Irrevocable Trust

Protecting Your Business Assets and Interests From Divorce     Properly protect your business assets in divorce. Comparing the prenuptial vs irrevocable trust.   Business owners and self-employed professionals should think about what their lives would be like if they get divorced. It does not matter if they currently live in marital bliss of if they have not yet tied the knot; the odds for married couples in the United States to end up in divorce court are about 50/50 for first-time marriages, and they increase to 70 percent for business owners or couples that walk down the aisle for a second and third time.   Marriage = Business Liability   Legal divorce proceedings across many jurisdictions have the potential to decimate business holdings when certain demands are made by a separating spouse. Think about the unfairness of this scenario: An entrepreneur builds his or her business through decades of hard work and sacrifice, only to see it dismantled in divorce court. In many cases, the very ownership of the business is at stake during a marriage dissolution. What couples need is some sort of prenuptial insurance to “divorce-proof” their business.   Both business ownership and holdings are at stake during a dissolution of marriage, but they need not be. Protection is available, but most people erroneously think about prenuptial agreements in this situation. There is a legal instrument that can be effectively used to protect a business prior to getting married, and it does not involve asking a future husband or wife to review and sign an awkward document. Using an irrevocable trust as a prenup method of asset protection makes a lot of business sense for the following reasons:   No Awkward Moments When Planning Your Prenup with Your Fiancé   Is there anything more unromantic than a prenuptial agreement? First of all, for such a legal instrument to be effective, the future groom and bride should get their own, separate attorneys. After that, the future spouses must provide full disclosure and accounting of their assets for the purpose of deeming them marital and separate property. In these modern times, this part of the prenuptial agreement process is basically an invitation to a premarital argument.   Irrevocable trusts remove all the awkwardness of a prenuptial agreement by skipping the process above. A fiancé or fiancée does not have to know about the trust, and he or she certainly will not have to sign it. Business or personal assets in the irrevocable trust are protected throughout the marriage; in case of divorce, a judge will examine the trust only for the purpose of checking if marital assets are contained therein.   Retain Control: No Protracted Legal Battles   The problem with prenuptial agreements is that they often invite legal challenges. This may seem ironic since these agreements are intended to be equitable insofar as the parties are involved, but the reality of the litigious civil society we live in makes premarital contracts fodder for litigation.   Depending on the jurisdiction, attorneys can employ a number of legal strategies to contest premarital agreements. Excessive child support is one such strategy that diminishes the purported protection of a prenuptial agreement, and the court proceedings involved are usually lengthy and expensive. With an irrevocable trust, a grantor will often be able to determine the assets that will be distributed to his or her children and at what age they will be able to receive them.   Making the Other Spouse Happy   One of the reasons prenuptial agreements are so often contested and end up overwhelming court systems across the U.S. is that spouses enter a different mindset when they start marriage dissolution proceedings. When executing a premarital agreement for the first time, couples are mostly focused on the future wedded bliss; once they get past the awkwardness of talking about such matters, both fiancé and fiancée are willing to sign on the dotted line and walk down the aisle. Once the idea of a divorce is introduced, this mindset is reversed.   The unwavering tenacity of some men and women to extract as many assets from the business operations of their spouses often results in numerous challenges and expensive divorce proceedings. Irrevocable trusts allow spouses to settle such challenges in a civil manner since grantors have the power to give their divorcing spouses whatever they deem enough to settle their claims and thus avoiding lengthy legal battles.   Postnuptial Agreements Not Required   Some couples are so shaken by the complexity of divorces and their effect on business operations that they sit down to hammer out a postnuptial agreement before the marriage dissolution is finalized. These contracts are similar to prenuptial agreements, but they are executed by husband and wife before they cease to be a married couple. In theory, these postnuptial contracts should give business owners peace of mind, but not every jurisdiction recognizes them, and even in states where they are valid they are not free from legal challenges.   In the end, prenuptial agreements simply do not provide the level of asset protection that irrevocable trusts can offer. These instruments can benefit anyone, but they are particularly useful to business owners, entrepreneurs, and professionals who have significant earning potential and stress such as doctors, dentists, engineers, etc. To find out more about how an irrevocable trust can protect your business better than a prenup, please call us now at (888) 938-5872.    

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION   SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2792-10T1 JAMES R. HAPPOLD, Plaintiff-Respondent, v. JEAN HASHER HAPPOLD, Defendant-Appellant. November 21, 2011 Telephonically argued October 25, 2011 – Decided   Before Judges Axelrad and Ostrer. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Gloucester County, Docket No. FM-08-309-09.   Stacy L. Spinosi argued the cause for appellant. Maryann J. Rabkin argued the cause for respondent (Rabkin Law Offices, P.C., attorneys; Ms. Rabkin, on the brief).   PER CURIAM   Defendant Jean Happold appeals from the alimony and counsel fee award in the divorce judgment entered on December 21, 2010 after a brief trial. Defendant argues that it was error to award ten years of limited duration alimony instead of permanent alimony after the parties’ long-term marriage. She also argues that the court failed to apply the required factors in considering her counsel fee request. We reverse and remand.   I.   The parties were married in 1989. Plaintiff filed his dissolution complaint on October 14, 2008 after separating from his wife the previous July. The parties have three daughters; one was emancipated before trial. Defendant was born in 1966 and plaintiff in 1965.   Before trial, counsel reported that the parties reached agreement on all matters except: alimony, equitable distribution of an account that defendant alleged plaintiff had dissipated, and the enforceability of a prenuptial agreement. Although counsel did not mention attorney’s fees, that remained an issue.   The parties agreed that defendant would have primary residential custody of the two minor children and plaintiff would exercise overnight parenting time twenty-six nights a year. The parties also agreed to divide all assets evenly, except that defendant would receive the marital home, which had $164,000 in equity after subtracting a $32,000 mortgage. Insurance cash values were allocated to pay off the house debt and defendant would reimburse plaintiff $82,000 by transferring part of her half-interest in plaintiff’s 401(k) account.   At trial, plaintiff’s employer testified that plaintiff was a project manager, estimator, and corporate secretary for Masonry Preservation Group, Inc., where he had worked for over twenty years. He started out as a laborer, but his income grew substantially after 2003, as he acquired new skills and responsibilities. His reported income was $101,000 in 2005 and $180,900 in 2006. The court found that plaintiff currently received a base salary of $156,000 a year, plus $8000 in automobile benefits. As plaintiff’s bonus income fluctuated, his total wages including bonuses were $181,370 in 2007, $215,000 in 2008, and $238,500 in 2009. His employer testified no bonus was expected in 2010 because of business conditions.   Defendant became pregnant with the parties’ first child, a daughter, when she was sixteen years old in tenth grade. Plaintiff was in eleventh grade. Defendant then dropped out of school, finishing only ninth grade. She lived with her parents after the birth in the spring of 1983.   In 1984, she and the child began living with plaintiff in his family’s home. Plaintiff finished high school, and began working. Plaintiff’s mother also worked. Defendant remained in the home, cleaning, washing, cooking, and caring for the child.   Defendant testified that plaintiff proposed marriage on Christmas Eve in 1987. They began looking at houses and in July 1988, plaintiff purchased in his sole name what would become the marital home. (Plaintiff testified that he bought the house in 1987 before the engagement, but he could not explain on cross-examination why the deed clearly reflected a July 1988 closing.) The parties and their child moved in after the purchase.   The parties married on December 30, 1989. However, two days before, the parties entered a prenuptial agreement in which defendant purported to waive any claim for support or equitable distribution in the event of divorce, or any claim to plaintiff’s property in the event of his death. Plaintiff conceded at trial that he retained the attorney who represented both parties to the agreement.[1]   Defendant gave birth to the parties’ two other daughters in 1993 and 1995.   The parties disputed the extent of their home-making duties. Plaintiff testified that he did all the shopping, helped with cooking and house cleaning, and attended all school-related conferences, which his wife did not. As discussed below, defendant described a different allocation of roles.   The parties also differed regarding the family budget. Plaintiff testified that his wife and two teenaged daughters jointly spent $20 a month for hair care, and $25 a month for clothing, but he would give clothing as gifts and would pay for hair care and manicures around birthdays. In his case information statement (CIS), he alleged that his wife and daughters spent $5 a month for prescription drugs; and $10 a month for non-prescription drugs, cosmetics, toiletries and sundries. Plaintiff allocated zero for entertainment, lessons, sports and hobbies, school lunch, dry cleaning, medical or dental expenses, savings, and maintenance of the ten-year-old minivan defendant drove. Plaintiff budgeted monthly $70 for restaurants and $375 for vacations for his wife and children. Earlier in the marriage, the parties took annual vacations to Maine or Florida. As plaintiff’s income rose, they took more expensive vacations to Hawaii, California, Las Vegas, and St. Maarten.   Plaintiff claimed that defendant chose not to enter the workforce. She was generally uninvolved in the family’s finances, and did not have any bank accounts or credit cards in her own name. The only jointly-held asset was a savings account with roughly $2000 at the time of separation, which was intended to give defendant immediate access to money if plaintiff died. All other marital assets, including all bank accounts, were in defendant’s name. He testified that she resisted his efforts to teach her how to write a check.   Defendant painted a different picture of her role in the family, the family finances and her absence from the workforce. She testified that plaintiff discouraged her from obtaining employment, stating, “He always

ESTATE OF DITO v. Elenice S. Dito, Objector and Respondent.   ESTATE OF Frank P. DITO, Deceased. Barbara Merritt et al., Petitioners and Appellants, v. Elenice S. Dito, Objector and Respondent. No. A128921.   — July 29, 2011   Barulich Dugoni Law Group, Inc, Randall B. Schmidt, Kevin M. Rodriguez, for Petitioners and Appellants.Ramin Mozaffar, Mark Adrien Gullotta, for Objector and Respondent.   In an earlier appeal arising out of this probate matter, we affirmed the trial court’s ruling that respondent Elenice S. Dito is the surviving spouse of decedent Frank P. Dito 1 and is entitled to receive a share of his estate as an omitted spouse pursuant to Probate Code 2 section 21610 et seq. After the earlier appeal had been decided, appellants Barbara and George Merritt filed a petition alleging that Elenice is liable for financial elder abuse committed against Frank. The trial court sustained a demurrer to the petition without leave to amend on the ground the claim was barred by the doctrine of res judicata.   We conclude the trial court erred. Because the primary right at issue in appellants’ petition is different from the one at issue in the earlier appeal, the petition is not barred as a matter of law on the basis of res judicata. Nevertheless, we conclude the demurrer should have been sustained on other grounds, albeit with leave to amend.   Factual and Procedural History   In reviewing an order sustaining a demurrer, we would ordinarily take the factual background from the properly pleaded material allegations of the complaint. (See Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) Here, however, because one of the claimed grounds for the demurrer is res judicata, we must necessarily consider the prior judgment that purportedly has res judicata effect. (See Planning & Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 225 [court may take judicial notice of court records in considering demurrer based on res judicata].) Therefore, we begin by summarizing the prior judgment that allegedly precludes appellants’ petition.3   Summary of Prior Appeal   Elenice was born in Brazil. She came to the United States in the early 1990’s to work as a housekeeper for a Brazilian family. Elenice began working as a live-in housekeeper for decedent Frank Dito and his wife, Rosana, after being introduced to them in late 1994 or early 1995. The couple were elderly and physically impaired when Elenice began working for them. Elenice’s visa did not permit her to work legally for the Ditos.   Rosana died in December 1995. Elenice continued to live with Frank and care for him after Rosana’s death. At some point in 1997, Frank and Elenice began discussing marriage as an option. They were married in August 1997. At the time of their marriage, Frank was 94 years old and Elenice was 28 years old. Before they were married, Frank and Elenice entered into a prenuptial agreement. The agreement provided that both parties waived their right to alimony, maintenance, or spousal support in the event of divorce, death, or dissolution of marriage.   Frank and Rosana had one child, appellant Barbara Merritt, who is married to appellant George Merritt. Barbara was the trustee of her parents’ living trust.   Frank died in December 2004. In early 2005, Elenice filed a petition for letters of administration. Barbara filed a competing petition to administer Frank’s estate and to admit his will to probate. Barbara attached to her petition a pour-over will executed by Frank in 1994 that identified Rosana as his wife. The will did not mention Elenice. In July 2005, Frank’s grandson, Terrence, filed a petition to administer the estate. Barbara withdrew her petition to administer Frank’s estate in favor of her son, Terrence.   In October 2005, Elenice filed a petition seeking, among other things, her share of Frank’s estate as an omitted spouse, a determination that the prenuptial agreement is unenforceable, and a determination that the surviving spouse’s waiver in the prenuptial agreement is unenforceable. She also sought an accounting and a reconveyance of trust assets allegedly transferred to Barbara. She further alleged that Barbara was liable for financial elder abuse and should be deemed to have predeceased Frank pursuant to section 259 as a result of the elder abuse.   Upon stipulation of the parties, the trial court ordered the issues raised by the competing petitions bifurcated so that the following issues could be tried before all other issues in the case:   (1) whether Elenice is the surviving spouse of Frank and is entitled to receive a share of his estate pursuant to section 21610 et seq.; (2) whether the prenuptial agreement is enforceable; and (3) whether the surviving spouse’s waiver contained in the prenuptial agreement is enforceable. The parties’ stipulation explains that they agreed “the Court should first decide whether Elenice S. Dito is the omitted spouse of Frank P. Dito ․ and whether the Premarital Agreement ․ and the surviving spouse’s waiver contained therein, are enforceable, and that, in the event that the Court decides that Elenice S. Dito is the omitted spouse of Frank P. Dito ․ and that the Premarital Agreement ․ and the surviving spouse’s waiver contained therein are enforceable, the Court will then try all other remaining issues in this case.”   The court conducted a bench trial on the three issues identified in the bifurcation order. In an order filed December 8, 2006, the court ruled that Elenice is the surviving spouse of Frank and is entitled to receive a share of his estate pursuant to section 21610 et seq. The court further ruled that the prenuptial agreement was invalid and unenforceable. For the same reasons it found the prenuptial agreement invalid, the court ruled that the spousal waiver contained in the agreement was likewise invalid.   Terrence appealed. He claimed the marriage between Frank and Elenice was void because it was entered into for the sole purpose of allowing an illegal immigrant to remain