Dealing with Foreign Assets – What Do I Do With My Non-U.S. Property?

Now and again, I get a client who owns property in a foreign country. Unsurprisingly, they want to know how to incorporate this property into their estate plan successfully. Since every country has a different set of laws, and some countries may not recognize a U.S. will or trust, this is a tricky situation to deal with. If you’re lucky, you may be able to find an attorney familiar with the laws of both countries, but this magical lawyer is often hard to find. Absent that, here are a couple of approaches to dealing with foreign assets:

The first approach is to have one estate plan for your U.S. assets and another estate plan for your foreign assets. Each estate plan should be drafted by an attorney familiar with the laws of that country. This approach guarantees that your wishes will be honored in each country where you own property, and you don’t have to worry about foreign laws or taxes causing problems for your beneficiaries. The downside is that it’s more complicated than just having one plan. For example, you need to be careful that one plan doesn’t override the other, and you want to make sure your attorneys consider international tax issues, not just the tax issues for their country.

The second approach is to use an international will. An international will has more requirements than a regular will, but following these requirements will ensure that your will is honored in foreign countries. This is a bit easier than having two estate plans, but it’s important to remember that this will only work if the foreign country signed the treaty that set out the requirements for international wills. If the country your property is located in did not sign this treaty, and your will does not meet that country’s requirements for a valid will, then they may choose not to honor it. At this time, only 13 countries have signed this treaty, so an international will is only of limited use.

There are other options out there, but these two are the most common and, in my opinion, the easiest to implement. If you have questions about dealing with foreign assets,  international wills, or having multiple estate plans, please feel free to reach out at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

 

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Seven Things to Know About the Copyright Small Claims Court

The Copyright Small Claims Court is Now Open!  It’s been a long time coming, but the Copyright Claims Board is finally up and running, and copyright owners with small claims can now file them for consideration.

For those who missed my previous article on the subject, Congress passed a law in 2020 allowing the Copyright Office to create a small claims court. The purpose of the Copyright Small Claims Court is to help copyright owners who either can’t afford the expense of a full lawsuit or whose claims are so small it’s not worth the time and expense of a trial. Here’s what you need to know about how it works:

  1. Attorneys are not required. The system is user-friendly, so while attorneys are allowed, you don’t have to have an attorney to participate.
  2. All proceedings are online. No travel is required to have your case heard, and the process of submitting evidence is much more streamlined than in a formal court case.
  3. Monetary damages are capped at $30,000. Again, this is a small claims court. Even if you win, the amount of money you can be awarded is limited.
  4. Participation is voluntary. This could be the biggest drawback of the system – both parties have to agree to participate for the Copyright Claims Board to hear the case. If you file a claim and the other party refuses to participate or doesn’t respond, then your claim will not be heard, and you’ll have to go to federal court.
  5. The Board will only hear certain types of claims. The point is to resolve copyright disputes, which is all the Copyright Claims Board will rule on. If you have an infringement case, want them to decide if an activity would be infringing, or wish to dispute a DMCA take-down notice, then this is the right place for you. If you have additional grievances against the other party, you may want to consider filing in federal court.
  6. You can’t file the same case in federal court before the Copyright Claims Board. The point is for this to be an alternative to federal court. You can’t have your cake and eat it too – you have to choose one. You could switch from a federal case to the Copyright Claims Board, or vice versa, while proceedings are ongoing, but you can’t have both cases going at the same time. Once a decision has been made in one system, you can’t hop over to the other system in hopes of getting a better ruling.
  7. Options to appeal are limited. To keep things simple, once the Copyright Claims Board makes a decision, the decision is final. Therefore, they do not offer an appeals process. The only time they will reconsider is if you can show that there was a clear error of law or fact that affected the outcome of the case.

For more information, please see my previous article here, or look at the Copyright Claims Board website at https://ccb.gov/

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

 

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What Should I Put in My Trust?

One of the most frequent questions I hear at the trust signing is “What should I put in my trust?” It’s an excellent question, and the answer is a bit more complicated than “Everything.”

The house is a given. For many people it’s their highest-value asset, and if it’s not in the trust at the time of death the estate will almost certainly go into probate – or best case, the trustee must petition the court for permission to move it into the trust, which is less hassle than a full probate but still takes time and money. It’s much easier for everyone if the house is put in the trust shortly after signing.

Bank accounts and other investment accounts are a little trickier. In a perfect world, I would recommend that these assets also be placed in the trust. The problem with this is that most banks will change the account number when they convert the account into a trust account. If you have a lot of automated transactions set up (e.g. direct deposit for your paycheck or Autopay for your electric bill), it will be a big hassle to update all those transactions with the new account numbers.  So in most cases, I recommend that the client convert those accounts that don’t have a lot of automated transactions, such as their savings or money market accounts, and keep the bulk of their funds in these accounts, but leave their checking accounts alone.

Life insurance is a toss-up. Unless you’ve created an Irrevocable Life Insurance Trust (ILIT), it won’t make a big difference whether the policy is owned by you as a person or by the trust. In either case, the proceeds will go to whoever you’ve named as a beneficiary, and because it goes directly to a beneficiary it’s not subject to probate. Since it won’t make a big difference, there’s no real reason to go through the effort to put it into the trust. The better route for life insurance policies is to name your spouse as the primary beneficiary, and your trust as the contingent beneficiary.

Pay on death accounts, or any accounts with a named beneficiary, don’t need to be placed in a trust at all. They will pass directly to the beneficiary upon death, and will not be subject to probate.

Retirement accounts should not be placed in a trust, as a general rule. There are negative tax consequences to having a trust be the owner or recipient of these funds. In most cases, it’s better to name the intended beneficiary directly and not get the trust involved at all. A notable exception is when the intended beneficiary is a minor child, in which case the negative tax consequences will be put on hold until the child becomes an adult, and it might make sense to have the trustee manage the accounts until that time. It’s also possible to name someone as custodian of the account until the minor child reaches a certain age; you can discuss with an attorney which is the better option for your circumstances.

These are only general guidelines; for specific advice related to your circumstances please consult with an attorney. If you would like that attorney to be me, please feel free to reach out to me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

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What Rights Do Foreign Works Have? Using Foreign Works in Your Book

I’ve had several people ask me about works that were copyrighted and/or published in other countries, and whether these foreign works have rights in the U.S. If they do have rights, are those rights different from those of U.S. works?

The answer is the classic lawyer response: “It depends.” The U.S. does extend copyright rights to foreign works if those works fall into one of the following categories:

  1. The work has not been published. All unpublished works that qualify for copyright protection get that protection, regardless of where they come from. If it hasn’t hit the market yet, it’s off-limits.
  2. The work was first published in a country that has a copyright treaty with the U.S. There are a few copyright treaties out there, with the most notable one being the Berne Convention, adopted in 1886. The U.S. is a signer of the Berne Convention, and one of the requirements of that treaty is that all signers must give full copyright protection to the published works of all other signers. So if a country has signed on to the Berne Convention, then the U.S. must give works published in that country the same copyright protection that works published in the U.S. receive. This rule extends to all other copyright treaties the U.S. has signed as well. So before you decide to quote from a book published abroad, check to see if that country is part of a copyright treaty with the U.S.
  3. The work was written by an author who is a citizen or domiciliary of a country that has a copyright treaty with the U.S. That’s a mouthful, so let me break that down. Even if the work you want to use was first published in a country that does not have a copyright treaty with the U.S., it still might receive protection, depending on who the author is and where they live. If the author is a citizen of a country that is part of a copyright treaty with the U.S., then the work is still protected under U.S. copyright law. Likewise, if the author lives in a country that has a copyright treaty with the U.S., then the work is protected under U.S. law. So in addition to checking where the work was originally published, you’ll need to check on where the author lives and what country they’re a citizen of.

If the work falls into one or more of the above categories, then it receives full protection under U.S. copyright law, just as if it was created and published in the United States. As with U.S. works, foreign works do not have to be registered with the Copyright Office, but they will receive additional protection if they are. Given the number of countries that have signed on to the Berne Convention (currently about 179), it’s safest to assume that a foreign work is protected under U.S. copyright law.

If you have questions about copyright protection for foreign works, or you want to check and make sure you aren’t infringing on someone else’s copyright, please feel free to email me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

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What Happens If I Die and I Don’t Have a Will or Trust?

Most people I talk to know that they should have a will or trust, but they’re not quite sure why. Perhaps more importantly, they wonder what happens if they die and they don’t have a will or trust? To be clear, dying without a will does not mean chaos and confusion (unless that’s just how your family rolls). California has rules in place to make sure that everything is taken care of in an orderly fashion, whether or not someone has a will or trust.

Here’s what happens when someone dies:

Disposition of remains. Something needs to be done with the body. If there’s no health care directive, then California gives this task to the surviving spouse. If there’s no surviving spouse, then the burden is on the adult children. If there are no adult children, then the responsibility goes to parents, then siblings, and then whoever has the closest blood relationship to the deceased person (“decedent”). If the decedent has no living relatives, or the relatives can’t be located, then the funeral director or cemetery administrator will have the authority to dispose of the decedent’s remains.

Life insurance policies and retirement accounts. These are controlled by contract and will automatically go to whoever the decedent named as a beneficiary. If the decedent did not name a beneficiary, or the beneficiary died before the decedent, then the money will be part of the general estate.

Pay on death accounts. Any accounts with a beneficiary designation will automatically go to the beneficiary, just like life insurance policies and retirement accounts.

Joint accounts and joint tenancy property. Any bank accounts held jointly, and any real property owned by the decedent and someone else as joint tenants, will automatically go to the survivor. The financial institution will need to be notified (and the County Recorder for joint tenancy property), but otherwise, no further work needs to be done for these assets.

Community property. Anything held as community property between spouses (which is almost everything for most married couples) automatically goes to the surviving spouse. The surviving spouse will need to update the records at financial institutions and the County Recorder’s Office, but that’s about it.

Assets in trust. If the decedent had a trust, then anything held in trust would be disposed of according to the terms of the trust.

General estate (i.e. everything else). If there is anything left in the estate after all of the above, someone will have to add up the value of the remaining estate. If the value is above the probate threshold limit (currently $166,000) then probate will be required.  When an estate goes through probate, the Probate Court makes sure that the rules are followed, all debts are paid, and the remaining estate goes where it is supposed to go. If there is a will, then the probate process will be simplified, but it won’t be avoided entirely. Probate is orderly, but it is also tedious, time-consuming, and expensive.

If the remaining estate is below the probate threshold, then it can be dealt with by the surviving spouse or next of kin without going through Probate Court. There’s some legwork and paperwork required, but it will usually go faster than a full probate.

This is a 10,000 foot overview of the estate administration process, but it gives you an idea of what will happen to everything when someone dies. The easiest route by far is to simply have everything (or most everything) held in trust, which puts it all in a centralized location, tells everyone what’s supposed to happen, and names the person or people who are responsible for getting it done.

I hope this article has helped if you’ve been wondering what happens if you die and you don’t have a will or trust? I always believe this information should make you feel empowered to make the right decision for your family. If you would like to learn more about the estate administration process or would like assistance creating a trust, please contact me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

 

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When Should I Copyright My Work?

I am often asked, when should I copyright my work? Whether you have authored a book or created a piece of art, the good news is that you automatically have copyright.  Specifically, as soon as the work is “fixed” (i.e. written down, recorded or in some other format that others can perceive), it has a copyright. However, you still want to register your copyright with the Copyright Office, for the reasons I went through in last month’s article.

Following are some considerations for when to register your copyright:

Registering After a Work is Complete. Registration is not legally required, so you can register at any time. However, if someone infringes on your copyright and you haven’t registered the work yet, you’ll have to wait for your registration certificate to arrive before you can sue them in court. If you won your case you would only be awarded the amount of money the infringer cost you – in other words, you would be reimbursed for lost sales and, if the court thinks it’s justified, your court fees. (In most cases the court would only order the loser to pay court fees for the winner if they felt the loser was a bad actor – or if they really didn’t like them.) If your work was registered before the infringer used your work, your case would be heard more quickly and you could get additional fines imposed on the infringer because the court assumes the infringer acted in bad faith if the work was registered when they started infringing. For all these reasons, it’s best to register early, ideally no later than three months after the work has been “published” (i.e. put on the market).

Registering Before a Work is Complete. I’m often asked if it makes sense to register a copyright before the work is published, or even before the work is complete. Registration is absolutely allowed before a work has been published, and you can register an incomplete work if you want to. However, the Copyright Office does not encourage this – they prefer to have the “final” version. In addition, any changes to the work between registration and publication will be considered a “derivative work” – in other words, you’ll have to get a separate copyright that only covers the substantive changes. There are sometimes advantages to this approach, but most of the time it’s just an extra hassle.

To summarize, you can register your work at any time, but the best time to do so would be just before or just after publication.

If you have any questions about when to register your copyright, or would like any assistance with the registration process, please feel free to reach out to me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

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3 Reasons to Register Your Copyright

Believe it or not, you do not need to register your work with the Copyright Office in order to have protection. You possess a copyright as soon as you complete any work that is copyrightable (such as a novel, painting, song, or video). However, it is still a very good idea to register your copyright, for the following 3 reasons:

  1. It puts the world on notice that you have a copyright and you want to protect it. The Copyright Office keeps a database of all registered copyrights, so someone can look up a book or song and see who the copyright belongs to. This means that anyone who does their homework knows that the work they’re borrowing from is copyrighted and permission is needed to use it. Additionally, it makes asking for permission much easier, assuming the copyright owner kept their contact information up to date.
  2. It’s required before you can sue someone. If you do find someone infringing on your copyright, you cannot file a lawsuit against them until your copyright is formally registered. In other words, you can’t set foot in a courtroom until that Copyright Certificate of Registration is in your hands. The registration process can take some time, so having it done beforehand speeds up the process if you need to get into a courtroom quickly.
  3. If your work was registered before the infringement started, you can get statutory damages. The idea here is that since the infringement started after you registered your copyright, the infringer must have known that they were infringing on your work. Since the infringement was deliberate, the court will punish them with extra fines, beyond the actual damage they did to your sales. This can make a big difference in how much you get awarded (assuming you win your lawsuit), so it’s a good idea to register your copyright shortly after your work hits the market.

There are other good reasons to register your copyright, but these are the big ones. Copyright registration is a pretty straightforward process, and relatively inexpensive, so there’s no reason not to register each work as it is published.

If you have questions about how the copyright registration process works, or if you would like help registering your copyright, please feel free to email me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

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When Should I Update My Will or Trust?

A number of current and potential clients have asked me some great questions about their will or trust. For example: When should I update my will or trust? Once the document is signed, how long is it good for? At what point does it have to be revised?

There is no one right answer to these questions. While I recommend that clients review their will and trust annually, or at least every five years, this doesn’t necessarily mean that an update is required. Updating a will or trust has more to do with one’s circumstances than with timing. Here are a few reasons why it might be time for an update.

  1. Changes in tax laws. Tax laws are constantly changing, and there have been many changes in the last few years that impact estate planning. Some of them are good, like the law that raised the estate tax threshold to $5 million per individual (indexed for inflation). Some of them are not so good, like the law that severely limited the reassessment exclusion for property that children inherit from their parents. Good or bad, when the tax laws change it’s a good idea to update your will and trust to ensure your tax bill stays as low as possible.
  2. Changes in personal circumstances. Life continually changes, regardless of whether or not you want it to. Children are born, loved ones die, people get married or divorced, houses are bought and sold . . . these are just a few of the life changes that should make you think about your will and trust. If you experience a big life change, you should probably update your will and trust to reflect the changes in your life and circumstances.
  3. Changes in preferences. Perhaps your life hasn’t changed that much, but your preferences have. That person who seemed like a great choice for a trustee ten years ago isn’t looking so great anymore. Your children are now grown up and don’t need to have their money managed for them until they’re fifty. You wanted to remember a good friend with a cash gift, but you had a nasty argument five years ago and haven’t spoken since. There are many reasons why you might want to change who’s in charge and who gets what, but the change won’t take effect until you’ve made a formal update to your will or trust.

There may be other reasons to update your estate plan, but these tend to be the most common ones. If you are wondering whether your will and trust are due for an update, you are welcome to reach out to me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

 

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Can I Use a Trademark in My Book?

The question: Can I use a trademark in my book, has come up several times recently in conversations with clients, so here are some guidelines for using someone else’s trademark.

As a general rule, it’s fine to use someone else’s trademark in your writing. Most brand owners would probably enjoy the free publicity. However, there are some things to watch out for.

  1. Are you actually referencing the company or product? It’s fine to use a trademark to talk about a product or company, but not to simply name-drop. For example, it’s fine if you write about a character driving a Dodge truck or taking a trip to Disneyland, but not if they are carrying a Dodge briefcase or using Mickey Mouse as a swear word.
  2. Are you only using the mark when necessary? There’s no rule about how many times you can use a trademark, but when the same mark pops up on every page, readers start wondering if the company is paying the author. When it looks like the company is affiliated with the author, or is endorsing the book, the company will usually ask their legal department to step in.
  3. Are you using the mark in a positive way? While this is not a legal requirement, it significantly reduces the chances of a lawsuit. Trademark owners don’t mind free publicity, but they do mind when their mark is used in a way that makes the company or product look bad. So your character can eat at McDonald’s, but it shouldn’t give them food poisoning.
  4. Are you using the mark correctly? When a trademark is used as a substitute for the general name of the product, the company loses its trademark (lawyers call this “genericide”, because the mark has become generic for the product). This is how Bayer lost their aspirin trademark, Otis Elevator Company lost their escalator trademark, and many other trademarks became generic for their products (such as zipper, thermos, and cellophane) This has happened enough times that companies with well-known trademarks go to great lengths to make sure their marks are used correctly. When you’re using a trademark, it’s important to remember that trademarks are always adjectives, and they always refer to a specific company or product. Your character does not ask for a Kleenex, they ask for a Kleenex tissue. Your character does not Xerox a paper, they make a copy using a Xerox copier. You do not Google something, you make a Google search using a Google browser. Get the idea?
  5. When in doubt, check the Usage Guidelines. Most large companies have branding and usage guidelines available to the public, telling them when and how others can use their trademarks. If you’re not sure if your use would be okay, check the guidelines. You could also reach out and ask permission – but I wouldn’t bother unless you’re using the mark extensively and/or the trademark is an important part of your manuscript.

If you are uncertain about whether or how to use a trademark in your book or another writing project, you are welcome to reach out at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

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Should I Be Worried About my Parent Part 2: Red flags for undue influence

Should I Be Worried About my Parent Part 2: Red flags for undue influence

Last month I talked about how many people lose their mental abilities as they get older. Another unfortunate truth is that older people are often targets for financial abuse. Some people will seek out older people, particularly those with severe mental impairments, and try to convince, coerce, or even seduce the elder into giving them their money. “Undue influence” is the term for when a person uses excessive persuasion to make an elder do what they want, regardless of the elder’s wishes or interests, causing an unjust outcome. An elder who lacks capacity is particularly vulnerable to undue influence.

As with lack of capacity, an elder who is being financially abused is rarely in a position to help him or herself. Here are some red flags that loved ones should watch out for:

  1. The elder has a weakened mental state and/or lacks capacity. Please see last month’s article for signs of lack of capacity. However, any mental condition that weakens a person’s ability to resist outside pressure puts them at a higher risk of undue influence (e.g. senility, loneliness, illness, grief, etc.)
  2. There is one person the elder is physically or emotionally dependent on. This by itself is not always a problem – sometimes there is a relative or friend who steps up when others around the elder can’t or won’t. However, when an elder is dependent on one person, that person can exert a lot of influence over them. This can be obvious (“I won’t take you to the doctor’s until you sign this”), or it can be more subtle (“Shouldn’t I get more for being here by your side every day?”).
  3. A person isolates the elder and limits their contact with others. Sometimes the elder legitimately doesn’t want to see people, or their physical state limits how many visits they can handle in a certain period. However, someone who acts as a gatekeeper has a lot of power over the elder, and they could use it to make sure no one realizes what is going on or can take steps to intervene.
  4. The elder is making significant changes to their will or trust. Generally speaking, a person with capacity can make whatever changes they want to their will or trust and choose whoever they wish as beneficiaries. However, when these changes are radically different from their previous documents, or their previously stated intentions, there may be something happening behind the scenes, especially if the changes benefit the person the elder is dependent on.
  5. Radical changes in the elder’s behavior and/or spending. If the elder is spending money in places they never shopped before, making large money transfers when they previously never transferred anything, or simply doing things that are very out of character, there’s a good chance that someone is pushing them into doing these things (or spending the money on themselves).

As with lack of capacity, one of these flags by itself may not be a cause for concern. However, when you see multiple flags, you should investigate to see if more is going on.

It’s important to remember that someone has not committed undue influence by simply being in a position to exert influence over the elder. They must use their position of influence to make their desired outcome happen. Courts want to see solid evidence that the accused person used their influence to force an unjust outcome, so be very sure of what is going on before you make an accusation or start a lawsuit.

If you have questions or are concerned about a loved one, please contact me at kaway@kawaylaw.com.

Kelly Way Attorney pic and bio Kelley Way was born and raised in Walnut Creek, California. She graduated from UC Davis with a B.A. in English, followed by a Juris Doctorate. Kelley is a member of the California Bar and an aspiring writer of young adult fantasy novels.

 

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