Blog - Vacaville Attorney

Revocable Transfer on Death Deeds

A Revocable Transfer on Death Deeds, also known as a “TOD” or “beneficiary deed” is a simple way to leave your residence to beneficiaries without the need for probate. A free form for this deed can be found here: https://saclaw.org/wp-content/uploads/sbs-tod-deed.pdf

Because there are potential pitfalls with this type of deed, this article is not intended as a recommendation of Revocable Transfer on Death Deeds. We provide this information as education on this option.

What is a Revocable Transfer on Death Deed?

The current owner during their lifetime names beneficiaries. The deed has no effect until the death of the transferor, so the deed can be changed, the property can be sold or refinances, etc. When you die, the property does not need to go through probate, but your heirs will need to file or record certain documents.

What type of properties are eligible for Revocable Transfer on Death Deed?

A Revocable Transfer on Death Deed can only be used with a property with one to four residential dwelling or condominium units or a single family residence with less than 40 acres of land.

What are the advantages of a Revocable Transfer on Death Deed?

You can potentially avoid probate, provided that it was done correctly and there were no unexpected family changes. It is a simple process. It can be revoked during the lifetime of the transferor if you change your mind. There are some tax advantages.

Have there been recent changes to the laws relating to Revocable Transfer on Death Deeds?

A recent Bill which you can access in its entirety here, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB315, addressed some of the problems with Revocable Transfer on Death Deeds.

It states: This bill would revise and recast those provisions, and instead make them operative until January 1, 2032. Among other things, the bill would redefine and newly define terms for these purposes, including, but not limited to, “beneficiary,” “real property,” “subscribing witness,” and “unsecured debts.” The bill would make changes to how and when a revocable TOD deed becomes effective or revoked, and would instead require the deed or revocation to be signed by the transferor, acknowledged by the transferor before a notary public, dated, and signed by 2 witnesses, as specified. The bill would add additional provisions to the statutory forms for executing and revoking a revocable TOD deed to conform to these changes, and would add additional information to the statutory “common questions” pages. The bill would require, after the death of a transferor, that the beneficiary serve notice on the transferor’s heirs, and would create a new statutory notice form for these purposes.

Where can I find out more information on how to properly execute a Revocable Transfer on Death Deed or discover whether there is a better mechanism to transfer my property to heirs?

At the Law Office of David Knecht we have extensive experience with estate planning in California. We can evaluate your assets and give you an opinion on whether a Revocable Transfer on Death Deed is right for you and your family. We will listen to your concerns and customize an estate plan that is advantageous to you and your loved ones. Contact us at 707-451-4502 for more information.

Filed Under: California Estate Plan, Vacaville Attorney, Vacaville Lawyer

5 Tips for Winning a Divorce Mediation in California

The American Bar Association published an article with tips for a successful mediation, with content inspired by the best-selling book, “Getting to Yes.” This article will summarize these mediation best practices, and the full story can be found here:

Separate the person from the problem.

Both parties almost always have anger, resentment, and distrust of their ex, but for the purpose of negotiation those negative emotions – while often very justified—are not productive to getting what you want out of the negotiation. Your ex’s personality is not going to change in the divorce. However, if you can identify specific problems to be solved, then those may be negotiable.

Develop options for mutual gain.

The more options that are presented, the more likely it is that both parties can find an option that is palatable to everyone. Look for options that are win-win for both people so that instead of a combat position, you are taking a problem-solving tact.

Focus on interests, not positions.

With a position approach, you have a winner and a loser. With an interest-centered approach, you try to understand the interests of the other party and the goal is to achieve solutions not winners and losers. When you take time to really listen to what makes the other side tick, then you will understand how to properly incentivize the behavior you want to achieve.

Find objective material to lead to common understanding

Both parties can respond to objective material. For example, if two parties value property or assets differently and neither will budge, then an assessor could be hired to provide data or internet research could be done to get objective information.

Focus on the best alternative to a focused agreement “BATNA.”

If you are trying to get everything you want in a negotiation, you are likely to fail. If you identify what you really need and prioritize, then you are more likely to achieve those realistic goals through settlement.

Consult with the Law Office of David Knecht

At the Law Office of David Knecht we have extensive experience with family law in California and can help you successfully negotiate a California divorce. Contact us at 707-451-4502 for more information.

Filed Under: General

New Higher Estate and Gift Tax Limits for 2022

A new year brings with it new federal tax exemption numbers. For 2022 deaths, the estate and gift tax jumps from $11.7 million in 2021 for an individual to $12.06 million per individual. The gift tax annual exclusion climbs from $15,000 from previous years to $16,000 for 2022. This article will summarize changes in federal gift and estate tax law with content from an article from Forbes.com, which can be found here:

What do these new numbers mean?

These numbers mean that wealthy tax payers can transfer more to heirs during their lifetime and upon death.

How are gifts used as a strategy for transferring wealth?

One strategy that is commonly used is to transfer gifts to heirs every year to the max allowable, which will be $16,000 per individual in 2022. Spouses can each make a $16,000 gift, which doubles the impact.

Is there a limit on how many can receive gifts from you?

You can transfer $16,000 to as many individuals as you like, so children, grandchildren, etc. can each receive that amount without a federal tax consequence to the giver.

What about appreciation with the gifts?

Another advantage of transferring wealth through gifts during your lifetime is that the appreciation that would result from any investments that those gifts were used to purchase would go to the new generation and therefore not be in your taxable estate.

How are tuition payments and medical expenses a wealth transfer strategy ?

You can make unlimited direct payments for medical expenses or tuition for an many individuals as you like. These can add up and be very powerful to help the next generation create a better situation.

Where can I find an attorney who can help me with estate planning in California?

An experienced attorney can help you make advantageous estate planning decisions for the benefit of you and your loved ones. At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning in California and can help you create the right plan for you.

Filed Under: Taxes

5 Divorce “Don’ts” for a California Divorce

If you are considering divorce, you may have reached out to friends or family to get their advice. Many people may have shared with you the do’s and don’ts to help you navigate the divorce process effectively. This article will add to the advice, with a cautionary list of things not to do.

Don’t necessarily keep the house.

A home can have a lot of sentimental value, but when evaluating it in the divorce, you need to look at it as simply an asset or a liability. Determine whether you have sufficient resources not just for the mortgage and utilities but for any maintenance. Consider whether it meets your needs now. Evaluate with logic not emotion.

Don’t ignore potential tax consequences or retirement accounts.

Make sure you understand how your taxes will be impacted going forward and how any deductions or stimulus for the children will factor in. Talk to an accountant or lawyer to plan taxes ahead of time so that you aren’t caught by surprise. Additionally, make a plan for splitting the retirement so that you aren’t left without those resources later on.

Don’t forget about health insurance.

If you or your children have been covered by your ex’s policy, you need to determine how health insurance will work going forward.

Don’t spend lavishly out of spite.

You may be receiving support pending the divorce, but generally you should spend money the same way that you did during the marriage. Spending lavishly out of spite could interfere with the asset division.

Don’t roll over all of an ex’s retirement account into an IRA if you need some of the money for divorce expenses.

If your divorce settlement allocates assets under a qualified domestic relations order (QDRO), then any withdrawal a QDRO alternate payee takes from a 401(k) or 403(b) is exempt from the 10% early withdrawal penalty—even if you’re under age 59½. The bottom line is if you think you’ll need money now, you might want to make a withdrawl before the rollover. But, do this with caution, because you will owe income tax on the amounts withdrawn.

Consult with Experienced Divorce Attorneys at the Law Office of David Knecht

Filed Under: General

Where You Should Keep Your Estate Planning Documents

A recent business story in the LA Times online posed an interesting question: Where should you keep your estate planning documents? This article will answer this and other basic estate planning questions.

1. What is the downside of putting your estate planning documents in a safe deposit box at the bank?

People sometimes think they should keep their original estate planning documents in a safe deposit box. However, when the bank is notified that you have died they will often seal the box until your executor can prove they have the legal right to access the contents. If the documentation needed is in the box, then that can create a sticky situation.

2. What is a better place to store your estate planning documents?

One option is to keep the documents in your own safe, but that is not the best solution. If you fear someone with bad motives could access your safe, then that is not a great option. For most people, the best option is to leave the original with your attorney and provide copies to your executor and other trusted people. You can give them your attorney’s contact information and have peace of mind knowing that the documents are in a safe place.

3. What estate planning documents should I store with my attorney?

The following is a list of estate planning documents that you will want to have stored safely:

A Living Trust
Powers of Attorney for Property and Healthcare
HIPAA Authorization
A Living Will/Advance Healthcare Directive
A Pour-Over Will
Deeds to Your Properties
Beneficiary Designations
Guardian Nominations for Minor Children

Where can I find an attorney who can help me with estate planning in California?

Filed Under: California Estate Plan

What is a Holographic Will and are Holographic Wills Legal in California?

This article will explain some basic principles relating to holographic wills in California. What is a holographic will?

The definition of a holographic will found at is a holographic will is a will that is handwritten, dated and signed by the person writing the will. See https://www.courts.ca.gov/documents/Common_Words_Probate_Cases.pdf

Where can I find the law relating to holographic wills in California?

CA Prob Code § 6111 (2017) contains the black letter law relating to holographic wills. It can be found here: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=6111.&lawCode=PROB#:~:text=%29%206111.%20%28a%29%20A%20will%20that%20does%20not,as%20to%20the%20date%20of%20its%20execution%20and%3A

What does Section 6111 say?

(a) A will that does not comply with Section 6110 is valid as a holographic will, whether or not witnessed, if the signature and the material provisions are in the handwriting of the testator.

(b) If a holographic will does not contain a statement as to the date of its execution and:

(1) If the omission results in doubt as to whether its provisions or the inconsistent provisions of another will are controlling, the holographic will is invalid to the extent of the inconsistency unless the time of its execution is established to be after the date of execution of the other will.

(2) If it is established that the testator lacked testamentary capacity at any time during which the will might have been executed, the will is invalid unless it is established that it was executed at a time when the testator had testamentary capacity.

(c) Any statement of testamentary intent contained in a holographic will may be set forth either in the testator’s own handwriting or as part of a commercially printed form will.

What kind of attorney can help me with a loved one’s holographic will?

An attorney who has experience in estate planning law can help you with the probate process and understanding whether a holographic will is enforceable.

At the Law Office of David Knecht, at 707-451-4502, we have extensive experience with estate planning in California and can answer your questions relating to a holographic will.

Filed Under: General

Dividing Stock Options in a California Divorce

Stock options that are granted subject to employment can present a challenge when dividing assets in a divorce. This can occur because the options may not have vested yet or the employment upon which the options were based may have occurred before the marriage as well as during the marriage. This article will provide an overview of the logic relating to analyzing the value of the stocks and to whom that value should accrue. However, this is a complex area of the law, and we recommend that you consult with attorneys who are familiar with the valuation and division of stock options. At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in divorce in California and can help you with complex questions relating to valuation and division of assets in a California divorce.

Is the stock option community property or separate property?

Establishing whether a stock option is community or separate property is important. Many facts can play into this analysis such as the date the options were issued, whether they have vested, and the requirements that were met or will be met to justify the stock award.

What is the date of separation?

The date of separation is important in assessing stock options. The date of separation is defined as the date that a complete and final break in the marriage relationship has occurred, evidence by both the following: 1) the spouse has expressed to the other spouse his or her intent to end the marriage, and 2) the conduct of the spouse is consistent with his or her intent to end the marriage. https://codes.findlaw.com/ca/family-code/fam-sect-70.html

Are the stock options vested or unvested?

A vested option can be exercised by an employee. An unvested option can be exercised at some point in the future usually based on certain requirements (such as remaining employed). An option that has vested during the marriage is more clear cut, but that doesn’t mean that an option that hasn’t vested before the date of separation has no value to the nonemployee spouse. California courts have held that even though unvested options may have no marketable value at the time of divorce, they can still be an asset subject to division in the divorce.

What are the formulas used by courts in these cases?

There are multiple formulas that a court can use, and the court has broad discretion to apply the formula that will achieve the most equitable result. Although the formulas vary, the basic idea is that the longer the time between the date of separation and the date the options vest, the smaller the overall percentage of options that will be considered community property. For example, consider a divorce where the options vest just a day after the separation. Now consider a divorce where the options vest years after the separation. In general, equity would suggest that the nonemployee spouse should be entitled to a greater share of the stock options that vest just a day after separation than those that are years away from having market value.

You can a couple cases that are examples of these formulas here: https://scocal.stanford.edu/opinion/re-marriage-brown-27941

https://www.leagle.com/decision/200715366calrptr3d871148.xml

What is the best way to position yourself in a divorce relating to stock options?

Even though nonvested stock options may have no present market value, you may want to retain an interest in the shares and potential profits. This area of family law can be very complex, and possibly the best way to position yourself well relating to stock options is to obtain advice from an experienced divorce attorney who can analyze and comment on your specific situation.

Conclusion

At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in divorce in California and can help you with complex questions relating to valuation and division of assets in a California divorce.

Filed Under: Divorce Advice, Divorce Attorney

The Evolution of Trust and Estate Disputes and Selecting the Right Mediator in California

Some would assert that the pandemic and shifting landscape around wealth transfers is fueling increased trust and estate disputes. This article will summarize a podcast with an interview of the Honorable Glen Reiser, a judge who serves as educational trainer for all trust and probate judges throughout California. He spent more than 20 years with the Superior Court in Ventura County, California, and before that, more than two decades as a civil litigator. The full transcript of the podcast can be found here: https://www.jdsupra.com/legalnews/podcast-jams-neutrals-on-the-evolution-5378200/

Contested cases have risen dramatically over the last five years, and particularly recently due to COVID.

With Covid, we are seeing a high number of unexpected deaths.

There is an increase in the will disputes, with issues relating to blended families and sibling rivalry.

More people are dying without a will due to the unexpected nature of Covid.

In the “old days” more wealth was earned individually, but now we are seeing that more frequently, wealth is transferred through family deaths and trust and estate matters, so that seems to be where large amounts of capital are exchanged. Contests in that area have risen dramatically.

The Court system is increasingly encouraging mediation over trial.

With Covid, we are seeing a high number of unexpected deaths.

There is an increase in the will disputes, with issues relating to blended families and sibling rivalry.

More people are dying without a will due to the unexpected nature of Covid.

In the “old days” more wealth was earned individually, but now we are seeing that more frequently, wealth is transferred through family deaths and trust and estate matters, so that seems to be where large amounts of capital are exchanged. Contests in that area have risen dramatically.

Mediation has advantages the court cannot offer.

Mediation can save time and money.

Attorneys can work with the mediator and other parties to craft often creative solutions.

Mediation can allow for more customized solutions, since they can be tailored specifically to the parties.

Capacity tends to be a significant issue and cases require a lot of court resources.

Will and trust contests tend to be judge decided not jury
The burden on judges for these types of cases is large because the cases require trial and long opinions, so judges generally would like to encourage settlement
The testamentary instrument is either a trust or a will. That document in most cases, not always, was drafted by an estate planner or a lawyer who dabbles in estate planning. Thorough preparation would be to interview the estate planner to see what their recollection is, even if it relates to issues such as capacity, undue influence, document interpretation or intent.
With capacity cases, a geriatric psychiatrist or PhD psychologist with expertise in geriatrics should be consulted.

The role of undue influence in estate disputes.

In our mobile society, many family members move away, but someone stays to help take care of the elderly person. So, when the elderly person changes their instrument to benefit the person taking care of them, then that’s a common circumstance where undue influence will be alleged.

Undue influence is a particularly fact specific factor, and questions that should be asked are: Is the person isolated? Are they competent to write emails? Who is taking them to the lawyer’s office? Whose lawyer is it? Who is sitting in on meetings with an estate planner? These issues and more are the type of fact-specific inquiry needed on these cases.

Tips for successful mediation of estate disputes.

Preparation is key.

Consider spending money on the science up front. There is a lot of development in the science of cognitive deficits with scientific evidence that can be relevant to undue influence and capacity, and it may be that spending money on the science up front will make the negotiating position stronger.

Find a mediator who will read everything, understand the positions and get involved.

Avoid selecting a mediator who is just a “carrier pigeon” to take the offers back and forth. Look for a mediator who has the skill set to add to the discussion.

Conclusion

At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning and litigating estate disputes. Contact us today!

Filed Under: Estate Planning, Estates

5 Assets Not to Forget in a California Divorce

There are a few categories of assets that are sometimes missed by couples getting a divorce. This article will discuss five important asset classes to remember in a California divorce so that the division of assets is fair, accurate and equitable. At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in divorce in California and can help you with complex questions relating to valuation and division of assets in a California divorce.

Bitcoin, Ethereum, or other Cryptocurrency or alternative currency.

With the popularity of investing in cryptocurrency greatly increasing, this is one important asset class to divide in a divorce. Crypto assets can be missed because they can be traded through Venmo, or various platforms like Coinbase that the other spouse may not be aware of. The timing on when it is purchased is important, as well as the issue of whether there were any gains made during the marriage.

Stock options.

Stock options that are granted subject to employment can present a challenge when dividing assets in a divorce. This can occur because the options may not have vested yet or the employment upon which the options were based may have occurred before the marriage as well as during the marriage. Even though nonvested stock options may have no present market value, you may want to retain an interest in the shares and potential profits. This area of family law can be very complex, and possibly the best way to position yourself well relating to stock options is to obtain advice from an experienced divorce attorney who can analyze and comment on your specific situation.

Stimulus money.

If you received stimulus money during the course of your marriage, then this is an asset that can be split as part of the divorce settlement.

Pension plans.

Some employers, particularly the state or federal government, still offer pension plans, and if these were earned during the marriage, it’s an important source of income not to forget in a divorce settlement.

Military Benefits.

A service member’s military pension in an extremely valuable asset and can be divided just like any asset. It is important to include military pensions and other military benefits in a division of assets.

Conclusion

Filed Under: General Legal Advice, Vacaville Attorney, Vacaville Lawyer

Can I Get More Money if My Spouse Cheated?

A commonly asked question in divorce is whether cheating can be used as leverage for the other spouse to get more money or custody in a divorce. Cheating is typically defined as a physical relationship with a person who is not in the marriage. This article will discuss the legal consequences of cheating and explain why it is almost always irrelevant to financial or custody issues in a divorce.

Cheating is not one of the grounds for divorce in California.

There are two grounds for divorce in California: irreconcilable differences and permanent legal incapacity. You don’t need to prove cheating to get a California divorce because irreconcilable differences covers all problems or differences that make one person in the divorce want to leave the marriage.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=2310.

Typically cheating will not result in greater alimony for the other spouse.

California does not consider marital fault when determining alimony payments, so cheating typically does not factor into alimony.

What are the factors a judge would consider in awarding alimony?

California has a list of the factors that a judge should consider when making a spousal support/alimony determination. This statute can be accessed in its entirety here: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=4320.&lawCode=FAM

(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:

(1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.

(2) The extent to which the supported party’s present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.

(b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party.

(c) The ability of the supporting party to pay spousal support, taking into account the supporting party’s earning capacity, earned and unearned income, assets, and standard of living.

(d) The needs of each party based on the standard of living established during the marriage.

(e) The obligations and assets, including the separate property, of each party.

(f) The duration of the marriage.

(g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.

(h) The age and health of the parties.

(i) All documented evidence of any history of domestic violence,

(j) The immediate and specific tax consequences to each party.

(k) The balance of the hardships to each party.

(l) The goal that the supported party shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336, a “reasonable period of time” for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court’s discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.

(m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4324.5 or 4325.

(n) Any other factors the court determines are just and equitable.

CONTACT AN EXPERIENCED DIVORCE ATTORNEY

An experienced attorney can help make the divorce process easier for you and help you make important decisions. At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in divorce in California. Call us today!

Filed Under: Family Law, General, Vacaville Attorney, Vacaville Lawyer