No More Social Security Checks!

Beginning March 2013, the U.S. Department of the Treasury will only pay federal benefits electronically into a financial account. This means that people who receive veteran’s benefits or social security will no longer have the option of receiving a check in the mail that they can cash and pay their expenses. Everyone receiving such benefits will require an account with a bank, credit union or similar financial institution to receive their money. Many of the recipients of these benefits do not have a financial account and will now need such an account to receive their money.

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Attorney’s Fees Clauses

Many contracts include what is known as an attorney’s fees clause. An attorney’s fees clause provides that, in the event of a lawsuit, a Judge or Arbitrator might require the losing party to reimburse the winning party’s attorney’s fees. An example of such a clause is as follows:

“In the event of litigation relating to the subject matter of this Agreement, the non-prevailing party shall reimburse the prevailing party for all reasonable attorney’s fees and costs resulting therefrom.”

If you are thinking about suing someone or someone is suing you for a breach of contract case, this is one of the first clauses you need to find if there is one in the subject agreement. The practical effect of such a clause is that at some point in a lawsuit, the focus turns from trying to recover damages from the other party to trying to recoup the attorney’s fees spent on the lawsuit – the proverbial “tail wagging the dog.”

Most settlements result in both sides bearing their own attorney’s fees. Those cases that do not settle sometimes continue to trial due to the costs incurred in the lawsuit. However, even if a party wins the lawsuit, the Judge or Arbitrator may not award any fees or drastically reduce the amount of fees requested. These are just some of the considerations you need to bear in mind when filing a breach of contract claim.

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Estate Planning Can Be A Form of Insurance

Every year, people spend hundreds, if not thousands of dollars on car insurance, homeowners insurance, flood and earthquake insurance. The premiums come rolling in like clockwork. The policies are in place just in case something happens and they provide you and your family with peace of mind and a sense of security. But most of the time, nothing bad happens. How would you like to spend some money every few years that is guaranteed to provide your family a better sense of security and save potentially thousands of dollars? That is what a basic estate plan can provide for most people.

By spending several hundred to a few thousand dollars one time (and subsequent lower payments for reviews every few years) to form a living trust, funding that trust and creating a living will to “scoop up” the miscellaneous items of an estate into the trust, people can look to save thousands upon thousands of dollars in federal estate taxes and seek to avoid probate (which in California causes one to incur thousands of dollars for probating an estate over $100,000 in net assets). Why not spend some money now to at least set up an estate and put yourself in a situation that is likely guaranteed to save your family a lot of money? Schedule your appointment with an estate planning attorney today and pay the one time “premium” to ensure your family a better future on the assets you worked so hard to accumulate.

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Oh, The Tangled Web We Weave

Family law cases can be full of intrigue, jealousy, pettiness, sadness and emotion. Spouses will lose perspective and fail to understand how to move forward. They also forget what they have said or done in the past.

Case in point. A wife files for divorce. She thinks that her husband of twenty years with three children has been with another woman, but he has never admitted to it. She wonders if she’s doing the right thing by filing the divorce.

Unbeknownst to her, a few years earlier, the husband was sued in small claims court and lost. He was ordered to pay several thousand dollars to a creditor. The creditor filed a request to garnish husband’s wages. In response, the husband filed a declaration asking the court to limit the amount of the monthly garnishment because of his responsibility in taking care of FOUR minor children. Now that the wife knows about this “extra” child she is certain she made the right choice in seeking a divorce.

We all leave marks in this world, just be careful where you leave them.

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Don’t Be Left In The Dark

A key component of every marriage is trust. There is emotional trust and financial trust. With regard to financial trust, many marriages delegate one spouse to handle the finances. If you are the spouse who does not handle the finances, you should ask about your community assets and liabilities. Spouses in a healthy marriage will get an open and full response. Spouses in an unhealthy marriage will be looked upon with suspicion or raise a red flag to the other spouse that something is wrong. Regardless of the response, you owe it to yourself to make the inquiry and become more aware of your overall financial condition no matter whether you stay married or not.

For example, with regard to the house where you live, is it worth anything (is there any equity)? Do you know who holds the mortgage or mortgages? Are there second or third mortgages against the house? Do you know what the monthly payment on the mortgage? Do you, as a couple, have any other vacation homes or investment properties? If so, do you know the addresses and the same information regarding the equity and mortgages on those properties?

Turning to financial accounts, the same types of questions apply. Do you know the name of your financial advisor if you have one? Do you know where all of your accounts are held? What about the name on the account or the account numbers? Does your spouse trade stocks on e-Trade or a similar site? How much money is in those trader accounts? Are there any personal loans to friends or family that are documented?

What about your spouse’s employment? Do you even know their salary? Are they on commission? Is there an annual bonus? Is there a pension? What other benefits do they receive?

With regard to liabilities, what are your monthly bills or how much do they generally add up to? What about insurance premiums for the house, cars, life, health or disability insurance? Has your spouse borrowed money for personal debts (i.e., are there promissory notes to third parties)? What other expenses or debts are there?
We always encourage people to try to salvage their marriage and being part of a marriage involves trust and openness. If you don’t know the answers to any or most of the foregoing questions, you should ask. You do not want to be surprised now, in the future, or find out when your marriage is ending that you’re broke and facing a lot of uncertainty.

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Just In Case You Forgot, Be Prepared

The New Year starts people thinking about preparing for that year. This may include a goal of a new promotion or plan for your family vacation or your ongoing “Bucket List”. However, just like in that movie (starring Jack Nicholson and Morgan Freeman), there are other things that are more important for you to think about. Take the time to prepare for the long-term and for any unforeseen events.

What will hapen if you become incapacitated, are in a severe accident or unexpectedly pass away this year? Would your spouse or children be able to access your finances? Do they know where copies of your powers of attorney and healthcare directives are located? Do they know where your will or trust is located? Do they know the attorney who prepared those documents? Do they know where your insurance policies or copies them are located? Do they even know the name of your insurance company or your insurance agent? It will not be fun, but it is important. You should put the key components of your estate and life down on a piece of paper and give it to someone in your family, a close friend or someone else you trust (such as your CPA or attorney) just in case something bad should happen to you.

A suggested Just In Case List should include (1) Personal Information including full name, all names used and date of birth; (2) Names and addresses of your closest living relatives (for notification purposes); (3) Names and addresses of your doctor(s), insurance agent, financial planner, accountant and attorney; (4) Location of Key Documents, e.g., will, trust, passports, tax returns, deeds, insurance policies (especially life insurance) and unpaid bills or notes including mortgages; (5) location and identity of all insurance policies; (6) location and identity of all financial documents including any and all financial accounts, the location of those financial accounts, any stocks, bonds or other forms of financial assets (e.g., promissory notes, etc.); and (7) the location of any other personal items of value you deem important.

The foregoing list is not comprehensive, but should provide enough information for anyone who has that list to take care of your family. Since this list will include extremely sensitive information, you should only provide a copy of it to those whom you absolutely trust. As the Boy Scouts say, “Be prepared”, but also, be smart.

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It’s Never Too Late …

Marriages have their phases, their conflicts and their roller coaster of emotions which make them volatile at times. Apparently, even a long ago tryst is enough to push someone to seek a divorce.

A 99-year old Italian man is now seeking to become the oldest divorcee in recorded history after discovering his wife’s love letters to a long ago paramour from the 1940′s. His wife is not contesting the divorce and we’ll see if he finalizes it, but he’s on track to beat the current record for the oldest person to go through with a divorce. See more of the article in the attached link in the Huffington Post.

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Auto Insurance – Are You Underinsured?

Every responsible driver on the road should or is required to have auto insurance. However, does every car owner have enough insurance?

Every driver should check whether or not they have sufficient insurance for uninsured or underinsured claims. Uninsured or underinsured coverage provides you with the ability to make a claim against your own insurance company if you are injured in an accident caused by a third party who does not have any or enough insurance to cover your claims.

For example, if you are in a serious automobile accident and the third party who caused the accident only has $15,000 in coverage, you may be only able to recover that amount from that third party’s insurance carrier. If you exhaust your claims against that third party without a full recovery on your claims and have sufficient uninsured or underinsured coverage, you can then make a claim against your insurance policy (assuming you have more than $15,000 in your uninsured and underinsured coverage) for the balance of your damages up to the limits of the uninsured and underinsured coverage. There is no guarantee that you will recover additional damages on your claims and there are certain procedures you may have to follow to pursue those claims, but without the coverage, you cannot pursue any such claims.

Therefore, before you are involved in an accident, it is advisable to consult your insurance agent or an attorney if you have any questions about these issues.

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Elder Abuse Scams

The elderly continue to be the targets of fraud.  One of the “oldies” but goodies is when a “friend” or stranger needs a “temporary” loan to send to a relative out of the country who lost their wallet or needs the money to get back home. Unfortunately, an elderly person will become fixated on helping these people rather than even considering that this is a fraud. Education is the key. Make sure your elderly parents or relatives contact a trusted family member before “loaning” any money to anyone.

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