MEAL AND REST PERIODS UNDER CA LAW

Under California law (which is much more generous to employees than federal law), if you are a non-exempt worker, you are entitled to meal and rest breaks: a 30-minute meal break if you work more than 5 hours in a workday, and 10 minutes breaks for every 4 hours you work. There are other requirements though. If your boss doesn’t comply with break requirements, they are required to pay you one extra hour of regular pay for each day on which a break violation occurred.

 Rest Breaks

  1. If you work at least 3.5 hours in a day, you are entitled to a rest break.
  2. Your boss must give you a rest break of at least 10 consecutive minutes for each 4 hours worked.
  3. Rest breaks must, to the extent possible, be in the middle of each work period.
  4. Rest breaks must be paid.
  5. Your boss may require you to remain on work premises during your rest break.
  6. You cannot be required to work during any required rest break. However, you are free to skip your rest break provided your boss isn’t encouraging or forcing you to do so.

Meal Breaks

  1. If you work over 5 hours in a day, you are entitled to a meal break of at least 30 minutes. However, you can agree with your boss to waive this meal period provided you do not work more than 6 hours in the workday. You can also agree with your boss to an on-duty meal break which counts as time worked and is paid.
  2. If you work over 10 hours in a day, you are entitled to a second meal break of at least 30 minutes. You can agree with your boss to waive the second meal break if you do not work more than 12 hours and you did not waive your first meal break.
  3. Your boss has an affirmative obligation to ensure you are free to take your meal break off work premises.
  4. You cannot be required to work during any required rest break. Moreover, your boss has an affirmative obligation to ensure you are actually relieved of all duty and are not performing any work during meal breaks.

Keep in mind, there are many exceptions to the above for certain industries, such as the healthcare, group home, motion picture, manufacturing, and baking industries.

If your employer is violating your rights to meal and rest breaks, you should contact a lawyer right away. Your claims could be subject to strict filing deadlines. For meal and rest break violations, the filing deadline is usually considered to be 3 years thanks to a recent California Supreme Court decision. [Murphy v Kenneth Cole Productions, 40 Cal.4th 1094 (2007)], but in certain cases, a 1 year filing deadline could also apply.

WFB Legal Consulting, Inc.–A BEST ASSET PROTECTION Services Group–Lawyer for Business

PROTECT YOUR SMALL BUSINESS WITH EXECUTIVE EMPLOYMENT CONTRACTS

Hiring a high-level employee or executive is a big step for most small businesses. The consequences of making the right hire are much greater with an executive than with most other employees. This hire involves a much bigger financial commitment on your part than hiring rank-and-file employees in terms of salary, benefits, and perhaps even an equity stake in the company. Your hope, of course, is that the experience and expertise the executive brings will result in greater sales and more opportunities for business growth, thus paying for the financial commitment many times over.

Because the stakes of such hires are so high, small business owners should create a formal, written employment contract that dictates the specific terms of your employment agreement with the executive. This will provide protection for both you and the new hire. An employment contract will help ensure, for example, that the executive doesn’t leave your company and take valuable proprietary information to a competitor. And by spelling out the specific conditions under which the executive can and cannot be terminated, the contract provides a higher degree of job security for him or her.

An executive employment contract typically includes, at the very least, the following components:

  • Duration of Employment: In most states, if an employee is hired without an employment contract that stipulates the duration of employment, he or she is considered to be employed “at will.” This basically means that either the employer or employee can terminate the employment for any legal (i.e., nondiscriminatory) reason at any time. By including a specific time duration of employment, the contract gives both sides an “out” if the arrangement isn’t going as expected. Given the higher stakes involved in an executive hire, this is often welcomed by both sides. However, the contract can include an at-will clause stating that the employment term is open-ended if both sides prefer this kind of arrangement.
  • Compensation Details: Compensation packages for executives are often more complicated than those for rank-and-file employees. Not only do they include a base salary but they may include stock options, incentive compensation plans, specially designed retirement plans, and other perks such as a company vehicle or a country club membership. Given this complexity, it’s usually a good idea to put all of this in writing in a formal employment contract. Also include any specific benchmarks or performance levels that must be met for the executive to qualify to receive such compensation if applicable.
  • Severance Package: To attract top executives, you may have to agree to pay them a certain amount of money or equity in the business or provide certain benefits for an extended period of time after they leave the company. The terms of any agreed upon severance package should be spelled out in detail in the employment contract, including the specific circumstances of employment termination that will and will not trigger the severance.
  • Restrictive Covenants: Also known as Non-Compete agreements and Proprietary Rights agreements, these could be your primary protection both against an executive leaving your business and taking proprietary information or trade secrets to one of your competitors, and/or starting a business to compete with yours. Most non-compete agreements dictate that the executive cannot go to work for a competitor or start a competing business within a certain time period (such as one year) after leaving your company. The legalities of defining a “competing” business can get tricky, and courts tend to be unpredictable in how they rule in such cases. Various state laws also affect the outcome of non-compete enforceability. Regardless, including at the very least, restrictive covenants in your employment contract, will make executives think twice before jumping ship and taking proprietary information to a competitor.
Contribution by:  Don Sadler

WFB Legal Consulting, Inc.–A BEST ASSET PROTECTION Services Group–Lawyer for Business

WHEN ARE YOU ENTITLED TO A COPY OF A TRUST?

A beneficiary or heir doesn’t automatically get a copy of a trust. Each beneficiary and heir is entitled to notice when a trust settlor dies and/or there is a change of trustee. Once the beneficiary or heir asks, in writing, for a copy of the trust then the trustee must provide a copy of the trust and all of its amendments within sixty days.

Once those sixty days have run, the beneficiary can petition the probate court to compel the trustee to provide a copy of the trust and its amendments. The beneficiary can also ask for attorney’s fees and court costs for having to file the petition. California law does not put any cap on the attorney’s fees and costs. This means the longer the trustee fights to be provided a copy of the trust, the more it will cost the trustee when he or she loses. Whatever amount the court awards for fees and costs is payable by the trustee personally. The trustee can’t use trust funds to pay.

The trust instrument determines the nature and scope of a trustee’s duty to account and report [Prob. Code §§ 16061, 16062]. The trust instrument may expand, restrict, or waive the duty to account and report, subject to certain restrictions. It is important to note that although the trust instrument may waive a trustee’s general duty to account when the trustee is not a disqualified person, a trustee nonetheless may be compelled to account “upon a showing that it is reasonably likely that a material breach of the trust has occurred” [Prob. Code § 16064(a)]. As such, a trustee cannot rely upon exculpatory language in the trust instrument to refuse to account to a beneficiary.

If you have cause for an Elder Abuse claim, you may file a Petition to Remove the trustee and/or ask for an accounting of the Trust. Otherwise, the first task the practitioner must undertake when representing a beneficiary is to review the trust instrument to determine whether the trustee owes a general duty to account or report, as well as the scope of that duty.

WFB Legal Consulting, Inc.–Lawyer for Business

ENTREPRENEURS, ESTATE PLANNING and LIVING TRUSTS

When it comes to understanding trusts, knowing the difference between revocable and irrevocable trusts is crucial. If you ask for a revocable trust and get an irrevocable one, or vice versa, the legal and tax consequences will be significant.

Revocable Living Trusts

A revocable living trust, also known as a revocable trust, living trust or inter vivos trust, is simply a type of trust that can be changed at any time.

In other words, if you have second thoughts about a provision in the trust or change your mind about who should be a beneficiary or trustee of the trust, then you can modify the terms of the trust through what is called a trust amendment. Or, if you decide that you don’t like anything about the trust at all, then you can either revoke the entire agreement or change the entire contents through a trust amendment and restatement.

Since revocable living trusts are so flexible, why aren’t all trusts revocable? Because the downside to a revocable trust is that assets funded into the trust will still be considered your own personal assets for creditor and estate tax purposes. This means that a revocable trust offers no creditor protection if you are sued, all of the trust assets will be considered yours for Medicaid planning purposes, and all assets held in the name of the trust at the time of your death will be subject to both state estate taxes and federal estate taxes and state inheritance taxes.

So why should you use a revocable living trust as part of your estate plan?

  1. To plan for mental disability – Assets held in the name of a Revocable Living Trust at the time a person becomes mentally incapacitated can be managed by their disability trustee instead of by a court-supervised guardian or conservator.
  2. To avoid probate – Assets held in the name of a Revocable Living Trust at the time of a person’s death will pass directly to the beneficiaries named in the trust agreement and outside of the probate process.
  3. To protect the privacy of your property and beneficiaries after you die – By avoiding probate with a revocable living trust, your trust agreement will remain a private document and avoid becoming a public record for all the world to see and read. This will keep the details about your assets and who you have decided to leave your estate to a private family matter. Contrast this with a last will and testament that has been admitted to probate – it becomes a public court record that anyone can see and read.

Irrevocable Trusts

An irrevocable trust is simply a type of trust that can’t be changed after the agreement has been signed, or a revocable trust that by its design becomes irrevocable after the Trustmaker dies or after some other specific point in time.  However, refer to Can an Irrevocable Trust Be Changed? for more information about certain situations in which an irrevocable trust may be changed.

With the typical revocable living trust, it will become irrevocable when the Trust-maker dies and can be designed to break into separate irrevocable trusts for the benefit of a surviving spouse, such as with the use of AB Trusts or ABC Trusts, or into multiple irrevocable lifetime trusts for the benefit of children or other beneficiaries.

Irrevocable trusts can take on many forms and be used to accomplish a variety of estate planning goals:

  • Estate Tax Reduction

Irrevocable trusts, such as irrevocable life insurance trusts, are commonly used to remove the value of property from a person’s estate so that the property can’t be taxed when the person dies. In other words, the person who transfers assets into an irrevocable trust is giving over those assets to the trustee and beneficiaries of the trust so that the person no longer owns the assets. Thus, if the person no longer owns the assets, then they can’t be taxed when the person later dies.

As mentioned above, AB trusts that are created for the benefit of a surviving spouse are irrevocable and, thus, can make full use of the deceased spouse’s exemption from estate taxes through the funding of the B trust with property valued at or below the estate tax exemption. Then, if the value of the deceased spouse’s estate exceeds the estate tax exemption, the A Trust will be funded for the benefit of the surviving spouse and payment of estate taxes will be deferred until after the surviving spouse dies.

ABC trusts can be used by married couples who live in a state that collects a state estate tax and the state estate tax exemption is less than the federal estate tax exemption. For example, in Massachusetts the state estate tax exemption is only $1 million, as compared with the current federal $5.34 million exemption, so in Massachusetts the first $1 million will go into the B Trust, then next $4.34 million will go into the C trust, and anything over $5.34 million will go into the A Trust.

  • Asset Protection

Another common use for an irrevocable trust is to provide asset protection for the Trust-maker and the Trust-maker’s family. This works in the same way that an irrevocable trust can be used to reduce estate taxes – by placing assets into an irrevocable trust, the Trust-maker is giving up complete control over, and access to, the trust assets and, therefore, the trust assets cannot be reached by a creditor of the Trust-maker or an available resource for Medicaid planning. However, the Trust-maker’s family can be the beneficiaries of the irrevocable trust, thereby still providing the family with financial support, but outside of the reach of creditors. There are also irrevocable trusts called self-settled trusts or domestic asset protection trusts that in some states, including Alaska, Delaware, Nevada, and Tennessee, offer creditor protection and allow the Trust-maker to be a trust beneficiary.

In addition, as mentioned above, the various irrevocable trusts that can be created for the benefit of the Trust-maker’s surviving spouse or other beneficiaries after the Trust-maker of a Revocable Living Trust dies can be designed to offer asset protection for the trust beneficiaries.

  • Charitable Estate Planning

Another common use of an irrevocable trust is to accomplish charitable estate planning, such as through a charitable remainder trust or a charitable lead trust. If the Trust-maker makes the initial transfer of assets into a charitable trust while still alive, then the Trust-maker will receive a charitable income tax deduction in the year of the transfer is made. Or, if the initial transfer of assets into a charitable trust doesn’t occur until after the Trust-maker’s death, then the Trust-maker’s estate will receive a charitable estate tax deduction.

 

WFB LEGAL CONSULTING, Inc.–Lawyer for Business-A BEST ASSET PROTECTION Services Group

ENTREPRENEURS, ESTATE PLANNING and LIVING TRUSTS

 

DOL FINAL OVERTIME RULE DELAYED

A federal judge has blocked the Department of Labor from implementing and enforcing a final rule that would have raised the minimum salary required to be classified as exempt from overtime under the Fair Labor Standards Act (FLSA). This means the rule has been delayed and will not go into effect on December 1, 2016 as expected. Instead, the minimum salary required for the administrative, professional, and executive exemptions will remain at $455 per week pending a final decision in the case.

Background:

On May 18, 2016, the Department of Labor published a final rule that, among other things, would have raised the minimum salary for the administrative, professional and executive exemptions from $455 per week to $913 per week. The minimum salary increase was scheduled to take effect December 1, 2016.

Preliminary Injunction:

On November 22, 2016, a United States District Court Judge in Texas granted a request by 21 states and several business groups to temporarily block the rule from taking effect. Therefore, the minimum salary for the administrative, professional, and executive exemptions will remain at $455 per week at least temporarily.

The delay is temporary while the case continues to be litigated and the court determines whether the DOL had the authority to make the FLSA changes and whether they are valid. The delay applies to employers nationwide.

The court’s preliminary ruling delays the effective date of the FLSA changes until the court makes a final decision. Therefore, the rule did not go into effect on December 1, 2016, but the final rule could still become effective in the future. Employers should watch for updates on the case as it makes its way through the court process and continue to check the Department of Labor website for further updates.

On December 1, 2016, the Department of Labor filed a notice of appeal with the federal court. Pending the outcome of that appeal, the preliminary injunction remains in place.

If you have employees properly classified as exempt under the existing regulations (they meet all of the exemption tests, including the performance of applicable job duties and the current salary threshold of $455/week), you have the option of not making any changes. While this may be an option, there is also some risk that the rule could become effective in the future and be applied retroactively. For this reason, while the case is still being litigated, consider tracking the hours of employees who stay classified as exempt but who will have a salary that falls below $913 per week (or limit their hours to 40 or fewer per week). Consult your legal counsel to discuss your options.

If you’ve already notified an employee of a salary increase or reclassification effective December 1 or have already made the change, it may be too difficult to reverse that change or communicate that the change will not be made. For example, there may be employee relations implications if a salary increase were reversed. As mentioned above, there is also some risk that the rule could become effective in the future and be applied retroactively. If you do decide to reverse a salary increase or delay implementing one already announced, consider tracking the exempt employee’s hours (or limiting their hours to 40 or fewer per week) in case the rule becomes effective in the future and is applied retroactively.  Additionally, keep in mind that applicable state laws may require advance notice of any changes in pay and state laws may also govern the overtime exempt status of employees. Employers should consult their legal counsel to discuss options available before making and communicating decisions related to this latest development.

WFB LEGAL CONSULTING, INC.–A BEST ASSET PROTECTION Services Group

LAWYER for BUSINESS

PORTABILITY ELECTION IN ESTATE PLANNING

The estate tax is somewhat similar to income tax except unlike income tax, there is an exemption amount.  In the case of estate tax, the exemption amount is currently $5.45 M.  That is per individual, so if you are a married couple, it’s $10.9 M ($5.45 M x 2).  That’s a large exemption, so it’s not very common for estate tax to be due unless you possess a sizable estate.  Portability is when the surviving spouse claims the deceased spouse’s unused portion of the deceased spouse’s estate tax exemption limit.

For example, assume the deceased spouse dies with a taxable estate of $1.7M.  The deceased spouse still has $3.75M ($5.45M-$1.7M) available that is not used.  The surviving spouse, unless the law changes again, still also has $5.45M available as an estate tax exemption. Accordingly, by making the portability election on the deceased spouse’s estate tax return, he/she can claim the deceased spouse’s unused portion as well, thereby increasing the available exemption amount for the surviving spouse to $9.2M ($5.45M + $3.75M).

Although it might not be necessary in all situations, this can be very helpful to a surviving spouse, particularly one who has taken over a family business and/or real estate, the value of which could appreciate considerably over time.  The surviving spouse should talk with a competent estate planning professional as soon as possible following the death of the deceased spouse, because there are deadlines to make the portability election, which is typically nine months from the date of death of the first spouse.

WFB LEGAL CONSULTING, INC.–Lawyer for Business–A BEST ASSET PROTECTION SERVICES GROUP

COHABITATION PROPERTY RIGHTS FOR UNMARRIED COUPLES

wfb_legal_consulting_inc_largeWhen unmarried couples live together for a while, it is likely that they accumulate a good amount of property. In this case, it is in each person’s best interest to write out a property agreement that spells out who owns what and how the property will be distributed should the couple separate. This is especially important if a couple acquires real estate together. On the other hand, this agreement is probably not necessary for couples who have only lived together a short time and do not have much property.

Without an agreement, you could face expensive and time consuming legal battles, defending your property rights. This trouble can be saved by each party entering an agreement they both consent to, while the relationship is sound.

 WHAT A COHABITATION PROPERTY AGREEMENT SHOULD INCLUDE

 A cohabitation property agreement is about you and your partner, and therefore, should include what meets the specific needs of your relationship. Most agreements include the following:

  • How specific assets are owned
  • Whether, and how, income and expenses are shared
  • How newly acquired assets are owned?
  • How bank accounts, credit cards, insurance policies, etc. will be managed
  • How specific assets will be distributed in the event of a separation, or what process will be used for resolving disputes of property rights

HOW TO COVER YOUR HOUSE IN A COHABITATION PROPERTY AGREEMENT

 Because buying a house together is such a huge financial responsibility and can carry emotional ties with it, including the purchase of your home in your cohabitation property agreement is particularly important. Take extra care with your plans to ensure that you do not cut yourself short of your property rights. This part of your contract should cover at least the following:

  • How the ownership is listed on the deed of the house. If you own the house as “joint tenants with right of survivorship,” when one of you dies, the other automatically inherits the entire house. If you own the house as “tenants in common,” when one of you dies that person’s share of the house goes to whomever he or she names in a will or trust. If the deceased person does not have a will or trust, his or her portion of the house will go to blood relatives according to state law.
  • How much of the house each partner owns.Additionally, you should include how any portion of the home can be transferred between the partners. For example, if the one who owns less can acquire more by making improvements or mortgage payments, this should be specified in the agreement.
  • The buyout rights, if any, and how the house will be appraised. Usually, people decide to have their original realtor appraise the house. Then, they allow one partner no more than five years to pay the other partner for the home. This varies, and should be specified to your own specific needs.
  • What happens to the house if you break up. Decide how the proceeds will be divided upon a sale, who will stay in the house if it is not sold, or what your buyout plan will be.
  • Eviction: The law in most states says that if someone has been living with you for a certain number of months, he or she has a legal right to live there (even if the person isn’t on the lease or deed). You have to go through a formal eviction to remove the person from the premises. You will have to go to your local courthouse to file a “Complaint for Eviction” or something similar.

 Support Payments:

Many people use the term “palimony” to refer to support paid to an ex-partner when the couple was never married. Palimony is not a legal term and carries no legal significance. In fact, members of unmarried couples have no rights to support, unless the two have previously agreed on it. To avoid a tense disagreement about palimony, it is in the couple’s best interest to include whether or not support will be paid in a written agreement. Recently, the California Supreme Court ruled that an ex-partner could sue for support if he or she could show that an implied contract existed between the two.

 Importance of Including Income in a Cohabitation Property Agreement:

Creating a cohabitation property agreement in the beginning, while the relationship is still sound can avoid a lot of tension, disagreement, and hassle should the couple break up. Property that is owned separately could be changed by the circumstances or by one of the partners claiming that there was an agreement to something, when there really was not. This becomes even more important when one of the partners makes significantly more money and supports the other partner who has little or no income.

Example: Pat and Sam are unmarried partners who decide to move in together. Pat is a successful surgeon, and Sam is unemployed. They use Pat’s income to purchase a home that Sam will fix up. To protect their individual property rights, just in case they break up, they decide to enter into a written cohabitation property agreement. In the agreement, they decide that after Sam completes the home improvements according to the couple’s plans, they will become joint tenants with the right of survivorship. They also agree that all furniture and fixtures that they place in the home will be owned and divided equally, should they break up. Their agreement explains that if the couple breaks up, that Sam would remain in the house to care for their child, but that Sam will compensate Pat for Pat’s portion within 5 years. Aside from this house payment, no support or other payments will be exchanged between the couple.

 Liability for Debts:

Unmarried partners are not responsible for each other’s debt unless they have a joint account or one is a cosigner or guarantor for the other. This is different from married partners who can be held liable for marital debts. In some states, registered domestic partners are responsible for all debts acquired for basic living expenses, like food, shelter, and clothing.

 Property Rights of a Surviving Cohabitating Partner:

A surviving partner has no property rights to the deceased partner’s individual property – unless a partner leaves property to the surviving spouse by will or trust. Now if the couple owns real estate as joint tenants with rights of survivorship, then the surviving partner will inherit the deceased partner’s half. But as you can see, these are very specific examples.

Some states that recognize domestic partnerships do have rights to inherit a portion of the deceased partner’s property. However, the best way to provide for the surviving partner is by leaving a will or living trust.

 Need More Information About Property Rights? Get a Free Legal Consultation.

Property agreements are very important and useful tools for protecting the property rights of unmarried, cohabitating partners. The agreement should be designed according to the couple’s specific situation. If your certain circumstances are complicated or you have questions about how your property rights can be affected by your relationship, consult WFB Legal Consulting, Inc.–lawyer for bussiness today for a free initial legal consultation. A BEST ASSET PROTECTION Services Group.

HOW DO I KNOW IF I AM AN EMPLOYEE OR INDEPENDENT CONTRACTOR?

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There is no set definition of the term “independent contractor” and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor, California starts with the presumption that the worker is an employee. Labor Code Section 3357.  This is a rebuttable presumption however, and the actual determination of whether a worker is an employee or independent contractor depends upon several factors, all of which must be considered, and none of which is controlling by itself. Consequently, it is necessary to closely examine the facts of each service relationship and then apply the law to those facts.

For most matters before the Division of Labor Standards Enforcement (DLSE), depending on the remedial nature of the legislation at issue, this means applying the “multi-factor” or the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341. In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are:

  1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
  2. Whether the work is a part of the regular business of the principal or alleged employer;
  3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
  4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
  5. Whether the service rendered requires a special skill;
  6. The kind of occupation, regarding whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
  8. The length of time for which the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The method of payment, whether by time or by the job; and
  11. Whether the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288)

Other points to remember in determining whether a worker is an employee or independent contractor are that the existence of a written agreement purporting to establish an independent contractor relationship is not determinative (Borello, at 349), and the fact that a worker is issued a 1099 form rather than a W-2 form is also not determinative with respect to independent contractor status. (Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877)

LAWYER FOR BUSINESS: WFB LEGAL CONSULTING, INC.—A BEST ASSET PROTECTION SERVICES GROUP

WHEN AND WHY SHOULD YOU REVIEW YOUR ESTATE PLANNING DOCUMENTS?

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It is very important to periodically get out your estate planning documents and review them. You can pick a date that will be easy to remember such as your birthday, the beginning of the year, or a particular holiday, and do it every year. Everyone has changing circumstances in their lives, so for your planning to most benefit you and your loved ones when the time comes, keeping your estate planning documents up-to-date is important.

Very common issues that lead to the need to review estate planning documents are the birth or passing of family members, a need to change your fiduciaries (Executor, Attorney-In-Fact, Medical Agent, Trustee) due to the named agent’s passing, incapacity, or personal situation that prevents them from serving such as an illness in their own family or a relocation to another state, change in marital status, etc.

When drafting documents, it is important to name successor agents, so that during your incapacity such changes will already be addressed, but if you have capacity and are aware of the unavailability of your first named agent it will serve you and your family best to update your documents to have a valid first and second, and possibly even third choice, particularly in the case of an expected long term incapacity or a long term trust.

Likewise, if you have minor children and you have named a guardian for them in your Will, it is very important to review often to make sure the family you have named is still the best situation for your children, considering the demands on that family, any special needs of you children, relationships and school districts, etc.

Also, when initially doing your estate planning, hopefully, you coordinated all beneficiary designations with your Will or Trust terms. Oftentimes people change jobs, or their bank merges with another, etc. and life insurance and retirement plan beneficiary designations need to be made. It is important to review your documents and maintain consistency. For example, if your Will directs your assets to a revocable trust you don’t want to negate that credit shelter planning by having the new beneficiary designation go directly to your spouse.

There are a multitude of situations that could create the need for review, including anytime real property is purchased. This is particularly true of property purchased in another jurisdiction or investment property. In those cases, you may wish to review your ability to avoid probate. Each and every property you own outright is subject to probate in its local jurisdiction at the time of your death, but there are methods of avoiding probate in multiple jurisdictions such as having an entity (i.e. trust or LLC) own the property, or if a joint owner with rights of survivorship (i.e. your spouse) survives you.

Another issue to consider is whether your spouse or child (or other beneficiary) has developed a special need, which could be medical, emotional or financial concerns who would benefit from leaving them assets in trust rather than outright. Trusts can be included in the terms of your Will or be written within a separate trust document that will remain private at your death, and with the help of your attorney can be drafted to meet whatever needs your particular situation requires.

Finally, the law often changes, and this can drastically affect estate planning. Our firm holds an annual estate planning seminar, which is complimentary, in order to alert our clients to any changes in the law that may affect them. If it has been many years since you reviewed your documents, it is wise to make an appointment with your attorney to discuss any changes that might need attention. We recommend never going more than five years without reviewing your documents with your attorney, preferably review would take place every three years.

HOW TO CHOOSE A BUSINESS LOCATION

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When you start a business, how do you choose the location? The answer depends on your type of business, your customer base and how you sell. For some types of businesses, such as retail stores or restaurants, you need a physical location located where most of your customers are. For others, such as service businesses or ecommerce companies, your physical location is less important, and you have more flexibility in your choice. Here are some factors to consider when choosing your location.

What does your business do? Do you need space to manufacture, store, package and ship products? Then you may need an industrial space. Is most of your work “knowledge work,” such as consulting, which takes place on a computer? Then you can work from just about anywhere.

Where are your customers located? If you plan to sell your products or services online, it doesn’t matter where your customers live since they can buy from you wherever they are. On the other hand, if customers must physically visit your location, this can rule out options such as working from home, since many zoning ordinances prohibit home-based businesses that attract too much traffic.

What materials, vendors or suppliers will you require? Do you need to be physically close to sources of product, or to key vendors? For example, if you need materials to produce a product, the cost of shipping them to your location can be prohibitive if you’re located too far away from your sources.

What’s your budget? If you’re on a shoestring budget, lower-cost options such as working from home, sharing office space or subleasing space from another business. or renting a spot in a co-working space could help you save money.

Will you have employees? If you plan to hire employees, you’ll need space to put them, which will require some type of commercial location. You’ll want a space that is configured appropriately for the layout you need, is handicapped-accessible so you don’t get into trouble with local zoning authorities, and requires minimal if any modifications before you move in.

What type of infrastructure do you need? When choosing your location, keep in mind factors such as Internet access, electrical and telecommunications services. For example, some older buildings aren’t adequately wired to handle the needs of a high-tech company. Along the same lines, your home may not have the Internet access speeds you need to run a home-based business effectively.

What’s on the outside? Don’t forget to assess the exterior of any location you are considering. Who are the neighboring tenants, and are they complementary to or competitive with your business? Is there enough parking for employees and/or customers? Is the location near major highways and/or public transportation so employees and customers can get there easily, and if you need foot traffic, is there plenty of it? Are the common areas well maintained and up-to-date?

 

WFB LEGAL CONSULTING, Inc.–LAWYER for BUSINESS

A BEST ASSET PROTECTION SERVICES GROUP