need of updating your existing estate plan, contact the Law Offices of Ian S. Topf, APC by calling (619) 546-9777 or by email: ian@topf-law.com. The Law Offices of Ian S. Topf, APC offer a free consultation on a variety of issues, including estate planning, family law/divorce, bankruptcy, criminal/DUI matters, and landlord/tenant disputes.

Are You A Tenant Moving Out? What You Need To Know About Security Deposits

Lately, I have been getting requests regarding terminating a tenancy. What is a tenant to do when facing the end of their lease or if there’s a desire either by the landlord or tenant to terminate the lease early? More importantly, and the most frequently asked question on this matter:  what’s going to happen to the security deposit?

California Civil Code Section 1950.5 mandate that landlords have a hard 21 days after the tenant vacates the premises to return part or all of the security deposit and if the security deposit isn’t fully refunded, an itemized list of deductions.

So a tenant wishing to maximize the amount returned from his or her security deposit should follow some basic but important guidelines:

As soon as the landlord is aware that the tenant will be vacating the property, the landlord is required to give the tenant a written notice of the tenant’s options for a pre-move-out inspection of the premises, where the tenant has a right to be present at the time of the inspection, within a reasonable amount of time prior to the actual move-out date.

• If the tenant agrees, the inspection needs to happen in the final two weeks with an agreed date and time.
• If no agreement can be reached on a date and time, the landlord can schedule an inspection within 48 hours of the notice.

My advice to tenants is to try to schedule the pre-move-out inspection well in advance of the actual move-out date, just in case there are noted issues/damages. This will allow the tenant plenty of time to remedy the situation on their own rather than leaving it up to the landlord to take care of it after the tenant has left. In many situations, the damages are minor and can be fixed by the tenant themselves at little cost, while landlords generally hire people to make repairs and pass the costs along to their tenants out of their security deposit.

When conducting the inspection, the landlord usually uses a move-out inspection form, which is typically the same as the move-in form, to note any damage/concerns. So long as the tenant is present, both the landlord and the tenant can have input on the notations on the form. From the observations at the inspection, damages can be evaluated and resolved. It is important for tenants to document the condition of the property both at the inspection and when they actually move out – in other words, take photos.

After the inspection, the landlord may or may not provide the tenant with an itemized statement of the landlord’s intended deductions from the security deposit.   These can include professional cleaning, replacing the carpet, drywall repair, etc.  Tenants should not presume that such a list will be provided before move-out and should insist on promptly getting a copy of the form they completed with the landlord at the inspection.

If a move-out inspection takes place prior to the tenant leaving, the inspection form must include a complete evaluation of the condition of the premises and both the landlord and the tenant will be bound by the notations on same, with certain exceptions; a landlord can include anything that was not listed on the pre-move out inspection only if the damages were hidden by the tenant’s possessions. For example, if the tenant’s furniture blocks a cracked baseboard or a hole in the wall, as long as the landlord can show that they did not have access to the area, it can be added to the list after the tenant vacates to hold the tenant liable for any necessary repairs.   Tenants should compare the itemized deduction list, provided by the landlord with the return of their security deposit, with the move-out inspection report and the tenant’s own notes.

Allowable deductions:

• Repairs for damages other than normal wear and tear.
• Cleaning (the residence must be clean as it was when the tenant first moves in).
• Replacing or repairing personal property, such as garage door remote or keys

What is not deducted:

• Normal wear and tear, such as faded paint (lifetime of paint: 3-5 years), worn carpet (lifetime of carpet: 5-6 years), or loose grout on bathroom tiles (lifetime of tiles: 25 years).
• If the residence is as clean moving out as when the tenant moved in, then cleaning costs may be objectionable.
• Defects to the premises existing prior to the tenant moving in.
• Any damages not noted by the landlord in the move-out inspection, unless the landlord was unable to ascertain the same due to the tenant’s possessions.

Possible deduction – additionally, unpaid rent may be taken out of a security deposit only if the lease specifically provides for such a deduction.

Additional Words of Advice:  During the move-out inspection, the tenant should give the landlord their forwarding address.  Without knowing where to send the security deposit and itemized list of deductions, the landlord will have a reasonable excuse as to why they could not comply with the 21 day time period for the return of the security deposit.  And that 21 day rule holds steep penalties for landlords:  failing to comply Civil Code Section 1950.5 can subject a landlord to penalties of up to two (2) times the amount withheld, effectively requiring payment to the tenant of a total of three (3) times the amount withheld, along with any fees and costs incurred for having to bring same to the Court’s attention.

Are you in a situation affecting your rights as a tenant? The Law Offices of Ian S. Topf, APC offer a free consultation in a variety of issues, ranging from family law, estate planning, bankruptcy, and DUIs and landlord/tenant disputes.

Can I Represent Myself in a Divorce or Dissolution of Domestic Partnership Proceeding?

If you’re thinking of representing yourself in a divorce or dissolution of domestic partnership proceeding in California, there are two options I would suggest considering. Both come with significant pros and cons, which you should be aware of before moving forward.

Option 1 – Family Law Facilitator

Most counties in California offer a “for-free” service called the Family Law Facilitator. The Family Law Facilitator’s office usually is located at your local courthouse. Their office staffs anywhere from one to several attorneys and support personnel and are available to assist individuals in drafting the requisite documents related to family law matters, such as divorce, custody and support.

An obvious advantage of using this service is the money saved by limiting your costs to filing fees and other out-of-pocket expenses. In a situation where both parties are in complete agreement on the custody arrangement and division of property (and debts), this option may be worth considering.

On the other hand, Family Law Facilitators are prohibited from giving legal advice. They can’t tell you which course to pursue during a Family Law proceeding, nor can they advise you as to the strengths and weaknesses of your case.

Also, due to the fact that there is a high demand for these facilitators, be prepared to spend a lot of time simply accessing their services. In many cases, you have to get to the courthouse one to two hours before the Facilitator’s office opens, just to get a place in line. Then you have to wait for the Facilitator’s office to open, after which you’re generally given a number to be served. Only when your number is called do you actually meet with a Facilitator. This means you might end up sacrificing a half-day or even a full day every time you need documents prepared.

Most people don’t have that kind of time to spare. On the other hand, hiring a Family Law attorney to prepare, present, and handle your case generally provides more convenience and, generally, less effort for you in the pursuit of your legal rights.

Option 2 – Online Do-It-Yourself Services

A variety of websites provide the necessary forms to file for divorce or dissolution of domestic partnership, as well as sometimes providing assistance in how to complete those forms. (Most of these sites require payment for these services.) Employing an online service will generally cost
less money than hiring an attorney but I’ve found that many people who start out this way end up in my office.

Why? Because when they turn in documents to the Court that they’ve completed online, Judges and court staff regularly find those documents have been prepared incorrectly and may instruct these people to obtain the services of a lawyer. Plus, many sites may not be properly maintained and may neglect some of the specific forms required in the county in which you live or the forms they provide may be obsolete.

Another thing to keep in mind: if you hire a non-attorney or you go through a self-service program and something goes wrong, where can you go to complain and try to get your money back? While attorneys are accountable to the public through a State Bar Association, people have very limited recourse with non-attorney providers. Additionally, very few situations involve
uncontested, no-issue dissolutions. Generally speaking, something always pops up during the proceeding (e.g. a dispute over custody, disagreements concerning the division of debt, etc.) and the above mentioned options offer very little assistance in such cases.

In summary, hiring an attorney skilled in Family Law matters may cost a bit more but it means you get someone who knows the law and who is accountable, giving you the necessary confidence and peace of mind in your time of need.

Are you in need of legal counseling for divorce or dissolution of a domestic partnership? The Law Offices of Ian S. Topf offer free consultation on a variety of issues, ranging from family law, estate planning, bankruptcy, DUIs, and landlord/tenant disputes.

Does Filing for Bankruptcy Get Rid of Support Obligations?

Is someone who relies upon support payments from his or her ex-spouse (either for themselves or for any children they may have) affected when their former spouse or partner files for bankruptcy?

When someone files for bankruptcy relief under Chapter 7 or Chapter 13, that person’s creditors must immediately stop all collection efforts on their debt claims. This is known as an “automatic stay”—meaning, creditors are prohibited from actively pursuing the collection of an outstanding debt. Wage garnishments, foreclosures, and nagging phone calls from creditors all must stop.

But does the same principle apply when the issue relates to spousal or child support obligations?

The general answer is no—the automatic stay rule does not apply to domestic support obligations. In other words, regardless of the amounts involved or the reasons why a person decides to file for bankruptcy, alimony/spousal support and child support payments are considered priority debts and are therefore, in the eyes of the court, “non-dischargeable” and exceptions to the automatic stay. The collection of these debts cannot be stopped by a bankruptcy filing, nor are the support obligations, both current and arrears, eliminated after a
debtor completes his or her bankruptcy case.

In a Chapter 7 bankruptcy, ongoing support obligations must be paid during the pendency of the case. As for past payments due (arrearages), they will not only still be due and owing, but also they continue to accrue interest, even during a bankruptcy case, until paid in full.

With a Chapter 13 bankruptcy, things are a bit more complicated. Support obligations—both current and those in arrears—must be paid within the timeframe of the Chapter 13 plan, which is up to five years. But under Chapter 13, you’re permitted to reorganize your debts in order to more effectively catch up with missed past payments (while of course meeting your current support obligations), which may lead to discharging at least a part of your non-support debt. The challenge here is that if you enter Chapter 13 with significant back-support payments due, you will likely face high monthly payments due to a limit on the duration of a Chapter 13 plan to five years (60 months).

A related question I’m often asked: Can I (the debtor) avoid a request for an increase in support by filing for bankruptcy? Again, the general answer is no. In California, the automatic stay imposed by bankruptcy does not preclude a Family Court from determining new support obligations or modifying existing ones.

Bankruptcy is not a way to get out of meeting spousal and/or child support obligations. In any bankruptcy, the ex-spouse or child receiving support will always get priority status.

That’s why it’s in the best interest of all parties to make arrangements before bankruptcy sets in so that support obligations continue to be met in a reasonable and reliable manner. Contact a family law attorney for advice on the best way to proceed in this situation.

Are you in need of legal counseling or have any questions about the above topic? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.

What to Do If You’re Pulled Over For A DUI

The best advice I give my clients about avoiding arrest and conviction for a drunk-driving charge is simple: Don’t drink and drive.

Unfortunately, there are many people out there who fail to heed this simple advice. In these cases, there are a few important guidelines to keep in mind should you be among those pulled over by a law enforcement officer suspects you of driving under the influence.

Be polite, calm, and compliant with your actions. If an officer “lights you up” or otherwise indicates that you should pull over, choose a safe, well-lighted place to do so. Signal your intention and come to a stop. Keep your hands on the wheel where they are visible.

Although it’s a stressful situation, you’ll do yourself a big favor by remaining calm and polite. Wait to reach for your license and registration until the officer requests you to do so. In everything you say, be polite and respectful.

Don’t answer questions. At the officer’s request, you are required to hand over your license, registration and insurance information. You are not legally obligated to answer any questions regarding how much you’ve had to drink, how fast you were driving, etc. In fact, anything you do say can be used against you.

If, for example, you’ve had four drinks and you tell the officer you only had one, you’ve just lied and damaged your credibility. Your best response to questions is simple: “I’ve been told by my lawyer not to answer these questions and I don’t wish to do so at this time.”

Decline a field sobriety test. The officer will ask you to complete a series of field sobriety tests (e.g. walking a straight line, estimating an amount of time in your head, etc.). You are not required by law to take any such tests. While you risk the possibility of irritating the officer, it is important to remember that these tests may be hard to complete while you are sober and therefore tend to be set up for you to fail in the first place. Additionally, you are not required to blow into the hand-held breath device at the scene (Preliminary Alcohol Screening device – PAS). These devices are considered highly unreliable and just tend to give the officer another reason to arrest you.

Blood Alcohol Testing. If arrested for drunk driving, you will be subjected to a test to determine your blood alcohol level. California law sets out that you must submit to a blood alcohol test if arrested for drunk driving. If you refuse, the penalties of an eventual DUI conviction will be much worse, including mandatory jail-time and a possible one-year suspension of your driver’s license. That being said, you will get to choose one of 3 such tests: breath, blood, or urine. I personally would go with a blood test for several reasons, including that the law enforcement agency is required to maintain the blood sample throughout your case and you will be given the chance to re-test it, using your own expert, which may provide different, more favorable results on your blood alcohol level –neither breath (which provides no captured sample) nor urine (which has a limited shelf life as to the blood alcohol content) will
give you such an opportunity to re-test.

Make your phone call count. Call a friend or family member as soon as possible from the police station. If possible, have someone else hear you speaking clearly and logically, so as to disprove any later charge of “slurred speech.”

One more point to make with respect to a DUI charge:

In California, there are two vehicle codes usually affiliated with a drunk driving charge. Under California Vehicle Code Section 23152(a), the charge of driving under the influence of drugs and/or alcohol doesn’t require a specific amount of alcohol to appear in your chemical test. California Vehicle Code Section 23152(b), on the other hand, specifies driving with a blood alcohol level of .08 or higher. In other words, even if you think you haven’t had so much to drink
that you are “over the legal limit,” you can still be arrested and prosecuted.

Finally, if you are arrested for drunk driving, make sure to promptly contact an attorney to go over your rights and options, some of which require immediate action to be taken. In a future blog post, we’ll discuss your options concerning the suspension of your license and your rights to challenge that suspension. For now, as noted earlier, if you plan to drink, have someone else do the driving.

Just got arrested for drunk driving or have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation in a variety of issues, ranging from DUIs, bankruptcy, debt collection defense, estate planning, family law, and other civil matters.

Estate Plans—Don’t Get “Caught Dead” Without One

When people come to me seeking advice and assistance on estate planning, it’s generally because they want to make sure their loved ones avoid the expensive and time-consuming process of probate. Horror stories around this issue occur all the time. Here’s just one:

Barry, a retired surgeon with a large estate (including a house, many retirement benefits, and extensive personal property) was an older man married to a younger woman. (His widow was younger than his three adult children.) Barry hired an attorney to draft an estate plan but considerable time passed between their initial contact to completion of the final draft of the plan. Sure enough, Barry died before he could sign the plan. He left behind for his wife and children a messy legal issue that took more than three years to resolve. Court expenses, appraisal fees, and the general costs of litigation ate up a huge chunk of the estate—some of the costs borne by the
estate, some by the beneficiaries themselves. Had Barry completed the estate planning process earlier, only a fraction of these costs would have been incurred, with the rest of the estate going to his loved ones as originally intended.

An estate plan addresses specific legal questions that come up when a person passes away. What is the state of that person’s financial affairs? What properties do they own and who gets what? Should a personal guardian be appointed to care for minor children? How much tax payment is involved in transferring ownership of property? How will funeral costs be paid?

A carefully designed and comprehensive estate plan:

• Identifies family members or others who will receive your property after your death.

• Makes sure property is transferred to designated beneficiaries with as few legal obstacles as possible.
• Lessens the tax burden passed on to your survivors.
• Employs living trusts and other legal mechanisms to avoid the time and cost associated with probate.

• Specifies the types of life-prolonging medical care you want to receive should you become incapacitated.
• Details the funeral arrangements you prefer and how the expenses will be paid.

A word of caution: Plenty of estate planning services are available online and some people choose this option to avoid paying legal fees. The problem is, without expert advice, you don’t always know what you need or what you’ll get with these services. They’re not customized to address an individual’s specific needs.

Based on my own experience as an attorney advising and handling estate planning issues, believe me—it’s extremely important to attend to these matters while you still can. No one wants to leave a mess behind, creating a substantial burden for their loved ones. A well-executed estate plan avoids all that and provides invaluable peace of mind for you and your loved ones.

Are you in need of legal counseling? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from estate planning, bankruptcy, and family law to traffic violations, and landlord/tenant disputes.

Considerations When Funding a Trust with Your Real Estate Holdings

Generally speaking, people own two kinds of real estate – a primary residence and/or investment property (residential rental, commercial real estate, etc.). So when the time comes to design an estate plan, the natural question is: Should I put my house or investment property in my living trust? There are several factors to consider before adding your property to your trust.

In California, there are several ways to hold title to a piece of real estate. You can, of course, do so under your name. When two or more people are involved (married or otherwise), they can hold title in one of the numerous ways:

• Community property – A jointly owned asset between spouses.
• Tenants-in-common – Two or more people each hold title to an equal share of the property or some other stated percentage. Each person can sell, transfer, or otherwise dispose of their share of the property, usually without disrupting the other shares.
• Joint tenancy with right of survivorship – In the event of one owner’s death, the property passes to the surviving joint tenant (the deceased person’s will is generally not relevant here).
• Community property with right of survivorship – If a spouse or domestic partner dies, the property passes to the surviving spouse or partner (also unaffected by the deceased person’s will).

These are the most common ways people hold title to the property. If you decide you want to put that property (or more specifically, your share of that property) in your trust, you must re-title your interest in the name of your trust. Many people forget to do this; they see the property listed in the initial inventory of their trust and figure that by naming the property as an asset of
the trust, it automatically is transferred into the trust. However, in California, a transfer deed (e.g. Grant Deed to Revocable Trust) must also be executed and recorded with the County Recorder where the property lies. If you fail to do so, your future beneficiaries will experience difficulties transferring the property into their names and the County Recorder will probably need a court order through probate for such a transfer.

An exception to this is when the property is held with the right of survivorship (Joint Tenancy with Right of Survivorship or Community Property with Right of Survivorship) and the property transfers to the other person(s) listed on the title. However, what happens when all persons on title pass away? Answer: expensive and time-consuming probate.

Drawbacks with placing property in a trust

In the vast majority of situations, your primary residence should be placed in a trust. Why? Again, to avoid probate and/or other unnecessary delays and costs in transfers to your beneficiaries. As a side note, in California, this act of transferring this type of property is excluded from a reassessment by the County Assessor’s Office and therefore is not subjected to reassessment and which can result in a supplemental property tax.

However, if either your primary residence or investment property is subject to a mortgage, your deed of trust (mortgage note) may include a term that stipulates, “Upon transfer of the property, the mortgage may come due and payable in full.” (Often, in this case, the lender may look the other way and not require that the mortgage come due. But it’s always advisable to check with a
lender before making a transfer of this kind.)

Your liability with investment property in a trust

A more pressing concern is this: Whether you keep investment property in your name or add it to your living, revocable trust, all of your assets remain together in one big pot that may be subject to attachment by creditors.

People who own investment property are typically more vulnerable to liability from third parties than owners of just their private residence. Investment property owners have tenants, tenants often have guests and, in the case of a commercial property, customers may be involved. In all of these situations, you as the owner have little to no control over possible accidents that may occur.

With every person who comes into contact with your property, you’re exposed to various liability claims (e.g. a customer falls, another makes a claim under the Americans With Disabilities Act, etc.). Let’s say you’re sued by a tenant or customer and you lack sufficient insurance coverage to cover that claim. In such a situation, everything that is held in your name—including property you’ve placed in a basic living trust—is subject to collection by the claimants.

There are alternative solutions including but not limited to getting an “umbrella insurance policy” or placing the real estate holding in an LLC or other business entity. Before making any decision about this critical issue of how to hold title to your property(ies), contact an experienced estate planning attorney and learn more about your options.

Are you in need of legal counseling or need assistance with your estate plan? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from DUI/criminal defense, bankruptcy, family law, and estate planning to traffic violations and landlord/tenant disputes.

Homeowners’ Rights During The Foreclosure Process

In this economy, losing one’s home to foreclosure is a scary but very real possibility. The very thought of it brings a state of despair and an overwhelming sense of helplessness. That being said, in many cases, a missed mortgage payment (or even several) doesn’t automatically cause you to lose all of your rights to your property.

The foreclosure process usually starts after a homeowner defaults (i.e. misses) on a loan or mortgage payment. That’s because most loans are secured by a deed of trust, a recorded agreement that generally includes a built clause stating that, in case of default, the lender has the right to proceed with foreclosure.

It’s not always understood that a similar clause in most mortgage agreements stipulates that even a secondary lender with secured mortgage interest can initiate foreclosure proceedings. So, for example, if you have three loans against your property, any of the three mortgage holders may have the right to foreclose on their respective loans if and when payments aren’t made.

But this doesn’t mean every lender starts foreclosure proceedings when a payment is missed. I’ve seen lenders go for years without foreclosing on a defaulted loan. Also, missing a payment doesn’t mean you automatically give up the right to live on the property. There’s no obligation to leave until you receive legal notice/court orders to vacate the premises.

Notice Of Default

In general, the foreclosure process starts when the lender serves you with a “Notice of Default” and files said document with your local County Recorder. While this can happen after the homeowner misses one payment, many lenders wait until after a couple of payments are missed. Since this document sets out your rights and responsibilities during the foreclosure process, it’s
important that you read it very carefully.

The Notice of Default officially notifies you that you have a right of redemption where you have ninety (90) days from receipt of the notice to “cure” (make yourself current on payments). This can include having to pay all the money in which you are arrears, as well as other allowable costs the lender may have incurred.

If you make yourself current, the Notice of Default is rescinded (withdrawn) and you’re back in good standing. If not, you face foreclosure on your property.

Sometimes a lender will accept less than the amount stated in the notice (on the principle that some payment is better than none). So there is always the possibility that you can negotiate terms with the lender and have the default notice canceled.

After Foreclosure Gets Underway

If you’re unable to make yourself current after the initial right-of-redemption period, the lender can post a Notice of Sale (as noted, not before 90 days have passed from the time the Notice of Default was issued). The Notice of Sale states that the lender (or “trustee”) can sell the home at auction within 21 days. As referenced on the California Courts website, the Notice of Sale must,
among other things:

• Be sent to you by certified mail.
• Be published weekly by a newspaper in the county where your home is located (for three weeks before the sale date).
• Be posted on your property, as well as in a public location (for example, the local courthouse).

During this time, you can try to make up payments but the lender is not required to honor those payments after the right-of-redemption period have passed.

If Your House Is Sold

At the Trustee Sale, a buyer purchases the property and the deed is transferred to the new owner. This effectively makes you a “de facto” tenant. You can leave the property willingly or negotiate some other terms in order to stay. I’ve seen numerous examples of new owners entering into rental agreements with the prior owners that allows the prior owners to stay in the house. I’ve also seen situations where the new owner, wishing to avoid a lengthy eviction process, negotiates a payment to the prior owner(s) so that he/she/they will depart in a timely and peaceful manner, (otherwise known as “Cash for Keys”).

If you choose not to cooperate, the new owner can start the eviction process—which includes sending you a notice to vacate. Attempting to fight this in court can be difficult, time-consuming and expensive for both the new owner and the former owner.

Foreclosure is a complicated and occasionally highly emotional process. If you find yourself facing foreclosure, seek legal advice or assistance immediately. A skilled attorney can offer the best guidance for finding the solution that works best for you.

Are you in need of legal assistance or have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation on a variety of issues, ranging from bankruptcy, debt collection defense, estate planning, family law, as well as DUIs and civil matters.

How a Reaffirmation Agreement Can HelpYou During Bankruptcy

A Chapter 7 bankruptcy is a legal action that allows a person to eliminate most of his or her debts. With respect to unsecured debts, such as general consumer debts, credit card debts, and any other debts that aren’t secured by some form of collateral, the vast majority, if not all, will be wiped out.

A question I usually get is what happens to secured debts in a Chapter 7 matter? A secured debt is when the creditor has a lien on your property to protect the creditor’s rights as to the underlying loan obligation. For example, with the typical car loan, the agreement with the lender will include the lender placing a lien on the car, in case you stop paying on the loan. This permits the creditor to repossess the vehicle.

If you face bankruptcy and have one or more secured debts, there are different options available to resolve the situation:

• You can surrender the property to the lender or other financing company and wipe out
  your personal liability for the debt.

• You can redeem the property by buying it outright for the then-market value. If you make
  a lump-sum payment for the fair amount value of any item of property, a bankruptcy
  court will allow you to keep the property and eliminate any remaining debt against that
  property. (The fair-market value has to be agreed upon by the lender or ordered by the
  court).
  • Let’s say you have a car worth $4,000, but the conditions of the financing agreement with the bank means you still owe $12,000 on the car. By writing a check for $4,000, you can keep the car and see the remaining $8,000 debt wiped out.

• Finally, you can sign a reaffirmation agreement. This is a contract between you, the
  debtor, and the creditor, which allows you to maintain your interest in the property. To
  use another example involving a car: You have a car worth $6,000 and you owe $9,000 in
  debt against the car. You don’t have the funds to buy the car outright (as in example #2),
  but through a reaffirmation agreement, you agree to adhere to the terms of your car loan,
  thereby keeping the vehicle while continuing to make payments per the original contract.

A reaffirmation agreement is a good option if you wish to keep your car, but can’t buy it outright—a car being, of course, close to essential for many people.

A few other points on this subject:

• When you file for bankruptcy, any debts that are not reaffirmed or ordered by the court to be non-dischargeable or non-dischargeable by law are wiped out. In other words, if you do not sign the reaffirmation agreement, the debt against your car is eliminated—but since the lender has a lien on the car, they have the right to repossess the vehicle at any time.
• Many creditors, such as mortgage lenders, do not offer reaffirmation agreements. But,
  generally speaking, if you continue to make payments on your mortgage, they are
  unlikely to initiate foreclosure actions.

There are times when signing a reaffirmation agreement can have negative consequences. When you sign this agreement, it gets processed by the bankruptcy court. If you lose your job or otherwise default on your debt, the creditor has the same rights as if you never went through bankruptcy at all. The creditor can also refuse payment and repossess the property if they wish.

If you face a bankruptcy situation and have secured debt on the property you are thinking about keeping, a reaffirmation agreement is an option worth exploring. Be sure to contact an experienced, knowledgeable bankruptcy attorney before making any such decisions.

Are you in need of legal assistance regarding debt relief options or have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation in a variety of issues, ranging from bankruptcy, debt collection defense, estate planning, family law, as well as DUIs and civil matters.

How Can You Avoid Falling into the Bankruptcy Trap?

There’s a familiar—and dangerous—cycle I regularly see with regard to debt and bankruptcy relief. Many people come to the conclusion that they’re carrying more debt than they can afford, so they file for bankruptcy, get relief from those debts, and then fall into the same debt-incurring behavior. Eight years pass, (the legal period between filing for another Chapter 7 bankruptcy), and because they lack any other options, they once again file for debt relief. This “bankruptcy trap” is a terrible spot to find yourself in and I advise clients to do everything possible to avoid it.

If you’ve experienced this situation and want to make some serious changes in your life, here are options for improving your chances of breaking the cycle:

Take the required classes in credit counseling seriously. Since 2005, it’s been mandatory in California that anyone seeking bankruptcy relief must attend two required classes. The first class, on credit counseling, actually takes place before your bankruptcy filing. In this class, counselors offer informal opinions about what course of action might be most beneficial for you—applying for debt relief, working out a household budget, etc. While in most cases, filing for bankruptcy is inevitable, I believe there’s value in getting a third party to objectively assess your situation. The second class, taken during the bankruptcy process, is called a “debtor education class.” Individuals learn about moving forward following bankruptcy, receiving valuable advice on budgeting, rebuilding credit, and avoiding credit scams and other pitfalls. I urge my clients—and anyone else in the same situation who reads this post—to take these classes very seriously. They can be very useful in helping you turn your life around.

Design a sensible budget. When you file for bankruptcy (especially Chapter 7), you’re showing the court that your net income is insufficient to pay your reasonable expenses. Chapter 7 helps you eliminate substantial debt but you still walk out of the process with that same budget. Now, it’s time to reassess your expenses, which is easier to do than reassessing your income. What
expenses can you get rid of and what expenses should be paid first? Sticking to a sensible budget plan will take you a long way toward financial stability.

Schedule your payments. It’s vitally important to pay your bills on time since prompt payment makes up a key portion of your credit score. Missing payments negatively affect your credit score and limit your opportunities to bounce back from bankruptcy. On the other hand, making payments on time improves your credit score, which in turn makes future credit opportunities
easier to attain—and often with lower interest rates. This can be very helpful when the time comes to apply for a car loan or borrow money to pay rent.

Apply for credit. Many people mistakenly believe that if they file for bankruptcy, they’ll never be able to get a credit card again. On the contrary—credit card companies will see you as a “clean slate” and do everything they can to get your credit card application. It’s OK to apply for a new credit card, as long as you read the fine print. Many so-called credit card opportunities
come with astronomically high interest charges attached (as high as 25-30% annual rates). Signing up for one of those will only send you back down the path to debt.

Fortunately, by doing your due diligence, you may find yourself eligible for lower interest-rate credit cards or a secured or pre-paid credit card. When you stay on top of your payment schedule, the bank (or other entity) that offers the card will report those positive payments—thus affecting your credit score in a positive way. Then you’re on the way to establishing your good
credit.

Be smart. Know your limits. Create and maintain a workable budget. Then you’re much less likely to fall prey to the dreaded bankruptcy trap.

Are you in need of legal counseling for bankruptcy or debt issues or have any questions regarding the above? The Law Offices of Ian S. Topf offer free consultation on a variety of issues, ranging from bankruptcy, family law, and estate planning to traffic violations and landlord/tenant disputes.

How Does a Child Support Order Get Enforced?

The principle behind laws regarding child support in California is very simple. The parents of children born in the course of a marriage (or conceived out of wedlock) are legally responsible for the financial support of their offspring, regardless of whether or not those parents are living with their child(ren).

Typically, an order for child support is issued by the Court by agreement of the parties or after a Court hearing, where the judge has determined that one party is entitled to receive assistance from the other party in financial support for their child. These child support orders can arise in proceedings for divorce, dissolution of domestic partnership, paternity, or one partner’s petition for the establishment of custody of the child.

Whatever the circumstances, once a child support order has been issued, the supporting parent is legally obliged to obey that order. Failure to do so can be deemed by the Court as willful non- compliance, which can lead to contempt proceedings and if the supporting parent is found guilty, may be punishable with time in jail.

Enforcement options

Of course, when it comes to enforcing a child support order, things don’t always go smoothly. Once the custodial parent has a court order, she (for purposes of this discussion) has different options for ensuring that the order gets enforced. She can hire an attorney to enforce the order or a private child support collection agency to service that debt. The collection agency works much the same as similar agencies charged with collecting credit card(s) or other types of debts. They can garnish that person’s wages, put a lien on property, etc.. but they almost always charge a fee for their services.

Another option for enforcing a child support order is using the Department of Child Support Services (DCSS). Utilizing DCSS has advantages and drawbacks. First off, its services are free. Also, DCSS is connected to multiple state government agencies, such as the Employment Development Department and the Department of Motor Vehicles—meaning they have access to records that can be very useful in collection activities against a non-paying supporting parent. DCSS can also:

• File a petition to establish and/or enforce a child support order.
• Report the failure to provide child support to credit agencies, increasing the difficulty for the supporting parent to get a loan.
• Put a hold on that parent’s bank account.
• Attach a lien on that parent’s property or vehicle.
• Ask an employer to garnish wages.
• Confiscate IRS tax refunds.
• Suspend a driver’s, professional and/or recreational license.
• Assist the Court in issuing an arrest warrant.

The chief disadvantage in relying on DCSS to enforce a child support order is that, like all government agencies, it’s overworked and understaffed. With recent cutbacks in government spending, DCSS has downsized its personnel and struggled to keep pace with state-of-the-art computer technology. Going through DCSS, therefore, requires a lot of patience since results may be a long time coming.

A lot depends on the specific nature of the child support order. A family law firm like mine does have a great deal of enforcement tools at our disposal to enforce the child support order, such as processing and serving a wage garnishment order on the supporting parent’s employer. If you feel you need assistance in the enforcement of your child support order, I would suggest you contact an attorney to explore your options.

Are you in need of legal counseling or have any questions about the above topic? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.

How Does Foreclosure Work?

In today’s economy, many people find themselves underwater with regard to their monthly expenses. When their total monthly debts amount to more than the money they’ve got coming in—and, as is usually the case, the monthly mortgage payment represents their larges expense—people sometimes opt to neglect this big debt and pay off their smaller, more manageable debts instead.

In my opinion, this is the wrong action to take. Mortgage lenders (such as banks) generally prefer partial payment to no payment at all. If they feel an effort is being made to meet the mortgage obligation, they’re less likely to initiate the dreaded foreclosure proceedings, and may even reach out to the homeowner with possible loan modification options.

Foreclosure is the process wherein a mortgage lender attempts to take possession of real property (e.g. house, condominium). When you sign your mortgage paperwork, you give your lender the ability to proceed with a foreclosure action when you fail to make your required mortgage payment. As with all contracts, it is important to read all documents you sign to ensure clarity and understanding. I recommend that every homeowner reading this article go back and read your mortgage paperwork, specifically your Deed of Trust, to educate yourself on the actual rights and responsibilities of both you and your lender.

Most mortgage agreements grant the mortgage lender the right of acceleration of the loan after one or more missed payments, causing the loan to be completely due and payable upon the lender’s demand. The mortgage lender will mail the homeowner a “Notice of Default” and record a copy of the Notice with the County Recorder. This Notice gives the homeowner a period of time (90 days in California) to exercise their “right of redemption”, i.e. the right to catch up on any or all missed or partial payments and make themselves current.

If the homeowner is unable to become current on their loan, the lender may opt to proceed with one of two ways:

(1) Pursue a judicial foreclosure (rarely done in California) by initiating a foreclosure action with the local Court; or

(2) Pursue a non-judicial foreclosure, where the property is placed in the hands of a foreclosure trustee and eventually sold at a Trustee’s Sale.

All of this is typically spelled out in your mortgage paperwork, which is why, again, I encourage people to review their mortgage documents very carefully.

Soul-search time

The foreclosure process generally takes a good deal of time, anywhere from four to six months or more after a notice of default is served.

At this point, it’s time to do a soul-searching. A reality check to determine whether or not you truly believe you can keep the property. Is what caused you to miss your mortgage payment(s) the result of a temporary hardship that can be quickly remedied or part of a larger, more critical situation where you’ll continue have problems making payments no matter what you do?

If you’ve missed payments because you were temporarily out of work but are once again resuming employment, aggressive negotiations with the mortgage lender may ease the situation and avoid foreclosure. Mortgage lenders generally don’t want to go through with foreclosure if they don’t have to if they have some assurances that future mortgage payments will be made. They’ll typically respond favorably to a plan that results in making payments current and agree to halt the foreclosure process.

Actions a borrower can take

Many lenders offer loan modification programs and I encourage people facing the possibility of a future foreclosure to look into them sooner than later. That’s the good news. But it’s important to note that such programs may not necessarily solve the issues that caused problems with a mortgage payment in the first place. A mortgage lender’s idea of a modification may only apply to a reduction in the overall interest rate or adding missed payments to the back end of your loan—with no actual reduction in your required monthly payment — and there’s no guarantee that this will alter your ability to comply with the terms of the mortgage in the future.

Also, please take note that a mortgage lender’s foreclosure department is not required to delay the foreclosure process while the loan modification process is pending. These are usually two separate departments and they typically do not communicate with each other automatically. (It’s usually the homeowner who needs to make sure that both departments are aware of the situation to avoid a foreclosure during attempts of loan modification).

If a person feels they can’t keep up with house payments, there may be actions to take to avoid having a foreclosure on your credit report. These actions include proceeding with selling your property, even if it is in a short sale due to little to no equity in the property. While a short sale is still a negative mark on your credit, it usually is much better than having a foreclosure on your record.

Another last-ditch effort is looking into your bankruptcy relief options. In Chapter 13 bankruptcy action, the Court will allow you to make up your arrears so long as you are able to make your current monthly payments as well. Pursuing Chapter 13 bankruptcy relief with a good-faith plan (whereby you make up the missed payments) will not only help to stop the foreclosure process but should also help you regain control of your household finances to keep the mortgage lender from further pursuit of foreclosure.

Foreclosure is a complicated legal process that can take a homeowner on a dangerous roller- coaster of confusion and extreme emotions. If you find yourself facing foreclosure, seek legal advice or assistance. A skilled attorney can offer the best guidance for finding the solution that works best for you.

Are you in need of legal assistance or have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation in a variety of issues, ranging from bankruptcy, debt collection defense, estate planning, family law, as well as DUIs and civil matters.