Can I Freely Use the Internet to Create Legal Forms? The Unauthorized Practice of Law and Other Pitfalls
By Daniela | February 15, 2010
The internet is the greatest invention yet. You can find anything on the internet, merely if you have the patience to look for it. Often I am asked by my clients if they should use forms and other documents provided for free on the Internet to create legal forms, such as wills, trusts, powers of attorney, basic contracts and more.
An attorney can’t tell you whether you should or should not use what is readily available on the internet, but as a consumer, you should always use caution and make sure you fully understand what you are doing.
Creating Legal Forms to Help a Friend Considered the Unauthorized Practice of Law
A woman asked her friend to help her prepare a will. The friend found a will in the internet, and filled in the blanks provided. The friend was named as executor of the estate. The woman subsequently died and her will was admitted to probate. In Franklin v. Chavis, 640 S.E.2d 873 (S.C. 2007), the court found that the testatrix was not involved in drafting the document and did not review it. Further, the court held that the friend had acted as more than a scrivener and had engaged in the unauthorized practice of law. The friend also drafted a power of attorney for the testatrix that did not involve filling in blanks in a form and this, too, was the unauthorized practice of law. The court also determined that the friend could not receive compensation for acting as the executor.
In addition to the loss of compensation to the executor, this person was subject to legal action for the unauthorized practice of law. The cautionary tale here is to remember that sometimes helping a friend out, and providing them with legally enforceable agreements, opens the door to future legal action. You should always consult with a licensed attorney prior to creating, filling out, or drafting any legal documents.
Do you want to create a will? If so, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: Estate Planning | No Comments »
SECOND MARRIAGE? ARE YOU A POTENTIALLY FORGOTTEN SPOUSE?
By Daniela | January 15, 2010
For many of us that are into our second or subsequent marriage, questions of rights to property are often complicated and do not get resolved prior to one spouse’s passing, which can make for a very complicated estate administration. Often, spouses come into these partnerships with property, separate assets, and often children. This situation becomes even more complicated if there are children born to this new union. As always, it is important to have a frank discussion on all aspects of estate planning early on, so that neither spouse feels that they are “forgotten” later in life.
Couples can consider entering into pre or post nuptial agreements, which will spell out the reasons for the particular division of property agreed to. Remember that it is important that both sides fully disclose assets and are independently represented by counsel so if there is a challenge to these agreements later, their strength can be ensured. The Code section also requires a seven-day waiting period prior to marriage if a spouse waived their right to a share of the estate in the other spouse’s estate. Remember that if you do not provide for all contingencies, the law will.
SHARES FOR FORGOTTEN SPOUSES
Section 21610 of the California Probate Code protects a spouse who is not mentioned in estate planning documents executed prior to the marriage. The statute gives the omitted spouse a statutory share of the estate, but not if (1) the decedent’s estate plan specifically disinherits the spouse, (2) the spouse receives assets outside the estate, or (3) the spouse executes a valid waiver.
So, what this means is that after a marriage, it is imperative to speak with your estate planning professional to ensure that your future desires are properly spelled out in those important documents. The Code specifically provides certain rules for waiving rights that must be followed to the letter. Consult with your estate planning professional to ensure you do not have a forgotten spouse problem in the future.
Furthermore, all life changing events, such as marriage, childbirth, divorce, or death of a loved one–should trigger a re-examination of a person’s estate plan, if not an amendment of key documents. Not amending the documents in a timely manner may indeed ensure a protracted and expensive litigation among remaining family members.
If you require a review and amendment of your estate planning documents, please call The Law Offices of Daniela Lungu for your complimentary consultation at (925) 558-2710 or by email at info@lungulaw.com.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: Estate Planning, Probate, Trusts, Wills | No Comments »
Home Loan Modification – Is a Trial Period Required?
By Daniela | December 15, 2009
There are a number of Home Affordable Modification Programs available for those of you that are having a hard time conforming to your loan terms during these difficult economic times. Before you explore your options, there are a number of issues that have to be considered, including terms and trial periods.
Is a Trial Period Required to Get a Modification?
The general answer to this is yes, particularly If your mortgage modification is part of a government sponsored program. For example, Fannie Mae’s guidelines require a three month trial period if your loan is in default when the trial period starts, or four months if your loan is current but default is imminent when the trial period starts. Alternately, Freddie Mac requires a three month trial period.
What is the Purpose of the Trial Period?
The purpose of the trial period is to test a customer’s commitment to make the modified loan payment because the loan servicer does not want to complete the loan modification requested if it does not truly help your financial situation and if a future default is probable. This trial period also permits you to make the modified payment while the lender completes the documentation.
Will a Trial Period Stop or Postpone a Foreclosure?
Generally loan servicers will not pursue foreclosure action during the trial period, but that is contingent on you complying with all the requirements of that trial period. State laws dictate whether the foreclosure process can be delayed during the trial period, and how soon after the trial period ends it can resume. You should check with your local state laws to be sure of your protection.
Are there Additional Requirements During the Trial Period Other than the Payment?
The primary requirement is that you make the required payment on time during the trial period. However, the lender might require you to submit other documentation or proof of financial fitness, and also may require you to complete their loan modification paperwork during this trial period.
Once Begun, Can the Terms Change During the Trial Period?
Depending on the information collected during the trial period, and if there are changes to the financial circumstances of the borrower, the terms might change. It is important to provide accurate information to the lender during this process.
How Will my Credit Rating be Affected During the Trial Period?
The answer to this depends on the status of the loan before entering the trial period, and if you are participating in a government sponsored program such as Fannie Mae or Freddie Mac. You should speak with your lender about your particular situation.
Is the Loan Servicer Required to Complete the Modification if I Meet the Requirements?
There is a financial incentive for lenders to complete the modification if they are part of the Making Home Affordable Program. You should check with your lender to see if they are participating in a government sponsored program.
What Happens if I Miss a Payment?
If you miss a payment during the trial period, your eligibility to participate in the program might end. You need to check with your lender to see what rules exist for late or missed payments, or if there is a right to pay off the remaining balance due during the trial period to ensure continued eligibility.
Bottom line is that you should speak to a trusted mortgage broker or lender to find out about your individual circumstances, and read the information carefully to ensure you understand the terms of your particular loan modification program. For referrals to trusted lenders, please call the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: My Blog, Uncategorized | No Comments »
Marital Communication in Estate Planning
By Daniela | November 15, 2009
Often couples divvy up financial responsibilities in their marriage depending on strengths, or simply a pattern of behavior. If the husband for example, has always handled the couple’s finances, that will continue in perpetuity. The issue then becomes..what happens to the wife when the husband dies? Will she have knowledge and access to all financial accounts? Will she have an understanding of the overall financial picture and what she needs to do to protect her future? This of course is more complicated if there are minor children in the marriage at that first death.
A study done by Fidelity Investments shows that about 45 percent of couples work jointly in making day-to-day financial decisions such as budgeting and only 38 percent discuss retirement, savings and investments. This lack of communication guarantees that the surviving spouse will have financial problems and confusion when the first spouse passes.
During my initial sessions with couples that are considering creating an estate plan, I encourage frank and complete dialogue of these issues between spouses. Even if one spouse is more financially savvy than the other, it makes financial and economic sense that each spouse know where the assets are held, passwords to the accounts, has access to paper financial records and statements, etc.
There are many reasons for having this discussion with your spouse and working together so that each person understands the full financial picture. Health care, future retirement, savings, care for children, and more provide the basis for this discussion.
Before you have that all important discussion, use this checklist as a guide to gathering the information needed:
· Identify all cash, savings, money market, certificates of deposit and other liquid assets
· Identify all retirement accounts including 401(k), 403(b), SEP and other IRA accounts
· List all real property investments worldwide and have a copy of the deed handy
· List all other assets such as vehicles, promissory notes, business interests
· List all other personal property, such as jewelry, art collections, etc.
Make sure that you have a copy of the most recent statement for each titled assets. Once you have assembled the documents, make sure both of you understand the ownership and titling of each asset and how it might pass after death, either by will, trust or joint ownership. You might also want to involve a financial advisor, CPA, or estate planning attorney in this process.
Should you require a questionnaire to assist in gathering all the information required to complete this project, please send your request to info@lungulaw.com .
If you have any questions about the information provided or recommendations, please call the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: Estate Planning | No Comments »
Obligation of Trustees Under Trust Documents and Law
By Daniela | October 15, 2009
A. Trust Distribution Issues
Undoubtedly, one of the trustee’s most important duties is to make distributions to beneficiaries in accordance with the settlor’s wishes as expressed in the trust instrument. This will often require the prudent exercise of discretion to provide income and principal payments to one or more beneficiaries, in accordance with the trust instrument. The trustee must be loyal and fair to all beneficiaries, both current and remainder. In addition, the trustee may have to take into account (but not necessarily be controlled by) the income tax situation of each beneficiary to assure that the overall income tax liabilities for the trust and the various beneficiaries will be minimized to the extent consistent with the settlor’s objectives. If the trustee does not follow the terms of the trust instrument, or provisions of the law, then there is risk
1. Sanctions for Improper Distributions
If the trustee makes an improper payment, even if it was an honest mistake, there is liability. Therefore the beneficiary may successfully sue the trustee for the improper distribution, depending on the circumstances surrounding that distribution. Trustees are duty bound to treat beneficiaries fairly, make proper distributions, provide accountings, etc. If any of these duties are violated, the trustee is in violation of the law, and therefore liable for damages, which might include restoring the financial value of the trust. What this means is that the trustee has to be careful that any distributions proposed are consistent with the terms of the trust and also the law before being made.
2. Withholding or Postponing Distributions
The UTC and the Restatement prohibits a trustee from withholding distributions to which a creditor or other transferee of a beneficiary’s interest is entitled. Before withholding distributions from the trust, trustees should ensure that they have a legally defensible reason for doing so.
b. Preventing Distributions For Asset Protection Purposes.
When creditor protection is important, such as in cases where the trust instrument has a valid and enforceable spendthrift provision, the trust itself would provide the trustee with the legal basis for withholding otherwise mandatory distributions, if the trustee, in the exercise of the trustee’s sole and absolute discretion, should deem the distributions to be adverse to the beneficiary’s interest because there exists a creditor problem at the time that the distribution would otherwise be made. The beneficiary’s interest is reinstated after the disqualifying event has passed or has been resolved. This suspension protects against creditors’ claims, provided that the trustee’s power to suspend distributions is absolute and not just a condition limiting the time or manner of payment. The trustee should ensure that the spendthrift provision gives them the appropriate level of control over trust assets before making such an important decision.
C. Appropriate Screening by the Prospective Trustee
Each individual or corporate fiduciary that is considering an offer to be a trustee under a particular trust should fully assess the situation before agreeing to serve. Careful review of the trust documents might highlight potential pitfalls that should be discussed with the settlors prior to that agreement being made. Some of the things to look for can include: ambiguities, inconsistencies, potential tax problems, and potential conflicts of interest, as well as trustee fees. Further, the potential trustee should learn as much as possible about the beneficiaries of the trust, including their family history and familial relationships. Doing the appropriate level of due diligence might avoid potential future problems.
A potential future trustee and the settlor can and should seek the advice of their professional counselors in order to consider and address all these issues, prior to proceeding with legally enforceable trusts.
Do you want to create a trust? Are you considering being a trustee or successor trustee? If so, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com for a complimentary assessment of your legal needs.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: Estate Planning, Trusts | 5 Comments »
Avoiding Probate Litigation
By Daniela | September 15, 2009
I have repeatedly stated to my clients that one of the functions of estate planning is the avoidance of probate related matters. Not all probate actions are bad or ill advised, and in the absence of complete planning, might be the best option available. Certain matters handled by probate courts, such as admitting wills to probate and appointing executors, are routine and not contested. Routine probate matters can be handled very efficiently.
Here is a list of some of the factors (in no particular order) involved in probate litigation, grouped by categories:
“Contested matters” handled by probate courts (aka “probate court litigation”) is a broad term that includes a variety of situations, including, but not limited to,
• will contests (a challenge to the validity of a will);
• will and trust construction suits (a request that the court make a determination regarding the legal meaning or effect of particular wording used in a will or trust);
• guardianship contests (a fight over (1) whether a guardian should be appointed for a particular individual who allegedly has lost his mental capacity (and did not do any advance planning, such as executing powers of attorney), and (2) if so, who should be appointed as the guardian to make medical decisions and handle financial matters for that mentally incapacitated person);
• trust modification and trust reformation suits (a proceeding that requests the court to change (or “fix”) the terms of a trust because something is wrong with the way the trust is worded);
• trust termination suits (a legal action brought to terminate a trust because the purpose of the trust has been fulfilled or can no longer be fulfilled); and
• breach of fiduciary duty actions (suits by beneficiaries against an executor, trustee, guardian, or agent alleging that the fiduciary failed to act in accordance with the law and/ or the instrument appointing her and thereby caused damage to the beneficiaries).
There are several high risk factors for probate litigation such as sibling rivalry and multiple marriage situations, the so-called “second marriage” situation. Many people marry for a second (or even third or fourth) time without signing a premarital agreement (”Pre-Nup”) before the wedding. The Pre-Nup is one of the best ways to avoid probate litigation on death. It can also avoid a very expensive “forensic accounting” on the death of the first spouse. Many people mistakenly believe they own certain assets as their separate property (perhaps simply because the asset was in existence before the marriage and/ or is titled solely in their name) when, in fact, their property may have become community or marital property, in whole or in part, during the marriage. The classic probate court litigation case: children of the first marriage versus the spouse of the second marriage.
Some Factors That Could Lead to Probate Litigation
Creating a “Nonstandard” Estate Plan
Some examples included estate plans that (1) “cut out” a child, (2) treat children differently, (3) create overly detailed trusts attempting to “control from the grave,” and (4) make gifts to mistresses.
The Second Marriage Situation
As previously noted, if the Pre-Nup or Post-Nup does not clearly define the ownership of assets by couples who were married previously, the potential for litigation on the death of a spouse is much greater (especially if there are children from the prior marriage). If assets are not cleanly divided between the surviving spouse and the children from the prior marriage, problems can arise.
Not Appointing the Right Fiduciary
Serving as the executor of an estate, the trustee of a trust, or an agent under a financial power of attorney requires a huge commitment of time and effort and absolute honesty. When making your choice consider all factors, including: 1) their communication skills, 2) ability to follow legal instructions from adviser, 2) timeliness in getting work done, 3) trustworthiness, 4) financial skill set, 5) susceptibility to bad influence, 6) general attitude, 7) level of common sense, and 
ability to be organized.
Ill-conceived or “Faulty” Planning
There are so many examples of “bad estate planning” that it is impossible to list all of them here. Some are the result of incompetence and/ or lack of experience on the part of the attorney who prepared the plan. Others are the result of individuals trying to do things themselves that are not well thought-out. Some examples include (1) a person writing his or her own will or codicil (unless the instrument is a handwritten codicil that disposes only of personal effects); (2) having a customized estate plan not drafted by an attorney with sufficient expertise to draft non standard provisions, or 3) appointing one child as the trustee over another child’s trust.
Other Difficult Situations
Other situations that are always more difficult to plan for and that increase the need for solid planning to avoid probate litigation (and other problems) include (1) heterosexuals living together who have not executed a “non-marital cohabitation agreement” to avoid a “common law spouse” lawsuit on death; (2) gay and lesbian couples who do not do “special additional planning to place their partners in a secure position of control (to override state law priority statutes) and to arrange for the unassailable transfer of assets to their partners on death (tax planning also can be harder because the estate tax marital deduction is not available to gay and lesbian couples); (3) making unreported “taxable gifts during life (a taxable gift is a gift that is more than $13,000 per person per year (the current annual exclusion amount)); (4) making gifts during life to just one child and not to all children in equal amounts; (5) failing to tell the estate planning attorney about an illegitimate child or child from a prior marriage; and (6) failing to organize the client’s financial and other important information to enable the executor of the estate to do a good job.
Failure to Follow Up
This category includes the client (1) failing to review the estate plan on a periodic basis (estate plans become outdated very quickly); (2) failing to do the necessary “homework incident to the estate plan (such as re-titling accounts and completing beneficiary designation forms as instructed so that non-probate assets are coordinated with the client’s estate plan in his will or trust); (3) failing to change the will, account titles, and beneficiary designations after marriage or divorce; and (4) failing to re-title all the assets in the name of the living trust before death if the intention is to avoid probate completely.
How to Avoid Probate Litigation
Do not do anything that could cause serious legal consequences without first discussing them with legal or other advisors. Check with your advisors regularly to ensure you are on the correct path and be prepared to discuss every issue and concern. Follow through on necessary “homework” such as account titling and beneficiary designation matters (see above). Plan ahead whenever possible. Make sure you make the correct choice of fiduciaries.
In discussions with family members, you should explain the reasons for the plan being implemented, although you will need to be careful how you state your reasons.
Not all probate litigation can be prevented, of course, but a large portion of probate litigation can be prevented by good planning.
For a complimentary consultation of your particular legal needs and how to avoid probate in your estate, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.
Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.
About Daniela Lungu, Attorney at Law
Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.
Topics: Estate Planning, Probate | 4 Comments »
Welcome!
By Daniela | March 31, 2008
Welcome to the Blog of the Law Offices of Daniela Lungu
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