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Spring 2012 Edition

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In This Issue
10 Tips to Avoid Identity Theft Online
Free White Papers on Ohio Divorce and Ohio Estate Planning
Palimony Not Recognized in Ohio
Estate Planning Alert:...The Time for Aggressive Gift Giving is Now!
Win a $25 Gift card to Amazon from Holzfaster, Cecil, McKnight and Mues!
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10 Tips to Avoid Identity Theft Online
Identity theft is a $37 billion crime that affects 9 million Americans each year according to the Federal Trade Commission (FTC).
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Identity theft occurs when someone uses your personal information, such as your name, credit card number, or social security number to commit fraud.  Identity theft and fraud costs the average consumer $631 in out-of-pocket expenses as well as an average of 33 hours to rectify the issues.  While there are a myriad of ways identity theft can occur, this article will focus on tips to avoid identity theft on the internet.

Top 10 Tips to Avoid Identity Theft Online:

Don't Use Obvious Passwords - Combine letters, numbers and special characters to create strong passwords and memorize them rather than carrying them with you.

Watch Out for "Phishy" Emails - "Phishing" are attempts from online scammers to obtain your personal private information by posing as a legitimate service.  Commonly the sender asks you to confirm your personal information for a bogus reason such as your account is being closed, verifying a purchase, or a computer malfunction. The term is a variant of fishing and alludes to "baits" used in hopes that the potential victim will "bite" by clicking a malicious link or opening a malicious attachment, in which case their financial information and passwords may then be stolen. Stay away from them!

Never Enter Your Personal Information in a Pop-up Screen - Often a "phisher" will direct you to a legitimate site and then a pop-up window appears requesting personal information.  Legitimate sites do not ask for this information via pop-up windows.

Protect Your Computer With Anti-virus, Anti-spyware and Use Your Spam Filter - A spam filter can help reduce the quantity of "phishing" emails.  If an email lands in your junk box, be very suspicious of it. When there is any question about it, delete it!

Don't Open Attachments or Links in Emails From People you Don't Recognize - Viruses are often spread online in this manner. The  subject in the email may be a harmless call for sympathy or a threat that calls for instant action. Most people will readily click any link or attachment that is presented to them in order to solve a problem or access further information.  Delete it!

Before Buying Online, Research the Company - Check out online reviews of the company before purchasing.  Be sure it is a secure site before providing your credit card information.

Job Seekers Beware - Some "phishers" will scour the job opening websites and pretend to be potential employers.  They try to entice you with the salary or job description then ask for your social security number and other personal information.  This is not the way reputable potential employers or agencies operate.

Monitor Carefully Your Bank Statements and Credit Card Accounts - Make a habit of checking these at least once per week to look for suspicious activity which could signal identity theft.

If it Looks Too Good to be True, Avoid it - "Phishers" are very creative in their attempts to hook you.  Recently I have seen purported emails from the IRS with the subject being an " Income tax refund", contacts purportedly from the Better Business Bureau (BBB) regarding a recent business complaint, my accountant's license is going to be revoked (which I don't have) or I need to verify identity for a large lottery prize I won.  Do yourself a big favor and just delete them without even thinking about opening them.

Protect Your Smartphone with a Password - A bit off topic, but if you have a smartphone and you use it for social networking, online commerce or mobile banking, be sure to create a strong password.  A Smartphone has a whole cache of valuable personal information which you wouldn't want to get into the wrong hands.  Never auto save any passwords on your Smartphone.

If you suspect that identity theft may have occurred, contact the bank or Credit Card Company over the phone as soon as possible.  Follow all their procedures they tell you to take to limit any losses.  For information about how to put a "fraud alert" on your files at the credit reporting bureaus and other advice for ID theft victims, contact the FTC's ID Theft Clearinghouse at  http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html  or call 877-438-4338. For more information on how to be more secure online, check out Google's "Good to Know" website at  http://www.google.com/goodtoknow/

Free White Papers on Ohio Divorce and Ohio Estate Planning
We are excited to announce the recent launch of our completely redesigned legal website along with several free white papers which can be downloaded from our law website at www.hcmmlaw.com.

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It is important in our view to provide the public with around-the-clock access to valuable information in our practice areas.  Several more white paper reports are in the works.  The Four Basics of Estate Planning in Ohio and Finding Hidden Income/Assets During a Divorce are the two inaugural white papers that we have authored.

Ohio estate planning does not need to be complicated or confusing.  Unfortunately, there is a great deal of inaccurate information out there about Ohio estate planning. We want to help the public become knowledgeable about this critically important area.  Download from our white papers The Four Basics of Estate Planning in Ohio simply by entering your name and email address at www.hcmmlaw.com. In it we explain in understandable language the purpose of the four documents needed to complete a comprehensive Ohio estate plan.

We receive questions about dealing with deceitful spouses all the time.  So, as part of our white papers, we have included Finding Hidden Income/Assets During a Divorce, and offer it at no charge. In a divorce case, property division and alimony considerations are predicated on a full disclosure of all income, assets and liabilities. This report includes practical ways to help detect  financial cheating!

In addition to these white papers, our recently redesigned website is packed with even more valuable consumer information. In it we have included many detailed answers to Frequently Asked Questions, comprehensive descriptions of all the varied areas of our legal practice, plus videos from each of our five Dayton attorneys. We are proud and excited about both the look and the expanded content of our redesigned website. We hope that you will check it out!

Palimony Not Recognized in Ohio - Resuming a Romantic Relationship is Insufficient to Establish a Contract
Ohio Supreme Court Rules on Ownership of Unmarried Couple's Home
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Palimony is a form of alimony awarded to one of the unmarried partners in a romantic relationship after the breakup of that relationship following a long period of living together. Unlike alimony which is typically provided for by law, palimony is not guaranteed to unmarried partners.   Palimony cases are determined in civil court as a contract matter, rather than in family court, as are divorce cases.  Generally, a palimony plaintiff must prove an underlying contractual basis for his/her claim, such as an express (written or oral) or implied contract.  Our research shows that approximately 23 states have enforced a cohabitation agreement, either express or implied.

It is rarely a good idea for unmarried individuals to purchase property together as their joint residence.  Should the relationship fail, issues inevitably arise, often leading to disputes.  Who will continue to live in the residence?  Who will pay the mortgage payment, utilities and insurance?  Will the property be sold, and can the parties agree on a price?  Can the property be sold (is the mortgage greater than the value)?  In all likelihood, the individual no longer residing in the property will want it sold or refinanced as soon as possible to remove his or her name from the deed and loan obligations, while the resident may be in no hurry to do so.  

The problems arising from homeownership by a couple not married were brought to light again recently in a case reviewed by the Ohio Supreme Court.  This case had been hawked as the first Ohio Palimony case.  In Williams v. Ormsby, decided in February of this year, the homeowner's boyfriend moved into the house and started making mortgage payments.  After Mr. Ormsby paid off the remaining balance, Ms. Williams transferred ownership to him.  They broke up.  They signed an agreement stating that when the house sold, Mr. Ormsby would receive the first $324,000 from the sale and Ms. Williams would receive the balance.  They reconciled.  Then, they signed a document making them "equal partners" in the property.  They broke up a final time and, inevitably, filed suit against each other.  

The Trial Court agreed with Mr. Ormsby that Ms. Williams was not an equal partner in the property and not entitled to half of the proceeds of sale and that the deed to Mr. Ormsby gave him ownership of the property.  The Court of Appeals disagreed and held that the parties' contract to make them "equal partners" was enforceable.  In response to whether there was consideration provided by both parties as required to make a contract enforceable, the Court of Appeals held that "moving into a home with another and resuming a relationship can constitute consideration sufficient to support a contract."

The case went to the Ohio Supreme Court who correctly upheld the long-standing proposition that love and affection are not sufficient consideration to establish a contract; and, more specifically, moving into a home with another person while engaging in a romantic relationship does not satisfy the necessary requirements to form a contract.

From our perspective the Ohio Supreme Court was not going to reverse the long-standing position of refusing to consider division of assets and property between unmarried cohabitants.  Justice Lanzinger hit the nail on the head when she wrote "palimony is not recognized by Ohio statute or common law".  Ohio Civil Courts are swamped and the thought of all the added caseload if now palimony cases were to became viable would be profound.

Clearly, the Supreme Court got it right.  However, the more important point is that it isn't surprising that this matter ended in lawsuits being filed and countless thousands of dollars being spent through the lengthy litigation process.  The bottom line is that one should think long and hard before ever putting his or her signature on the bottom line and assuming co-ownership of a residence with a non-spouse.  Bad things usually happen!

Adapted from an article written by Joseph E. Balmer and posted on The Ohio Family Law blog on April 7, 2012. Click here to read more articles on our Blog.
Here is the Link to the case: http://www.leagle.com
Link to the blog: www.ohiofamilylawblogspot.com

Estate Planning Alert:  The Time for Aggressive Gift Giving is Now!
Many people know that you can give up to as much as $13,000 per year per person without any gift tax implications.  Most people don't know the particulars beyond that and how gift giving and estate taxes work hand in hand.
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Because of the relationship between gift taxes and estate taxes, this is an excellent year for large net worth individuals to consider aggressive gift giving.

The federal estate tax exemption is actually an estate tax and gift tax combined exemption.  The exemption for 2012 is $5,000,000 but, unless Congress can reach a compromise agreement, this exemption will go back down to $1,000,000 on January 1, 2013.  What this means is that if an individual dies in 2011, the first $5,000,000 of his or her estate will be exempt from federal estate taxes, less excess gifts made during his or her lifetime.

What do we mean by excess gifts?  A person can give up to $13,000 to an individual in a given year without having to file a gift tax return.  If a person gifts more than that, the person has to file a gift tax return, but that doesn't necessarily mean any gift tax has to be paid.  The IRS keeps a record of the excess gift and applies it to the $5,000,000 exemption.  For example, if a person gifts $113,000 to another person in one year, the grantor files a gift tax return reporting the excess $100,000 gift made over the $13,000 allowed.  The excess gift is subtracted from the $5,000,000 exemption, and the grantor now has an estate tax/gift tax exemption of $4,900,000 to use.  No gift tax must be paid unless the entire $5,000,000 in excess is used up.

As stated above, unless Congress can reach a middle ground, this $5,000,000 exemption will revert to $1,000,000 next year.  Thus, this year a $5,000,000 gift could be made to remove the asset from the grantor's estate, while next year only $1,000,000 could be made without gift tax implications.

The bottom line is that this important change in the law won't apply to most individuals.  However, for those individuals with a large net worth looking to reduce the size of their estate and maximize the amount of money that can be passed down to their heirs, aggressive gift giving in 2012 should be considered as part of one's estate planning.

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