Mom and Dad Have Something to Tell You: Talking to Kids about Divorce

Posted June 8, 2015 in Family Law by Michael Lonich.

With forty to fifty percent of married couples proceeding in marriage dissolution, thousands of children experience the stress of divorce each year. While the adults are navigating their own emotions, children are also struggling with their own feelings. Many of these children get lost in the process as their parents often find it difficult to talk to them about divorce.

When parents decide to break the news to their children, it is important to leave any feelings of anger or blame out. Practicing the conversation may be helpful as to release any feelings of anger before talking with them. If possible, parents should also break the news together to avoid confusion. Telling children together also helps to preserve the child’s sense of trust in both parents.

The conversation should also be age appropriate. In other words, “[t]he discussion should fit the child’s age, maturity, and temperament.” It should also always include the following message: “What happened is between mom and dad and is not the child’s fault.” It is imperative to include this message as most children will feel that they are to blame for the separation, when this may be far from reality.

It is also vital to be prepared to handle children’s reactions to the news. For the children who become upset, parents can let them know that they care about these feelings and reassure them that their feelings are understandable. Some children may not react immediately. For these children, parents can let them know that this is also okay and that they will be there for them when they are ready to talk.

While there is no easy way for parents to break the news to their children, there are important things that both parents can do to help guide their children through this challenging time. The following is a list of helpful tips:

·      Be truthful and discuss changes with your children.

·      For younger children, have a simple and to-the-point conversation.

·      Remember to keep legal talk, heated discussions, and visible conflict away from the children.

·      It is important to keep each parent involved in the children’s lives.

·      Try to minimize any disruptions in their daily routines.

·      Restrict negative talk to private therapy sessions or conversations with friends outside of the home.

·      Encourage children to share their feelings.

·      Remind your children how much you love them.

·      Most importantly, support your child as he or she is navigating through the process.

The Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  If you have any questions about helping your children through this process, please contact the Certified Family Law Specialists at Lonich & Patton for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

 

Source: http://kidshealth.org/parent/positive/talk/help_child_divorce.html

Source: http://www.redlandsdailyfacts.com/social-affairs/20150530/the-ins-and-outs-of-talking-to-kids-about-divorce

Source: http://www.babycenter.com/0_how-to-tell-your-child-youre-getting-divorced_3657051.bc

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Automatic Temporary Restraining Orders or ATROs: Positive or Negative

Posted May 22, 2015 in Family Law by Susan Dent.

While there are marriages that end on good terms and amicably, this is a rarity in today’s world. The “ideal” divorce is hard to find and in reality, most marriages do not dissolve so easily, and from the moment a spouse is served, their emotions can get the best of them. They may act out- draining community accounts, cancelling joint benefits, or even threatening to withhold or leave with the parties’ children. This is when Automatic Temporary Restraining Orders, or “ATROs” come into play. Unlike a traditional restraining order which protects against other people, ATROs serve to protect the status quo of the marriage.

Specifically, California Family Code § 2040(a), which outlines the contents of ATROs, lists the following that both parties are restrained from exploiting during the dissolution process:

  • removing the minor child or children of the parties, if any, from the state without the prior written consent of the other party or an order of the court;
  • transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life, and requiring each party to notify the other party of any proposed extraordinary expenditures at least give business days before incurring those expenditures and to account  to the court for all extraordinary expenditures made after service of the summons on that party;
  • cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their child or children for whom support may be ordered;
  • creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. [1]

As one of the obligations when filing for dissolution of marriage, the Petitioner must file and serve a Summons and a Petition to put the other party on notice that they are being divorced. This Summons, Form FL-100[2] in California, lists the ATROs or the “Standard Family Law Restraining Orders” in their entirety. The ATROs binds both parties and becomes effective immediately upon the service of the Summons.

ATROs impact to main issues in a divorce proceeding: travel with children and finances. ATROs temporary “freezes” both parties financial assets and forbids travel with children outside of the state of California without the prior written consent of the other party, or a court order.

An interesting case involving the effect of ATROs in the marital dissolution proceedings is of John McTiernan, director of big Hollywood films such as Bruce Willis’s Die Hard and his ex-wife, Donna Dubrow. [3] During the course of their dissolution proceedings, McTiernan sold certain community property stocks, which he partially used to pay community expenses. However, ATROs forbids the transfer or disposing of any property, “whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life.” The court found that although he did not sell these stocks in ill will or maliciously, it was nevertheless a violation of ATROs because he could have consulted his wife or obtained court approval. Since he did neither, the court awarded Dubrow with restitution damages resulting from the sale of the stocks.

Essentially, ATROs protect both spouses and any disruptions to their “financial status, home life, and relationships with children while in the process of dissolving their marriage.”[4] If either party were worried about either finances or their relationships with their children, these items should be prioritized during the process. The concerned party may want to immediately file for temporary custody orders or even reach out to the other party about accounts and assets. In an already upsetting and tense situation, ATROs helps to safeguard a degree of respect between the divorcing couple and may even relieve some of anxiety and mistrust that so often results in the marriage dissolution process. For these reasons, ATROs are an invaluable tool during divorce proceedings. [5]

If you are considering filing for divorce at any time of the year and have questions regarding ATROs, the Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  Please contact the Certified Family Law Specialists at Lonich & Patton for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.



[1] Cal. Fam. Code § 2040(a) (West).

[2] http://www.courts.ca.gov/documents/fl110.pdf

[3] In re the Marriage of John McTiernan and Donna Dubrow (2005) 133 Cal. App. 4th 1090.

[4] Dana Warstler, A History of the Automatics TROS in Family Code 2040(A), 11 J. Contemp. Legal Issues 191, 191 (2000).

[5] http://www.more.com/relationships/marriage-divorce/what-divorcing-women-need-know-about-automatic-temporary-restraining-?page=2

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Billionaire’s divorcing wife wants at least $1 million per month

Posted March 6, 2015 in Family Law by Lonich and Patton.

How difficult would it be to spend $1 million dollars per month? In divorce proceedings that initiated last July, the wife of hedge fund manager Ken Griffin says that is precisely the amount that she requires to maintain her standard of living.

What are some of these expenses? They include:

-          $2,000 a month for stationary

-          $6,800 a month for groceries

-          $7,200 a month for restaurant meals

-          $8,000 a month for gifts

-          $60,000 a month for an office and professional staff

-          $160,000 a month for hotels

-          $300,000 a month for a private jet

She makes this claim despite the presence of a prenuptial agreement that she signed in 2004. Ms. Dias-Griffin is seeking to have the prenuptial agreement nullified on the basis of duress and coercion. Mr. Griffin argues that she was fully aware of what she signed. The terms of the prenup included that she received $25 million upon signing the document, $1 million every year thereafter and Ms. Griffin had the advice of independent counsel – namely three prominent law firms – when signing.

In papers filed in Illinois state court, Mr. Griffin claims he already paid Ms. Dias-Griffin some $37 million in payments under the premarital agreement, in addition to giving her a 50% stake in the couple’s $11 million Chicago home. Ms. Dias-Griffin claims that this would only leave her with 1% of Mr. Griffin’s net worth and should be voided since she signed it under duress.

“Anne failed in her initial effort to obtain these things from Ken in the name of maintaining the ‘status quo,’” the filing reads, according to CNBC. “Now she claims that these same expenses are in fact ‘child support.’”

If you don’t know who he is, Ken Griffin is one of the world’s wealthiest men. As the founder and CEO of Citadel, a global investment firm, Forbes estimated his net worth at a value of $5.5 billion in 2014.  Mr. Griffin married Anne Dias-Griffin in July of 2004. Ms. Griffin is also a founder of the Chicago-based hedge fund firm Aragon Global Management. Together, they have three children each less than 10 years old.

Typical Components of a Prenuptial Agreement

A prenuptial agreement can be a powerful tool in limiting property rights and alimony. A properly drafted prenup may be impossible to set aside. While the requirements for properly drafted prenuptial agreements vary from state to state, some of the general requirements in California for a valid prenuptial agreement under the California Premarital Agreement Act are:

-          They must be executed voluntarily;

-          Each party had independent legal counsel (or properly waived that right);

-          Had legal capacity to enter into the agreement;

-          There was no fraud, duress, or undue influence;

-          A seven day waiting period between being presented with the agreement and signing it;

-          Any other factor a court deems as relevant.

These are not all of the requirements, and each of the above mentioned requirements have elements that must be met in-and-of themselves. The Certified Family Law Specialists at Lonich & Patton have decades of experience handling complex family law matters.  If you are interested in learning more about prenuptial or post-nuptial agreements, please contact the Certified Family Law Specialists at Lonich & Patton for further information.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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Question: What happens to your Facebook account when you die?

Posted February 20, 2015 in Estate Planning, Probate by Lonich and Patton.

Answer: Now, you can designate someone to control your Facebook account with the legacy contact option.

As estate planners, we see people each day who think about what happens to their personal effects when they pass away. We write wills in order to designate who should receive a client’s material possession upon their death and answer questions like; where do my assets go? Who will maintain control of my estate when I pass away? But more and more of us are starting to consider what happens to our digital possessions such as our Facebook accounts when we die. Facebook has responded by creating what they call a “Legacy Contact.”

Up till now, when Facebook learned that someone died, they would offer only a basic memorialized account that other people could view but couldn’t manage. It would be frozen, angering heirs who wanted to edit the deceased’s online presence. When Alison Atkins died in 2012 after a battle with a colon disease, her sister and parents wanted access to her digital assets. Slowly, these accounts began shutting down in order to protect Alison’s privacy, per the websites’’ terms of service. Later that year when her Facebook account disappeared, her family felt like they were losing another part of Alison.

However, starting this Thursday, you can assign a legacy contact who can have more room to manage an account when the user dies.

Your legacy contact will have limited control

There are limits, however, to what a legacy contact can do. A legacy contact can:

  • Write a pinned post for your profile (ex: to share a final message on your behalf or provide information about a memorial service)
  • Respond to new friend requests (ex: old friends or family members who weren’t yet on Facebook )
  • Update your profile picture and cover photo
  • Download a copy of what you’ve shared on Facebook (this is an additional option that you can add/decline)

There are several things your legacy contact cannot do, and you should be aware of them. A legacy contact cannot:

  • Remove or change past posts, photos and other things you’ve shared on your Timeline (regardless of how embarrassing they might be)
  • Read messages you’ve sent to other friends
  • Remove any of your friends

Choosing your legacy contact

Once you have decided who your legacy contact will be, selecting them is easy. A concern that is coming is what if you select your spouse but you both travel frequently together? What if you both die? At this point in time, you can only select one person with no back up.

Estate planning has always been a complex field and the digital era is adding new complexity to this process. Facebook and other tech companies are starting to realize this, prompting changes to their terms of service. In 2013, Google began allowing people to assign beneficiaries of their Google accounts as well.

Whether you are concerned with devising a plan for either a family estate or that of a business, it is important to get good advice. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters including business succession plans, wills, and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information as we are happy to offer you a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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How will proposed tax reform affect your estate plan?

Posted January 30, 2015 in Business Law, Estate Planning, Probate by Jennifer Mispagel.

On January 20th, 2015, President Obama stood before a joint session of Congress and delivered the annual State of the Union address. Some of the topics discussed were the current State of the Union, College Savings Plan reform, his legislative agenda as well as several White House proposed tax reforms for the upcoming fiscal year.

While many of his new policies will affect all Americans in some way, several of his proposed tax increases will particularly affect upper-income persons and financial corporations. One in particular is a proposed change to the tax on appreciated estate property, otherwise referred to as the “trust-fund loophole.”

Taxation on Appreciated Estate Property

The term Capital Gain stands for the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale.  In the United States, individuals and corporations pay U.S. federal income tax on the net total of all their capital gains just as they do on other sorts of income. “Long term” capital gains are generally taxed at a preferential rate in comparison to ordinary income.

Currently, the law states that property which has appreciated in value that is owned by an estate is generally not subject to tax at death. Under this tax scheme, children and other heirs typically receive and sell property with little or no capital gains tax since most property receives an increase in basis to fair market value. For example, a parent who dies can pass along a valuable asset to their child or heir with no capital gains tax being due. When the child or heir eventually sells the asset, the current law limits the eventual tax bill by figuring the taxable gain only since the parent’s death. While this is a feature commonly known as a stepped-up basis the administration refers to this as the “trust fund loophole” and is looking to change it.

The White House proposal is to tax this appreciated estate property. The proposal states that the tax will be at 28% if the difference between the cost of the property and the fair market value at death exceeds $100,000 per person. There would be a separate exclusion for a personal residence of $250,000 per person. The proposal would not include clothes, furniture and most other personal items.

In arguing its case for revising this aspect of the tax code, the White House claims that all of the gain on valuable property or assets that occur prior to the death of a parent unfairly escapes tax. The White House claims it is in good company. Critics of the current tax code say that it is outdated. They claim that while the current policy reduces disputes over prices paid for assets long ago, they acknowledge that revision to the tax code would unlock capital by removing an incentive for holding valuable assets for generations.

Many experts, such as USC tax expert Edward Kleinbard, agree. Mr. Kleinbard notes that the capital gains tax is our only truly voluntary tax. Taxpayers can defer it for a considerable amount of time simply by withholding on the sale of their taxable assets. He argues that if you’re rich enough to hang onto your stocks and bonds, or can utilize financial strategies to enable you to exploit their value without selling them, you can defer paying capital gains tax your entire life.

Whether the White House prevails in passing this legislation remains to be seen. It seems clear, however, that negotiations on tax policy will continue in attempts by the current administration to eliminate tax loop-holes. Eliminating the lock-in effect, where holders of appreciated assets avoid selling because of the taxes imposed on the sale, could have a major impact on estate planning strategies and should prompt concerned individuals to look more closely at their estate plans, which should be revised periodically to ensure the best treatment of ones assets.

These are issues that make estate planning a complex field. Whether you are concerned with devising a plan for either a family estate or that of a business, it is important to get good advice. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters including business succession plans, wills, and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information as we are happy to offer you a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

 

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