What Happens to the House When Unmarried Couples Break Up?
by Laine Carver, Associate Attorney
These days, it is not uncommon for people to be in long-term relationships in which they live in the same household as their partner without ever being married. This is oftentimes referred to as cohabitation.
In many states, including Wisconsin, marriage laws were created to attempt to leave both spouses in a similar financial position upon the dissolution of the marriage. However, those marriage and divorce laws do not apply to cohabitants who wish to terminate their relationship. Instead, the people involved in the break-up must piece-together separate areas of Wisconsin law to determine how the break-up should resolve. In this article, I will discuss what is likely the most expensive part of a breakup—determining ownership of real property owned by the once-loving partners.
There are three potential scenarios that play out when partners own real estate together and wish to end their relationship: (1) both partners agree to sell the property and split the proceeds; (2) only one partner wishes to retain the property and that partner has the money or credit to “buy-out” the other partner; or (3) both partners wish to keep the property and/or neither partner has the ability to buy-out the other. The third scenario is the focal point of this article.
When a person owns an interest in real property, there are specified remedies for which that person can sue. The first is for declaratory judgement, essentially asking the court to declare the person the owner of the property. The second is monetary damages. The third is for a partition of the interest in the real estate. The remedy of partition is sought when real property is owned by two or more people, and those people no longer wish to own property together.
There are three ways a court will handle a partition claim. First, if the court finds there is an easy way to divide the land by the portion of the real property interest owned by the parties (e.g., 50-50), the court will divide the land and grant each party their respective portion of the land.
Second, if the court does not see an easy way to divide the land according to the parties’ proportional interests, the court may appoint a third party (a referee) to attempt to draw a fair boundary to divide the land between the parties. The referee may conclude there is no fair way to divide the land and, therefore, it should be sold. Generally, the court will then order the sale of the property.
Third, the court may determine there is no fair way to divide the land as a matter of law and make the decision without the appointment of a referee. This is generally the case when the real property at dispute in a partition claim is a residence. In that scenario, the court will order the sale of the property, the proceeds of which will be distributed to the parties based on their proportional interest.
As you can probably tell, partition claims can be complicated and relatively expensive. That is why you should be sure to contact an attorney (1) to avoid entering into a situation in which a partition claim will be necessary, and (2), if you find yourself in the middle of a partition claim, to pursue or defend that claim to reach the best outcome for you. Please do not hesitate to contact Russell Law Offices, S.C. if you have any questions or concerns about cohabitation and the legal ramifications that may accompany it.
Automatic Stays in Bankruptcy: What are they can they be lifted?
by Justin Brewer, Associate Attorney
When a person or business files for bankruptcy, the bankruptcy court issues an automatic stay, which stops creditors and third parties from starting or continuing collection actions and other lawsuits. The automatic stay is an injunction, designed to protect the debtor and any co-debtors from creditors’ collection attempts or other lawsuits while the bankruptcy proceedings take place.
The automatic stay is a powerful tool to protect debtors. If a creditor knowingly violates the stay, debtors can recover damages, including attorneys’ fees and costs from the creditor. Further, any actions taken in violation of the stay are voided.
However, the automatic stay is neither permanent nor absolute. It doesn’t stop every type of lawsuit, nor every type of collection action. The stay will only last until the termination of the proceedings, and in some circumstances, creditors can ask for the stay to be lifted.
What are the exceptions to an automatic stay?
The automatic stay is a blanket injunction against collections, but there are exceptions. In the following circumstances, third parties can continue their collection or legal actions against a debtor.
- Criminal Prosecution: any ongoing or new criminal prosecutions or proceedings are not halted by the automatic stay.
- Family Law actions: actions in family law cases, such as establishing paternity, establishing or modifying child support, establishing or modifying child custody or placement, and even certain divorce actions are not halted by the automatic stay.
- Government Action: government actions to enforce their regulations or more are not halted by the automatic stay, including withholding from paychecks to pay loans against pensions or 401ks.
- Previous Bankruptcy Liens: liens from a previous bankruptcy are not halted by the automatic stay.
- Evictions: evictions that a debtor received notice of prior to filing bankruptcy are not halted, and debtors can still be evicted during the stay for property endangerment or illegal use of substances.
How can automatic stays be lifted?
In order to lift or remove the stay, creditors need to move the court to do so for the collateral property they have an interest in. A court can lift the stay when a creditor’s interest in property of the bankruptcy estate is not adequately protected, when the debtor does not have equity in the property, or when the property is not necessary for an effective reorganization under bankruptcy. A creditor will have to make a motion to the court to receive the stay. Courts can also grant emergency relief from the stay to prevent irreparable damage to collateral covered by the stay.
While the automatic stay is a powerful tool for debtors, it is not an impenetrable defense. Negotiating the bankruptcy automatic stay can be confusing and complex; if you need help understanding the automatic stay, or any other matter related to bankruptcy or collections, the experienced team of attorneys at Russell Law Offices S.C. is here to help! Please note, Russell Law Offices, S.C. only represents the creditor, not the debtor.
You and your partner broke up, now what?
by Mike Schulz, Associate Attorney
For unmarried couples who live together, breaking up can be far more complicated than couples going through a divorce. Wisconsin does not recognize the concept of common law partners, and unmarried couples are not afforded the protection of marital property laws and codified divorce procedures. Instead, any unresolved issues that require the court’s involvement will be treated as a separate civil case between individuals. This often means that resources available to divorcing couples are not an option, which in turn can drive up litigation costs.
Determining paternity may also be a problem for unmarried couples. Without a formal declaration of paternity with the court or a stipulation between the parents, one parent will not have custodial rights. Even where all property is mixed and assets shared, spousal support or maintenance is also unavailable to unmarried couples. Although both parents are obligated to contribute towards financial support for their children, that obligation does not extend to a former partner like it might for a divorced couple.
Cohabitation also can raise issues regarding estate planning. Without a will or trust directing where assets go upon death, any property that is not jointly with a survivorship interest will not pass on to the surviving partner. Instead, the estate would go to their default heirs – likely children or surviving parents.
Whether it is the personal property division, joint ownership of a home or car, assignment of debt, children, or even pets – these issues can be more difficult to unwind without the usual divorce procedures. Cohabitation agreements are a proactive solution to many of these problems, and can streamline an otherwise long and stressful ending of a relationship.
Russell Law Offices, S.C. can help take the sting off a breakup by drafting a cohabitation agreement in case your relationship results in a breakup. Contact the office today to schedule your consultation.
Pulled over after drinking? What to do!
by Morgan Sauder, Senior Attorney
What a dreaded feeling, to see an officer flip their lights on behind you. You’ve been drinking and a million things are going through your mind. What should you do? What do you have to do? What if you don’t do something that is asked of you?
STOP: First and foremost, pull over in a timely fashion. Don’t endanger yourself, passengers, other motorists or officers by taking them on a wild goose chase. If an officer is telling you to pull over just do it, or you’ll potentially face felony eluding charges.
STOP TALKING: You are under no obligation to make small talk with the officer. That includes answering questions such as where you are coming from or where you are going to, if you’ve been drinking, if you have any idea how fast you were going or why they pulled you over. When they pull you over, provide them with your license and registration upon request, but otherwise tell them you will be remaining silent. You can politely say “Are you detaining me or am I free to go?”. They may pick up on enough cues to have probable cause to believe you are intoxicated, those usually include the odor of intoxicants coming from the vehicle, bloodshot and glassy eyes, slurred speech and obvious open intoxicants in plain view. They may ask you to submit to either a PBT (Preliminary Breath Test) or FSTs (Field Sobriety Tests).
PBT: Preliminary Breath Tests, or PBTs, are a legal encroachment into your 4th Amendment rights against unlawful search and seizure. If an officer has probable cause to believe you are intoxicated they may ask you to submit to a PBT, the little handheld device you blow into that is supposed to be able to give an approximate BAC (Blood Alcohol Concentration). If you refuse to do a PBT, you automatically lose your driving privileges for 1 year. You have a very short window of opportunity after your refusal to hire an attorney and fight the refusal charge. If you refuse, the officer will quickly get a warrant for your blood and drive you to the nearest hospital for a blood draw.
FSTs: Field Sobriety Tests, or FSTs, are the silly human tricks officers put people through along the side of the road. You do not need to do these silly human tricks, the officers are only collecting more evidence to use against you! They are looking for cues decided on back in the 1970s by the National Highway Traffic Safety Administration to prove you are too impaired to drive. They often include such tests as the HGN (Horizontal Gaze Nystagmus) where you can’t move your head but you have to follow their finger or pen around, the one leg stand or the walk and turn. Even totally sober some of these tests make people look like fools, so just politely tell the officer you will not participate.
BOOKED: Once you have been asked about a PBT and FSTs, if the officer believes there is enough evidence to arrest you for Operating While Intoxicated, they will read you your Miranda Rights and an Informing of the Accused form. They will take you to be booked at the police station. At several times they will try to get you to talk to them. Remind them that you are not answering any questions, but do give them the necessary information they need, such as who will be picking you up from the station as your responsible party. Do not let them push you into talking by being nice to you, telling you that innocent people talk or by making threats about how they think your defense will go if you don’t talk.
RELEASED: Call us! ASAP. There are so many time sensitive things to take into consideration when you have been arrested for Operating While Intoxicated. First, hire an experienced attorney who you can feel confidence in to help you with your case. Then, you can talk all you want.
Hang in there, we are here to help!
Do I Need an Attorney for an OWI 1st?
by Morgan Sauder, Senior Attorney
Wisconsin is unique in that an OWI 1st (Operating While Intoxicated) is classified not as a crime, but as a traffic offense. People frequently handle traffic offenses on their own, most often by just paying the fine.
Paying the fine is the same as entering a guilty plea. Once the fine is paid, a guilty plea is entered on behalf of the driver and a SR-22 form needs to be provided to your insurance company. That’s it, you can just pay the fine and be done. Could it really be that simple? Sure, but…
With years of experience, we have learned things are not as simple as they appear for OWI 1st clients.
If you have a CDL, entering a guilty plea on any new drunk driving charge means you can say goodbye to your CDL. A lot of people earn their living on their CDL and don’t realize the life changing impact of an OWI after getting a CDL license.
Even for those without a CDL, getting an OWI 1st will absolutely raise your insurance rates. You will also lose your driving privileges for a minimum of 6 months, likely longer. You will have to attend an Alcohol Assessment and be given a Driver Safety Plan to reinstate your driving privileges after your revocation.
Depending on your level of intoxication and whether or not you caused an accident or have an aggravated driving record, you may also be faced with a PAC (Prohibited Alcohol Content) charge, increased driver license revocation and be forced to put in a costly IID (Ignition Interlock Device) on any vehicle you own or operate and pay the monthly fees for the IID.
As with any offense, whether or not you use an attorney your decision, but it is always recommended to work with a legal professional who can help guide and defend you.
Russell Law Offices, S.C. has attorneys on staff with significant experience handling OWI cases in Southern Wisconsin and would be happy to come on board and help you with your defense. Call today for a free consultation.
What is a Testamentary Trust?
by Mike Schulz, Associate Attorney
A trust is an agreement under which a trustee holds property for the benefit of a beneficiary. Trusts can differ greatly in how they are created, what terms govern their operations, and so on. Trusts that are created through instructions left in your Will are known as testamentary trusts. For those with young children, this type of trust is a low-cost way of ensuring that their needs will be met, and their inherited property is managed responsibly in the event that both parents die before the children turn 18.
Care for Children
As opposed to outright distribution of an inheritance to an adult beneficiary, in the event that both parents die and intend to leave property to their minor children, the property must be managed for them under some kind of fiduciary arrangement. Consequently, it should not be assumed that an estate is too small to justify setting up a trust for minor children.
As is the case for all trusts, significant consideration should be given to the trustee appointment and powers. The same individual who might serve as the guardian of a minor’s estate can be selected as a trustee and would probably serve more easily and flexibly under a trust or as custodian of a testamentary custodianship.
There are several advantages to setting up a testamentary trust versus other arrangements for minor children. Under a guardianship for example, minors receive property and the ability to manage the funds at the age of 18. Distribution at such an early age can be avoided by using a testamentary trust. The trust can be structured in a way which defers termination until the child becomes 21 or 25, or even at such time as it appears to the trustee that the child has completed their education. Distribution of the remaining funds to all beneficiaries can (and often should) be deferred until youngest child has attained the required age or circumstances specified within the will.
Flexibility and Cost
Testamentary trusts are created through instructions provided within your will – which means it can be updated at any time based on the changes in circumstances. The executor of an estate – the person administering the will through probate – is instructed to create the trust if certain conditions that are met.
Additionally, because the trust isn’t formed until your death, the cost of creating the trust can be paid out of the estate – saving the upfront cost and efforts that go along with creating a different type of trust.
Russell Law Offices, S.C. can help you navigate this process efficiently and effectively. Call the office today to schedule your consultation with one of our Estate Planning attorneys.
Landlord/Tenant Checklist & Its Importance
by Alex Levy, Associate Attorney
The summer rental season has begun, prompting a post about a particular document that marks the beginning, and end, of many tenancies – the move-in/move-out checklist. The move-in/move-out checklist is a form that a tenant traditionally fills out to record the physical condition of the rented premises upon moving in, and that a landlord traditionally fills out to record the physical condition of the rented premises upon the tenant moving out. This form often receives attention in the context of the return of, or the withholding from, a tenant’s security deposit. Below are a few reasons why landlords and tenants may find this move-in/move-out checklist useful, as well as some considerations in filling out the form.
A landlord may utilize a move-out checklist to identify deficiencies at the premises following a tenant’s departure and calculate the extent that the tenant’s security deposit will be withheld, if any. A landlord may also use the move-out checklist as the procedural or documentary vehicle through which they restore the premises for the subsequent tenant – since the form illustrates the types of cleaning, repairs, and replacements that need to be made to return the unit to ‘move-in ready’ condition, it can just as readily serve as the checklist to turn the unit. A proactive landlord may also use the move-in checklist they receive from a new tenant as a way to identify, and remedy, potential deficiencies on the premises that the landlord may have failed to notice when they conducted the move-out checklist for the previous tenant.
A tenant who thoroughly fills out a move-in checklist upon taking possession of the premises, and who returns it promptly to their landlord, reduces the likelihood of encountering a misunderstanding with their landlord about the extent that the state of the property differed from move-in to move-out. This benefit manifests most relevantly in the form of a more likely return of the tenant’s security deposit. A new tenant also benefits from filling out a move-in checklist because the activity forces them to evaluate their newly rented premises in an amount of detail that they may not have otherwise done, which facilitates the immediate identification of any physical deficiencies. Such a tenant may then act quickly and request that their landlord make any remaining repairs that were identified on the move-in checklist, without drawing as much suspicion from the landlord about whether or not the damage preceded the new tenant’s occupation of the premises.
There are a few considerations that both a landlord and a tenant may want to take into account when filling out the move-in or move-out checklist, respectively. First, many appliances may not appear to lack functionality in plain view, so it is wise to test each of them to make sure that such items are in fact entirely operable. Second, certain deficiencies may warrant increased specificity – this may be achieved by describing the deficiency more articulately on the form or by taking pictures of the noted deficiency. Lastly, a reminder that communication is an important aspect of developing, maintaining, and ending a productive landlord-tenant relationship – mutual management of expectations may reduce the likelihood that potential disputes will flare up in the future.
Special Needs Trusts
By Laine Carver, Associate Attorney
All too often, people receiving public benefits like Medicaid or Supplemental Security Income (“SSI”) are disinherited from a relative’s estate. The fear is that an inheritance will disqualify the individual from those public benefits. However, the solution does not have to be to disinherit that individual. By creating a Special Needs Trust, the individual can likely receive the benefits of the inheritance while retaining their public benefits like Medicaid or SSI.
A trust is a legal creation in which a third-party—the trustee—has legal ownership of the trust assets for the benefit another person—the beneficiary. A Special Needs Trust is one created for the benefit of a person with a legally-recognized physical or mental disability and specific language that allows the beneficiary of the trust to retain public benefits like Medicaid and SSI. The trust assets can be used to pay for the beneficiary’s medical expenses, travel, entertainment, and other quality of life expenses. Furthermore, upon the death of the beneficiary, assets remaining in the Special Needs Trust can be paid to another party as determined by the language in the trust.
Self-Funded vs. Third-Party Funded Special Needs Trusts
A Special Needs Trusts may be funded in one of two ways. The first way is to fund the trust with the beneficiary’s own assets. This is a “self-funded” Special Needs Trust. The second way is to fund the trust with assets owned by a third party who wishes to pass those assets to the beneficiary. This is a “third-party funded” Special Needs Trust. Though largely similar, there is one very important difference between self-funded and third-party funded Special Needs Trusts: upon the death of the beneficiary, if the beneficiary received Medical Assistance under the state’s Medicaid plan, the amount of this assistance generally must be paid back to Medicaid under a self-funded trust. However, there is noMedicaid payback requirement when the Special Needs Trust is third-party funded. Therefore, it is extremely important to be certain that inheritances and gifts are made directly to an individual’s Special Needs Trust and not the individual, if at all possible.
Pooled Special Needs Trusts
Pooled Special Needs Trusts (PSNTs) are a common way for individuals to access the benefits of Special Needs Trusts at a lower cost. PSNTs are Special Needs Trusts managed by a non-profit organization that holds trust assets for the benefit of multiple individuals. Each beneficiary of a PSNT has their own sub-account within the trust itself. The benefits of PSNTs are plentiful. First, the pooling of trust assets reduces the administrative costs of managing the trust. For example, the cost of investing the trust assets is reduced since there are more assets to invest. Second, PSNTs are often managed by experts who specialize in Special Needs Trusts and public benefits like Medicaid and SSI. Finally, some PSNTs, like those managed by Wispact, provide grants to beneficiaries to pay for the attorney’s fees for establishing a sub-account within the trust.
First Step in Creating a Special Needs Trust
If you think you or someone you know could benefit from a Special Needs Trust, please do not hesitate to contact Russell Law Offices, S.C. to set up a consultation to determine if a Special Needs Trust is right for you.
What is Estate Planning?
by Michael Schulz, Associate Attorney
Did you know you have an estate?
Almost everyone does! Your estate includes the things that you own such as your home, car, personal belongings, bank accounts, life insurance and more. Upon the event of your death, an estate plan will help those who are taking care of your arrangements follow through with your wishes.
Create a Will or Trust
A Will provides the instructions for your estate and lists the beneficiaries of your assets. Within a Will, your assets are required to go through your state’s probate process. The court system sets the framework for the distribution of your assets based on your wishes. Typically, this process can take a few months to a couple years depending on the complexity of your estate. On the other hand, a Trust avoids the probate process while also listing the beneficiaries of your estate. Additionally, a Trust can remain valid long after your death, when managed by a Trustee, for future wishes of your assets such as taking care of a loved one or providing for future generations. Everyone’s needs for their estate will be different, so a personalized plan is the best option. Consult your attorney for advice as to which option is best for you and your estate needs.
Estate planning will organize your records, ensure your assets have accurate information and update your beneficiary designations. It is likely that only YOU know the information about your assets, where the information is and how to access it. The estate planning process is a great way to collect your information from inside of your head and put it in all one spot so there is no confusion for your loved one. Honest mistakes and outdated information can become a big problem for your beneficiaries and may end up under the supervision of the state. Inaction could leave you with no input as to where your assets and minor children go at the time of your passing.
Going through the estate planning process is very important, so do not delay! If you do not have an estate plan completed upon your death or incapacity, your estate follows the standard process and beneficiary flow chart that your state applies. While it is the standard, you may not like your assets to be managed in that manner. Thus, it is critical that you control the future of your estate with a complete and up-to-date estate plan.
All in all, an updated estate plan should give you peace of mind that your loved ones will be protected after your death. Call Russell Law Offices, S.C. to schedule your estate planning consultation today.
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