I know a gentleman, “Sam”, who remarried after losing his wife of 32 years. His new wife, “Sally”, sold her home and moved in with Sam. Sam put Sally’s name on the deed to his home taking title as “joint tenants”. Sam also put Sally on his bank accounts. Sam has a will which leaves all of his property to his two sons. What Sam didn’t realize though, was that when he moved property into joint tenancy with Sally, his will no longer controlled the distribution of his home or his bank accounts when he dies. Since those were Sam’s only major assets, he essentially had nothing to leave his children by way of his will and when he dies, everything would be inherited by Sally as the surviving joint tenant of those assets.
Property held in joint tenancy; brokerage or bank accounts held TOD or POD, retirement plans, and life insurance are not controlled by a will or even the probate court, but rather are controlled by joint tenancy and beneficiary designations. So in Sam’s case, by holding property in joint tenancy with Sally, all of those assets would go directly to Sally without probate and without control by his will, thereby completely disinheriting his children. But even more shocking, those assets could even end up going to Sally’s children when she passes, even if Sam and Sally pass at the same time.
How have you planned your estate? Does you plan match your intentions and objectives? With the number of blended families these days, the problem of how to provide for your spouse without disinheriting your children (especially those from a previous marriage) is huge.
So how can we solve these problems? A living trust is one of the most common ways to provide for your surviving spouse while he or she is living, then upon your spouse’s death, the remaining assets will go to your children. A trust will give you added assurance – it can protect your children’s inheritances and keep the assets out of control of the probate court when your trust is properly funded and managed.
Each family is unique, which is why it takes careful planning with an experienced attorney who can look at various factors and options for your specific needs. CALL 925.516.1617 TODAY to schedule your estate plan consultation.
Mechanics liens – Don’t Miss that Deadline
Mechanics liens can be tricky, even for the most experienced contractor. It is important to make sure you keep track of certain deadlines in order to preserve your right to place a lien on privately-owned property under construction for which you have provided labor, service, equipment, or material.
The first step is to provide a “20-day preliminary notice” – sometimes referred to as a “pre-lien” – to the owner, the direct contractor and the construction lender if there is one. Service of a preliminary notice is a necessary prerequisite to the validity of any mechanics lien or stop payment notice. Disputes usually focus on:
- Whether all necessary parties were served;
- Whether the form and content of the notice met statutory requirements; or
- Whether the notice was properly served.
The preliminary notice for private works must be given within 20 days after the claimant has first furnished work or materials on the work of improvement. This means that if you serve it late, then you are limited to a mechanics lien only for work performed within 20 days immediately preceding service of the notice and continuing through completion of work.
What happens after you served your pre-lien? Hopefully you’ll get paid, and most likely you’ll be asked to sign a release of your claim upon payment. But if you don’t get paid, then you’ll need to record a mechanics lien, which must be recorded no later than 90 days after completion of the project if no notice of completion is recorded, or 30 days after recordation of a notice of completion if you are a sub-contractor (60 days if you are a direct contractor).
So now you’ve recorded your mechanics lien on the property, what next? At this point, most contractors have gotten the attention of the owner or the direct contractor and started negotiations to get paid. These discussions can often drag out for several months. What most contractors don’t realize is that they have only 90 days after recordation of their lien to file suit with the court. This time frame is not extended or “tolled” just because you were in settlement discussions to get paid. After 90 days, you can be forced to release your lien and you will have to pay the owner’s attorney’s fees if you refuse and the owner has to file suit. You can still sue to get paid for the work or materials you provided, but you won’t have the leverage of a mechanics lien.
Experienced counsel can assist a contractor to navigate through this complicated area of the law to avoid costly mistakes and preserve your legal rights.
Co-ownership and the Right to Partition
One of the most common real property disputes that I come across has to do with the breakdown of the relationship between co-owners of a piece of real property. Obviously, divorce is a very common scenario which requires the division of real property, but there are other situations as well. Often, parents unwittingly place their children in situation that is ripe for disagreement. After both parents have passed away, siblings who remain as co-owners of the family residence often disagree with what to do with it. Those children with less emotional attachment to the home – due to stress in their own lives, geographical distance, or a multitude of other reasons – are fine with either renting it out or selling it. Other siblings – who may even still be living in the home – might prefer to hold onto it, even when it does not make economic sense. These situations often turn into ugly family arguments, or worse yet, litigation over what to do with the property.
The right of a co-owner to seek partition is governed by statute. The basic statutory provision is section 752 of the Code of Civil Procedure which provides, in pertinent part, that “[w]hen several cotenants own real property … an action may be brought by one or more of such persons, … for a partition thereof according to the respective rights of the persons interested therein, and for a sale of such property, or a part thereof, if it appears that a partition cannot be made without great prejudice to the parties.”
It has been said that “a cotenant is entitled to partition as a matter of absolute right; that he need not assign any reason for his demand; that it is sufficient if he demands a severance; and that when grounds for a sale are duly established it may be demanded as of right.” (De Roulet v. Mitchel (1945) 70 Cal. App. 2d 120, 124.)
However, one well-recognized limitation is that the right of partition may be waived by contract, either express or implied. For example, in one case, the court held that a property settlement agreement between a divorcing couple which provided that the family home was to remain in the name of the parties so long as the wife did not remarry constituted a waiver of the right of either party to partition the property so long as the restrictive conditions existed. (Miranda v. Miranda (1947) 81 Cal. App. 2d 61). In another case, the court found there was an “implied” waiver of partition where cotenants agreed to a plan designed to develop property over a period of time (Thomas v. Witte (1963) 214 Cal. App. 2d 322) or invested in property which was subject to a long-term lease with a view toward obtaining a secure source of investment income (Pine v. Tiedt (1965) 232 Cal. App. 2d 733).
Whether or not these legal principles favor my clients, I always recommend trying to work out an amicable resolution rather than resorting to litigation, which can be expensive and uncertain. Sometimes it is necessary to initiate litigation in order to get the parties to the bargaining table, but mediation is still possible. Over the years, I have helped numerous clients resolve similar disputes, usually through some type of buy-out or sale of the property. Sometimes family relationships can be repaired too, and sometimes not. But at least all parties agree in the end and litigation can be avoided or dismissed.