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Monday, January 26, 2015

Leaving a Timeshare to a Loved One

Many of us have been lucky enough to acquire timeshares for the purposes of vacationing on our time off.  Some of us would like to leave these assets to our loved ones.  If you have a time share, you might be able to leave it to your heirs in a number of different ways. 

One way of leaving your timeshare to a beneficiary after your death is to modify your will or revocable trust.  The modification should include a specific section in the document that describes the time share and makes a specific bequest to the designated heir or heirs. After your death, the executor or trustee will be the one that handles the documents needed to transfer title to your heir. If the time share is outside your state of residence and is an actual real estate interest, meaning that you have a deed giving you title to a certain number of weeks, a probate in the state where the time share is located, called ancillary probate, may be necessary. Whether ancillary probate is needed will depend upon the value of the time share and the state law.

Another way you could accomplish this goal is to execute what is called a "transfer on death" deed. However, not all states have legislation that permits this so it is imperative that you check state law or consult with an attorney in the state where the time share is located. A transfer on death deed is basically like a beneficiary designation for a piece of real estate. Your beneficiary would submit a survivorship affidavit after your death to prove that you have died. Once this document is recorded the beneficiary would become the title owner.

It is also important to investigate what documents the time share company requires in order to leave your interest to a third party. They may require that additional forms be completed so that they can bill the beneficiary for the annual maintenance fees or other charges once you have died.

If you want to do your best to ensure that your loved ones inherit your time share, you should consult with an experienced estate planning attorney today. 

 


Monday, January 12, 2015

Sponsoring a Family Member for Immigration

The Immigration and Naturalization Act allows citizens and permanent residents of the United States to sponsor family members abroad for immigration to the U.S.  The relatives must be direct relatives, and their sponsors must commit to supporting them financially.

A petitioner may apply on behalf of a son, daughter, husband, wife, parent, brother or sister.  In many cases, these relatives may bring along dependents, such as a spouse or unmarried children under 21.

What Paperwork Is Required?

The sponsor begins by filing a Form I-130, Petition for Alien Relative, which contains basic information about the identity of the sponsor and the relative seeking to immigrate.  The sponsor must also complete a Form I-864, Affidavit of Support, agreeing to be financially responsible for the relative.  

The Affidavit of Support assures the U.S. government that the immigrant will not need public assistance, such as food stamps or Medicaid.  If the immigrant ends up receiving "means-tested public benefits," the financial sponsor may be required to reimburse the government.  This affidavit remains enforceable until the immigrant becomes a U.S. citizen or has done 40 quarters (10 years) of qualifying work.

Financial Requirements

A sponsor must have an income level at or above 125% of the federal poverty level, or 100% in the case of active duty members of the military bringing in a spouse or child.  The exact numbers, which can change, are listed in form I-864p, Poverty Guidelines.

Sponsors who do not meet this requirement can submit evidence of bank accounts, stocks and bonds, real estate, or other assets.  These assets must have a cash value equal to at least five times the difference between 125% of the poverty level and the sponsor's income, or three times if the relative is a spouse or adult son or daughter.  It can simply be equal to the difference if the relative is an orphan arriving for adoption.

Other Sponsors

Financial sponsors can count the income and assets of other household members related to them by birth, marriage, or adoption, if they are listed as dependents on the sponsor's tax return or have lived with the sponsor for the last 6 months.  The sponsor and household member must complete Form I-864A, Affidavit of Support Contract Between Sponsor and Household Member.

A sponsor can also have an unrelated "joint sponsor" willing to accept financial responsibility for the immigrant.  A joint sponsor must complete a separate Affidavit of Support and meet all of its requirements independently.

Sponsoring a family member for immigration is an important matter.  You should discuss your situation with a seasoned immigration attorney to ensure that the process is handled appropriately.


Monday, January 5, 2015

Life After Bankruptcy-How to Rebuild Your Credit

If you are thinking of filing for bankruptcy, you might be deterred by the devastating effects it can have on your credit score.  It is true that filing for bankruptcy can negatively impact your credit for the ten years that it is noted on your credit report. Luckily, you are not totally helpless as you can take steps to rebuild your credit after you have received your final bankruptcy discharge.

Knowledge is power!  Meaning that in order to have control over rebuilding your credit you must be informed about the things that are affecting it.  After your bankruptcy discharge date, or when your bankruptcy is finalized, you should get copies of your credit reports.  You can request copies from all three agencies, Equifax, Experian and TransUnion, in order to have the most complete information.  You should review these reports carefully in order to identify what is negatively affecting your credit and look for any mistakes.  If you find anything that is incorrect you should contact the agency to let them know and dispute the matter if necessary.

Another step you can take to rebuild your credit is to get a new credit card.  Most likely you will not qualify for a conventional card, but you probably will not have trouble getting a secured card.  A secured card is one in which you make a deposit to collateralize your line of credit.  If you do not pay your bill, the deposit is there for the company to seize.  The amount of your deposit will determine your line of credit.  You should only make small purchases with this card and should only use a small amount of the credit line.  It is also extremely important that you make on-time payments and pay off the entire balance each month.  If you do well with a secured card, you might qualify for a retail card within a few months.  These cards should be used the same way.

It is particularly important to pay your bills on-time when you are trying to rebuild your credit after bankruptcy.  If you can pay your bills early, you should do so.  Paying on time has a huge affect on your credit score and is one of the easiest ways to re-establish good credit.  Having a cash reserve is always a good idea as it can prevent you from relying on credit cards if you ever encounter an emergency.

http://www.moneytalksnews.com/2013/05/31/how-to-rebuild-credit-after-bankruptcy/


Monday, December 29, 2014

How To Prove U.S. Citizenship for Work or Other Purposes

There are many situations in which an individual might need proof of citizenship.  All United States employers are required to verify that a newly hired employee can legally work in the U.S.  One must also prove citizenship to obtain a U.S. passport.  For someone born in the U.S., proving citizenship is usually straightforward.  For those born outside the U.S., whether to U.S. citizens or to non-citizens, there may be additional requirements.

Documents That Can Prove Citizenship

There are at least five types of documents that can help to prove citizenship.

  • Birth Certificate.  For individuals born in the U.S., a certificate from the state in which they were born is usually all that is needed.  The Bureau of Vital Statistics in each state can usually provide this.  It must be an official birth certificate, filed with the state's registrar, signed and embossed.
  • Consular Report of Birth Abroad (CRBA).  A CRBA is generally available to individuals born outside the U.S., provided that one parent was a U.S. citizen and lived in the U.S. for a required period of time.  After 1986, the minimum period is usually 5 years, during two of which the citizen parent was over age 14.  Parents must register their child's birth at the nearest consulate or Embassy when the child is born. 
  • Certificate of Citizenship.  Individuals born to a U.S. citizen abroad who do not obtain a CRBA by the age of 18 cannot use that option.  They can, however, apply to the United States Citizenship and Immigration Services (USCIS) for a Certificate of Citizenship by providing detailed information on Form N-600 about their parents and the circumstances of their birth.
  • Naturalization Certificate.  Applicants who became U.S. citizens after turning 18 through the naturalization process can obtain one of these.
  • Passport.  Issued by the U.S. Department of State, a U.S. passport is proof of citizenship.  It helps to have one of the preceding proofs of citizenship already in hand when seeking a passport.  There are, however, ways to obtain one without them.

Secondary Evidence of Citizenship

Secondary evidence of citizenship may be used to obtain a passport.  Early Public Records from the first five years of one's life -- e.g. baptismal certificate, hospital birth certificate, census record, doctor's record, early school record -- may sometimes serve as evidence of U.S. citizenship.

Applicants born abroad who do not have a CRBA or a USCIS Certification of Birth but who claim citizenship through a U.S. citizen parent can also obtain a passport.  They must submit foreign birth documents with evidence of their parents' citizenship, including all of the following:

  • Foreign birth certificate (translated to English);
  • Evidence of citizenship of the U.S. citizen parent;
  • Parents' marriage certificate; and
  • A statement of the U.S. citizen parent detailing all times and places of residence or physical presence in the U.S. and abroad before the applicant's birth.

If you need to prove your citizenship for work or other purposes, you should contact an experienced immigration attorney to help you through the process.


Monday, December 15, 2014

Considering Online Estate Planning? Think Twice

The recent proliferation of online estate planning document services has attracted many do-it-yourselfers who are lured in by what appears to be a low-cost solution. However, this focus on price over value could mean your wishes will not be carried out and, unfortunately, nobody will know there is a problem until it is too late and you are no longer around to clean up the mess.

Probate, trusts and intestate succession (when someone dies without leaving a will) are governed by a network of laws which vary from state to state, as well as federal laws pertaining to inheritance and tax issues. Each jurisdiction has its own requirements, and failure to adhere to all of them could invalidate your estate planning documents. Many online document services offer standardized legal forms for common estate planning tools including wills, trusts or powers of attorney. However, it is impossible to draft a legal document that covers all variations from one state to another, and using a form or procedure not specifically designed to comply with the laws in your jurisdiction could invalidate the entire process.

Another risk involves the process by which the documents you purchased online are executed and witnessed or notarized. These requirements vary, and if your state’s signature and witness requirements are not followed exactly at the time the will or other documents are executed, they could be found to be invalid. Of course, this finding would only be made long after you have passed, so you cannot express your wishes or revise the documents to be in compliance.

Additionally, the online document preparation process affords you absolutely no specific advice about what is best for you and your family. An estate planning attorney can help your heirs avoid probate altogether, maximize tax savings, and arrange for seamless transfer of assets through other means, including titling property in joint tenancy or establishing “pay on death” or “transfer on death” beneficiaries for certain assets, such as bank accounts, retirement accounts or vehicles. In many states, living trusts are the recommended vehicle for transferring assets, allowing the estate to avoid probate. Trusts are also advantageous in that they protect the privacy of you and your family; they are not public records, whereas documents filed with the court in a probate proceeding are publicly viewable. There are other factors to consider, as well, which can only be identified and addressed by an attorney; no online resource can flag all potential concerns and provide you with appropriate recommendations.

By implementing the correct plan now, you will save your loved ones time, frustration and potentially a great deal of money. In most cases, proper estate planning that is tailored to your specific situation can avoid probate altogether, and ensure the transfer of your property happens quickly and with a minimum amount of paperwork. If your estate is large, it may be subject to inheritance tax unless the proper estate planning measures are put in place. A qualified estate planning attorney can provide you with recommendations that will preserve as much of your estate as possible, so it can be distributed to your beneficiaries. And that’s something no website can deliver.


Monday, December 8, 2014

Will Marriage to a U.S. Citizen Make an Undocumented Immigrant Legal?

Under the laws of most states, a United States citizen can marry an undocumented immigrant.  Regardless of whether the marriage is legal, however, the marriage may not confer legality upon the undocumented spouse's immigration status.

Usually, an immigrant who marries a U.S. citizen becomes an "immediate relative" and is eligible to apply to the United States Citizenship and Immigration Service (USCIS) for a green card, i.e. lawful permanent residence.  After the marriage, the U.S. citizen spouse can file Form I-130, Petition for Alien Relative and the immigrant can file Form I-485 seeking Adjustment of Status to permanent resident.

If the spouse is here illegally, however, the couple may encounter some obstacles.  The spouse's illegal presence may mean that using Form I-485 to apply for permanent residence is not an option.  The undocumented spouse must first leave the United States and rely on  processing by a U.S. Department of State Consulate abroad before returning.  Once outside the U.S, however, he or she may be barred from returning to the U.S. for years because of laws designed to punish and deter illegal immigration.

According to Section 212 of the Immigration and Nationality Act, if the spouse was present unlawfully for more than six months but less than a year, he or she would be barred from returning to the U.S. for three years.  If present for more than a year, the spouse would be barred for ten years.

Under a recent change in immigration law, undocumented immigrants can apply for a provisional waiver of the three- or ten-year ban.  If granted, the undocumented spouse would still have to leave the U.S. and apply at a consulate for reentry, but would not barred from returning.

Undocumented spouses must also meet the requirements that any documented spouse would have to meet.  They might have to show that they are not inadmissible for other reasons, such as a criminal past, a dangerous communicable disease, or a need for public assistance.  The marriage to an undocumented immigrant, like a marriage to a legal immigrant, would also have to be genuine and not a ploy to help the immigrant spouse get citizenship.

As the consequences of remaining in the country illegally can be severe, if you or your spouse is undocumented and intends to apply for citizenship based on the marriage, you should contact an immigration attorney as soon as possible.


Monday, November 24, 2014

Deferred Action Extended to Millions

New changes to immigration law will extend protection from deportation to millions of immigrants currently in the Unites States illegally.  A recently announced program will shield immigrants who qualify from the threat of deportation, as well as issue work permits to remain living and working in the US.

 

The new program expands on the Deferred Action for Childhood Arrivals (DACA) program, which began in 2012.  Under DACA, immigrants who were brought to the U.S. illegally as children (before the age of 16) could apply for the program if they met a certain criteria.  Among the requirements to qualify for DACA, the immigrant had to arrive in the U.S. before June 15th 2007, has to have a certain level of education and no criminal record, had to be physically in the US on June 15th, 2012 (when DACA began), and had to be younger than 31 as of June 15th, 2012.  Over one million immigrants in the US qualified for DACA, and by applying for the program could obtain a legal status that protected them from being deported. 

 

Now, under the newly announced changes, that program has been expanded to anyone brought to the US as a child before January 1st, 2010.  Under the new changes, there is no age cap to DACA, so anyone older the 31 as of June 15th, 2012 can now apply.  Also, anyone brought to the US after June 15th, 2007, but before January 1st, 2010 can apply as well.  This opens up the DACA program to hundreds of thousands of immigrants who otherwise didn’t qualify under the original criteria. 

 

Furthermore, this deferred action program also applies to millions more.  If you have been in the US illegally for more than five years, and have a child who is a U.S. citizen or legal permanent resident, you can now apply for a legal status and protection from deportation.  Those who are accepted must first pay a fine and pass a background check, and then will be issued a work permit and could be eligible for a driver’s license.  The program provides a legal status for three years once you are accepted, and can be renewed after the three years are up. 

 

This program does not provide a pathway to citizenship and it is not like having a green card.  Rather, it is deferred action, which means the government acknowledges that you are here illegally, but assures you that you will not be deported, and provides you with a work permit.  And it is not permanent – it only grants legal status for three year periods.  But during those periods, the threat of deportation will be removed, allowing qualifying immigrants to live and work openly in the US.

 

Details and a timetable regarding the application process have yet to be released, but it is expected to be similar to the DACA process.  Immigration processes can be very difficult to navigate without the help of an attorney.  If you are one of the millions of immigrants that could benefit from this new program, contact our office today for a free consultation to determine if this program applies to you.


Tuesday, November 18, 2014

401(k) Loans and Bankruptcy

Consumers considering bankruptcy usually do so only as a last resort. If you are in this situation, you have likely exhausted all other options to keep yourself financially afloat, from selling off possessions to cashing out or borrowing against retirement accounts. If you have borrowed – or are considering borrowing – from your 401(k), 403(b), 457 or other qualified retirement plan, keep in mind that these loan repayments receive very different treatment, depending on whether you are filing for Chapter 7 or Chapter 13 bankruptcy, and can negatively impact your ability to qualify for a Chapter 7 discharge. If bankruptcy may be in your future, you should consult with an attorney before borrowing against any retirement accounts to avoid unintended consequences.

Most who borrow against their 401(k) accounts do so because they need access to immediate cash and intend to repay the loan in the short term in order to preserve the funds for retirement and avoid the income tax ramifications of an early distribution. Unfortunately, bankruptcy trustees don’t see it the same way. In the trustees’ view, allocations for repayment of 401(k) loans result in an unnecessary reduction in disposable income that you would otherwise use to repay your creditors under a Chapter 13 plan.

The primary difference in how these retirement account loans are treated in Chapter 7 versus Chapter 13 bankruptcy is in the “means test.” To qualify for a Chapter 7 bankruptcy, you must meet one of two conditions: 1) your household income is below the average income for your family size in your state; or 2) if your household income is greater than the average, but you pass the means test. In Chapter 7, the means test is used to help the court determine whether the debtor has enough income to fund a repayment plan under Chapter 13, rather than seeking a discharge under Chapter 7.

The means test establishes a budget using “reasonable” figures as determined by the IRS. If your actual expense exceeds the “reasonable” figure, any excess is deemed to be disposable income available to repay unsecured creditors. Unfortunately for 401(k) borrowers, these loan repayments cannot be included in their Chapter 7 means test budget. As a result, under the means test calculation, any amount you are repaying to your 401(k) loan is actually deemed to be “available” to repay creditors under a Chapter 13 repayment plan. The trustees are concerned with making sure your creditors are paid, if at all possible, and are not concerned as to whether your failure to repay your 401(k) loan will cause you to owe income taxes or penalties.

Under a Chapter 13 bankruptcy means test, however, 401(k) loan repayments are included as an allowable expense. The Chapter 13 means test is used to determine how much money should be paid to unsecured creditors as part of your repayment plan. By including the loan repayments as an expense under the Chapter 13 means test, the amount of disposable income leftover to repay your unsecured creditors is reduced.

As you can see, with so many nuances and distinctions between the bankruptcy remedies available, it is vitally important that you share with your attorney all available information about every asset or debt – even when you just owe the money to “yourself”.  


Wednesday, November 5, 2014

Role of the Successor Trustee

When creating a trust, it is common practice that the person doing the estate planning will name themselves as trustee and will appoint a successor trustee to handle matters once they pass on.  If you have been named successor trustee for a person that has died, it is important that you hire a wills, trusts and estates attorney to assist you in carrying out your duties. Although the attorney that originally created the estate plan would most likely be more familiar with the situation, you are not legally required to hire that same attorney. You can hire any attorney that you please in order to determine what your obligations are.

 If the decedent had a will it is common that the successor trustee is also named as the executor.  Although the role of executor is similar to that of trustee, there are technical differences. If there was a will, you should consult with an attorney to determine if a court probate process will be required to administer the estate. If all assets were titled in the trust prior to the person’s death, or passed by beneficiary designation, such as in the case of life insurance and retirement plan assets (such as 401ks, IRAs, etc.), then a court probate may not be needed. However, if there were accounts or real estate in the person’s name alone that were not covered by the trust, a court probate may be necessary.

During the probate process, all of the deceased person’s assets must be collected and accounted for. This includes all bank accounts, stocks, bonds, mutual funds, investment accounts, retirement assets, life insurance, cars, personal belongings and real estate. All of these assets should be valued and listed on one or more inventories. Depending upon the value of the assets, an estate tax return may be needed. You should be aware of any final expenses, the person’s final income tax returns, and any creditors. Although this process is lengthy, once all of the appropriate steps are taken, the assets will be distributed and the estate will come to a close. 

If you have been named a successor trustee, an experienced estate planning attorney can help you through this process and make sure you carry out your legal duties as required.  Contact us for a consultation today.


Thursday, October 30, 2014

When will I receive my inheritance?

If you’ve been named a beneficiary in a loved one’s estate plan, you’ve likely wondered how long it will take to receive your share of the inheritance after his or her passing.  Unfortunately, there’s no hard or and fast rule that allows an estate planning attorney to answer this question. The length of time it takes to distribute assets in an estate can vary widely depending upon the particular situation.

Some of the factors that will be involved in determining how long it takes to fully administer an estate include whether the estate must be probated with the court, whether assets are difficult to value, whether the decedent had an ownership interest in real estate located in a state other than the state they resided in, whether your state has a state estate (or inheritance) tax, whether the estate must file a federal estate tax return, whether there are a number of creditors that must be dealt with, and of course, whether there are any disputes about the will or trust and if there may be disagreements among the beneficiaries about how things are being handled by the executor or trustee.

Before the distribution of assets to beneficiaries, the executor and trustee must also make certain to identify any creditors because they have an obligation to pay any legally enforceable debts of the decedent with those assets. If there must be a court filed probate action there may be certain waiting periods, or creditor periods, prescribed by state law that may delay things as well and which are out of the control of the executor of the estate.

In some cases, the executor or trustee may make a partial distribution to the beneficiaries during the pending administration but still hold back sufficient assets to cover any income or estate taxes and other administrative fees. That way the beneficiaries can get some benefit but the executor is assured there are assets still in his or her control to pay those final taxes and expenses. Then, once those are fully paid, a final distribution can be made. It is not unusual for the entire process to take 9 months to 18 months (sometime more) to fully complete.

If you’ve been named a beneficiary and are dealing with a trustee or executor who is not properly handling the estate and you have yet to receive your inheritance, you should contact a qualified estate planning attorney for knowledgeable legal counsel.


Wednesday, October 15, 2014

What’s really covered on your homeowners insurance policy?

 A solid homeowners insurance policy can provide peace of mind about securing one of your most valuable assets. Unfortunately, many homeowners don’t fully grasp what exactly is covered under that policy, and most importantly, what isn’t.


Homeowners insurance policies generally cover your home itself and other physical structures on the property. Your personal belongings also fall under most policies, along with property damage and bodily injury sustained by you or others on your property. You, your spouse and children, and any guests, tenants, or employees in your home can all be covered under this policy, just be sure to check when you purchase the policy.

Sounds like they’ve got you covered, right? Not so fast; there are a number of possible perils that are often not covered under basic homeowners insurance. Knowing what falls into this category can save you a lot of time and trauma if you ever experience one of these situations in the future.

The two main exceptions are earthquake and flood damage. The impacts of these natural disasters would not be covered by your standard policy. Earthquake insurance and coverage for some types of water damage can often be purchased as an addendum, but flood insurance must be purchased on its own as a separate policy.

Further, standard policies don’t cover damages to your building as a result of your failure to perform regular maintenance on your property. Insect, bird, or rodent damage, rust, mold, and any kind of wear and tear on your property is typically not covered. Neither are hidden defects, mechanical breakdowns, or food spoilage in the event of a power outage. Though there is no current concern for this, damage caused by war or nuclear exposure is also not covered.

Some things have minimal coverage built into your standard policy, for which you can purchase additional coverage as an addendum. Valuable property, including firearms, jewelry, silverware, etc., is usually covered by a standard $1,000. Insurance for replacement value of lost or damaged property is usually determined on an itemized basis that takes depreciation into account. You can expand this coverage by paying to remove depreciation from consideration.  Liability coverage can be increased if desired as well.

These should serve as general guidelines for your homeowners insurance, but be sure to consider the details on your specific policy.  It’s important to consider exactly what you have covered in order to determine what additional types of insurance you may want to purchase.

 


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