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Monday, May 18, 2015

Mediation: Is It Right For You?

Mediation is one form of alternative dispute resolution (ADR) that allows parties to seek a remedy for their conflict without a court trial. Parties work with a mediator, who is a neutral third party. Usually, mediators have received some training in negotiation or their professional background provides that practical experience.

Unlike a judge, a mediator does not decide who wins; rather, a mediator facilitates communication between the parties and helps identify issues and solutions. The goal is for parties to reach an acceptable agreement.

Mediation can be an appealing option because it is less adversarial. This might be important when the relationship between the parties has to continue in the future, such as between a divorcing couple with children. The process is also less formal than court proceedings.

Mediation often costs less than litigation, which is another benefit. Another advantage to using mediation is that it generally takes much less time than a traditional lawsuit. Litigation can drag on for years, but mediation can typically be completed within a few months. Court systems are embracing mediation and other forms of ADR in an effort to clear their clogged dockets. There are some programs that are voluntary, but in some jurisdictions, pursuing ADR is a mandatory step before a lawsuit can proceed.

Mediation can be used in a variety of cases, and it is sometimes required by a contract between the parties. Mediators can be found through referrals from courts or bar associations, and there are companies that specifically provide ADR services. Ideally, a mediator will have some training or background in the area of law related to your dispute.

Mediation is often a successful way to reach a settlement. If parties fail to resolve their conflict, information learned during mediation might be protected as confidential under state law.

Contact our law firm today to help determine if mediation would be a valuable tool to resolve your case.


Monday, May 11, 2015

Franchise Agreements

A franchise agreement is a contract that governs a franchise relationship.  These agreements are entered into by the franchisor, the entity that owns the business model, and the franchisee, the individual or entity that will run a location of the business.  While the terms of each contract are unique to the particular deal, most include similar provisions. 

Most franchise agreements will include provisions describing where the franchise will operate and whether that territory is exclusive.  The agreement will also detail how long the franchise relationship will last.

These contracts will most likely include terms regarding franchise fees and royalties the franchisee will have to pay the franchisor.  The agreements will also usually contain provisions relating to how the franchise is to be run on a day to day basis, including details as to what training is to be provided by the franchisor.

Terms relating to intellectual property owned by the franchisor are very important in franchise situations.  Franchise agreements include provisions instructing how patents, trademarks and copyrights can be used by the franchisee.  Advertising terms are also usually included in these contracts as it is likely that the franchisee will have to contribute toward advertising costs.

Termination and renewal terms are also essential parts of a franchise agreement.  These detail how the franchise relationship can be ended before the natural expiration and how the relationship can be revived if the parties so choose.  It is also common to find terms relating to disputes that may arise between the franchisor and franchisee and how these disputes are to be resolved.  This is where alternative dispute resolution and choice of law clauses may be utilized.  Terms relating to the resale of the franchise might also be present, as many franchisee’s have this option, although there may be a right of first refusal clause accompanying it.  This would provide the franchisor with the option of buying back the franchise before anyone else.

Franchise agreements determine all of the details of the franchise relationship and therefore must be clear and understood by all parties.  They can often be complex and it is therefore of the utmost importance to consult with a business law attorney who has experience with franchise law to advise you and negotiate with the franchisor.


Monday, April 27, 2015

Your Wishes in Your Words

During the estate planning process, your attorney will draft a number of legal documents such as a will, trust and power of attorney which will help you accomplish your goals. While these legal documents are required for effective planning, they may not sufficiently convey your thoughts and wishes to your loved ones in your own words. A letter of instruction is a great compliment to your “formal” estate plan, allowing you to outline your wishes with your own voice.

This letter of instruction is typically written by you, not your attorney. Some attorneys may, however, provide you with forms or other documents that can be helpful in composing your letter of instruction. Whether your call this a "letter of instruction" or something else, such a document is a non-binding document that will be helpful to your family or other loved ones.

There is no set format as to what to include in this document, though there are a number of common themes.

First, you may wish to explain, in your own words, the reasoning for your personal preferences for medical care especially near the end of life. For example, you might explain why you prefer to pass on at home, if that is possible. Although this could be included in a medical power of attorney, learning about these wishes in a personalized letter as opposed to a sterile legal document may give your loved ones greater peace of mind that they are doing the right thing when they are charged with making decisions on your behalf. You might also detail your preferences regarding a funeral, burial or cremation. These letters often include a list of friends to contact upon your death and may even have an outline of your own obituary.

You may also want to make note of the following in your letter to your loved ones:

  • an updated list of your financial accounts with account numbers;
  • a list of online accounts with passwords;
  • a list of important legal documents and where to find them;
  • a list of your life insurance and where the actual policies are located;
  • where you have any safe deposit boxes and the location of any keys;
  • where all car titles are located; the
  • names of your CPA, attorney, banker, insurance advisor and financial advisor;
  • your birth certificate, marriage license and military discharge papers;
  • your social security number and card;
  • any divorce papers; copies of real estate deeds and mortgages;
  • names, addresses, and phone numbers of all children, grandchildren, or other named beneficiaries.

In drafting your letter, you simply need to think about what information might be important to those that would be in charge of your affairs upon your death. This document should be consistent with your legal documents and updated from time to time.


Monday, April 20, 2015

Top 5 Overlooked Issues in Estate Planning

In planning your estate, you most likely have concerned yourself with “big picture” issues. Who inherits what? Do I need a living trust? However, there are numerous details that are often overlooked, and which can drastically impact the distribution of your estate to your intended beneficiaries. Listed below are some of the most common overlooked estate planning issues.

Liquid Cash: Is there enough available cash to cover the estate’s operating expenses until it is settled? The estate may have to pay attorneys’ fees, court costs, probate expenses, debts of the decedent, or living expenses for a surviving spouse or other dependents. Your estate plan should estimate the cash needs and ensure there are adequate cash resources to cover these expenses.

Tax Planning: Even if your estate is exempt from federal estate tax, there are other possible taxes that should be anticipated by your estate plan. There may be estate or death taxes at the state level. The estate may have to pay income taxes on investment income earned before the estate is settled. Income taxes can be paid out of the liquid assets held in the estate. Death taxes may be paid by the estate from the amount inherited by each beneficiary. 

Executor’s Access to Documents: The executor or estate administrator must be able to access the decedent’s important papers in order to locate assets and close up the decedent’s affairs. Also, creditors must be identified and paid before an estate can be settled. It is important to leave a notebook or other instructions listing significant assets, where they are located, identifying information such as serial numbers, account numbers or passwords. If the executor is not left with this information, it may require unnecessary expenditures of time and money to locate all of the assets. This notebook should also include a comprehensive list of creditors, to help the executor verify or refute any creditor claims.

Beneficiary Designations: Many assets can be transferred outside of a will or trust, by simply designating a beneficiary to receive the asset upon your death. Life insurance policies, annuities, retirement accounts, and motor vehicles are some of the assets that can be transferred directly to a beneficiary. To make these arrangements, submit a beneficiary designation form to the financial institution, retirement plan or motor vehicle department. Be sure to keep the beneficiary designations current, and provide instructions to the executor listing which assets are to be transferred in this manner.

Fund the Living Trust: Unfortunately, many people establish living trusts, but fail to fully implement them, thereby reducing or eliminating the trust’s potential benefits. To be subject to the trust, as opposed to the probate court, an asset’s ownership must be legally transferred into the trust. If legal title to homes, vehicles or financial accounts is not transferred into the trust, the trust is of no effect and the assets must be probated.


Monday, April 13, 2015

Life Insurance and Medicaid Planning

Many people purchase a life insurance policy as a way to ensure that their dependents are protected upon their passing. Generally speaking, there are two basic types of life insurance policies: term life and whole life insurance. With a term policy, the holder pays a monthly, or yearly, premium for the policy which will pay out a death benefit to the beneficiaries upon the holder’s death so long as the policy was in effect. A whole life policy is similar to a term, but also has an investment component which builds cash value over time. This cash value can benefit either the policy holder during his or her lifetime or the beneficiaries.

During the Medicaid planning process, many people are surprised to learn that the cash value of life insurance is a countable asset. In most cases, if you have a policy with a cash value, you are able to go to the insurance company and request to withdraw that cash value. Thus, for Medicaid purposes, that cash value will be treated just like a bank account in your name. There may be certain exceptions under your state law where Medicaid will not count the cash value. For example, if the face value (which is normally the death benefit) of the policy is a fairly small amount (such as $10,000 or less) and if your "estate" is named as a beneficiary, or if a "funeral home" is named as a beneficiary, the cash value may not be counted. However, if your estate is the beneficiary then Medicaid likely would have the ability to collect the death proceeds from your estate to reimburse Medicaid for the amounts they have paid out on your behalf while you are living (this is known as estate recovery). Generally, the face value ($10,000 in the example) is an aggregate amount of all life insurance policies you have. It is not a per policy amount.

Each state has different Medicaid laws so it’s absolutely essential that you seek out a good elder law or Medicaid planning attorney in determining whether your life insurance policy is a countable asset.


Monday, March 23, 2015

Paying for Your Grandchildren’s Education

The bond between a grandparent and grandchild is a very special one based on respect, trust and unconditional love. When preparing one’s estate plan, it’s not at all uncommon to find grandparents who want to leave much or all of their fortune to their grandchildren. With college tuition costs on the rise, many seniors are looking to ways to help their grandchildren with these costs long before they pass away. Fortunately, there are ways to “gift” an education with minimal consequences for your estate and your loved ones.

The options for your financial support of your heirs’ education may vary depending upon the age of the grandchild and how close they are to actually entering college. If your grandchild is still quite young, one of the best methods to save for college may be to make a gift into a 529 college savings plan. This type of plan was approved by the IRS in Section 529 of the Internal Revenue Code. It functions much like an IRA in that the appreciation of the investments grows tax deferred within the 529 account. In fact, it is likely to be "tax free" if the money is eventually used to pay for the college expenses. Another possible bonus is that you may get a tax deduction or tax credit on your state income tax return for making such an investment. You should consult your own tax advisor and your state's rules and restrictions.

If your granddaughter or grandson is already in college, the best way to cover their expenses would be to make a payment directly to the college or university that your grandchild attends. Such a "gift" would not be subject to the annual gift tax exemption limits of $14,000 which would otherwise apply if you gave the money directly to the grandchild. Thus, as long as the gift is for education expenses such as tuition, and if the payment is made directly to the college or university, the annual gift tax limits will not apply.

As with all financial gifts, it’s important to consult with your estate planning attorney who can help you look at the big picture and identify strategies which will best serve your loved ones now and well into the future.


Monday, March 16, 2015

Affidavits: Avoiding Potential Problems

You may have signed several affidavits over the years, without fully knowing what they are.  You might have signed one to register to vote or obtain some government benefit.  An affidavit can also be used as evidence in a lawsuit.

An affidavit is a written document.  The person signing it (the “affiant”) declares under oath that he or she is making voluntary and truthful statements.  Requirements for an affidavit vary based on the circumstances and jurisdiction.  In most jurisdictions, an affidavit must contain the affiant’s name, physical address and the affiant’s signature.  

The contents need to be voluntary and limited to what the affiant knows to be true because of direct observation or experience.  Before signing an affidavit, be certain of the basis of your knowledge.  Do you know these statements to be true or just think that they’re true?

Most jurisdictions require the affiant swear under oath that the statements are true before signing the document.  That signature needs to be witnessed and certified by a notary public, attorney or other public official authorized to take oaths.  The affiant must understand the content of the affidavit, the importance of an oath and the consequences for violating an oath.  A person who lies on an affidavit may be deemed to have committed perjury and face considerable penalties. Given the significant consequences, anyone who is not mentally competent shouldn’t sign an affidavit or be asked to sign an affidavit.

You may be asked to sign an affidavit if you witnessed an incident that may lead to, or has already resulted in, legal action.  Parties, or their attorneys, may want a formalized, written statement of what you saw.  If you’re in this position, make sure the affidavit is complete and accurate.  Consult your own legal counsel before signing.  The party contacting you may want an affidavit that puts them in the best light, not one that tells the whole story.

Be very careful about what’s stated in the affidavit, as opposing counsel may focus in on the document and investigate every aspect of it during litigation.  In a deposition or during a trial, opposing counsel may press you on the contents of affidavits to impeach your credibility.  

Is this the first affidavit on this topic?  If not, review the previous affidavit(s).  If something you previously stated was true, but you now know is false, you need to discuss with your attorney how this should be addressed.  
 
Before signing on the dotted line of an affidavit, think it through and make sure the information presented is accurate.  If you have any questions about an affidavit you’ve been asked to sign, or want to sign for your own purposes, consult with an attorney who can review it to ensure it is optimally drafted and does not end up getting you in hot water.  
 
 
 

Monday, March 9, 2015

Leaving a Timeshare to a Loved One

Many of us have been lucky enough to acquire timeshares for the purposes of vacationing on our time off.  Some of us would like to leave these assets to our loved ones.  If you have a time share, you might be able to leave it to your heirs in a number of different ways. 

One way of leaving your timeshare to a beneficiary after your death is to modify your will or revocable trust.  The modification should include a specific section in the document that describes the time share and makes a specific bequest to the designated heir or heirs. After your death, the executor or trustee will be the one that handles the documents needed to transfer title to your heir. If the time share is outside your state of residence and is an actual real estate interest, meaning that you have a deed giving you title to a certain number of weeks, a probate in the state where the time share is located, called ancillary probate, may be necessary. Whether ancillary probate is needed will depend upon the value of the time share and the state law.

Another way you could accomplish this goal is to execute what is called a "transfer on death" deed. However, not all states have legislation that permits this so it is imperative that you check state law or consult with an attorney in the state where the time share is located. A transfer on death deed is basically like a beneficiary designation for a piece of real estate. Your beneficiary would submit a survivorship affidavit after your death to prove that you have died. Once this document is recorded the beneficiary would become the title owner.

It is also important to investigate what documents the time share company requires in order to leave your interest to a third party. They may require that additional forms be completed so that they can bill the beneficiary for the annual maintenance fees or other charges once you have died.

If you want to do your best to ensure that your loved ones inherit your time share, you should consult with an experienced estate planning attorney today. 

 


Monday, February 23, 2015

You’ve Finally Done Your Healthcare Directives – Now What?

Healthcare directives can be vitally important, as recent cases, like that of Terry Schiavo, clearly brought to light. These important documents can mean the difference between your health care wishes being carried out or family members fighting over whether a loved one should be placed in a nursing home or removed from life support. Healthcare directives usually include both a healthcare power of attorney and a living will, or a form which is a combination of the two. In a healthcare power of attorney, an individual authorizes another individual to make healthcare decisions for him or her if the individual becomes unable to do so. A living will expresses an individual’s preferences about life support.

Once you have executed your healthcare directives, you may be uncertain as to what to do with them. First, you should make copies of the documents and inform others of their existence. In addition to your health care agent, persons you should consider notifying of the directives include family members and your health care providers.  Ideally, the originals should be kept in a place that is both safe and easily accessible.

You may wish to consider using a secure registry service to store your healthcare directives. Such services allow you to access healthcare directives any time and in any location with access to the Internet.  Some also allow the documents to be accessed via an automated fax-back service. In addition to providing the healthcare directives, many registries also allow caregivers to access information like emergency contacts, allergies, and other pertinent medical information.

You should review your healthcare directives regularly.  As individuals get older, their preferences about health care and life support change, and it’s important that your directives reflect your current health care wishes.   Of course, life changing events such as marriage, divorce, or the death of a loved one typically require changes in those documents to ensure that the people named in them are still those you wish to make decisions on your behalf.  

Moving to another state? Many states provide that healthcare directives prepared in another state are valid, but you should consult an attorney to make sure your wishes will be carried out in the manner you desire.

Establishing your healthcare directives can spare your family a great deal of anguish if they need to make decisions at a time that is already very emotionally-charged. By keeping the documents in a secure place, providing copies to loved ones, and reviewing them regularly, you can be more certain that your healthcare wishes will be carried out.
 


Monday, February 16, 2015

Considering Online Estate Planning? Think Twice

The recent proliferation of online estate planning document services has attracted many do-it-yourselfers who are lured in by what appears to be a low-cost solution. However, this focus on price over value could mean your wishes will not be carried out and, unfortunately, nobody will know there is a problem until it is too late and you are no longer around to clean up the mess.

Probate, trusts and intestate succession (when someone dies without leaving a will) are governed by a network of laws which vary from state to state, as well as federal laws pertaining to inheritance and tax issues. Each jurisdiction has its own requirements, and failure to adhere to all of them could invalidate your estate planning documents. Many online document services offer standardized legal forms for common estate planning tools including wills, trusts or powers of attorney. However, it is impossible to draft a legal document that covers all variations from one state to another, and using a form or procedure not specifically designed to comply with the laws in your jurisdiction could invalidate the entire process.

Another risk involves the process by which the documents you purchased online are executed and witnessed or notarized. These requirements vary, and if your state’s signature and witness requirements are not followed exactly at the time the will or other documents are executed, they could be found to be invalid. Of course, this finding would only be made long after you have passed, so you cannot express your wishes or revise the documents to be in compliance.

Additionally, the online document preparation process affords you absolutely no specific advice about what is best for you and your family. An estate planning attorney can help your heirs avoid probate altogether, maximize tax savings, and arrange for seamless transfer of assets through other means, including titling property in joint tenancy or establishing “pay on death” or “transfer on death” beneficiaries for certain assets, such as bank accounts, retirement accounts or vehicles. In many states, living trusts are the recommended vehicle for transferring assets, allowing the estate to avoid probate. Trusts are also advantageous in that they protect the privacy of you and your family; they are not public records, whereas documents filed with the court in a probate proceeding are publicly viewable. There are other factors to consider, as well, which can only be identified and addressed by an attorney; no online resource can flag all potential concerns and provide you with appropriate recommendations.

By implementing the correct plan now, you will save your loved ones time, frustration and potentially a great deal of money. In most cases, proper estate planning that is tailored to your specific situation can avoid probate altogether, and ensure the transfer of your property happens quickly and with a minimum amount of paperwork. If your estate is large, it may be subject to inheritance tax unless the proper estate planning measures are put in place. A qualified estate planning attorney can provide you with recommendations that will preserve as much of your estate as possible, so it can be distributed to your beneficiaries. And that’s something no website can deliver.


Monday, February 9, 2015

Top Ten Child Support Myths

Child support disputes can bring out the worst in many parents, conjuring images of greedy ex-spouses and children who are used as pawns in games of parental posturing and revenge. While there may be a certain degree of truth to some of the stereotypes, there are many myths that are prevalent in the context of children and divorce.

Myth: Child support payments are based on the needs of the children.
Fact: Support payments are based on the parents’ ability to earn income and have no basis in the actual costs to raise a child.

Myth: Child support payments must be spent on the child.
Fact: No state requires child support recipients to account for expenditures or prove they were necessary to meet the child’s needs, or even whether they were spent on the children at all. In fact, many states view the purpose of child support as protecting the standard of living of the custodial parent.

Myth: I can move out of state to dodge my child support obligations.
Fact: Each state has its own child support enforcement agency and these agencies all work together. You cannot escape this obligation.

Myth: I can quit my job in order to avoid making child support payments.
Fact: The courts are permitted to “impute” income to a parent who intentionally quits a job, whether or not that parent is currently earning a paycheck. Obligations will continue to accrue and payments must be made.

Myth: I have lost my job and can’t make my child support payments, so I will be sent to jail.
Fact: You can only be incarcerated if you have the ability to pay but refuse to do so. If you have lost your income and do not have the ability to pay, you will not be criminally liable for non-payment.

Myth: My ex-spouse uses child support payments for shopping, dining and to support a lavish lifestyle; therefore, my support payment should be reduced.
Fact: So long as the custodial parent pays expenses to feed, clothe and house the minor children, which is the ultimate purpose of child support payments, whatever else she spends money on is generally not scrutinized.

Myth: My living expenses are high and I cannot afford the child support payments; therefore, my support payment should be reduced.
Fact: Generally, expenses must be necessary and extreme in order to be considered as a basis for child support calculations.

Myth: Child support payments are deductible on my income taxes.
Fact: Child support payments are not deductible to the paying parent; nor are they considered “income” to the receiving parent.

Myth: If I have children with a new partner, my child support payments will decrease.
Fact: The birth of a new child will not reduce your obligations to make child support payments to a prior spouse. New children may affect the existing child support order if you get another divorce and must pay child support for the second set of children.

Myth: My ex-spouse claims she can modify the child support order and take my house, bank account or other assets.
Fact: A future child support modification can only address the amount of child support payments going forward. Assets cannot be seized and typically are not considered in modifications.
 


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