California Wage and Hour Lawsuits Spreading to Mom’s Living Room

At home caregiver_1In a recent post, we discussed the hazards, from a tax reporting perspective, of erroneously treating California caregivers as independent contractors as opposed to employees.  If a caregiver is an employee (as is often the case), her employer also must comply with the various wage and hour rules that apply to the employment relationship.

Many elders and their families simply pay caregivers a straight hourly rate for 12 or 24 straight hours of work.  This approach, though convenient, may set the stage for employment litigation against the elder.  Below, we’ll discuss the two sets of rules that apply to California caregivers depending on the nature of their work – those who employ caregivers will need to pick the right set of rules and follow them. Continue Reading

Watch Out for Tax Issues When Paying California Caregivers

At home caregiverHired caregivers (also known as home care aides) permit many California seniors to remain in their homes as they age and need assistance with activities of daily living.  Yet from my window looking out at Sacramento, I can see massive liability associated with the classification and payment of such workers.  Consider that baby boomers are now entering their 70s and a 75-year-old American has a life expectancy of 12.2 years.  A growing number of seniors will need help.

Let’s say Dad has advancing dementia, perhaps caused by Alzheimer’s disease, and needs round-the-clock caregivers to help with cooking, cleaning, toileting, and dressing.  His daughter, perhaps as agent under his power of attorney or as a trustee of his trust, hires a home care agency, at a rate of $25-plus per hour, to provide multiple shifts of caregivers.  Then one of the caregivers offers to work directly for Dad (and to bring in others to do the same) at a straight hourly wage of $15 per hour.  This could save $250 or more per day, which will add up quickly as the weeks pass.

What’s wrong with this approach?  Federal and California law likely treats caregivers as employees of the elders they serve.  If the elder’s family ignores the assorted legal requirements associated with the employer/employee relationship, the elder (or his beneficiaries when he dies) may face hefty liability on two fronts.  As we’ll briefly discuss below, tax authorities may seek taxes, interest and penalties.  In a later post, we’ll explain how caregivers may sue for unpaid overtime and failure to provide meal and rest breaks – indeed, California law encourages such suits by awarding legal expenses to prevailing plaintiffs. Continue Reading

Sacramento Appellate Court Rejects Personal Liability for Legal Fees in Trust Disputes

The Exchange of MoneySince California trustees generally can use trust funds to pay lawyers to handle disputes, litigation can drain away the funds available for distribution to beneficiaries.  Hence, an overaggressive beneficiary can pursue litigation that penalizes all beneficiaries, even those who have no responsibility for the fight.

Last week the California Third District Court of Appeal, based in Sacramento, clarified the scope of liability for litigants who act in bad faith in trust disputes.  In Pizarro v. Reynoso (2017) ___ Cal.App.5th ___, the Court of Appeal ruled that a probate court’s equitable authority to charge the trustee’s legal expenses against a party who has litigated in bad faith is limited to the party’s share of the trust estate and does not extend to the party’s personal assets. Continue Reading

A Friend Request From The Beyond: California’s New Post-Death Digital Assets Law

Digital AssetsNext time you schedule an appointment with Downey Brand’s Sacramento office to revise your estate plan you will have a new question to consider: who will manage your Facebook account when you’re gone?

Assembly Bill No. 691, which became effective on January 1, 2017, attempts to aid in that process.  It is commonly called the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”), and it establishes a scheme for designating who is entitled to access your online accounts (and what portions of those accounts) after your death.  The Act has been added to the California Probate Code at sections 870 to 884. Continue Reading

Sacramento Financial Elder Abuse – Next Steps for Victims and Their Advocates

Christine Ann Cooper

Booking photo of Christine Ann Cooper

Elder financial abuse is all too common in Sacramento County and elsewhere.  The abuser, often a family member or caregiver, drains away the resources of an elder or dependent adult who cannot work to replenish them.  By the time the theft is discovered, the money may be long gone and the victim may be saddled with debt.  What can the victim do?

In a recent post, I commented on how often elder financial abuse cases often go unprosecuted in California, to the chagrin of victims and their families.  A week after that post, the California Department of Insurance announced the conviction in Placer County Superior Court of Christine Ann Cooper, who was arrested in Sacramento County and ultimately sentenced to 18 months in jail after embezzling approximately $129,000 from her mother’s trust accounts.  According to the Department, Cooper wrote checks to herself from the accounts over a nine-year period and falsified records to conceal her thefts.

Contact with local law enforcement eventually may result in prosecution, but victims and their advocates should take a multi-faceted approach.  Continue Reading

A Sacramento Estate Planner Shares Thoughts on Conflict Avoidance

John Goralka Headshot

John Goralka, estate planning attorney at Goralka Law Firm

I asked estate planning attorney John Goralka, of the Goralka Law Firm in Sacramento, to share his thoughts on working with clients to avoid disputes over their estate plans.

John has been a lawyer since 1988.  The State Bar of California has certified him as a specialist in both Taxation Law and Estate Planning, Trust & Probate Law, a dual certification held by relatively few California attorneys.

Tell me about your personal and professional background.

Family is important to me.  I grew up on a ranch in the Livermore Valley in Alameda County with five brothers and three sisters.  I feel truly blessed to have grown up in a large family.  We remain close and enjoy spending major holidays and other gatherings throughout the year together.  Each of my siblings has an advanced degree, which is a testament to my parents.  Our family get-togethers are never quiet or boring.

I founded the Goralka Law Firm in 1996.  The firm helps successful families, business owners and real estate owners achieve their enlightened dreams by minimizing taxes, better protecting assets, resolving transitions, and even cleaning up messes from time to time. Continue Reading

Notice of Proposed Action May Quiet Back Seat Driving Beneficiaries

Woman in backseatActing as a trustee can be a thankless and time consuming job, especially when the reward at the end is nothing more than second-guessing from trust beneficiaries.  In our Sacramento-based trust and estate practice, we represent trustees who have strained relationships with beneficiaries, whether their siblings, step-relatives, or otherwise.  One useful tool to help trustees manage those relationships is the Notice of Proposed Action.

The notice procedure allows a trustee to obtain immunity from breach of trust claims without (1) obtaining an order from a California probate court, or (2) waiting three years for the statute of limitations on breach of trust claims to run. Continue Reading

California Trust Conflict Avoidance – A Bank Trust Officer’s Perspective

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Chris Ann Bachtel, Senior Vice President and trust manager at First Northern Bank

This week we share a perspective on California trust conflict avoidance from Chris Ann Bachtel, who is a Senior Vice President and trust manager at First Northern Bank, a regional bank founded in 1910 with branches across Northern California.

Tell us about your background.

I majored in Speech Communications and Theater at Wake Forest University.  Despite that major, I entered the business world immediately after graduating.  Nearly 34 years ago I started as an Administrative Assistant in Wells Fargo’s Santa Barbara Trust Department.  I was a quick study and learned to love the business (or loved to learn, I should say).  I have handled every aspect of trust work through the years – operations, administration, compliance, and a lot of business development.

Fifteen years ago, I was asked to start the trust department by my current employer, First Northern Bank.  Since then we have remained the only locally-headquartered trust department in the Sacramento Region.  Our trust department consists of myself, my colleague Alysia Corell,  operations staff, and a portfolio management team.  Alysia and I are Certified Trust and Financial Advisors. Continue Reading

Are California Trusts that Favor Spouses Presumptively Invalid?

Receiving giftsWhen Wife works with her Sacramento estate planning lawyer to favor her Husband over her children from a prior marriage in her trust, does California law presume that Husband exerted undue influence over the Wife to gain a benefit?  Until 2014, most California trust and estate lawyers would answer that question in the negative.  Favoring a current spouse over other potential beneficiaries is a common and natural choice in estate planning.

Yet a California Court of Appeal based in San Jose took the opposite position in Lintz v. Lintz (2014) 222 Cal.App.4th 1346.  The Lintz case casts a shadow over millions of “honey I love you” wills and trusts in the Golden State.  Until the California Legislature or Supreme Court resolves this question, step-children will invoke Lintz in an effort to gain the upper hand over step-parents.  This post will discuss the inconsistency that Lintz recently has created in California law. Continue Reading

It’s Rigged: How Our California Trust and Estate Litigation Blog Was Dragged into Election 2016

VotingAs a trust litigation attorney in Sacramento, I seldom see overlap between bare knuckle political campaigns and family inheritance disputes. So, on the eve of a big election, it seems fitting to report on a new case that bridges political and family conflicts. Continue Reading

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