- Bankruptcy
There was a time many years ago when bankruptcy was rare. That was a different world. In that world customers dealt with local bankers and local vendors. The bankers and vendors were willing to work with the customer who fell behind on his or her payments due to an illness or unemployment. And, the credit card had yet to be invented.
Today most of us owe money to creditors who may be hundreds or even thousands of miles away. We are unable to develop the same kind of personal relationship common years ago, and creditors are not as willing to work with financially strapped customers. To make matters worse, we are bombarded daily with pre-approved credit card offers. These often promise access to several thousand dollars, but what happens if you get behind on your payments? Most credit card companies immediately increase your interest rate and tack on late fees, etc. and before you know it, you are several thousand dollars over your head in debt! Next come the law suits and wage garnishment, and the constant harassment from collection agencies.
Bankruptcy is a way to get a fresh start. It is a legitimate provision to reduce or eliminate debts which have become impossible to pay because of illness, loss of employment, and spiraling credit card debt.
Our law firm handles both chapter 7 and chapter 13 bankruptcies. If you qualify for a Chapter 7 bankruptcy, you can literally wipe out the vast majority of your debts. And, you generally do not have to give up your car or home.
If you do not qualify for a Chapter 7 bankruptcy, you may qualify for a Chapter 13 which is basically a reorganization of your debts. For example, if you are behind on your house or car payments, a Chapter 13 will allow you to pay back your arrearage over a period of time. And, while you are making these payments, the bank cannot foreclose on your house or repossess your car. If your debt is largely unsecured as in the case of credit cards payments or medical bills, a Chapter 13 will allow you to pay back only a percentage of your debt over an extended period of time up to five years.
Contact an attorney to determine whether you qualify for a Chapter 7 or Chapter 13 bankruptcy.
What are the consequences of filing bankruptcy? Admittedly, no one wants a bankruptcy filing on their credit history but a bankruptcy on your credit report does not mean that you will never be able to qualify for a loan again. In fact, a Bankruptcy is usually not as detrimental to your credit rating as being chronically behind in your payments.Back to top
- Criminal
The firm's philosophy on the practice of Criminal Law comes from experience and wisdom gained through serving on both sides of the courtroom-the prosecution and the defense. The knowledge gathered from these opposite perspectives better helps the attorney assess the strengths and weaknesses of a client's case.
The Johnson Law Partnership advises a client never to talk to an arresting officer, never to make a voluntary statement or recording, and never to make a confession without the full advice and assistance of Counsel. A defendant in a criminal case has numerous constitutional rights of which he or she may not be aware, and it is our job to know these rights, point them out to our clients, and aggressively protect them.
We have found that the person charged with a crime usually has no idea what the charges against him or her mean, let alone what penalties he or she may be facing. The defendant is often quite frightened and wonders just what is to become of him or her. Less often a defendant is not enough concerned, because the accused really has no idea how much punishment he or she may be facing. It is our policy to fully explain the charges and relate all the options.
Sometimes a client charged with a crime is best served not in the trial arena, but through the quiet efforts of negotiation with the prosecution and the exploration of alternative sentencing, such as work release, home incarceration, and enrollment in various treatment centers or drug court. And, sometimes, even after incarceration, there are still some options, for example what is termed "shock probation" that may be appropriate to pursue.Back to top
- Elder Law
Our elder law practice focuses on those issues faced by our older clients. Common concerns include: (1) the ability of someone to manage the client's affairs in the event the client is unable to do so; (2) the client's wish not to be left on life support indefinitely if the client is unconscious and there is no hope of recovery; (3) the ability of a trusted family member or friend to make health care decisions on behalf of the client if the client is unable to do so; (4) the provision of an inheritance for the client's family; and, (5) qualification for Medicaid in the event a nursing home becomes necessary.
A durable power of attorney to enable someone to manage your affairs can be structured so that it is effective immediately upon signing, or it can be drawn to become effective only upon your incapacity (this is sometimes referred to as a springing durable power of attorney). In either case, you need to be sure that the person holding this power is someone you trust to access your financial accounts, sign contracts on your behalf, and even sell your home if need be.
We all know stories about individuals who have been left on life support in a vegetative state for months, even years, because the hospital was legally unable to terminate life support. None of us wants to be on either side of such an ordeal. A health care directive (referred to as a living will in some states) is a legal document that allows you to direct a hospital to remove life support measures in the event you fall into a state of unconconsiousness from which there is no likelihood of recovery. If you have such a document, it is important that you provide the hospital with a copy and let family members know where the document is in case you are unable to give it to the hospital yourself.
You may also wish to consider appointing a health care power of attorney who would have authority to make medical decisions on your behalf in the event you were unable to do so. The health care power of attorney provides more flexibility than a health care directive or living will for two reasons: (1) in order to become active, the health care power of attorney only requires you to be unable to communicate your healthcare decisions, whereas a health care directive does not become active until you are in a state from which there is no hope of recovery; (2) a health care power of attorney covers all medical decisions while a health care directive or living will generally only covers the removal of life support. For obvious reasons, the holder of your health care power of attorney should be a very trusted individual.
Most of us hope to provide some inheritance for our family. This is generally accomplished through a Will or Trust, but what if you need to go to the nursing home? Will there be anything left for your family to inherit? To that end we advise clients on how they may give an inheritance to their family while at the same time qualifying for medicaid in the event a nursing home becomes necessary. Depending upon the client's situation, the options may range from making gifts to children, to spending money on the house or other items, to establishing a trust (See Income Only Trust). To make the most of these options, we advise that you speak to an attorney well before you believe you may need to receive nursing care. However, you may have options even if you wait until the last minute to speak to an attorney.Back to top
- Probate
The attorneys of the Johnson Law Partnership offer years of experience in handling estates of all sizes. Our responsibility is to guide the Executor/Executrix (known as a Personal Representative in some states) through the probate of the decedent's Last Will and Testament; help him or her discover the debts of the estate (including any taxes); establish an estate account to pay the debts; and collect and distribute the estate assets following the decedent's wishes set forth in the provisions of the Will. We also is notify all of the heirs and keep them abreast of the progress of settling the estate.
Most estates take a minimum of six months to complete the probate process. Many questions inevitably arise during this period, and our firm is always ready to discuss with the Executor any aspect of the estate to ensure a smooth and uneventful administration.
If the decedent leaves no Will, his or her bills will, nevertheless, have to be paid, and the assets such as real estate, vehicles, household items, bank accounts, savings etc. will have to be distributed among the heirs. Someone must qualify to do these things. If the person who qualifies is male, he will be known as the Administrator; a female will be known as the Administratrix. Without the written wishes of the deceased to go by, the disposal of the property can become complex. Those who are handling such estates are especially appreciative of the knowledge of the attorney helping them with this obligation.
(For those persons who may live in another state, but have been called upon to settle the estate of a friend or family member who died in our area of Kentucky and/or has property located here The Johnson Law Partnership is happy to help you be appointed to administer the estate, and we have much experience in assisting with ancillary probate.)
When the resources of an estate are small and/or everything is jointly owned, it is often our practice at the Johnson Law Partnership to petition the court to probate the Last Will and Testament and name an Executor or Executrix but to dispense with the formal administration of the estate allowing the direct transfer of certain properties. Or if there is no Will, to simply appoint an Administrator or Administratrix and again dispense with the formal administration. It is important to seek competent legal help when contemplating such a step.
In fact, it is of great benefit to all of those who are entrusted with the settling of an estate, whether named by the Will or appointed by the Probate Court, to have direction from a competent attorney while navigating the legal requirements, including meeting various deadlines such as inventories, tax filings, etc. The Johnson Law Partnership is fully familiar with these steps in settling estates and is glad to help those in need of such services and bases our fees upon the type of service we provide. Back to top
- Trusts
There was a time when trusts were thought useful only for the very wealthy. That is no longer the case. Trusts can prove useful in a variety of situations. We have experience in drafting:
A Living Trust (also known as an Inter Vivos Trust) is a trust that is established while you are still alive. The trust is usually revocable, meaning you can change or even terminate it as you see fit. It can have banking accounts in its name and own real property, and is administered by one or more trustees. Living Trusts offer three major benefits: (1) privacy, (2) continuity during incapacity or at death, and (3) the reduction of attorneys fees at death.
With regard to privacy, a Living Trust can allow you to keep your assets confidential at your death. Without such a trust, your executor will be required to file a list of all your assets with the probate court. This list will be available to any member of the public that requests it. If you have a Living Trust, any assets in the trust will not be considered part of your probate estate and a list of these assets will not need to be filed with the court. The public, therefore, will not have access to the state of your affairs.
A second benefit of a Living Trust is the continuity it provides upon your incapacity or death. When you establish a Living Trust, you choose a trustee (generally you and your spouse) and successor trustees. In the event you were to become incapacitated, your spouse, for example, would continue to act as trustee. Your assets would continue to be managed without the need for a court to appoint a guardian or conservator. If both you and your spouse became incapacitated, your successor trustee would assume the role of trustee with full power to manage all of the trust assets - again, without court involvement or supervision. At your death, your spouse would assume the role of sole trustee. Upon your spouse's death, your successor trustee would assume management of the trust and distribute the trust assets in accordance with the distribution provisions. These provisions are much like the provisions of a Will, allowing you to declare who is to receive what assets. Because these assets can be distributed without court approval, the beneficiaries of a trust generally receive their bequest more quickly than do beneficiaries of a Will.
Finally, at your passing, a Living Trust can substantially reduce the expense normally associated with probate. If you establish a Living Trust and place your assets into the trust, you may have little or no assets that need to be probated. As a result, the attorneys fees associated with the probate process may be much less than would otherwise be the case.
In the event you own land in more than one state, placing such land in a Living Trust can avoid the need to probate the estate in all states in which you own land.
A Testamentary Trust is simply a trust drafted within your Will. These Trusts are especially useful for parents with young children. In the event a parent dies leaving property to a minor child, the courts generally require a probate estate to be opened and a conservator appointed to manage the assets on behalf of the child. This is an expensive process that entails a great deal of court supervision. Furthermore, without a Testamentary Trust, when the minor child reaches the age of majority (18 in most states), the property is turned over to the child. How responsible a person were you at the age of 18?
A Testamentary Trust allows for a parent to appointa trustee who will possess and manage the assets on behalf of the child. The courts need not get involved and no conservator need be appointed. If the trustee is a family member, the costs associated with managing a Testamentary Trust are much less than the expenses involved in multiple trips to court during the life of a probate estate. In addition, a Testamentary Trust allows you to set an age beyond 18 when your child will receive a portion or all of the trust property. An added benefit is the fact the trust assets are safe from most creditors your child may have.
An Income Only Trust is a type of Trust that is useful in preserving assets for future generations. Many people use this Trust to help them put aside money for their family while reducing their assets so as to qualify for Medicaid in the event a nursing home becomes necessary. Medicaid requires that assets be below a certain level before an individual becomes eligible for Medicaid payments. If your assets exceed the established amount, Medicaid will require you to spend down your assets until they are below the set level.
An Income Only Trust is an irrevocable trust, meaning that you cannot amend or terminate it once it is established. The trustee would need to be someone other than you and your spouse (many people use their children). In addition, the money put in the trust would be beyond your reach. You would not be able to withdraw it once it is placed in the trust. However, you would receive any income generated by the trust (hence the name Income Only Trust).
Because you would not be able to access the assets placed in the Income Only Trust, it is generally recommended that the trust be funded only with those monies you can comfortably do without. The money in the trust should be viewed as part of the inheritance for your children.
Some people who are considering the possibility of nursing home care choose to simply give their money directly to their children. While that is certainly an option, there are advantages to using a trust. A trust will protect the money from any creditors of the children. In the event a child were to go through a divorce, the trust will generally protect the money from the family court. If a child or grandchild were to be near college age, the monies in the trust would not be counted as the child's assets so as to disqualify him or her from financial aid.
If you decide that you want to use an Income Only Trust, it is important that you put the money in the trust as soon as possible because Medicaid requires that any transfers of money within a certain period of time be reported at the time an individual applies for benefits This period of time varies depending upon the type of transfer involved. If you have made a transfer within the relevant period of time, the amount transferred will be considered a part of your assets and you will be ineligible for medicaid for a time.
A Special Needs Trust (also referred to as a Supplemental Needs Trust) can be particularly beneficial for those families who have disabled family members. For individuals with a disability, government benefits such as SSI and Medicaid are often a critical part of meeting that person's basic needs. If you are a parent or relative of such an individual, you may want to leave him or her sufficient funds so as to insure a comfortable living after you are gone. Unfortunately, if you leave money directly to a person receiving SSI and/or Medicaid, his or her government benefits will likely be reduced or eliminated, and the individual will be forced to "spend down" the inheritance in order to become eligible to receive government benefits again. A Special Needs Trust enables you to provide for your disabled child or relative without jeopardizing his or her government benefits. The Trust may be created while you are alive or in your Will, and other family members, grandparents for example, may leave money to the Trust.
A Special Needs Trust is used to supplement government benefits rather than replace them. In general, the Trust does not provide food, clothing, or shelter because these needs are provided by the government. While the government will provide basic food, clothing, and shelter, there are many needs the government will not meet. For example, the government will not pay for your child or relative to go on a vacation. The travel expenses associated with your child or relative visiting other family members (or those family members visiting him or her) are not covered by the government. The government will not provide for your child or relative's entertainment needs, such as a television or stereo or funds for a trip to the ballpark. Nor will the government generally provide your special needs person with the help needed to remain in his or her home, such as someone to help with personal hygiene, shopping, and meal preparation. A Special Needs Trust can provide such things.
With regard to medical care, a Special Needs Trust can pay for medical measures not covered by Medicaid, such as certain dental work and many medical procedures for symptoms that are not life threatening. The Trust could also pay for a second opinion when a procedure is covered by Medicaid.
A Special Needs Trust can generally provide for anything that is not food, clothing, or shelter without affecting the beneficiary's government benefits. And, depending upon where you live, the Trust may even be able to provide food, clothing, or shelter with minimal impact on SSI and no impact on Medicaid.
Many people decide to leave money to a trusted friend or relative with instructions that they use the money to take care of a disabled child or relative. While this approach may preserve your child or relative's government benefits, there are some significant drawbacks of which you should be aware.
First, there is no way to enforce your instruction that the money be used for the benefit of your disabled child or relative. The individual to whom you give the money is free to spend the money in any way they deem appropriate.
Second, the money left to the trusted individual would be vulnerable to that person's creditors or a family court. In the event the individual were to suffer a sudden and expensive illness or go through a divorce, the money left to that individual could be in jeopardy. It is unlikely the family court or a creditor would care that the money in that person's possession was for the benefit of another.
Third, any income or capital gains generated by the money left to the trusted individual will be charged against the trusted individual. Because the IRS will not recognize that the money in the individual's possession is for the benefit of another, your relative or friend will be personally liable for any taxes resulting from the money. It is even possible that the income generated from the money could result in placing that individual in a higher tax bracket.
If a child or relative's disability is the result of an accident, your child or relative may receive a large sum of money as a result of a personal injury lawsuit. A Special Needs Trust may be used in this situation as well. Make sure your attorney in the personal injury action is well versed in creating a Special Needs Trust. If he or she is not, ask them to work with an attorney who has such experience. The trust should be established before any funds from the lawsuit are distributed.
Even families with modest estates can establish a Special Needs Trust. This is especially true if a trusted individual is willing to serve as trustee. In addition, many non-profit organizations have established what are known as "Pooled Trusts," which are managed by the organizations. Such a Trust allows families with modest estates to "pool" their resources, thereby attracting a professional trustee to manage the funds. Though the money is pooled together, a separate account is maintained for every beneficiary of the Trust. The minimum contribution for such Trusts is generally modest.Back to top
- Wills
Many people are understandably reluctant to contemplate their own demise. Others choose not to do a Will based on inaccurate or incomplete "common sense." Regardless of the reason, upon your passing, your loved ones will be the ones impacted by your decision not to have a Will or other estate plan.
While we cannot overcome your reluctance for you, we can address many of the common misconceptions that lead some to decide against having a Will or other estate plan.
- If I die without a Will all of my property automatically passes to my spouse.
This is a common misconception. Pursuant to statutes in most states, if you die intestate (without a Will) your spouse will receive all of your property ONLY if you have NO children. If you have even one child, your spouse will likely receive only a portion of your estate. The other portion of your estate will go to your child or children. Consider whether your spouse could comfortably live on a portion of your assets.
- I do not need to worry about estate planning because all of my property is jointly owned.
While it is true that jointly owned property can avoid probate, it only avoids probate for the estate of the first person to die. The survivor's estate will have to go through probate. In addition, joint ownership of property can have unintended (and undesirable) consequences, especially if the property is jointly owned by anyone other than your spouse. For example, the survivor may have to pay gift tax, your property may be attached by creditors of the surviving joint owner, or you may inadvertently disinherit a grandchild.
And what if the joint owners die in a common occurrence - who will inherit the property?
- If my spouse and I die, our child will be cared for by his or her closest relative.
If you and your spouse die leaving a child under the age of 18, a court will have to determine who will serve as your child's guardian. The court's decision will not be based solely on your child's relationship to a particular individual. Many factors will be considered to determine what would be in the best interest of your child. If you would like your voice to be heard by the court, you must speak up now by executing a Will in which you nominate a guardian. There is simply no other way to have your wishes made known by a court of law. This is particularly important if you would like a non-relative to be your child's guardian.
