A new breed of assets for planners

The vast majority of probate estates are straightforward... and tangible. Or maybe it is right to say that the vast majority of probate assets are tangible assets. Until recently, obscure intangible assets were rare. Technology has transformed even the most mundane estates into a walk through the world of contract and intellectual property law. Email or the asset that constitutes email creates a whole new set of questions for attorneys to address. Before the internet, personal correspondence was a simple concept. Someone wrote on a piece of paper. Certainly, the law of intellectual property and copyright might make an appearance in a theoretical review of the laws related to a physical letter, but it is pretty clear that physical letters are tangible assets that form part of a decedent's personal estate.

E-mail is a letter in electronic form. That's simple enough or at least it may seem so. If only it were that easy. The situation is made even more complicated because of the different ways email can be processed. There are at least two types of e-mail: POP-based and Web-based. POP-based email is usually downloaded to and stored on a local computer or other device. Web-based email is remotely accessed in via a password in a remote account and stored in one or more jurisdictions by an e-mail provider. Already, the issue of ownership of e-mail has become murky. What exactly is the e-mail and who should it belong to?

There is still an unsettled debate as to the exact nature of e-mail. Again, POP-based email is seems easy enough to deal with if it is all downloaded to a central computer and that computer is gifted to the same person who is the intended recipient of the e-mail. However, what if the electronic correspondence is of value and the recipient of the computer is different from the recipient of the e-mail? What if the e-mail is stored on multiple devices such as a desktop computer, cell phone, iPad, and netbook computer? Web-based email presents even more problems. What if the web-based account provider does not provide for transfer of the email account? What if the personal representative does not have a password? In a "normal" estate, one of the first things a personal representative is counseled to do it to have the U.S. Mail of a decedent forwarded to the representative's address. What about electronic mail? What if the decedent was receiving bills via email? Will the representative be able to get to the account?

These issues only begin to scratch the surface of a complex area that is still very much developing on a day to day basis. In the next installment, I'll give an example of this complexity in practice - the case of the Estate of Justin M. Ellsworth and Yahoo! email.

click here to go to part one
click here to go to part three

Probate and estate planning law and virtual or digital assets

Here is a topic I will spend a few posts on. Technology is moving at a blistering pace. Unfortunately, the law rarely moves fast enough to keep up. According to a Pew Research Center August 2010 report, 66% of all adults in America have a high speed broadband internet account. The world of modern technology and widespread access to the on-line world has created new challenges to estate planners, probate attorneys, and their clients as new forms of assets and doing business are created and evolve. Most of these new challenges created by the online world have not yet been addressed directly by the law. At the dawn of the internet, there were certainly technology issues, but they were relatively minor in comparison to today's issues. The widespread adoption of the internet and other modern technology has brought new issues to the fore. Just as people must plan for their mortal death, they must also plan for their digital death. Careful estate planning and probate practitioners should be proactive to minimize the confusion and complexities caused by the advance of modern technology. Tomorrow's executors, administrators, heirs, and legatees will benefit from a focus on technology today.

click here to go to part two

Hardship Letters are Hard

In the wake of the housing bubble, many homeowners have sought various non-foreclosure remedies from their lenders. These range from loan modifications to short sales and deeds in lieu of foreclosure.

In almost all instances, the loss mitigation department of the lender will require, among other things, that the delinquent borrower produce a "hardship letter". Google the term and you will find LOTS of examples. In fact, there is one very common one that seems to be repeated over and over on many sites. Here's an old but excellent article on how "Not to write a Hardship Letter". The article actually picks apart this "common" hardship letter and explains what a bank loss mitigation specialist is looking for when they read a hardship letter.

Court clarifies rule on eviction notices

The Illinois Appellate Court of Illinois in a new case, Figuero v. Deacon, has clarified the law with respect to the service of a notice of termination of tenancy when a tenant is in actual possession of a premises.

735 ILCS 5/9-211 provides the rules related to service of demand or notice for an eviction as follows: "Any demand may be made or notice served by delivering a written or printed, or partly written and printed, copy thereof to the tenant, or by leaving the same with some person of the age of 13 years or upwards, residing on or in possession of the premises; or by sending a copy of the notice to the tenant by certified or registered mail, with a returned receipt from the addressee; and in case no one is in the actual possession of the premises, then by posting the same on the premises.”

The court determined that the list of methods for service of process are exhaustive and, as the forcible entry and detainer action (eviction) is a special statutory proceeding that is in derogation of the common law, the statute must be strictly enforced. Factually, the landlord did not deliver a copy of the termination notice to the tenant but instead posted the notice on the door and slid another copy under the door. To proceed with the case would violate the tenant's due process rights. As a properly served notice of termination is jurisdictional, the case could not proceed.

Landlords would be well advised to serve notice either through personal service or certified mail (with certified mail having the additional difficulty of requiring proof of delivery) when processing an eviction of their tenants.

Tips for Renters

Here are some tips for renters looking to find the right place.

1) Always remember that there are lots of rental units on the market. This is a renter's/buyer's market. If something does not smell right, walk away.

2) Consider using a real estate agent. In the downturn, many real estate agents have gotten into the game of showing apartments. It costs nothing from the renter's pocket to use an agent. Agents have access to MLS listings and can pre-arrange appointments to walk a potential renter through a number of units on the same day.

3) Tenants should be familiar with the Chicago Residential Landlord Tenant Ordinance and their rights under it vis a vis security deposits, prohibited lease provisions, and other required disclosures. It is actually better to find a landlord who complies rather than either 1) a landlord ignorant of the law or 2) a landlord who does not comply with the law.

4) Check the cook county clerk of the circuit court website to see if your potential landlord is a party to any lawsuits, especially foreclosures. You can also check the recorder of deeds website to see if there are any lis pendens recorded against the property. Building code violations can also be a good clue that the landlord has a big problem. Landlords involved in foreclosures are usually not going to be good landlords nor will a tenant's tenancy likely extend the full term.

5) If the landlord agrees that anything is to be done before a tenant moves in, the tenant should not move in before the work is done. This should be a provision in the lease excusing the tenant from performance until the landlord completes any necessary work. For instance, if a landlord is supposed to paint a bedroom but does not, a tenant can safely assume that most likely this is 1) probably the landlord's normal practice and 2) the yob will probably never get done. Tenants should negotiate a small hold fee or security deposit until any of those sorts of things are completed. A landlord who waits on those sorts of things is likely waiting for the tenant's deposit to have the money to do whatever work needs to be done or does not really intend to do the work.

6) Tenants should not spend their own money on a rental unit until they are sure that they will be staying/leasing. I was contacted a few months ago by a lady who told me that she had terrible allergies. After doing massive remodeling in the property, she told me she discovered mold in the unit and it was hazardous for her to live there. The landlord had committed numerous CRLTO violations that would give her a right to terminate the lease. The tenant declined to move because she "spent so much money fixing the place up". True story. Don't do this.

7) Plan in advance. A tenant should look in plenty of time before needing to move. Tenants should not get caught in a situation where they must move and then might have to accept a less than optimal situation.

8) Tenants should inspect a rental unit THOROUGHLY. Check under the kitchen sink or in places where water flows for mold. See how drafty the windows are. Listen for traffic/train noise. Make sure everything works (turn on anything that might leak and let it run for a while to be sure). Make sure there are no stains in the carpet being hidden. Look "UP" - at the ceilings for signs of water damage or repairs to water damage. Document the condition of the place. Take pictures. Sign something that indicates any bad conditions that exist at the start of the tenancy so there is not question as to who is on the hook at the end of the tenancy.

9) Prospective tenants should talk to other tenants in the building to get a sense of the landlord's responsiveness and practices. If things are bad, other tenants will usually say so.

10) Tenants should go with their gut and should not act stupid. Trust instincts when they say "run". Do NOT trust a landlord that does not have paperwork or copies available - if you don't get your lease and receipt up front, you might never get it.

I could probably go on and on, but those should give tenant's a good head start on having a successful run as a tenant.