Specific bequests

You may find yourself with a desire to give to a charitable organization, such as a church, at your death. There are a number of ways in which you might accomplish this. First, you could put a “specific bequest” in your will. It would look something like this: “I give $500 to Church X.” But while there is a time and a place for specific bequests, I generally discourage them. If you change your mind regarding the amount, or if you change churches and no longer want to donate to Church X, you have to change your entire will (which means a lot of formalities, like signing in the presence of two witnesses).

POD to Church X

There are, generally, better options. You could, for example, create a separate bank account that is payable on death to Church X. During your life, you have full control over that account. If you originally fund the account with $500 but later decide you want to give more or less to Church X, all you have to do is transfer money into or out of the account. When you die, the money left in the account automatically goes to Church X. If you decide you no longer want to give to Church X, you can either close the account, or you can make the account payable on death to Church Y (which is a lot easier than redoing your will).

Uncle Sam loses out

Finally, there is a third, and sometimes best, option for giving to a charitable organization. It’s a little more complicated to understand, but it can be well worth the intellectual investment. Suppose you have a tax-deferred retirement account (that is, your contributions have not been taxed, but the withdrawals will be taxed), like a traditional IRA. Suppose you have $50k in that retirement account, and you have $25k in an ordinary checking account. If you leave $5k to Church X from your checking account and everything else to your daughter, then your daughter is left with $70k ($20k from the checking account, and $50k from the IRA). But your daughter will have to pay at least some tax on the $50k she received from the IRA. Instead, you could name Church X as, say, a 10% beneficiary of the IRA (amounting to $5k). Church X, as a charitable organization (tax-exempt), does not have to pay tax on the $5k it receives from the IRA. In this situation, each party (Church X and your daughter) is left with the same amount, but your daughter’s tax liability is reduced. The only party that loses out is Uncle Sam (albeit in a completely legal way).

More than just a drafter

My role for you is more than just a document drafter. I’m also a planner. I can help you set things up so that those you care about most are provided for in the best way possible. Now, if you enjoy paying taxes, we can plan that way, too. But my guess is that you are interested in creative solutions like the one described above. I look forward to serving you!

–Joel Dendiu

You got served!

In a previous post, I discussed serving a party by sheriff. To “serve” a party means to provide him with legal notice of, for example, a lawsuit that you have filed against him. If a party does not receive notice, any judgments entered against him are most likely void. If, therefore, you can’t find a person, you’ll probably have a hard time getting a judgment against him (even if you have a very strong legal claim).

The more expensive option

In the prior post, I also mentioned that service by sheriff is more expensive than, say, serving by certified mail, return receipt requested. Certified mail provides the sender with proof of mailing, and the “return receipt requested” requires the addressee to sign for the mail, thus providing proof of receipt. Taking such a route is a valid form of legal service. The party, however, may simply refuse to sign for and/or accept the parcel. He, of course, won’t know what’s in it until he has opened it, meaning he doesn’t automatically have a “heads up” that he should refuse to sign.

Tougher to dodge

That’s one of the biggest reasons that it’s often advisable to pay the extra cost of service by sheriff. The sheriff (or, more likely, one of his deputies) will personally deliver the required documents to the person’s home (generally, a copy of the lawsuit complaint and a summons, which is a document from the court that orders the person to appear). It’s a lot tougher to dodge the sheriff than it is to dodge the mailperson (or refuse the letter that he is carrying).

If you need to file a lawsuit, I can help you with all of these decisions. Your problem becomes my problem, and, with all due respect, I can probably handle your legal problem a lot better than you can. Please call or email to set up a consultation.

–Joel Dendiu

The cost of a case

The filing fee for a civil case in St. Joseph County is $141 (a small claims case is $60 cheaper). If you want the Sheriff to deliver the summons (the legal document that tells a person that she has been sued), you must pay an additional $13. Why you would use the Sheriff instead of, say, certified mail is a topic for another day. What’s important for this post’s purposes is that before you’ve even hired an attorney (like me), you’re out $154.

More on flat fees

That $154 brings a few thoughts to mind. First, I’ll shamelessly (again) plug my flat-fee philosophy: when I quote you a fee for my services, that $154 (if you are retaining me to initiate a civil lawsuit) is included. Most attorneys, when speaking with you about fees, will say, “This case will cost you X dollars per hour plus costs.” The $154 isn’t included. There isn’t necessarily anything wrong with that. I just want you to be aware of the facts. And I want you to know that when I say that when you hire me, you pay one fee and you are done, I really mean it.

Just not worth it

The second thought which comes to mind is that there are lots of times when it just isn’t worth it to file a lawsuit. Suppose your neighbor backs into your yard and causes $200 worth of damage to your landscaping. You ask the neighbor to pay up, but she refuses. With these facts, you could probably file in Small Claims Court, which means $94, not $154. I give you a quote (this is just a hypothetical) of $300 for your claim. Is it worth it to you?

Objectivity

That’s the tough question that I will help you answer. That’s something that I can help provide you with: objectivity. You’re seeing red. You’re ticked at your neighbor who won’t pay up, which might lead you to do something silly, like spend $300 to get $200. But it might be worth it to you just to see your neighbor pay or just to make sure that your neighbor doesn’t do it again. These are the sorts of things that I can help you think through. I might lead you to the conclusion that you shouldn’t file a lawsuit. That would stink for me because I like getting paid. But I have an ethical obligation to counsel you in the best way possible, even if that means not moving forward. And that ethical obligation is one that I will follow every time.

–Joel Dendiu

General thoughts

There are multiple types of protective (sometimes called “restraining”) orders in Indiana. Before discussing them specifically, it’s beneficial to keep a few general thoughts in mind. First, any type of protective order will not guarantee that someone won’t be able to harm you, but a protective order can certainly help your chances. Second, if you don’t have a protective order against someone, and you fear for your safety, call the authorities. Don’t think, “There’s a person on my front porch yelling obscenities and threatening to hurt me, but since I don’t have a protective order, I can’t do anything.” You absolutely can do something, and that something is contacting the police.

Order of protection

In Indiana, an actual order of protection can only be obtained by the victim of domestic or family violence, a sexual offense, or stalking. That means that if your neighbor is yelling things at you but isn’t your family member or significant other, hasn’t sexually assaulted you, and isn’t stalking you, then you can’t get a protective order against your neighbor (though you still might consider calling the police). But if someone does fit into one of those three categories, then you can petition the court for an order of protection. There is no filing fee for such a petition, but there may be attorney fees. If the judge chooses to grant your petition, she can craft the order in all sorts of ways (e.g. staying a certain distance away from your home and place of work, not calling you or speaking to you, etc.).

Workplace Violence Restraining Order

A second type of protective order in Indiana is called a Workplace Violence Restraining Order. If, at your place of work, you are the victim of stalking and/or battery, your employer may seek, on your behalf, an order from the court which directs the individual to stay away from you at your job. As with the order of protection, there is no filing fee. But a Workplace Violence Restraining Order must be sought by your employer, not you.

Just a piece of paper

As with court judgments, a protective order is just a piece of paper. It doesn’t do much on its own. But the police will have a copy of the protective order, and this fact provides you with additional safety. Perhaps, pre-protective order, a suspicious character walks repeatedly in front of your house at odd hours of the night. It reaches the point where you call the police. The police come but say that the individual hasn’t done enough to warrant intervention. But it turns out that this person has been and is stalking you, and you are able to convince a court of this fact. The court provides you with an order of protection which includes, among other things, a statement that the individual may not come within 500 feet of your home. Now, post-protective order, when the individual walks by your house, the game is up: when you call the police, they can remove or arrest him because he has violated a court order. The person doesn’t have to have done anything else.

Seek help

If you find yourself in situations like this, make sure you contact the authorities. But if you need additional assistance, contact me.

–Joel Dendiu

Something bad happened to you

Someone did something bad to you. That “something” also happened to give rise to a “cause of action” against the “someone.” This, unfortunately, is an often-overlooked point: not every bad thing that happens to you is against the law or even gives you the right to file a lawsuit. Well, you technically have the right to file a lawsuit that doesn’t have any merit, but judges don’t look kindly on such actions, and I certainly won’t be filing it for you.

Just a piece of paper

But suppose that in this case, the law did give you a remedy for the bad thing that happened to you, and you actually won your claim in court. Congratulations! What do you do now? As my Torts professor said on my first day of law school, “A judgment is just a piece of paper. It doesn’t get you paid.” And that’s completely true. The judge is not going to collect your money for you.

Options

You have options once you’ve received a judgment in your favor. Under certain circumstances, you may be able to get an order of execution. This isn’t as grim as it sounds. The order is to the sheriff and instructs the sheriff to seize property of the other party. This might be the property at issue in the lawsuit (say, the person stole your car). Or it could be property unrelated to the lawsuit that is simply seized and then sold to pay off the judgment. Again, this option isn’t always available.

Another possible way of collecting arises from the following fact: a judgment becomes a lien (or interest) in any real property that is owned by the losing party within the county where the judgment is recorded. To sell real property (that is, land), you generally need clear title. A lien on your property means your title to your land isn’t clear. Before the property owner can sell, she has to take care of the lien, which means paying you off.

Proceedings supplemental

For various reasons, however, neither of the above methods is usually the route taken in order to collect a judgment. You probably don’t know about any of the personal property of the losing party, and it’s very possible that she doesn’t own any real estate (which means no liens against her real property). The most typical approach is called “proceedings supplemental.” Proceedings supplemental is a process in which the court orders the losing party to appear in court and answer questions about her assets so that you can figure out how to collect your judgment. You might ask the losing party about savings accounts, motor vehicles, or jobs. Once you have that additional information, you can take subsequent steps to collect (for example, garnishing the other person’s wages).

I wish it were easier, but that’s the law of Indiana. Collecting isn’t always an easy process. I can help and look forward to hearing from you.

–Joel Dendiu

Not greater than $50,000

In Indiana, if the decedent’s (that is, the person who died) estate is, less liens and encumbrances, valued at not greater than $50,000, then the decedent’s estate, under certain circumstances, may be distributed “without administration.” Distributing an estate “without administration” can be less complicated and time-consuming than the more traditional process. It’s not, however, appropriate in every circumstance. Part of your initial consultation with me is determining which path to take.

Liens and encumbrances

An example of “liens and encumbrances” is a mortgage. So if I die with $20,000 in cash and an $80,000 house that has a $60,000 mortgage balance, my estate would potentially qualify for distribution without administration (since, less liens and encumbrances, my estate has a maximum value of $40,000).

Use the experts

Distributing an estate without administration is yet another example of the large number of options and possibilities in the world of estate planning. These aren’t things you should be tackling yourself; there is simply too much to know. You may be able to figure it out on your own and do an acceptable job in the same way that you can do some plumbing work at home (that is, assuming you aren’t a plumber) and end up with a passable result. But in the same way that your plumbing work can have serious consequences, so can your legal work. You wouldn’t want the creditor of a decedent filing a lawsuit against you for distributing the decedent’s estate without administration when the law did not allow you to do so.

–Joel Dendiu

Joint accounts and POD accounts

As I’ve written about before, estate planning isn’t just about planning for death; it’s also about strategically setting things up during your life. A good example of this involves bank accounts. If you are married and want your spouse to have complete access to a bank account, making the account “joint” is generally the way to go. The spouse has full power over the account during your life, and when you die, the account automatically passes to him or her. The account does not become a part of your estate. One advantage of such a setup is that your spouse doesn’t have to wait for the probate process in order to access the funds.

A Payable on Death (POD) account operates in a similar fashion at death but differently during your life. If the account has only your name on it and is POD to your spouse, then during your life, your spouse does not have power over the account (for example, he or she cannot make withdrawals from it). But when you die, whatever is in the account automatically passes to him or her, just like in the case of the joint account.

An unfunded executor

You might ask yourself, “Why don’t I just make all of my accounts this way? Then my assets don’t have to go through probate, which means that I don’t have to pay court costs and lawyers like Joel.” While there may be a time and a place for this, there are many situations in which this sort of a setup would be disastrous. Let’s look at an example. I, Joel, die with the following assets, will provisions, and heirs:

1. $10,000 in cash (in a POD account payable to my spouse).
2. A house valued at $100,000 (with no mortgage).
3. Spouse and son named as heirs (75% to spouse, and 25% to son).
4. Son named as executor of my estate.

To review, the executor is the person who administers the estate (that is, the person who makes sure that property is distributed according to Indiana law and the testator’s wishes). My spouse is entitled to the $10,000 automatically as a result of the account being POD, meaning the $10,000 doesn’t go into the estate. That just leaves the house, which my spouse and son share a 75/25 percent interest in. My spouse and son agree to sell the house and divide the proceeds. But there’s a problem: how is my son, as my executor, supposed to pay for the process of selling the house specifically and the process of administering my estate generally? I haven’t left the executor any “liquid funds.”

A better option

The executor has access to an asset (the house), but that asset can’t really be used to pay for necessary expenses upfront (like court costs, realtor fees, property taxes and insurance while the house is on the market, etc.). A better option would have been to not make the bank account POD nor make the account joint, thereby making the cash part of the estate. Then the executor has resources to administer your estate.

But what about your poor spouse who now gets $10,000 less? Well, careful planning can take care of that. Under the first plan, your spouse was going to get (before estate administration expenses) $85,000 ($10,000 in cash, and $75,000 from the sale of the house). If you simply give your spouse 77% and your son 23%, your spouse will still end up with approximately $85,000 (before estate administration expenses). And now you have an executor who can actually administer your estate because he has access to liquid funds.

Lots of possibilities

As you can see, there are all sorts of possibilities, plans, contingencies, and unforeseen circumstances when it comes to estates and estate planning. I can help with all of that. I can make sure that those you love are taken care of during your life…and even after.

–Joel Dendiu

Preparing for life

Estate planning is not just about preparing for death; it’s about preparing for events that happen during life, too. Bad and unexpected things, unfortunately, happen. That’s why the “will package” that I offer includes more than just a will; it also includes a Living Will, a Power of Attorney Designation, and a HIPAA Authorization.

Living Will

A Living Will allows you to express your wishes regarding medical care in the event that, say, you are in an accident and the use of life prolonging procedures on you would serve only to artificially prolong the dying process or if the accident puts you in a persistent vegetative state. Without a Living Will, your loved ones might be placed in a position to make incredibly difficult decisions. This can be an agonizing process even when your wishes are known. Imagine how tough it would be if your loved ones have no guidance.

Power of Attorney Designation

There may come a time when you are not able to supervise your affairs and/or make your medical decisions. That’s where the Power of Attorney Designation and Appointment of Health Care Representative comes in. In short, the Power of Attorney Designation gives someone else the power to do things with your property (like sell real estate that you own, carry on banking transactions in your name, etc.), and the Appointment of Health Care Representative gives someone else the power to make medical decisions for you (for example, whether you should undergo a potentially life-saving, but also potentially dangerous, surgery).

I usually draft these documents to take effect immediately, not delay the effect until you become incapacitated. This is for a couple of reasons. First, you might think, “But Joel, I don’t trust Bob to have power over my bank accounts right now.” My response is, “If you can’t trust Bob when you are not incapacitated, why would you trust Bob when you are incapacitated?” The fact of the matter is that whomever you designate as your Attorney in Fact (that is, someone who has a Power of Attorney over you) needs to be someone you trust to a deep degree.

Second, if these documents are drafted in such a way as to not take effect immediately—which I can do for you if you so desire—then there is a greater possibility of headaches when you become incapacitated. The bank might say to your Attorney in Fact, “Please provide us with three opinions from separate doctors regarding Jim’s incapacity.” And your Attorney in Fact would probably have to comply. When the documents are drafted such that they go into effect immediately, all that the Attorney in Fact has to present are the actual documents.

HIPAA Authorization

HIPAA stands for Health Insurance Portability and Accountability Act. The law was passed in 1996, and its main purpose is confidentiality and security of healthcare information. A HIPAA Authorization basically allows someone to have access to your healthcare information. You may think, “Why would I need this when I’ve already appointed a Health Care Representative?” The short answer is, “You may not need a HIPAA Authorization.” But such Authorizations can be useful. You may only want one person being the actual decision-maker (the Health Care Representative), but you might like multiple people being in the “information loop” (which is what the HIPAA Authorization allows). It can also make things easier for your Health Care Representative. Perhaps you make your spouse your Health Care Representative, but you authorize your three children to be in the information loop. This allows your children to, say, pick up an x-ray in South Bend, a prescription in Mishawaka, etc., which makes things a lot easier on your spouse.

What happens without these documents?

If you haven’t designated someone as your Attorney in Fact and/or Health Care Representative, and you happen to become incapacitated, moving forward can be much more difficult. In order to make decisions regarding your property or your person, a loved one may have to seek a guardianship. This involves court proceedings and court oversight. There is a time and a place for guardianships, and I can help should the need ever arise, but it’s usually a whole lot easier to have these documents in place.

Remember, estate planning isn’t just about death; it’s about life, too. I know thinking and planning for these sorts of things is generally not a fun thing to do, but it is the responsible thing to do. Let me help you. Call (574.514.3566) or email (joel@mishawakalaw.com) to set up an appointment today.

–Joel Dendiu