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Clear Counsel Law Group / Estate Planning

ClearCast #15: Our Friends at VidAngel May Have Some Trouble On Their Hands

Welcome to today's ClearCast! A fun one for Episode 15!

I feel like our audience will be divided into two groups: those whom are fully invested in this legal battle with no further explanation needed1)"Get to the lawyers already!" I hear you. & those of whom that have never even heard of VidAngel. If you are in the former group, please feel free to skip right to the great episode; I won't be offended in the slightest.

Now for the rest of you, (I'm in this group too don't feel bad), you have got to check out this VidAngel company. The marketing is hilarious! I've enjoyed it thoroughly.

In essence, this streaming service provides a means for consumers to censor movies in the way that they choose, whether it be censoring language or violence.

I'll let Mr. Flake and Mr. McArthur explain the specifics of how it works.

For those of my friends of the more liberal persuasion that likely are objecting to on the grounds of "censoring art," I have a couple of questions for your consideration.2)Mr. Flake and Mr. McArthur have some great ones of their own as you'll see

  1. Shouldn't parents be permitted to introduce their children to socially questionable material on their own terms instead of what Hollywood thinks is best? (as in, the majority of society has questions about certain behavior)3)Is this about Freedom?
  2. Wouldn't you at least concede the the violent imagery/language on tv/in movies is more extreme now than it has ever been?4)For those of you who say "then just don't watch it." Don't worry..

I don't have children, but these desires seem very reasonable to me.

Nor do I have a stake in this fight5)I have not nor would likely use the service, but I certainly pity the good folks over at VidAngel. From what I've seen, I really think they meant well.

Thanks for watching!

-Brian

[End note]

..There's been an update! The 9th Circuit ruled; see below.

Jordan Flake: Welcome to Clear Past. I'm attorney Jordan Flake and I'm really happy to be joined by Matt McArthur. He's an attorney in our firm who practices in bankruptcy. Even though this video isn't about bankruptcy, you'll see that Matt has some experience that makes his viewpoint on this subject relevant. What we're gonna talk about today is in response to this New York Times article that's catching a lot of interest. It says here, "Hollywood: Faith Goes to the Movies." What the article addresses is the streaming video service called VidAngel. Now, I know a lot of my Facebook friends and family have used VidAngel. We've had conversations about it. I'm sure you're the same.

Matt McArthur: Sure.

Jordan Flake: Have you used VidAngel before?

Matt McArthur: I have.

Jordan Flake: Okay, so you're a consumer of VidAngel.

Matt McArthur: Yeah

Jordan Flake: Tell us why you wanted to use it, how it works. A lot of you probably already know, but just by way of review Matt'll talk to us about how it works and then we'll get into what's happening with the lawsuit. Go for it.

Matt McArthur: The way VidAngel works is you go through their services, through their website or their app and you purchase the digital rights to a movie or a television show, and it's akin to a cross between Redbox and Netflix where you can stream the video content that you're purchasing and still have the option of being able to keep it for a short period of time, sell the digital rights back after a day, and still be able to recoup the vast majority of the expense of actually buying the movie. In the past, my recollection is a little fuzzy here, but it was about $1.50 or something in that neighborhood to be able to watch a movie for 24 hours and be able to give those rights back to VidAngel.

Jordan Flake: Great, and so what happens then is you buy a video off of VidAngel, you purchase it for a good reasonable fair market value, they have a digital copy which they've purchased that corresponds with your copy. In that sense the studios are being made whole by the fact that there's an actual copy corresponding with the copy that you purchase in your home?

Matt McArthur: Correct.

Jordan Flake: Why VidAngel? What's VidAngel?

Matt McArthur: The neat thing about VidAngel is unlike Redbox or Netflix, by using the VidAngel app you're actually able to edit the content that you're consuming. If you wanted to filter out all of the F-words in a movie or all of the graphic violence or nudity, you can filter that right out of the movie and be able to watch a movie that you are otherwise unwilling, or perhaps your children were unable to watch.

Jordan Flake: Brian's off camera here. Brian, did we get some of Matt's beautiful children in this?

Brian: They are in the shot you bet.

Jordan Flake: Are they in the shot? Okay, because we have here Davis, and Allie and Dex. We don't necessarily want these little children of yourself watching some of the content, but at the same time there's some really great stories out there. I don't know if Davis is ready for Last of the Mohicans or something like that, or Lord of the Rings, Lord of the Rings being a great one. There's just a few things that might be too scary for kids his age.

Matt McArthur: Sure. You're able to consume the vast majority of-

Jordan Flake: Do you remember what VidAngel movie you watched? Maybe you don't remember.

Matt McArthur: I do remember. We watched Argo. I didn't watch that with the kids, but I watched that with the wife and that was a movie that we would have otherwise not watched. My wife's appetite for that type of material in movies is perhaps not as high as some others.

Jordan Flake: Argo's a great example because you take a few language elements and there's really nothing super violent about it, there's nothing inherently inappropriate from a sexual, nudity standpoint. You win. You're winning because you're bringing in this movie in the home. From VidAngel's perspective they're winning because when they sell you the movie and buy it back, they get to pocket the dollar or $1.50 or whatever from the transaction.

Matt McArthur: By the way, if you decide that you like the movie so much, you can retain the digital rights.

Jordan Flake: You don't have to send it back. It's $19 or whatever. From VidAngel's perspective, they would also say, "Hey, the studios are winning because we bought a copy to correspond with the copy that we sold to the McArthur family. Now, obviously they're upset. The studios are very upset at this. I think the reason's they're upset probably go beyond the scope of my understanding of the industry, frankly. At a bare minimum, we know that the studios make these contracts with Netflix, with Redbox, with Amazon, Amazon Prime, Hulu, Blockbuster, whatever. The VHS at Blockbuster. Bryan's dying off camera here. Basically, they want to be able to control the digital content. I wouldn't be surprised if in the final analysis, in the smoke-filled room where the diabolical studio executives are sitting, just kidding. The real question here is one of how to control the digital content, not just for this one little VidAngel slice of our story, but also prospectively in the future. How do we make sure that we control this?

Matt McArthur: I was just gonna follow up on that presumption you're making. Do you think it's more of a artistic license freedom issue or is it a monetary issue, or both?

Jordan Flake: Both because I think there's a situation where the movie creators, the creative minds, they get done meditating in the morning and having their chai latte. I'm so full of stereotypes today. What's going on? The point is they say to the studios, "I want creative control over this." If the guy who produced Argo, which I think is an excellent movie, if he comes along and the studios say, "Hey, by the way, one of the ways that Argo's gonna get disseminated out to the public is by way of VidAngel, and they're gonna take your movie and make it appropriate for five year olds." They're gonna say, "Well I'm not gonna do business with you, studio, because I have my artistic standards and I want my work to be protected." I definitely think that there's a creative, protect the creative process, "my movie is a work of art and I want it to be put out in the marketplace the way that I intended it to be put out there, not in some other diluted form."

When this originally happened with CleanFlicks, another prior company that underwent a similar lawsuit, Steven Spielberg took great exception to his masterpiece, Schindler's List, being totally neutered by CleanFlicks, turning it into a story about a really nice business guy who hooked up some victims with an additional life. The violence, for Steven Spielberg, was a necessary element to show the horrific suffering of the Holocaust on the one hand, and the extreme magnanimity of Schindler in purchasing and doing what he did to preserve these lives on the other. To him, it was a huge affront to take this and gut it, from a creative angle.

Matt McArthur: I get where you're going with that, but at the same time, if you look at what TNT or TBS does when they're replaying movies for the general TV audience, there's censoring.

Jordan Flake: Or what they do on airliners, right?

Matt McArthur: Sure. That can't be the whole story.

Jordan Flake: They're responding to a market need. That's all the VidAngel are trying to say is, "We're just responding to a market need here, and one of our needs is the McArthur children. We want to bring quality films like Argo, take out the few objectionable parts and makes it so that Misty McArthur can enjoy viewing that movie. I understand that. That's the creative side. The money side is obviously they don't want Jordan Flake purchasing 10 digital copies of a movie and then going to my friends and saying, "Hey everybody, I'm gonna create Jordan Flake's digital streaming platform, and I'm gonna rent these movies out to you, and you guys are gonna give me three bucks back."

Matt McArthur: They're being completely cut out of the deal.

Jordan Flake: Cut out of the deal because I'm the guy, it's sort of a Napster except for Napster was illegal downloads, this would be legal downloads, but unanticipated hosting, me capitalizing off of somebody else's hard. Those are kinda the big questions. VidAngel, I've seen their videos, their ads are funny. They run a very good defense of what they're trying to accomplish and what they're trying to do. Let's talk a little bit about one of the cases right now. Right now there has been an injunction issued against VidAngel.

Matt McArthur: Take a step back. Big studios are suing to stop VidAngel.

Jordan Flake: Studios are suing to stop VidAngel and saying, "This represents a huge end around of our entire industry. It threatens the creative side, it threatens the monetary side, and we gotta shut VidAngel down." VidAngel's waving their hands and saying, "How can you tell me I can't buy a Pablo Picasso. I can buy a Pablo Picasso and I can tape other little figures in the Pablo Picasso or I could cover parts of it with sticky notes because it's mine. I own the Pablo Picasso, I can put sticky notes on it. Then I can go back to the art dealer and say, "Hey, the sticky notes didn't do any damage cause it was on the outside of the frame. Now I'm gonna sell you this Pablo Picasso back and you get to keep some of the money from the transaction. How can you tell me what I can and can't do with your art that comes into my home?"

This is where the streaming rights, it gets very complicated, the monetary angle, what the studios are allowed to do, what they're not allowed to do. The studios have agreements in place with the creative minds that we won't let certain things happen with your content. That's where it becomes an issue and they sue to shut VidAngel down. They did something called an injunction. Although that's not my area of expertise, civil litigation, my understanding is that an injunction is basically saying, "Hey listen, Your Honor. We need to shut these guys down now." It might take two or three years to resolve this case, but in the meantime VidAngel shouldn't be allowed to operate because they're doing irreparable damage to us by not allowing us to capture the profits that we would otherwise. They're probably hurting our relationships with Netflix because one VidAngel tagline is 'See this movie before it becomes available on Netflix,'" which must have the studios pulling their hair out.

There's the irreparability angle, and also there's a likelihood of success of the merits angle. It's probably pretty hard to get a California court that are traditionally very liberal, traditionally very everybody has their day in court, to issue this injunction unless there really was a likelihood of success on the merits. Right now there's an injunction in place and they're saying, "You can't go show these movies." I guess, Bryan, was there a violation of the injunction?

Brian: My understanding is that Neal kept putting movies up on VidAngel after the injunction was put in place.

Matt McArthur: Neal is the owner of VidAngel, correct?

Brian: Yeah, he's putting up new films as well. Sully, and two other films.

Jordan Flake: Just the mere fact that we're saying Sully, I can see the directors and creators of Sully saying, "That was a family movie to begin with. Why am I subjecting it to this filtering service?"

Brian: Maybe Tom Hanks is saying, "I want as many people as possible to see my movie."

Jordan Flake: Exactly, maybe he's saying, "Let it go with this. I want the McArthurs, who for whatever reason they object to the use of this word or that word, they're still getting the main idea of the film. They're still getting to appreciate a nobility of the character, etcetera. That's this current legal status. Do you have any thoughts about what's likely to happen, how it's gonna go down, what you hope happens?" Just give your take on that.

Matt McArthur: I can't say that I used VidAngel a lot, but the times that I did use it, I was very impressed. It really opened doors to us that were otherwise shut, either because me and my wife were unwilling to watch a movie with content that we didn't really appreciate, or because I wasn't going to subject my children to certain types of content. For me, as a market consumer, it gave me more options and more content. Quite frankly, it was really convenient. It was like I didn't even have to go down to the Redbox and rent the blue-ray. I could just stream it from my own home, and have a really nice, cheap on-demand type service, or I could just stream the movie. From my perspective, I would love to see VidAngel be able to overcome this lawsuit and be able to continue it. Whether it's working out some sort of arrangement with the production companies to where they're being cut in, or winning outright.

Jordan Flake: I think that's where consumers probably would, if they're thinking about this clearly, that's what we would all hope for.

Matt McArthur: There's some kind of room for a middle ground where everybody can win.

Jordan Flake: There's gotta be a way that says, "Hey, listen, studios. Why don't you create VidAngel, brought to you by the studios?" Then I think the hangup there is that the creative side might not appreciate that, but then you have the TNT, TBS, airline exceptions. Why don't those things come into prevalence? This is obviously a big bowl of fish hooks. I think one thing I can say is we can't have a situation where regular consumers are setting up movie hosting sites that undercut the studios. The reason why I say we can't have that situation is because if the studios can't make money off of streaming, they'll stop creating movies and then it'll be incumbent on the individual users to create movies, the individual hosting sites to create movies. That's something that VidAngel is facing right now. Netflix is coming up with original content. Honestly the Netflix original content is probably a surprise for most people. Wouldn't have thought that Netflix was going to be doing its own shows.

Matt McArthur: Yeah, they had some ... They had some big hits there.

Jordan Flake: Several years ago, they've had some really good hits. Maybe that's one angle, is VidAngel can do its own content. Maybe there is some comprise to be had between the studios and VidAngel. It'll be interesting to see how it plays out. I definitely hear you on the content things. Under any circumstances, the McArthurs certainly are not going to change their mind about allowing certain content in the home. It's just not gonna happen.

Matt McArthur: Quite frankly, if the movie companies are being cut in on some of these rental profits that VidAngel's currently making, it's simply broadening our horizons.

Jordan Flake: We're very interested. We know we have viewers out there who, like Matt, have tried VidAngel and were very curious to see where you stand on this. We'll keep you posted if there are any interesting developments in this story. In any event, it's very interesting to see how this'll progress. Thanks so much for joining us for Clear Cast. Definitely let us know how you feel about this. Thanks.

Matt McArthur: Bye, everyone.

 

[Endnote]

The 9th Circuit denied the emergency petition from VidAngel. (The 9th Circuit is essentially "the California circuit". Hard to imagine them weakening the copyright protection of Hollywood, yes?)

Next week I'm going to explain why as a Nevadan, you should be concerned if they don't add a ninth justice to the Supreme Court.

How do you feel about living under California law?

Stay tuned..

Footnotes

Footnotes
↑1 "Get to the lawyers already!" I hear you.
↑2 Mr. Flake and Mr. McArthur have some great ones of their own as you'll see
↑3 Is this about Freedom?
↑4 For those of you who say "then just don't watch it." Don't worry..
↑5 I have not nor would likely use the service
ClearCast / Estate Planning / General Interest - 01/05/2017

ClearCast #14: In Response to the Rob Graham Matter

[Editor's note]

Welcome to today's ClearCast!

A quick word about today's video.

If you are unfamiliar with what is being alleged, you can read more here about one of the victims. This is a horrible story about a local probate lawyer allegedly misappropriating client funds; it could be for even more than 13 million dollars.

If you are a client (or prospective) of Clear Counsel Law Group, we understand that it's important that you trust us with your most valuable assets.

In turn, we produced this video to explain how your money is protected.

Of course, if you have specific inquiry (or just need a little reassurance, certainly understandable), please reach out to us at (702) 522-0696.

Thank you and Merry Christmas!

-Brian

[End Note]

 

ClearCast Episode 14: Answering Your Questions Regarding Rob Graham

Jordan Flake: Hi, I'm Jordan Flake and I'm here with my partners Jared Richards, Jonathan Barlow. The three of us are the managing partners are Clear Counsel Law Group, and welcome to another ClearCast. Today we're going to be talking about something that has kind of rocked the legal community. We've had friends and family who've asked us questions about this news story. Through this ClearCast and potentially others, we hope to respond to some of these questions we receive, but I'm referring to the Rob Graham issue. Rob Graham is an attorney here in town. He practices in the areas of guardianship, probate, trust administration. The allegations right now are that he stole money from his client's trust account, basically that he misused that money. A lot of my friends and family have asked me, "What's a trust account? How did this happen? Why can an attorney all of a sudden steal a lot of money?" The allegations are that he stole $13 million, potentially, of his client's money is missing.

First of all, before we even get into those questions, we just roundly wholly 100% condemn any type of misuse, any type of unethical illegal access to clients' funds. That should never, ever, ever happen and we'll talk a little bit more about that. We all feel horrible and we spend a lot of time talking about the clients who are victims in this situation, and our heart goes out to them and their families. We'll talk about that a little bit more too as well, that we feel really, really bad. It's the worst possible way to spend the holidays, knowing that there was money that was being held and entrusted in an individual and now that money has essentially been stolen.

First, Jonathan, you're the one who, in our firm, in the three of us, you take a little bit more of a lead role in managing the trust account. Can you talk to us and some of our viewers about what is a trust account and difference between a trust account and operating account, how that works. There's a chance that people viewing this may actually be our clients and have money in our trust account right now and they'll want to know what's going on.

Jonathan Barlow: What we're doing. In short, there's two types of accounts that a law firm generally holds. One is what we call the operating account. That's money that we've earned. It's our law firm's money. We've earned it through fees, through clients paying us money to perform our services. That's our money as a law firm. We use that to pay our employees, we use it to pay our rent, and all the other expenses of operating the law firm. That's our operating account.

The story about Rob Graham doesn't really have to do with his operating account as far as the missing funds. What the missing funds came from was that second type of account that's called a trust account. A client trust account. Attorneys in various types of practices will have a reason to be holding money in a bank account that is not our money. For instance, just like Mr. Graham did probate work, we do probate work. That's when a deceased individual leaves behind assets that need to go through a process before they're distributed to the heirs. In doing that probate work, we'll collect a bank account. We'll close a bank account that the deceased individual had and we'll bring that money and deposit it to our client trust account.

Though that account at the bank is held with our law firm's name on it, it'll say "Clear Counsel Law Group" on the account statement as a designation IOLTA interest on lawyers' trust account, it's not our money. It's not ours. We are responsible to ensure that it goes to the right places, that it's applied appropriately. We are strictly prohibited from reaching into that client trust account and using it to pay anything other than the client's expenses.

Jordan Flake: Let me just stop you there and make sure that everybody's understanding. Grandpa John passes away and there's a bank account just in his name at Wells Fargo. There's $48,000 in that account. We get a probate started and we can go and we can liquidate that $48,000. We can't turn around and use that $48,000 to pay our employees, to buy Christmas presents for our family. We can't do anything like that because it's actually the family that Grandpa John left behind, that's their money we're just holding in trust. Can I shift over here to Jared? Jared does personal injury. Can he talk to us a little bit about the mechanics of a trust account in the personal injury context?

Jared Richards: Right. In a personal injury context, we go and we gather money for an injured person. When we gather the money, we put it into our trust account. Again, the moment it hits the trust account, it is somebody else's money. We then are responsible for making sure that that money goes to the right places. The money will often need to go to pay for medical providers. Sometimes it'll need to go to pay back, say if Medicare or Medicaid had paid medical bills. Sometimes that happens and we have to repay the government. Then we have to pay our clients. Out of that, we also get paid a fee.

At the end of a case, when we are going to distribute money, before we distribute money to ourselves for certain, we will send the client an accounting so the client knows where all the money went, where if we had to advance money for filing fees with the court or to pay to go depose another party's expert and we advance that money, we also account for that money when we get paid back for that amount. At the very end of the case, the client knows where every penny has gone and then gets the money that the client deserves.

Jordan Flake: There's a $50,000 vehicle insurance policy, $50,000 policy. You make a demand and say, "Hey, insurance company, your guy, your insured hit Tommy, our client." We give us the $50,000 and we hold that in trust because Tommy has medical bills that need to be paid out of that purse.

Jared Richards: Right. For example, as you said, let's say that Tommy got hurt and there's a $50,000 insurance policy. We make a demand on the insurance. The insurance company agrees and they pay $50,000. That $50,000 would go into our IOLTA trust account, the trust account we hold for clients. We then do an analysis of are there medical bills that need to be paid out of that account? Are there contractual obligations that our client has that we need to honor in that account?

Jordan Flake: If we just gave that money to the client ...

Jared Richards: Then it would be a problem because then we may be breaching the client's contractual obligations. We may be breaching our own contractual obligations, and we may actually be violating the law that require us to, say, pay back Medicaid.

Jordan Flake: Right, and if we use that $50,000 to run off and pay our own expenses ...

Jared Richards: Then we've got major problems. We've just stole the money.

Jonathan Barlow: Then a similar issue related to that is several law firms have several different actual trust accounts with different account numbers. We hold all ours in one account. We got Mr. Jones's money in there, we got Ms. Smith's money in there. It's all in there. Just like we can't use the trust account to pay our expenses, I can't use Mr. Jones's money to pay Ms. Smith's medical bills for her case.

Jordan Flake: Which is why from an accounting standpoint we have sub-accounts that we keep track of who has what share of that account.

Jonathan Barlow: What we do is we have every single case that we have, every single client that we have, we separately distinguish, this is their money, this is where it went, this is where it's going. Because I can't dip into this account or this person's money to pay the other person's money. That's essentially how a trust account works until it's determined, like Jared said in the personal injury context, this is where all the money's going. Similarly, we do that in the probate or trust context of determining where it's going to be distributed.

Jared Richards: We're all very careful to not make mistakes. However, if the attorney does make a mistake with that money, the attorney is personally responsible for that money. While that money is in the attorney's trust account, that attorney's on the hook for all of it.

Jordan Flake: Right, and that's been my experience since starting our law firm, is that when we have our trust account checks and I'm signing a check and that check's going out the door, I look at that and I say, "Am I sure that this money is money that is under the law ready to be legally paid out?" There's no other considerations here, because if I did send out a check that I shouldn't have sent out, then I personally am on the hook for that. I would go to Jonathan and I'd say, "From operating account you need to reimburse this client because we mismanaged some trust funds and we need to put it back immediately." If that ever happened.

Jared Richards: Not that that does happen because we're careful, but if it were to happen, that's exactly what would happen.

Jonathan Barlow: In the Rob Graham context, one of the big questions is it's $13 million, and that's a significant and sizable trust account.

Jordan Flake: Clear, I'm going to lawyer this one. To be clear, we don't know. We don't have any personal knowledge about what went on with Rob Graham. We just read the same newspapers everybody else does and we hear the same allegations. When people are hurting and they lost their money and it appears that an attorney abused a position of trust, we're all human first and we are rabid and we want justice, but Jared, I think what you're getting at is facts are going to come in and we need to be careful.

Jared Richards: The allegation is right now that he stole $13 million, and if that's true, then [crosstalk 00:09:56].

Jonathan Barlow: My only point is the price tag is shocking, the amount.

Jared Richards: It's a huge amount.

Jordan Flake: What is alleged to have happened here, if you guys want to go into that at all? Did Rob Graham one day open up his online trust account and see that there was $13 million and think, "Okay, this is my chance to write a check to myself?" What's the allegations say?

Jared Richards: I think that what happens in situations like this, you have two possibilities. Either the attorney makes a conscious decision to liquidate the entire trust account and run away with it, which I don't know of any actual incident where I've heard that happening, but I'm sure it has happened before. I think that the allegation here is that Rob Graham was not running as efficient and as successful as a business as he wanted to project, and that he was using client money to supplement his own business, his own money, which is just as illegal and just as wrong. It's just a slower and more slippery slope.

Jordan Flake: So there wasn't a $13 million check?

Jared Richards: Probably here. We don't know.

Jonathan Barlow: I don't think that's the allegation. I think the allegation right now is that over the course of time, he started dipping into some client funds and then continue to dip in to try to make that right. Sort of a Bernie Madoff type of a transaction.

Jordan Flake: Ponzi scheme.

Jonathan Barlow: Almost a Ponzi scheme.

Jordan Flake: Almost, where he's using the money that's there today to meet those obligations.

Jonathan Barlow: Exactly.

Jared Richards: And hoping that the money tomorrow will come in to pay yesterday's obligations.

Jordan Flake: The money that he's waiting to have come in through the door in this situation appears to have not been his money, and that's the major, major problem. If we're just running all of our expenses out of the operating account, that's business. That's just the way it's done. If an attorney were to ever dip into the trust account and say "I need to make payroll this month. Shoot. I only have $15,000 in my operating account and I have $4 million in my trust account. I could use some of the $4 million to pay my payroll since I don't have enough in my operating account." That's kind of what might have happened here.

Jonathan Barlow: Who knows if thinking, "I'll pay it back."

Jordan Flake: I'll make it back and I'll ...

Jared Richards: The only difference between the allegation of him stealing all $13 million in one fell swoop or him dipping in month after month for a number of years is the dipping month after month, we can more humanize it, but it doesn't make it any less wrong.

Jordan Flake: Right, because the end result is the same, which is a tragedy of thinking, "My Grandpa John died. He had $48,000 in his Wells Fargo account. We hired Rob Graham to go and liquidate that $48,000 account and we were going to split it up three ways."

Jared Richards: Exactly.

Jordan Flake: "We were hoping to be done around the holiday season so we could all have that extra money to go out and buy Christmas gifts or whatever for our family." Now that money's gone. That's horrible.

Jonathan Barlow: It's devastating.

Jordan Flake: It's devastating to the families.

Jonathan Barlow: There's a couple other allegations that raise points that are red flags in the way that a lawyer handles his trust account. Apparently, according to allegations, it appears that Mr. Graham was the only person at his office who really controlled the trust account, who had any access, knowledge of the trust account. That sure makes it easier to hide some things that you don't want other people to know about. One good protection, and particularly with the three of us here, is to have multiple people who have control of the trust account, who have eyes on the trust account, and who review that trust account and realize, "What's this payment coming out?" And can question those things if necessary. That's been a good thing for us, is that the three of us can have that equal access to it, equal control over it. Heaven forbid one of us try to do something wrong. You have two people who are going to watch over it.

Jared Richards: Exactly. You have at least multiple partners that have oversight that can track it. Also, something that we do that I think more firms ought to do is we have a bookkeeper that is the employee of a separate accounting firm who helps us keep track of our books. If there are abnormalities that happen in the books, the bookkeeper would be alerted and the partners would be alerted. Those two things are safeguards: multiple partners with oversight, and somebody outside the firm that's connected to a separate accounting firm that has oversight as well.

Jordan Flake: To that point, you have the bookkeepers keeping their books and we're keeping our books and they have to match up every single time. That's all done internally. One of the problems with the Rob Graham case, the allegation is that his mother-in-law was the bookkeeper, and so those conversations and those huge red flags that needed to pop up in this context apparently never did.

Jonathan Barlow: Right. If our books that we keep here on my computer don't match with the accountant's books, then we make the correction as necessary.

Jordan Flake: Do either of you expect to see more regulation from the government or the state bar? State of Nevada, or the state bar?

Jared Richards: The problem is that from time to time, you will hear the Nevada bar reprimand somebody for overdrawing their trust account. Because any bank, the rule is the banks, if they hold attorney trust account money, if the check bounces, if the account is overdrawn, the bank is required to notify the state bar so the state bar can do an investigation as to why. The shocking part of Rob Graham is yes, it appears that he may have stolen some money. I know, I'm a lawyer, I'm being all cautious. That's why they're smiling. Because we don't know. The allegations may have some ...

Jonathan Barlow: It'll come out.

Jared Richards: Yeah, the allegations will come out and the facts will come out in their own due course. The two things that are utterly shocking about this case is the size of the alleged theft and the prominence of the attorney. In the probate estate planning community and those people that watch, I can't remember what news channel Rob advertised on, but Rob Graham's a known name. We all know the name. Between those two things of a large amount stolen by a noted, prominent attorney, it may jar the rule makers into making more rules.

Jonathan Barlow: I wouldn't be surprised, really, to see something else change. Really, the only time that the state bar, and this is why I think there probably will be some changes, the only time the state bar will come and look at your client trust account and make sure to get a truly outside from the government or state bar or whatever, is if there's a complaint made against one of our attorneys, that doesn't even necessarily have to do with a client trust account. Say one of our attorneys messed up a case. Client gets upset and they file a complaint with the state bar.

Jordan Flake: I'm going to lawyer that one too. We don't do that.

Jonathan Barlow: Right, it hasn't happened because we haven't ever been audited. Anyhow, in the context of the state bar coming in to investigate, "Why'd you mess up this guy's case?" They will audit the book at the same time.

Jordan Flake: Just as a matter of course.

Jonathan Barlow: As a matter of course, almost. That's about the only time that they independently come in to audit books. I wouldn't be surprised to see some audit requirements coming out of this.

Jared Richards: The problem you have with that is the sheer number of attorneys out there handling [crosstalk 00:18:06].

Jonathan Barlow: Trust accounts, yeah. It's a monumental task.

Jared Richards: It would be a monumental task to send in auditing standards for everybody.

Jordan Flake: Right, but if that task is necessary to restore the community's faith in our profession, which is one of the goals of the state bar, then they'll have to do it.

Jonathan Barlow: One of the good things to that point is what's happening with Rob Graham's client. As discouraging as it was to see a very prominent name like this happen, we have observed the rest of what we call the probate bar. The other probate attorneys have rallied around this issue, not to pour dirt on Mr. Graham's grave, but to try to get his clients back to where they need to be. That was primarily led initially by Jason and Brandy Cassidy, excellent probate attorneys here in town, who took the initial task of .. What the state bar's asking them, "Cassidies, would you do this?" They took those client files and they've been trying to sort through those files. They've done an excellent task of doing that. Now, I've seen multiple attorneys who have offered to help and who will be probably taking on some of those cases, including our law firm. We'll be taking on a large handful of these cases to help them move forward.

Jared Richards: With the understanding that the money for those cases already seems to have been embezzled.

Jonathan Barlow: Almost in every case, the attorneys will be doing that pro bono, including our firm. Meaning without payment.

Jordan Flake: Without payment. You're right. This is just a small silver lining on this sad story, but it is nice to see that the attorneys all recognize how wrong this is and what a tragedy it is for the clients involved, and to the extent possible we're trying to mobilize our resources, and especially good shout out to Jason and Brandy Cassidy, who are really taking on the bulk of that project, and we're all here to help. Any last closing thoughts on this from either of you? On this whole situation and what you would want to tell our viewers.

Jonathan Barlow: It's shocking to see a story like this. It shocked us to see a story like this about an attorney. It'll shake confidence. A lot of people don't have good opinions of attorneys in the first place, so it'll certainly shake some confidence of them. If there's any hope behind this, is the fact that this is such a rare occurrence. I've been practicing 10 years and nationwide, this is the first story that I've seen of this size or nature. Just happened to happen in our backyard with somebody we know. It's such a rarity to see something like this happen that you can take some comfort in knowing there's a lot, 99.9% of the attorneys out there are doing this the right way, including our firm trying to do the right way the best we can.

Jordan Flake: Great, any last thoughts?

Jared Richards: No, I think Jonathan covered it.

Jordan Flake: I think the only last thing I'd say is really with any regulations, the biggest and best regulation is just be extremely trustworthy. To know why we're doing this and to know that there are real people, our clients are real people and that they deserve trust, respect, and especially when it comes to valuable assets and things of that nature. Thanks so much for joining us for ClearCast. If you have any thoughts on this ClearCast, please link us, comment us, ask us any questions. If you would like to see us answer questions in a future ClearCast, please let us know. Jonathan, Jared, thanks so much for joining us today and we'll see you next time.

 

ClearCast / Estate Planning / General Interest / Las Vegas / Nevada Law / News / Probate / Probate Videos - 12/21/2016

Watch This Before Adding a 'Pay on Death' Provision to Your Estate Plan

Transcript:

Hello, my name is Jonathan Barlow. I’m an estate planning and Las Vegas probate attorney here at Clear Counsel Law Group. Thank you for tuning for yet another riveting video about probate and estate planning tips and practices that you can use to help you in your life and probably actually your elderly parents who actually most need this advice.

Today we’re going to about what are called “pay on death designations” or “transfer on death designations,” sometimes called “beneficiary designations” also. You might typically think of these in the context of life insurance policies.

That’s what people most think about. If I have a life insurance policy, I get to name somebody. When I die the money goes to little Jimmy or little Sally or whoever you want it to go to.

You can do these same type of beneficiary designations on a host of other type of assets, and not just life insurance. For example, you could put they’re called “POD” or “TOD”, for short, you can put POD designations on your personal bank accounts.

You could put a POD designation on a vehicle title. You can put them on stock certificates. In fact in Nevada and some other states, not all states, but Nevada in particular, allows you to do a form of a deed called a “beneficiary deed” or “transfer on death deed” for your house.

What the effect of these are POD or TOD designations is, is that when you die the ownership of that asset transfers automatically simply by virtue of your death to the person you designated. Let’s think about the house.

 

Potential Problems with 'Pay on Death' Provisions with Real Property

If you’ve done a beneficiary deed for your house, and you say, “When I die,” basically in this deed, “When I die this house shall be transferred to Brian, Jim and John, my three sons, as joint owners. They essentially, after you pass away, they go down to the County Recorder, take your death certificate with a form of an affidavit and say, “Hey, dad’s died and now we own the house.”

That’s essentially in layman’s terms how that would work. That transfers the title automatically to them. They’re then the current owners. It’s quick, it’s easy and it gets those assets transferred really quickly.

Now, we want to contrast that to what happens if you don’t use these type of designations. Typically these type of assets would go through probate, which is something that we do here at Clear Counsel Law Group quite a bit.pay on death, nevada, las vegas, probate

Probate’s a core process that oversees the transfer of those assets to whomever they’re supposed to go to. Whether they go to your closest next of kin or whether you’ve done a will that says you want them to go somewhere. Probate can be expensive in the attorneys’ fees that are paid.

In Nevada, typically, and of course it depends a lot of factors, but attorneys’ fees are going to be somewhere between five to ten to fifteen thousand dollar or more to get that estate through probate. A lot of people are concerned about that cost and that’s why they look for these other vehicles to … or ways to transfer assets without incurring that cost after they pass away.

Again, it’s a quick and easy way to do it. However, I want also point out some important pitfalls and reasons why you might not want to do that. That’s really the main reason why we’re talking about these today.

Let’s think about this. Let’s think about, again, that house. You’ve got Brian, Jim and John, your three sons, and you want to make it easy for them to get your assets after you pas
s away. After you pass away, and if you make Brian, Jim and John the co-owners of the house, that is in almost every situation I’ve ever seen becomes a disaster scenario for those three sons.

Suppose Brian no longer wants to pay for his share of the house mortgage, or Jim says, “I’m not going to pay for the property taxes. I don’t got that kind of money to do that.” John says, “Well, I want to rent the house out and I want to get some rental income.” The other two are like, “Well, I don’t want to be landlords for some period of time.”

It’s a disaster waiting to happen because all three of them essentially have to agree on how they’re going to hold the property, how they’re going to use the property, who’s going to pay the expenses, when are we going to sell, how much are we going to sell for.

It’s a very, very difficult situation to put people in to be able to be on same page with that.

 

Potential Issues with 'Pay on Death' Provisions with Bank Accounts

Now, with financial accounts it’s not as big of a concern. If you have, again, let’s say your savings account has got fifty thousand dollars in it, and you go into the bank and you designate Brian, Jim and John as the pay on death beneficiaries of the savings account it is really easy for them because the bank is just going to cut three checks in equal amounts to the three of them.

We’re not going to have problems with co-ownership. Let’s think about a couple of things that could go wrong with that situation.

Let’s say John is actually sixteen years old when you pass away. He’s a minor child. The bank is not going to give him that money.

If you have a minor child, and even if it’s life insurance, if it’s a bank account, if it’s any asset those assets will not be transferred to that child unless somebody sets up a court appointed guardianship for that person.

You’re throwing them into a guardianship proceedings in order for that person to get access to the account or benefit from the account. Even if that happens, when John turns eighteen in a couple years he’s going to get all that money straight out, straight into his hands at eighteen years old.

There’s not very many eighteen year olds that can handle a substantial amount of money very well. That’s something you’d probably want to avoid.

Other problems that could come up; let’s Jim, he’s an adult, however Jim’s receiving government benefits. I had this situation just last week actually with somebody whose father has passed away.

We’re not into taking care of his estate, and one of the children was receiving a government benefit. If he receives a large inheritance, he’s going to lose that government benefit for a period of time, and becomes ineligible for that. It kicks him off of the government benefit because he’s received a large inheritance.

That would happen if a person is designated as the pay on death beneficiary of a bank account. They receive twenty thousand dollars, the Government’s going to want to know about that, and he’s probably going to lose a benefit that is conditioned upon his level of income and assets and things like that.

These are considerations you really have to think about. Sorry, one more consideration. Let’s say you designated Brian, Jim and John five years ago, and two years ago Brian died. Brian has children. You love those grandchildren very much, and you’d otherwise want to take care of them.

Guess what, when you pass away, and you have forgotten to go and update that, so when you pass away the only surviving beneficiaries are Jim and John. That bank account is going to go fifty percent to Jim, fifty percent to John, and zero percent to Brian’s kids who are your grandkids that you love.

They get nothing.

You effectively have disinherited that line of your family. Also, an unintended consequence that happens frequently with these pay on death beneficiary designations.

There are a lot of good things about these pay on death designations. They do make it easy to transfer the assets. They’re very inexpensive because there should be no need for an attorney to be involved at all. There’s going to be no court costs to transfer them.

However, there’s all kinds of pitfalls to using these in certain situations.

If you’re thinking about using a pay on death beneficiary designation on your bank account, on your car title, on your house deed, you’re still well worth talking to an estate attorney who can advise you about the benefits of using a trust, benefits of doing a will, benefits of doing the pay on death designations, which a good estate planning attorney will go through that and say, “Yeah, you know what, that will work for you the pay on death designation. That makes sense in this situation. Why don’t you go ahead and do that.”

They’re not always going to have to try to sell you on the trust or the will or anything like that if you get a good one.

Sit down with a good estate planning attorney, somebody that you trust to give you the best advice to go through your situation with all your kids or whoever you want to benefit.

Are they minors? Will they be able to handle co-ownership after you die? Are they receiving benefits that would be affected by this?

Those are all considerations that you should take into account when deciding whether to use a pay on death beneficiary designation.

I hope this has been helpful for you. If you have any more questions about pay on death designations certainly give us a call here at Clear Counsel Law Group.

We’d be very glad to answer your questions, to give you a free consultation about your estate planning situation, to give you the advice about what tools you should use or not use.

If you end up doing some planning with us then we’ll charge you for that, but the consultation is free.

Give us a call here at Clear Counsel Law Group.

Take care.

 

Probate Videos / Estate Planning / Probate - 09/29/2016
rent, las vegas, nevada

ClearCast Episode 1: Should Home Buyers Fear Rent-to-Own Arrangements?

This morning, the New York Times published a very interesting exposé on rent-to-own agreements, with the examples cited from South Carolina and Ohio.

The article is worth reading in full, but to quickly summarize: Many folks out there are signing rent-to-buy agreements as a cheap alternative to buying a home. However, people are not aware of the terms of some of these agreements. There are examples cited in the article of people putting $10,000 into repairing their homes, only to be evicted for a missed rent payment.

Do Nevada consumers need to be concerned about rent-to-own leases? Will Nevada law protect you?

 

 

If you would like to see the video produced along with the article, you may see it below:

 

Transcript:

Hi, my name is Jordan Flake. I'm an attorney with Clear Counsel Law Group. Welcome to ClearCast and the goal of ClearCast is to take issues that are in the news and hopefully offer some kind of helpful legal insight or at least move the discussion along, hopefully in a productive manner.

I was reading the New York Times this morning and I learned something that might be of interest to some of our Nevada citizens because it has to do with property.

It seems like Nevada is a state where when we're talking about real property and homes, a lot of interesting stuff happens in Nevada, California, and Florida. This is something that is happening throughout the country but not as much in Nevada but it's still something that we really need to look out for.

The article is called "Rent-to-Own Homes: A Win-Win for Landlords and a Risk for Struggling Tenants". Let me describe what a rent-to-own scenario is.

In the wake of the financial disaster home situations happened over the course of the last several years, several homes stayed vacant and big conglomerates, real estate conglomerates would come along and purchase up these small homes, maybe for $10,000 because they're just vacant homes sitting on lots, they've fallen into disrepair.

Well, they have some options at this point, these conglomerates, these real estate conglomerates could pour a lot of money into these homes and try to sell them or they could pour a lot of money in these homes, bring them up to code and try to rent them out.

They could either sell them or rent them out.

What these real estate companies decided to do is kind of a tricky third option and the tricky third option that they tried to do and they're trying to do is something called a rent-to-own contract.

The reason it's tricky and worrisome is because there are a lot of protections for renters and there are a lot of protections for purchasers, but what these sophisticated real estate companies are trying to do is create this third path that really doesn't offer very many consumer protections and let me show you a little bit what that would like like.

 

An Example of How Rent-to-Own Would Work

They purchase a house in South Carolina for $7,000 because it's fallen into disrepair, nobody wants it, and it's far, far below code and there's all kinds of unpaid violations for this, that and the other, and then they go to a potential tenant and they say, "Hey listen. Not only can we rent you this property but what we'll do is it will be a rent-to-own situation. You're not a traditional renter and you're not a traditional buyer but what you are is you are renting to own this property and we're going to have you to come move into this. You pay $1,000 down or $1,500 down and you start paying $600 per month, and at the end of the long lease term, then you'll actually own this property."

They move in and they're like, "Okay, good. This is great." Then they find out that the renter is responsible for making repairs and the way the real estate company gets away with that is they say, "Okay, you're not a traditional renter. You're actually renting to own this property so because of that, you have to pay for the repairs."

They're not a traditional seller and so it's not like that the home is actually in their name, they're not a traditional seller-buyer operation so the home isn't in their name.

They're sitting there in this ambiguous third category where the renter is responsible for paying to bring this house up to code and to put money into it.

Guess what? The real estate company is actually still in the driver's seat because all of a sudden, the renter is using all the money to bring the home up to code and misses two or three rent payments, and they can just kick them out.

Now they have a property that now has that much more value because the renter put money into it. They can then turn around and rent that to somebody else who will then put more value into it.

They keep getting this home that gets more value into it with really no intention to ever have it be sold because they just can arbitrarily kick people out.

This is the type of thing that has come out of this new strange landscape after the housing collapse. This is something that I want Nevada consumers to be very aware of.

 

Make Sure You Read Your Lease Carefully

Are you getting into something that sounds like a rent-to-own type scenario? Are you in a position where you're being asked to put repairs into your house, but you're not certain whether or not you should be paying for those repairs? Are you do something that is neither a traditional landlord-tenant type arrangement nor is it a traditional residential purchase type arrangement? Because if you are, you could be on very thin ice.

Landlord and tenant law is very well established and there are certain rights and protections that the tenant has and the landlord has. Residential purchases are very well established and there are certain protections given to both the buyers and the sellers.

What we have is real estate companies and sophisticated parties attempting to come and occupy this strange gray area where they lure people in saying, "Hey, you can own a home. Put down the money on this and start making these repairs and start paying rent and pretty soon the house will be yours." There's no protections and there's no really great established body of law.

We look through the Nevada revised statutes and couldn't find anything that was directly on point in these situations.

Again, we have established law for landlord-tenant, established law for residential purchase, but nothing in this third category.

If you're aware of these situations, if you are involved in one of these situations, maybe you're an owner or a landlord who actually wants to do this the right way.

These are all reasons to give us a call and we can help you figure out how to stay on top of it and how to do this is an honest and accurate way.

In any event, my heart goes out to those tenants who are right now potentially being exploited by these more sophisticated parties and it will probably be years and years and years before the law really catches up and addresses these different situations.

This is basically what I noticed this morning and what had got me thinking about.

Please feel free to reach out to Clear Counsel Law Group if you have any questions or issues and also on our Twitter and Facebook pages or our blog. We're very interested to hear your own experiences and your own comments.

Thanks so much.

 

Estate Planning / General Interest / Las Vegas / Nevada Law / News - 08/22/2016

Nevada Advice for Folks with Out of State Wills

Out of State Wills in Nevada: What Happens Next?

Transcript:

Hello, my name is Jonathan Barlow, I'm a wills and probate attorney in Nevada, at Clear Counsel Law Group. Questions often come up, Nevada's a melting-pot, especially Las Vegas, where it's a melting-pot of sorts.

A lot of people come here to retire from other states in the United States. With that, they bring with them estate planning documents, particularly their will, that they did in another state.

They move here to Nevada and they have done their will in Ohio, or Montana, or California, some other state, move to Nevada, and they don't do a new will in Nevada.

Questions often come up when mom or dad die as a Nevada resident with a California will, with a Texas will. "Is that out of state will still valid because mom was a Nevada resident and she doesn't have a Nevada will?"

What do we do? Is the out of state will still valid?"

The basic answer is that if that will was valid in the state in which it was created, at the time it was created, Nevada will treat it and accept it as valid, even if the requirements under Texas law for a valid will are different than the requirements of a Nevada law for a valid will.

Let me give you some examples regarding out of state wills to flush this out a little bit and to make sense of what we're talking about.

 

What is a Valid Will in Nevada?

Let me start with, what is a valid will in Nevada?

In Nevada, and we're going to talk about typewritten wills, we're not going to talk about handwritten wills, there's different blog posts about that on our website. I encourage you to take a look at that for handwritten wills.

A typical typewritten will in Nevada has a few simple requirements. Obviously, the person creating the will has to sign the document, and they have to sign it in the presence of 2 witnesses.

We have to have 2 witnesses who also sign their names to the will, and those witnesses would be able and willing to sign a statement, which is usually incorporated into the will, could be done later.

They have to be able to say and testify that they witnessed the person signing the will, that in their opinion the person appeared to be of sound-mind, and that the person appeared to be of age of not under any undue influence.

The person needs to sign it, we need to have 2 witnesses who will say that the person met those legal standards of what's called capacity, that they understood what they were doing, appeared to be of sound mind, and of age.

That's a valid will under Nevada law.

 

out of state will, Nevada, probate

 

The Standard for Wills Differs Between States

The question comes up because other states don't have the same requirements for a valid will.

Some states require a notary to sign the will, or to notarize the signatures on the will.

Nevada doesn't require a notary even though sometimes we see notaries on Nevada wills, not required. Some states require only 1 witness to sign on the will.

Nevada requires 2.1)Please know that there can be serious risk if you do estate planning on your own. We have estate planning attorneys that can help you.

I often see wills done in Nevada, usually done by the person themselves, on a do-it-yourself type of document, where they get just 1 person to witness the will.

It's not going to be valid under Nevada law if it was done in Nevada.

Other states allow that 1 witness to witness the will and have it be valid.

 

You are not Permitted to be a Beneficiary and a Witness

Let me tell you one other important thing that also happens under Nevada law.

Say we have those 2 witnesses who sign the will.

Let's say that 1 of those witnesses is named as a beneficiary of the will, they're named in the will to receive something.

They're the son or the daughter of the person and they're going to receive something from mom's estate and they then also sign as a witness, or mom, or the person leaves, "$10,000 to my neighbor, Betty."

Betty then witnesses the will.

Nevada law says that if you sign as a witness on the will your gift in the will is invalid.

The will itself is still valid, you can witness the will and make it a valid will, but your gift in the will is invalidated.

I've seen it happen many times, it's very unfortunate when that happens. You have to be very careful about who you have as your witnesses.

One small caveat, if there are 3 witnesses and 1 of them has a gift, we're still going to be okay because we have 2 other witnesses.

That's rare when we see that.

 

How Nevada Courts Treat Out of State Wills

Okay, let's say a Montana will has come in. I don't know Montana law, but let's say Montana says you can have just 1 witness on a will to make it a valid will.

Under Nevada law, that would not be valid.

Again, we're going to examine Montana law and if, when mom signed that will in Montana 10 years ago, if it met the Montana requirements for a valid will, Nevada is going to treat it as a valid will and accept it as a valid will even though Nevada requires 2 witnesses.

How do we prove that? How do we show the court that this is a valid, out of state will? The practice of the courts, here especially in the Clark County and Las Vegas area, the practice of the courts has been to accept a letter of opinion, written by a Montana, or whatever state, by a licensed attorney in the other state, that says that they have reviewed the will and that the will complies with the requirements of that state for a valid will.

We take that letter of opinion, we present it to the court, and the court can rely on that opinion of validity to allow that out of state will to be accepted to probate.

Which means to accept it as a valid will here in the state of Nevada.

 

More May Be Required If the Out of State Will is Disputed

In disputed situations, that may not be sufficient, that letter of opinion from another attorney. The court will then take a look at that closer and make its own determination at that point.

It greases the wheels a little bit to get that letter of opinion from another attorney.

As long as there's no disputes, Nevada will use that, rely on that letter, to accept that will done in another state with different requirements of validity, to accept it as a valid will in Nevada.

It's a concept called, under the US constitution, full faith and credit, where other states give full faith and credit to the laws of other states and allows transactions to happen across the country, and honors the laws of the sister states in the United States.

If you have a concern about that, where mom or dad has moved to Las Vegas, and you're wondering whether they need to re-do their will in Nevada, or mom or dad have passed away in Nevada and you know that they did a will in another state, give us a call here at Clear Counsel and we'll be able to help you understand whether that will be treated as a valid will here in Nevada, or whether we're going to be under a different situation.

We'll help you walk through that situation, as we have done many times in these exact situations.

Look forward to talking to you and answering these questions.

Give us a call here at Clear Counsel Law Group and we'll be glad to help you.

 

Footnotes

Footnotes
↑1 Please know that there can be serious risk if you do estate planning on your own. We have estate planning attorneys that can help you.
Probate / Estate Planning / Probate Videos - 07/18/2016

Pet Trusts in Nevada: What You Need to Know

The Answers to Common Inquiries Concerning Pet Trusts

Transcript:

Hello, my name is Jonathan Barlow and I'm a probate attorney here at Clear Counsel Law Group. You may have seen in the news different times different people who leave money to a pet after they die and questions come up about these so-called pet trusts; whether they're valid, whether they're inevitably going to lead to litigation and disputes after the person dies.

We're going to discuss a little bit today about pet trusts and how those might work in Nevada and how you might be able to use them to take care of a pet, or if you're the person who's being disinherited in favor of a pet, what you might be able to do about it.

 

But Will They Have Pet Trusts After the #Brexit?

There is a recent story, actually in London of a woman who is still alive who is leaving quite a large amount to her dog. The interesting part about this particular story that just came out is that she, actually ahead of time, went and talked to her sons and said, hey sons I'm leaving my money to the dog.

And the two sons, according to the news story, were totally okay with it. Good for them. A lot of times though, the children are not so happy about millions of dollars being left behind for Fluffy, the dog.

 

Pet Trusts Under Nevada Law

Let's start with the beginning point of Nevada law. Nevada law actually specifically allows a person to leave money in trust for a pet, to take care of a pet. It is specifically allowed that you can do this. It's not absurd on its face or just to think about it. To think that somebody would leave money for an animal. It happens all the time from horses to dogs, to cats. All kinds of animals.

The key thing there is that the person leaving the money designates what is called a trustee, that is an individual, a human being that's actually in charge of the money. Obviously, the dog can't own property. You can't title a house in the name of Fluffy the dog, so it has to be titled in the name of a trustee of the such and such trust.

We have a human being in charge of the money, using it to take care of the dog under the standards that the person sets out in their trust.

Are they going to get filet mignon, are they going to have a country club membership?

Are they going to have to live off of the little cans of dog meat from the store?

The person gets to decide how the money is used to take care of the animal, and again, it is specifically allows under Nevada law.

pet trusts

Pet Trusts and Disinheritance

Now what are you going to do if you're the child of this person and you're not happy after mom has died.

You've read the trust document and you've realized that mom has either completely disinherited you or reduced your amount so far low in favor of the dog, that it's clear that you're not going to get what you expected to get from mom's estate.

What can you do?

Obviously, if you didn't know about this, you're going to be pretty upset. Typically that will weed into the litigation situation where you're going to bring a dispute or a contest of that trust document trying to overturn it in some way.

If you have been completely disinherited, meaning you're getting zero dollars from the trust, there is actually a pretty high incentive or I should say actually, there is not a disincentive for you not to contest the trust. You can come along and try to show that mom was not of sound mind, that she didn't understand what she was doing.

That she didn't meet the legal standards for setting up a trust of this nature.

 

Challenging Pet Trusts in Court Can Be Difficult

It's the same thing you would argue in other situation with a trust when you're trying to disprove the trust or contest it in some way.

You have to prove the same things, which is lack of capacity, lack of understanding of those who are your errs, what your property is.

There may undue influence.

That might be a little bit weird in a pet situation, but somebody could unduly influence a person to leave that for Fluffy, I suppose. You have the same standards you're going to have to prove.

Again, if you're getting zero dollars from the trust anyways, what does it hurt to give it a try, as long as you have a good faith basis, meaning as along as it's not frivolous to contest the trust.

You're likely going to do that. It may lead to a settlement coming out to you to resolve it. Fluffy gets a big share, you get a little share, whatever it is you come to an agreement on.

 

Is There a Way to Avoid Pet Trusts Probate Litigation?

That brings us to the point of as if now you're the person who wants to create the pet trust, have in mind that again your children are probably not going to be happy after you die, and they find out that you've left it for the animals.

What can you do knowing that they're probably going to contest this?

Like this woman in England did, you may want to talk to your family about it ahead of time. Make it very clear to them what you're doing, why you're doing it.  Transparency often is a great policy in these situations to let them know, "this is why I'm doing this."

You may also want to consider not disinheriting your children completely. Again, if you leave some gift them in the trust, they have some disincentive to not contest it.

If they did contest it they would lose that what you did give them. Say if you gave them a $100,000.00 and they contested it, their risk is to lose that $100,000.00 or whatever the case may be.

We also talked about it on a different video on our blog about a process in Nevada that allows you before you die to go into court and ask the court to declare your trust or find your trust to be valid.

And if you do that before you die, then after you die, no one can contest it. The right to contest the trust is gone because you've got a court order before you die that it is valid.

Pet trusts are super fascinating. I've certainly done some where people love their pets very much, just like they love their children, and they want to leave money for them.

It's allowed, you can do it, but if you're going to do it, you want to make sure you do it in a way that is going to prevent the inevitable concerns, inevitable disputes that will arise after you die when the children find out that they're cut out.

If you want to set up a pet trust, give me a call. If you're concerned that your mom set up a pet trust and you're cut out, give me a call. We do the disputed work and we can advise you about whether you can do something about it.

For more information about pet trusts and other things related to trusts and disputed trusts matters, you can read our blog on clearcounsel.com.

Again, I'm Jonathan Barlow, I'll be glad to talk with on any questions you have.

 

Probate / Estate Planning / Probate Videos - 06/29/2016

Can a Witness be Compelled to Appear in Probate Court?

 

 

 

How to Require a Witness to Appear in Probate Court

Transcript:

Hello, my name is Jonathan Barlow. I'm a probate and trust attorney in the Las Vegas, Nevada area. In particular over the course of my career I have handled many trust and estate disputes so disputed matters, litigation matters within the probate and trust context.

It often comes up that we become aware as we're trying to resolve this dispute, as we're trying to get the court to have a trial on it and determine what should happen, we often become aware that there is a person somewhere who has information, a witness, who has information that would be helpful for us in our disputed case.

If that's your situation, you come to me and say, "We've got to get this testimony of Joe. Joe knows what happened in that situation. He could tell us what happened."

There are two things that I could do to help you get that testimony and make sure that the court hears that testimony.

 

How I Compel A Witness to Testify

The question is, can we make Joe come to court and testify as a witness? Is there a legal process that we can force Joe to come into court as a witness?

First, if Joe is in the state of Nevada and our case is happening here in Nevada, yes. I can give a subpoena to him, have a subpoena served on him. It's a legal document, a legal command to Joe that says, "Joe, you are commanded by the state of Nevada to appear at a certain place at a certain time to give testimony."

That's usually in a trial. We can have a subpoena served on him. He is legally required to come to court to give his testimony. Now Joe can choose to ignore that and not show up and that's a risk that could happen. However if he does that he's going to be in contempt of court, he could face jail time and a civil penalty, so usually people don't ignore those subpoenas.

 

What if the Witness Doesn't Live in Nevada?

Now the second situation that often comes up though, which is a little bit sticker is, what if Joe is in New York? How can we get him from New York into Nevada?

We've got to have this information from Joe. In this situation, a lot of law firms get bogged down and they get tripped up on this and they say, "Well, we can't do it. We can't bring Joe into Nevada."

That's true, but we can't stop there and we don't stop there.

It's true, there is no legal process to force Joe to come from New York to Nevada to give his testimony. However, there is a way to get his testimony, preserve it so that we can use it in trial, and to support your case.

What we do is we start again with that basic Nevada subpoena and the Nevada subpoena says, "Joe, you've got to give us testimony."

We take that Nevada subpoena, we go to New York. We'd go open a case in New York actually and have the New York courts take the Nevada subpoena and out of that, create a New York based subpoena where the state of New York says, "Joe," just the same thing as in Nevada, "Joe, you are commanded to appear at a certain place and a certain time within the state of New York to give testimony."

 

witness

 

I as the attorney can either fly out there to be there in person which is most effective. It can be done over the phone if the parties agree.

I'll go out there to New York. Joe arrives, he's put under oath just as if he is in a court of law, sitting there at trial, he takes an oath to tell the truth.

We have a court reporter there who's taking down every word that's being said just as if we're sitting in a court. I get the opportunity to ask him questions. He's under oath to tell the truth and answer those questions. We get the opportunity to preserve his testimony through what's called a deposition. That's that deposition process.

Now we bring that deposition back to Nevada and we get to the point of having our trial. We call Joe and say, "Hey Joe. We'd really appreciate you coming out to Nevada to come to the trial and give your testimony." Joe says, "Not going to do it. Not coming out there. Not going to take the time nor the expense to do that."

 

The Value of a Witness Deposition

We're not up a creek. In that situation, we can go in and ask the court to allow us to have permission to use Joe's deposition, to use the video from that deposition or to simply have the transcript, the document read, the answers and questions read, into court at the trial. That's treated just as if Joe was sitting there in court at trial giving his testimony.

That's a way to preserve his testimony even though he's all the way out on the other side of the country and even though we can't legally command him to Nevada to give that testimony.

You're not out of luck if we've got to get this testimony from other people and we here at Clear Counsel know how to do that process and we've gone through that process of going to other states to get those subpoenaed issued in the other states to get that testimony.

We've flown to other states to take that testimony and use it in trials successfully to preserve their testimony.

If you're in that situation, where you're wondering about getting this evidence or testimony or we need this information from a witness, we here at Clear Counsel would be glad to talk to you about that.

We do a free consultation to review your case, to review the disputes that you're having and help you plan a way to resolve those disputes and preserve testimony from witnesses whether they're in Nevada or out of New York.

I encourage you to give me a call and let's have that free consultation today.

 

Probate Videos / Estate Planning / Probate - 06/08/2016

Your Nevada Estate Plan Deserves To Be Drafted by a Nevada Attorney

 

 

 

Transcript:

Hi. My name is Jordan Flake. I'm an attorney with Clear Counsel Law Group, and I practice in estate planning. Today I want to address a question that we get about whether or not it's important to have a Nevada attorney, who is at a law firm in Nevada, prepare your estate planning documents.

What we have, sometimes, is there are out of state law firms that will do legal services. Sometimes people will go to a different state to get their wills drafted, or the power of attorney, or their trust documents drafted.

There are a lot of reasons why it's important to come see a Nevada attorney whose main office is here in Nevada and who is familiar with Nevada laws.

In the entire arena of estate planning there is a lot of overlap between the different states. There really is, and that's fine.

A house in California or Iowa needs to have certain designations that would help it pass, upon your passing. Whether you're in any state Iowa, California, Nevada there's certain concepts that apply across the board.

Because of that we have a situation where sometimes residents of one state will obtain estate planning documents from a firm that may only have a small outpost here, or they may go to a different state and get those documents.

 

You Need a Nevada Attorney to Update Your Estate Plan

However, I think that by doing that you'd be missing out on a big opportunity. With estate planning it's important to go with an estate planning attorney that is where you are.

I would encourage Nevada residents to come to an estate planning attorney here, locally.

Here's why, estate planning often isn't just a one-shot situation.

At least good estate planning is a situation where every three to five years your estate planning attorney should follow up with you and say, "Hey, has anything changed in your life?" Is there a different marriage, maybe a different job, maybe you've sold houses or purchased a house. Maybe one of your siblings had or one of the people you had designated as a personal representative had passed away.

You want somebody who's close to you geographically, and who's close to you from a professional standpoint, who will be able to ask these questions and get these answers from you. That's one advantage of having someone local. It's going to be easier to have the type of relationship where you have more constant contact.

 

nevada attorney

 

As a Nevada Attorney, I Understand the Nuances of Nevada Law

Second to that, also, is there are differences in the law. Even there aren't big difference in the law, there easily can be differences in the law when the Nevada legislature changes the law.

You're going to want somebody who is tied in enough to Nevada's revised statutes, that when there is a big change in the law something triggers in our mind that says, "Hey we should reach out to all of our estate planning clientele and let them know that this thing has changed."

That's another reason why you wouldn't want to go with an attorney who merely has a Nevada license, or has a license in another state but isn't really tied into the state. They're not going to be aware of changes in the law that might effect your estate planning situation.

 

The Clear Counsel Difference

Clear Counsel, in contrast, if there is a change in the law we're equipped to determine which clientele are going to be affected by that. We'll send out a newsletter, or a letter, to all of our clients saying, "Hey, these are some changes in the law. Please contact us if you feel like this might apply to you." That's just another advantage of going with someone here locally.

That actually can be extrapolated into a more general sense of, we're tied into the community.

For example, I'm an appointee on the senior citizens advisory commission for City of Henderson's senior citizens. I know a lot about different resources in the community that are intended to benefit seniors.

I'm sitting here with a senior citizen from Henderson. Of course we're talking about estate planning. Other things come up to.

We have somebody maybe move here from Michigan and they wonder what service opportunities are available. I know those types of things because I am locally tied into the community.

I can tell you, "Hey, it just so happens that the senior community center down here offers all of these different programs. Here's somebody who you can get in touch with."

That's the type of overall generalized advantage that you can get from dealing with a local Nevada attorney who's plugged into the community. Who's aware of the laws, and who's geographically available to talk about any changes that might happen with your estate plan.

If you're here in Nevada, please reach out to us, Clear Counsel Law Group. We'll meet with you. For a consultation we don't charge at all. In the future you'll be happy that you had somebody here locally who can help you out with different changing situations. Whether in the law, or in your own life.

Give us a call. I'm attorney Jordan Flake. You can reach us at (702) 476-5900.

Thank you.

 

Estate Planning / Probate / Probate Videos - 06/02/2016

Are You Sure You Can Rely on Your Form Estate Plan?

 

 

 

Transcript:

Hi, my name is Jordan Flake and I'm an estate planning attorney with Clear Counsel Law Group and one of the questions that we get from a lot of our clients is there are these companies out there that have form driven estate planning practices that will help you get a valid trust or will or power of attorney documents, but the real question is whether or not they're effective.

I don't want to mention these companies, but what they do is they basically provide you with the forms that will allow you to put in your name into the different spots in the form and what you will have at the end of the day is a valid legal document that essentially is customized to your situation or at least presumptively is customized to your situation.

I can't mention the names of the companies that provide these form estate plans, but I often get the question, "Jordan, are these form estate plans really good? Are they okay? What about them? What do we do?"

I mean they're oftentimes less expensive than seeing an attorney, so maybe they're great, right? I get this question and sometimes my way jokingly responding that they are really good because if you're lost in the wilderness and you need to start a fire, then you can use these form estate plans as kindling to start a really great fire. In that sense, they can be really effective and very useful.

Obviously I joke they can be good if you have a super straightforward, simple situation and you're willing to see them for what they are which is just a very much fill in the blank estate planning solution.

 

Joking Aside, I Know How Important Your Estate Plan is to You

Now my concern about them is that they are not really customized to what you may want or need. It comes down to the difference of something being valid and legally enforceable which I concede and acknowledged that they can be on the one hand valid, but on the other hand, are they really truly effective, do they really accomplish what you want them to accomplish.

Let me talk a little bit about that.

Our law firm Clear Counsel Law Group, we do estate planning and that's the side that I really enjoy.

I get to meet with people. We sit down. We give you options. We execute an estate plan.

You get the peace of mind of knowing that your documents are done correctly. That's the part that I like. The part that I still do and I enjoy it as well, but not just quite as much is if people pass away and they don't have their estate planning done or maybe they have some estate planning but maybe they did it themselves.

We have to deal with the disputes and the fallout that comes from those situations where they weren't really relying on attorney drafted documents.

 

form estate plans

 

So You Say You Have Form Estate Plans..

I can just tell you that as a practitioner in this area for almost a decade, when we get a phone call from somebody and they say, "Hey, yeah my dad their own estate plan. He did his own estate plan. He drafted his own estate plan. He thought he knew what he was doing," automatically in my mind I have this automatic response from years of experience that says,

"Oh no, what did he miss? What T wasn't crossed? What I wasn't dotted that has the potential to cause a lot of problems downstream?

How are we going to cover this gap? Who did he forget to disinherit?" He intended to disinherit one of his children, but he didn't properly say that or do that properly. There's all these things that arise in my mind where I think, "Oh no, they did their own estate planning."

When I hear that a document was drafted by an attorney who actually sat down and met with the client, 9 times out of 10, that document is going to be just fine. The case might have other issues that are causing problems, but the document itself is going to be sound.

That's the difference in my mind being on both of the fence, the non-disputed estate planning side, I want to give you a customized document. Over here on the disputed side, if we see a customized document, we don't think there are going to be as many problems with the document as if there's a document that was a drafted by perhaps the individual.

That's the difference there between what's merely valid on the one hand and what's truly effective on the other.

If you come in for a consultation, we'll review your existing estate plan documents if you have them. If not, we'll sit down and we'll figure it out how do we actually make the law work for you in your specific situation, not just to make it valid but to actually make it effective and easy on your loved ones and to make sure everything is really optimized to go specifically with what you want.

 

A Final Consideration Before You Make a Mistake with Form Estate Plans

Let me just put one thing in perspective here. You are talking about how you're going to pass all of your earthly wealth onto your most beloved individuals in your life. It is not something that you want to take on on your own.

It may cost more to have an attorney do it than to have you try to figure it out on your own, but I would suggest that that is a big enough and important enough project that it's worth actually meeting with an attorney.

The other thing is it might not be as expensive as you think. We are all about options at Clear Counsel Law Group. We're about options and transparency.

We're about coming up with solutions that work for all of our clientele, whether you have a lot of money and assets that you're passing or whether you don't have very much at all.

Come meet with us so that we can give you options and we can find the best possible solution for you.

Again, I'm Jordan Flake. We'll do a free consultation.

Just give us a call.

Thank you.

 

Estate Planning / Probate Videos - 05/26/2016

See Jordan Flake, Esq., on Morning Blend

Jordan Flake, Esq., appeared on "Morning Blend" on 19 May 2016.

See the segment below:

 

 

A special "Thank You" to the folks over at KTNV (Channel 13 Las Vegas) for having me on this morning!

Jordan Flake

I had a great time participating in Morning Blend's "Spring Cleaning" Segment.

Remember folks, estate planning isn't just for the very wealthy. In fact, all of us will leave an estate upon our passing.

Wouldn't you like to have a little control over your affairs after you go?

I thought so.

Give us a call at (702) 522-0696 and schedule your free consultation.

I have produced dozens of additional videos if you would like to learn more about estate planning.

I recommend you visit our legal blog where you can find even more free information about estate planning, probate, bankruptcy, personal injury, and even a little current events!

 

Estate Planning - 05/19/2016
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