Posts

2015 Resolution: Take Care of Your Legal Needs

On behalf of all of us at the Law Offices of Ian S. Topf, APC, best wishes for a happy, healthy and prosperous 2015!

It’s not too late to make a New Year’s resolution that will benefit you and your family throughout the new year. This is a great time to take care of some essential legal planning responsibilities – and you’ll feel much better when you do.

Estate planning

Many people mistakenly think of an estate plan as something that matters only when they die, but there’s really much more to it than that. With a thorough and carefully prepared plan in place, your loved ones won’t have to experience the additional stress of wondering about your final wishes (health, financial, etc.) should you become physically incapacitated and unable to share those wishes during a highly emotional time.

If you already have an existing estate plan, the new year offers a perfect opportunity to review the plan so it reflects any changes that took place during 2014. Such changes might have included:

  • Got divorced or remarried
  • Blessed with the birth or adoption of an additional child in the family
  • Need to remove or replace an agent or beneficiary who passed away
  • New wishes for how you want to have your medical needs addressed

It’s also important to note that, depending on when you first created your estate plan, California law may have changed in ways that invalidate some provisions (or at least affected them so they’re no longer practical). In my legal practice, for example, I’ve come across very old estate plans that haven’t been modified to accommodate requirements under HIPAA (Health Insurance Portability and Accountability Act) and/or the California Probate Code. Without being updated, such plans could run into serious legal problems at a later date; the same problems you have sought to avoid by creating your estate plan in the first place.

In summary, now’s a good time to check with an experienced lawyer to make sure your estate plan is still legally valid and will sleeping aids carry out your wishes, and, if you do not have an estate plan in place, get to it!

Debt relief

Are you one of the many, many Americans who spent too much money during the holidays and find yourself starting the new year in considerable debt? Rather than wallow in this predicament, take advantage of free consultation offered by many debt relief attorneys (including myself)!

We can help you design pro-active ways to resolve your debt and gain control of your financial situation, so you can actually move forward in 2015 without this enormous weight on your shoulders. Don’t wait for debt collectors to start coming after you!

Take action

This brings me to what I think should be everyone’s most important New Year’s resolution: Stop procrastinating! It’s understandable that people put off their legal planning—after all, approaching a lawyer about estate planning or debt relief or any other legal matter seems like a severely negative thing, and most of us naturally drag our feet on these issues, sometimes until it is too late. But think how much better you’ll feel after you address and resolve these matters directly.
For families and individuals who have enrolled in legal insurance plans, I suggest you take a closer look at what these plans have to offer. Many plans provide full-service benefits for legal matters like estate planning and debt relief. They’re also very helpful for general legal advice on a wide range of legal matters.

Remember—you don’t have to wait until you’re facing a lawsuit (or initiating one) to get in touch with an attorney. We can help you cope with many of life’s challenges and free you up for other important goals in the coming year.

Are you in need of legal counseling or have any questions about the above topics? The Law Offices of Ian S. Topf, APC offer a free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.

Are You One of Three Americans Delinquent on Debt?

Recently, there was a flurry of headlines noting a disturbing trend in the U.S.—more than 30 percent of Americans have debt in collections, according to a study released by the Urban Institute. “Debt in collections” refers to money that’s owed well past an account’s due date (usually 180 days) and which has been turned over to debt collection agencies. The study looked at debts incurred through credit card bills, car loans, medical bills and child support payments, ranging from just $25 to $125,000 (average amount owed was $5,200).

When one in three Americans are delinquent on debt, you don’t have to be a financial expert to know we’ve got a real problem on our hands.

The sad truth is, as a society, we’re generally irresponsible when it comes to managing our finances. I think the main problem is our insatiable appetite for the American Dream—that is, to acquire more and more stuff. But most of the products and services we purchase on credit come and go …and at the end of the day, what do we have to show for it?

On the other hand, a contributing factor to this problem, I believe, are the predatory practices of creditors, many of whom impose outrageous interest rates on credit cards, loans and other opportunities for credit. Many times, people sign up for loans and credit cards in awe of their ability to have access to such high credit limits, without thoroughly reading the fine print, where these dangerously high interest rates are noted.

What you can do

The way most people get into debt—excluding emergency and medical situations where bills can pile up quickly on the spur of a moment—is through a failure to budget and save money for the future. Therefore, in order to avoid getting buried under a mountain of unmanageable debt without the means to get out, I think it’s necessary for us to get back to these basic but valuable concepts. By budgeting wisely and putting aside some money for a rainy day, we’re better prepared to maintain our credit, obtain much of the stuff we crave, and be able to weather a sudden, unexpected financial hardship.

Of course, some people just aren’t capable of handling their own budgets. I don’t mean this in a negative way; we’re not all equally adept at balancing numbers and making sure payments are made on time. The good news is, there are resources out there to help you get things under control. Even if you are not in financial distress at this time, it may be a good idea to talk to a financial advisor or debt relief professional as a preventative measure.

Three choices

If, however, you’re one of those three unfortunate Americans already seriously delinquent on debt, you will find generally three options to choose from to handle your situation:

Ignore the debt. Under California law, there’s typically a four-year statute of limitations for debts except those made with an oral contract (these have a two-year state of limitations). After this period of time (running from the date you last used the account and/or made a payment, whichever is more recent), creditors generally find themselves barred from trying to collect on your debt.

But ignoring your debt, wishing and hoping that your account will be the one that falls through the cracks long enough for the statute of limitations to run, is not a solution. Once you’ve stopped making payments on your credit card bills or outstanding loans, you will hear from collections agencies on a fairly consistent basis. Also, interest continues to accrue on each debt you have, compounded by late fees and other penalties for non-payment.

In other words, ignoring your debt won’t make it go away. It only gets bigger and bigger and more unmanageable over time.

Negotiate to settle the debt. Creditors are often willing to negotiate a settlement to a debt, on the principle that getting a reduced payment is better than no payment. The problem is, they will generally require a lump sum payment in order to make the rest of the debt go away. If you’re unable to do that, this option won’t work.

File for bankruptcy relief. If creditors consistently hassle you, threatening to attach your wages and/or property, and you don’t have the funds to make payments or settle the debt, the last-ditch option is applying for bankruptcy relief. But be forewarned: You can only attempt to completely wipe out your debts through Chapter 7 bankruptcy once every eight (8) years and it will always have a huge negative impact on your credit standing. Additionally, a person who seeks bankruptcy relief will also find it harder to rent an apartment, open a bank/credit union account or obtain credit in the future (though generally not impossible).

Getting out of debt isn’t easy but with the right strategy and guidance, it can be done. What’s the best way to start? Explore your options through a conversation with a skilled debt relief/ bankruptcy attorney.

Are you in need of legal counseling for bankruptcy or debt issues or have any questions regarding the above? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from bankruptcy, family law and estate planning to traffic violations and landlord/tenant disputes.

What Happens When You Marry Someone with Support or Debt Obligations?

These days, it’s not uncommon for a person to marry someone who comes with some financial “baggage”—that is, with debts or support obligations of some kind. Here’s a fairly typical scenario:

Jane comes to my office seeking information about getting a pre-nuptial agreement. Her fiancé, Frank, is saddled with several types of obligations. Her fiancé underwent a horrible divorce from his first wife and Jane believes the ex-wife will go to any lengths to get what she can from him—including having her attorney subpoena Frank’s financial institutions for information on his various accounts. Naturally, Jane wants to know, if she proceeds to marry Frank, is she exposed to similar legal actions?  What is her risk with respect to his spousal support, child support and/or any debt Frank has incurred?

Let’s take a look at each type of obligation and see how Jane may or may not be involved:

Spousal Support

 In California, a new spouse’s income or assets generally has no effect on the spousal support obligation of their new partner. In other words, what belongs to Jane in terms of property or income is not connected to Frank’s spousal support situation. The Court doesn’t use this new information to re-calculate or otherwise alter the amount of support Frank is obligated to pay his ex-wife.

There is one notable exception: If, after remarrying, Frank were to quit his job or become a stay-at-home spouse (because his new wife has a well-paying position) and then attempt to either terminate or decrease the amount of spousal support he’s obligated to pay, the Court would likely see this as an intentional attempt to evade his legal responsibilities – and may not change his spousal support obligation.

Child Support

Again, in California, Jane’s assets generally do not come into play in a situation where Frank is paying child support related to his previous relationship(s). But, as noted above, it’s a different story if Frank decides to leave his job or otherwise decrease his income. Under California Family Code Section 4057.5, the income of a new spouse can be used “in an extraordinary case where excluding that income would lead to extreme hardship to any child subject to the child’s support award.”

The court will always be guided by what is deemed to be in the child’s best interests.

Debt

When it comes to debt obligations, Jane’s potential risk is a different matter entirely. With a new marriage in California, what both parties own together is automatically subject to community property law (e.g. anything acquired during the marriage is presumed to be split 50-50 between the spouses). If Jane puts Frank’s name on any of her assets – for example, adding his name to her savings account or on the deed to the house – creditors can now pursue what Jane considers her property for repayment of Frank’s debts. Her assets should remain untouched if her name is the only one connected to those assets. Most creditors won’t go to the trouble of going after assets in the non-debtor spouse’s name.

Of course, where a house or similar large property is concerned and a lender or other entity requires the signing of a Interspousal Transfer Deed in the course of a refinance (placing title solely in Jane’s name), Frank essentially gives up his legal rights to ownership by signing such documentation. Should this second marriage end up in divorce, Frank may have no claim on the house and the property will be awarded to Jane as her sole and separate property.

A pre-nuptial agreement is an effective way to fully clarify both spouses’ debts and support obligations before marriage takes place and provide the parties with clear guidelines on how to handle their property and obligations throughout their marriage. That’s what I recommended to Jane and what I generally tell all of my clients facing this relatively common situation.

Getting married or just have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation in a variety of issues, ranging from family law, bankruptcy, debt collection defense, estate planning, criminal defense, DUIs, and general civil matters. 

Protect Your Assets by Keeping Records

When two people fall in love and decide to get married, they don’t want to consider the possibility that at some time in the future they may no longer feel the same way about each other – and that the experience of separation and divorce might turn ugly over issues of community assets and debt obligations.

Sadly, as we all know, this scenario happens all too frequently. But while divorce is an unhappy topic to consider before such a happy occasion as marriage, I believe it’s vitally important to do so. A well-considered and expertly crafted pre-nuptial agreement can set out rights and responsibilities, address issues of property characterization, and minimize the potential legal costs involved in a lengthy and contentious divorce.

Division is right down the middle

Here’s a common problem I see in my practice. A client comes in who’s been married a long time (10 years, 12 years, longer) but doesn’t have a pre-nup. This person is very unhappy at the prospect of having to divide practically everything he or she owns 50-50 – as generally is required by California community property law. Why? Because, the client says that they came into the marriage with substantial assets acquired well before anyone said, “I do.”

Since California is a community property state, we start with the assumption that, when it comes to property that has been acquired in the course of a marriage (that is, all the assets as well as debt obligations), the division almost every time will be right down the middle.

A possible exception occurs in cases where domestic violence is involved. If the court determines that one person has been severely injured and is leaving the marriage with substantially diminished capacity to acquire new assets and income, he or she may be entitled to more than a 50-50 division of assets and debts.

The importance of “tracing”

 But what about assets and debts acquired either before the marriage or after separation?  The key to asserting one’s exclusive rights to property acquired before marriage or after separation is through what’s known as “tracing.” If you can trace the timing of the acquisition of an asset to a date either prior to the marriage or after you and your spouse/partner separated, the court will, in most cases, take this as proof of separate property belonging to the person who acquired it. The same principle applies to assignment of debt in the divorce.

But tracing depends on accurate documentation – and that’s where many of us fall short. As in the long-term marriage I mentioned above, it’s easy to lose track of any documents you might have concerning the acquisition of assets 10, 15 or 20 years ago. Unless you can produce such documentation, it will be very difficult to establish that any specific asset should be deemed your separate property.

Things get further complicated when you have to reach out for assistance with documents. Many institutions like banks expunge records after a certain amount of time has passed. So when it comes to obtaining financial and investment information from long ago, unless you’ve kept good records on your own, you may be out of luck.

I can’t stress this strongly enough. Print out your important documents (bank statements, credit card statements, etc.) and keep them locked away. You never know when a particular document will prove useful in court.

How can you attempt to avoid all this drama and turmoil? Look into having a pre-marital agreement, even if it casts a momentary shadow over your upcoming wedding celebrations. It’s by far the best way for both parties in a marriage to identify and protect their separate assets and minimize the possibility of being liable for the other’s pre-marital debt obligations, if things take a turn for the worse somewhere down the road.

Is a pre-nup right for you or just have any questions regarding the above topic?  The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from family law, estate planning, bankruptcy, and DUIs and landlord/tenant disputes.  

Legal Resolutions You Can Make in 2014

There’s no better time than the start of a new year to get your legal and financial house in order. That’s why I advise all of my clients to make sure certain legal documents are in place and to take other precautions so there’s a better chance that 2014 will be a “legally hassle-free year.”

Here are some actions to take in the new year:

Run a credit report. Many people don’t realize that they’re entitled to one free credit report a year. I strongly recommend taking advantage of this. You may think you know everyone you owe money to, but if you run a credit report, the results might surprise you:

You may have forgotten about a debt you owe to a creditor.

  • A creditor may have made a mistake, identifying you as owing a debt when in fact that’s not the case.
  • A creditor may have failed to report that a particular debt has been satisfied.
  • You may be the unwitting victim of identity theft, possibly resulting in numerous debts you didn’t know about.

There are different ways to go about running a free credit report. To get started, check out www.annualcreditreport.com.

Create an estate plan. Thinking about one’s incapacity (e.g. coma) and eventual death is generally not a pleasant experience but, in this day and age, it’s become a necessity.  The overall extent of estate planning will depend on not only what you have but also what you want to do with it.  Without the requisite documents (e.g. living trust, will, power of attorney, health care directive), you and your loved ones may find yourselves in a serious legal situation.

Or update your estate plan. Most experts recommend reviewing your estate plan at least every five to seven years. Why? A lot can happen during that time-frame, including changes in the law and changes in your life – like having children, getting a divorce or inheriting some significant assets.

If you’re a renter, be sure to keep good records. Some recent “Topf of Mind” blog posts have covered tenants’ rights regarding apartment leases and security deposits. The underlying lesson weight loss here is to always keep copies of essential documents. If you don’t already possess a copy of the lease, contact the landlord and get a copy. While you’re at it, ask for copies of any other rules and regulations affecting your status as a tenant as well as other documents relating to your lease. For example, in order to preserve your rights in the event you have to vacate the property, obtain a copy of any inspection report of your residence (e.g. move-in inspection).

Review legal considerations before you get married. With the recent increase in marriages due to the legalization of same-sex marriage in California, we’re seeing again the need for everyone planning to get married to talk to an attorney before taking their vows. (Most couples don’t consult a lawyer until they’re considering a divorce).  Pre-nuptial agreements, for example, are an important consideration to think about prior to marriage.

Get help if you’re facing bankruptcy. This time of year, as people swarm the malls both before and after the holidays, I tend to get a lot of inquiries about bankruptcy. If you face an increasing mountain of debt, it’s definitely time to contact an attorney. And, as I’ve emphasized many times in the past, prior to making that appointment, put together all relevant documents (proof of income, estimates of monthly expenses, an inventory of your personal assets, list of creditors, etc.). Your time spent talking with an attorney will be far more productive if you have the necessary documentation at your fingertips.

This last point applies to all of the resolutions above. Whether the situation involves debt, a tenant’s issue, pre-nuptial or DUI, make contacting an attorney the first thing you do. This will help make 2014 a much better year for you and your family.

Happy New Year!

Are you in need of legal counseling or have any questions about the above topics? The Law Offices of Ian S. Topf offer a free consultation in a variety of issues, ranging from family law/divorce, bankruptcy, and estate planning to criminal/DUI matters and landlord/tenant disputes.

What a Pre-Nuptial Agreement Can and Cannot Do

A pre-nuptial agreement (also called a “pre-nup”) is a legal contract between two people who intend to get married. This document defines each party’s respective rights and obligations, should the marriage eventually go down the path of divorce or legal separation.

Can be used as evidence in a court of law

In California, pre-nups are governed by rules outlined in the Uniform Premarital Agreement Act. Such an agreement can be drafted to address present and future property rights, as well as either party’s future entitlement to spousal support and (in a very limited sense) issues relating to any children the couple might have.

In a court of law, the pre-nuptial agreement represents a contract that may be enforceable or, at the least, used as evidence of what each party intended at the time they got married. While the court may find reason to invalidate a part or parts of the pre-nup, the document can still be used as evidence of each individual’s prior intentions.

To make the pre-nup more enforceable, it must (a) be drafted under the rules of the Uniform Act and (b) include a stipulation that, at the time of creating the agreement, each party receives a full financial disclosure form the other party—including a complete list of assets, debts and respective incomes. Each party must then be allowed seven days to review the document prior to signing it, during which they can, and should, seek the advice of an attorney if they don’t already have one.

Make the best decision for your future

What can be included in a pre-nup:

  • Under California law, almost anything acquired during the marriage, be it income, property or debts, is presumed to be community property. This means either party is entitled to half of the assets or responsible for half of the debts, regardless of who actually acquired them. In some cases, a pre-nup can alter that presumption—not only by defining assets coming into the marriage as the separate property of the person bringing them into the relationship, but also by identifying a person’s acquisitions during the marriage (wages, bank accounts, etc.) as being in that party’s separate property.
  • Both parties may agree on either a waiver of spousal support or other limitations on one person’s entitlement to spousal support—that is, the maximum amount of support allowed or the maximum duration of payments of spousal support allowed.
  • The parties may agree on other terms of support that courts don’t usually consider, such as a child’s eventual college expenses. The pre-nup can stipulate that one party will assume the burden of paying those expenses, an issue usually beyond the court’s jurisdiction.

What cannot be included in a pre-nup:

  • Any terms deemed “unconscionable”—for example, a plastic surgeon earning $500,000 a year is unlikely to be permitted to insist on a waiver of spousal support from his fiancé, a teacher in the public school system, who earns vastly less.
  • Provisions pertaining to child custody, visitation and child support terms are not allowed in this document.
  • A pre-nup cannot include terms of “punishment,” such as “If he cheats on me, I get damages of $50,000.”

Should couples intending to get married have a pre-nuptial agreement? The answer varies depending on the individual circumstances, but I believe it’s always a good idea to know what you’re bringing into the marriage and what you’d like to have, should the marriage come to an end. Whatever the case, enlist the services of an experienced attorney to make sure you arrive at the best decision about your future.

Getting married or just have any questions regarding the above topic? The Law Offices of Ian S. Topf offers a free consultation in a variety of issues, ranging from family law, bankruptcy, debt collection defense, estate planning, criminal defense, DUIs, and general civil matters.

Is Getting a Premarital Agreement a Good Idea?

A premarital agreement (more commonly known as a “pre-nup”) can be helpful for two parties anticipating marriage in the near future. This document—which must be committed to paper and signed by both parties—is meant to offset some of the issues partners may face should they later end up in divorce or legal separation.

What’s addressed in a pre-nup and what’s left out

Most issues that can come up during divorce or legal separation can be addressed in a premarital agreement, including spousal support (how much, how long, etc.); the characterization of property (separate or community); property division; and debt characterization and division. In other words, the premarital agreement is useful for covering most of the key areas of potential dispute should the parties decide to separate.

What the premarital agreement doesn’t address is anything relating to the children of a marriage or domestic partnership. As the courts have determined, the best interests of children can’t be anticipated at the outset of a marriage. All issues relating to children’s needs must be addressed at the time those needs arise.

The terms of a premarital agreement may be altered during a marriage if one party or the other does something contrary to its original terms—for example, the husband brings a house into the marriage but later deeds the property over to his wife or arrange for joint ownership. In legal terms, this is called a “transmutation of asset.” Any deliberate changes to the agreement must be outlined in a written agreement signed by both parties (e.g. amendment or post-nuptial agreement).

What to do before seeing an attorney

Of course, talking about the possibility that your upcoming marriage might fail isn’t a pleasant topic. But if you and your spouse (or partner) decide a premarital agreement is a good idea, don’t wait until you’re in the attorney’s office to start discussing details.

I can’t emphasize this strongly enough. Not only will discussions between you and your partner save money in attorney’s fees, it’s far preferable to iron out any differences ahead of time. This way, when you do meet with a lawyer, you both come in knowing (or at least having a good idea) about how you see the terms of this proposed pre-nup.

However, keep this in mind:.while a premarital agreement is generally enforceable by law, it is not an absolute. Courts can disregard a pre-nup for a variety of reasons. But it is valuable, nevertheless, because when a divorce or legal separation becomes necessary, this document serves as evidence that both parties anticipated and agreed upon certain terms before the marriage took place. In most courts of law, a pre-nup will be given the same consideration as any other evidence submitted in a divorce proceeding.

A final important tip: Don’t make an appointment to initially consult an attorney on a pre-nup a couple of days before the wedding. Most premarital agreements take anywhere from two weeks to several months to prepare, negotiate, revise and then execute and sign. And the law has a built-in, seven-day required window between the time the pre-nup is presented to each party and the time the agreement is signed. Waiting until the last minute to address this topic will only delay your happy event.

Is a pre-nup right for you? The Law Offices of Ian S. Topf offer free consultation in a variety of issues, ranging from family law, estate planning, bankruptcy, and DUIs and landlord/tenant disputes.