Know Your Law

Tenants' Rights 101

noreply@blogger.com (O'Flaherty Law) — Mon, 14 May 2012 20:06:00 +0000

Most apartment tenants have a horror story or two: busted pipes, leaks, mold, infestation, horrible neighbors, etc.--and many of these apartment tenants probably did nothing about these horror stories, believing that their only remedy was moving out. Historically this was the case, but today tenants have a variety of rights to ensure that they live in peace and comfort.

Implied in every lease is an implied warranty of habitability, which requires that the apartment be maintained in a livable condition by the landlord. Working pipes, plumbing, heat, removal of insects and rodents, and keeping the premises within the housing code are the some of the basic requirements of this warranty.

If a breach of the implied warranty of habitability arises and the landlord fails to remedy the problem within a reasonable time, the tenant has several remedies. The tenant may (1) move out and terminate the lease, (2) repair the problem and deduct that cost from the rent, (3) reduce the rent by the damage done, or (4) sue for damages. If the tenant does not wish to take advantage of these remedies, he or she should document all of the damage to ensure that the security deposit is not reduced due to the landlord’s negligence.

Additionally, If the tenant entered into a nice, clean apartment with relatively high rent, only to see the place fall into disrepair, the tenant can sue to have rent reduced by the lowered property value of the premises.

Tenants may not own their apartment, but they do own the possessory right to that apartment: they are entitled to exclusive possession of their entire apartment for the term of the lease. Unless the law of the city provides otherwise, even landlords are not allowed to enter a leased apartment without permission. If the landlord does so he or she is committing a trespass.

Further, Landlords cannot evict tenants without good cause. Good cause generally requires nonpayment of rent for no reason, illegal activities, or severe damage to the building. Historically a landlord could personally enter into your apartment and evict tenants, but today only police are allowed to evict tenants, and they need a court order to do so.

Every city has different rules regarding landlord-tenant relations. Therefore, you should consult with an attorney to determine your rights and remedies before taking action against your landlord.

--Submitted by Eric Turner

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

If I file for bankruptcy, can I keep my house and cars?

noreply@blogger.com (O'Flaherty Law) — Thu, 10 May 2012 16:14:00 +0000

If you file for bankruptcy, you still have an opportunity to keep your house and vehicles. Whether this will be possible depends on two factors: (1) how much equity you have in the property that you are attempting to keep; and (2) whether your equity in the property exceeds the bankruptcy exemption for that type of property; (3) if you have a loan secured by the property, whether the bank will agree to reaffirm the loan despite the bankruptcy; and (4) whether you will be able to afford to continue to make your loan payments after the bankruptcy.

Step 1 - How much equity do you own in the property you are trying to keep?

First, you must determine how much equity you own in the property that you are hoping to retain. Equity is determined by subtracting the balance of any mortgages or other loans secured by the property from the value of the property. For example, if your house is worth $100,000.00, and you have a balance of $75,000.00 on your mortgage, then you have $25,000.00 of equity in your house.

Step 2 - Does your equity in the property exceed the bankruptcy exemption for that type of property?

Second, determine whether your equity in the property in question is greater than or less than your state's bankruptcy exemption for such property. Federal and state statutes provide that certain types of property are exempt from inclusion in the bankruptcy estate, up to a certain monetary value. This means that if your ownership interest (equity) in a piece of property is less than the statutory exemption amount, the trustee cannot sell such property for the benefit of your creditors.

For example, the Illinois exemption for residences is $15,000.00. So, if you have less than $15,000.00 of equity in your residence, the trustee cannot sell your residence for the benefit of your creditors.

Illinois has a $2,400.00 exemption for vehicles and a $4,000.00 "wildcard exemption" that can be applied to any personal property (meaning anything but real estate). So, if you use to use your wildcard exemption on your vehicle, you can keep your vehicle so long as you have less than $6,400.00 in equity in the vehicle.

You should note that the vehicle and residence exemption amounts are doubled if you are filing jointly with your spouse and you and your spouse jointly own the property in question.

In your analysis, you should also bear in mind that if your equity in a given piece of property is slightly greater than the exemption amount for such property, you still may be able to keep the property, because the trustee may decide that the monetary benefit to your creditors would be outweighed by the burden of taking possession of the property, selling it, and distributing the proceeds.

So, the bottom line is that if you have less equity in a particular piece of property than the statutory exemption amount for that type of property, or if it is close, the trustee will not seize the property and sell it for the benefit of your creditors.

Step 3 - If you have a loan secured by the property, will the bank agree to a reaffirmation agreement?

If you own the property in question free and clear, then Step 2 should be the end of your analysis. Usually however, property such as residences and vehicles are secured by a loan. If you want to retain the property in question, you will have to reaffirm the loan. This is accomplished by executing a contract with the bank that holds the loan, called a reaffirmation agreement, whereby you and the bank both agree that the loan will not be wiped away in bankruptcy with the rest of your debt. After your bankruptcy, you will still have the debt represented by the loan and still be required to make payments as you were prior to the bankruptcy.

If you do not execute a reaffirmation agreement and file it with the court, you will no longer be responsible for the loan, but the bank will have the right to collect the property secured by the loan (i.e. you won't have to make your mortgage payments or be responsible for the mortgage balance, but the bank can take your house).

Banks are almost universally willing to execute reaffirmation agreements.

Step 4 - will you be able to afford to make the loan payments after the bankruptcy?

When you file your reaffirmation agreement with the court, you will have to determine whether the assumption of the loan creates a presumption of undue hardship. This is done by subtracting your monthly expenses including the loan payments from your monthly income. If you do not have enough monthly income to pay for your monthly expenses (including the loan payments), then the court will presume that reaffirmation of the loan creates a hardship upon you. If this is the case, you will have to appear in court and explain to the judge how you expect to be able to make monthly loan payments after bankruptcy. The judge will then determine whether to allow the reaffirmation agreement.

If there is no presumption of undue hardship or if the judge allows the reaffirmation agreement despite the presumption of undue hardship, you will be able to keep the property after your bankruptcy.

The Elements of a Typical Estate Plan

noreply@blogger.com (O'Flaherty Law) — Mon, 30 Apr 2012 18:26:00 +0000

This week we will explain the elements of a typical estate plan for a married couple with assets below $2 million dollars. Such an estate plan will contain the following documents:

Ø Joint Revocable Trust: Primary estate plan document, which sets forth inheritance wishes, provides for disability, and establishes successor trusts for children.

Ø Pour Over Will: Safety net document, which provides that any assets not transferred to trust during lifetime will be dealt with according to the terms of the trust; also provides for guardianship of minor children.

Ø Financial Power of Attorney: Allows your spouse (and successor agents) to execute financial transactions on your behalf.

Ø Health Care Power of Attorney: Designates an individual to make medical decisions on your behalf in the event of incapacity.

Ø Living Will: States your wishes in the event that you are incapacitated and death is imminent except for delaying procedures.

"I'm a new business owner -- how many different types of taxes do I need to pay?"

noreply@blogger.com (O'Flaherty Law) — Tue, 03 Apr 2012 14:56:00 +0000

Today, our friend, D Zorea of DDZ Accounting Group, submits the following article:

If you're a new business owner and are feeling overwhelmed by the prospects of paying too many taxes, it might be because there are so many different types of taxes for which to account. Depending on your type of business, an Illinois business owner will be liable for different taxes including (but not limited to):

Sales: Does your business sell widgets, or food products? You are responsible for collecting the state (and sometimes local municipality's) Sales and Use Tax and remitting these back to the appropriate taxing agencies. Sales tax rates can range around 7.5% to 10%.
Payroll: Do you have employees? You will be matching your employee's payroll withholding taxes, as well as contributing to federal and state unemployment insurance premiums based on your employees' earned wages.
Franchise: The state of Illinois charges a Franchise tax of 1.5% for corporate business owners. This includes LLC, C-corporations and S-corporations, but not sole-proprietors or unincorporated partnerships.
Income: Similar to sole-propietorships, S-corporations and LLC's are considered "pass-through" entities. In other words the net profits of those businesses "pass-through" to their owners and are taxed at the business-owners' individual tax rates. The income tax returns for S-corps and LLC's generate a K-1 form for each shareholder or LLC member; these are the business owner's equivalents to an employee's W-2 form. However, different from a W-2 which typically already includes income tax withholding, a business owner with net-income from his/her business can either file and pay quarterly estimated taxes throughout the year or pay the lump-sum with the year-end income-tax return.

For the above taxes, the IRS and Illinois state agencies may apply late file or late-pay penalties; so work with your tax-professional to calculate the correct taxes due, maximize your tax return, file on time, pay on time, and save all that time and headache of doing it alone. For other questions, please contact D Zorea at DDZ Accounting -- e: d@ddzgroup.com, p: 630-368-0183, other client-testimonials at www.facebook.com/ddzaccounting.

Videoblog: O'Flaherty Law Small Business Seminar

noreply@blogger.com (O'Flaherty Law) — Tue, 27 Mar 2012 17:10:00 +0000

Please enjoy part 1 of the Small Business Primer seminar presented by O'Flaherty Law and DDZ accounting. Parts 2 and 3 of this seminar can be found on our youtube channel along with our previous seminar on wills and trusts and all of our informational videoblogs.

The topics discussed in our Small Business Primer seminar include:

I. Entity Selection - how to choose between S Corps, LLCs, C Corps, and Partnerships

II. How to get your business up and running

Incorporation and maintenance of your corporate book
Quickbooks
The initial meeting with your accountant
Insurance
How to obtain an EIN (Employer Identification Number)
Contacting the Illinois Department of Revenue for a Tax Identification Number
Dealing with special licenses and regulations that are necessary for your particular business

III. How to make the transition to being an employer

Hiring a payroll service
Dealing with benefits - steering clear of ERISA problems
Obtaining Department of Labor posters
Registering with the Illinois Department of Employment Security & Dealing with Unemployment Insurance
Worker's Compensation insurance
The elements of an employment agreement

Non-compete clause
Confidentiality of trade secrets and other info
Enforcement clause
Probationary period

Creating an employee handbook for systematized and documented expectations and discipline
The importance of termination letters
Considering independent contractors as an alternative

IV. Finding space for your growing enterprise.

If you are a small business owner, please do not hesitate to contact us with any questions you may have, or to set up a free consultation.

March 22: Open Bar and Small Business Primer at Shanahan's in Woodridge

noreply@blogger.com (O'Flaherty Law) — Fri, 16 Mar 2012 20:58:00 +0000

O'Flaherty Law and DDZ Accountng invite you to join us on Thursday, March 22, 2012 for an informative and fun evening at Shanahan's pub (1999 W. 75h St., Woodridge, Illinois). Open bar and free appetizers will run from 7pm to 9pm.

Attorney Kevin P. O'Flaherty, accountant D Zorea, financial adviser Justin J. Villanueva, and commercial real estate broker Troy Golden will discuss strategies for small business success. Whether you are just starting your business or an experienced business owner looking for a tune-up, this event will provide you with a road map to keep your business legally and financially secure.

After the presentation we hope you will stick around and get to know the speakers as well as the O'Flaherty Law staff.

If you have any questions about this event or any other topic, pleas feel free to give us a call at (630)324-6666, drop us an e-mail at info@oflaherty-law.com, or check out our website. We look forward to seeing you there!

Dividing up the Marital Estate upon Dissolution of Marriage

noreply@blogger.com (O'Flaherty Law) — Thu, 08 Mar 2012 21:00:00 +0000

There are several issues courts consider when dividing marital property in the event of dissolution of a marriage. The first issue is to determine the types of property that will be divided. Property subject to division by the court includes, but is not limited to, homes, automobiles, furniture, bank accounts, retirement accounts, pensions, stocks, and business interests.

Most people are familiar with community property states, such as California, that divide the marital estate equally. Illinois is an equitable property state and, therefore, Illinois courts order a fair division of the property based on the following factors:

Contribution of each spouse to acquisition of property, including contribution of spouse as a homemaker;

Value of the property;

Duration of the marriage;

Economic circumstances for each spouse;

Custodial provisions for children;

Age, health, occupation, and needs of each party;

Any obligations or rights arising from prior marriage;

Pre-nuptial agreement;

Whether distribution of property is in lieu of or in addition to maintenance;

Opportunity of each spouse for future income;

Tax consequences of property division on each spouse; and

Any dissipation.

The second important issue the court will deal with when dividing the martial estate is whether property is considered marital or non-marital. Marital property means all property acquired by either spouse subsequent to the marriage. The following is considered non-marital property:

Property acquired by gift, legacy, or descent;

Property acquired in exchange for property acquired by gift, legacy, or descent;Property acquired after judgment of legal separation;

Property excluded by valid written agreement of the parties;

Any judgment or property obtained by judgment awarded to one spouse from the other spouse;

Property acquired before the marriage;

Any increase in value of the above-listed property; and
Any income from the above-listed non-marital property, as long as the income is not attributable to the personal effort of a spouse.

Although an equitable division of the marital estate is considered on a case-by-case basis, the court is prohibited from considering marital misconduct when dividing the marital estate. Property will be divided fairly without the court acknowledging the transgressions of either spouse.

By Maggie Pucher

Preparing for Bankruptcy

noreply@blogger.com (O'Flaherty Law) — Mon, 20 Feb 2012 20:41:00 +0000

Filing for bankruptcy can be an overwhelming process. There are a considerable number of documents to gather, forms to fill out, and courses to complete. Your attorney will determine which forms the Bankruptcy Court requires for your particular situation, and can help you complete them properly. However, your attorney is only as helpful as the information you provide. If your records are shoddy, then completing the forms could take a couple tries, which costs you valuable time and money. That’s why diligence and organization is crucial in bankruptcy.

Regardless of the chapter of the Bankruptcy Code that you and your attorney decide to file under, there is some basic information that you will need to assemble. Below is a checklist that the attorneys at O’Flaherty Law ask their bankruptcy clients to complete before filing the petition to ensure the bankruptcy process goes as smoothly as possible.

Credit Counseling Course: You will need to complete an accredited online credit counseling course. Go to www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm and find your state in the drop down menu. If you live in Chicago or one of the collar counties, you need to find a course accredited by the Northern District of Illinois. Most courses are approximately $50 and will take a couple of hours to complete. At the end of the course, you will receive a Certificate of Completion by e-mail. Provide your bankruptcy attorney with that certificate.

Schedules: You will need to fill out schedules, listing all of your assets, liabilities, income, and expenses. Please use the linked Schedules as a worksheet to help organize your finances before you meet with your attorney. Your attorney can then ensure that everything was filled out properly and answer any questions. Below is a breakdown of what each schedule entails and how to best fill it out.

Schedule A: List all of your real property (i.e., land, houses, condos, etc.), the approximate value of the property, and the amount of debt secured by the home. Be sure to include all loans secured by your home, such as mortgages and home equity lines, when calculating the secured debt.

Schedule B: List all personal property that you own and the approximate value of the property. Personal property includes more than we often think it does. Please review this schedule carefully because it is itemized to ensure you do not miss anything. Use Kelly Blue Book to value your motor vehicles and use resale values for your furniture, collectibles, luxury items, etc.

Schedule C: This schedule lists property that is considered “exempt” for bankruptcy purposes. This means that the trustee cannot take these assets from you in order to satisfy debts to your creditors. I have purposely excluded Schedule C from the linked .pdf because every state has different rules regarding what kind of property is exempt and for what amount. This schedule is better left for your attorney to complete.

Schedule D: List all debt that is secured by collateral, such as mortgages, car loans, etc. Include the name and address of the creditor, as well as the account number and amount of the debt.

Schedule E: This schedule lists the kinds of debt that you will not be able to discharge through bankruptcy. Check off and list all debt that falls into the categories listed on Schedule E.

Schedule F: List all other debt that you have not listed on previous schedules. This will consist of unsecured debt, which is any debt that is not secured by collateral (i.e., credit card debt, medical bills, etc.).

Schedule G: List all leases and executory contracts (i.e., timeshares) that you are subject to.

Schedule H: List all “codebtors” and the name of the creditor to whom debt is owed by you and the codebtor. A codebtor is someone whose name is also on any of the debt listed in Schedules D, E, or F.

Schedule I: List your monthly income by filling out this schedule accordingly.

Schedule J: List all monthly expenditures by filling out this schedule accordingly.

Proof of Income: Gather and provide your attorney with evidence (i.e., paystubs) of all payment received by you within the two months prior to filing the petition.

Proof of Payments: Gather and provide your attorney with evidence of all payments toward your debts that you have made within the three months prior to filing the petition. If you have paid back debt to a family member, keep track any payments made within one year prior to filing the petition.

Fees: Gather the necessary amounts for attorney’s fees and court costs. Typically, attorneys in the Downers Grove area charge anywhere from $1,300-$2,500 for a Chapter 7 or Chapter 13 filing, and attorneys will typically require a flat fee for a Chapter 7 filing. The court filing fee is $306 for Chapter 7 and $281 for Chapter 13. Keep in mind that certain amendments made to the Schedules during the course of the bankruptcy proceeding may carry additional fees.

Financial Management Course: Keep in mind that you will be required to complete an online Financial Management course toward the end of the bankruptcy proceeding. The completion process is similar to that of the Credit Counseling course.

-- Submitted by Elizabeth M. Keleher

Incorporation Issues for Professionals

noreply@blogger.com (O'Flaherty Law) — Mon, 06 Feb 2012 16:29:00 +0000

I was recently asked the following question relating to professional corporations in response to my recent video blog: Which Corporate Form is Right for Your Business?

Q: Hi Kevin! I ran across your video blog about corporate forms on Facebook - looks like things are going well for you guys! You mentioned emailing with any further questions...I have one. I have a full-time job, but I am now taking on private clients (home-based speech therapy services). I have liability insurance already. Do I HAVE to incorporate or can I just consider it a side job and claim it appropriately on my taxes?

A: Thanks for contacting me. I'm glad you enjoyed the video blog.

In answer to your question, incorporation would probably only be beneficial for you for tax purposes at this point. Speech pathologists and certain other professionals are required to form "professional corporations" or "PCs." PCs, unlike other corporate forms, will not protect you from malpractice liability. As your business grows, you may want to consider forming a PC to protect you from liability for your business' contracts. However, at this time, since you probably do not have a lease or other such contracts to worry about, a PC would probably not be helpful for liability purposes.

Although incorporation will not protect you from the type of liability you are likely to incur with a home-based speech pathology business, forming a PC and filing an S-Corp election with the IRS may be beneficial for tax purposes. Sole proprietors must pay self-employment tax on their profits (including salary), while S-Corp shareholders only pay self-employment tax on their salaries, not their profits. You can learn more about this by reading my article: LLCs vs. S-Corps: Selecting a Corporate Form for Your Small Business.

Whether you are taking in enough profit with your business to make an S-Corp beneficial is something you should discuss with your accountant. If you do not have an accountant that you are happy with, I recommend D Zorea (info@ddzgroup.com) or Joe Leo (jleo@scanlanleo.com).

We offer free "tune-up" consultations to small business owners to discuss both legal and non-legal issues that you may be facing (e.g. website, insurance, accounting issues, regulations, contracts, etc.). If you think this might be helpful, I would be happy to schedule a time to meet with you.

Non-compete Agreements

noreply@blogger.com (O'Flaherty Law) — Wed, 01 Feb 2012 23:30:00 +0000

As part of your employment contract, you may have signed an agreement not to compete. These agreements give employers the protection they need to prevent employees from jumping ship to a competitor and bringing along any skills, information, client lists, and secrets they may have obtained from their previous employer. Employers need not worry about competitors poaching their most valuable employees to their detriment. However, these agreements inhibit an individual’s freedom to choose their own place of employment, and are oftentimes harsh or overly broad. As a result, such agreements are frequently contested in court. How do you know if your non-compete agreement is enforceable?

Primarily, a non-compete agreement must be reasonable in scope. This is determined by whether it protects a legitimate business interest, doesn’t place an undue hardship on the employee, and doesn’t violate public policy.

A business that has a near-permanent relationship with its clients, such as physicians or insurance companies, has an interest in protecting their continued business with the client and may restrict an employee from attracting their clients to their new employer. Similarly, if an employee has learned trade secrets or confidential information, their employer may restrict their freedom to work for a competitor in order to protect this information. A clause that prohibits a former employee from doing any activity with a competitor, even activities that aren’t a threat to their interests, may be considered too broad to be enforceable.

For example, an enforceable agreement may prevent a salesman or a researcher from taking a job with a competitor for the same position, and bring his clients or expertise to his new job. However, an agreement that prevents a salesman or a researcher from going to a competitor to work as a mechanic may be unenforceable, as the expertise he will be applying at his new job wasn’t acquired at his old job and isn’t a threat to his former employer’s interests.

Additionally, the agreement not to compete must not impose undue hardship on the employee. A clause prohibiting the employee from working for a competitor in a 10 mile radius may be acceptable, but one that prohibits him from working for any competitor in North America may not.

Finally, the agreement must not go against public policy. Agreements that are illegal, give employers virtual monopolies on the workforce in that field or location, or unduly deprive an employee from choosing to go work elsewhere may be unenforceable.

All agreements must be supported by independent consideration—in other words, getting something in return for your promise to adhere to the agreement. Most of the time, the offer to hire in return for accepting the non-compete agreement is sufficient. If you are already hired and are offered a non-compete agreement, continued employment with the employer or a monetary payment can also be acceptable.

Though it may seem like non-compete agreements are easily contested, in reality most agreements are upheld. Contracts in general are highly valued by the courts, as they are hesitant to override an independent agreement between two private entities. Determining whether an agreement is reasonable is done on a case-by-case basis and you should contact an attorney before deciding to leave an employer with which you have a non-compete agreement.

-- Submitted by Eric Z. Turner

Video Blog: Which Corporate Form is Right for Your Business?

noreply@blogger.com (O'Flaherty Law) — Wed, 25 Jan 2012 15:32:00 +0000

In this month's Know Your Law video blog, Kevin O'Flaherty discusses the differences between C-Corps, S-Corps, LLCs, and Sole Proprietorships in order to help you determine which form is the right fit for your business.

For more Know Your Law videos, please visit our youtube channel.

Debt Collection Process Explained

noreply@blogger.com (O'Flaherty Law) — Mon, 16 Jan 2012 23:01:00 +0000

If you are a small business owner dealing with past due accounts receivable, or if you are having trouble paying your monthly bills and are receiving notices from creditors, you should acquaint yourself with the collection process. This article will provide a summary of that process. The narrative will be from the creditor’s perspective, but it will be equally helpful to debtors.

Bear in mind that each of the following steps tends to increase the pressure on the debtor to settle his debt. Each successive step will only be required if the debtor is non-responsive to the previous steps. In practice, it is usually unnecessary to take a collections case all the way through Step 7.

STEP 1: Internal collections procedures: Before you speak to a collections attorney, you should be sure to refine your own collection procedures. Every business is different, but the following tips may help you increase your collections on your accounts receivable:

In your contracts with your customers, include an attorney-fee provision providing that if either party is required to take action to enforce the contract, the other party will be required to pay attorney fees and other expenses.
In your contracts with your customers, include a late fee provision, informing your customers that late fees will be charged on late invoices.
On the face of each invoice, you should explain your collection procedures. Let your customers know in advance that if their invoice is x days past due they will be required to pay late fees, and that if it becomes y days past due, the invoice will be sent to collections.
Follow up on past due invoices with letters explaining the consequences of continued failure to pay.

If you believe that it will not be possible to collect an account internally, you should hand the account to your attorney to begin a collection suit.

STEP 2: Demand Letter: Once the past due account has been turned over to your attorney, he should send the debtor a demand letter to the debtor informing him that suit will be filed unless payment is made within a specific time period.

STEP 3: File suit and obtain a judgment: If the debtor does not respond to your attorney's demand letter, he should file a complaint against the debtor in the proper county (usually the county where the defendant does business or resides). In my experience, debtors tend not to defend collections cases. If the debtor does not defend the case, the court will enter a default judgment (judgment for failure to defend) in your favor at the first court date. Default judgments can be easily vacated (reversed) if the defendant files a motion within thirty days. Your attorney will therefore wait for thirty days after judgment before initiating post-judgment proceedings.

STEP 4: Citation to Discover Assets: Often, obtaining a judgment against a debtor is the easy part. Once you have a judgment, the next step is to find the debtors assets. Sometimes, you will be able to discover real estate or vehicles owned by the debtor through an advanced internet search. If this search does not provide you with assets sufficient to satisfy your judgment your attorney will file a citation to discover assets. A citation is a demand that the debtor appear in court on a specific date to testify under oath as to his assets.

Like the complaint, the citation will have to be personally served upon the debtor by sheriff or special process server. If you have any previous checks from the debtor, you will be able to determine at least one of the debtor's banks. Your attorney should send the citation to any banks at which you suspect the debtor maintains an account. These banks will be required to freeze the debtor's accounts until the citation is lifted.

STEP 5: Rule to Show Cause: In my experience, debtors rarely appear at the original court date set for the citation. If the debtor fails to appear, the court will enter a Rule to Show Cause order. A Rule to Show Cause is an order requiring the debtor to appear at a second court date to explain to the court why he should not be held in contempt for failing to appear on the citation. Like the citation and the complaint, the Rule to Show Cause will have to be personally served upon the debtor by sheriff or special process server. If the debtor appears at this court date, the citation will go forward and he will be interviewed as to his assets.

STEP 6: Body Attachment: If the debtor fails to appear on the Rule to Show Cause, the Court will enter a Body Attachment. A Body Attachment is a warrant for the debtor's arrest. Your attorney will deliver this to the sheriff, who will seek to enforce it. If the sheriff is successful, the debtor will be arrested and will usually be required to spend the night in jail until he can be brought before the judge to answer for his failure to appear on the citation. At this point, the judge will fine the debtor and set a new date for the citation.

STEP 7: Turnover of assets: Once your attorney discovers assets held by the debtor, he will seek an order from the court instructing the debtor (or his bank) to turn over all such assets to you by a specific date, except for those that are exempt from collection. If the debtor fails to do so, he will be held in contempt of court. If your attorney discovers the debtor's place of employment, he will serve a wage garnishment upon the debtor's employer, which will require the employer to directly pay you a percentage of the debtor's wages. If your attorney discovers real estate or vehicles, a sheriff's sale will be held with the proceeds going to satisfy the debt in question.

How to Get Out of a Contract - Defenses to Breach of Contract Explained

noreply@blogger.com (O'Flaherty Law) — Mon, 09 Jan 2012 17:24:00 +0000

That contract you signed with Oppressive Corp. seemed like a pretty great deal at the time, but no your circumstances have changed and you are looking for a way out; or maybe you didn't read the fine print before signing on the dotted line. Are you still bound by the contract? Maybe not.

The following contract defenses provide an arsenal of not-so-secret weapons that you can use to get out of an unfavorable contract. This article will provide you with a basic understanding of these defenses, enhancing your understanding of the contracts you sign as well as your ability to identify the situations where an attorney consultation may be useful.

Defenses to breach of contract:

Material breach by the other party: If the person that you contracted with has himself breached the contract, then you are no longer bound by it, so long as the breach is material. A breach is material if it is the type of breach that defeats the purpose of the contract. In other words, a minor deviation from the terms of the contract by the other side does not absolve you of your duty to perform.

Anticipatory Repudiation: If the other party represents or takes action to indicate that he does not intend to perform his obligations under the contract, you are absolved of your own obligation to perform. This defense would arise if, for example, you contract to buy a television from a friend only to discover that, between the time of contracting and the exchange, your friend has put the television up for auction.

Duress: If you were forced to sign the contract against your will, you are not bound by it. This defense includes not only physical duress (the proverbial gun to your head), but also economic duress. Economic duress is defined as the unlawful use of financial or economic pressure or threats to force a person to contract.

Unconscionability: An unconscionable contract is one that is extremely one-sided in favor of the party with superior bargaining power. An example of an unconscionable contract is an unfair contract that exploits a poorly educated or impoverished consumer. Individual clauses within contracts have also been held to be unconscionable. This usually occurs in the context of a take-it-or-leave-it contract, called an adhesion contract, where the party with superior bargaining power drastically limits the rights and remedies of the other party without significantly limiting its own.

Mistake: Courts will not enforce a contract where there is a material mistake regarding the subject matter, so long as the mistake is mutual. If only one party is mistaken, courts will not enforce the contract if the other party knew of the mistake and should have acted to prevent it.

Fraud: If you entered into a contract because of a material misrepresentation of fact by the other party, the contract is not enforceable against you. It will, however be enforceable against the party committing the fraud. Bear in mind that failure to disclose material information (omission) also qualifies as fraud.

Undue influence: A contract will not be upheld where one party exercises control over another party so as to overcome that party's independent judgment. The definition of undue influence includes, but is not limited to, exploitation of a vulnerability, such as a mental deficiency; exploitation of a confidential relationship; blackmail; bad faith threats of criminal prosecution; or extortion.

Impracticability: If an unexpected event makes performance of the contract impossible or impracticable, neither party will be bound by the contract. Examples of impracticability include the death of an individual who is to provide a service; destruction of property that is the subject of the contract through a natural disaster, or a new law that renders the contract illegal.

Some other considerations:

Loopholes: The terms of the contract may provide you with a loophole that provides you with an out. Be sure to have your lawyer review your contract.

Statutes: State or federal statutes may invalidate your contract or certain clauses within it.

One-sided clauses: Many states will interpret a one-sided contract clause as reciprocal. For example a provision requiring only one party of a contract to pay attorney fees if it loses in litigation may be applied to both parties by the courts.

Ambiguities: Ambiguities in the contract will be interpreted against the drafter, especially where the drafter has superior bargaining power.

Modification: Often the other party will be willing to renegotiate and modify the contract based on changed circumstances.

How to Transfer Your Assets to a Revocable Trust and Save on Legal Fees

noreply@blogger.com (O'Flaherty Law) — Tue, 03 Jan 2012 22:56:00 +0000

In our previous article, "Crash Course in Wills and Trusts: Part I," we discussed the importance of a good estate plan and introduced you to the basic elements of such a plan. In "Trusts and Wills: Which is Right for You?," we generally recommended a revocable living trust over a will as the primary vehicle for your estate plan. This week, we will explain the trust funding process. Hopefully, we will be able to help you determine which parts of the process you can accomplish without an attorney, with the aim of reducing your legal fees.

As we explained in the above articles, trusts are legal instruments that direct how certain property will be distributed and maintained. However, your property must generally be transferred to a trust before it will be subject to the trust's provisions. In this respect, trusts differ from wills, which must merely describe the property in question and indicate how you wish the property to be distributed.

Before we dive into how to fund your trust, a few notes:

You Retain Control: If you are worried about transferring title to your property to your revocable living trust, never fear. In most cases the creator of a revocable living trust is also both the trustee and beneficiary of the trust during his or her lifetime. This means that if you transfer your assets into a revocable living trust, you will retain the same amount of control over those assets during your lifetime that you had prior to the transfer. You will always have the ability to revoke or amend the trust.

You Don't Have to Transfer All of Your Assets: If certain assets totaling less than $100,000 have not been transferred into your trust at the time of your death, the executor can file a small estate affidavit. This affidavit will act to sweep up to $100,000 of personal property (i.e. property that is not real estate) into your trust, allowing this property to avoid probate. For this reason, we generally do not recommend transferring your primary checking account into your trust. The small estate affidavit can also cover your cars and furniture so long as the total amount of personal property that you leave out of your trust totals less than $100,000.

You Must Transfer SOME Property to Your Trust: Trusts are not legally effective until they have been funded with at least SOME property. This means that you cannot rely on the small estate affidavit to sweep ALL of your property into the trust upon your death. If your trust is drafted, but does not possess title to any property at your death, your estate will be treated as if no trust was in place at all.

So, once your trust is drafted, how do you go about transferring your property to the trust, and how much of this process can you accomplish on your own? The answer to this question depends on the type of property you are trying to transfer, the amount of time you are willing to personally allocate to trust funding, and your comfort level in dealing personally with financial institutions and forms. Your attorney should provide you with an outline of the steps necessary to fund your trust, based on your particular asset structure, at which point you will be able to decide which steps you would prefer to handle on your own.

Below is a list of the steps necessary to transfer particular types of assets to your trust:

Retirement Accounts: The institution that manages your accounts can provide you with forms to change the beneficiary designation for your account. We generally recommend that if you are married, you name your spouse as the primary beneficiary and the trust as successor beneficiary.

Stocks and Mutual Funds: In order to transfer stocks or mutual funds, you should fill out a stock assignment form supplied by your brokerage company.

Bonds: Savings bonds can be transferred to your account by filling out form PD F 1851 E, which can be obtained from www.savingsbonds.gov.

Life Insurance: Your insurance provider will be able to provide you with change of beneficiary forms. Like your retirement account, you should generally name your spouse as the primary beneficiary and the trust as the successor beneficiary.

Business Interests: If you are the owner or part owner of a closely held corporation or LLC, you should either transfer your shares of the company to the trust or amend the company's bylaws or operating agreement to deal with succession of shares upon your death. The most effective way to accomplish your goals with respect to your company will depend on your individual circumstances. This process should be handled by your attorney.

Real Estate: Generally, you should execute a deed transferring your real estate to the trust. Again, the best way to handle this process will depend on your individual circumstances and goals. This is another step that should always be handled by your attorney. Once drafted, you or your attorney must record the deed with your county's Recorder of Deeds.

Bank Accounts: Depending on the amount of personal property you possess, it may be advisable to transfer your savings accounts, and possibly even your checking accounts, to the trust. This can be accomplished by delivering a letter of instruction to the bank retitling such accounts so that they are held by the trust.

Remaining Personal Property: Again, depending on the amount of personal property you own, it may be advisable to transfer all of your personal property (e.g. furniture, art, heirlooms, etc.) en masse, to the trust. To accomplish this, your attorney should draft a quitclaim bill of sale.

Even the most savvy individuals should leave real estate transfers, business asset transfers, and quitclaim bills of sale to their attorneys. However, depending on your tolerance for dealing with financial institutions, you may be able to save on legal fees by personally handling, after consultation with your attorney, the transfer of your retirement accounts, life insurance policies, stocks, mutual fonds, bonds, and bank accounts.

Although the trust funding process may seem like a lot of effort, the time and attorney fees that you spend properly funding your trust will pale in comparison to the time and money that you will ultimately be saving your loved ones.

New Laws for Illinois in 2012

noreply@blogger.com (O'Flaherty Law) — Fri, 30 Dec 2011 16:19:00 +0000

Illinois will add 200 new laws on January 1, 2012. This article by Christen Drew of WSILTV.com provides an alphabetical list of the new laws. We hope you find it helpful!

Thanks to our friend, Caryn Coyle, for asking us about this topic on our facebook wall.

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

How to Appeal Your Property Tax Assessment

noreply@blogger.com (O'Flaherty Law) — Wed, 28 Dec 2011 17:05:00 +0000

Property values in the past few years have plummeted, yet homeowners find themselves paying higher property taxes than ever before. Your property taxes are linked to the fair market value of your home; however, when the fair market value of your home is uncertain, the tax assessment may be inaccurate. Due to the slow-paced real estate market, fewer homes are being purchased, making it difficult to get a fair estimate of what someone might pay for a home in your area, let alone a home similar to yours. Assessors do not have the raw data to work with as they did in the past, so they must refer to outdated information and do the best they can. Therefore, because many homeowners feel they have more accurate information than the assessor, they decide to appeal the assessment of their property.

Appealing your tax assessment is a daunting task, but if you are up for the challenge, there are a few things you should remember. Although the assessment of real property in State of Illinois is governed by Illinois law, each county and township can create additional rules and filing procedures. And, even though your individual township’s assessor may be the office actually valuating your property and mailing the notice of reassessment, assessment appeals are often processed through your county. Also, since each county has its own appeal procedure, it is crucial to read through your county’s rules for filing the appeal. For example, Downers Grove residents will receive their assessment from the Downers Grove Township, but will need to follow the Rules of the DuPage County Board of Review.

Most counties have a strict time limit in which you can file your appeal. For example, DuPage County residents have 30 days from the date the assessment was published to send the Board of Review the appeal form and supplemental documentation. The last day to file an assessment appeal is typically provided on your assessment notice. All documentation must be filled out appropriately and sent to the Board by this date or the resident is barred from appealing his or her tax assessments.

Once it is clear that the time limit has not expired, you will need to fill out the required forms and provide supplemental documentation before the review board will give you a hearing to argue your position. Assessments can be appealed for two reasons: (1) the property was assessed at more than one-third (1/3) of its market value or sale price or (2) the property was assessed at an amount not uniform with the rest of the community. In either case, sufficient documentation needs to be provided to support your claim that the value of your home is not what it was assessed at. In order to do this, you should provide the review board with more detailed information about your property, as well as detailed information about other comparable properties in the area. Documentation may be in the form of:

a. Listing contracts;
b. MLS catalogue pages, other listing catalogues or websites;
c. Closing statements;
d. Contractor’s affidavit of costs of new improvements;
e. Appraisal made by an Illinois State Licensed or Certified Appraiser; or
f. Assessed value of comparable properties.

In many counties, residents are required to fill out a residential grid form, comparing specific features of the property in question to other properties with similar features that have been recently sold in the neighborhood. Specific features often include: lot acreage, building and basement square footage, age of building, number of bathrooms, air conditioning, fireplaces, pools, decks, etc. It is important to find comparable properties with as many similar features to your property as you can. Taking the time to acquire accurate information and to diligently fill out the forms is the most crucial stage of the process.

If you fill out the forms completely and provide the best possible documentation available, you should hear back from the review board with a scheduled hearing date. At the hearing you will be able to demonstrate to the review board that the assessment of your property is inaccurate using the evidence you have previously collected. Please note that many counties require all documentation to be provided to the review board by the assessment appeal due date, meaning that additional documentation may not be sent later or presented at your hearing. That being said, some counties will allow an appraisal to be submitted within a specified time following the due date. For example, DuPage County allows residents to submit an appraisal by an Illinois State Licensed Appraiser within 10 days of the assessment appeal due date.

Appealing your taxes is a research project that requires attention to detail and a commitment to finding the best possible information about your property and comparable properties that is available. Therefore, many homeowners choose to use the experience and expertise of an attorney in this process. If you are considering using an attorney or another qualified individual to appeal your tax assessment on your behalf, remember to include in your appeal packet to the review board a letter authorizing that individual to act on your behalf in the matter.

Contributed by: Elizabeth M. Keleher
O'Flaherty Law

Child Support Explained

noreply@blogger.com (O'Flaherty Law) — Thu, 22 Dec 2011 18:17:00 +0000

Child support is the responsibility and obligation of both parents to provide for a child’s physical, emotional and mental well-being. It is not simply a financial matter, as many people assume. In any instance where a child’s parents are no longer living together or married, the residential parent is entitled to support from the non-residential parent.

The main question most parents have when the topic of child support comes up is how the court determines the amount of child support which the support paying parent will be ordered to pay. The Illinois Marriage and Dissolution of Marriage Act provides a detailed outline as to the state minimums the court will use to determine child support obligations. The IMDMA guidelines require the support-paying parent to pay from their net income as follows: twenty percent (20%) for one child; twenty-eight percent (28%) for two children; thirty-two percent (32%) for three children; forty percent (40%) for four children; forty-five percent (45%) for five; and fifty percent (50%) for six or more children. The net income is determined as the income after taxes, social security, retirement contributions, health insurance and several other deductions permitted under state statute.

The court may order child support that deviates from the state required minimum if the court finds it is in the best interest of the child. The court can use several factors to determine the best interest of the child. First, the court will determine the financial needs of the child. Second, the court will consider the financial responsibilities and needs of both the residential and non-residential parent. The court may also consider the physical, emotional and educational needs of the child. Finally, the court will consider the standard of living the child would have enjoyed had the parents not divorced.

Once an order of child support is entered, the order may only be modified, whether increased, decreased or abated, if a court finds that a change in circumstances warrants a modification. Further, an order for child support will terminate upon the child turning eighteen years old or upon graduation from high school if the child turns eighteen and is still in high school. However, child support will usually not be ordered past a child’s nineteenth birthday. Several courts will make an order for contribution towards post high school education even though child support, as required under state statute, has terminated.

It is important for parents to keep in mind child support is an independent obligation and should be preserved despite other problems which may arise between parents, such as disagreements regarding visitation. It is important to note, however, that recent studies have shown non-residential parents are more likely to pay support in a timely fashion when their visitation with their child(ren) occurs without interference from the residential parent.

By Maggie Pucher

noreply@blogger.com (O'Flaherty Law) — Fri, 09 Dec 2011 15:31:00 +0000

Thank you so much to Kirsten Rider for allowing me and my firm to be spotlighted in the American Bar Association newsletter, ABA Member Pulse. What an honor!

To read it, click here.

What You Need to Know About DUI Law

noreply@blogger.com (O'Flaherty Law) — Tue, 29 Nov 2011 16:57:00 +0000

With the holiday season upon us, holiday parties will most certainly be on everyone’s calendar. While you are enjoying a night out with friends and family you must remember the importance of driving responsibly. Arrests for driving under the influence are extremely prevalent around the holidays. Police are on high alert for drivers who may be driving over the legal limit. If you find yourself arrested for a DUI here are some important factors to consider.

If it is your first offense, you can attempt to have the charges dismissed or reduced. If the State is not willing to dismiss or reduce the charges and you should then request court supervision. First time DUI offenders in Illinois are entitled to court supervision. Court supervision will allow you to avoid having your license revoked and having a conviction placed on your record. Court supervision comes with several conditions such as fines, an alcohol evaluation, Victim Impact Panel, and community service. When you complete the requirements of supervision the case will usually be dismissed after approximately twelve months.

If it is your second or more DUI, the situation is much more complicated. First, you are not eligible for court supervision. Also a revocation of your license is guaranteed upon a conviction. There is also the possibility of jail time although many courts will agree to extensive community service in lieu of jail time. Finally, if this is your third DUI it is considered a felony.

Aside from a conviction for driving under the influence, you also have to worry about a statutory summary suspension of your license. In Illinois, when you are pulled over for suspected DUI the officer will request that you submit to a chemical test, usually a breathalyzer. If you refuse to submit or if you submit and have over .08 BAC, your license will be suspended. If you have not more than one DUI in a five year period and your BAC is over .08 your license is suspended for six months. However, if you refuse to submit to the test your license will be suspended for one year.

It is important to understand that although the consequence of refusing to submit to a breath test is a longer statutory suspension, submitting and testing over the legal limit provides the prosecution with irrefutable evidence of your guilt. It is difficult to argue against test results that demonstrate your level of intoxication. Either suspension period automatically starts 45 days after your arrest.

When your license is suspended under statutory summary suspension you are entitled to hearing, despite the suspension automatically starting 45 days after the arrest. You are permitted to file a Petition for a Hearing within 90 days of your arrest. If you do not file the Petition within 90 days, your right to a hearing is considered waived. Once the Petition is filed the State is required to set the hearing within 30 days or the suspension will be dismissed.

At a statutory summary suspension hearing you can challenge the following:

Whether the officer had probable cause to pull you over
Whether a proper arrest was made
Whether you received the proper warnings for statutory summary suspension as required by Illinois law
Whether there was actual refusal or failure of the breath test

This is only a brief overview of what you will experience as a result of being arrested for driving under the influence. The best advice is to avoid being in this situation all together. When you go out for a drink this holiday season, have a designated driver or call a cab to ensure your safety and the safety of everyone else on the road.

By Maggie Pucher

Trusts and Wills: Which is Right For You?

noreply@blogger.com (O'Flaherty Law) — Wed, 23 Nov 2011 16:35:00 +0000

Happy Thanksgiving to all of O'Flaherty Law's friends family and clients! While you spend time with your family this holiday season, you may want to think about implementing an estate plan to protect their future well-being. Below is a breakdown of what you need to know about the features of wills and trusts. For a more in depth discussion of the subject, please visit our estate planning resource page or view the below video of our recent estate planning seminar, the remaining portions of which can be viewed on our youtube site.

Consequences of Intestacy (No Estate Plan)

Probate: Probate case must be opened

After opening the probate case with the court, the personal representative takes the following steps:

inventory and collect the decedent's property
pay any debts and taxes
distribute the remaining property to the beneficiaries

Estate is diminished by attorney fees

Heirs do not have immediate access to assets
Bond: Executor must pay surety bond to probate court
Distribution: Assets are distributed according to state intestacy laws

Advantages of a Will over Intestacy

Waiver of Bond: Although estate will still go through probate, the executor’s surety bond can be waived
Distribution: Assets are distributed according to decedent’s wishes
Guardianship: Ability to name a guardian for minor children

Advantages of a Revocable Trust over a Will

Probate Avoidance: Any assets transferred to a trust during your lifetime will avoid probate at death
Diminished attorney Fees
Immediate access to assets
No need to appear in court or obtain court approval for payment of debts, distribution, and termination of the trusts
Disability Planning: A revocable trust allows a trustee to manage a disabled client’s trust assets without the need to resort to guardianship arrangements, which can be expensive
Confidentiality: Unlike a will, a living trust is not filed with the probate court when the client dies. Therefore, the details of the client’s estate plan do not become a part of the public record.
Protection from Renunciation: Under Illinois law, a surviving spouse may renounce a will and elect to take a third of the estate (half if there is no descendant after payment of creditors). Trust assets are not included in the estate for this purposes.
Financial Control: By properly drafting your trust, you can ensure that the assets in question are distributed in a financially responsible manner to your heirs.

Note: Wills DO have some advantages over trusts

Ability to Select a Fiscal Year: The estate can select a fiscal year, while the trust must be a calendar-year taxpayer.
Shortened Claims Period: Probate shortens claims period from two years to six months – For professionals who have personal exposure for their work, probating may be desirable.

Please visit our website for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

Corporate Formalities: How to Maintain your S-Corp

noreply@blogger.com (O'Flaherty Law) — Mon, 14 Nov 2011 18:57:00 +0000

Most small business owners are aware that it is preferable to operate your business as a corporation, an LLC, or an LLP rather than as an individual, because doing so shields your personal assets from business creditors. However, many business owners that I have met with did not know that in order to maintain this liability protection, they are required to do more than simply file articles of incorporation. In fact, your corporate liability shield will only be effective so long as your corporation continues to maintain certain corporate formalities throughout its operation.

Since we generally recommend S-Corps rather than LLCs or LLPs (for more information, read our article: LLCs and S-Corps: Selecting a Corporate Form for Your Small Business), I will limit this discussion to the corporate formalities required for S-Corps.

Do not be intimidated by the procedures listed below. You should be aware of these formalities, because you are the person ultimately responsible for following them; however, your attorney should guide you through this process and should handle most of the procedural work.

You and your attorney should work together to ensure that your corporation follows the following procedures:

File Articles of Incorporation with the Secretary of State - this filing will create your corporation and name its shareholders.
Draft Bylaws - Bylaws are the rules for the operation of your corporation and the interactions between shareholders. Even if your corporation only consists of one shareholder, you will need a set of bylaws in order to show that the corporation is distinct from the shareholder as an individual.
Hold an Initial Meeting of Shareholders - At this initial meeting, you should adopt your bylaws and elect directors. Your attorney should draft minutes from this meeting and file them in your corporate book. Again, even if you are the only shareholder in your corporation, it is important to hold and keep minutes of initial and annual shareholder meetings.
Create a Stock Ledger - A stock ledger is a document recording the issuance and transfer of all shares, as well as the names and addresses of all current shareholders as well as the number of shares held by each.
Create a Corporate Book - This is a book that should be created and maintained by your attorney to house all corporate documents including your bylaws, meeting minutes, and notices.
File Annual Reports - This is an annual filing required by the secretary of state to update the information on file for the corporation. An accompanying fee is required to be paid on an annual basis.
Hold an Annual Meeting of Shareholders - At least one shareholder meeting per year is generally required. In preparing for the meeting, it is important to comply with the notice requirements in your bylaws. Minutes of the meeting should be recorded in your corporate book.
Hold Special Meetings of Shareholders as necessary - Depending on your bylaws, certain decisions may require a shareholder vote, rather than simply director consent. If this vote cannot be taken at the Annual Meeting of Shareholders, you should hold a Special Meeting with proper notice to all shareholders.
Follow the Bylaws for Corporate Action - Your bylaws should indicate which corporate actions require the Directors to vote or consent in writing, which require the vote or consent of shareholders, and which require neither. You should know what your bylaws require and comply with them before taking corporate action.

Depending on the number of shareholders and the operational procedures you desire, you may choose to file your Articles of Incorporation as a Close or Closely Held Corporation, which will allow your S-Corp to do away with some of the decision-making formalities listed above. Close and Closely held corporations will be the subject of next week's article.

Please visit our website for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

Pet Trusts in Illinois

noreply@blogger.com (O'Flaherty Law) — Mon, 07 Nov 2011 22:12:00 +0000

A year and a half ago, my wife and I added Leah, a stoic black lab, to our family. As any dog owner would expect, Leah is much more than "just a pet" to us. She is the closest thing to a child that we have at this point.

When my wife and I are out of town, we call my friend, Kristin Skelton, owner of Floofins & Co., which provides pet sitting and dog walking services, to make sure that Leah is taken care of while we are gone. Kristin recently told me that many of her clients had asked her about pet trusts, which are trust funds you can establish to ensure that your pets are taken care of after you pass away. Being a dog lover myself, I was thrilled to write an article on the subject at Kristin's suggestion.

Pet trust law, including the validity of such trusts, varies from state to state. Fortunately, Illinois recently enacted a statute that explicitly provides for the creation of pet trusts.

When you create a pet trust, your attorney will draft a trust document naming your pet as the beneficiary of the trust after you pass away and also naming a trustee, who will be responsible at that time for managing the assets of the trust for the benefit of your pet. You and your attorney can then transfer assets into the trust.

Such assets will remain in your control during your lifetime, but will not be included in your estate at your death. Instead such assets will be legally held by the trust until they are distributed for the care of your pet according to the terms of the trust.

For more information on trusts in general, please visit our estate planning page, where you can watch a short video of our recent estate planning seminar.

If you are considering a pet trust, you should keep the following information in mind:

Trustee: It is advisable for the trustee to be someone other than the caretaker of the pet. You should also name at least one successor trustee in case the original trustee should be unwilling or unable to perform his or her duties. The Illinois statute provides that no portion of the trust assets can be used for the trustee's own purposes, unless specifically provided for in the trust document. Your trust document can provide for compensation to your pet's caretaker or to the trustee, should you so choose.

Beneficiary: You may identify each beneficiary pet by simply stating your pet's name. However, you can also reference your pet's microchip, if you have had one inserted. In addition, you may include any descendants of your pet as beneficiaries.

Management: In the trust document, you may provide a detailed description of how your pet should be cared for, including naming specific veterinarians that are authorized to care for your pet.

Termination: The trust will terminate when no beneficiary pet is living. The trust document should describe how you want the remaining trust assets to be distributed at this point. If the document does not contain such a description, the remaining assets will be distributed to your heirs, according to statute.

Funding: The trust may be funded by transferring your assets to the trust during your lifetime. However, it may also be funded by a life insurance policy, of which the trust is the beneficiary. If the assets in the trust are substantially more than reasonably necessary to accomplish the trust's purpose, the court has the power to reduce the amount of assets held by the trust.

Please visit our website for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

O'Flaherty Law will donate 1/3 of its November estate planning fees to the Olivia Cerone Foundation

noreply@blogger.com (O'Flaherty Law) — Mon, 31 Oct 2011 16:45:00 +0000

Thank you to everyone who attended our estate planning seminar last week! We had an amazing turnout, and Beth, Maggie, Ryan, Stephanie and I had a great time getting a chance to talk to all of you.

If you were unable to attend, but would like to learn about wills and trusts, you can view the embedded video of Justin Villanueva and I speaking on the subject. Additional segments of the video are available on our youtube channel.

We would like to thank the Olivia Cerone Foundation for helping us put on the event. The foundation is a not for profit charity that supports Children's Memorial Hospital's childhood asthma research. We have pledged to donate 1/3 of our November estate planning income to the foundation, so if you are planning on having your estate plan updated, please do not hesitate to contact us for a free consultation. If you are not in need of estate planning work at this time, but would like to make a donation to the foundation, you can do so directly from our website.

Please visit our website for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

Oct. 25: Open Bar and Estate Planning Forum at Shanahan's in Woodridge

noreply@blogger.com (O'Flaherty Law) — Mon, 10 Oct 2011 17:09:00 +0000

The O'Flaherty Law team invites you to join us on Tuesday, October 25, 2011 for an informative and fun evening at Shanahan's bar (1999 W. 75th St., Woodridge, Illinois). The party starts at 7pm. Open bar and appetizers will run from 7pm to 9pm.

Attorney Kevin P. O'Flaherty and financial adviser Justin J. Villanueva will discuss current strategies for setting up and funding your estate plan. Whether you are recently married, starting a family, or simply wish to learn how to update your current will or trust, this event will provide you with a powerful head start, allowing you to save on attorney fees while enjoying a cocktail.

After the presentation, we hope you will stick around and get to know the O'Flaherty Law staff.

If you have any questions about this event or any other topic, please feel free to give us a call at (630)621-8329, drop us an e-mail at info@oflaherty-law.com, or check out our website. We look forward to seeing you there!

Filing a Petition for Dissolution of Marriage

noreply@blogger.com (O'Flaherty Law) — Mon, 03 Oct 2011 21:23:00 +0000

It is an unfortunate reality that a large percentage of marriages end in divorce. Divorce proceedings can be extremely emotional and stressful for all the parties involved. The process of obtaining a divorce or dissolution of marriage, as the courts refer to it as, can be made less traumatic when parties understand the procedure. In this article, I will discuss the first step of dissolution proceedings, which is filing a Petition for Dissolution of Marriage.

A Petition for Dissolution of Marriage is the initial filing in a dissolution proceeding. It is a document in which a Petitioner is praying for a Judgment of Dissolution from the court. It requests the court to make decisions involving the care, custody and control of the parties’ minor children, the equitable division of the real and personal property, the equitable division of the debts and obligations of the parties and any additional matters the parties need resolved.

The Petition needs to outline several important key points. It is crucial to incorporate all information regarding the parties, the marriage, any children, assets, and debts in order to educate the court as much as possible. The more information the court has the easier it will be to reach an equitable decision.

The first point the Petition should address is the court where the Petition will be filed is the proper venue. According to the Illinois Marriage and Dissolution of Marriage Act, proceedings should be held in the county where the plaintiff or defendant resides. Any objection to venue will be waived if it is not made within the time defendant's response to the dissolution or legal separation petition is due.

Next, the Petition will outline basic background information of the parties. Many clients wonder why courts need to know their age, address and occupation. The reason is that it helps the court “get to know” the parties. For example, the parties’ addresses can help with jurisdiction matters and also determine where the respondent will be served. The Petition also must outline the specifics of the marriage. Parties will state the date of the marriage, as well as where the marriage was registered.

It is required to state in a petition for dissolution in Illinois that both parties are domiciled in the state of Illinois and that they have been for in excess of ninety (90) days. Domicile means to live in a locality with intent to make it a fixed and permanent home. Parties can have multiple residences but only one domicile.

The next element in a Petition for Dissolution, is to state the grounds for which a party is seeking the dissolution. This is an area many people are familiar with, especially the most commonly used grounds of irreconcilable differences. There are eleven (11) grounds for dissolution of marriage in Illinois and they are as follows:

1. natural impotence at the time of the marriage and continuing thereafter;

2. bigamy;

3. adultery;

4. willful desertion or absence from the petitioner for one year;

5. habitual drunkenness for a time of 2 years or more;

6. gross and confirmed habits caused by the excessive use of addictive drugs for 2 years or more;

7. threatening the life of the other by poison or other means showing malice;

8. extreme and repeated physical or mental cruelty;

9. conviction of a felony or other infamous crime;

10. infecting the other spouse with a communicable venereal disease; and/or

11. irreconcilable differences

In the event the parties have children, they should be listed in the Petition for Dissolution, along with their individual dates of birth. It is also important to specifically state in the Petition that the wife, regardless of whether she is petitioner or respondent, is not pregnant at the time of the filing. Further, all children should be listed regardless of whether they were born of the parties or adopted by them. All of this information will be relevant when issues of child custody and visitation come about. The Petition should make a specific request regarding custody of minor children and visitation rights of the non-custodial parent.

The Petition also addresses the matter of marital property and the equitable division of that property. Generally, parties will have a marital residence, joint bank accounts, retirement accounts, pensions, automobiles, furniture and other personal property that will need to be divided upon the dissolution of the marriage. The Petition will not get into specific assets, rather it will generally state there are assets between the parties that will need to be equitably divided. The division of the marital property is usually incorporated into a Marital Settlement Agreement which will be incorporated into the Judgment for Dissolution and filed with the court.

Finally, the Petition should mention marital debts and the allocation of payment of such debts. Marital debt is approached in a similar manner as marital property in the Petition for Dissolution. The Petition should state there is marital debt to be addressed between the parties and a Marital Settlement Agreement should be drafted to divided up these debts.

The Petition is only the first step in a divorce proceeding. The Petition informs the court of the circumstance of the marriage and pending issues between the parties. A well drafted petition will help to reach an equitable resolution that is in the best interest of the individual parties and their families.

- by Maggie E. Pucher