Oct 28 2013

Drafting Documents Saves Money – A Guardianship Story

Back in August, I was appointed to represent an “Alleged Incapacitated Person” by a judge of the State Supreme Court in Suffolk County. This is a guardianship proceeding; an Alleged Incapacitated Person, or AIP, is what they call the person that the petitioner feels is in need of a guardian. In this case, the petitioner was the hospital to which the AIP was admitted after her massive stroke.

A guardianship petition is necessary when an adult can no longer care for themselves, or take care of their own financial situation. It involves hiring an attorney and is handled as if the AIP is being sued. Both the AIP and the petitioner will incur legal expenses. The total bill could end up in the thousands of dollars. It also takes time – our first hearing has been delayed twice so far, and the judge may not rule at that hearing. If a guardian is to be appointed, then it may not happen until some time AFTER the hearing. Until then, there is nobody who can act for the AIP. In this case, that means that there is no one who can make medical decisions for her, and there is no one who can fill out her Medicaid application. There isn’t even anyone who can cash her pension checks.

Drafting a few documents – a Power of Attorney and an Advance Directive – can save a lot of time and energy later on, because in many cases, those documents can prevent the situation here. It is also important, however, to make sure that people know where to find those documents in an emergency. The AIP in my case did in fact have an Advance Directive. However, the hospital did not know of its existence and nobody was listed as an emergency contact in order to get the paperwork to the hospital. Had it been found, this story might be different.

It’s also worth noting that there was no phone number on the Advance Directive. It is important that you make sure that your health care proxy list some way to reach the person that you are appointing, so they can get to the hospital in case there is an emergency.

Oct 28 2013

Digital Assets Presentation

After feedback from listeners to our first two conference calls, we have changed our format – instead of a scheduled time, we are now putting our presentations up on YouTube. Our first Protecting your Family Update is posted – Digital Assets.

To watch it, please click here.

Oct 21 2013

New Baby means New Discussions

A long-time client of mine(we’ll call her Janet) recently told me that she was pregnant with her first child. She was very excited, and I was excited for her as well. We were talking about everything that she’d now need to prepare in order to protect her new baby. Janet already had a will, Power of Attorney and health care proxy, but that wasn’t going to be enough. Halfway through, she realized it was a more detailed list than she had thought about.

  • Standby (or Pre-Need) Guardian Appointment – Janet’s Power of Attorney appointed someone to take care of her financial needs, and her health care proxy appointed someone to take care of her medical needs. There was nothing, however, that said who would take care of her new child. Should something happen to her and her husband, what happened next? This is a document that will appoint someone to step in as guardian of a child if the parents are unable to take care of the child for any reason. Unlike a Power of Attorney or health care proxy, this document can survive the death of the signer.
  • 529 Plan – 529 plans are plans that allow you to save money for your child’s education. These plans, which can include tax savings, are extremely beneficial when started early. The plans vary by state, and generally only a plan in your state will work as a tax planning vehicle, but you are not limited to using your own state’s plan. These plans can be set up online, or through an investment manager.
  • Life Insurance – This was something that Janet and her husband had considered off and on for a little while – because they both worked, they were evaluating how reliant they were on each other’s salaries. The most recent decision had been that either one of their salaries was enough to cover the bills and that the first death might just mean eating out a little less, and a little less in savings. With the new baby, however, that paradigm changed. Now, the first death might mean that a nanny was needed, or that the surviving spouse had to work fewer hours or take a pay cut. This became much more of a necessity.
  • Last Will and Testament – Janet’s will left everything to her husband. If he died before her, then it all went to several charities that she supported. That was no longer how she wanted to distribute her assets. It also failed to appoint a permanent guardian for her child. Janet needed a new will that contained a trust for any children she had, and ensured that her wishes for who should take care of the children in the event of her death was known.


Oct 17 2013

NY Department of Labor Releases New Regulations on Employee Deductions

This past week, new rules from the Department of Labor went into effect. These rules make some changes to the way employee deductions can be made – now there are five broad categories of permitted deductions. The first three are unchanged.

  1. Required deductions – these are deductions for state and federal taxes, as well as any other deductions required by law, such as garnishments.
  2. Union dues
  3. Deductions for the employee’s benefit – this includes health insurance, day care, and other company-provided services where the employee receives a benefit. Services that are for the employee’s convenience (such as check-cashing) are not considered a benefit and fees cannot be charged/deducted. While this regulation is unchanged, the DOL has provided additional clarification and categories of employee benefit.

The two new ones are:

  1. Repayment of salary advances
  2. Repayment of overpayment of salary

Both categories require the employee to be told how the deduction will be made. In the case of the salary advance, the employee must be given the terms of the advance (how much will be advanced, how much each deduction from future wages will be, when the deductions will cease) ahead of time. In either case, employers must have a written grievance procedure and, if the deduction is grieved, the employer must halt deductions. For salary advances, it is also important to be aware that the employer cannot charge interest under this program.

The new regulations do not change many existing rules – for example, employers still cannot fine employees for tardiness or other workplace rule infractions and take those fines out of employee salaries directly. While you can discipline employees for these infractions with suspensions or firing, you cannot make them work while deducting salary.


Oct 15 2013

Government Shutdown Doesn’t Mean Taxes Aren’t Due

Just a note to remind you that even though the government is shut down and the IRS is mostly closed to taxpayers, that does not mean that tax payments are not expected to be filed. If you filed an extension, then you must file your taxes by today (or request another extension). Any payments that are due are still due as of the original date. Questions may not get answered by the government, but it will still cash your checks.

Oct 14 2013

Have You Had Your Meetings Yet?

With only two and a half months left in the year, it is a good time for Corporate officers to start looking around and make sure that they have covered all of their yearly formalities. For Corporations, that means having both a Shareholders’ and a Board of Directors Meeting. For LLCs, that means holding a Members’ Meeting.

It’s not enough to hold the meeting; minutes of the meeting should be kept, and then put with the company’s other documents. If your governing documents state how much notice each attendee must be given, you should send out that notice, or get a waiver from each attendee.

At these meetings, you should ratify every major act that the business has taken – this does not mean the day-to-day actions, but any big contracts, such as leases or loans, that have been signed should be voted on and ratified here (unless they were approved previously).

For small companies, these meetings are important; they establish the company as its own entity and not merely as an extension of the owners. So while they may seem silly, these formalities will help if there is ever a lawsuit – these help to limit or eliminate the liability of the owners of the company.

We have forms available for Meeting Minutes, Notice of Meeting and Waiver of Notice. Please feel free to contact us if you need them, or if you have any questions.

Oct 01 2013

Government Shutdown – Business Update

As Day One of the Great Government Shutdown of 2013 comes to a close, here is how it will affect businesses:

  • E-Verify is down. This means that businesses that use E-Verify are unable to check a potential employee’s status. New companies cannot sign up for E-Verify. This does not mean that new hiring must stop – employers can, and in fact must, still get I-9 forms from new hires, and verify eligibility when the shutdown ends.
  • It will be harder to get Employer ID Numbers. The IRS provides a website that can issue EINs to new businesses, but the site does not always work. If it proves impossible to get an EIN through the site (something that can happen if the responsible party also got its EIN through the web), then an application SS-4 must be filed. There is no one working to process the forms.
  • SBA loans will halt. The SBA will not process new loans, although current loans will still be backed by the agency.
  • Audits are put on hold. The IRS is suspending audits, which means that businesses currently under audit will have that hanging over them for a while longer.
  • DOL audits are also suspended. The Federal Department of Labor will most likely be unable to follow up on any complaints regarding federal labor laws.

As things change, we will continue to keep our clients updated.

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