Tuesday, May 30, 2017

True Default Divorce Finalized in Just Six Months!


Divorce is never easy, but a recent Divorce for a Walnut Creek client was finalized in six months. This relatively simple solution went a long way towards helping our client get on with her life.
“Zoe”, who lives in Pleasant Hill, came in to our office for assistance with her Divorce. Zoe is 32, has a good job as an account executive with a national publication, and had been married to Bobby, 34, the operations manager for a manufacturing company, for nearly two years. Like many busy professionals these days, they met online and were delighted to discover their shared interests. They quickly fell into a pattern of spending their weekends together.

Zoe and Bobby began to drift toward marriage

The couple had attended a number of weddings together over the last year, and they were at that age when young couples begin to think about settling down. They set a date and married in the summer of 2015. Bobby moved into Zoe’s home that she’d inherited from her parents, and they began their new life together. But almost from the beginning, their relationship was troubled. While they’d spent considerable time together before marriage, they found that actually living together was challenging. They were soon quarreling, tried counseling, but finally admitted that they they’d married for all the wrong reasons, and in less than a year, Bobby moved out and left no forwarding address.

Zoe wanted to be married and have a family, but with a different partner

Zoe wanted to divorce and get on with her life. There were no kids, no support issues, no property issues or community assets. When Bobby moved out, he simply packed up his belongings and took them with him. (While California is a community property state, Zoe’s home was deeded to her before she met Bobby, and she made no effort to include him on the title after they were married.)

Bobby was not involved in the Divorce

Zoe knew that Bobby wouldn’t want to be part of the Divorce process, but she also knew where he could be served. She filled out our workbook, we prepared the initial paperwork and one of Zoe’s friends served Bobby the Divorce papers. Bobby didn’t file a Response within the required 30 days, so we were able to file a “true default” judgment for Zoe, which was signed by the judge and filed with the court. Bobby never had to sign a thing, and Zoe’s Divorce became final within six months of her initial office visit.

True default judgments and California law

According to California law, if someone does not respond to his/her spouse or partner’s petition for Divorce, the case will be considered a “true default” judgment. In a “true default” case, the spouse is giving up the right to have any say in in the Divorce. A true default judgment is uncommon because, unlike Bobby, most people are stakeholders in their marriages—they have emotional and economic investments—there are kids and property to divide–so this kind of simple solution is somewhat unusual. In most cases, even if the Divorce is uncontested, both parties work together to make decisions about custody, a parenting plan and division of property.
Are you contemplating divorce? Call California Document Preparers at one of our three Bay Area offices today to schedule an appointment. You can also jumpstart the process with our easy-to-use, secure online storefront–we’re still available by phone and email if you have questions. Our dedicated family law specialists are helpful, compassionate and affordable.

Wednesday, May 24, 2017

Who Has the Title to Your Deed: You May Be Vulnerable to Probate

This case study is a cautionary tale, and unfortunately, we see this kind of situation all too often. It highlights the importance of what is called vesting, or the way in which title to a Deed is held. It seems like a small thing, but a Deed is the legal document that identifies the property owner. Without the title, it is impossible to buy or sell a home. And as our client discovered, she also couldn’t update her Living Trust.

Updating Claire’s trust to reflect the changes in her life

It began when our client, “Claire”, came in to our Walnut Creek office to update her Living Trust. She’d experienced some significant changes since she’d created her Trust more than ten years before. She’d divorced, added a grandchild, lost her daughter to breast cancer and her mother to heart disease, changed jobs so that she was making significantly more money, bought a very promising stock that was soaring, invested in a Tahoe timeshare and purchased a life insurance policy. These were precisely the kinds of life events that should alert people to the need to be updating their Trusts.
We began amending Claire’s Trust to reflect the many changes in her life, but ran into a problem when we got to Claire’s Walnut Creek home. We needed to move the home into the Trust, but it was partially owned by her mother, and mom had died in 2015. Unfortunately, the Deed didn’t state that the owner and her mother were “joint tenants”, which meant that full title didn’t automatically pass to Claire when mom died. The result: 50% of the property would now have to go through Probate to determine ownership.

Probate a growing practice area for us

At California Document Preparers, uncontested Probate is a growing practice area for us, and this is one of the situations we most frequently encounter.
As part of Probate, the Court appoints a personal representative, or administrator, to settle the estate, so we work closely with the administrator throughout the Probate process. Claire became the administrator for the Probate, responsible for the following:
  • Placing a notice in the local newspaper and mailing notices to creditors. Probate is a public process.
  • Collecting the Probate property of the decedent.
  • Paying all debts, claims and taxes owed by the estate.
  • Collecting al rights to income, dividends, etc. and settling disputes.
  • Distributing or transferring the remaining property to the heirs.

Access to the decedent’s accounts

As an administrator, Claire can access all of the decedent’s records to understand the financial landscape. This may include valuing assets, taking physical custody of assets and selling assets, as necessary, to pay off debts or expenses. In this case, since Claire’s mother had already dealt with those financial assets by beneficiary designations, the only outstanding issue was the Deed to the home.
During Probate, the deceased’s estate becomes a separate tax entity, so Claire had to obtain a federal identification number. She was also responsible for filing the estate’s tax return and a final individual tax return.

Distribution of remaining assets

Once all taxes and debts have been satisfied, the Court distributes any remaining assets according to state law. In California, as in most states, the first priority is given to the deceased’s spouse, followed by the deceased’s children. In this case, the only asset in question is the 50% ownership of the home in which Claire is living. Claire was her mother’s only daughter, so mom’s interest in the house was distributed to Claire.

By vesting the Deed as joint tenants, they would have avoided Probate

If the Claire and her mother had been joint tenants on the Deed to their home, this scenario would have been dramatically simplified and they would have avoided Probate. When we prepare a Deed, we present all the options so clients can make informed decisions about how they wish to hold title—hopefully avoiding an unfortunate situation like this.
Do you need to transfer your Deed? Call California Document Preparers at one of our three Bay Area offices today to schedule an appointment. You can also jumpstart the process with our easy-to-use, secure online storefront–we’re still available by phone and email if you have questions. We’re helpful, compassionate and affordable.

Tuesday, May 16, 2017

Updating Living Trust After Death of Spouse


When we create Living Trusts for our clients, we always caution them that there’s a reason these are referred to as Living Trusts---these are living documents that need to be updated with important life events.

So what are life events?

A good way to think of this is anything that would affect the inheritance of those who are included in the Trust: Births, deaths, divorce, the acquisition of significant assets, including real property.
A good example of someone’s updating his Trust is Mike, from Pleasant Hill, who came in to update his Trust after his wife, Mary, died from a long battle with breast cancer. Mike and Mary originally created their Trust in 1997, when their daughter Lucy was 15 and their son Joey was 17. They had named Mike's older brother, Bob, as the Successor Trustee, and his wife's twin sister, Jennifer, as the Backup Successor Trustee. Lucy and Joey were equal beneficiaries when they reached 25.

Amending their old AB Trust

Mike and Mary had a complex AB Trust, fairly common at the time, that was to be divided into two Trusts when the first spouse died. But according to Article 7.3 of their Trust, at the death of the first spouse, the surviving spouse can amend or revoke any part of the entire Trust. As the lone Trustee, Mike had permission to amend his Trust.

Needs had changed; Mike now wanted adult children to serve as Trustees

When Mike and Mary had originally created their Trust, their kids were young, and they needed to include adult Trustees in the event something happened to them. But those kids were now grown and married, with lives of their own. Mike wanted to remove Bob and Jennifer as Trustees and make Lucy, a CPA in San Jose, the Trustee—she was most able to take care of him and manage his affairs if he became incapacitated. Joey, a graphic designer, would be Lucy’s backup.
Mike’s home was in the Trust, and he had inherited his mother's home from her Trust when she died. His mother's home was in Washington state, and while he had added Mary to the title, he had never moved this home into their Trust. He wanted to move his mother’s home into his and Mary's trust.

How California Document Preparers assisted Mike

  • Amendment to Living Trust. Mike amended their Trust, converting it from an AB Trust.
  • A change of Trustees. He amended the Trustees, making his CPA daughter Lucy the first Successor Trustee and Joey her backup. Lucy also became his Agent with Power of Attorney for financial matters and the Agent for his Advance Healthcare Directive.
  • Affidavit of Death of Joint Tenants. We created an Affidavit of Death of Joint Tenants, informing Washoe County, Washington, that Mike’s wife had died and prepared a Deed to transfer his mother’s home into his and Mary's Trust.
  • Pour Over Will. A standard part of our Trust package is a Pour Over Will, which Mike created. There is a lot to think about when preparing legal documents, and clients are often concerned that they will have forgotten to include some of their assets in their Living Trusts. The Pour Over Will acts as a safety net, stating that any remaining assets or property not previously transferred into the Trust “pours over” into the Trust so they may be distributed according to the terms of the Trust.
  • Personal Organizer. We also included a personal organizer, a place for listing contact information of healthcare providers, insurance agents, financial advisers, veterinarians, etc. We also encourage our clients to include login information to their digital assets.
Mike's total fee was $949. This fee included amending and updating his Living Trust, the Will, Power of Attorney, Advance Healthcare Directive, Affidavit of Death and Deed Transfers. The fees for our Living Trusts and Deeds are fixed rates--no surprises.
We were delighted when the following week Mike’s daughter, Lucy, came in to create a Living Trust for herself and her husband, Jake.

Call California Document Preparers today at one of our three Bay Area offices today to schedule an appointment to update your Living TrustWe’re helpful, compassionate, affordable.

Monday, May 8, 2017

Single Mom Creates Living Trust to Provide for Her Daughter

The concept of family has evolved. It’s not uncommon for men or women these days to decide that they really don’t want to get married at all, but they do want to have a child and be a parent. The families they form may include the child’s birth father or mother—or not. It’s really up to them to define their version of the new American family.

Introducing Mary: A 34-year-old pregnant surfer

One such woman, “Mary” recently came in to our Walnut Creek office. She is 34, lives in Danville, has a great job, loves to surf at Ocean Beach—and is five months pregnant with a little girl. She and her boyfriend, “Oliver” have been together for five years, and he’s a software salesman who does a fair amount of traveling. When she told him that she was pregnant, he wanted to get married. But while she loves Oliver, she doesn’t want to marry him.
Mary owns two properties—a four-unit apartment in Alameda and the home in Danville in which she lives. It had been her grandmother’s house, and when she died, Mary and her parents became equal owners.

Having a child will dramatically change her lifestyle

Mary is healthy, happy and eagerly anticipating the birth of her daughter. She knows that being a single mother is going to be challenging and that her lifestyle will change dramatically. Even with her demanding job, she knows she must prioritize the needs of her new daughter.
But Mary has always wanted to have children, and she knows that this is the right time. She also knows she can count on her strong support system, including Oliver. Her parents, who live close by, are ecstatic about the prospect of their first grandchild. Mary also has friends and extended family members who live in the East Bay, and she knows she will need to rely on all of these people as she navigates her new life as a single mom.

What happens to her daughter if something happens to Mary?

Mary is worried, however, about what would happen to her daughter if something happened to her. She wants to make sure her daughter would inherit her assets, but she also wants to make it easy for Oliver to raise their child.

Here’s how California Document Preparers helped Mary provide for her daughter:

  • We created Mary’s Living Trust package from the information she provided in our easy-to-use workbook.
  • She named Oliver and her father as Co-trustees.
  • Mary left the apartment to Oliver and her home to her parents.
  • She named Oliver as the child's guardian and her sister as a backup guardian.
  • Our comprehensive Living Trust package includes a Power of Attorney, and she decided that her father, an attorney, will be her Financial Power of Attorney, with Oliver as the backup.
  • Mary named Oliver, her sister, mother and father on her Advance Healthcare Directive.
  • We also did two Deeds transfers for Mary; the Alameda apartment building is 100% in her Trust and her grandmother’s Danville home is 50% in her parents’ Trust and 50% in her new Trust.
Mary is delighted that we were able to take care of her Trust in one week--long before her child is due. It is giving her peace of mind as she prepares for the birth of her daughter.
There’s a common misperception that Living Trusts are just for old people! In the same way that Mary wanted to provide for her daughter if something happened to her, anyone with dependents should have a Trust.
Call California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate, affordable.

Thursday, May 4, 2017

The Economics of Divorce: 6 Ways to Prepare

If you’re thinking about divorce, you’re likely agonizing over your decision. While you’d love to be living without the constant bickering and tension that you know are affecting your kids, divorce would likely mean making some economic sacrifices. Living in the Bay Area is expensive, and you’ve built a life predicated on two incomes. Will you be able to afford your current lifestyle on a single income or will you need to make changes, including selling your home? Should you be talking to your boss about a raise or looking for a new job altogether—one that pays a lot more money? What about the timing? Can you be looking for a new job while you’re in the process of getting a divorce?
Here at California Document Preparers, these are among the concerns we frequently hear from our clients. While they invariably decide that creating a new life, free of an abusing spouse or a dysfunctional relationship is worth it, there is significant anxiety associated with the decision. And ultimately, many of those anxieties are related to the economics of divorce.

If you’re contemplating divorce, here are six things to do now to prepare 

  1. Take stock of your mutual assets. Take stock of account balances and understand the total value of joint assets, including checking, savings and brokerage accounts, retirement plans and life insurance policies, real property, vehicles and other acquisitions that are part of your total net worth. You will need this information as you begin the division of property.
  2. Be fiscally conservative. Resist the urge to make significant withdrawals or expensive purchases prior to or during the divorce process. You’re going to have some big expenses coming up.
  3. Prepare for a new career ASAP. As soon as people know they are getting a divorce, they should think about how they will support themselves in the years after the divorce. If one spouse has been a stay-at-home mom or dad, it’s time to get serious about reentering the workforce. A common mistake is waiting until a divorce is final before beginning a job hunt. By that point, precious months have been squandered that could have been spent polishing skills, getting new training or networking to build important business contacts.
  4. Don’t get emotional about your home or other items. In many cases, people give up valuable assets or other rights in order to keep the family home. Selling the house can be traumatic because there are so many emotions tied to the family home—it’s where you once lived happily together and raised your kids; it may be in a great neighborhood where you’re surrounded by friends, but sometimes it’s the right thing to do. Try to look at the big picture, with the house as just one part of the overall accumulation of assets.
  5. Think about the tax implications. Next to a house, a retirement fund may be the most valuable asset a person owns. But couples shouldn’t simply cash out and split the proceeds. There are tax consequences of trading one asset for another as you divide your property. The vacation home is a tax-free benefit while the 401k is taxable.
  6. Consider all insurance options. Divorces commonly require one spouse to pay child support or maintain health insurance for dependents. But if that person loses his/her job or is unable to work for whatever reason—something that is all too common these days—a significant amount of support suddenly disappears. Picking up the cost of health insurance for dependents can be a significant financial contribution.

Do you have questions about our Uncontested Divorce?

We assist clients who can agree on division of property and a parenting plan. Our family law team prepares the legal documents, notarizes and files them with the court. Divorce is never easy, but we’re sensitive to the emotional needs of our clients and are in touch throughout the divorce processWe’re helpful, compassionate and affordable.