Monday, March 27, 2017

Mom Dies in CC County, but Nevada Home Means Separate Probate

A woman came into our Walnut Creek office seeking help with her parents’ estate. Like many of the clients who come through our doors, she needed information. She’d never dealt with an estate before and was still in shock over her mother’s sudden death. Her mother had been healthy and active but had collapsed during her morning exercise class. They’d called 911 and rushed her to the hospital, but she’d had a ruptured aneurism. Despite heroic efforts by the EMTs and the emergency room doctors, her mother died in the hospital.

No Living Trust, but there might be a Will . . .

Our client had a brother, but she would be managing the estate. They knew that their mother and father, who had died the previous winter, had never created a Living Trust, despite their frequent urging. They did think, however, that their parents had at one time created a Will.
Brook encouraged her client to try and find the Will, as it would detail how her parents’ assets would be distributed. The client returned a week later with the Will—she had carefully gone through her mother’s papers and found it locked in the back of a desk with other important documents, including the title to her car, tax statements from the last few years and the deed to a home in Nevada.
The Will detailed that the assets would be evenly divided between the son and daughter, our client. There were a life insurance policy and some stocks that had significantly appreciated over the years. The Will also identified how some of the family’s belongings–a few quality antiques, paintings and jewelry, would be allocated between their son and daughter.

No real property, assets less than $150,000: They avoided Probate—in California

Since they had owned no real property in California, their assets totaled less than $150,000, they did not have to ask the court to Probate any California assets. Yet, because California is her state of residence, our client will have to file for Probate in California first in order to have the authority to initiate Probate in Nevada.

A separate Probate in Nevada

Brook initiated the Probate process, preparing court documents stating that her client would be the Executor of her mother’s estate. These documents will be used at the hearing that the Probate clerk schedules; it is at this hearing that the Probate judge signs off on this document, legally naming her the Executor. She will then take this certified document to a Nevada attorney to initiate a Probate case in that state. The full Probate process will take place in Nevada.

A cautionary tale . . .

If our client’s parents had created a Living Trust, settling her parents’ estate would have been a simple matter of distributing their assets according to the details of the Trust. The estate has now gotten significantly more complicated—and expensive.
Are you still putting off creating your Living TrustWe prepare the legal documents and notarize them–most of our clients tell us they’re surprised at just how easy it was! Schedule an appointment at one of our three Bay Area offices today today.  

Monday, March 20, 2017

Revocable Transfer on Death Deed? A Better Solution: Living Trust

A woman, “Joan”, recently came into our Oakland office to talk to us about adding the names of her longtime partner and her daughter to the Deed for her home. As with many of our clients, health issues had caused her to think about succession planning. Joan had recently had a heart attack, and while she was recovering, it had been a sobering experience, and she was making lifestyle changes now to avoid further stress on her heart.
Joan was 72 years old and the home in which she and her longtime partner, “Jim”, lived was completely paid off. The title was in her name only, and she wanted to add Jim and her married adult daughter, “Claire”, so they wouldn’t have to go through Probate if something happened to her. Her neighbor had told her about revocable transfer on death deed. California offers this option so that real estate can bypass Probate. Joan would retain ownership of the home until she died, at which time it would pass to the people she designated in the death deed.

Bequeathing a home to two people who aren’t related: proceed cautiously

People should be thinking carefully about bequeathing a home to two people two who aren’t related or married. In this case, there are several things to be thinking about. Joan might have intended for Jim to stay in the home until he died, when he would pass it on to Claire. Relationships change when there’s money involved. The daughter, for instance, might have other intentions. She might have been more interested in the money she would make from the sale of the house in today’s inflated real estate market than Jim’s wellbeing. There are other issues associated with dual ownership. Maintaining a home is expensive. If Jim continued to live in the home and it required expensive repairs, such as a new roof, would Claire be responsible for half the costs?

A better way to avoid Probate: A Living Trust

A better way to avoid Probate is to create a Living Trust that identifies the process for the home’s succession. A Living Trust details the distribution of all assets, along with other items that may be of monetary or sentimental value. Joan would be able to specify that Jim would live in the home until he died, at which time the property would transfer to Claire. The home’s Deed would be moved into the Trust.
For Joan, our Living Trust package provides other benefits and some peace of mind that she needs at this point in her life. Our Trust package includes a Power of Attorney and an Advanced Healthcare Directive. In this way, Joan would be naming Jim or Claire to make decisions for her in the event she became incapacitated and no longer able to do this herself.
Are you still putting off creating or updating your Living Trust? We prepare the legal documents and notarize them--most of our clients tell us they’re surprised at just how easy it was! Make an appointment today to get started on your TrustWe’re Helpful, Compassionate and Affordable.

Wednesday, March 15, 2017

After 10 years and 5 Employees, Sole Proprietorship Gets Upgrade

Many of our business formation clients are like “Joan”, who came in to our Oakland office to talk to us about incorporating her bookkeeping business. Joan was in her late 50s and had had a good job in the accounting department of a large corporation for more than 20 years. As a manager, she had autonomy, enjoyed her team and her 401k and benefits. She had planned to work there until she retired at 65.

Employer’s involvement in housing market resulted in loss of job

Unfortunately, Joan’s employer was peripherally connected to the housing industry, and the company was affected by the market failure of 2008. Joan never saw it coming when her boss called her into his office and told her that her job was being eliminated. Her six-month severance package helped, but the fact remained that she was a single mother with a mortgage and two kids in college, and now she was jobless in a very bad economy.
Joan updated her resume and began applying for jobs, but they were few and far between. She had a few interviews but never made it to the second round. Within a few months, she faced the reality that she might not find another job, and she couldn’t afford to continue looking. She knew she needed to start her own business. Accounting was what she knew, so she created a website, formed a Sole Proprietorship and launched her new bookkeeping practice.

Ten years later . . .

Joan’s business is thriving. She has two fulltime employees and several part-time people who help out during tax seasons. She knows that her Sole Proprietorship is no longer robust enough to address the needs of the business she owns today. She wanted to create an LLC because of the liability advantages.

The benefits of an LLC

  • Protected assets.LLCs provide limited liability protection to their owners (members), who are typically not personally responsible for the business debts and liabilities of the LLC. Creditors cannot pursue the personal assets (house, savings accounts, etc.) of the owners to pay business debts. Conversely, in a Sole Proprietorship or General Partnership, owners and the business are legally considered the same—so that personal assets are vulnerable.
  • Pass-through taxation.LLCs typically do not pay taxes at the business level. Any business income or loss is “passed-through” to owners and reported on their personal income tax returns. Any tax due is paid at the individual level.
  • Heightened credibility.Forming an LLC may help a new business establish credibility with potential customers, employees, vendors and partners because they see you have made a formal commitment to your business.
  • Limited compliance requirements.LLCs face fewer state-imposed annual requirements and ongoing formalities than other forms of incorporation, such as S or C corporations.
  • Flexible management structure.LLCs have become popular in the last few years because they may have a simpler organizational structure, unlike corporations which have a board of directors who oversee the major business decisions of the company and officers who manage the day-to-day affairs.
  • Few restrictions.There are few restrictions on who can be an LLC owner or how many owners an LLC may have (unlike S corporations).

LLCs may have some potential disadvantages:

  • Transferable ownership.Ownership in an LLC is often harder to transfer than with a corporation. With corporations, shares of stock can be sold to increase ownership. Typically with LLCs, all owners must approve adding new owners or altering the ownership percentages of existing owners.
  • Less precedent.Because the LLC is a newer type of business structure, there is not as much case law or legal precedent for LLCs as there is for corporations.

Have you been considering changing your business structure to a corporation or an LLC?

We can help you make informed decisions about which business structures are right for you. Make an appointment today at one of our three Bay Area offices to get started. You can also jumpstart the process by purchasing our business formation package from our secure online storefront. We’re available by phone and email to help you through every step of the process. At California Document Preparerswe’re helpful, compassionate, affordable.

Friday, March 10, 2017

Case Study: CDP Helps Ease the Stress of Conservatorship


“Maureen” came in to our Walnut Creek office to inquire about our assisting her in becoming the Conservator for her mother. Her mother was 72, but her family had begun noticing her forgetfulness a decade earlier. They had laughed about it at first—her habit of frequently misplacing her keys, then finding them in the unlikeliest of places, including the refrigerator or the shower stall. Maureen’s mother’s forgetfulness was worrisome for her family as it became more progressive. The father was also in poor health and was not able to help or monitor the mother’s behavior, and it became increasingly erratic; she was carelessly charging things to their credit cards that they would never use.
She drove to a local event one night and couldn’t find her way home. She drove around for three hours before being pulled over by a policeman for reckless driving. The policeman drove her home and talked to Maureen about her mother. It was at this point that the family faced the reality of their mother’s dementia.

Dementia means it’s time for conservatorship

When a neurologist confirmed her condition as advanced dementia, Maureen knew it was time for an intervention. Maureen and her husband lived with her mother and father in their Brentwood home, and they had been acting as their caregivers. She wanted our assistance in creating and filing the legal documents with the court that would make her and her father Co-Conservators for her mother. She felt that her father would be more comfortable with what she was doing if they shared the Co-Conservatorship role.

Filing documents with the court and scheduling an investigator

Maureen filled out our Conservatorship workbook and took it home to review with her father. We created the legal documents and filed them with the court. Part of the Conservatorship process involves scheduling an investigator who goes to the home to ensure that everything is in the best interests of the mother. The investigator then reports back to the court. This critical step verifies that the person for whom the Conservatorship is being created is not being exploited in any way.
Conservatorships can be trying for all concerned—generally the family members who take this legal step so they can manage the care and finances of a family member who can no longer do this for him/herself. Having California Document Preparers prepare and file legal documents can take a huge burden off the family.
A final note: Maureen was realistic and looking ahead; she knew that she was ultimately going to be responsible for both of her parents. She asked about the process for becoming her father’s Power of Attorney. She realized that her father’s declining health meant that soon she would be paying bills, dealing with finances and making other decisions for both of her parents. We gave her the workbook for her father to fill out for his Power of Attorney.
If you’re considering a Conservatorship for someone in your family, contact one of our three Bay Area offices today to talk to one of our specialists. While this can be an emotional time, we help our clients through this process. Helpful. Compassionate. Affordable.

Friday, March 3, 2017

Thinking About Divorce? 7 Things Not to Do

Regardless of how troubled a marriage may be, most couples want to be divorced; they rarely want to go through it.

At California Document Preparers, we assist our clients with uncontested divorce, what we call amicable divorce–where couples agree on division of property and a parenting plan. Yet, given the emotional upheaval and the mountain of details that are inevitable parts of every divorce, it’s not surprising that many couples wind up making critical mistakes. Here are a few things to be thinking about if you and your spouse are contemplating divorce.

1. Don’t forget to update your Living Trust

If you want to prevent your soon-to-be-ex-spouse from receiving the assets you had identified during better times, you need to update these legal documents. If you die before your divorce is final, and you have left your spouse nothing, he or she can sue and recover part of your estate.

2. Don’t take it out on the kids

Children need a supportive environment to deal with divorce. Professionals suggest that you talk about divorce as little as possible, yet answer questions and be truthful; let them know what’s going on and what to expect. Attend school and after-school events, help your kids with homework. Spend time with them. When you’re relaxed, they will be too. Kids are remarkably resilient and savvy; they’re surrounded by other kids whose parents are divorced. They get it.

3. Don’t refuse to see a therapist

Seeing a therapist can help you get through the fluctuating emotions that you will experience. Take care of yourself and think about getting help before you become depressed or angry. A professional therapist is trained to help you and your children through the process. For those who have been married for a long time, a therapist can help you cope with being single again, learning to be self-sufficient.

4. Don’t forget about taxes

Typically, the person who has primary custody of the children lives in the house with the children. But the house may not be the best deal. Maintaining a home is expensive. If you can’t afford the mortgage, taxes and upkeep on the house, you may want to ask for the investment portfolio of equal value instead. You’re now a single person, and the tax landscape changes. A single people is not allowed to shelter as many capital gains from taxes. Stocks can also be at issue. Newly purchased stocks may be more desirable because they will cost you less in capital gains taxes. Not good at this stuff? Talk to your financial adviser or accountant. If you don’t have one, ask us for a referral. It’s a worthwhile investment.

5. Don’t increase your debt

No question about it; divorce is expensive. If you are the spouse who is moving out, you will need money to set up a new household. Whether you’re buying or renting, you’re going to need a large initial payment. Try to get used to having less now. It may seem stressful, but the freedom you’ll enjoy down the line will be well worth the struggle.

6. Don’t wait until after the holidays

There’s no good time of year to get divorced. We traditionally think of the holidays as Thanksgiving, leading up to Christmas and the New Year. But here in our multicultural community, holidays fall on a wide range of calendar dates. For many families, vacations have special meaning—trips to the lake or mountains, family reunions, etc. It’s a lot easier to get used to an empty home before the holidays, and if you’re one of those people who promised yourself you’d never spend another holiday with your spouse, commit to this—it won’t be any easier next year.

7. Don’t forfeit your financial security just because you want out

Just because you want out of your marriage ASAP doesn’t mean you should forfeit your financial security. Be thorough; consult a financial adviser or CPA if you need help. Make copies of important financial documents: pension statements, tax forms, brokerage and mutual fund statements, credit card statements and other records. Be aware of what you own and what you owe. Make sure that you and your children will continue to have health insurance during and after the divorce proceedings. While you are still married to your spouse, an illness or accident can alter the division of property.

Is uncontested divorce right for you? 

California Document Preparers has helped more than 2,000 couples with uncontested divorces.
  • It’s necessary that couples agree on division of property and a parenting plan.
  • We use attorney-approved workbooks and other materials to collect the necessary data, including information about financial accounts.
  • We prepare the legal documents and file them with the court.
  • Our dedicated family law specialists are helpful and sympathetic, available by phone and email throughout the process.
  • Best of all, we’re affordable—just one flat fee.
  • Jumpstart your divorce by purchasing our documents from CDP’s secure online storefront.

Have you been putting off your Divorce? Most of our clients tell us they’re surprised at just how easy it was! Make an appointment today at one of our three Bay Area offices to get started on your Divorce.