Posts tagged with "will"

Spendthrift Trusts for You and Your Children’s Own Protection

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It’s unfortunate, but clients who meet with me to do their estate planning will sometimes mention that one or more of their children is somewhat of a liability for one reason or another. You see it and hear about it all the time, a troubled youth or just a child who has no idea how to manage their affairs. Often, parents still want to include these children in their wills, but they fear what may happen when the children do get the money. The answer: A spendthrift trust.

Using such a trust as a component of your estate planning is generally a wise approach when a child (or any beneficiary who is not a child) is in one or more of the following circumstances: If the child…

  • Is irresponsible with money management, does not have a history of saving and investing, and there is a concern that your hard-earned estate will be wasted;
  • Has a history of creditor problems, actually has current creditor problems, or you are reasonably certain that creditor issues will arise in the future based on the child’s behavior;
  • Is in an unstable marriage where a divorce is more than likely…the trust can prevent the estate from becoming part of a divorce settlement process;
  • Is addicted to drugs, alcohol or gambling;
  • Has a history of being influenced by an overbearing spouse in regards to money management;
  • Belongs to a religious group or some similar organization and you do not want some/all of your estate to ultimately be donated to such a group;
  • Would be prone to “financial predators” and scam artists.
What is a spendthrift trust?

A spendthrift trust is a trust usually established with the object of providing a fund for the maintenance of another person, known as the spendthrift, while also protecting the trust against the beneficiary’s imprudence, extravagance, and inability to manage financial affairs.

For example, a settlor establishes a spendthrift trust for his son, a compulsive gambler, who spends money injudiciously with no concern for the future. Under the terms of the $400,000 trust, which is to be administered by the family’s lawyer, the son is to receive $15,000 a year. Any words that indicate the settlor’s intention to impose a direct restraint on the transferability of the beneficiary’s interest can be used to create a spendthrift trust.

Spendthrift Creditors

Such trusts do not limit the rights of the spendthrift’s creditors to the property after it is received by the beneficiary from the trustee (one appointed or required by law to execute a trust). The creditors cannot compel the trustee to pay them directly. This means that any of the spendthrift’s creditors can seek to have the money the spendthrift has already received applied to satisfy their claims. A creditor’s claims to future payments under the trust, however, are restrained.

The spendthrift’s creditors cannot reach the $15,000 that he is to be paid in a subsequent year until it is actually paid out to him. If such a person could dispose of his right to receive income from the trust, his incompetence or carelessness might lead him to anticipate his income and transfer to monetary lenders and creditors the right to receive future income as it became due. By restricting the spendthrift so that he can do nothing with the income until it is paid into his hands by the trustee, he is more likely to be protected, at least to some extent, against impoverishment.

Please note that this is not always the best approach, but those of you in a situation such as this should discuss this issue with an estate planning attorney. Otherwise, your child’s inheritance may tragically disappear…and perhaps make your child’s problem worse. If you have any questions of spendthrift trusts, or are looking for an attorney to plan your estate, please do not hesitate to contact Joseph Maya and the other experienced attorneys of Maya Murphy, P.C. today at 203-221-3100.

What Happens if I Die Without a Will in Connecticut?

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After someone dies, attention naturally shifts to the decedent’s survivors, property and wishes. A probate court (also called a surrogate court) is a specialized court that handles distribution of the decedent’s property and ensures that any debts, funeral expenses and taxes are paid prior to distributing the remaining assets. If there is a will, the decedent’s wishes are carried out and the process is typically straight forward. However, if there is no will, distribution of property is awarded to survivors in accordance with the state’s laws of “intestacy.”

Asset Distribution

In Connecticut, if you are survived by a spouse and children, your spouse takes the first $100,000 plus half of the remainder and your children take the other half of the remainder. If you are survived by a spouse and children who are not your spouse’s children, your spouse takes half and the children share the other half equally. If you are survived by a spouse and parent(s) but no children, your spouse takes the first $100,000 plus three quarters of the remainder and the parent(s) takes the other one quarter.

If you are survived by a spouse only, your spouse takes it all. If you are survived by children only, your children take it all. If you are survived by parent(s) only, your parent(s) take it all. If you are survived by brother(s) and sister(s) only, your brother(s) and sister(s) take it all. If you are survived by next of kin only, your next of kin takes it all. If there is no next of kin but there is a step-child, your step-child takes it all. If there is no step-child, it all goes to the State of Connecticut.

The Benefits of Having a Will

Regardless of the value of your property, it is always in your best interest to have a will. If you have a will, it may be possible to reduce the amount of tax payable on the inheritance. If you die without a will, your money and property may not be distributed as you had wished. If you are unmarried but have a partner, he or she cannot inherit your property without a will.

If you have children who are minors, you will need a will so that living and financial arrangements are as you had wished in the event of your death. If your former partner’s circumstances have changed and there is a new partner in the picture, you may want to have a will to ensure your property is distributed as you’d wished.

Maya Murphy Attorneys at Law can provide you with estate planning with artfully crafted trusts and tax avoidance. We know that clients want peace of mind for the future. Our experienced attorneys will help you map out a plan so that your family is properly cared for in the event of your death. Please do not hesitate to contact Joseph Maya and the other experienced attorneys at 203-221-3100, or at Ask@Mayalaw.com to schedule a free consultation.

Is a No-Contest Clause Right for Your Will?

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In order to discourage disappointed heirs from disputing your estate plan, you can include a “no-contest” provision that automatically cancels an heir’s inheritance if he or she challenges the distribution of your assets in any way. You are not obligated to leave property to anyone. The original reasoning for the no-contest provision was to intimidate any heir who may consider contesting a will or trust, thereby securing his or her cooperation.

“No-contest” clauses can be broad or narrow, and may even disinherit people who challenge transfers made outside your will (through a trust or beneficiary designation).

A Relevant Case

Of course, you cannot make a bequest of property you don’t own, but you can often provide in a will that a beneficiary will only receive your bequest if they abandon their rights in some other property. In a case, a court was asked to decide whether a refusal to abandon such rights would constitute a “will contest” that would void other gifts.

When a testator died, he left a complex estate plan that included a will, a trust, and beneficiary designations for his retirement account. The testator’s wife legally owned part of his retirement account and other “community property.” The testator’s will and trust required his wife to abandon her “community property” rights in order to receive benefits worth $2.65 million from her husband’s trust.

The wife filed a special petition with the court, asking whether she would be viewed as “contesting” the estate plan if she sought to enforce her community property rights. The wife claimed that her husband had mistakenly transferred some community assets to his own trust, and she was merely trying to correct the mistake.

On appeal, the Court ruled that the wife’s challenges would constitute a “contest.” Therefore, she had to decide whether to assert her “community property” rights (and thus receive only her share of community property, and nothing from her husband’s trust) or simply accept the provisions of the trust and will (thus sacrificing her “community property” rights).

Implications of Including a No-Contest Clause

This case illustrates an important issue. If you make a mistake in your estate plan, a “no-contest” clause in a will or trust may prevent your heirs from correcting the mistake. On the other hand, if you don’t include a “no-contest” clause, an heir might contest your estate plan, thus delaying the distribution of your assets, and frustrating your goals. There are many such issues with Estate Planning that require careful planning and expertise to avoid.

In most cases, a “no-contest” clause does make sense. However, as the example in this article illustrates, you want to be careful when doing your estate plan in order to avoid unnecessary problems for your heirs. Seeking competent advice is more often than not well worth the price paid.

If you have any questions regarding no-contest clauses or other matters involving estates and trusts, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

LegalZoom Will Held Invalid Due to Lack of Compliance with Statute of Wills

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In a Superior Court case, Litevich v. Probate Court, a LegalZoom was held invalid for failing to comply with the requirements of the Statute of Wills C.G.S.A section 45a-251. The plaintiff in the case, a proposed beneficiary under the LegalZoom attempted to have the will probated although it was not witnessed nor signed. The court held that the lack of those requirements was not simply a “harmless error” and therefore the will was invalid. Instead, the court held valid a will some 20 years older which gave nothing to the plaintiff.

Case Details

The facts of this case were simple. The decedent had no children, was not married, and met the plaintiff in 2000 while working at Yale. Around 2011, the decedent fell ill due to her habit of being a heavy smoker. When there were little signs of her health improving she sought to update her will but decided to use LegalZoom instead of contacting an attorney. Plaintiff maintained decedent chose this method to save money.

After completing the will online the decedent had to provide personal information, give numerous confirmations to LegalZoom, and electronically sign that the wishes stated were indeed hers. Once completed, decedent paid LegalZoom and they mailed her the documents. Unfortunately, decedent was in the hospital when the documents arrived and plaintiff received them for her. Instead of getting the will signed, they attempted to have a notary present because they believed one was needed in order for the will to be valid. A notary is not required by statute in Connecticut.

A notary was not available until decedent fell into such a state of health that she did not have the legal capacity necessary to sign a legally binding document. The will was left with plaintiff unsigned upon decedent’s death. Plaintiff contends that the LegalZoom will is binding and that her electronic signature and confirmation online should satisfy the Statute of Wills.

The Court’s Analysis

The court began its analysis by laying out Connecticut law which states as follows: § 45a–251, provides: “A will or codicil shall not be valid to pass any property unless it is in writing, subscribed by the decedent and attested by two witnesses, each of them subscribing in the testator’s presence; but any will executed according to the laws of the state or country where it was executed may be admitted to probate in this state and shall be effectual to pass any property of the decedent situated in this state.”

“[O]ur [S]tatute [of Wills] amounts to a positive rule for the transmission of property, which must be complied with, as a complete act at the time of execution, or never, so far as the act of the testator is concerned.” (Emphasis added; internal quotation marks omitted.) Hatheway v. Smith, 79 Conn. 506, 511, 65A, 1058 (1907).

The statute has, from its inception, been treated as an act that “permits a disposition of property by will upon compliance with the prescribed conditions.” (Emphasis added.) Id. Thus, to be valid, a will must strictly comply with the requirements of the statute. See Gardner v. Balboni, 218 Conn. 220, 225, 588 A.2d 634 (1991); see also Hatheway v. Smith, supra, 79 Conn. 511 (Statute of Wills “prohibitory and exhaustive”). The statute is designed to “effectuate the policies of safeguarding titles and frustrating fraudulent claims.” Starcez v. Kida, 183 Conn. 41, 45 n. 2, 438 A.2d 1157 (1981).

The Court’s Decision

The court followed the law strictly and succinctly stated, “the language of § 45a–251 plainly provides that for any testamentary instrument to be valid it must be subscribed by the decedent and attested by two witnesses in the decedent’s presence. Gardner v. Balboni, supra, 218 Conn. 225. In the present case, the will is not subscribed by the decedent or two witnesses. Accordingly, the court concludes that the Legalzoom will fail to satisfy the statute.”

Although the court made this finding, the plaintiff still attempted to have the will probated by means of the harmless error doctrine. This doctrine “provides that a testamentary instrument is not invalid for failure to satisfy the execution formalities of a given jurisdiction if the proponent of the will can establish by clear and convincing evidence that the testator intended the document to be his or her will.

See Uniform Probate Code, § 2–503, p. 141 (“Although a document … was not executed in compliance with [the formalities for execution of a will], the document or writing is treated as if it had been executed in compliance … if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute … the decedent’s will …”); 1 Restatement (Third), supra, § 3.03, p. 217 (“A harmless error in executing a will may be excused if the proponent establishes by clear and convincing evidence that the decedent adopted the document as his or her will”).”

The Harmless Error Rule

No court in Connecticut has decided to adopt the harmless error rule and neither has the Connecticut Legislature in C.G.S.A. 45a-251. When speaking on the doctrine the court said even if it was to apply, “[i]n applying [the harmless error doctrine] to particular cases, a hierarchy of sorts has been found to emerge among the formalities.”

For example, “[t]he requirement of a writing is so fundamental to the purpose of the execution formalities that it cannot be excused as harmless under the principle of [the] Restatement. Only a harmless error in executing a document can be excused …” (Emphasis in original.) Even then, “[a]mong those defects in execution that can be excused, the lack of a signature is the hardest to excuse. An unsigned will raises a serious but not insurmountable doubt about whether the testator adopted the document as his or her will.”

Following the Harmless Error Doctrine

Instead of clearing, adopting or rejecting the doctrine, the court concluded the following: “were the court to agree with the plaintiff that Connecticut law allows for the harmless error doctrine, it would not apply to the facts of this case. As the defendant observes, and as confirmed by the commentary to 1 Restatement (Third), supra, § 3 .03, within the harmless error doctrine exists a “hierarchy” of defects. Failure to sign a will at all, as with the case presently before the court, is considered by those states that have used the doctrine to be one of the most difficult defects to overcome. Id.

Therefore, even if Connecticut were to follow the doctrine, it would still be a stretch to apply it to facts such as those presently before the court, where the will was signed by neither the decedent nor any witnesses. The “electronic signature” claimed by the plaintiff is not sufficient because, even if electronic signing were allowed by § 45a–251, a question the court does not now decide, the signature does not appear on the face of the will. Accordingly, the court rejects the plaintiff’s arguments relating to the harmless error doctrine.”

Conclusion

As you can see, sometimes LegalZoom is not all it’s cracked up to be. Truly nothing can beat the experience and know-how of a lawyer who has dealt with Connecticut wills, trusts, and estates. Although at times expensive, the cost can be balanced against the goals it achieves. For example, this case. The sad story of the decedent who should have had her current last wishes carried out, not the wishes she made some two decades prior. Although LegalZoom may be a helpful resource in some instances, it does not in any way provide a substitute for an attorney. But don’t take our word for it, here is LegalZoom’s disclaimer from their own website in full:

Disclaimers

LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney. LegalZoom’s legal document service is not a substitute for the advice of an attorney.

LegalZoom.com, Inc. (“LegalZoom”) is a registered and bonded legal document assistant, #0104, Los Angeles County (exp. 12/13) and is located at 101 N. Brand Blvd., 11th Floor, Glendale, CA 91203. LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction.

LegalZoom is not permitted to engage in the practice of law. LegalZoom is prohibited from providing any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies

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This site is not intended to create an attorney-client relationship, and by using LegalZoom, no attorney-client relationship will be created with LegalZoom. Instead, you are representing yourself in any legal matter you undertake through LegalZoom’s legal document service. Accordingly, while communications between you and LegalZoom are protected by our Privacy Policy, they are not protected by the attorney-client privilege or work product doctrine.

LegalZoom provides an online legal portal to give visitors a general understanding of the law, as well as to provide an automated software solution to individuals who choose to prepare their own legal documents. To that extent, the site publishes general information on legal issues commonly encountered.

LegalZoom’s document service also includes a review of your answers for completeness, spelling and grammar, as well as internal consistency of names, addresses and the like. At no time do we review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation. LegalZoom and its services are not a substitute for the advice of an attorney.

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Although LegalZoom takes every reasonable effort to ensure that the information on our website and documents are up-to-date and legally sufficient, the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, LegalZoom cannot guarantee that all the information on the site is completely current. The law is a personal matter, and no general information or legal tool like the kind LegalZoom provides can fit every circumstance.

Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney in your area. Visitors to our site may obtain information regarding free or low cost representation through your state bar association or local legal aid office.

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This site and some of the articles on this site contain links to other resources and businesses on the Internet. Those links are provided as citations and aids to help you identify and locate other Internet resources that may be of interest, and are not intended to state or imply that LegalZoom sponsors, is affiliated or associated with, guarantees, or is legally authorized to use any trade name, registered trademark, logo, legal or official seal, or copyrighted symbol that may be reflected in the links.

LegalZoom is not responsible for any loss, injury, claim, liability, or damage related to your use of this site or any site linked to this site, whether from errors or omissions in the content of our site or any other linked sites, from the site being down or from any other use of the site. In short, your use of the site is at your own risk.”

Our estate planning firm in Westport Connecticut serves clients with will, trust, and estate law issues from all over the state including the towns of: Bethel, Bridgeport, Brookfield, Danbury, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, New Fairfield, Newton, Norwalk, Redding, Ridgefield, Shelton, Sherman, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton. We have the best probate attorneys in CT on staff that can help with your Connecticut or New York estate today.

If you have any questions or would like to speak to a probate law attorney about a will, trust, or estate matter, please don’t hesitate to call our office at (203) 221-3100. We offer free consultation on all matters. Call today.

Connecticut Superior Court Denies Prejudgment Remedy and Declines to Impose a Constructive Trust

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Marinelli v. Estate of Marinelli, 2011 Conn. Super. LEXIS 1857 (2011)

The plaintiff, Michael Marinelli, brought an action against Joanne Marinelli, the executrix of the Estate of Anthony V. Marinelli, Jr. (the “Estate”) and the trustee of the Anthony V. Marinelli, Jr. Revocable Trust (the “Trust”).  The decedent, Anthony V. Marineeli, Jr., fraudulently induced the plaintiff, his brother, to believe that he would receive a 50% ownership interest in real property according to the plaintiff.  A family car repair business was operated on the real property in question and the plaintiff sought to impose a constructive trust.  The plaintiff filed an application for a prejudgment remedy against the Estate and the Trust pursuant to Conn. Gen. Stat. § 52-278d.

The Court held a hearing on the application and found there was an absence of probable cause to believe the plaintiff would prevail.   The plaintiff’s father clearly transferred title of the real property to the decedent who maintained the car repair business and assumed liability for all of its debts.  The evidence presented indicated that the plaintiff voluntarily relinquished his interest in the car repair business.  The apparent representations by his father and brother indicating that the plaintiff would be “taken care of” were imprecise assurances that did not persuade the Court.   There was no evidence of wrongdoing engaged in by the decedent. As a result, the plaintiff’s application for a prejudgment remedy was denied.

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Should you have any questions relating to wills, trusts, estates or probate issues generally, please feel free to contact Joseph C. Maya, a lawyer in the firm’s Westport, Connecticut office in Fairfield County by telephone at (203) 221-3100 or by e-mail at jmaya@mayalaw.com.

Trustee Interpretation of Ambiguous Trust Provisions will not be Changed by a Court Without Evidence of a Clear Abuse of Trustee Discretion

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Heath v. Heath, CV094044709S, 2012 WL 2477953 (Conn. Super. Ct. June 5, 2012)

In a case before the Superior Court, four trust beneficiaries filed a three-part complaint against the trustees of a trust created by their mother.  The complaint alleged breach of fiduciary duty, unjust enrichment, and other charges. The trial court ruled that the trustees had properly distributed the trust interests and entered judgment in their favor.

Case Background

In 1953, a trust indenture known as the Hembdt Trust was drafted with assets consisting of royalty interests in oil, gas and mineral rights.  During her lifetime, the settlor and beneficiary of this trust (“the decedent”) married and had ten children.  Upon her death, the terms of the trust provided that the royalty interests would pass to “his or her legal representatives, heirs at law or next of kin in accordance with the provisions of law applicable to the domicile of the deceased beneficiary.”

In 1967, the decedent died. Pursuant to her will, several testamentary trusts were created, including a testamentary trust for the benefit of her husband (“marital trust”) and a trust for her children (“children’s trust”).  The trustees and executors of the decedent’s will determined that the provision in the Hembdt Trust required the trust’s royalty interests to pass into her estate which, in accordance with her will, resulted in these interests being distributed in a 54/46 ratio between the marital trust and the children’s trust.

Legal Representatives of a Trust

The beneficiaries of the children’s trust argued that the entirety of the royalty interest should have been distributed to them as the decedent’s heirs at law because the term “legal representatives” in the Hembdt Trust provision, used under the circumstances provided, could only be interpreted to mean the children of the decedent.  The decedent’s husband, in his capacity as a fiduciary of the trusts, argued that the beneficiaries’ interpretation was inconsistent with the language of the trust instrument and the law.

He argued that the term “legal representatives” was used in conjunction with “heirs at law” and “next of kin;” therefore, the clear intent of the Hembdt Trust provision was that upon the death of the individual beneficiary, his or her interest would pass to: (1) the beneficiary’s legal representatives, which would be the beneficiary’s executors, if the person died testate, to be administered according to the beneficiary’s will, or the beneficiary’s administrators, if the person died intestate and a probate estate was opened; (2) the beneficiary’ heirs at law if the person died intestate and no probate estate was opened; and (3) the beneficiary’s next of kin if there were no heirs at law.

The decedent’s husband further argued that if all three conditions existed, then the distributions would have to be in accordance with Connecticut law, which requires that, when a decedent leaves both a spouse and children, they both inherit.  Finally, the decedent’s husband argued that Connecticut law requires that if a decedent leaves a will, a distribution is made according to the will.   Conn. Gen. Stat. § 45a-431.  The remaining trustees adopted the arguments of the decedent’s husband.

The Language of a Trust Instrument

According to Connecticut case law, a court’s role in the construction of a trust instrument is to determine the meaning of what the grantor stated in the trust instrument and not to speculate upon what the grantor intended to state in the instrument. Connecticut Bank & Trust Co. v. Lyman, 148 Conn. 273, 278-79, 170 A.2d 130 (1961).  Language in the trust instrument is to be accorded its common, natural and ordinary meaning and usage.  WE 470 Murdock, LLC v. Cosmos Real Estate, LLC, 109 Conn.App. 605, 609, 952 A.2d 106, cert. denied, 289 Conn. 938, 958 A.2d 1248 (2008) (internal quotation marks omitted).

Furthermore, no language will be construed as to remove a trustee from equitable control; courts may intervene only to protect and preserve the trust in circumstances where the trustees have abused their discretion.  Gimbel v. Bernard F. & Alva B. Gimbel Foundation, Inc., 166 Conn. 21, 34, 347 A.2d 81 (1974)

The Court’s Decision

Connecticut case law has established that the phrase “legal representatives” in a testamentary instrument is an ambiguous or equivocal term. Smith v. Groton, 147 Conn. 272, 274–75, 160 A.2d 262 (1960).   In interpreting the trust provisions, the court determined that the language did not permit the decedent’s beneficial interest to pass to each of the three categories (“legal representatives, heirs at law and next of kin”) or to pass to different recipients depending on an exercise of discretion (“legal representatives, or heirs at law, or next of kin”).

For that reason, the court found that the terms “legal representatives,” “heirs at law,” and “next of kin” did not conflict and that the provision required that the decedent’s beneficial interest pass to the recipients in the order clearly listed the trust instrument.  Therefore, the trustees did not abuse their discretion in determining that the royalty interests passed to the executors, as the decedent’s legal representatives, to be distributed to the marital trust and children’s trust in accordance with the decedent’s will.

Because the trial court did not find that the trustees of the decedent’s trusts abused their discretion, the court refused to upset their determination of how the decedent’s interests should be distributed.

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Should you have any questions relating to wills, trusts, estates and other personal asset protection issues, please do not hesitate to contact Attorney Susan Maya, at SMaya@Mayalaw.com or 203-221-3100, and Attorney Russell Sweeting, at RSweeting@Mayalaw.com or 203-221-3100, in the Maya Murphy office in Westport, Fairfield County, Connecticut.

Assets Protected From Creditors in Connecticut

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In today’s economy more and more people find themselves having a hard time paying the bills and avoiding late payments.  Still others have a problem with creditors chasing them for unpaid debts.  Now more than ever it is important for you to know what assets are protected from creditors and what are not.

Connecticut law provides some protection from creditors in a situation where your income or assets are subject to a court judgment or lien.  You can protect yourself in a variety of ways by planning ahead and consulting with a professional financial planner and an attorney.   Taking out liability insurance or setting up a corporate entity or trust for your property are examples of how you can shield your assets from future creditors.  However, there are some individual assets that are automatically protected from creditors.  Here is brief summary of the law in Connecticut:

A.            Wages

Once a creditor obtains a judgment against you, it can apply for an execution against your wages.  See Connecticut General Statutes, Section 52-361a.  Connecticut law does provide for some protection in this situation.   No more than twenty-five percent of an individual’s weekly disposable earnings may be subject to a wage execution.  The portion of disposable earnings subject to the wage execution is withheld and applied to the amount of the judgment.    In some cases, the maximum amount that can be withheld may be less depending upon the ratio between the individual’s disposable earnings and the hourly minimum wage in effect at the time of the execution.

B.             Retirement Plans

Generally, retirement plans are exempt from claims by creditors.  Both IRAs and 401ks are protected assets pursuant to Connecticut General Statues, Section 52-321a.

C.             Personal Property

Connecticut law provides a list of exempt personal property that creditors cannot claim an interest in pursuant to Connecticut General Statutes, Section 52-352b.  The list of property includes basics necessities such as apparel, bedding, foodstuffs, household furniture and appliances.  Items necessary for a person’s occupation or profession such as tools, books, instruments, farm animals and livestock feed are also considered exempt property.  Wedding and engagement rings are not subject to creditor claims as well.

D.             Insurance and Government Assistance Payments

Some insurance and government assistance payments are exempt from creditors under Connecticut General Statutes, Section 52-352b.   Health and disability insurance payments are exempt as are Workers’ compensation, Social Security, veterans and unemployment benefits.  In addition, under Connecticut General Statutes, Section 38a-453, creditors of an insured cannot seek payment from a life insurance policy beneficiary under most circumstances.

E.             Child Support and Alimony Payments

Any court approved child support payments received by a debtor are exempt and protected from creditors.  Alimony payments, to the extent that wages are exempt from creditor claims, are also protected.  See Connecticut General Statutes, Sections 52-352b & 52-361a.

F.             Real Estate

Your homestead or personal residence is exempt from creditor claims up to the value of seventy-five thousand dollars.  If a creditor has a money judgment arising out of hospital services, then the value of the exemption increases to one hundred twenty-five thousand dollars.  The exemption is calculated based upon the fair market value of the equity in the property taking into account any statutory or consensual liens on the property.  See Connecticut General Statutes, Section 52-352b.

There is no such exemption in place for commercial real estate or rental properties.

G.             Motor Vehicles

Only one motor vehicle is exempt from creditor claims up to the value of one thousand five hundred dollars.  The exemption is calculated by estimating the fair market value of the motor vehicle and taking into account any relevant liens or security interests.  See Connecticut General Statutes, Section 52-352b.

H.              Bank Accounts

         A creditor can enforce a judgment by way of a bank execution.  However, the same exemptions apply to bank accounts as they do to government assistance, insurance, alimony and child support payments as outlined above.  Therefore, you have the opportunity to challenge a bank execution based on these exemptions and prevent a creditor from taking money out of your account.   In addition, you can claim a general exemption not to exceed one thousand dollars.

In conclusion, Connecticut law prevents creditors from seizing all of your income, property, possessions and savings pursuant to a judgment or lien.  However, the law does not prevent a debt collector from jeopardizing your livelihood and financial wellbeing.  You best bet is to limit individual liability and plan ahead to avoid a creditor claim in the first place.  Consulting with a professional financial planner and an attorney is recommended.

Estate Planning for Single Individuals

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For single individuals without children and without any future plans to have children, it is still vitally important to formulate an estate plan in the event of untimely death.  A single person, of course, possesses assets, possessions, money, accounts, etc., and an estate plan allows for all of those assets to be distributed to the person, persons, charities, or organizations of the decedent’s choosing.

Asset Distribution Without a Will

Without a will, an individual’s possessions and assets will be distributed to relatives and family members of the decedent in accordance with a preset order determined by law.  This, however, is predetermined and may not be the order in which the deceased may have wanted his or her assets to be distributed.  Furthermore, without a will, the deceased’s family might have to expend a lot of money navigating the waters of the administrative proceedings associated with intestacy.  Intestacy is the term for what happens when a person dies without a will.

Under Connecticut law, where a person dies without any children and without a will, the estate will be distributed in accordance with the following order: first a portion will go to the decedent’s husband or wife, if any; next, to the parent or parents of the deceased; if there is no parent, the estate will go to the siblings of the deceased and those who legally represent them.  If the deceased has no surviving parents or siblings, the “residue of the estate shall be distributed equally to the next of kin in equal degree.”[1] Those “next of kin” may be relatives you have never met or heard of or met, but who by law could be entitled to a share of your estate in the event of death.

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It is important to consult with an attorney who is experienced in estate planning law.  The attorneys at Maya Murphy have years of experience in will consultations, preparation, and contests.  Should you have any questions relating to your estate planning, do not hesitate to contact our Westport, Fairfield County office at 203-221-3100.

 

[1] Conn. Gen. Stat. §45a-439.

What is a Pre-Need Funeral Services Contract?

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A pre-need funeral services contract allows an individual to set aside funds, before his or her death, to be used specifically to pay for funeral expenses. Under the terms of such a contract, a “purchaser” signs the contract and advances funds, which are held in an escrow account for the purpose of paying for future funeral services for the “beneficiary” upon his or her demise. See C.G.S. §42-202. A pre-need funeral services contract may only be sold by a funeral director licensed by the public health commissioner. See C.G.S. §42-201.

Funeral Service Requirements Under Connecticut Law

There are strict requirements for such contracts under Connecticut law. For example, funeral services contracts must be in writing, and must contain the following:

(1) The name, address, telephone number and Social Security number of the beneficiary and the purchaser;

(2) The name, address, telephone number and license number of the funeral director for the funeral service establishment providing the goods or services;

(3) A list of the selected goods or services, if any;

(4) The amount of funds paid or to be paid by the purchaser for such contract, the method of payment and a description of how such funds will be invested and how such investments are limited to those authorized pursuant to subsection (c) of section 42-202;

(5) A description of any price guarantees by the funeral service establishment or, if there are no such guarantees, a specific statement that the contract contains no guarantees on the price of the goods or services contained in the contract;

(6) The name and address of the escrow agent designated to hold the prepaid funeral services funds;

(7) A written representation, in clear and conspicuous type, that the purchaser should receive a notice from the escrow agent acknowledging receipt of the initial deposit not later than twenty-five days after receipt of such deposit by a licensed funeral director;

(8) A description of any fees to be paid from the escrow account to the escrow agent or any third party provider;

(9) A description of the ability of the purchaser or the beneficiary to cancel a revocable funeral service contract and the effect of cancelling such contract;

(10) For irrevocable contracts, a description of the ability of the beneficiary to transfer such contract to another funeral home; and

(11) The signature of the purchaser or authorized representative and the licensed funeral director of the funeral service establishment.

Funeral Service Contracts

See C.G.S. §42-200(b). A funeral services contract must also contain a statement that if the particular merchandise provided for in the contract is not available at the time of death, the funeral service establishment will furnish merchandise similar in style and at least equal in quality of material and workmanship to the merchandise provided for in the contract.  See C.G.S. §42-202(g). Funeral services contracts should not be confused with burial insurance policies, which are separately codified in the Connecticut General Statutes, under Section 38a-464.

For further information on pre-need funeral services contracts in Connecticut, see Chapter 743C of the Connecticut General Statutes. The General Statutes can be found online at: http://www.cga.ct.gov/. Additional information is available in the State of Connecticut’s Office of Legal Research Report on pre-need funeral services contracts online at: http://www.cga.ct.gov/2007/rpt/2007-R-0578.htm.

Connecticut Appellate Court finds that a Creditor is allowed to conduct Discovery pursuant to a Probate Court Order

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In re Probate Appeal of Cadle Co., 129 Conn. App. 814; 21 A.3d 572 (2011)

The executors of the Estate of F. Francis D’Addario (the “Estate”) filed an interim accounting with the Probate Court for the District of Trumbull.  The Probate Court then allowed the Cadle Company (“Cadle”), an unsecured creditor of the Estate, to conduct discovery in reference to the management of the Estate’s assets and the concerns it had regarding the accuracy of the accounting.

Both the executors and Cadle appealed the discovery order and the Superior Court affirmed the order permitting discovery but remanding to the Probate Court.  The Superior Court found that the scope of discover ordered by the Probate Court was beyond its jurisdiction.  Cadle appealed the Superior Court ruling.

On appeal, the Appellate Court decided the issue of whether the Probate Court had jurisdiction to allow a creditor to conduct discovery into the business judgment and operations engaged in by executors in managing estate assets.

The Appellate Court found that the Probate Court had the power, under Conn. Gen. Stat. §45a-175(g), to order broad discovery in an accounting proceeding.  This power coincided with the same power that the Superior Court would have in a case involving a challenge to such accounting.  Therefore, the Appellate Court reversed and remanded to the Superior Court to reinstate the original Probate Court discovery order.

Should you have any questions relating to wills, trusts, estates or probate issues generally, please feel free to contact Attorney Russell J. Sweeting, a lawyer in the firm’s Westport, Connecticut office in Fairfield County by telephone at (203) 221-3100 or by e-mail at rsweeting@mayalaw.com.