Practice Areas and Legal Definitions

Probate: 
Probate is the legal process of transferring property following a person's death.  Although probate customs and laws have changed over time, the purpose has remained much the same: an individual formalizes his or her intentions as to the transfer of his or her property at the time of death (typically through a Will); his or her property is collected, certain debts are paid from the estate and the property is distributed accordingly.

Wills:
A Will is a written instrument containing directions on how the assets and property of the testator (individual creating the Will) shall be divided upon his or her death.  Wills can also contain instructions regarding the care of minor children, gifts to charity and formation of posthumous trusts.  In order for a Will to be legally valid, the testator must sign the Will in the presence of two witnesses and he or she must be mentally competent and not acting under duress or under the controlling influence of another.

Will Contest Litigation:
A Will Contest is a type of litigation that challenges the admission of a Will to probate.  Issues that are likely to spur the contesting of a Will include: 

• the testator lacked mental capacity, i.e. was senile, delusional or of unsound mind at the time the documents were created;
• the testator was subjected to fraud, coercion or undue influence during its creation and implementation;
• there are ambiguities in the document or
• the Will is a forgery or does not conform to legal requirements as to the number and nature of the witnesses.

If the Will is thrown out, the court, depending on state law and the specific facts and circumstances may disallow only the part of the Will that was challenged; throw out the entire Will, distributing the property as if the person died without a Will or use the last previous Will.

Trusts:
Trusts are estate-planning tools that can replace or supplement Wills and can also help manage property during life.  A trust manages the distribution of a person's property by transferring its benefits and obligations to different people.  Maintaining assets in a Trust often makes it easier to minimize taxes and leave a larger inheritance.  A Trust is also a way to provide a steady income to the Beneficiary over time (as opposed to distribution in a lump sum), thus reducing the Beneficiary's tax burden, allowing the Trust to grow through investment, and keeping assets free from creditors of the Trust beneficiary.  Trusts can also be established for the benefit of charitable organizations.

Probating Estates:
Estates are categorized as probate or non-probate property.  Probate property is property that is transferred by the provisions of a Will.  Non-probate property is property that is either jointly held and passes by right of survivorship, is directed by beneficiary designation such as an IRA or a life insurance policy, or passes according to the terms of a trust.

Estate Planning:
Good estate planning is more than just a simple Will.  It minimizes potential taxes and fees (including Federal and State gift and estate taxes), and sets up contingency planning to make sure wishes regarding health care treatment are followed before and after death.  A good estate plan also coordinates what happens to a home, investments, business, life insurance, employee benefits (such as a 401K plan) and other property in the event of disability or death.

Powers of Attorney:
Powers of Attorney are governed by the law of agency, a branch of common law concerned with the delegation of power from one person (the principal) to another (attorney-in-fact or agent).  When a person becomes incapacitated, the government or the court often steps in and appoints someone to represent and make legal decisions for the incapacitated person.  One of the ways to avoid government or court intervention and the appointment of a stranger to act as your guardian, is to use a Power of Attorney.  A Power of Attorney is a written document that can be limited in scope, or it can allow one person to give another the full power and authority to represent him or her.  There are two types of Power of Attorneys; one covering assets and one covering health care decisions.

Estate Litigation:
Estate litigation is a legal dispute usually initiated by someone who feels they did not receive all they were entitled to in a Will.  Wills can be challenged if it is suspected that the Will is not legally valid or if the person who was writing the Will was wrongly influenced while creating it.

Conservatorship:
A conservatorship is a court order that a person deemed fully or partially incapable be subject to the legal control of another person.  The conservator is responsible for the assets and finances of an incapacitated person.  Many jurisdictions use the term "guardian of the person" to refer to the same legal principle.  It may be necessary to petition a court to appoint a conservator for persons:

• Who have physical or mental problems that prevent them from managing their own financial affairs;
• Who have no person already legally authorized to assume responsibility for them; and
• Where other kinds of assistance with financial management will not adequately protect them. 

Guardianship:
A guardianship is a legal relationship created by a court between a guardian and his ward, either a minor child or an incapacitated adult.  The guardian has a legal right and duty to care for the ward.  This may involve making personal decisions on his or her behalf, managing property or both.  Usually, a person has the status of guardian because the ward is incapable of caring for his or her own interests due to infancy, incapacity or disability. 

Courts generally have the power to appoint a guardian for an individual in need of special protection.  There are different types of guardians that can be appointed.  A guardian with responsibility for both the personal well-being and the financial interests of the ward is a general guardian.  A person may also be appointed as a special guardian, having limited powers over the interests of the ward.  A guardian appointed to represent the interests of a person with respect to a single action in litigation is a guardian ad litem. 

Estate Tax Returns:
The money and property you own when you die (your estate) may be subject to federal estate tax.  Most estates are not subject to the tax.  Only about 2% of all estates are subject to the estate tax.  An estate tax return generally will not be needed unless the estate is worth more than the applicable exclusion amount for the year of death.  The estate tax is technically a tax on the transfer of property to others, generally to children of a decedent. 

Estate taxes are different from, and in addition to, probate expenses and final income taxes owed on income the decedent earned in the year of his or her death.  They also are separate from inheritance taxes that are collected by some states. 

Most states impose their own estate taxes, usually as a "sponge tax" that piggybacks on the federal estate tax.  The federal estate tax allows each estate a tax credit for any state inheritance or estate taxes paid, up to a maximum dollar amount. 

Private Annuities & Charitable Trusts:
In a private annuity trust, an owner transfers property to an irrevocable trust in exchange for a promise to make prescribed payments to the owner for his or her lifetime.  The trust then sells the property to a third party, the proceeds of which are invested to provide the payments promised to the owner.  On death, the remainder of the trust estate typically passes to the heirs of the property owner.  The trustee must be someone other than the property owner. 

A charitable trust is somewhat similar to a private annuity trust, except that the owner transfers property to an irrevocable trust of which one or more charitable organizations will be beneficiaries.  The type of charitable trust most likely to be used is a charitable remainder trust, in which the owner retains an income interest for his or her lifetime.  The property can be sold by the trustee and the proceeds invested to provide the payments to the owner.  On death or after a specified term of years, the remainder of the trust estate passes to one or more designated charitable organizations.  Unlike a private annuity trust, the trustee can be the property owner. 

Bankruptcy

Chapter 7:
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property.

Chapter 13:
A Chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. Chapter 13 permits individuals to keep their property by repaying creditors out of their future income.  It is not available to corporations or partnerships. After completion of payments under the plan, Chapter 13 debtors receive a discharge of most debts.

Foreclosure:
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien".

A Foreclosure by Sale ends in the posting of a sign advertising the auction of your home on the sale date. The only ways to stop a foreclosure are full payment of the arrearage, or the filing of a Chapter 13 bankruptcy. Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage. Most people lack the money to make full payment. This process stops the foreclosure and allows you to repay your arrearage over a three-to-five year period. The arrearage is paid through a court-appointed official, while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the law day or sale date, and it is often the only avenue to save your home.

Debt Consolidation:
Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It further enables a consumer to reduce the amount owed and thereby eliminate interest. Very often a consumer can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, you are probably in too much debt:

• You have begun charging to your credit card essential expenses like food and daily expenditures
• You are making only the minimum payments on your credit cards each month
• You are near the limit of your credit cards
• You have too many credit cards
• You are unsure how much money you owe creditors

If you or someone you know needs the skilled legal counsel of a San Diego Estate Planning lawyer, call Preovolos & Associates, A Law Corporation, today at 866-435-2799, or use the contact form provided on this site to schedule a free consultation.

If you or someone you love needs the assistance of an experienced San Diego Estate Planning lawyer, call Thanasi Preovolos today at 866-435-2799, or complete the contact form provided on this site to schedule a free consultation.

ADDRESS OF THE FIRM:
Preovolos & Associates, A Law Corporation
401 B Street
Suite 1520
San Diego, CA 92101
Phone: 866-435-2799
Hours: M-F, 8:00AM-5:00PM

MEMBERS OF THE FIRM:

• Attorney Thanasi K. Preovolos
  

Thanasi Preovolos, founder of Preovolos & Associates, has dedicated his law career to protecting his corporate and individual clients with asset protection strategies. With expertise in estate planning, business, and tax law, as well as qualified and non-qualified benefit plans and offshore planning, Mr. Preovolos has built a diverse practice with a focused mission to offer all-inclusive asset protection service to his clients, effectively protecting and maximizing their personal wealth.

Mr. Preovolos earned his Bachelor of Science in Business Finance with a minor equivalent in Economics at the University of Southern California, and earned his Juris Doctor from San Diego’s Thomas Jefferson School of Law, where he completed his studies in two years. While in school and after graduation, he interned at the San Diego Public Defender’s Office where he received extensive litigation training. He continues his legal education by attending seminars, workshops and classes on a regular basis.

Thanasi is a member of the State Bar of California and an active member of the San Diego County Bar Association, maintaining membership in the Estate Planning, Trust & Probate Law; Business & Corporate Law; and Taxation Law sections. He donates much of his time to charitable organizations, such as the YMCA, delivering informational seminars and offering complimentary services.