Category: Estate Planning

As I write this article, there is almost a foot of snow on the ground. The groundhog has seen his shadow. Cabin Fever is at epidemic levels in the area and we are all counting the days until spring. This is hardly the season to think about home remodeling. However, one good thing about Cabin Fever is that it forces all of us to take a good close look at the cabin.

If significant home improvements are in your immediate plans, then this article is intended for you! Before, you start reading further you may want to check out this company that provides high-quality restoration services in Levittown, for instance. You can also browse similar companies in your local vicinity if you are planning to restore your home to a refurbished state. Perhaps you just plan a spring makeover of a room or two in your home. Perhaps you are at a “transition point” in your life. The children are gone leaving you with the proverbial “empty nest” and the on-going burdens of nest maintenance. Maybe it’s time to sell the place, but before you do, you know that some major work is needed. Whatever your situation or motives, if you are considering significant home improvements, the issues raised in this article should help you avoid becoming a victim of the ever increasing phenomenon known as “Home Improvement Fraud”.

We have all heard that “an ounce of prevention is better than a pound of cure” and that is certainly true in the context of planning and contracting for home improvements. A few simple suggestions, if followed at the early stages of a project, can save considerable heartache (and dollars) in the end. Consider the following points:

1. Don’t overdo it! If your goal is to realize the most bang for your buck by improving your present home before selling it in the near term, then it is imperative that your planned improvements make economic sense. The addition of a new bath or Window Shades may be very cost-effective whereas other improvements may not yield a short-term return on the investment. It is always a good idea to check with a real estate professional (a sales agent, broker or appraiser) during the planning stages of a project to make sure that your intended improvements will make both dollars and sense.

2. Do your homework! Once you have identified the scope of your project, then the most important part is the selection of a suitable contractor to do the work. For instance, if you would need windows and doors replaced in your dwelling, you would need to find someone who could be reliable and has a good reputation for residential window and door. Here is where a little time invested on your part can save a lot of later hand wringing and gnashing of teeth. Get bids from several contractors, but don’t necessarily go with the lowest bidder before checking the references on that company or person – and don’t just accept the references that a contractor freely offers. Few contractors would give the name of a dissatisfied customer. Ask about recent work activity. Where was the company yesterday? Last week? Last month? Get the names of the owners of those projects and call them! Ask if they are satisfied with the job. Are cost estimates followed? Are timelines met? Conduct thorough research. Look for information on the Web. For instance, if you are looking for a roofing contractor who can do Asphalt Roof installation in somerset Wisconsin, then search on the Internet for the top contractors near you. Go through the review page and check if they provide satisfactory work.

Does the contractors devote on-going attention to the job? A slow job or one that comes in over estimated costs can be the result of an inexperienced contractor, or – worse yet – one that is over-extended or over-committed with other work. Don’t be afraid of hurting someone’s feelings. Most reputable building contractors in our area are true artisans who are proud of their work. They will gladly share it with you.

3. Know your rights! This point is critical. If you are generally knowledgeable of what rights the law affords you as a home improvement consumer, you will be in a better position to enforce those rights and avoid becoming a victim of home improvement fraud. Unfortunately, when you discover your rights after they have been violated, then you may find yourself dealing with the proverbial “pound of cure” that can be both expensive and ineffectual in producing positive results for you.

Indiana’s law on the subject of home improvements is generally divided into two distinct areas – (i) civil law and (ii) criminal law. Each area has a potentially different impact on you, the consumer.

As the name implies, the criminal statutes define certain offenses that have been criminalized in the home improvement arena. Those offenses are the typical ones that we normally associate with home improvement fraud. They include gross over-charging (a contract price that is at least four times the fair market value of the work that is done), misrepresentation of either the provisions of the home improvement contract or of the existing or pre-existing conditions of the property involved, false promises of performance or product performance that the home improvement supplier knows are false (such as misrepresenting the heat retention factor of insulation or quoting an unreasonably short “payback” projection for anticipated savings in utility expenses, etc.), or other acts that one would normally think of as fraudulent (such as using a false or fictitious name that is not duly registered to conceal the true identity of the supplier). The offenses range from Class A misdemeanors to Class C felonies, depending upon, among other things, the dollar value of the fraudulent contract. Since seniors have been particularly victimized by such scams, the offenses (and hence the potential punishments) are greater if the victim is sixty years of age or older.

As with any criminal prosecution, the initiating party must be the state of Indiana. Frequently, as part of the “plea bargaining” process, the prosecutor will attempt to obtain financial restitution for the defendant’s victims, but there is no guarantee that any perpetrator of such fraudulent schemes will have the financial resources to make such restitution. My own experience in representing clients in matters such as these is that the prosecutors are sometimes reluctant to initiate actions in the first instance because of the existence of the civil remedies that will be discussed below.

The second area of protection that has been legislatively afforded consumers is in the civil arena. Indiana has adopted a section of its Deceptive Practices Act that applies to home improvement contracts. A few of the act’s major provisions are:

• It applies to all consumers who own or lease residential property.
• It applies to any home improvement contract having a price greater than $150.
• It requires that the supplier of the home improvement contract provide the consumer with a fully completed written agreement, BEFORE signing by the consumer that includes, among other things, (i) the name of the improvement supplier, its address and phone number and the names of any agents of the supplier to whom inquiries can be directed, (ii) a detailed description of the work to be done and, if specifications are not included as a part of the contract, a statement that the specifications for the work will be provided to the consumer before commencing the work, (iii) the approximate starting and completion dates for the project, (iv) a statement of any contingencies that would materially change the approximate completion date, (v) and the home improvement contract price. Finally, the contract must be in a form that is easily read and understood by the consumer.

A completely executed copy of the contract must be given to the consumer immediately after the consumer signs the document. Failure of the supplier to comply with those procedural requirements constitutes a violation of the act. Additionally, other parts of the Deceptive Practices Act define violations to include exceeding a cost estimate for the project by more than ten percent without first having obtained the approval of the consumer to the additional cost (and provided that the total cost for materials and services exceeded $750.00).

A person who has been the victim of a deceptive practice may recover the actual damages that were suffered plus reasonable attorneys fees. In this regard it is important to understand that, as the client, you will still be expected to pay your attorney from your own funds. However, any judgment for attorneys fees that the court might enter and that might ultimately be collected would go to reimburse you for those attorneys fees. Finally, if the victim is sixty-five years of age, or older, a court may order the recovery of three times the actual damages suffered in the case of a deceptive practice.

While all of that may sound comforting, the reality is that litigation in the area of home improvement contract law can be quite expensive, time consuming and very frustrating. The recommended “ounce of prevention” will always be preferable to the pounds of legal cure that are afforded under these laws. However, it is important to understand and exercise your rights should, despite your best efforts, you become a victim of home improvement fraud. After all, it is your castle!

The opinions and conclusions expressed in this article are those of the author and are not intended to constitute legal advice as to any particular person or situation. The laws cited in this article contain both substantive and procedural nuances that require the submission of any particular case to competent legal counsel of your choosing.

by Richard E. Boston

For any number of people, estate planning consists solely of executing a will and making sure that they have adequate life insurance to provide for their burial. Granted, these are important and critical steps in anyone’s planning. But with a will and life insurance, you have dealt only with what happens at the time of your death.

What plans have you made to provide for those unexpected events that occur during one’s life, particularly as health issues become more of a probability than just a possibility? Instead of thinking only about providing for your spouse and family at your death, you should also consider doing what you can, while you can, to ease the emotional and financial burdens of those you care most about should your health fail, leaving you incompetent to execute legal documents.

In counseling new clients and when reviewing and updating the estate plans of existing clients, I strongly encourage the use of four documents as an essential beginning point for any estate plan, irregardless of the size of the estate. Those documents consist of a will, a durable power of attorney, a health care representative appointment, and a living will. The last three provide for the client’s needs while living.

DURABLE POWER OF ATTORNEY – this document provides for the ongoing conduct of the client’s financial and business affairs should he or she either not be able or not be available to carry out these functions. Most people name their spouse as the person to act on their behalf when they cannot. If the spouse should no longer be available, a successor is named in the document. Generally, this is one or more family members or a close friend. The power of attorney can either be made effective immediately upon its execution or it can be drafted so that it becomes effective only upon the client’s physician’s certifying that the patient is incompetent to manage his or her financial affairs.

This document is customarily very broad in the powers that it bestows on the person appointed to act, but such powers can be limited to a person’s specific needs. Some examples of what a power of attorney can provide for are the following: banking functions, including check writing; the execution of deeds, notes, mortgages and other documents dealing with real estate; the filing of income tax returns; estate planning functions; the operation of a business; or the handling of all types of insurance matters.

You may ask why this is important. In many instances it prevents the spouse or children from having to go to court to have a person declared incapacitated and to then have a guardian appointed to handle that person’s business and financial affairs as well as their day-to-day care. When the court becomes involved, an inventory of assets must be filed. This is a matter of public record. The family loses its financial privacy. A formal accounting must be filed with the court at least every two years by the guardian. This means accounting for all income and all monies spent. Too, any extraordinary expenditures may require court approval. With proper planning, all of this can usually be avoided, leaving such decisions to the family and not to the court’s discretion.

Another common scenario is where a house is owned jointly between a husband and wife. One spouse becomes incapacitated and at some point the house needs to be sold, whether that be because it’s too large, or money is needed for long-term nursing care, or for any number of reasons. The sale and transfer would require the signature of both husband and wife. With a power of attorney, this problem would be solved. Without a power of attorney, a court-appointed guardian would most likely be necessary in order to have someone with the legal right to sign the incapacitated spouse’s name to the deed.

HEALTH CARE REPRESENT-ATIVE APPOINTMENT – This document functions much like a power of attorney, but relates to a person’s health care needs rather than to business and financial affairs. Again, the spouse is usually named as the first choice with a family member or close friend being named as a successor.

The named health care representative is authorized to make health care decisions for you when you cannot do so. This power may need to be exercised only for a short period. Once you are again able to make your own health care decisions, you do so.

With this document, the attending medical personnel have someone with the legal authority that can make critical health care decisions as necessary. This could be as a result of an accident, or a general health-related problem such as an incapacitating stroke.

LIVING WILL – Most clients have strong feelings as to whether or not they wish to be kept alive if they have no chance of recovering and living a quality life. Should this circumstance arise, it is important that you leave a directive as to whether or not you wish to be placed on, or kept on, a life support system and if you are taken off of life support, whether or not you wish to continue to receive nutrition and hydration.

A living will provides a written statement of your wishes in this regard. This does two things. It provides the medical personnel with information they need. More importantly, it relieves your spouse or family from being left with the responsibility of trying to decide what you might want in this situation, yet being reluctant to make a decision that will end your life. This is an onerous decision to leave to your spouse and family. However, this is a decision that you can make by using a living will and thereby avoid placing those you care most about through this trauma and possibly having a decision made that you yourself would never have made.

Begin your estate plan with an appropriate will that carries out your wishes while meeting the needs of your survivors. But do not stop there. Make plans for your living as well as for your dying by incorporating the above planning tools into your basic estate plan. Should the need ever arise for their use, I can assure you that your family members’ lives will have been made abundantly easier as a result of your forethought.