Landlords: Beware of Dog

The Iowa Court of Appeals recently had before it a sad (sad for the child that was injured and sad for the dog) and somewhat surprising dog-bite case in which they decided that a fact question was created, necessitating further review, when a landlord had knowledge that a dog had a propensity towards violence and yet that landlord allowed the dog to remain on the property.

The abbreviated facts are as follows:  Landlord's son, who was also a tenant, had a German Shepard as a pet.  German Shepard was kept outside, possible neglect occurring (Disclosure Alert: dog owner writing this blog post). German Shepard attacks neighbor.  Landlord/father is aware that tenant/son's dog attacked neighbor.  Steps are taken to insure that dog does not get loose again.  Tenant/Son sent jail for unrelated matter.  Dog left in fenced in yard (testimony showed neglect).  Landlord/father insists that dog be removed.  Son/ex-tenant threatens suicide, father/ex-landlord relents.  Dog eventually escapes and severely injures neighbor boy.  Court of Appeals finds, among other things, that a fact issue requiring further review had been created as to whether the landlord was negligent in allowing a dangerous dog to remain in his property.

The lesson:  If you are going to allow your tenants to have pets you should have your tenants provide you with information regarding the animals demeanor and any past displays of abnormal aggression.  Also, you should put a provision in your leases that would allow you to terminate the lease should you become aware of an animals aggression and after such aggression the tenant refuses to find alternate accommodations for pet. 

Photo by flickr

When S/He Won't Pay

On May 20, 2008 a man from central Florida will stand in front of a Judge and possibly be sentenced to five years in prison for failing to pay hundred of thousands of dollars in child support. Robert Abraham, age 65, pleaded guilty in mid-March to failing to pay $651,000 in child support for his three children. The charges marks the first time anyone in his county of residence has been charged with a felony for neglecting to make child support payments.

Often custodial parents face the same ordeal, although owing hundred of thousands of dollars is rare. In Iowa, the custodial parent can bring a contempt action in court for non-payment and each missed monthly payment may be the basis for individual counts of contempt. If the non-custodial parent has missed many months, the counts can add up (26 counts in a case I handled last year). The court can employ many remedies which are set out in the Iowa Code including forcing the non-custodial parent to post bond equal to months of future-owed payments, fines and jail time - up to 30 days for each finding of contempt.

Abraham further demonstrated his lack of intelligence when he declined to settle his $651,000 child support debt for $200,000.

Dealing with Planning for Parents

A couple of recent posts here and here serve as good reminders of the importance on open discussions with your parents or grandparents as to their assets and plans.  While it may difficult to bring the topic up, a brief moment of discomfort may help to avoid future headaches and family disputes.  Once you broach the topic, it get becomes easy to cover some of the key points.  Some possible openings to consider:

  • "Mom/dad, we just completed our own estate planning and wanted to let you know that we used ******** to help us with our planning in case something happens to me.  Who have you used to handle your affairs?"
  • "Isn't that awful about the situation that ********** is in with his parents.  I understand that it has been a  nightmare to get those issues sorted out.   I hope you have taken steps  so that we don't have a similar experience."
  • "Mom/dad, you're no longer a spring chicken.  Let's talk about how much money I'm getting when you croak and discuss your spending habits."
And for you parents, don't leave it up to your kids to make that first move.  Take advantage and promote a dialogue.

What to Do When Someone Living in Iowa Dies

Besides taxes, the other sure thing in life is that it comes to an end eventually.  A common question becomes "what's next?"  (I'll skip the whole afterlife heaven and hell discourse and stick to the worldly issues.)  And of course you have the whole "what to do with the body issue".

Depending on the planning that was done beforehand will dictate a lot that will be done afterwards.  For example, if the decedent properly used a revocable trust, it may not be necessary to go through the probate process.  Good planning and organization prior to our "time" is important in helping to alleviate the work that our family and friends are forced to go through.

Transfer of Assets

If all of the assets were held jointly, it may not be necessary to go through the probate process, although there may be some other advantages with going through probate.  Also, if the asset has a named beneficiary (e.g. life insurance, IRA, etc.), that asset will pass automatically and not subject to any will, trust or other dispositive document.  Otherwise, other than joint assets or named beneficiaries, the estate plan of a will, trust, or the state's plan will determine where those assets go. (And it might not matter that you're the child from the first marriage or dad liked you the best.)

Payment of Bills/Claims

Depending on financial situation of the decedent, there may be certain bills and expenses that need to be paid.  Through certain publication processes in the probate process, all potential claims can be "pulled out of the woodwork" in order to determine how much should be paid and whether it is a valid debt or not.   Also, if the decedent was receiving certain public assistance benefits (e.g. Medicaid) during life, of if the decedent's predeceased spouse received such benefits, there may be a lien against any remaining assets that follows those assets.

Taxes

In Iowa, if the only beneficiaries are a surviving spouse, children, grandchildren, parents or other lineal descendant or ascendant, there is no Iowa Inheritance tax and no need to file an  Iowa inheritance tax return.  There are some issues if there have been certain gifts within the past three years which should also be examined.

Federal estate taxes are normally not applicable for estates less than $2,000,000 (for 2008).  If the estate is below that figure, typically it is not necessary to file a federal estate tax return.  Again, gifts during life of the decedent are important to review also.

Summary

This list is not meant to be exhaustive, but mainly as a guide of some items to consider when it becomes necessary, and hopefully help you choose to do some proper planning ahead of time.  You should consult with an experienced attorney when it becomes necessary to sort through all of these items.

National Healthcare Directives Day

I missed it last week, but April 16th was National Healthcare Decisions Day 2008.  Most people have an opinion on what type of medical treatment they would receive if they had the opportunity to visit with their healthcare provider.  It certainly makes sense that one would want to establish ahead of time what type of medical treatment if they weren't capable of visiting.  Unfortunately, a 2003 article reported that less than 50% of severely or terminally ill had an advanced directive in their medical record.

If you don't have an advanced directive already, take steps to have one signed.  Then, after getting it signed, the next step is to have it included as part of your medical record.

Striking Back

Apparently there is now YouTube Divorce. In an effort to have the last salvo, Tricia Walsh-Smith (an actress and playwriter), posted a YouTube video in which she lashes out against her prominent soon-to-be-ex-husband, Philip Smith, president of Shubert Organization (the largest theater owner on Broadway). She spills intimate details of their marriage in an effort to leave a lasting imprint of humiliation.

Ms. Smith goes through their wedding album on camera, describing family members as "bad" or "evil" or "nasty," and talks about how her husband is allegedly trying to evict her from their luxury apartment. She also makes embarrassing claims regarding their intimate life, and then calls his office on camera to repeat those claims to a stunned assistant. Part of Ms. Smith's anger arises from a prenuptial agreement she signed. While the terms and conditions were not disclosed, one can assume from her behavior that she will get little, if anything, from her divorce.

This behavior teaches us two things: first, always have an attorney review any prenuptial (or antenuptial agreement for that matter) with you before you sign. While love is blind, money is not. Second, Ms. Smith's behavior, although envied by many who have gone through tumultuous divorces, may not sit well with a judge. Judges make decisions partly on a person's judgment. If Ms. Smith challenges the validity of the prenup, her recent YouTube escapade may have some impact on the ruling, especially her credibility.

Guns in the Workplace

Florida Governor Charlie Crist signed a controversial fire arms bill today.  On the anniversary of the Virginia Tech shootings and in light of increased violence in schools and the workplace, increased laws controlling guns might be expected. However, the new Florida legislation allows employees to keep legally owned guns locked in their car during work hours so long as the employee has a permit to carry a concealed weapon. The new law is getting mixed reviews.  Employers are understandably upset as they are prohibited from promulgating policies concerning guns on their property.  Proponets believe it is a constitutional right of all citizens.

Currently Iowa employers are still allowed to set forth their own policies concerning guns in the workplace and on company property.

Good Tenants Make Good Landlords

Four Legacies Mortgage - Chief Inspiration Officer - Brent Rauch recently put together an informative article addressing the phenomenon of accidental landlords  if you review his article pay special attention to the section titled: Tenents of Tenants. 

It has been my experience that the wrong tenant can make being a landlord a nightmare (side note: the 1990 movie Pacific Heights with Michael Keaton, Melanie Griffith and Matthew Modine comes to mind).  Making a poor choice when deciding on a tenant can turn the once profitable rental property into a money-pit.  The inconsiderate tenant will eat into your profits both though extra damage to the realty and through the non-payment of rent.

Bottom line for success as a one or two unit landlord:  First, choose a property that will increase in value at least as much as your market average. Second, just as Brent suggests, do your due diligence when selecting a tenant to rent your property and with a little luck you just may find that being a landlord can be both enjoyable and profitable.

Iowa Legislature Passes Smoking Ban

Final CigBased on the premise of worker protection, the Iowa House and Iowa Senate worked out a compromise and have passed a smoking ban for most public locations.  The bill will be signed by Governor Culver and will go in effect July 1, 2008.  Gambling areas of casinos, outdoor areas of bars, outdoor areas of county and state fairs and a few other designated areas would still permit smoking under HF 2212

It took bipartisan support to get this bill passed, by a close margin.  The controversial exemptions created issues, as did the mere fact of the perceived intrusion into individual liberties.

I'll just enjoy going out for dinner and drinks and not smelling like an ashtray.

Celebrity's Estate Planning Miscues III - Britney Spears

All of the glamor and attention of Hollywood celebrities provide an effective example of how important proper estate planning can be and how even the rich and famous can fail to properly plan, despite their vast resources.  I've previously mentioned mistakes and oversights by Heath Ledger and Anna Nichole Smith.  As Steve Follet with the Arizona Estate Planning & Probate blog points out in his post, Britney Spears failed to properly fund and maintain her trust that she established.  Now, with the "issues" in her life, court involvement and publicity will continue to provide fodder for entertainment shows...and estate planning attorneys.  You gotta love Hollywood.