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Many widows and widowers simply do not like living alone after their beloved spouse dies. As widows and widowers increasingly meet and decide to get remarried, they need to be aware of important estate planning considerations. As the life expectancy of people in the United States dramatically increases, the reality of second and third marriages becomes more likely. Widows and widowers are increasingly likely to meet and decide that a second marriage is an excellent way to avoid spending their golden years alone.

A remarriage can be one of the best parts of a senior’s life. However, a remarriage later in life often creates a unique set of legal questions. For example, many older clients take for granted that their adult children will inherit from them when they pass away. The reasoning behind this assumption is because the majority of their property and life have been spent with their previous spouse, who was often a co-parent to those children, and the one who helped to build or sustain the family assets.

However, a new marriage means that the marital property is governed by the laws of the new marriage. If there is no prenuptial agreement, then the surviving spouse would, under the laws of New Jersey, inherit at least one-third of the estate. This means that the adult children from the first marriage might be in for a rude awakening. A large part of the children’s inheritance might be “swallowed up” by the second spouse’s right to inherit one-third of her new husband’s estate.

The problems that are created by second marriages should not be taken lightly. It is important to talk these things through with your future spouse. Chances are, he or she also wants to make sure that adult children receive assets. If you don’t have a frank discussion with your would-be spouse, you may end up causing your loved ones a great deal of heartache and confusion as they struggle to figure out what would be best and what you would have wanted.

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The franchise agreement is the cornerstone document of the franchisee–franchiser relationship. It is this document that is legally binding on both parties, laying out the rights and obligations of each. A sample agreement may either be attached to the disclosure statement or presented separately. Either way, you are entitled to receive it as a prospective franchisee five business days before signature. You should have it reviewed by a lawyer familiar with franchise matters–especially since most agreements are extremely one-sided in favor of the franchiser. No one should enter into a franchise and expect to have an evenly drawn contract.

The agreement will contain provisions covering, in considerable detail, the obligations of the franchiser (the company) and franchisee (you) regarding operating the business; the training and operational support the franchiser will provide (and at what cost); your territory and any exclusivity; the initial duration of the franchise and any renewal rights; how much you must invest; how you must deal with things such as trademarks, patents and signs; what royalties and service fees you will pay; tax issues; what happens if you should want to sell or transfer the franchise; advertising policies; franchisee termination issues; settlement of disputes; by the company, operating practices, cancellation, and attorney fees.

There is no standard form of franchise agreement because the terms, conditions, and the methods of operations of various franchises vary widely depending on the type of business involved. For example, franchises for printing, employment agencies, and automotive products will differ from the franchises for fast food service, convenience stores, or clothing.

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If a spouse dies, then the surviving spouse may elect to take a one-third share of the deceased’s estate. This is called an elective share. Basically, a spouse can’t be disinherited. The surviving spouse has a right to the elective share. The only way that a surviving spouse can be completely disinherited is through a prenuptial agreement, where both spouses can agree to waive any claims to an elective share of each other’s respective estates.

Your elective estate includes not only property in your name alone, but also most assets with beneficiary designations such as bank accounts, securities, IRA accounts, your interest in jointly-held property, annuities, certain interests in trusts, the cash value of life insurance, and even property that you might transfer to a child during the one-year period preceding your death. In other words, you cannot easily ignore your spouse’s rights to his or her elective share. Many clients ask me how the surviving spouse will be able to claim his or her share if the assets are left in trust for a child. The answer is that the surviving spouse can file a probate proceeding and force the child to return the assets to satisfy the elective share obligation.

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The ADA prohibits private employers, state and local governments, employment agencies and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions, and privileges of employment. The ADA covers employers with 15 or more employees. To learn more about what constitutes a disability and what accommodations employers are required to provide to workers with disabilities, check out the Equal Employment Opportunity Commission’s ADA page here.  To get an idea of the full scope of ADA protections beyond the employment context, visit the ADA information page here.

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Due to an increased life expectancy, a 50% or higher divorce rate in the United States, and an increasing amount of second marriages, prenuptial agreements are now widely accepted. It is very important for seniors to approach the idea of a prenuptial agreement with an open mind. It must be emphasized that a prenuptial agreement does not mean that you are planning to get a divorce, or that you do not trust your new spouse. Instead, senior couples are now recognizing the seriousness of their upcoming commitment of marriage. Moreover, senior couples are now communicating their concerns for the future financial security of their other relatives, and are expressing their respect for the hard-earned assets and accomplishments of their future spouse.

Although many people look at a prenuptial contract as rather “unromantic,” the reality is that individuals in middle and later life are likely to have more significant assets than younger couples. Additionally, seniors often have important financial obligations in the form of alimony or child support payments, hard-earned estates they wish to leave to their children, and emotional baggage from their previous marriages. In order to provide a solid foundation for their future marriage, seniors should consider sorting through their finances. They should also create a plan for how they will merge their economic as well as their emotional lives.

Seniors should not jump into the serious business of marriage. There are some very harsh consequences that can occur if a senior does not carefully plan for economic ramifications. Life is not a romantic experience. If seniors came with me to divorce court for a week, then at least half would choose not to get remarried. At this later stage of life, seniors should carefully prepare a detailed and comprehensive prenuptial agreement that addresses every aspect of their financial life.

There is a tragic story out of Virginia.  Apparently a 15 year old was riding his bicycle when a car approached him from the rear.

According to published reports, the car mosed into the oncoming lane to pass the cyclist. The young boy, however, then turned left in front of the car.

According to accounts, the young cyclist was wearing headphones as the time of the accident. Unfortunately, he died from injuries sustained in the accident.

The obvious but sad lesson is that wearing headphones while bicycling (and, for that matter, while running near traffic) is a recipe for disaster.

The Supreme Court of Minnesota rules that Medicaid may not recover from the estate of a Medicaid recipient’s surviving spouse if, at the time of her death, the recipient did not possess a legal interest in the property being claimed. However, the court also finds that federal Medicaid law does not totally preclude recovery from the estate of a surviving spouse of a Medicaid recipient.

Dolores and Francis Barg had been married for 53 years when Mrs. Barg entered a nursing home in 2001. Once she entered the home and began receiving Medicaid benefits, Mrs. Barg’s guardian transferred her joint tenancy interest in the couple’s home to Mr. Barg, individually. Mrs. Barg died in January 2004 without leaving a probate estate and Mr. Barg passed away five months later. The county Medicaid agency then filed a claim against Mr. Barg’s estate for the cost of Medicaid services paid on Mrs. Barg’s behalf. Mr. Barg’s estate contested a portion of the county’s claim and an appellate court decided that, under principals of real property law, Mrs. Barg possessed a one-half share of the property at the time of her death which could be recovered from Mr. Barg’s estate.

Mr. Barg’s estate appealed, arguing that federal Medicaid law preempts any recovery from the estate of a surviving spouse, and, even if recovery was allowed in some cases, the state could not recover from Mr. Barg’s estate because Mrs. Barg had transferred her property interest to Mr. Barg during her life, not through a transfer at her death. The county argued that Minnesota law allows recovery from the estate of a surviving spouse for any assets jointly owned by the couple at any point during their marriage.

The Supreme Court of Minnesota rules that federal Medicaid law does not preempt a state from pursuing all estate recovery against the estate of a surviving spouse because there is “sufficient ambiguity” in the federal statute authorizing estate recovery. However, the court also finds that the allowable scope of estate recovery is limited to assets that the Medicaid recipient had a legal interest in at the time of her death and voids a portion of the Minnesota estate recovery statute permitting recovery of assets in which the recipient did not have a legal interest. Since “Dolores had no interest in assets at the time of her death that were part of a probate estate or an expanded estate definition permissible under federal law … there is no basis for the County’s claim against the estate,” the court writes.

While long-term care insurance can be a good way to pay for a nursing home stay or a home health care worker, it doesn’t come cheap. Annual premiums vary significantly, depending on your age, health, and the type of policy, but policies can run as high as $5,000 per year. You do not need to pay that much, however. The following are some ways to reduce your costs.

• Shorter benefit period. The most significant cost-saving step you can take is to not purchase a lifetime policy. Unless you have a family history of a chronic illness, you aren’t likely to need coverage for more than five years. In fact a new study from the American Association of Long-term Care Insurance shows that a three-year benefit policy is sufficient for most people. According to the study of in-force long-term care policies, only 8 percent of people needed coverage for more than three years. By purchasing coverage for three, four, or five years instead of a lifetime, you can save thousands of dollars in premiums. If you do have a history of a chronic disease in your family, you may want to purchase coverage for 10 years, which would still be less than purchasing a lifetime policy.

• Buy younger. Long-term care insurance premiums rise as you age, so the younger you buy, the cheaper your premiums. Be careful, however, because insurance premiums can, and often do, increase considerably from your initial purchase price. Even if you have a policy that is “guaranteed renewable,” your premiums can still increase.

• Shared care policy. If both you and your spouse are purchasing long-term care insurance, a shared care policy might be able to give you more coverage for less money. With a shared care policy, you buy a pool of benefits that you can split between you and your spouse. For example, if you buy a five-year policy, you will have a total of 10 years between you and your spouse. If your spouse uses two years of the policy, you will have eight years. A shared care policy may cost more than separate policies with the same benefit period, but it will allow you to buy a shorter policy, knowing that you have a pool of benefits to work with.

• Longer elimination period. Most policies have a waiting period before coverage begins, typically 30-90 days. The longer you make this waiting period, the cheaper your premiums. Keep in mind, however, that you will have to pay for your care out of pocket until the waiting period is over and the insurance begins its coverage.

• Reduce the daily benefit. Instead of purchasing the maximum daily benefit you might need in a nursing home, you can consider paying for a portion of the daily benefit yourself. You can then insure for the maximum daily benefit minus the amount you plan to pay. A lower daily benefit will mean lower premiums.

• Inflation protection. Inflation protection increases the value of your benefit to keep up with inflation and is almost always recommended. But you can save on premiums by which method of protection you choose: compound-interest increases or simple-interest increases. If you are purchasing a long-term care policy and are younger than age 62 or 63, you will need to purchase compound inflation protection. This can, however, more than double your premium. If you purchase a policy after age 62 or 63, some experts believe that simple inflation increases should be enough, and you will save on premium costs.

You should also remember that your premiums may be tax-deductible. Premiums for “qualified” long-term care policies will be treated as a medical expense and will be deductible to the extent that they, along with other unreimbursed medical expenses (including “Medigap” insurance premiums), exceed 7.5 percent of the insured’s adjusted gross income.

The New Jersey Appellate Division in an unpublished decision, Cesar S. Arredondo v. Nersy Pujols, Docket No. A-5459-05T25459-05T2, ruled that breaches of both of a lease provision and a New Jersey statute for failing to obtain municipal permits before commencing construction work were NOT grounds for evicting a commercial tenant.  Although very fact specific to a landlord with apparently “unclean hands”, this decision highlights pitfalls that can beset a landlord in the New Jersey eviction process.

Cannot Evict for “Minor” Breaches (No Permits, No Insurance, Sidewalk Sales, Etc.)

The Appellate Division agreed with the trial court on the insurance issue and the landlord’s inconsistent testimony.  However, the Appellate Division held that the breach was “not material” to warrant the tenant’s forfeiture of his leasehold interest. The Appellate Division noted that the New Jersey statute specifically provides grounds for an eviction where there is a “…violation of such covenants or agreements” of the lease. See N.J.S.A. 2A:18-53.  However, before a judgment may be entered, the landlord must establish the breach. 

Citing New Jersey case law, the Appellate Division held an eviction based on a “forfeiture” is deemed a penalty for failing to do a particular thing.  In New Jersey, the law does not favor forfeitures and requires a trial court to strictly review the provisions of the lease that a landlord seeks to forfeit the tenant’s interest, resolving any ambiguous language in favor of the tenant.

Based on the testimony and review of the lease, the Appellate Division held the breach was a minor deviation of the lease terms.  The court held that the work was undertaken under the direct order of the plaintiff and done by an independent contractor.  Further, all work was done in a workman-like fashion and that pursuant to the Jersey City inspector, the defendant could retroactively cure any of the code violations by obtaining a permit. 

Concerns for Landlords When Instituting Eviction Action Payment Defaults

This unpublished decision raises a number of pitfalls for commercial landlords. In this case, the landlord clearly failed to submit the proper proofs.  Before instituting an action to evict a tenant, landlords should consider a number is issues including:

1)     What proofs do I have?  In this case, the landlord had serious inconsistent statement, whereas the tenant’s testimony was not questioned.  Further, the tenant had two additional witnesses to prove his case, one being a city electrical inspector; and

2)     Is the Breach “Material”?  Here, failure to obtain permits was not “material”.  However, would that have changed if what the landlord was cited for resulted in a fine or penalty from the municipality?

3)     Can the Breach be Remedied before Trial?  Here, the alleged breach of the lease became a non-issue because it was remedied prior to trial. What other breaches can be remedied?

Strategic Use of Eviction Proceedings

This and other recent decisions by the Appellate Division raise pitfalls for commercial landlords in eviction proceedings. Landlords may think to strategically use the eviction process as a way in which to make the tenants become compliant with the lease.  To lessen the legal costs, landlords should take care to place in their lease that the tenant is required to pay the landlord’s attorney fees. 

In the case discussed, although an eviction did not occur, the act of taking the case to trial precipitated the tenant to obtain the proper permits and get insurance.  However, if a landlord wishes to actually evict the tenant, it is extremely important to sit down with your attorney ascertain “minor” or technical breaches.

For more information on evictions or other commercial lease issues, please feel free to contact Christopher J. Hanlon at chanlon@hnlawfirm.com, Phone (732) 863-9900 Ext. 109.

If you are getting remarried, you obviously want to celebrate, but it is also important to focus on less exciting matters like redoing your estate plan. You may have created an estate plan during your first marriage, but this time it will probably be more complicated–especially if you have children from your first marriage or more assets. The following are some pointers for ensuring your interests are taken care of when you remarry:

• Take an inventory. The first thing you and your partner should do is each take an inventory of your assets and debts and share it with the other person. Don’t forget to include life insurance policies and retirement plans in your inventories. It is important to be open and honest about money if you want to prevent bad feelings in the future.

• Decide how you want to handle finances. Once you know what you are dealing with, then you need to decide if you want to combine (or not combine) assets when you are married. For example, if one partner is selling a house and moving in with the other partner, will he or she contribute to the cost of the house? If one partner has significant debt, you may not want to combine finances or make any joint purchases. These decisions need to be made upfront so everyone is clear on what to expect.

• Decide what you want to happen when you die. You and your future spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a complicated discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family. Again, open discussions can prevent problems in the future.

• Consult an elder law or estate planning attorney. Even if you don’t have a lot of assets, you should consult an attorney, especially if you have children. You will definitely need to update your will. You may also need to update or create other estate planning documents such as a durable power of attorney and a health care proxy. If you have significant assets, a prenuptial agreement may be appropriate. In addition, the attorney can help you decide if a trust is necessary to protect your children’s interests.

• Change your beneficiaries. You may want to change the beneficiaries on your life insurance policy, annuity, and/or retirement plan. If you are divorced, however, you may not be able to change some of the beneficiaries. Bring your divorce decree with you to the attorney so he or she can make sure you do not violate the decree. If you can’t change your beneficiaries, you may want to buy additional life insurance or retirement plans that will include your new spouse.

The most important thing to remember is to be open and honest with your future spouse and your family members about your wishes.