The Thunderbird Yacht is Back…

  • July 13, 2016

…and it is just in time for its birthday. The drought that hit the sierras after the historic 2010-2011 ski season has been devastating to many parts of California and Nevada. Lakes and reservoirs dried up, thunderbird-tahoe-0_Cwildfires raged, and a number of other negative effects were caused by the extended drought. The 2015-2016 ski season was not a huge winter, historically, but it did work wonders in bringing Lake Tahoe back above its natural rim and beyond. Water is flowing into the Truckee River, the boat ramps around the lake are accessible, and the most beautiful and historic yacht on Lake Tahoe is back in the water.

In 2014, the Thunderbird Yacht had engine trouble in both of its engines. The Thunderbird Lodge Preservation Society’s Executive Director and Curator, Bill Watson, did what he does best. He raised enough money to rebuild the engines. Even before they were reinstalled in the yacht, they were on display at the Thunderbird Lodge and looked spectacular. Everyone was excited to get the yacht back into operation.

Unfortunately, the winter did not provide enough snowmelt in 2014-2015. This left the dock that houses the Thunderbird with insufficient water to store the infamous yacht. Again, Mr. Watson was able to make something good out of an otherwise unfortunate situation. Recently, the bottom of the yacht was replaced, some of which had not been replaced since 1939 (when the yacht was originally constructed), even though most wood bottoms only last 20-30 years.

The Thunderbird Yacht was recently relaunched and sent back to its boathouse. This is just in time for her 76th birthday in mid-July (July 14). If you have not been to the Thunderbird Lodge, you should definitely go take a tour. The Yacht itself is worth the trip. Add in all the history, the tunnels, and the ever-popular opium den and you have an experience to remember. Plus, your money goes toward a great cause: keeping the property maintained and open for us all to enjoy.

30th Anniversary of The U.S. Supreme Court’s Summary Judgment Trilogy (June 25, 1986)

  • June 24, 2016

To be effective lawyers, sometimes we have to be a little bit nerdy.  We have to read lots of statutes and cases to provide legal clarity and best represent our clients.US Supreme Court Reports - books

Thirty years ago, the United States Supreme Court handed down a trio of decisions that dramatically changed the way in which lawyers argue and judges decide motions for summary judgment in state and federal courts, including Nevada and California. The trio of decisions issued June 24, 1986, were the following:

 

  1. Celotex Corp. v. Catrett, 477 U.S. 317, 322-27 (6/25/1986) — established new burdens of production, persuasion, and proof for summary judgment motions, and held that a defendant moving for a summary judgment only needs to show that the plaintiff lacks evidence to support a required element of its case.

 

  1. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (6/25/1986) — authorized the use of a heightened evidentiary burden of proof which would be applicable at trial when ruling on a pre-trial motion for  summary judgment — for example, the burden of “clear and convincing evidence” to prove a defendant’s actual malice in a public figure libel case.

 

  1. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 596-98 (3/26/1986) – decided three months earlier — ruled that  the court may dismiss an inherently implausible antitrust claim based on an alleged conspiracy to fix predatory prices. “If the factual context renders respondents’ claims implausible, i.e., claims that make no economic sense, respondents must offer more persuasive evidence to support their claims than would otherwise be necessary.”

 

Perhaps we are nerds for celebrating the evolution of civil practice which has taken place in the wake of the summary judgment trilogy 30 years ago.  But these cases and the impact they have had on state and federal practice are critical to the way in which we plan litigation and assess the viability of pretrial motions designed to end cases as soon as possible. Before the trilogy of cases, there was a long history of state and federal court decisions which made summary judgment practice often ineffective except in the narrowest kinds of cases. Following the summary judgment trilogy, the use of summary judgment motions has attained its proper status as a viable tool to ensure the just and speedy resolution of all civil cases, consistent with rules of civil procedure.  These cases are a focal point of civil practice and the little lawyer nerds in us would like to share their importance with our readers.

 

  • May 9, 2016

Welcome to CLARITY – Incline Law Group’s Blog featuring legal and community news you can use.

Thanks for being here!

What If My Relative Died Without a Will? (Intestate Succession)

  • May 3, 2016

If a person dies without a will or a trust, their real and personal property passes through a process known as intestate succession. Intestate succession provides a distribution to the living heirs of the decedent pursuant to the statute in the state where the decedent was a resident when s/he passed away. If the descendant left real property in another state, the intestate succession laws of that state will govern the disposition of that property.

When someone dies without a will, the estate will still have to go through a legal process. This will require filing the proper pleadings with the court in the appropriate jurisdiction. Instead of appointing an executor of the will, the court will appoint an administrator of the estate. Similar to an executor, an administrator has a fiduciary duty to act in the best interest of the estate.

The process for intestate succession follows almost exactly the same process as a probate. Depending on the estimated value of the estate, there may need to be a notice to creditors, an inventory and appraisement of value, as well as many other formalities to process the estate so that it can be properly distributed to the rightful heirs.

If you need assistance gaining legal clarity for an intestate succession, please feel free to call the attorneys at Incline Law Group.

Does a Will Cover Assets in Two States?

  • May 3, 2016

As an attorney, people often ask me what to do if a relative who had a Last Will and Testament passes away, but leaves property in more than one state.

Based on our geographic area in Lake Tahoe, it is very common for our clients and their relatives to have property in both California and Nevada. In cases such as these,California and Nevada State Line in Lake Tahoe there will usually need to be two separate probates completed. The first probate is done in the state where the decedent resided at the time of death. In this initial probate, all of the real property in that state, as well as all personal property located in any state will be probated. If there is real property in another state, a second “ancillary” probate is processed. Ancillary probates are similar to an ordinary probate but they do have some intricacies. Many times, there is only one piece of real property in another state. Depending on the value of that real property, this may allow for a shorter, more expedited ancillary probate than would otherwise be available.

Many prefer to substantially complete the probate in the home state before starting the ancillary probates. However, ancillary probates may be done concurrently with the home state probate in order to expedite the distribution of the entire estate of the decedent. As with an ordinary probate, ancillary probates are required to transfer title to any real property in any state that is not the home state of the decedent.

The attorneys at Incline Law Group are licensed in both Nevada and California and can assist with a home state or ancillary probate.

What is Probate and Why Do You Need It?

  • May 3, 2016

Probate is the legal process whereby a will is “proved” in a court and accepted as a valid public document that is the true last testament of the deceased.  The probate process varies by state and by the size of the estate of the deceased person.  In both California and Nevada, there are specific laws and defined processes for the appointment of an executor of the will and the distribution of assets to heirs.  The executor is the person who handles the affairs of the estate throughout the probate process and who ultimately distributes the property according to the terms of the will.

An attorney is not required in a probate proceeding.  However, an attorney can certainly be beneficial to an executor, especially in more complex probates. It is important that certain steps be taken in a particular order to comply with the various probate statutes. An attorney can help navigate this process which may save the estate money. Since the executor of an estate is considered a fiduciary, the executor may become liable to the beneficiaries if s/he attempts to probate the will of his/her own and ends up doing so improperly or spending extra money on steps that did not need to be taken.

The attorneys at Incline Law Group are available to assist you with probate proceedings for estates of all sizes.

Avoiding Probate in Nevada and California with a Heggstad Petition

  • April 19, 2016

The use of revocable inter vivos trusts, also known as living trusts have gained in popularity. A wide range of estate, tax and wealth planning objectives can be achieved by the use of living trusts. A primary objective of the living trust is the avoidance of probate.

Problems can arise, however, when a trust is created but assets are not transferred into the trust, whether inadvertently or because of an ineffective transfer document. When real estate assets are inadvertently not transferred to the trustee of the trust, it may still be possible to avoid a lengthy and expensive probate.

Heggstad PetitionUnder California law, a trust can be created by a written declaration by the owner that the real property in question is held subject to a trust, and no separate transfer by deed is required to fund the real property into the trust. (Estate of Heggstad (1993) 16 Cal. App. 4th 945.) This ruling provides an opportunity to have a court declare real property to be subject to a trust through the filing of a petition that has become known as a “Heggstad petition”. A successful Heggstad petition can allow the parties to avoid a more lengthy and costly probate proceeding.

Several provisions in the Nevada Revised Statutes (NRS) dating back to 1999 authorize a Heggstad-like petition in Nevada. The most recent addition to the NRS in this regard was enacted by the 2015 Nevada Legislature in Senate Bill 484, Section 64. The new amendment of NRS 164.015 confers additional explicit authority upon the Nevada District Courts in cases involving non-testamentary trusts to hear and act upon “petitions for a ruling that property not formally titled in the name of a trust or its trustee constitutes trust property…”

For more information on California or Nevada probate, and the possibility of avoiding probate, the attorneys at Incline Law Group, LLP may be able to assist.

Why Operating Agreements are Critical

Why Operating Agreements are Critical

  • March 31, 2016

While Operating Agreements may not be required in many states, most, if not all, authorize the use of Operating Agreements for limited liability companies (LLCs).

Why are Operating Agreements so critical? Because they help to define the rights, obligations and relationships between all those involved in the LLC. As I often tell clients – every partnership is a great one…until it’s not. And when it stops being great, or the parties want to go in different directions, having an agreement that can guide a resolution or decision making authority is key.

Members, managers and the company can generally agree to operate the LLC in any manner they want so long as it is in compliance with applicable law. While Operating Agreements can cover a myriad of issues there are generally five areas that most members and managers will turn to for guidance, and therefore are areas that are worthy of careful consideration when entering into an Operating Agreement.

1. Manager Authority: This section will set forth what decisions the manager of the LLC can make without member input. This might be all day to day decisions, but not major decisions or some variation of that.

2. Member Decisions: The extent to which the members have a vote on certain LLC business can be minimal or broad. Often members will want to retain the right to vote on new managers, the ability of the LLC to borrower money, dissolution of the LLC or amendments to the Operating Agreement.

3. Duties: Most states provide a statutory framework for certain duties that managers may owe to the company and/or members. These usually include certain fiduciary duties and duties of care. These duties can often be expanded or narrowed by agreement of the parties in an Operating Agreement.

4. Allocations and Distributions: Operating Agreements can specify how the company will allocate and distribute profits and losses to the members. Members have the flexibility to create preferred returns, allocations of profit and loss that are different that ownership interests and many other structures for the allocation and distribution of profits.

5. Transfer of Membership Interests: How, when and if members can sell their interest or otherwise withdraw from the LLC is very important. The Operating Agreement can provide for very restrictive transfer and withdrawal rights or very liberal transfer rights. It is important that members understand any limitations on their ability to sell their interest or otherwise withdraw from the LLC.

Operating Agreements can cover many issues. The five noted above are some of the key issues that we find are often important to clients. The flexibility of the LLC structure and Operating Agreement provisions are what make LLCs a very attractive entity structure for many people. Incline Law Group, LLP can assist you with preparing an Operating Agreement as well as the formation of an LLC in Nevada or California.

How Should I/We Hold Title to My/Our Property?

  • March 10, 2016

How Should I/We Hold Title to My/Our Property?

When you get to the closing on your new home, the escrow company will often ask, “How do you want to hold title?” The answer to this question may depend on a number of factors, such as whether you are married, whether you are purchasing the property with someone else or whether you have a trust for your estate. There may be other factors such as whether this is a property intended for investment or whether you are purchasing in the name of a corporation or LLC.

But for most individuals, the most common options are fairly straight forward. It should be noted that the discussion below is not exhaustive and that there may be other forms of vesting that could be of benefit in your specific circumstances.  Similarly,Holding Property Titles not all states are community property states and for those that are, the existence and terms of pre or post-nuptial agreements are critical to vesting decisions. Vesting is the way we describe how the title to the property is held – with different forms of vesting comes different rights and obligations of joints owners that are not discussed here. It is important that you consult with an attorney to determine the best form of vesting for your circumstances.

This post is broken up into 4 parts which are intended to cover the most common forms of vesting in the four most common circumstances: Part I) if you have a trust; Part II) if you are purchasing property in your name only; Part III) if you are unmarried and purchasing with another person; and Part IV) if you are married. As a bonus, since we are talking about title(s), if you can name the artists for each of these songs titles, please post your answers!

Part I: A Matter of Trust

Generally if you have a trust, and the property is intended as your primary residence, you will likely title it in the name of the trustee of your trust. This is true whether you are single or married and often if you are purchasing with someone else to whom you are not married. You should always consult with your estate planning attorney when transferring property into or out of your trust.

Part II: All the Single Ladies

If you are purchasing property as an unmarried person and in your name only, the vesting is pretty much just that, as an individual (you may see this written as a an unmarried woman/man or single woman/man which is a coded reference to whether you are divorced or never married – if you object to this, as I do, you can simply request that title be vested in your name as an individual).

If you are married, but you are purchasing the property as your separate property, the title will generally read just that: Jane Smith, a married woman as her sole and separate property. In community property states, in order for your spouse to disclaim any community property interest in the property s/he may be required to sign a Quit Claim or Interposal Deed.

Part III: Our House

If you are purchasing property with another person that is not your spouse, you really have two choices:  “joint tenants” or “tenants in common”. With joint tenancy, each owner has an undivided equal interest in the property. More importantly, joint tenancy comes with an automatic right of survivorship. This means that when one joint tenant/owner dies, his/her interest automatically transfers to the remaining owner(s). If one of the joint tenants transfers her/his ownership interest during their lifetime, this can destroy the joint tenancy and convert the ownership to tenancy in common.

More than one owner can also own property as tenants in common. In this case, each owner will own a percentage of an undivided interest in the property i.e. the ownership interest does not have to be equal. With joint tenancy there is no right of survivorship and when one joint tenant dies the interest is freely transferable to the decedent’s heirs. In Nevada, if the type of vesting is not specified, our statutes provide that the default vesting is tenancy in common.

Part IV: Love and Marriage

Married couples can also hold property as joint tenants or tenants in common.  However, both California and Nevada have the option for married couples to hold property as “community property” or “community property with right of survivorship”. The community property with right of survivorship vesting carries two very important benefits, namely the automatic right of survivorship when one spouse dies and a tax benefit known as a “step up in basis”.

What this means is, when one spouse dies, the surviving spouse gets the benefit of a readjustment of the tax basis in the property up to the current value. This is important if, say, a married couple purchased the house in 1970 for $100,000. At the time of the death of the first spouse in 2016, the house is valued at $700,000. The surviving spouse elects to sell and downsize, without the step up in basis the surviving spouse could be subject to capital gains tax on the difference between the original basis of $100,000 and the new value of $700,000. If the property was vested as community property with right of survivorship, the surviving spouse would get the tax benefit of the step up in basis.

If a married couple holds title simply as community property (without the right of survivorship), they can take advantage of the step up in basis, but the transfer of title to the surviving spouse will not be automatic and may require probate.

As noted above, there are many ways for individuals to hold title to real property.  This post only discuses a few of the most common. Because there are tax and legal consequences to how title is held, it is important that you consult with an attorney to help you sort out the best approach for your needs. And do keep in mind that you can always change the vesting after close of escrow!

A Bright Line Rule on “Date of Separation”

  • March 3, 2016

The “date of separation” is a pivotal issue in many California divorce cases. This date signifies the end of the community estate. It is used to determine everything from the characterization of community and separate property assets and debts to

The date of separation signifies the end of the community estate.

The date of separation signifies the end of the community estate.

determination of the length of the parties’ marriage to determination of the length required for the payment of spousal support. It also develops a date to utilize for the calculation of the entitlement to reimbursements for payment of community expenses. It is an extremely important question and is often one of the most hotly contested issues in California divorce cases.

For the past 65 years, there has been much to argue about on this issue in any particular case. Determination had been determined largely on the interplay of various intentions, communications, facts and circumstances, unique to each case. Parties who lived under the same roof could still be “separated” under the prior case law just as parties who have lived in separate homes, sometimes for years, could still be deemed not to have separated. The determination in each case was unique to the facts and circumstances of each case and the flexibility provided for fairness.

Not anymore. The California Supreme Court just radically changed the landscape surrounding this issue. In re Marriage of Davis (2015) 61 Cal.4th 846 established a public policy bright-line rule requiring two people to actually cease living under the same roof in order to be considered living “separate and apart”.  While the intention may be to simplify things and give clarity to a confusing issue, it may likely have the opposite result.

People at the end of their marriages feel trapped in many directions and are facing a great deal of uncertainty. A bright line rule on an issue with such importance may prove to be quite limiting in a time that already feels very hopeless.  At first blush, having a clear rule may avoid the “he said, she said” that confounds lawyers and judges, making their jobs easier. However, it can only create more confusion and stress for family law litigants or those contemplating a divorce.  How will this rule impact parties who cannot afford to move out, especially with young children?  In order to file a Dissolution (e.g. divorce) in the State of California, the Petitioner must allege the date of separation. Do we now require that a person must move out of the home before filing for divorce?

I can’t even begin to imagine the strangulation effect this will have on stay at home mothers or disabled spouses who do not have the means to move out and must petition the court for the funds to do so. The time period between the decision one makes to leave his or her spouse and the time the Court first makes interim orders to protect the parties can already seem like an eternity. I have no doubt that the Davis decision will only add further complexity and stress during this period of transition and may create problems in its practical application to the realities of contemporary families.

Incline Law Group’s Family Law attorneys can help you navigate the application of this bright line rule and related issues.