The Probate Process Before the First Hearing

Several steps need to be taken at specific times and within certain deadlines throughout a Probate case. This article will provide you with a shortened version of the Probate process before the hearing, including the documents you will need at the initial consultation with your probate attorney, when certain documents need to be filed with the court, and what you will need to do in your role as Personal Representative of the Estate.

Essentially, the probate attorney will need all information about the decedent as possible. Creating a list or log of all accounts, property, heirs, those who should be disinherited, specific wishes, and the like will make the process much easier. Being organized, not commingling your funds with the decedents, paying debts, and keeping track of property may seem overwhelming at first, but as long as you stay on track and keep assets and debts separate, the Probate process will go much faster. At your initial appointment with the attorney, you should bring:

  • The decedent’s Trust documents (if any)
  • At least 5 certified Death Certificates
  • Titles of real property owned by the decedent (either jointly or separately)
  • Any bills in the decedent’s name (utilities, hospital bills, etc.)
  • Stocks, bonds, or annuities in the decedent’s name
  • All bank statements, IRAs, retirement statements, or portfolios
  • A list of all possible beneficiaries, heirs, or people who would be disinherited
  • Any Federal and State tax returns

Once you have initially met with the probate attorney, the original will and any codicils will be lodged with the court, the initial Petition for Probate will be filed, and a hearing date will be assigned. Your attorney will notify all potential beneficiaries or heirs of the decedent that there is now a probate case opened and notify them of the hearing date. The attorney will then file the Notice of Petition to Administer Estate with the court prior to the hearing to ensure the court that all heirs were notified of the proceeding.

The Personal Representative will need to obtain a bond through a surety company unless the decedent’s will declares that the bond can be waived with their own money. The amount of the bond is based off the value of the estate. However, even if the will declares the bond can be waived, the court may still order that a bond be obtained. The bond ensures that the Personal Representative will uphold their duty described in their role of being the Personal Representative of the Estate.

Your probate attorney will prepare and submit a proposed Order for Probate to the court prior to the hearing and then appear at the hearing. Once the Duties and Liabilities of the Personal Representative, Confidential Statement, and Bond are filed, the Judge will then appoint the Personal Representative, Letters of Testamentary will be issued and the Order For Probate will be signed by the Judge. Certified Letters will be needed so the Personal Representative can begin managing and administering the estate.

Tax Penalties: What Are They?

Negligence can always cause distress, but it will also cost you money when it comes to taxes. The Internal Revenue Service can hit you with an additional interest charge the moment they find out that you carelessly filed your tax return resulting in an underpayment of taxes.

To date, tax penalties are a reliable source of revenue for the federal government. In light of that consistent source of revenue, the federal government has invested in collection processes to collect tax penalties that leave some debtors at the mercy of the Internal Revenue Service.  However, if you owe tax penalties, rest assured that an experienced tax attorney can help you avoid those penalties and mitigate your tax liabilities.

Types of Tax Penalties

Here’s an overview of the classifications of IRS penalties:

  • Accuracy penalties. Do not try to understate your tax liability because once the IRS finds out that your tax return is misstated, they can impose an accuracy-related penalty that is equal to 20 percent of the net tax understatement. This type of penalty can either be due  to “substantial understatement” or “negligence or disregard of the rules or regulations.”

Warning – Accuracy related penalties (also called 6662a penalties after the relevant section of the Internal Revenue Code) can lead to substantial cost, especially in the cannabis industry. Tax courts have been quick to assess the 6662a penalty against cannabis dispensaries who’ve challenged the IRS in 280E litigation following applicable case law. Before making an aggressive tax strategy against conservative interpretations of tax state and case law, consult with a tax attorney. Especially for marijuana dispensaries, a cannabis taxation lawyer can help the business create a tax strategy that minimizes the risk of costly 6662a penalties.

  • Fraud penalties. If you are thinking of underreporting your income, well, think again. If the IRS checks your record and discovers that you fraudulently omitted your earnings, they can give you a penalty of up to 75 percent of the amount you did not report. 

The IRS says ignorance of the law does not constitute fraud. But once they find strong evidence of fraud, the case will be referred to the IRS Criminal Investigation Division for potential criminal prosecution.

  • Failure to pay employees’ taxes. If you are an employer who failed to withhold or deposit your workers’ social security, medicare, and income taxes on time, you can get in trouble with the IRS as well. This occurs when employers file IRS Form 941 late, and the penalty usually depends on how long it took them to settle the payments.
  • Failure to file information returns. This one still goes to employers but specifically to those who did not file Form 1099 that shows the payments made to service providers, such as contractors. The penalty will vary depending on the type of form they failed to file.
  • Failure to pay penalties. Time is of the essence when paying taxes, so in case you miss the deadline, the IRS can impose a penalty of 0.25 percent to 1 percent per month of the total amount you did not pay on time. The penalty will start at 0.50 percent per month, but if you agreed to be under an installment agreement, the IRS can drop it to 0.25 percent per month.
  • Late-filing penalties. Filing your tax return late and not requesting an extension can cost a 5-percent penalty per month, up to 25 percent of the total charge. The maximum of this penalty is reached when five months and one day after the April 15 deadline, you still did not file your tax return.

Offers in Compromise with the IRS

One way of removing your tax liability is to take advantage of an offer in compromise. An offer in compromise is an offer made by the taxpayer to pay a reduced amount from the original tax liability. It’s a good option for business owners or private individuals with federal tax debt who can afford some of the amount but not the full balance. If the IRS accepts an offer, the taxpayer can expect to pay a reduced amount and even schedule installment payments.

Getting Your Offer Approved

To get your offer approved, you must have a valid reason recognized by the IRS. Any of the following three circumstances can serve as a reason why you’re making an offer in compromise: 

  • Doubt As To Liability – there is a doubt about the existence of the tax liability itself.
  • Doubt As To Collectibility – there is uncertainty that the IRS can collect the full tax liability due to circumstances such as insolvency, lack of assets, etc. 
  • Effective Tax Administration – collecting the tax liability in full will lead to inequity or economic hardship. 

Your offer must also be greater than your RCP, which stands for reasonable collection potential. The IRS uses the RCP to determine a taxpayer’s ability to pay the tax. You must also submit all the necessary documents and fees. Failure to comply with the required documents and fees will result in your offer being returned. Don’t worry if this is the case – you can always cure your offer’s defect if it is returned and resubmit. If the IRS rejects your offer, you can still appeal the decision through the appeals process, which will be detailed in your rejection letter. 

Not everyone qualifies for an offer in compromise.  An experienced tax attorney can evaluate whether you meet the requirements for an offer in compromise and submit an effective offer on your behalf. 

Can A Marijuana Dispensary Deduct Expenses Related To Selling Products That Do Not Contain Marijuana?

Marijuana dispensaries generally cannot deduct business expenses due to IRC 280E. However, the CHAMP court held that section 280E does not preclude a marijuana dispensary from deducting expenses attributable to a trade or business that does not traffic in controlled substances simply because the dispensary also is involved in the trafficking in controlled substances.  In response, many marijauan dispensaries facing a notice of deficiency disallowing deductions under IRC 280E have argued that they have two separate trades and businesses, just like the marijuana dispensary in CHAMP.  

In light of the CHAMP decision, it is certainly possible that the sale of products that don’t contain marijuana can be deductible if those sales are part of a separate trade or business.  However, in practice the IRS has disallowed deductions for those sales and courts have reasoned that such sales are activities incident to the business of trafficking in a controlled substance and thus part of a single business whose deductions are non-deductible under IRC 280E.

Guest post by Jin Kim. Attorney Jin Kim practices marijuana tax law in California. She represents cannabis businesses with state and federal tax debt against the IRS and state tax agencies.

FAQs: Property Valuation in California Divorce

Property division is a common occurrence in California divorce. In some cases property division actually involves the sale of community property such as the family home. However, in other cases the property can be retained by a spouse. In that event, the asset is valued and the other spouse compensated for their community property interest. That compensation can come from refinancing the home or other funds. However, before property division with a compensating payment can occur, the community property must be valued.

What is the fair market value?

The fair market value of a property is the highest price agreed to on the date of valuation by:

  1. A seller, being willing to sell but under no obligation or urgent necessity to do so; &
  2. A buyer, being ready, willing, and able to buy but under no particular necessity for doing so.

It is important to determine the fair market value of property because it is the value used by the court for the marketable asset in a marital dissolution case. In addition, your divorce attorney needs to have an accurate valuation of the property to negotiate with the other party.

Who are valuation experts?

Valuation experts are people who are appointed by the court to value property. They may be court-appointed or presented by the parties. 

What should be the time for valuation?

A date as near as possible to the time of trial should be used in valuing the assets and liabilities in property division.

Can alternative dates be used?

Yes. If it is the only way to promote an equitable division of property in divorce, then an alternative valuation date may be used. Factors that may induce the court to use an alternative valuation date are:

  • A party’s deliberate actions that prevent the valuation of the property.
  • A party’s squandering of community assets after separation
  • Waste or mismanagement of assets by a party.
  • An increase in the value of the community estate through the sole hard work of a party.

Whose opinions can establish the value of real property?

The following are the only persons qualified to give opinions on the value of real property:

  • An expert qualified to express such opinions, or
  • The owner or the spouse of the owner of the property or property interest in being valued.

What are the valuation methods?

There are three methods that may be used in valuing property: the Market Approach, the Income Approach, and the Cost Approach.

What is the market approach?

Under this approach, the price of a sale or contract to sell involving the property (or a comparable property) is used as the basis for the opinion of the witness that establishes the value of the property. The sale must have been made in good faith and must have happened within a reasonable time before or after the date of valuation.

When is a property considered comparable property?

In order to be considered comparable, the following requisites must concur:

  • The sale or contract must have been made sufficiently near in time to the date of valuation.
  • The property sold must be located sufficiently near the property being valued; and
  • The property must be sufficiently alike in character, size, situation, usability, and improvements to make it clear that the property sold and the property being valued are comparable, and that the price paid for the property sold sheds light on the value of the property being valued.

What is the income approach?

In this method, the basis for the opinion of the witnesses on the value of the property are the incomes earned by the property. Income may be in the form of rent. Rental value of a comparable property will also suffice as basis under this method.

What else aside from rent can be considered in income approach?

The capitalized value of reasonable net rental value may be used as basis under the income approach, as well as a portion of gross sales or income from a business that operates on the lease property.

What determines the value in the cost approach?

The following indicates the value of a property under this approach:

The value of the land together with the cost of replacing or reproducing the existing improvements thereon, if the improvements enhance the value of the property or property interest for its highest and best use.

Less whatever depreciation or obsolescence the improvements have suffered

Legal observer to call for arrest, prosecution of officer he says shot him in the face during protests — FOX40

SACRAMENTO, Calif. (KTXL) — The National Lawyers Guild member who was shot in the face with a projectile during protests in Sacramento plans to ask for the arrest and prosecution of the officer or officers responsible. On May 30, NLG member Danny Garza served as a legal observer at the protests near J and 21st […]

Legal observer to call for arrest, prosecution of officer he says shot him in the face during protests — FOX40

When Do Divorce Attorneys Accept A Flat Fee?

There are many difficult decisions to make in divorce. Whether to file, wait to see if your spouse will really go through with it and file, whether to fight over the kids, or even whether your should hire a divorce attorney are issues that confront many individuals facing divorce. While there are many difficult decisions to make, if you decide to hire a divorce attorney you’ll also need to decide whether to hire an attorney by the hour or for a flat fee.

Flat Fees in Family Law Cases

Divorce lawyers work on cases for a flat fee to prepare documents or engage in limited scope representation. Rarely do divorce attorneys offer a flat fee to represent clients in all aspects of their divorce or other family law issue as the scope of work is uncertain.

Document Preparation

Divorce attorneys offer flat fees for ghostwriting, which is a term for preparing your legal documents. Once completed, you will still be self-represented and need to file your documents with the family court. However, you’ll have some assurance that your documents are accurate, prepared by a licensed attorney, and maybe even have some guidance as to the next steps in your case. While there are a few flat fee divorce attorneys for document preparation, many divorce attorneys only offer “full-scope representation.”

Limited Scope Representation

Limited scope representation is a concept that has gained traction in the past several decades, particularly within the context of family law. Instead of representing a client on all aspects of their divorce, which may include custody, support issues, etc., the attorney agrees to represent the client with regard to a specific event in their case or issue. For instance, the attorney may agree to represent the client at a particular hearing or filing a request for order for child support. By limiting the scope of the attorney’s service the attorney can offer the client a flat fee instead of traditional hourly billing. In essence, the limited scope of representation gives the attorney a better idea as to the number of hours they’ll need to invest, making a flat fee agreement more feasible for the attorney.

Resources For Filing Divorce In Roseville

Not everyone filing for dissolution of marriage in Placer County can afford an attorney. When parties must represent themselves in family court the law and court procedure can be intimidating, but there are resources that can help. From document preparers to self-help centers, filing divorce in Placer County can be accomplished without an attorney.

Note – it’s always advisable to hire an attorney when filing divorce. An attorney is licensed to provide legal advice and can help you achieve your legal objectives in family court. This article is designed for low-income individuals who absolutely cannot hire a local attorney for full-scope representation, usually by paying a several-thousand dollar retainer fee with hourly billing.

Document Preparer

A non-attorney document preparer can enter information into the required forms to start a divorce. However, they can’t provide legal advice. Their services are quite limited as forms alone usually won’t accomplish the 6 month plus process of divorce, and are even less likely to be sufficient if the other party files a response.

Ghostwriting

Even if you can’t afford an attorney for “full-scope” representation (representation from start to finish, including court appearances), you may be able to hire an attorney to prepare your documents. This is also called ghostwriting and it’s preferable to hiring a paralegal to do the same. An attorney can give you more guidance and explain the substantive law.

Self-Help Center

The Placer County Self Help Center can help self-represented parties with cases in Placer County or who reside in the county. Accordingly, residents of Roseville or others with family law cases in Placer County court can use the self-help center. The center can offer procedural guidance and assist with court forms, but they won’t represent you in court. Nevertheless, they can direct you to more self-help resources and quicken your search for reliable information.

Stipulated Child Support in California

In most California child support cases, the amount of support ordered aligns with the amount calculated by Dissomaster or other software following the Guideline formula. However, parties are free to settle on a different amount of child support and formalize that agreement in a stipulation to establish child support.

If the parties choose to stipulate to a different amount of child support there are some safeguards that allow the recipient to seek Guideline child support in the future.

Can the parties stipulate a different amount of support?

Yes. The parties may stipulate to a child support amount that is lower than Guideline child support, subject to the court’s approval.  

What should the parties declare in the stipulation?

The parties should declare the following in order for the court to approve the stipulated agreement:

  • They are fully informed of their rights concerning child support
  • They agree to the order without coercion or duress
  • The agreement is in the children’s best interests.
  • The children’s needs will be adequately met by the stipulated amount; and
  • The right to support has not been assigned to the county, and no application for public assistance is pending.

Who else should sign the stipulation agreement?

The local child support agency also has to sign when the agency is providing child support enforcement services. The child support agency cannot sign a stipulated agreement ordering an amount below the guideline amount if the children are receiving CalWORKS benefits, if there is a pending application for public assistance, or if the parent receiving support has not consented to the order. The stipulated agreement is not valid absent signature from the local child support agency. (See Family Code 4065(c)).

What information should the court provide if it approves a stipulation agreement?

When a court approves a stipulation agreement that orders child support in an amount different from the guideline formula, the court must include, on the record, the following information:        

  • The amount of support that would have been ordered under the guideline formula.
  • The reasons the amount of support ordered differs from the guideline formula amount.
  • The reasons the amount of support ordered is consistent with the best interests of the children.

Can The Recipient Change Their Mind and Seek Guideline Child Support Later?

If the parties stipulate to an amount of child support that is below that calculated using the Guideline formula, the recipient spouse can change their mind and seek Guideline child support later on. To modify a stipulated child support order that established support below Guideline support, the party does NOT have to show changed circumstances. For example if the parties file for dissolution of marriage in Modesto and stipulate to $1,000 per month child support, even though Guideline child support is $2,000, the recipient parent can always seek modification of the child support order to $2,000 without showing a change in circumstances.

When Cars Hit Pedestrians Outside of The Crosswalk

In California, car accident law often boils down to theories of negligence. At times, the negligent party is suggested by the facts. For instance, when a car hits a pedestrian who is using a crosswalk and causes injury, more likely than not the car driver was negligent to some degree. But who is negligent when a car hits a jaywalker or pedestrian outside of a crosswalk?

Pedestrian Crossing Outside Crosswalk

Pedestrians who do not use a crosswalk are required to yield the right-of-way to nearby motorists. They must also look for approaching and oncoming vehicles. Failure to observe these may lead to a finding of negligence for the pedestrian.

It is not necessarily illegal to cross the street without using a crosswalk. It cannot be used as a defense by a driver against an injured pedestrian plaintiff.

The presence of negligence on the pedestrian’s actions will not prevent them from claiming damages later on. The concept of comparative negligence under the law states that when both parties are negligent, the amount of damages that can be claimed will only be reduced.

Jaywalking

There is a presumption of negligence if a pedestrian jaywalks and there is an ordinance prohibiting it. The following requisites must exist for this presumption to arise:

  • Jaywalking continues to the moment of impact
  • It results in an injury that would not have occurred if the pedestrian had not disregarded the ordinance.

Pedestrian Walking Along Highway or Roadway

A pedestrian must walk close to the left-hand edge of the roadway if outside a business or residence district. However, the law now also allows pedestrians to walk close to the right-hand edge of the road. The latter is permitted if there is no crosswalk available.