SUMMER LOVE – A TALE OF SPOUSAL SUPPORT

  • July 25, 2014

By Stacey F. Herhusky, Attorney at Law, Incline Law Group

During the summer, many couples decide to tie the knot. It is a happy time for new love. Men are planning their bachelor parties. Women are busy being fitted for wedding dresses. Family law attorneys are preparing Premarital Agreements. But perhaps nobody is as happy at this time of year as the ex-husbands who anxiously await termination of their spousal support obligations when their ex-wives remarry. In California, as well as most states, the obligation to continue paying spousal support to your former spouse terminates upon remarriage.

In a recent California case, we learn that it is not always that simple. In Marriage of Left (August 2012), a former lawyer used her knowledge of the law to find a way to keep her alimony payments coming even after her re“marriage”. Andrea and Andrew Left married in 2001. Shortly thereafter, Andrea got pregnant and decided to stop working. Prior to this, she had worked as a program attorney at ABC Entertainment and Touchstone Television, earning a substantial income and honing her legal skills. Her new husband, Andrew, was a very successful stock trader and founder of Citron Research. He earned an extraordinarily high income which enabled her to retire from law and stay home with their children. Sadly, they divorced in 2008. Since Andrea was a stay at home mom and Andrew was a earning a very high income, he agreed to pay Andrea $32,547 per month in spousal support and $14,590 per month in child support (yes, those figures were per month).

Within six months, Andrea decided to remarry. They set a date, informed the children’s school they were getting married, registered at Bloomingdale’s and mailed wedding invitations to their guests. The celebration with her physician boyfriend took place in Palm Springs. Andrea wore a wedding dress and signed a Ketubah (which is a Jewish marriage contract). The only thing they did not do was obtain a marriage license.

Mr. Left stopped paying support based on her remarriage and Andrea took him back to court for back support, ultimately garnishing his Etrade account for $255,000. The Court, upon learning that there was no marriage license, refused to recognize the marriage and ordered Mr. Left to continue paying support. The court cited California laws which hold that in order to have a valid marriage, a marriage license must be issued.  Until that happens, the former Mrs. Left was not remarried and she has proven that you can, in fact, have your wedding cake and eat it too.

 

IS YOUR INHERITED IRA PROTECTED FROM CREDITORS?

  • July 20, 2014

By John C. Rogers, Attorney, Incline Law Group

This question is important to those who receive an IRA as a beneficiary, but more important to those who plan to pass an IRA to children or other beneficiaries. The latter have the opportunity to plan so that the inherited IRA includes protection from creditors.

In a recent landmark decision, the U.S. Supreme Court held that an inherited IRA does not qualify for the “retirement funds” exemption under the bankruptcy code Clark v. Rameker, 573 U.S. ___ (2014).

In that case, IRA beneficiaries filed for Chapter 7 bankruptcy protection and claimed about $300,000 in an inherited individual IRA as exempt “retirement funds.” (See 11 U. S. C. Sec. 522(b)(3)(C).)

The court decided that funds in an inherited IRA were not “retirement funds” intended to be protected by the exemption.

The court pointed to three legal characteristics of inherited IRAs that clearly distinguished them from protected “retirement funds.” (1) Inherited IRAs can never be increased by contributions from the inheriting holder. (2) Holders of an inherited IRA must withdraw funds from the account no matter how far they are away from retirement. And finally, (3) the holder may withdraw the entire balance of the account at any time, for any purpose, without penalty.

The policies that allow original IRA holders to exempt “retirement funds” from the reach or creditors help assure that IRA funds will be available to fund necessities during retirement years. Because of the distinguishing characteristics described above, an inherited IRA operates in opposition to those policies.

If you are the holder of an IRA and you anticipate naming children or others as beneficiaries, and if you want to provide creditor protection for those beneficiaries, there are a number of mechanisms that may achieve this goal.

If you already hold an inherited IRA, you may want to consult with an attorney regarding the pros and cons of liquidating that IRA and investing in other protected assets.

FANNIE MAE CHANGES MORTGAGE ELIGIBILITY RULES AFTER SHORT SALE AND DEED IN LIEU

  • July 15, 2014

By Cassell von Bayer, Attorney, Incline Law Group

One of often cited selling points for homeowners to undertake a short sale rather than a foreclosure sale is the ability to purchase a new home with financing in a shorter period of time. While all lenders have different eligibility requirements, most lenders current guidelines fall within a 2 to 5 year waiting period after a short sale or deed in lieu of foreclosure. While FHA guidelines may allow a borrower to obtain a new mortgage within one year of a short sale, those guidelines provide for several restrictions and FHA loans require significant and very costly mortgage insurance premiums.

Fannie Mae continues to be one of the largest mortgage holders and has up until now provided borrowers with mortgage eligibility two years after a short sale. Aside from FHA and VA loans, Fannie Mae has maintained the shortest wait periods after a derogatory credit event such as short sale or foreclosure. As of August 16, 2014 that will change. For all loan applications taken on or after August 16, 2014, Fannie Mae will impose a four year waiting period after a short sale and seven year waiting period after a foreclosure sale. Equally as important, for loan applications taken before August 16, 2014, the lender must document that the short sale or deed in lieu was completed two or more years from the disbursement date of the new loan. Similarly, where your credit report shows a “charge off”, meaning a lender, such as a second mortgage holder after a short sale, has reported the account charged off for accounting purposes, borrower’s may be subject to a four year waiting period. The new rules were issued on June 17, 2014, and as noted go into effect August 16, 2014. For the specifics please see: https://www.fanniemae.com/content/release_notes/du-do-release-notes-08162014.pdf

It is difficult to imagine that these new restrictions will aid the housing recovery or the reconstitution of the American Dream.

Incline Law Group Welcomes Jeremy L. Krenek

  • June 26, 2014

Incline Law Group Welcomes Jeremy L. Krenek

Jeremy L. KrenekIncline Law Group, LLP, is pleased to announce that Jeremy L. Krenek is now licensed to practice in both California and Nevada. Jeremy first worked at Incline Law Group (ILG) as an intern during the summer of 2011, and began working full time as a clerk for ILG in August of 2013. A Texas native, Jeremy graduated with honors from Texas State University. After initially working in sales, Jeremy and his wife Kelli moved to Incline Village and spent two winters working at the Diamond Peak ski area as snowboard and ski instructors. Determined to become full-time residents, they both returned to school; Kelli attended nursing school while Jeremy entered Santa Clara University School of Law. During his final year of law school, Jeremy competed in multiple Honors Moot Court competitions with stellar results. Jeremy and Kelli now call Incline Village home.

Jeremy’s practice will focus on general business and real estate law, family law, litigation and sports law.

Jeremy remains a dedicated snowboarder, and can be found most weekend winter mornings tearing up the slopes. In the summer, you’ll find him golfing, wake boarding on Lake Tahoe and four-wheeling in his Jeep. Incline Law Group is very pleased to have Jeremy on board to help support the needs of our clients in northern Nevada and northern California. Says Andy Wolf, ILG managing partner, “Jeremy is committed to ILG’s continued growth and success, and we expect the firm’s ability to serve our community will benefit greatly as a result.”

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Incline Law Group, LLP – A Law Firm Committed to Excellence & Committed to You. Incline Law Group, LLP is a boutique law firm located on the North Shore of Lake Tahoe. The firm, founded in 1973 by John C. Rogers, has earned a reputation for professionalism, discretion, diligence and positive results. Our areas of practice include change of residency, creation and management of entities, contracts, real estate, asset protection, family law, commercial transactions, civil litigation and estate planning. All of our attorneys are licensed to practice in Nevada and California.