Law Blog

Digital Assets in Estate Planning

Posted by on Feb 19, 2018 in Blog Post | 0 comments

For most of history, digital assets (ex: photos stored in the cloud, online accounts, etc.) did not exist. Their introduction changed a great deal about the way humans operate on a daily basis. Now, lawmakers have begun to address how digital assets affect estate planning. In 2017, the Montana Legislature adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Before this act, it was difficult, if not impossible, for a fiduciary or personal representative to access the digital assets of someone who had passed away. The default provisions of RUFADAA do not grant access to digital communications (i.e. emails) without specific consent. However, fiduciaries do automatically have access to other digital assets, unless expressly prohibited. Specific directions regarding digital assets or digital communications can be made in a will, trust, or power of attorney. It may be helpful for an individual who would like their digital assets accessed by their personal representative to keep a separate document listing important account numbers or usernames with their will.  

5 WAYS THE NEW TAX BILL MAY AFFECT YOUR DIVORCE

Posted by on Dec 29, 2017 in Blog Post | 0 comments

  1.  If you file for divorce after December 31st, 2018 you will not be able to deduct maintenance (alimony) payments on your taxes as part of your divorce agreement.  Currently if you are a spouse paying alimony you can deduct payments from your taxes.  The spouse that receives the maintenance must pay income tax on the maintenance received.   

 

  1.  You will no longer be able to claim a $4050 exemption per dependent child. In Montana we use a complex child support calculation to determine child support.  Historically, parents have negotiated which parent claims their child(ren) for the exemption.  This exemption affects the overall child support calculation.  Under the new tax bill the personal exemption is gone.

 

  1. The child tax credit has been expanded.  This year, for example, single parents were only able to receive the $1,000 credit per child if they make less than $75,000 per year.  The credit is a dollar for dollar reduction of tax owed to the IRS.  Under the new tax bill, a single parent can receive $2,000 for every child under 17 if the parent makes less than $200,000 per year.   Additionally, there is a new $500 credit for children over 17 and other adult dependents (elderly parents or an adult child with a disability).

 

  1. The 529 Savings Accounts can be used in new ways.  Many parents establish 529 Plans for their children as part of their divorce negotiations.  Historically, parents can invest pre-tax dollars in the 529 Plans to be used for college expenses.  Now, parents can use up to $10,000 per year to cover the cost of sending a child to a “public, private or religious elementary or secondary school.”

 

  1.  The tax penalty for health insurance has been eliminated.  Over the past few years, parents have been able to receive a credit on their child support calculations for paying for their own health insurance (since this was a mandatory expense).  In the new tax bill, the individual mandate will be eliminated in 2019.  Therefore, for Montana child support calculations, parents will no longer be able to deduct the cost of their health insurance from their overall income available for child support.  We should expect overall income for child support to increase, which will affect child support calculations.

Contracts: Legality

Posted by on Oct 31, 2017 in Blog Post | 0 comments

The final element of a valid contract is legality. This means that if a contract requires one of the parties to perform an illegal action, it would be declared void. If Liz offers to pay Ben $300 to break into her neighbor’s house, then refuses to pay him after he does, Ben cannot sue Liz for breaching her contract. Similarly, if either party enters into a contract illegally, the contract is generally unenforceable. For example, this would apply if someone formed a contract with an unlicensed professional when the law requires someone in that profession to have a license.

Contracts: Capacity

Posted by on Oct 23, 2017 in Blog Post | 0 comments

Capacity is the forth element in establishing a legally binding contract. The mental ability, or capacity, to enter into a contract might seem like a straightforward requirement at first, but can actually be one of the more difficult elements to establish in certain situations. Certain classifications of people, such as minors, mentally incapacitated, and sometimes even intoxicated persons, may inherently lack the capacity to contract. Minors, unless they are emancipated, are given the legal authority in most states to disaffirm, or void, any contract they enter into. Mental incapacity can be a little harder to determine. However, if any person, suffering from a mental disorder or not, enters into a contract understanding both the nature and obligations of the contract, they will be bound by the contract. In a similar way, if an intoxicated person merely exercises poor judgment due to their intoxication, but understands the contract, they will still be bound.

Contracts: Consideration

Posted by on Oct 18, 2017 in Blog Post | 0 comments

Consideration is another very important aspect of a contract. Consideration can be thought of as what each party will receive from the contract. In the example from last week, Liz sold her car to Ben. Once Ben made the offer and Liz accepted, the money he promised to give her is his consideration and the car she promised to give him is her consideration. There are many different types of consideration. First, it can be something that benefits the promise, such as Ben gaining a car or Liz gaining money in the example above. Second, it can be a detriment to the promisor. This would be Liz giving up the car and Ben giving up the money. Third, it can be a promise to do something, like paying someone in advance if they promise to come mow your lawn next week. Fourth, it can be a promise to refrain from doing something. This can be as simple as making a deal with your friend to give up eating chocolate for a month in exchange for $20.

Although a contract must have consideration on both sides to be considered valid, a court will rarely, if ever, judge the fairness of the consideration. Therefore, if Ben only offered Liz $3 for her car, but Liz accepted the offer, the consideration requirement is still fulfilled. Even though $3 doesn’t necessarily seem like a fair exchange for a car, a contact would still be formed between the two.