Friday, September 27, 2013

The Importance and Necessity of Networking

Below is an article by Wayne Baker, Ph.D. about the importance of networking. I wanted to share the article because, although the article focuses primarily on the dynamics and importance of networking in a business/work-place context, I would have perhaps, revised the Title a little, to " Networking is Important BOTH for Business and Personal Purposes. There are lifelong lessons to be gleaned from the article, the primary lesson being, I believe: All relationships, business, work, and personal, need to be cultivated and nurtured. We must contribute to receive. If we adhere to this principle, we grow as individuals in all of our relationships, emotionally, professionally, and intellectually. The benefits derived from this personal growth are exponential, and will manifest in all of your relationships.

Please read the article and, at least at first as a mental exercise, apply some of these concepts to your every day routine and personal relationships. I think you'll agree, "Mastering others is strength. Mastering yourself is true power." Loa Tzu

Enjoy

Networking is Even More Important

and More Powerful for Business

than for Personal Purposes

By Wayne Baker, Ph.D.

Think back to a cocktail party you recently attended. You will recall that there were guests who seemed to know almost everyone in the room, moving from group to group with great ease, leaving no hand unshaken. Others, meanwhile, stood either alone or with just one other person for what seemed like hours, chatting stiffly and appearing as if they couldn't wait to be on their way home. Which type would you expect to accomplish more in his or her career? Why? The ability to relate well with others is a sign of a person's mastery of the art of networking.

WHY NETWORKING IS IMPORTANT

In the traditional corporate culture that existed until the 1980s, an executive gave an order and subordinates were expected to follow it — no questions asked. Today, companies are constantly reorganizing. Clear cut lines of authority have faded.

One result: The actions and attitudes of superiors, subordinates, colleagues, customers, suppliers, competitors and government regulators are more important than ever to the success of your efforts, because each individual plays a key role in today's tight, anti-bureaucratic world. How well you do your job ... your pay raises and promotions ... depend on your ability to network with all of these different people. In addition, in today's downsized business climate, the people whose help you need to get your job done may be located in another department ... another company ... or even on another continent.

PRINCIPLES OF NETWORKING

To build a network — and help others build networks — managers must learn to use five key principles... Relationships are a basic human need. Helping other people fulfill their need for relationships helps you, too.

Example: If you form lasting relationships with suppliers they will be more likely to come through for you in a pinch. Your fuel oil dealer, for example, will supply you during a shortage, if he trusts you to stick with him when competition heats up.

People tend to do what is expected of them. If you expect the best of people, they will usually meet that standard. If you expect less, you will get less. Smart networking means building strong relationships that benefit both sides. You can't buy this kind of dedication with monetary rewards, for two reasons: It costs the company too much... and employees resent the thought that they are being bought like commodities.

Lesson: Convey expectations of high performance by encouraging input in the goal-setting process ... not to set basic strategy, but to decide how to achieve company goals. Invest time and effort in employee training ... give employees challenging assignments. Supply frequent feedback in as positive a way as possible, using past performance as a guide for future improvement. The result of these efforts will be enthusiasm on the part of members of your group, which invariably creates a strong foundation for lasting, mutually beneficial relationships.

People tend to associate with others similar to themselves. This tendency has both positive and negative consequences.

Advantage: By bringing together people with similar interests, you can build strong creative teams. This helps you, the manager, to earn the respect and cooperation of a wider spectrum of specialists.

Example: Putting company scientists and engineers into one building, rather than segregating them by specialty, helps to generate innovative products.

Downside: When people associate exclusively with others similar to themselves, they lose touch with the real world.

Example: Senior executives who avoid contact with the rank and file often find out about serious problems only when it's already too late.

Repeated interaction encourages cooperation. People who repeatedly come into contact with each other tend to develop positive relationships, especially when they share a common goal.

Example: When you set up a task force, encourage maximum cooperation by providing a reward for the entire group when it achieves its goal. Consider a compensation arrangement like that used by AT&T Global Information Solutions (formerly NCR), where raises depend 50% on individual performance — and 50% on the results of the entire unit.

It's a small world. You are surprisingly close to critical information, resources and people. The average professional knows 3,500 people directly... and each of those people has a similar number of contacts.

Lesson: Just a few well-placed phone calls to friends — and friends of friends — can get you in touch with almost anybody in the country. You will have a much better chance of forming a new relationship quickly if you can use the name of a mutual acquaintance — even someone you don't really know very well to introduce yourself to your target.

PERSONAL NETWORKING DIRECTIONS

In addition to the five principles, effective networking depends on managing your personal relationships in three directions...

Up, with your bosses...

Down, with your subordinates...

Laterally, with peers inside and outside the company.

In all three directions, effective networking means that you identify key relationships, build mutual understanding and act in ways that benefit both sides.

TO BUILD AN EFFECTIVE MANAGEMENT NETWORK

Right now: Make a list of critical contacts — those relationships that are particularly important for your effectiveness. Identify critical gaps — personal relationships you need but don't yet have.

Important: Don't rely on memory. For two weeks, keep a log of all your interactions — who, what, where, why. Put each person on a card and arrange the cards in order of the importance of the relationship. This will tell you how you should be dividing your time.

Next: Work to improve your critical relationships. Think of what the other people need and find ways you can help them do their jobs better. Fill the gaps. Get together with new people who are important to you... have yourself introduced or introduce yourself ... invite them to lunch.

In the long run: Get used to continuously appraising all of your relationships and try to get and give as much feedback as possible. Networking is a lifelong project.

Thursday, September 26, 2013

Trusts as an Estate Planning Tool

TRUSTS AS AN ESTATE PLANNING TOOL

The trust is a very useful and flexible tool for estate planning. Yet it is probably the most underused estate management technique. A trust is an artificial being, something like a corporation, created by a document or instrument.

A trust requires four basic elements - trustee, trust property, trust document and known or discernible beneficiaries. The trust document specifies the rules of operation for the trust, the powers of the trustee, the beneficiaries to share in the income and principal from the trust, and instructions for distribution of the trust property.

How is a Trust Created?

A trust is created by means of a legal document known as a trust agreement. A person who creates a trust may legally be referred to as a grantor, settler or trustor. This document contains the instructions regarding management of the trust assets, how the assets are to be distributed from the trust, and further instructions regarding what happens to the trust if the person who created the trust becomes incompetent or dies. This may include distribution of assets to trust beneficiaries and termination of the trust. Beneficiaries of the trust are also named in the trust agreement and may include the individual who established the trust, spouse, relatives, friends, churches and/or charities.

How is a Trust Funded?

An individual who creates a trust must take steps to change the title of ownership for each asset that will be placed in the trust from the individual’s name to the name of the trust. This process is known as funding the trust. It is not uncommon for individuals to execute the paperwork necessary to establish a trust but fail to complete and maintain the process of funding the trust. Assets held jointly (such as joint tenants with rights of survivorship or tenants in common) cannot be owned by the trust unless the joint ownership is severed. Other types of property such as cash, personal property or real estate, can be placed in a trust.

Who Manages the Trust?

Trust assets are managed by a trustee, according to the instructions contained in the trust document. The trustee can be the person who set up the trust (the grantor), or a corporate entity (bank or trust company), another family member, friend or a combination of these.

The trustee must maintain a high degree of responsibility, known as fiduciary care. A trustee cannot make risky, speculative investments outside of the instructions outlined within the trust agreement, and may be held personally responsible for trust losses.

The trustee’s duties include receipt and management of the trust assets, collection of income, accounting, tax reporting and payments, investment and income distributions according to the trust agreement. The trustee/grantor can maintain full control of the trust until the trustee’s death or incompetency. At this point, a successor trustee takes over and follows the instructions contained in the trust document.

What does it Cost to Establish and Maintain a Trust?

Trusts are sometimes promoted as a tool to avoid the costs of the probate process. However, the costs to establish a trust will likely exceed the costs of drafting a will. Note also that while trust assets are not included in a probate process, when the property is transferred to and titled in the trust, there are fees related to trust management and administration. While a family member serving as a trustee may waive the fees, most non-family members, banks and trust companies will charge fees for property management. Fees may vary according to the type of property being managed. For example, if the trust owns farm land, a trustee may claim a farm manager’s fee (such as ten percent of gross income). Trusts made up of corporate stocks, bonds or other investments requiring oversight may be subject to an annual management fee (one-half of one percent to two percent of the property in the trust, depending on the dollar value of the trust). There may be a minimum annual fee. In any event, it is important to consider the trust management fees over the lifetime of the trust as well as trust administration fees at the time of a trustee’s death in comparison to the costs of probate.

What are the Main Types of Trusts?

The two main types of trusts are living (or inter-vivos) trusts and testamentary trusts. A living trust is established by a living person, while a testamentary trust is established in a will and comes into being at the time of death under certain circumstances.

There are two main types of living trusts: revocable and irrevocable. A revocable trust transfers property ownership into the trust but retains to the grantor the power to alter, amend or terminate the trust. A typical revocable trust arrangement provides that the grantor receives the income for the grantor’s remaining life, with distributions to beneficiaries (spouse, children, grandchildren, etc.) at death.

A revocable trust does not save estate or inheritance taxes. Retention of control over the trust subjects the property to the federal estate and state inheritance tax. Since the revocable trust is subject to state inheritance tax, the property becomes part of the estate for the purpose of figuring attorney’s and executor’s fees if probate of the estate is necessary. If all or most of a decedent’s property is included in a revocable living trust at death, a simplified form of probate may be possible with potential reduction of estate settlement costs.

An irrevocable trust cannot be altered, amended or terminated by the grantor. The property transfer is complete without retention of powers over the trust or its property. A completed transfer of property is made, subject to gift tax, and the value of the irrevocable trust is not subject to federal estate tax, attorney’s fees or executor’s fees. If property was transferred to an irrevocable trust within three years of death, the value would be subject to state inheritance tax. In general, property transferred by gift is not included in the gross estate for federal estate tax purposes even though the gift occurred within three years of death. Irrevocable trusts are used rarely since few people are willing to give up complete control over their property during life.

Other Common Types of Trusts

Credit Shelter Trust (Bypass Trust or Family Trust)

This type of trust may be established in a will wherein a decedent’s will bequeaths an amount to a trust up to, but not exceeding, the amount that would maximize the use of the unified credit for federal estate tax. The remainder of the estate passes tax-free to a surviving spouse. Once in the bypass trust those assets are free from estate tax and could grow free from federal estate tax.

Generation-Skipping Trust (Dynasty Trust)

This trust allows an individual to transfer a substantial amount of money tax-free to beneficiaries who are at least two generations removed – typically grandchildren. The trust can provide income to the children during their lives. Successive life estates may be created for family members in succeeding generations. Since the children do not own the assets in the trust, property held in a granted life estate is not taxable in the estate of the deceased life tenant for federal estate tax purposes. Such a trust may be a useful tool for children lacking good money management skills or involved in issues related to creditors or divorce. It may be possible to skip more than one generation. Life insurance may also be a component in the trust. For generation-skipping transfers, a generation skipping transfer tax is generally imposed at the highest federal estate and gift tax rate (presently 35 percent). However, an exemption is provided for generation-skipping transfers of $5,000,000 per transferor (2012). Special use valuation for land is available in calculating the generation-skipping tax for direct skips.

Qualified Personal Residence Trust

This trust is useful for removing the value of a primary residence or vacation home from the estate. This may be useful if a home is likely to appreciate in value and there is a preference to avoid the sale and use of the capital gains tax credit ($250,000 individual, $500,000 for couples – as long as the house was used as the primary residence for at least two of the five years ending with the date of sale). The estate tax attributes are different for a Qualified Personal Residence Trust as compared to a Personal Residence Trust and a qualified tax professional should be consulted.

Irrevocable Life Insurance Trust

This type of trust is used to remove life insurance from the estate, help pay estate tax or provide cash to beneficiaries for other purposes. The policy must be owned by the trust and the former owner must surrender ownership rights (such as borrowing against the policy or changing beneficiaries). The beneficiaries receive tax free income. Transferring an existing policy is subject to a three year look-back period.

Crummey Trust

This type of trust is used to give property to minors and maintain control after they turn age 18. The trust is set up and often funded with annual cash contributions. The concept is to take advantage of the annual gift exclusion ($14,000 for individuals or $28,000 for couples in 2013) by meeting the requirement that it be a gift of “present interest” yet tying up the property until the children are allowed to receive the property, possibly upon attaining several different ages. When funded, the minors have 30 days to claim the gift. However, the minor is instructed that the gifts will end if claimed.

Qualified Terminal Interest Property Trust (Q-TIP)

A Q-TIP trust may be useful in families with divorces, remarriages or step-children and there is a desire to direct assets to a particular beneficiary. For example, the surviving spouse would receive the income from the trust, but the beneficiaries (children from a first marriage) would receive the principal or the remainder after a surviving spouse dies. The assets would not be included in the grantor’s estate but it would be included in the surviving spouse’s estate.

Special Needs Trust

These trusts, sometimes referred to as “Supplemental Needs Trust” are established to provide for the needs of a disabled individual. Such a trust is often designed to allow coordination with government programs so the individual remains eligible for benefits.

Charitable Remainder Trust

This trust allows the grantor to make a charitable gift and still retain an income stream from the gift. The trust can be set up to provide an income stream for a period of years based on the grantor’s life or the life of a beneficiary. At the end of the term the remaining assets go to benefit the designated charity. For example, donated land can be retained until the grantor’s death and then the beneficiary would receive an income stream. It is possible to donate other assets such as machinery or grain inventories. An income tax deduction may be possible and the deduction may possibly be carried forward five years. Charitable Remainder Unit Trusts pay out a fixed percentage while a Charitable Remainder Annuity trust pays out a fixed dollar amount.

These are just some of the basic Estate Planning Tools. As always, if you, or anyone you know, has any questions, please feel free to contact my office at any time.

Monday, September 23, 2013

Divorce and Estate Planning Issues

The emotional turmoil of divorce can be overwhelming or liberating depending on the client’s perspective. While it is commendable and responsible for families to do estate planning, there are some issues to be considered following divorce.

In most cases, the husband and wife seeking to dissolve their marriage are no longer interested in their ex-spouse being the beneficiary to their estate OR leaving their children in a position to be disinherited due to the fact that their ex-spouse may re-marry following the divorce. If their original plan was to leave everything to their spouse and then to their children, their spouse may still get everything if they do not modify their estate plans following divorce.

Beneficiary Designations

Following a divorce, the items below should be amended unless the client chooses to leave everything to his/her ex-spouse:

1. Beneficiary designations for the following financial instruments:

• Employer retirement plans

• Individual Retirement Accounts (IRA)

• Life insurance

• Annuities

• Health savings accounts

2. Transfer on Death (TOD) investment accounts

3. Payable on Death (POD) bank accounts

4. Will

5. Health care Proxies and Living Wills

6. Powers of attorney

7. Revocable trusts

8. Advanced estate planning structures such as irrevocable trusts

Medical & General Powers of Attorney

Generally speaking, if one has chosen to no longer be married to their spouse, they usually no longer want to leave their health care or financial decisions in the ex-spouse’s hands. It is therefore imperative that amongst the documents to be amended are the client’s Advanced Health Care Directive and Durable Power of Attorney.

Guardianship & Remarriage Issues

In a perfect world, if something happened to one parent, the other parent would assume guardianship of the minor child. However, that assumes that the non-custodial parent desires to raise the child and is fit to do so. If the ex-spouse is likely to assume guardianship, they will be responsible for providing a residence for the child, provide for care and support and education.

If the client is concerned that monies left to a child may not be used as the client wishes if the ex-spouse has access, the client can designate in the Revocable Living Trust (RLT) that the client’s successor trustee provide for specific items out of the funds of the trust such as private school tuition, extra-curricular activities, a car at a certain age, college applications and tuition. A parent can protect a child’s inheritance by having an RLT in place with a trustee to carry out the grantor’s wishes as specifically designated. The money would not be paid directly to the guardian, but would truly be for the benefit of the child. This also protects the grantor’s assets, which should be for the benefit of the children, from getting into the hands of the client’s ex-spouse’s new spouse should he or she remarry.

The client should also consider naming successor guardians in the event the ex-spouse does not want to raise the kids or is otherwise unavailable.

Remarriage

Perhaps a newly-divorced parent has a significant other in his or her life, and remarries. This situation could result in a parent unintentionally disinheriting existing children. Without legal documentation to indicate otherwise, a spouse is generally entitled to one-half of the deceased spouse’s estate. The second spouse may not be the resulting caretaker of the former step-children, particularly if another guardian has been named, yet he or she has received half of the assets intended to provide for them.

A divorced parent may typically desire to leave assets to care for BOTH the new spouse and the children. In such a situation, the parent should sit down with a financial advisor and an estate planning attorney to assess the options. An easy solution is the use of additional life insurance to assist the parent in his or her wishes to provide for both the minor children and the new spouse. Term insurance can be a low-cost solution to provide these benefits until the children reach adulthood, assuming the parent is insurable.

In most cases, changing these items is as simple as requesting, completing and filing the appropriate form. Since retirement & employer plans often represent the most significant portion of an individual’s net worth and liquid assets, it is particularly important to amend the beneficiary designations on these accounts.

Because assets passed to a named beneficiary pass under operation of contract, this designation supersedes the person’s will and state intestacy statutes. If no changes are made, the ex-spouse who was originally designated as the beneficiary will be entitled to the benefit, despite the existence of a will or trust designating otherwise or a new spouse. Beneficiary designation will always trump a will or intestacy laws.

Complex Changes

Advanced estate planning structures such as irrevocable life insurance trusts (ILIT’s), Qualified Personal Residence Trusts (QPRT’s), and charitable trusts may be very difficult, if not impossible, to amend, since the original intent of creating these structures was to make an irrevocable election, usually structured to benefit both husband and wife together. Should the husband or wife assume the power to change the irrevocable election, the tax advantages gained by the structure may be destroyed. It is imperative that the client work closely with his/her attorney, as well as the trustee, to explore possible options.

The client should also keep in mind that most states have an “elective share statute” which provides that the client’s spouse (whether estranged or not) will automatically be entitled to a certain percentage of the estate. However, through proper planning, there are a number of ways to avoid or limit the assets which are subject to the elective share, and to provide that the estranged spouse does not receive more of the estate than the client wants him or her to. This is another reason it is imperative to re-visit the client’s estate plan following divorce.

These are just some of the estate planning issues that the client faces following a Divorce. If you, or anyone you know, has any questions regarding any of the above information, please feel free to contact my office at any time.

Disclaimer Notice

Disclaimer Notice:

The information provided by James Thomas Kinder on this site is for informational purposes only, and such information does not constitute legal advice. This web site does not create an attorney-client relationship between the Law Office of James Thomas KInder and anyone viewing this site. You should not rely on the information obtained from this web site without first seeking the advice of an attorney regarding you application of any law to your specific situation. While I strive to keep the information on our web site accurate and current, I do not promise or warrant that the information is complete, accurate or up to date. Any information obtained by means of this web site is not a substitute for legal representation.
This information is provided with the understanding that if legal advice is required the services of a competent attorney should be sought.
The content of other web sites/links/resources found at this web site does not indicate any endorsement of their products or services, and James Thomas Kinder has no liability for any advice, services or products provided by any of them.

Protecting and Passing Along Digital Assets

Protecting and passing along digital assets

By Cushing and Dolan P.C.

23 September 2013

In the age of the Internet, estate planning increasingly includes decisions about digital data that would have been inconceivable a generation ago. To be sure, traditional questions about who should receive which property remain as important as ever. Someone seeking to pass along property must make wise choices about the effective transfer of assets, using instruments such as trusts, wills and gifts. But now, more and more, there are also digital assets to pass along. In this post, let's look at some of the ways this can affect estate planning or estate administration.

First of all, there is the practical issue of making sure that heirs are able to obtain access to online financial accounts that require a valid password in order to sign in. People who are planning wealth transfers should make sure that account numbers and log-in information are properly made available to appropriate parties at the right time. Ensuring this access is essentially an administrative matter. There can also be questions, however, about the transfer of other types of digital assets. And those questions can create potential administrative challenges. For example, someone may have a Web domain that could be extremely valuable for electronic commerce. Or someone could have a social-media account that receives signficant numbers of visitors.

Even for someone whose Web presence is not so high profile, it still makes sense to inventory online assets and make sure an appropriate person can access them in the event of death or incapacity. This could be done, for example, by creating a trust.

Source: The Wall Street Journal, "Make Sure You Know Who Will Inherit Your Twitter Account," Arden Dale, September 18, 2013

Happy Monday, September 23, 2013

Good morning and Happy Monday. Yes, I said happy Monday. Of course, I may be brushing against the grain with that particular salutation - Mondays being the formidable exit from the wekend that they are. But, let's just begin by considering it a new day for a new way.

Last week I posted several items running the gambit from Alimony and Estate Planning to Landlord Tenant and Corporate Law. Many may have no concerns regarding these matters. -- some may. If these items helped you in any way, I am grateful for the opportunity to help. If not, please, feel fre to post any questions regarding any legal concerns you, or someone you know, may have.

I am indeed fortunate to be in a position to direct people with questions regarding the law. I also encourage interaction on this blog. Questions lead to more questions, as do answers. Perhaps a particular response prompts further inquiry. Don't be shy. You may even disagree with something that I write. I welcome such challenge as an opportunity to further explore my own ideas, and increase my knowledge regarding any topic.

I look forward to interacting with you.

As I stated earlier.....Happy Monday : it's a new day and a new way.

Thursday, September 19, 2013

Massachusetts Landlords: Tenants From Hell

Massachusetts Landlords: Tenants from Hell

Using best practices to screen and select good tenants is the most important thing a Massachusetts landlord can do to avoid costly non-payment and eviction problems down the road, as I have posted about on this Blog. As the saying goes, an ounce of prevention is worth a pound of cure.

In my 17 years of practice, I have come across a sub-set of tenants which are extremely dangerous to Massachusetts landlords. They should be avoided like the Plague. I like to call them Professional Tenants.

Let me give you the profile of a typical Professional Tenant. (This is a generalization based on my personal experience, but it’s fairly accurate).

■History of eviction history and/or delinquency with prior landlords

■Surprising (and dangerous) knowledge of Massachusetts landlord-tenant law

■Background in real estate, engineering, contracting

■Marginal to bad credit: prior history of nonpayment collections, judgments or bankruptcies

■Gaps in rental history

■Non-existent or incomplete prior landlord references

The Professional Tenant’s Scheme

Shortly after moving in, they will start to complain about small issues with the rental property. Some will complain to the local board of health to have the landlord cited for code violations. (The state Sanitary Code can trip up even the most conscientious landlord.) Then the Professional Tenant will stop paying rent, claiming they are “withholding rent” due to bad property conditions. Of course, these tenants completely ignore the smart practice that any withheld rent be placed in an escrow account. Then the Professional Tenant will assert the landlord violated the last month rent and security deposit law, and ask for their deposit back, trying to set up the landlord for a triple damage claim.

In the meantime, months go by and the Professional Tenant has failed to pay any rent and the minor code violations, if any, are repaired. The landlord is forced to start eviction proceedings, only to be met with a slew of counterclaims and defenses from the Professional Tenant. The Professional Tenant then sends the landlord a myriad of document requests and interrogatories which automatically delays the eviction hearing by 2 weeks. If the Professional Tenant is really savvy, they will demand a jury trial, which in most small District Courts can delay the eviction by weeks and typically months. Meanwhile, the entire time, the Professional Tenant has still not paid any rent.

Months and thousands of dollars in attorneys’ fees later, the landlord finally gets his day in court. And the Professional Tenant doesn’t show up, leaving the landlord with a worthless judgment for thousands in unpaid rent and a trashed apartment.

Screen and Screen Again

The sad thing is that because Massachusetts landlord-tenant law is so tenant friendly, there is not much a landlord can do to avoid this situation, other than not rent to the Professional Tenant in the first place! Once a landlord has signed a lease with a Professional Tenant, they are stuck until the tenant violates the lease. My advice to landlords is to make screening the most important thing you do as a landlord, and do the following:

■Invest in good credit history checks.

■Follow up with landlord references

■Check employment info

■Check prior bankruptcies

■If someone seems fishy, they probably are

If you find yourself stuck with a Professional Tenant, give me a call. There are certain things an experienced eviction attorney can do to prevent or minimize these shenanigans. At least you will be fighting back against what I perceive as scam artists.

A Landlord's Guide to Massachusetts Evictions

A Landlord’s Guide to Massachusetts Evictions

Massachusetts Summary Process Evictions: An Unlevel Playing Field For Landlords

How do you evict a tenant in Massachusetts? In Massachusetts, evictions are called “summary process.” According to the rules governing eviction cases, summary process is supposed to be “just, speedy, and inexpensive.” In practice, however, summary process can be anything but that. In fact, as I always inform my landlord clients, Massachusetts is one of the most tenant friendly states in the country, and an eviction can be costly, frustrating and unfair to landlords. In some cases, it can take many months to evict a tenant.

Further, Massachusetts eviction practice is loaded with traps for the unwary and procedural complexities for landlords. Landlords who represent themselves do so at their own peril and will often arrive at court with their cases dismissed for not following these requirements. It’s not a do-it-yourself situation.

Grounds For Eviction

A. Non-payment

There are several common grounds for evicting a tenant. The most common is for non-payment of rent. In these cases, the landlord must send the tenant a statutory 14 day “notice to quit” before starting the eviction process. The 14 day notice to quit must be drafted carefully, and the best practice is to have it served by a constable or sheriff to ensure proof of delivery. The landlord must prove in court that the tenant received the notice, and service by constable or sheriff will automatically qualify as “good service.” Certified mail is not good enough as tenants can avoid pickup. Having an experienced eviction attorney draft the notice to quit can prevent have your case being “dead on arrival.”

B. No-Fault

Another common ground for eviction is for termination of a 30 day tenancy at will, otherwise known as a no-fault eviction. Again, a 30 day notice to quit must be served on the tenant before commencing an eviction. Landlords often trip up on this type of notice with short months. In practice, judges will often give tenants in no-fault evictions a bit more leeway in terms of vacating the premises.

C. For cause

“For cause” evictions encompass the range of bad behavior by tenants in violation of lease provisions. It could be illegal activity, drug use, excessive noise, uncleanliness, harassment of other residents, non-approved “roommates” and the like. Like all other evictions, the landlord must issue a notice to quit to the tenant stating the specifics of the offenses. “For cause” evictions are the most involved of all evictions as the landlord must offer proof by way of live testimony of the tenant’s violations of the lease. Getting police officers to show up for an eviction hearing can be challenging. For drugs and other illegal activity, Massachusetts also has a special expedited eviction process.

Going to Court

Starting an eviction requires the preparation and service of a Summary Process Summons and Complaint. You can choose to file your case in the local District Court or the Housing Court which is specialized to hear evictions. The Housing Court fees are less expensive, but can be busier. Some Housing Court judges have the reputation of being tenant or landlord friendly as well. Some would probably be happier retired and playing golf. It’s a tough job these days.

The summary process summons and complaint form is complicated to the layperson. It must be first served by a constable or sheriff on the tenant. Then, no less than 7 days after, it must be filed with the court by the “entry date,” which is always a Monday. The hearings are almost always on Thursday morning. Again, it’s best to have an experienced Massachusetts eviction attorney handle the legal paperwork.

This can be the start of frustration for the landlord, as the tenant has a right to file “discovery” – formal requests for information and documents – from the landlord, which will automatically delay the hearing for two weeks. The tenant also may assert defenses and counterclaims against the landlord. These can range from improper notice or service, unsanitary conditions, no heat/hot water, failure to make repairs, retaliation, discrimination, and violations of the security deposit law—which carries triple damages and attorneys’ fees. (See my prior post on security deposits). Regardless of the merits of such claims, these defenses and counterclaims make the eviction process more complicated, time-consuming, and expensive.

Agreements for Judgment and Mediation

Eviction sessions are very busy. In some courts, there are over 100 cases stacked up on any one day and only one judge to hear them all. Accordingly, the courts will encourage parties to work out their differences on their own through mediation which is an informal sit-down between the parties to discuss ways to resolve the case. Some courts have housing specialists who can preside over the mediation session. Mediation is always non-binding so if no agreement can be reached you can proceed to a trial.

In the Housing Court, there are trained housing specialists who facilitate the mediation process. There are many advantages for landlords to mediation, and I almost always recommend giving it a try. The end result of a mediation is for the parties to sign an agreement for judgment. In a non-payment case, you can structure a payment plan and/or voluntary move-out. For a “cause” eviction, you can provide for a “last chance” agreement or move-out. The major benefit for landlords is that an agreement for judgment becomes a binding court order and the judge is supposed to enforce it upon proof of a violation. It also shows the judge that the landlord has been reasonable and accommodating. Experienced Massachusetts eviction attorneys will also make the tenants waive their rights to appeal and right to delay the case any further so as to avoid last minute requests for more time to vacate.

On the other hand, sometimes the situation is untenable and you have to go before the judge. Some judges hold a basic hearing, giving both sides the opportunity to speak. Some judges, particularly in the Housing Court, are more formal and require an actual trial with live witnesses and exhibits. I’ve had hearings last one minute and jury trials in eviction cases go on for days. But I’m always prepared to put on a case on for trial, as I always have my client present in court or on standby.

Appeals

Tenants in eviction cases do have a fairly robust right of appeal which can greatly delay resolution of the case. (A good reason in and of itself to do an agreement for judgment waiving appeal rights). However, in certain cases, the landlord can ask the court to impose an appeal bond so the tenant must pay rent into court to proceed with the appeal. Most tenants do not have the financial ability to do that, so that will terminate the appeal.

If you have any questions or need assistance with a Massachusetts summary process eviction, please contact me.

Alimony Reform Act 2012

The New Alimony Reform Act and its Impact on Women

The new Alimony Reform Act, effective March 1, 2012, changed the game in Massachusetts for divorce. This new alimony law (the first in Massachusetts in 37 years) eliminated “lifetime” alimony, creates durational limits on the length of alimony awards, and creates four distinct types (general term, rehabilitative, reimbursement, and transitional) of alimony. For the sake of your financial security, you need to be aware of this new law and inform your friends and daughters.

In the 1960’s and 1970’s, marriage was viewed as a partnership where the wife/mother’s contribution as homemaker was as important and valuable as the husband/provider’s contribution as breadwinner. The old common law language required the husband to support his wife in the marital lifestyle “to which she had become accustomed.” Alimony developed as a means to provide for the continued support and maintenance of an economically dependent spouse following a divorce, and it was generally for life. It was seen as a matter of basic fairness.

In practice, though, alimony laws weren’t always so fair. Judges enjoyed broad discretion in deciding whether or not alimony was warranted in any given case. One person could be denied alimony by one judge—but would have the opposite result if she had the luck of being assigned a different judge. Since alimony was generally awarded without a specific time limit, some ex-spouses were forced to pay alimony for many years longer than they were married. Other ex-spouses chose cohabitation—sometimes holding themselves out as husband and wife to the community—instead of legal remarriage, just to continue to receive alimony payments. Over time, demand grew for reform.

And reform is what we got. The new Alimony Reform Act creates four distinct categories of alimony: rehabilitative alimony (support to help a person become self-sufficient within 5 years), reimbursement alimony (support awarded in short-term marriages to compensate for prior contributions to the payor’s financial resources, such as financing the payor’s education), transitional alimony (support awarded in short-term marriages to help the recipient adjust to a relocation or change in lifestyle), and general term alimony (regular payments of support based on the number of months a couple were married, usually in an amount equal to 30-35% of the difference in the parties’ incomes).

What’s more, alimony is NOT now for life. The Act provides that Alimony terminates when the payor reaches full retirement age. Further, a spouse’s cohabitation with a sexual partner for more than 90 days may result in the suspension, reduction, or termination of alimony payments. And this does not just apply to new divorces! Previously divorced persons may seek the new benefits offered by the Act by returning to Court to modify their previous divorce judgments (provided they have met the “waiting periods” detailed in the Act).

What does this mean to women? Divorcing women cannot expect to be supported by their former spouses for remainder of their lives. Women are well-advised to develop a reasonable plan to become self-supporting, particularly if they are married for fewer than 20 years (which is the date that courts in the Commonwealth can consider awarding alimony for an indefinite length of time). Women who currently receive alimony need to take action right now to plan for the inevitable end of alimony in their “golden years.” (Although it is not entirely clear, the Act suggests that providers/husbands may be permitted to continue to work beyond retirement age and have no obligation to pay alimony to their former spouses even if the marriage was longer than twenty years.)

And here is what it means to your daughters: Young wives and mothers who choose to “stay at home” will NOT (in most cases) be compensated in the future for setting aside their careers or minimizing their professional development—even if doing so was a great benefit to the family, and even if their choice was enthusiastically supported by their ex-spouse at the time. Our daughters need to know that they are wise to pursue life choices that create economic independence both prior to and during marriage by actively engaging in their careers/professions/businesses, even while raising children. Given the enormous number of failed marriages, particularly in the category of ten or less years, caretaker spouses cannot count on their former spouses to provide for them while raising children or after the children are emancipated. If you don’t want to be supporting your daughter when she gets divorced, advise her to be able to stand on her own two feet.

The passage of the Massachusetts Alimony Reform Act of 2011 largely ends an era where wives/mothers can stay at home to raise their families expecting that their futures will be financially secure in the event of divorce. Nothing in the Act has changed the original statute’s equitable division of property. However, few divorcing couples are able to live the rest of their lives on a share of the assets amassed during marriage. Women and their daughters need to invest in themselves and the creation of their own economic security.

As always, if you have any questions regarding this post, please feel free to contact my office.