GRANDMA’S CHINA

Grandma had the most amazing china. Her three adult grand-children continued to fight over who would get grandma’s china when she passed away. It wasn’t the house, the car or the money that her three grand-children bickered about, but rather the source of the commotion was Grandma’s fine china, routinely used to serve dinner on the most special of occasions.

Unlike financial assets, which can generally be divided easily among your heirs, tangible personal property is unique. And the complications associated with distributing a lifetime’s worth of possessions is something that many people overlook. Families have been torn apart over everything from ownership of a valuable painting, to the grandfather clock, to the gun collection, to who gets Mom’s recipe box. Sometimes the object in question is an item of substantial material value, but just as often the appeal is purely sentimental. People get emotionally attached to objects that symbolize the person who has passed away.

Discussing these issues while parents and grand-parents are still alive is preferable to letting children duke it out for themselves later. Some people address this subject before they die, by giving away possessions as they downsize, by asking which things have special meaning to particular family members, or by leaving directions about how personal property should be divided. Others have had adult children and grand-children express their preferences by putting their names on the bottom of things while the older generation is still alive.

If there are only one or two valuable possessions, your estate plan might direct the executor of your will or the trustee of your revocable living trust to sell the diamond or the painting, for example, and divide the proceeds among your heirs. If one of them really wants a particular item (like Grandma’s china) and has the funds, he or she could buy it from the estate for fair market value. Another approach, if only one person asks for certain expensive pieces, is to honor those wishes and reduce that heir’s share of other assets. To steer clear of conflicts, designate an independent third party to divide the assets.

For sentimental items that you want to go to specific people, it’s best to say so in your estate planning documents. For instance, in her will, Jacqueline Kennedy Onassis directed that most of her personal property go to her children, but she gave a handful of personal items to other people. She left her longtime companion, Maurice Tempelsman, a Greek alabaster head of a woman; her lawyer a copy of John F. Kennedy’s inaugural address signed by Robert Frost; and a close friend a couple of Indian miniatures.

The question is what to do about those sentimental personal items. One possibility is to direct your heirs to divide belongings in substantially equal shares and if they sell anything, to use the cash to equalize things. Another is to map out a very specific rotation of choice – for instance, by birth order – so that everyone gets a turn at having dibs on an item.

No matter what you decide, make sure you make these decisions in your estate plan.  By designating who will receive the china before she dies, Grandma can make sure that her grand-children won’t come to blows and that the china will peaceably pass to the next generation.

RESTRAINING ORDERS

There are any number reasons why you may need a restraining order. Your spouse or partner is abusing you or your child, someone you once dated is stalking you or an ex-friend keeps harassing you for money. In cases like these, and hundreds just like them, a restraining order is the best way to protect your safety and give you peace of mind.

Once you've made the decision that you need to obtain a restraining order, it's time to act. Knowing how to get a restraining order and how it will be enforced is the only way to get the protection you need.

·         Getting a Restraining Order

First, you need to do the paperwork. You can get the forms at your local courthouse, or you can find them online. Many shelters and domestic abuse prevention organizations also have them.  Once you have the forms, the process goes like this:

Complete the forms, describing the abusive or harassing behavior in as much detail as possible.

Take your forms, your ID and any identifying information about the person you seek protection from to your local courthouse and file them with the court clerk.

The court clerk takes your forms and information you provide to a judge, who will decide if a temporary restraining order is needed until a hearing on your application can be heard.

A hearing date for the permanent restraining order is set.

Important: Arrange for service of process on the person you are seeking to have “restrained” by the order. It gives that person notice of the hearing so they can appear at the hearing.  They have the right to be there, so you have to make sure you have them properly served.

At the hearing, you must show the judge the abuse or harassment, and your need for protection. The judge decides whether to issue the permanent restraining order, usually that same day.

·         Enforcing a Restraining Order

Once a restraining order is granted, you should make several copies of the order and keep one with you at all times. Also leave a copy of the order at work and at your children's school or daycare. An abuser or harasser breaks the law when they don't follow the restraining order's terms, which usually means they come within a certain distance of your child or you.

Important: But it's up to you to make sure the order is enforced! Call the police immediately if the person violates the order. The police should make a report of the incident, and if necessary, enforce the order by ordering the person to leave you alone or, if necessary, by arresting that person. In cases where the police refuse to act, usually you can:

File a civil lawsuit for contempt of the order against the person.

Talk to your local prosecutor about pressing criminal charges.

The person will most likely face jail time, a fine or both for violating the restraining order.

People do not want to find themselves needing to seek a restraining order. But when it happens, you must act to protect yourself.  Stand up for your protection, your property and your loved ones by using the law to get a restraining order when you need it.

PET TRUSTS IN CALIFORNIA

Do you love your pet?  Do you consider your pet to be part of your family?  Are you concerned about what will happen to Fluffy or Fido if anything happens to you?  If your answer to any of these questions is "yes," please read this blog and learn more about how you can create a pet trust to insure that the people you want will care for your pet when you can no longer do so.

·         What is a pet trust?

It is a legally enforceable document that insures your pet receives the care you would have provided had you not passed away or become incapacitated.

·         How does it work?

You name one or more persons to act as a trustee, the person who will use the money or property you put in the trust for your pet's benefit.  The caregiver you chose will care for your pet with a portion of your assets paid by the trustee.  The trustee will check periodically on your pet to make sure he or she is receiving the level of care specified in the trust instrument and that the monetary allowance left to the pet’s caregiver is being used for the care and feeding of your pet.

·         What are the main types of pet trusts?

There are two basic types:

1.      The first is the testamentary trust which takes effect on your death.  It is created during your lifetime with the assistance of an experienced estate planning attorney and is found in your Will.  Like the statutory pet trust described below, it details your pet's likes, dislikes, routines, medical history and anything else you believe a caregiver must know in order to give your pet the quality of life you provided.   The trustee pays for your pet’s expenses and the caregiver continues in that capacity as long as your pet is alive.

2.      The second type, a statutory pet trust, is also created during your lifetime with help from an experienced estate planning attorney.  It is called a statutory pet trust because its existence is expressly sanctioned by the California Probate Code.  This code section was recently amended to require your trustee honor all the terms of trust.  It also gives third parties the right to initiate court proceedings to further the interests of the pet trust.  And it gives the court the authority to appoint a new trustee and to ". . . make all other orders and determinations as it shall deem advisable to carry out [your] intent."  

Most pet owners are best served by choosing a statutory trust in which they act as the original trustee with someone else named as the successor trustee.  The trust instrument can anticipate and deal with all the situations that may arise during their pet's life and, even more importantly, it will provide detailed information to insure that the likes, dislikes and routines of your pet are made known and respected.  

·         When can I create a trust?

A pet trust can be created during your lifetime.  A statutory trust is effective once it is created while a "testamentary trust" goes into effect on your death.   A statutory trust can be funded as needed and can be supplemented by a gift in your will. The major drawback to a testamentary trust is that it cannot be funded until your will is probated, which is often a lengthy period during which your caregiver will have to bear all your pet's expenses.  However, if you set up a testamentary trust in your revocable living trust, this problem can be minimized (see an experienced estate planning attorney to prepare your revocable living trust that includes a testamentary trust for your pet).

·         How do I fund the trust?

If it is a testamentary trust, through assets designated in your will or trust.  If it is a statutory trust, the best approach is to open a bank account in the trust's name over which you, as the original trustee, have control during your lifetime and which you can supplement as your financial situation allows.  Either type of trust can be funded with virtually any asset you may own.  Popular approaches include naming the trust as a full or partial beneficiary of a life insurance policy, annuities or retirement accounts or pay on death bank accounts.  You can also transfer real estate to the trust through your will or revocable living trust.

·         How much should I put in my pet’s trust?

That depends on many factors.  Is the trust for the benefit of one pet or multiple pets?  What is the age of the pet and what are the anticipated veterinarian needs?  What is the standard of living for your pet?  Will the trustee and/or the caregiver be paid and, if so, how much?  Will the trust pay for sitters or other temporary caretakers if the caregiver is unavailable?

·         What happens if I put too much money in the trust?

You may recall the case where a court reduced the amount that Leona Helmsley left for the care of her Maltese, Trouble, from $12 million to a more "modest" $2 million.   The court has no express power under the Probate Code to reduce the amount placed in the trust; however, if it is an excessive amount, family members may try to undermine your intentions.  The best approach is to put no more than twice the amount you believe will be needed.

·         What happens to any money left in the trust on the death of my pet?

You can and should designate in the trust the persons or organizations you want to receive the surplus money after your pet passes away.  Many leave the remainder to relatives, friends or to organizations like the Humane Society, the SPCA or local animal rescue groups.  You should be very careful about leaving the surplus to the caregiver as that person may be tempted to put his or her financial interests ahead of the welfare of your pet.

·         Who should I select to act as a trustee?

It should be someone who cares about your pet and who will devote the time necessary to handling the trust's finances and periodically monitoring your pet's care.  Most importantly, it must be someone who has agreed to and can meet these responsibilities throughout your pet's lifetime.  Because this is not always possible, it is important to name successor or replacement trustees.

·         Who should I select to act as a caregiver?

Ideally, you want to select someone you believe will provide a good home for your pet.  Relatives, friends and neighbors are all good candidates but if none are available there are organizations that will take on this responsibility.  Successor caregivers should be named to give the trustee the option to place your pet elsewhere should circumstances warrant a change. 

·         What happens if the trust runs out of funds before my pet dies?

If this occurs you are dependent upon the good will and financial circumstances of your caregiver.  It is for this reason that you should use great care in choosing this person and his or her successors.  The trust instrument should contain a provision naming a person or organization you want your pet to go when all else fails. 

·         How do I create a pet trust for my pet?

Contact the Law Offices of Eric A. Rudolph for more information on pet trusts.  The initial consultation is always free.

HOW TO FILE YOUR BANKRUPTCY CASE

• Gather Your Records

The first thing you do in order to file your bankruptcy case is gather up all of your bills, including credit cards to mortgage and car payment slips. Include medical bills, parking tickets, tax records and other documents that show what you owe a creditor. It doesn't matter if you don't know the exact amount. As a matter of fact, even if you might owe somebody money, and even if it is disputed, your bankruptcy lawyer will want to know about it. Also include your bank accounts, your insurance policies and anything else which has value or entitles you to money. Don't forget to include any pending lawsuits brought by you, including personal injury claims or civil rights lawsuits as these are considered assets of your estate.

• Find A Good Bankruptcy Attorney

Check out recommendations from satisfied clients and peers. Consider whether the attorney files a lot of consumer bankruptcy cases. You should check whether the attorney has suffered disciplinary sanctions (check with the CA State Bar). You'll want to discuss attorney’s fees and costs in advance. Your attorney should give you detailed bankruptcy disclosures as well as a proposed fee agreement, in writing, at your first meeting.3

• Credit Counseling

You can't file a consumer bankruptcy case without first taking a consumer credit counseling course. It takes about an hour or two. If you don't take the consumer credit counseling course, your case will be dismissed.

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• The Means Test - Are you eligible for Chapter 7 or Chapter 13?

You'll need to gather more records for this. You need pay stubs from work for the last six months. You'll need records showing how much you pay on your mortgage and car loans. You'll need proof as to how much you spend per month. You must be very careful to be accurate about this. If you don't "pass" the means test, your chapter 7 case might be dismissed. Work carefully with your attorney. The means test is how we determine whether you are eligible to file a case under chapter 7 or whether you must file under chapter 13.
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• Your petition and schedules

You'll need to work with your attorney to develop a budget of your current income and expenses. So keep in mind how much you spend on housing, food, medical expenses, insurance, and other similar expenses in your household. This budget is important in developing a plan to pay your debts in chapter 13. It is also important to see whether you must file a chapter 7 or a chapter 13 case. In chapter 13, you'll spend 3-5 years paying your disposable income to a trustee. This money will be used to pay some or all of your debts. Once this is done, you'll work with your attorney to prepare your bankruptcy petition - the paper which takes you into court - and schedules which show all your assets and liabilities. You'll also complete a Statement of Financial Affairs. Tell the truth in all respects. Don't hide anything. Otherwise, you could lose your right to a discharge and may even be committing a bankruptcy crime.6

• The "341 Meeting of Creditors"

After you file your bankruptcy petition, you'll attend a meeting with your attorney. There, you will meet a trustee, whether you file a case under chapter 7 or chapter 13. The chapter 7 trustee will want to know if you have assets he can sell to pay creditors. The chapter 13 trustee will want to know if your plan is acceptable and can be confirmed. So answer all questions completely and carefully. Always bring your social security card and a government issued photo identification card to this meeting. You will be sworn as a witness and must answer all questions truthfully.7

• Take the financial management course

After you file your bankruptcy case, you must take another course - the financial management course - in order to receive your discharge in bankruptcy. Don't forget to do this or your case will be closed without a discharge. Then creditors will have the right to continue to collect from you even though you filed a bankruptcy case. You'll have to pay a fee of at least $250 to reopen your case, just to file the certificate of financial management course and you may have to pay additional attorney fee as well.8

• Reaffirm Debts if Advisable

If you have a debt secured by property, it may be advisable to reaffirm that debt, either on the original terms or better terms negotiated for you or by your attorney. You'll have to sign an agreement to do so. You'll have to be able to afford to pay the reaffirmed debt. If it looks as if you won't be able to pay, you'll go to court where you will have to explain to the judge how you can afford to continue to pay. It may or may not be to your advantage to reaffirm any given debt. Discuss this with your attorney.9

• Your Discharge - Your Credit

Keep your discharge and treat it as an important document. Send it to all of the credit reporting agencies. These are Experian, Equifax and Trans-Union. Start rebuilding your good credit by paying your obligations on time. Check your credit report 6 months after bankruptcy to be sure that old debts are no longer listed. Challenge anything that's wrong. And if need be, call your attorney and ask him to take steps to correct any errors. You will be solicited for credit card offers after bankruptcy. Accept them sparingly and never accept a credit card or other offer which you absolutely positively can afford to honor. Soon, you will be on your road to financial recovery and a fresh start.