Robinson ♦ Thatcher, LLP

A while ago, I started posting humorous bits on our Facebook page as Friday Friday Funnies.  After my Aunt passed away suddenly, I fell out of that habit.

The practice of law (especially a family-oriented practice like Robinson – Thatcher, LLP) is so frequently filled with such emotionally draining issues like divorce, custody battles and bankruptcy) that I decided to bring back the Friday Funnies on a slightly bigger scale.   Instead of limiting my post to Facebook, I’m bringing it to the Robinson – Thatcher blog as a whole.  So tune in on Fridays for a little bit of levity.

For the first post in this feature, I thought I would put up a tried and true bit of humor that I found around the web.  Thanks to Maxine for the image.  I think my Aunt Julie would have got a kick out of it – she was always the life of the party.

If you think you may need to file bankruptcy, you’ve got lots of company.

According the Bankruptcy Data Project at Harvard University, during calendar year 2009, 1,016,105 individual Chapter 7 petitions were filed. In 2010, the figure climbed to 1,101,534. Most Chapter 7 individual petitions were filed by people who primarily had consumer debt. In a Chapter 7 bankruptcy, a debtor’s assets are liquidated and the nonexempt proceeds are distributed to creditors. With California’s unemployment crisis continuing, it seems likely the figure will continue to rise in 2011. The following are some common reasons people end up needing to file bankruptcy.

Following on the heels of the New Year are two very important dates in my life.  The first is my birthday, the second is the anniversary of my father’s death, just two days later.  One of the very last things my dad said in his life was “Happy Birthday” to me.  So, at this time of year, when we are all making resolutions (or better yet, goals) for the new year, I tend to reflect on my dad and the example he set for my life.

With that frame of mind, when I recently read an article on the importance of elder care, and selecting the right provider, it started me thinking about my dad’s illness and the lessons I learned from the examples he and my mom set.

Living Trust

My parents had a “living” trust to take care of the financial aspects of death.  I previously discussed Living Trusts and other necessary estate planning documents, here.

Advance Health Care Directives

My both my mom and dad had advance care directives and medial peers of attorney allowing each other to make necessary medical care decisions. Just as important as having the legal documents in place, my parents discussed their wishes with each other (and me).

Before giving someone the power to make decisions on your behalf, make sure that person knows how YOU would make the decisions.

Long Term Care Insurance

My parents invested in long term care insurance. This insurance became vital in my dad’s illness. When they first purchased the insurance, I thought it was a great idea to help me when it came time to paying for a nursing home for them!

As it turned out, they needed the insurance sooner than expected, because my father passed away when he was only 65 (in no sense of the word was my father “elderly”). However, he did fight a ten year battle with cancer. When we learned that the cancer has spread to his lungs and liver and that the chemotherapy was more likely to kill him than save him, dad insisted on coming home (despite the fact that most of the hospital staff thought he should go to a rehab facility or nursing home).

Dad was too weak and ill to care for himself, my mom arranged for his care through a combination of hospice care and a wonderful in home care provider Visiting Angels in Orlando, FL.   As you might imagine, 24 hour, in home care can be costly.  Although, medicare covered some of the expense, my mom was able to pay for Dad’s care because she and my dad had the foresight to invest in long term care insurance.

At Robinson – Thatcher, LLP our mission is to bring peace to your family. Part of that mission is to ensure that our clients, friends, and neighbors have the necessary tools in place to enable their peace of mind knowing that their families are taken are of as they would wish.

Wishing you peace.

New Years Resolutions

I have a lot of resolutions for the new year, some are personal, some are professional. Most are a combination of both. For example, my resolution to work out in the new year helps to increase my general energy and will make me more productive for my clients (which is always a good thing).

Take Stock of Where You Are Now

The new year is a perfect time to take stock of where you are in life. Do you have children? If so, have you made a plan for their future? Helping secure our children’s future has so many aspects is hard to take care of them all at once. A good place to start is this: make a list of what you must, should and want to do for your children. Whether you can accomplish everything on your list this week (or even this year) is not the important thing.

Some of the things that should be on your “must” list:

1) have officially nominated guardians
2) have an estate plan in place (it can be either a will or a living trust)
3) have a plan for college and educational savings (such as a 529 plan or Coverdale account).

Leave Lasting Memories

I have an unusual recommendation for something that you may want to consider putting on your should do list. Write an autobiography. It could be as simple as an annotated photo album, or simply providing answers to questionnaires you find on the Internet.

There are also authors who can ghost write your story. The year my Dad died, he prepared his autobiography with a ghost writer (he also put one together for his mom, my grandma). I learned so many things about my parents and grand parents from those stories. And more importantly, I can use the books to help keep the memories of my parents alive for my children.

While I can’t write your life story for you, I can help you with creating Guardian Nominations for your children and preparing an estate plan to ensure your wishes are fulfilled as you would want them to be. If your New Years Resolutions include preparing an estate plan, please contact Robinson – Thatcher, LLP or another qualified estate planning lawyer.

Wishing you peace in the New Year!

Thanksgiving is almost here. This week in school, my oldest son (a second grader) had to prepare an oral presentation on three things he was thankful for. After much thought, he chose his family (because we love him and take him places), his pets (because he likes to play with them and they have soft fur) and God (he came up with this one all by himself with no prompting from me — because God made us and gave us the ability to make the things we need — I may have helped with the wording on that particular reason).

In preparing for the presentation, he eliminated many of the things for which he is thankful, because everyone did them. The number one thing on this list was food. He also was thankful for his house.

That got me thinking about the things for which I am thankful.

First and foremost I am thankful for my family – to be discussed chronologically. My gratitude starts with the woman who gave birth to me and gave me up for adoption. If she had not made that choice I would not have had the amazing, wonderful family that I have. So I start my list with a thank you to woman I don’t know for her courage and love.

I am so grateful to my parents who fought to be allowed to adopt despite my father’s health issues at the time. They gave me love and support and the belief that I can do whatever I set my mind to do. They also instilled in me a sense of the importance of gratitude and the need to give back to the community.

I am so grateful for my husband, who supports me at home and in my choice to start my own law firm. Also without him I wouldn’t have my two wonderful boys, who are the light of my life.

Although the are numerous things for which I am thankful, after my family come my clients. Not only for the obvious (because without you I would starve) but for the blessings you bring to my life. I am so honored to be a part of shaping your families and helping you find peace in your life. So, thank you for the opportunity to touch your lives, and please know that you have each touched my life making me a better person.

Wishing you peace this Thanksgiving.

Once it has become clear to you that you will need to file a bankruptcy, it will be advantageous to you to do some pre-bankruptcy planning.  The following is a brief list of tips to help you prepare for taking this step.

1.  No More Charging!

Stop using your credit cards.  Using a credit card to accumulate debt when you know you cannot pay it back is fraud.

2.  Order Credit Reports.

Order a copy of your credit reports from the top three credit reporting agencies – Experian, Equifax and Trans Union.  This can usually be accomplished on the internet, and if you have not ordered a report in the last year, it is free of charge.  Knowing what debts are listed on your credit reports will help you and your attorney compile the list of creditors which will be included in your bankruptcy petition.  Once you receive the credit reports, make a list of the creditors, their addresses, the amount owed and the date the debt was incurred.

3.  Determine Who To Pay.

Determine which of your debts may be non-dischargeable in your bankruptcy.  Knowing which debts will not be wiped out by a bankruptcy will help you to plan who to pay with the limited funds currently available to you.  Now that you are in this position, it only makes sense to pay those debts which will survive the bankruptcy.  Certain of these debts are what we call secured debts – debts which are essentially guaranteed by collateral, such as home mortgages, home equity lines of credit and car loans.  Other non-dischargeable debts include, but are not limited to, family support obligations, student loans and certain taxes.  If you plan on keeping your home and your car, keep making those payments.  Do not pay to cancelled credit cards or unsecured collection debts.

4.  List Your Assets.

Make a list of everything you own.  The list should include anything you own or have an interest in, including but not limited to bank accounts, tools of the trade, insurance policies and household furnishings.  Your attorney needs to know what you own so that those items can be covered by “exemptions” which allow you to keep it despite the bankruptcy.  If you have assets that cannot be covered by “exemptions”, they can be taken and sold for money to pay your creditors.  Also, making the list will assist your attorney in preparing your bankruptcy schedules.

5.  Track Your Income.

Keep track of your income from all sources for at least the six months preceding your bankruptcy.  This information is needed for the “means test” which determines whether you qualify to file a Chapter 7 bankruptcy, which eliminates your unsecured dischargeable debts, or whether you will need to file a Chapter 13 bankruptcy and pay your creditors at least a portion of what they are owed.

6.  Bite the Bullet and Deal With Outstanding Tax Issues.

Your bankruptcy may not be able to eliminate tax debt, but one thing is for sure:  if you do not file your tax returns you can be sure that the debt will not be discharged.  You are filing bankruptcy to get a fresh start.  Therefore, you need to be dealing with all of your financial woes.  So, gather your tax returns for the last three years.  Copies can be ordered from the IRS if need be.  Your tax returns will be requested by the bankruptcy trustee to verify your income.  If you have not filed your tax returns, you should contact a tax professional to assist you in dealing with your tax issues and filing the returns.  Be sure to let your attorney know the status of all tax debt.

7.  Do Not Pay Back Family/Friend Debt.

Do not attempt to pay off a loan from a family member or friend without consulting your attorney.  Such a payment can be viewed as a “preference,” which essentially means you favor one creditor over another.  Once the bankruptcy is filed, the trustee may file a lawsuit against the person or entity receiving the money and get it back to distribute amongst all of your creditors.  If the transfer of money is to a family member, partner, or corporation in which you are a decision maker, any transfers within the last year are suspect.  Small payments may be allowable, but you need to discuss this with your lawyer so that he or she can properly advise you and keep that special person from becoming a defendant in a lawsuit.

8.  Bank Accounts and Bank Credit Cards.

Finally, a word of warning: if you bank at an institution to which you owe money, for example, you have a checking account at ABC Bank and an ABC Bank MasterCard, the bank may have the right under state law to take your money on deposit and apply it to your debt to them.  Accordingly, if you file bankruptcy owing money on your ABC Bank MasterCard, ABC Bank may take the contents of your checking account as soon as they hear of your bankruptcy.  This is a violation of the bankruptcy automatic stay, which prevents creditors from taking certain actions against you once you file.  However, it can happen and you will have a nightmare of a time straightening it out.  So, move your money to another bank who has not issued you a credit card.

If you are concerned about your current financial situation please contact Sarah Jane Robinson by e-mail or telephone (310) 963-5151.

This morning on CBS’s The Early Show, they had a wonderful piece on Co-parenting after a divorce.  Since I started my practice, I have maintained the philosophy that although it is sometimes healthier for a couple to no longer be married, when there are children involved, you are going to be a family forever.

This morning’s piece provided some good information and examples of successful co-parenting.  Dr. Jennifer Hartstei spoke about some of the key things to remember in co-parenting.  The Early Show also included a segment showing an example of a successful co-parenting (but separate family).  The Thomas’ have a website for parents who want to try co-parenting, co-parenting101.org.

Going through a divorce is traumatic for all parties involved.  Shouldn’t we do everything possible to minimize the harm it does to our children?

If you are going through a divorce and want to minimize the traumatic impact on your children, Laura L. Thatcher of Robinson – Thatcher, LLP can help you create parenting plans that work for you and your family.

Wishing you peace.

This morning, I saw a news report about a company that offers divorce insurance. I did a double take. Divorce insurance? What is that?

The company that offers the divorce insurance is called Wedlock. WedLock is offered by SafeGuard Guaranty Corporation, a company created by John Logan. The insurance startup based in Kernersville, NC and underwritten by Prime Insurance Company, a surplus lines insurer based in Salt Lake City, Utah.

Cost and Benefits of Divorce Insurance

Insurance plans start at approximately $16 per month “unit” of coverage, which equals $1,250 in benefits. You can buy additional units at the same price — and keep going right up to 200 units, or $250,000 of coverage. As long as you continue paying the premiums, the company adds $250 of coverage every year per unit. The kicker is that there is a five year waiting period before benefits are available (for an extra premium the waiting period can be reduced to three years).

The policy is designed to cover the costs of divorce, including attorney fees, moving expenses, new digs, child support and alimony. However, it does not appear that there are any restrictions on how the benefits must be spent. It should be noted that if a couple pays for the insurance with community property funds, any benefits payable would also be community property.

I frequently advise my clients regarding the necessity of having all types of insurance, liability insurance, life insurance, earthquake insurance, and professional malpractice insurance. Did you know you can even get insurance for your wedding reception?  However, I’m not sure divorce insurance is something I would recommend.

The average cost of divorce in Southern California is approximately $70,000. Add that to the fact that nearly half of all marriages end in divorce, insuring against this risk does not seem like a bad idea.  That said, I just can’t think of a good way to start the conversation to purchase this insurance. It seems to me that purchasing divorce insurance may ensure you do get a divorce.

A Better Alternative

I think a better approach would be to have a prenuptial agreement.  If you are already married, rather than purchasing insurance, invest in a postnuptial agreement.  In previous posts, I have discussed my views on these agreements. In my opinion, both pre- and post-nuptial agreements can actually strengthen a marriage.  When done correctly, the process of preparing one of these agreements reinforces the intimacy and responsibilities that are essential for a healthy marriage (or will streamline the divorce process).

If you are contemplating getting married and need a prenuptial agreement, or if you wish that you had one, please contact Laura L. Thatcher at Robinson-Thatcher, LLP.

Wishing you peace.

One of the funniest stand up comedy performances that I have ever seen was Eddie Murphy’s Raw. I will never forget the sketch about community property and divorce in California. I can still hear Eddie Murphy’s voice in my head, saying “Eddieee, I want half!”

Unfortunately, the reality of divorce is simply not funny.

Married Couples who live in California are subject to California’s community property laws. Simply put: all income or property acquired while the couple lives together during the marriage is owned equally by both spouses. There are some exceptions to this, including property acquired before marriage, income from separately owned property or property that is inherited or a gift.

Upon divorce, the value of community property assets must be equally divided. This division includes not only assets but debts as well. So, if one spouse accumulates a large amount of debt during the marriage, the other spouse is equally liable for that debt. This sometimes comes as a great shock to the other spouse.

California’s community property laws can be easily avoided. Before marriage, a couple can enter into a prenuptial agreement which states the couples intention regarding property rights, or if issues arise during marriage, the couple can enter into a postnuptial agreement.

Property issues are frequently complex and it is often helpful, or necessary to talk to a lawyer about these issues. If you have questions, please contact Laura L. Thatcher at Robinson-Thatcher, LLP.

Wishing you peace.

This post will continue my series on how to gain peace of mind knowing that you have provided for your children in the event of tragedy.

In previous posts I discussed the importance of having a written nomination and the different types of guardians you should consider. Today’s post will discuss some of the characteristics that you should consider in selecting the people you will name as the physical guardians for your children (guardian if the person).

In putting together your list of people that you might consider, ask yourself: who would be a better guardian than foster care?

After you have your list of potential candidates, now is the time to carefully consider important qualities in your choice of guardian.

Some things you may want to consider include (in no particular order):

• Politics
• Religion
• Physical location
• Parenting style
• Education
• Life style
• Travel preferences
• Age of your guardian
• Your children’s relationship with the guardian

This list is not exhaustive but it is a start.

Remember, these are the people (or person) who will be raising your children in your place, so think carefully about how you are raising your children and what is important to you.

In my next post, I’ll be discussing guardians of the estate and things you may want to consider in selecting the person who will look after your child’s financial well being.

If you have any questions, please contact me or another qualified estate planning attorney.

Wishing you peace.