Author: Tammy Ryans

Free Webinar | Friday, June 4th | Planning for Incapacity

To register click the READ MORE button and the link.

Kroloff attorney, Rebecca H. Sem, specializes in probate and trust litigation and estate planning. She will be giving an informative webinar on the ins and outs of incapacity planning so that you can begin to take proactive steps to plan for the future. Incapacity can occur at any time and at any age.  Who will handle your affairs in the event that you or a loved one are deemed incapable of managing your financial or healthcare decisions? This webinar will help you prepare. https://us02web.zoom.us/webinar/register/8116200754741/WN__354g2hhSAWYYqc5fGPLiw

Free Webinar | Estate Planning for Parents with Minor Children

To watch the webinar click the READ MORE BUTTON then the link. https://youtu.be/yGcEbIOYyJ8

This webinar is presented by Kroloff Associate Attorney, Courtney S. Hayes and will feature important information for parents with minor children revealing valuable tools that parents can use to ensure their children are provided for. We’ll cover the importance of a Trust-based estate plan; Naming a guardian in your Will; Updating beneficiary designations; Setting up 529 Plans for college savings; and Using life insurance to fund your Trust. This helpful webinar will be held on Friday, May 7th at 12pm to 1pm. Join us!

Increase in California’s Homestead Exemption

Increase in California’s Homestead Exemption

On January 1, 2021, California’s homestead exemption increased by way of AB 1885, which amended Code of Civil Procedure § 704.730.

What is a homestead exemption?

The homestead exemption protects a certain amount of a home’s equity from being seized by the homeowner’s creditors to satisfy the homeowner’s debts.

The exemption primarily applies when a homeowner files for bankruptcy or experiences financial difficulty. If a creditor attempts to force a sale of the home, of if the homeowner files for bankruptcy, the homestead exemption protects a certain amount of the homeowner’s home equity from collection.

Note: the homestead exemption does not prohibit a forced sale of a home by creditors.  Instead, the exemption ensures that the homeowner receives the exemption amount out of their equity before creditors are paid from the sale proceeds.

How much did the exemption increase?

In 2020, California’s homestead exemption was $75,000 for a single homeowner, with a maximum of $175,000 for homeowners who met specific family, income, and age requirements.

As of January 1, 2021, the exemption amount increased. The amount of the increase depends on the median sales price of home sales in the county in the prior year. The increased amount will be at least $300,000, but can be no more than $600,000.  If the median sales price in the county for the prior year was $300,000 or less, the exemption will be $300,000 (even if the median sales price for the county was $220,000.)  For counties where the median sales price in the prior year was between $300,000 and $600,000, the median sales price will be the exemption amount.  If the median sales price is more than $600,000, the exemption amount will be $600,000.

For example, if the median sales price was $1,400,000 (as it was in San Francisco County in 2020), the exemption amount would be $600,000 in 2021.  If the median sales price was $435,000 (as it was in San Joaquin County in 2020), the exemption amount would be $435,000 in 2021.

What is the difference between an automatic exemption and a declared exemption?

The homestead exemption automatically applies when there is a forced sale of the home – this is called the “automatic exemption.”  It requires that the debtor have continuously lived at the home from the date that a judgment creditor’s lien attached until the date a court determines that the home is a homestead. If a creditor attempts to sell the home, the homeowner has the burden of proving to the court that the automatic homestead exemption applies.

Homeowners can alternatively declare an exemption for their home – the “declared exemption.” The declared exemption applies to both forced and voluntary sales of a home.  In order to declare an exemption, a homeowner must record a declaration of exemption with the county recorder and reside at the home on the date the declaration is recorded.  If a creditor attempts to force a sale of the home, the creditor has the burden of proving to the court that the homestead declaration is invalid. In the case of a voluntary sale, the exempt proceeds of the sale are protected from creditors if the homeowner purchases another home within six months of the sale.

Homeowners should make sure to record their declaration of exemption with the county recorder while they live in their home, and keep the recorded declaration in a safe place in case they ever need it to prove their exemption.

If you have questions about the homestead exemption or how to declare it, please contact our office, and one of our experienced attorneys will be glad to assist you.

Courtney S. Hayes published in “Across the Bar”

Kroloff attorney, Courtney S. Hayes, was published in the Spring 2021 Edition of the San Joaquin County Bar Association’s publication, Across the Bar.  Ms. Hayes’ article discusses the property tax changes and consequences of Proposition 19, which passed by a slim majority of California voters in November 2020.  The article can be viewed here: https://www.sjcbar.org/news-index/prop-19-the-end-of-the-parent-child-exclusion-as-we-know-it.

COVID-19 Vaccination Update for Employers

Many employers are wondering whether they can require or incentivize their employees to receive the COVID-19 vaccine.  Below are a few answers to commonly asked questions.

Q:  Can I require my employees to receive a COVID-19 vaccine?

A: Yes, with some limitations.  First, you should evaluate whether the vaccine is job-related and consistent with business necessity.  Second, you should ensure that your policies provide for employee accommodations.  On December 16, 2020, the EEOC issued guidance which permits employers to require vaccinations but requires employers to provide reasonable accommodations to employees who are unable to receive the vaccine due to medical or religious reasons.

Q: How do I determine if I must accommodate a medical or religious concern?

A: This depends on the reason you are relying on for requiring the vaccine.  For some jobs, such as healthcare, it may be the case that getting vaccinated is a standard qualification for performing the service.  The decision must be based on objective medical information.  For example, a strong factor supporting requiring the vaccine is if a government agency requires the vaccine as a condition of employing an individual in your industry.  Accommodations for an employee who will not receive a vaccine must be evaluated in the interactive process with the employee.  Some possible accommodations may include wearing a face mask while on-site even when no longer required for others, teleworking, or a leave of absence.  Denying an accommodation requires an “undue hardship” on the employer, which will vary based upon a business’s individual circumstances.

Q: Can I exclude someone from the workplace because their failure to receive a vaccination is a “direct threat” to the employee or others? 

A: In some circumstances, yes.  This is another exception to the requirement that a vaccine-related concern be accommodated.  However, the standard is very high and must be based on objective medical evidence and an individualized assessment.  The fact that employees have been working with masks for several months may make this difficult to establish.

Q:  Can I encourage vaccinations even if I do not require them?

A:  Yes.  Much like annual flu shots in some portions of the healthcare industry, an employer can encourage a vaccine and then put in place additional safety precautions for those who elect not to receive a vaccination.

Q:  Can I offer a monetary incentive for employees to receive a COVID-19 vaccine?

A:  Yes, but with limitations.  Employers should consider rules applicable to wellness programs and IRS requirements relating to taxability of such payments.  (A payment for receiving a vaccination is likely to be treated by the IRS as an employer-sponsored wellness program.)  Additionally, employers must decide how they will address employees who are not otherwise eligible for the incentive due to a medical or religious reason.

Q: Must I pay employees for the cost of the vaccine or the time spent receiving the vaccine?

A: If you are requiring the vaccine based upon business necessity, then it is likely in California that the employer would be required to cover the costs incurred by the employee in receiving the vaccine, including time spent.