WHY YOUR ADULT CHILDREN NEED A POWER OF ATTORNEY AND A HEALTHCARE PROXY

Posted October 19, 2014 by leeschw
Categories: 4) Trusts & Estates

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Now that your child has reached the age of 18, and may be starting college, there is something very important that you as parents should do, and that is to ask your son/daughter to sign a Power of Attorney and a Healthcare Proxy.

Why?

Because in most states parents do NOT have the authority to make health care decisions, or manage money on behalf of their kids once they turn 18. It does not matter that you are paying their tuition, or that they are covered on your health insurance or that you claim them as dependents on your tax returns. You still have no authority to make health or financial decisions for them. This means, if your child is in an accident and becomes incapacitated, even temporarily, you might need court approval to act on his or her behalf or even to find out basic information as to his or her medical condition.

There was a case in Texas where parents were unable to secure even basic information about the medical condition of their college-aged sons following a car accident that left both boys unconscious and in the hospital. After a few days, both sons regained consciousness and gave their doctors permission to speak with their parents. In another case – a couple’s college-aged daughter remained in a coma for weeks- parents had to start a court proceeding to become their daughter’s temporary legal guardian. Such court proceedings typically cost thousands of dollars, take time, and are not as uncommon as you might think.

Our firm offers our clients and friends of the firm what we refer to as a FREE COLLEGE STUDENT PACKAGE.   We offer any college age young adult the benefit of having  our firm prepare the following two documents for them:

     Health Care Proxy  – The Health Care Proxy will allow your child to name another person (typicallyhis or herparents) to make medical decisions for them if they are unable to make or communicate such decisions on their own. This document will also allow thedesignated agent to access your child’s medical information.

     Power of Attorney – The Power of Attorney allows your child to name you (or another person) to take over financial matters if need be, such as handling bank accounts, signing tax returns, and making other non-medical decisions.
If you are interested in taking advantage of our offer, please contact our office.
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ARE RED LIGHT TICKETS OR SCHOOL ZONE SPEEDING TICKETS EATING AWAY AT YOUR PROFITS?

Posted October 16, 2014 by leeschw
Categories: 1) Business Law, 2) Employment Law

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I am sure by now either you or your employees have received those annoying red light tickets or the school zone speeding tickets. Nassau County has collected over 1.4 million dollars since school started, and projects to receive as much as $25 million a year from those annoying and costly speed camera tickets. In 2013, Suffolk County generated more than $19 million from red light camera tickets, and has estimated bringing in $30 million this year with the installation of more cameras.red light cam
We all know by now how they work. Once a vehicle passes through an intersection when the traffic light is red, or speed through a school zone, an $80 ticket is then sent by mail to the registered owner of the vehicle. It doesn’t matter who was driving the vehicle, the ticket is assessed against the owner. If it’s one of your kids who gets the ticket, like most parents you will probably make your child pay the fine. Unfortunately, the same logic cannot be applied to your employees who get those tickets.

HERE’S THE PROBLEM:

New York State Labor Law says that an employer cannot make unauthorized deductions from an employee’s wages, nor demand separate payments to cover a company expense. It also makes it unlawful for an employer to demand that an employee reimburse an employer for company expenses caused by an employee’s mistake. Since a ticket issued on a company owned vehicle is considered a company expense, employees cannot be required to pay the fine associated with the ticket. If the employee offers to voluntarily pay the fine, employers must properly document this voluntary action, otherwise there could be repercussions from the Labor Department.

BUT THERE IS A SOLUTION:

Just because there is no monetary liability on the part of the employee for the ticket does not mean that employees can disobey traffic laws while driving a company owned vehicle with no repercussions. While an employee cannot be forced to pay for one of these tickets, an employer can take disciplinary action against an employee, including firing the employee or suspending them. An employee’s future raises or bonuses can also be impacted by getting these tickets. These disciplinary actions would most likely be worse for the employee than having to pay the fine associated with the ticket, and cause them to be more careful when they are driving a company vehicle.

Employers should also consider including in their employee handbooks express policies so that their employees are aware of the consequences of receiving red light traffic tickets and school zone tickets while driving company vehicles. With knowledge of the potential consequences, your employees might be more compliant with traffic laws when driving a company owned vehicle.

If you do not have an employee manual to include such policy, it is time to get one. If you do have one, it may be a good time to update it. We would be happy to assist you in drafting a policy on this issue for your employee manual. Contact us if we can be of assistance.

WHY BUSINESS OWNERS SHOULD OBTAIN A RELEASE FROM TERMINATED EMPLOYEES

Posted September 2, 2014 by leeschw
Categories: 1) Business Law, 2) Employment Law, Labor & Employment Law

If you are a business owner or manager and are terminating an employee and anticipate the possibility of claims being made by such employee, you should consider obtaining from them a release of claims.

Simply stated, a release of claims is an agreement between an employer and employee whose employment has been terminated, releasing the employer from employment related claims.  Generally, a release of claims is offered by the employer in exchange for the acceptance by the employee of a severance package.  A release is a useful tool when the employer wishes to terminate the employee but feels that there is some risk that the employee will sue.  The purpose of the release is to avoid potential litigation and resolve possible disputes, such as a claim for discrimination, before the employee files a complaint.  A more formal agreement may be necessary if the former employee has already filed a claim.

If you decide that you would like to obtain a release from an employee who is going to be terminated, there are a few factors to keep in mind.  For employees age 40 and over, the release should include an age discrimination clause, which specifically refers to release of any claims under  the Age Discrimination in Employment Act, protecting against age discrimination.  The release should be in writing, and written in a manner that the employee would understand.  The employer must inform the employee that he/she has 21 days to consider the release and to accept the severance package.  (The 21 days starts to run from the date of the employer’s final offer to the employee.)  The employee can sign the release prior to the expiration of the 21-day time period.  After signing the release, the employee has 7 additional days to withdraw or revoke the release.  Such time periods and rights must be specifically stated in the release agreement; otherwise, the release is unenforceable.  Also, the agreement should specifically advise the employee to consult with an attorney before signing the release.

The release of claims is typically offered at the employment termination meeting along with the severance package. The severance package is what you would give in exchange for the employee giving up any potential claims, since, to be enforceable, the employee must receive some consideration (i.e., severance package), above and beyond the value of what he or she was already entitled to.  It is common practice for the employer to give at lease two weeks severance pay and to pay an employee for unused vacation or sick days.

Be prepared for the employee to push for a better severance package.  This is where your negotiation skills will come into play.  In determining how much to offer, you should keep in mind that if a claim is brought by the terminated employee, regardless of the validity (or more often, the lack thereof) of the claims, defense costs alone will likely run tens of thousands of dollars, plus there is always the uncertainty of the outcome.

Any time you terminate an employee, you should consult with an attorney to help evaluate the potential for a lawsuit.  If we can be of assistance to you regarding a termination and/or the drafting of a release of claims, please do not hesitate to contact us.

CAN IDA INCENTIVES HELP YOUR COMPANY

Posted August 12, 2014 by leeschw
Categories: 1) Business Law, 3) Real Estate Law, Uncategorized

The purpose of the various Industrial Development Agencies  (IDAs) in the state of New York is to promote economic development within each of their respective counties.  Since 1969 the IDAs have been offering various types of financial incentives for business projects which are focused on the creation and retention of jobs and economic development, such as opening a new business, expanding or renovating your current business, or leasing or purchasing a new facility.  Project sizes range from one hundred thousand dollars to tens of millions of dollars.  In order to qualify for IDA assistance, your company would need to satisfy eligibility requirements and demonstrate a need for assistance.

Below is a list of some of the Financial Incentives the IDAs have to offer which your business may be eligible for.  

1.  Real Estate Tax Abatements

 The IDAs can transfer a portion of the value of its exemption from real property taxes to your company. To do so, the IDA takes temporary ownership interest in the property your company will use for the project, for the period of time during which the incentives are being provided. A “PILOT” (Payment In Lieu of Taxes) program is utilized to make reduced payments instead of real property tax payments. The PILOT program provides your company with valuable certainty as The PILOT payment, unlike actual real estate tax payments, will not rise above a set amount for the term in which the IDAs haslegal ownership of the property.

2.  Sales and Use Tax Exemptions

For projects in which construction or equipment purchases occur, the IDAs may issue a sales tax exemption letter for eligible construction materials, furniture and equipment your company purchases in connection with its project. This provides your company with a savings of at least 8 1/2 percent.

3.  Mortgage Recording Tax Exemptions

Your company may be entitled to a full exemption from mortgage recording tax for any mortgage recorded in connection with a project. The savings realized can be substantial.  For example, for a mortgage with a principal amount of three million dollars, the savings would be $31,500 (1.05% current mortgage tax rate in Nassau and Suffolk Counties x $3,000,000)

4. Tax Exempt Financing

The IDAs are authorized to issue tax-exempt bonds, and can act as a financial conduit by making the bond proceeds available to your company to finance an expansion. If your project meets the requirements for tax-exempt financing, your company may be able to obtain below market interest rates. Certain bonds are exempt from New York State and local income tax, while others are exempt from federal, New York State and local income taxes. An analysis will be undertaken by the IDAs to determine whether your project meets the requirements for tax-exempt financing established under the Internal Revenue Code.

 
The IDAs will undertake a wide variety of projects involving commercial or research facilities, as well as manufacturing, industrial or warehousing facilities, and is open to proposals from all economic sectors. If you are working on or considering a project which you think may be eligible for the financial incentives offered by the IDAs, or are just interested in hearing more about the financial incentives the IDAs have to offer, we will be happy to discuss them with you in further detail and guide you through the application process.

Do You Know Your Responsibilities If You Are Appointed as an Executor Under A Will?

Posted July 14, 2014 by leeschw
Categories: 4) Trusts & Estates

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Being appointed as an executor under a will is both an honor and an obligation. In order to make the administration of an estate go smoothly, an executor will often turn to an attorney for aswill--621x414sistance to avoid costly errors. So, as the nominated executor, your first step should be to select any attorney to represent the estate with whom you are comfortable working with. You are not required to retain the attorney who drafted the original will, nor the attorney who has possession of the original will, to assist you in your role as executor.

Below is a brief list of some of the duties of an executor, which will give you a general understanding of the role and responsibilities you assume if you accept the appointment.

1.  Understand the Will.

 It is very important to read and understand the will so that you know who the beneficiaries are and what assets they should receive.  You will need to know if the will gives all the assets outright to the beneficiaries, or if it creates trusts to which the assets are to be distributed.

2.  File the Petition for Probate with the New York State Surrogate’s Court.

A will must be admitted to probate before the distribution of a decedent’s assets. To submit a will for probate you must: (a) locate the New York State Surrogate’s Court with jurisdiction over the estate, which is the court in the county where the decedent lived; (b) obtain and complete a Petition for Probate and all other documents required to file the petition; and (c) file the Petition for Probate, along with the original will and death certificate. If you work with an attorney, they will handle this obligation.

3.  File an Inventory of the Estate’s Assets with the Surrogate’s Court.

After your appointment, you are required to prepare an inventory listing all of the estate’s personal and real property and file it with the Surrogate’s Court. Each asset must be appraised and fully described.

4.  Notify Banks, Credit Card Companies and Government Agencies of the Decedent’s Death.

You should notify all financial institutions in which the decedent held an account, and all credit card companies of the decedent’s death. The Social Security Administration must also be notified.

5.  Set Up a Bank Account for the Estate.

You must set up a separate bank account for the estate. Estate funds must be kept separately and not comingled with any other funds. If the decedent is owed any money, such as a paycheck, this can be deposited into the estate account. It is imperative to keep exact and careful records of all money received and paid out.

6.  Manage the Estate Assets.

You may have to work with attorneys and financial advisors in order to make sure the estate’s assets are properly valued and invested pending distribution to the beneficiaries.

7.  Pay the Estate’s Debts and Taxes.

You must have income tax returns for the estate timely prepared and filed, along with any required payment. You are also required to pay from the estate assets any debts of the decedent which arose prior to death and any debts of the estate incurred in connection with administering the estate.

8.  Represent the Estate in Court.

You will have to appear in court on behalf of the estate in the event the decedent was involved in any lawsuits at the time of death.

9.  Distribute the Assets of the Estate.  

After court approval,you are responsible for distributing the assets of the estate to the beneficiaries in accordance with the decedent’s wishes as expressed in the Will.

10.  Close the Estate.

You must file certain forms with the Surrogate’s Court to close the estate, and should obtain releases from all beneficiaries.

The job as an executor may be easy or complex depending on the simplicity or complexity of the estate, and the responsibilities may go beyond what is listed above. An executor is held to a higher standard of behavior, is expected to act in an ethical manner and manage the estate carefully. If the executor breaches this fiduciary duty, the executor could be held personally liable for any losses suffered by the estate or beneficiaries. We are happy to assist you with your responsibilities as executor, or with any other estate administration needs.

10 ITEMS TO INCLUDE IN YOUR EMPLOYEE HIRING PACKAGE

Posted June 16, 2014 by leeschw
Categories: 1) Business Law, 2) Employment Law, Labor & Employment Law, Uncategorized

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Whether you are a large or small business, it is important to have a well-organized hiring package for new employees.  A hiring package is essentially a packet of employment-related forms and documents for the new employee, which is provided at the start of employment to help streamline the on-boarding process.  The hiring package provides an introduction about your company culture, while ensuring your company’s compliance with labor and employment laws.  In addition, a well-designed hiring package may help to mitigate against employment-related disputes.
THE FOLLOWING ARE TEN ITEMS TO CONSIDER INCLUDING IN YOUR COMPANY’S HIRING PACKAGE
empoyee benefits
1.  Welcome Letter.  A brief welcome letter from the company is a positive first impression to a new relationship.  The letter introduces your company, its mission statement, and expresses delight in having the new employee join the “team”.
2.  Application Form(s).  A copy of any job application form(s) filled-out and signed by the new employee should be included in the hiring package.  An application should at least include contact information (i.e., address, phone number), date of birth, and an emergency contact person for the new employee.
3.  Tax and Government Forms.  Some forms are required by the Government, including a Form W-4 and Form I-9.  New York State requires that every new employee be given a Notice and Acknowledgment of Wage Rate and Designated Payday, Hourly Rate Plus Overtime, which they are required to sign and return to their employer.
4.  Consent and Disclosure for Background Checks/Drug Testing.  If your company conducts background checks and/or drug testing, prior notice and consent of the employee is required.  Such consent is typically obtained at the interview process but, if not, include proper consents/disclosures in the hiring package.
5.  Employee Handbook.  Becoming familiar and acquainted with company policies and procedures is essential at the start of new employment.  Provide an Acknowledgment of Receipt of the Employee Handbook for the new hire to sign and return.  (If your company does not have an employee handbook, please contact us to discuss the importance of having one.)
6.  Benefits and Insurance.  If the new employee is eligible for health insurance on other benefits, such as a 401(k) plan, you should include a summary plan description in the hiring package.
7.  Payroll Documents.  If your company uses direct deposit, include the enrollment form in the hiring package.
8.  Company Directory.  The hiring package should include a company directory, which includes a list of personnel names, title, email addresses and telephone extensions.
9.  Confidentiality and Non-Compete Agreements.  Depending on the nature of your business, you may want your new employee to sign a confidentiality agreement if he/she will have access to any trade secrets.  If applicable, you may also want the new hire to sign a non-compete agreement.
10.  Resume/Work Schedule/Job Description.  It may be worthwhile to have the new employee initial his/her resume submitted to the company for the job opening, and attach it to a work schedule and job description.  Including such paperwork in the hiring package may prove fruitful in the event of any discrepancy(ies) following the hiring.
This list is not exhaustive, as each company may have additional information and documentation relevant to its particular business that it may include in its hiring package.  We are happy to assist you in developing a new hiring package suitable for your company.

DO RECENT CHANGES TO NEW YORK ESTATE TAX LAWS IMPACT YOUR ESTATE PLANNING?

Posted April 14, 2014 by leeschw
Categories: 4) Trusts & Estates

Tags: , , ,

The New York State budget passed on April 1, 2014 includes dramatic changes to the state estate and gift tax laws. Below is a brief summary of the most important changes affecting New York trusts and estates.  It would be prudent to contact your attorney to discuss how these changes affect your estate plan and whether any action is necessary or desirable.

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Increase in Estate Tax Exemption
Since 2001, the federal estate tax exemption amount (the amount of assets that can be passed to heirs without incurring any estate tax), has risen from $1,000,000 to $5,340,000 while New York State’s exemption remained at $1,000,000 per person. Governor Cuomo’s 2014-15 budget bill has raised the New York State estate tax exemption amount to $2,062,500 per person immediately, with increases over the next 5 years so that the state estate tax exemption amount will mirror the federal exemption.

The exemption amounts phase in according to the following:

Individual Dying On Or After:                                Tax Exemption Amount:

  • April 1, 2014 & before April 1, 2015                         $2,062,500
  • April 1, 2015 & before April 1, 2016                         $3,125,000
  • April 1, 2016 & before April 1, 2017                         $4,187,500
  • April 1, 2017 & before January 1, 2019                    $5,250,000
  • January 1, 2019 & thereafter                                    $5,000,000+*

       * Indexed for inflation from 2010

Inclusion of Lifetime Gifts in New York Estate Tax Calculation
Although New York does not impose a gift tax on lifetime transfers (unlike the federal government), the value of gifts made by a New York decedent (i) within three years of death and (ii) between April 1, 2014 and January 1, 2019 will be added to the value of the decedent’s estate and may result in an estate tax on such gifts.

Repeal of New York’s Generation-Skipping Transfer Tax.
The New York (but not federal) generation-skipping transfer tax has been repealed, meaning that New York will not impose a generation-skipping transfer tax on certain trusts that are held solely for the benefit of individuals two or more generations below the creator of the trust.

Tax laws are highly technical. Always consult with your attorney or tax professional before engaging in any planning.