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Monday, July 24, 2017

Why New Parents Need an Estate Plan

Becoming a new parent is a life changing experience, and caring for a child is an awesome responsibility as well as a joy. This is also the time to think about your child's future by asking an important question: who will care for your child if you become disabled or die? The best way to put your mind at ease is by having an estate plan.

The most basic estate planning tool is a will, which enables a person to determine how his or her assets will be distributed after death. Without this important estate planning tool, the state's intestacy laws will govern how these assets will be distributed. In addition, decisions about who will care for any minor children will be made by the court. For this reason, it is crucial for new parents to have a will as this is the only way to name guardians for minor children.

In this regard, selecting guardians involves a number of important considerations. Obviously, it is important to name individuals who are emotionally and financially capable of raising a child. At the same time, a will can also establish a trust that provides funds to be used to provide for the child's needs. Ultimately, guardians should share the same moral and spiritual values, and childrearing philosophy of the parents.

In addition to naming guardians in a will, it is also critical to plan for the possibility of incapacity by creating powers of attorney and advance medical directives. A durable power of attorney allows a new parent to name a spouse, or other trusted relative or friend, to handle personal and financial affairs. Further, a power of attorney for healthcare, or healthcare proxy, designates a trusted person to make medical decisions in accordance with the parent's preferences.

Finally, new parents should also obtain adequate life insurance to protect the family. The proceeds from an insurance policy can replace lost income, pay household and living expenses, as well as any debts that may have been owed by the deceased parent. It is also important to ensure that beneficiary designations on any retirement accounts are up to date so that these assets can be transferred expediently.

In the end, having a child is a time of joy, but also one that requires careful planning. The best way to protect your family is by consulting with an experienced estate planning attorney who can help you navigate the process.

 


Monday, July 17, 2017

What is a Debt Management Plan?

If you are having trouble keeping up with your debts, an alternative to filing for bankruptcy is a debt management plan. In this arrangement, you make payments to a credit counseling agency which then pays creditors on your behalf according to a payment plan. Only unsecured loans such as credit card debt and personal loans can be included in a debt management plan while secured debt such as mortgage loans, car loans and student loans are not eligible.

The process starts by meeting with a credit counselor, who thoroughly assesses your financial situation. In addition to debt management, other options will be presented to you, including debt settlement, and filing for personal bankruptcy. If a debt management plan is arranged, the amount you owe will not be reduced, but rather a payment plan for a period of three to five years will be set up.

The counselor then notifies each creditor of the plan, and makes the agency the payer on your account. Depending on the circumstances the counselor can negotiate with the creditor to waive certain fees, lower interest rates and monthly payments. Each month, you pay the agency electronically, and then the agency pays your creditors.

It is important to note that creditors will most likely require accounts to be closed. However, before agreeing to the plan, you can request certain cards to be kept open for emergencies or business purposes. In addition, you will not be able to take on new credit obligations for the duration of the plan.

Lastly, if you fail to abide by the terms of your plan, creditors can begin assessing fees, raising interest rates, or begin collection activities.

In the end, debt management plans can help you get control of your finances. The benefits include making a single, lower monthly payment, stopping harassing debt collector calls, and paying down the debt over time. Ultimately, an attorney with experience in debt management and bankruptcy can help you explore your options.

 


Monday, July 10, 2017

Things to Consider Establishing a Charitable Giving Plan

For many individuals, leaving a legacy of charity is an important component of estate planning, but there are many factors involved in creating a charitable giving plan.

First, it is important to select causes that you believe in such as environmental, educational, religious or medical, or those dedicated to providing food and shelter to the poor. The number of charities you wish to give to depends on your available resources, as well as other beneficiaries of your estate. Many people opt to limit their selections to a handful of charities that are most important to them.

Once charities have been selected, it is crucial to do some homework to make sure the charities are legitimate, and that your gift will be used for the intended purpose, rather than to pay salaries or administrative costs. A good place to start is with the charity's website, and there are many publicly available resources that evaluate charities.

Further, it is important to be realistic about how much of our assets can be dedicated to gift giving, and how those donations should be allocated to the designated charities. Proceeds can either be divided equally, or more money can be provided to the charity you deem most worthy.

Lastly, it is important to avoid the common mistakes many make when planning charitable gifts. It is crucial to ensure that you are donating to a legitimate charity by thoroughly evaluating the agency. In addition, your gift should not be overly restricted since this could make it difficult for the charity to use.If your assets are in stocks, they should not be sold and the profits donated, rather the stocks should be gifted directly to the charity.  

In sum, your gift needs to be helpful to the charity, but also take advantage of tax benefits to which you may be entitled, and these objectives can be achieved by establishing a trust. For example, a charitable remainder trust is one into which property is transferred with a charity named as the final beneficiary. In this arrangement, another individual receives income from the trust for a set period of time and then the remainder is given to the charity. In the end, if your objective is to become a sophisticated donor, it is essential to engage the services of an experienced trusts and estates attorney.


Monday, June 26, 2017

Obtaining U.S. Citizenship Through a Grandparent

The Immigration and Naturalization Act provides that children born outside the U.S. are automatically U.S. Citizens if one of their parents is a U.S. citizen.  There are, however, a number of exceptions.  

To transmit citizenship to a child, the parent must not only be a U.S. citizen but must also meet a physical presence requirement.  The parent must have resided in the U.S. or one of its possessions for at least five years, and for two of the five, the parent must have been at least 14 years old.

If a child is not eligible because a U.S. citizen parent failed to meet the physical presence requirement, the child can still receive citizenship through the physical presence of a grandparent.  There are three basic requirements:

1.  The child is the offspring of parent who is a U.S. citizen, whether by naturalization or birth.

2.  The child is under the age of 18 and in the custody of the U.S. citizen parent.

3.  The child's U.S. citizen grandparent was physically present in the U.S. or its possessions for at least five years, for two of which the grandparent was at least 14 years old.

As with the U.S. citizen parent, the calculation of the total time of physical presence can include periods when the grandparent was not a U.S. citizen.

If the grandparent is dead, the provision is still available.  All that is required is that the grandparent was a U.S. citizen and met the physical presence requirements at the time of his or her death.

Parents seeking to use the grandparent provision for a child must file a form N-600K with the United States Citizenship and Immigration Services prior to the child's eighteenth birthday and attend an appointment in person with the child.  If the parent has died, the child's grandparent or legal guardian can apply within five years of the parent's death.

If you or your loved one is trying to obtain U.S. citizenship through a grandparent, you should seek the advice of a seasoned immigration attorney to achieve the best possible result.


Monday, June 19, 2017

Uncovering Hidden Assets in a Divorce

Going through a divorce can be a difficult process, especially when the proceedings become contentious. In fact disputes about spousal support and child support often arise, and it is not uncommon for one or both spouses to attempt to conceal their assets from each other and the court. While this is illegal, it happens more than many realize.

If you believe your spouse is hiding assets, there are number of steps you should take. First, since many financial transactions are conducted over the internet, viewing a web browser on a computer or smart phone can reveal vital information about sites that were visited. In particular money being transferred out of and into accounts is a telltale sign that someone is hiding assets.

In addition, social media may also offers clues that a spouse has money her or she claims not to have to pay spousal support or child support. Are there comments or pictures posted about purchasing a luxury item or taking an expensive vacation? If so, this is valuable evidence that an attorney can use at trial.

Many individuals may not be aware that retirement accounts such as 401(k)s and pensions are considered to be marital property that will be divided in a divorce. If your spouse claims not to have a retirement account, a quick check of the company's website can reveal whether these benefits are offered to employees.

In some cases, it may be necessary to hire a forensic accountant in order to uncover hidden assets such as investments, saving accounts off shore accounts or to track transfers of large sums of money.  In addition, tax returns can be examined to determine if there is income, interest, and dividends that a divorcing spouse may be trying to hide.

Ultimately, if you suspect that your spouse is hiding assets, it is best to speak to an experienced attorney who can take the appropriate legal measures to uncover any assets and present this evidence to the court.

 


Monday, June 12, 2017

A Primer on Irrevocable Trusts

Many individuals are aware that a will is one way to plan for the distribution of their assets after death. However, a comprehensive estate plan also considers other objectives such as planning for long-term care and asset protection. For this reason, it is essential to consider utilizing an irrevocable trust.

This estate planning tool becomes effective during a person's lifetime, but it cannot be amended or modified. The person making the trust, the grantor, transfers property into the trust permanently. In so doing, the grantor no longer owns property, and a designated trustee owns and manages the assets for the benefit of the beneficiaries.

In short, irrevocable trust provide a number of advantages. First, the property is not subject to estate taxes because the grantor no longer owns it. Moreover, unlike a will, an irrevocable trust is not probated in court. Finally, assets are protected from creditors.

Common Irrevocable Trusts

There are a variety of irrevocable trusts, including:

  • Bypass Trusts -  utilized by married couples to reduce estate taxes when the second spouse dies. In this arrangement, the property of the spouse who dies first is transferred into the trust for the benefit of the surviving spouse. Because he or she does not own it, the property does not become part of this spouse's estate when he or she dies.

  • Charitable Trusts - created to reduce income and estate taxes through a combination of gifting and charitable donations.  For example, charitable remainder trust transfers property into a trust and names a charity as the final beneficiary, but another individual receives income before,  for a certain time period.

  • Life Insurance Trusts - proceeds of life insurance are removed from the estate and ownership of the policy is transferred into the trust. While insurance passes outside of the estate, it is factored into the value of the estate for tax purposes, so this vehicle is designed to minimize estate taxes.

  • Spendthrift Trusts – designed to protect those who may not be able to manage finances on their own. A trustee is named to manage and distribute the funds to the beneficiary or directly to creditors, depending on the terms of the trust.

  • Special needs trusts - designed to protect the public benefits that many special needs individuals receive. Since an inheritance could disqualify a beneficiary from Medicaid, for example, this estate planning tool provides money for additional day to day expenses while preserving the government benefits.

The Takeaway

Irrevocable trusts are essential estate planning tools that can protect an individual's assets, minimize taxes and provide for loved ones. In the end, these objectives can be accomplished with the advice and counsel of an experienced estate planning attorney.

 


Monday, May 29, 2017

Disinheritance

Inheritance laws involve legal rights to property after a death and such laws differ from state-to-state.   Heirs usually consist of close family members and exclude estranged relatives.  Depending on the wording of a will, an individual can be intentionally, or even unintentionally, disinherited.

In most cases, spouses may not be legally disinherited.  Certain contracts, however, allow for a legitimate disinheritance, such as prenuptial agreements or postnuptial agreements.  These contracts are typically valid methods of disinheritance because the presumed-to-be inheriting spouse has agreed to the arrangement by signing the document.  

If there is no prenuptial arrangement, then the state’s elective share statute or “equitable distribution” laws protect the surviving spouse.  Pursuant to the elective share statute, he or she may collect a certain percentage of the estate. 

In states that follow “community property” or “common law” rules, however, the outcome may be different.   An attorney should be consulted for clarification of the differences in the law.  Divorces affect spousal inheritance rights.  Post-divorce, it is prudent to consult an attorney to draft a fresh will, in order to prevent confusion and unintentional dissemination of assets.

If the will is unambiguous, it is usually possible for a child to be disinherited.   It should be noted, however, that it is highly likely that close relatives will challenge or contest a will in which they have been disinherited.  Fighting such a lawsuit may put a great financial strain on the estate's assets.  Depending on how time-consuming and expensive it is to defend the will, less money may be available for distribution to the intended beneficiaries. 

There are ways to protect estate assets from such problems, for example through trusts.  It is essential for an individual to receive the counsel of a licensed lawyer in order to effectively protect his or her estate as inexpensively as possible.


Monday, May 22, 2017

Do I qualify for Chapter 7 bankruptcy?

Not everyone is eligible to have his or her debts discharged under Chapter 7 bankruptcy.  People with larger incomes will not be permitted to use Chapter 7 to eliminate their debts.  The test is that determines who is eligible for this form of protection is called the Bankruptcy Means Test.  The courts consider the petitioner’s income and expenses in order to determine if a petitioner qualifies.  The eligibility requirements vary from state to state.  But, the first step is always to determine whether a petitioner’s median household income is the less than the median income of a household of the same size in that state.  If this is the case, the test is passed and Chapter 7 bankruptcy protection is available.

Even if a petitioner’s income is more than the state’s median income, that person may still qualify for Chapter 7 protection.  If a person has income higher than the state median, the courts then look at how much of that income is disposable.  The court deducts necessary expenses based on regional standards to determine how much money a person has available to pay his or her bills.  Expenses that would reduce a petitioner’s disposable income include, but are not limited to, taxes, health insurance costs, unreimbursed healthcare costs, court ordered payments, child support, childcare, education expenses, charitable contributions, car payments, mortgage payments and costs for the care of an elderly, infirm, or disabled person in the petitioner’s household.  The information needed to make these determinations is submitted to the Bankruptcy Court in Official Form 22A, which is attached to every bankruptcy petition.

In the event that a petitioner does not qualify for Chapter 7 bankruptcy protection, the Bankruptcy Court will not discharge that petitioner’s debts.  Bankruptcy protection may still be available to that petitioner under Chapter 13 which requires making monthly payments and adhering to a strict budget.  There are benefits and drawbacks to filing a Chapter 13 instead of a Chapter 7, but ultimately, those who do not pass the Bankruptcy Means Test may have no choice as to how they choose to file.  A lawyer will help to determine what expenses should be listed on Official Form 22A to make sure that as many options are available to his or her client as possible.


Monday, May 8, 2017

Top Five Estate Planning Mistakes

In spite of the vast amount of financial information that is currently available in the media and via the internet, many people either do not understand estate planning or underestimate its importance. Here's a look at the top five estate planning mistakes that need to be avoided.

1. Not Having an Estate Plan

The most common mistake is not having an estate plan, particularly not creating a will - as many as 64 percent of Americans don't have a will. This basic estate planning tool establishes how an individual's assets will be distributed upon death, and who will receive them. A will is especially important for parents with minor children in that it allows a guardian to be named to care for them if both parents were to die unexpectedly. Without a will, the courts will make decisions according to the state's probate laws, which may not agree with a person's wishes.

2. Failing to Update a Will

For those who have a will in place, a common mistake is to tuck it away in a drawer and be done with it. Creating a will is not a "once and done" matter as it needs to updated periodically, however. There are changes that occur during a person's lifetime, such as buying a home, getting married, having children, getting divorced - and remarried, that need to be accurately reflected in an updated will. Depending on the circumstances, a will should be reviewed every two years.

3. Not Planning for Disability

While no one likes to think about becoming ill or getting injured, an unexpected long-term disability can have devastating consequences on an individual's financial and personal affairs. It is essential to create a durable power of attorney to designate an individual to manage your finances if you are unable to do so. In addition, a power of attorney for healthcare  - or healthcare proxy, allows you to name a trusted relative or friend to make decisions about the type of care you prefer to receive when you cannot speak for yourself.

4. Naming Incapable Heirs

People often take for granted that their loved ones are capable of managing an inheritance. There are cases, however, when a beneficiary may not understand financial matters or be irresponsible with money. In these situations, a will can appoint an professional to supervise these assets, or in the alternative a "spendthrift trust" can be put in place.

5. Choosing the Wrong Executor

Many individuals designate a close relative or trusted friend to act as executor, but fail to consider whether he or she has the capacity and integrity to take on this role. By choosing the wrong executor, your will could be contested, leading to unnecessary delays, costs and lingering acrimony among surviving family members.

The Takeaway

In the end, estate planning is really about getting your affairs in order. By engaging the services of an experienced trusts and estates attorney, you can avoid these common mistakes, protect your assets and provide for your loved ones.

 


Monday, April 24, 2017

Immigration Bonds

Non-citizens believed to be in the country illegally can be taken into custody and held by the Department of Homeland Security’s (DHS) Immigration and Customs Enforcement (ICE) branch. Just like in the criminal law system, detainees may be given the option to post a bond and be released from detention while they await judgment.

A bond is a monetary promise that the detainee will comply with the government’s demands and show up when required if they are released from custody. A bond is not a fine; it does not put an end to the issue at hand, it merely allows the detainee to live at home rather than in government custody while his or her case is processed.

Whether a bond is available and how much it will be depends on several factors. The minimum amount ICE can set for a bond is $1,500, but it can be set at a much higher rate as well. ICE will take into consideration the length of time the detainee has lived in the United States, whether he or she has family in the United States, the detainee’s employment history and criminal record, and whether the detainee has any past immigration law violations. There is no way to predict exactly what amount ICE will set a bond at, but an experienced attorney can provide a likely range.

If the detainee thinks his or her bond is too high, he or she can appeal ICE’s decision to a judge. Once the bond is finalized, it can only be challenged if the detainee’s circumstances change. For example, if the detainee has a criminal charge pending when bond is set that is later dismissed, the detainee can ask that bond be lowered.

While it is the detainee that might be challenging the bond amount, the detainee is not usually the one paying the bond. Immigration bonds must be paid by someone who is in the country legally. This can be a relative, friend or professional bondsman; it doesn’t matter as long as the person can prove he or she is in the country legally and can provide the government with a cashier’s check in the bond amount.

If all the government’s conditions are met, the bond money is returned to the lender at the close of the case. It does not matter if the detainee wins the case and gets to stay in the United States or loses and is deported; if the detainee always appeared when required by ICE, the bond money is returned.

If you or your loved one is involved in an immigration matter requiring a bond, contact an experienced attorney today.


Monday, April 17, 2017

Alternatives to Divorce: Collaborative Law


Let's face it:
getting divorced can be an emotionally charged experience, particularly if the proceedings become contentious. One way to avoid the acrimony that can arise in a marital breakup is by pursuing an approach known a collaborative law divorce.

Collaborative Law at a Glance

There are three overarching principles of a collaborative divorce. First, this approach is designed to avoid litigation and intervention by the courts. Further, the parties must engage in a good faith exchange of information and evidence without going through a formal discovery process. Finally, the parties must agree to communicate in a manner that will advance the highest priorities of the divorce.

This approach involves the considerations typically associated with divorce, such as the division of property, spousal maintenance, child custody and child support. The divorcing spouses and their respective attorneys must agree in writing to not litigate the matter and to negotiate a settlement, however. A collaborative law divorce is unique in that it relies on an interdisciplinary approach in which other professionals, such as psychologists, child specialists, accountants and other financial experts collaborate with the attorneys.

If an agreement cannot be reached, the parties can still take the case to court, but they both must replace their attorneys.  Moreover, if either party violates the principles by hiding assets, lying about relevant information or acting in bad faith, the attorneys can withdraw from the proceeding.

In the end, this alternative approach to divorce provides an opportunity for the parties to resolve their differences fairly, honestly and expediently. Because this process avoids spending time in court hearings, trials and filing motions, it is also less costly that a traditional divorce. A collaborative law divorce can ideally protect children from the emotional harm that often arises in a parental conflict, and restore family unity and harmony. By engaging the services of an attorney with experience in collaborative law, you can find a way to respectfully end your marriage and move on with your life.


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