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 February 2011 | April 2011 | June 2011 | September 2011 

The Morton Memo - DECember 2011 

 

The end of the year usually brings on thoughts of New Year's resolutions.  However, it should also bring thoughts of year end projects.  Our first article lists things to consider as the year draws to a close.  Tax issues are a major concern and you should speak with your accountant.  We can help you with the other matters listed.  
Social media continues to create interesting legal issues and our second article focuses on a surprising new legal development in that field. 
Baby boomers are aging but are slow to deal with their mortality.  Our third article concerns some of the basics of estate planning.
Earlier this year, attorneys Michael Ritter and Kellie Delaney joined the firm.  We now offer services in estate planning, real estate, and telecommunications, as well as expanded service in our existing practice areas.
Thank you for your support and your business this year.   We hope you have a wonderful holiday season and a happy, and prosperous, New Year.
The Morton Memo is for you, so kindly email me those topics of interest to you.

>> There Is No Time Like The Present  

>> Employees Griping on Social Media

>> Estate Planning Basics

There is no time like the present

Year end

As the year comes to a close and the New Year looms on the horizon, this is a great time to take stock of your business and legal affairs.  Think of it as a year-end checkup, and consider taking action on these items so when January 2012 comes around, you can focus on new business and forward-looking plans.

Tax Planning.  First, call your accountant.  Chances are, you can take a few steps this month to clean up your bookkeeping, assess any tax benefits you might get for 2011 by paying certain bills in December—or deferring them to January.  Determine whether your tax records are in order for preparation of your 2011 returns.  Do you need to gather information so you can issue 1099s to contractors or other vendors?  Few of us want to think about tax records, at any time of the year.  But doing it now, while the information is fresh, will let you get organized more quickly and address any holes before the year comes to a close.  Plus, your proactive efforts will pay off when deadlines are looming in a few months.  And remember:  in San Diego County, the first installment of your property taxes is likely due on December 10, 2011.  Be sure to pay this before the deadline to avoid penalties.

Corporate records.  Now is a good time to review your year’s business activity.  Are your corporate minutes up to date?  Do you have old business that should be resolved by year end?  Are there any transactions for which you have not prepared documentation?  What about the upcoming year?  Have you scheduled your annual board meeting for January?

Statement of Information.  If you do business in California as a corporation (including nonprofits and foreign corporations) or LLC, you must file an annual Statement of Information, due by January 31, 2012.  You may have received a postcard recently, reminding you of this requirement.  Be sure this is on your To Do list, or simply take care of it now.  The fee for most entities is $25.00 and most corporations can file this online through the California Secretary of State.  See the website at http://www.sos.ca.gov/business/be/statements.htm.   

Nonprofits.  A nonprofit may have additional reporting requirements.  Contact our office for more information if you operate a California nonprofit corporation.

IP portfolio.  May businesses fail to maintain a current inventory of their intellectual property and related information.  Now is a good time to schedule a review of your IP portfolio.  Have you registered any new domain names?  Are you considering new product lines?  Are your trademark and copyright registrations up to date or do any of these expire soon?  Do you have any licensing agreements that will need to be renewed or negotiated?   Please contact our office if you have questions.  The firm can help you to evaluate your portfolio, apply for renewals as needed, and to answer any questions you have about licensing agreements, recent cases, and new risks that you might encounter based on changes in your business model.

Business entities.  Is it time to dissolve an old corporation or form a new one?  Note that between December 16 and December 31, 2011, you can file to create a new entity and be exempt from paying the minimum corporate tax.  If you operate a sole proprietorship, you may want to determine whether now is a good time to incorporate your business.  Discuss this issue with your accountant and call our office if you need assistance with forming or dissolving a new entity.

More tax planning.  Laws change.  Certain capital gains exemptions expire at year end.  In the current political climate, it may be difficult to plan ahead.  But this is another reason to call your accountant and bring him or her up to date on your current financial situation.  

Estate plans.   Of course, the first question is always:  Do you have one?  We meet many people, savvy business owners, successful real estate investors—young and not so young—who attend to the details of their finances, their retirement plans, their children’s college funds, insurance, and so on, who nevertheless fail to develop an estate plan to protect their assets and their families.  If you don’t have an estate plan, it’s never too early to create one.  If you do have an estate plan, do you understand its provisions?  If you haven’t updated it for a few years, we recommend that you review it now.  As noted above, tax laws change.  Lives change.  If you have married, divorced, had children, or inherited property, these are all good reasons to have your estate plan reviewed to ensure that it reflects your current wishes.  See the related article in this issue of the Newsletter for a discussion of Living Wills. 

Take a few minutes to consider the topics above.  It may save you some time and money, and buy you a little peace of mind.

If you have any questions or need any help with the legal matters listed above, please contact us at info@ericmortonlaw.com or (760) 722-6582.

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                                                                                                     employees griping on social media

Social Network

Social media is creating further legal issues.  In our last newsletter we discussed the use of social media by businesses and its pitfalls. Now, another issue has arisen - employee griping in social media. Employee complaints are a fact of life.  Posting those complaints in social media may be embarrassing to the employer and give the employer a desire to terminate the complaining employee.  However, that may be illegal.

Recently, a National Labor Relations Board's (NLRB) administrative law judge ruled an employer violated the National Labor Relations Act (“the act”) when it terminated employees for discussing on Facebook criticism that a co-worker had made about them. An employee posted on her Facebook page that a co-worker criticized her and other co-workers' performance and planned to complain to management. Her co-workers responded with their own frustrations and in some instances targeted the alleged criticizing co-worker.  The employer fired the complaining employees.

The administrative law judge ruled that these Facebook posts constituted protected “concerted activity” under the act because the employees were not acting solely on behalf of themselves. The judge ruled that this sort of Facebook activity is concerted so long as it has the object of reaching out to fellow workers or seeks to improve working conditions. The judge ruled that the employees were engaging in activity due to concern that the complaining co-worker would take her criticisms to management. 

I should point out that the employees involved were not union workers.  The National Labor Relations Act applies to unorganized workers as well as union workers. 

Companies’ policies can be illegal if they prohibit employees from making disparaging remarks about the company and supervisors or where they failed specifically to permit concerted or group activity. Meanwhile, the NLRB has looked favorably upon policies that expressly state that the policy is not intended to restrict concerted activity or "to restrict the flow of useful and appropriate information". The NLRB has also stated that an employer can prohibit discriminatory or defamatory remarks. However, an employer must have evidence of discriminatory social media posts before it acts.

Fortunately, the NLRB has made clear that social media postings regarding work complaints do not automatically become concerted activities. It recently stated that the following conduct on Facebook was not protected: 1) an emergency medical services worker complaining on a US senator's page that her pay was low and her employer provided poor first responder services; 2) a bartender griping that he was not receiving tips and describing his customers as "rednecks"; and 3) a residential caregiver at a facility for the mentally ill joking about hearing voices and the residents' mental illnesses.

In each of these cases the employee was not using Facebook to reach out to co-workers or improve working conditions.

Employers should review their social media policies and consider adding language that specifically excludes from coverage any activities protected under the act. Moreover, employers should carefully assess social media postings  before taking disciplinary action against employees based on those postings.

If you have any questions, please contact us at info@ericmortonlaw.com or (760) 722-6582.

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estate planning basics

Will signature

We strongly recommend that all adults have certain basic estate planning documents.  From our professional experience, and the sometimes painful experiences of our clients, we attest to the importance of estate planning.  Most persons should have an estate plan that includes a will, revocable trust (also called a living trust), and living will (or power of attorney for health care).  We are continually amazed at the number of persons who die without any estate planning.  If you die without these documents, then you will create a lot of trouble and expense for your next of kin.

 

Will.  A will is a statement of the desires of the person making out the will (called the testator) for the disposition of the testator’s property after death, who will carry out those desires (the executor), and other specialized provisions (such as a nomination of who will be the guardian of minor children of the testator).    Every adult should have a will.  Even persons who do not own real estate or have children should have a will in order to ease the burden on his or her family in the event of death.  Often, the executor can use a properly executed will to gain title to automobiles or settle other minor matters.  Anyone will children must have a will.    A will must be properly executed in order to be effective. 

 

Living Trust.  A revocable trust or living trust is a trust that is similar to a will in that it states the desires of the person for the distribution of his or her property after death.  However, it is created primarily in order to transfer real estate, or other high value property, from a deceased person to his or her heirs without going through probate.  The person creating the trust (called a trustor) executes a trust document that creates the trust.  The trustor is also the administrator of the trust (called a trustee) and, during the lifetime of the trustor, the trustor is also the trust’s beneficiary.  Furthermore, the trustor can revoke the trust at any time.  In fact, creating the trust has no real practical effect at all during the lifetime of the trustor – the trustor retains complete control of (and the benefits of) his or her property.  

 The value of creating such a trust is to change title to real estate.  Typically, when a revocable trust is created, the trustor will also execute a deed transferring title from the trustor to the trustor as trustee of the trust.  For example, a deed might state: “John Smith to John Smith as trustee of the John Smith Revocable Trust”.  This is important because it allows the real estate to be transferred easily on the death of the owner. 

Real estate owned by a deceased person cannot be sold or otherwise be transferred without the permission of the court.  If a person dies owning real estate, then there is no one who can legally sell that real estate.  An interested person must petition the Superior Court to probate the deceased person’s estate and, as a part of that probate, sell or otherwise transfer, the deceased person’s real estate.  Probate is a process that takes at least four months to complete and is expensive.  

If the title to real estate is held in the name of a trust, then there is no need for probate because there is no need to transfer the real estate.  The trust continues to hold title.  The trust document that the trustor executed will list a successor trustee.  The successor trustee will take over the administration of the trust and carry out the trustor’s desires as stated in trust document.  The trust becomes irrevocable on the death of the trustor, so the successor trustee has no discretion but to carry out the desires of now deceased trustor.  The successor trustee can sell or otherwise transfer real estate and otherwise take care of the deceased person’s property that has been put in to the trust. Given the time and expense of probate, anyone owing real estate should have a living trust.

 

Living Will or Power of Attorney for Health Care.  A recent national poll revealed a surprising fact.  64% of all baby boomers (those born 1946-61) do not have a living will or other health care planning document.  This is particularly surprising since all those who qualify as baby boomers are now 50+ years old.  In other words, baby boomers are now in the zone for health problems such as heart attacks and strokes, but are not dealing with their mortality.  The reality is that anyone over the age of 50 should have a living will or similar health care planning document. 

A living will is a statement of the desires of person in the event of a catastrophic injury or illness.  The living will gives preferences for when and under what circumstances a person wants life support.  More importantly, a living will designates who shall make decisions regarding health care and life support in the event that the person executing the living will is incapacitated.   The importance of such a document is highlighted by such tragedies as the Terry Schiavo case. 

 In California, the living will have been supplanted by the Power of Attorney for Health Care (PAHC).   The PAHC is a statutory form spelled out in Probate Code Section 4701.  The form contains five parts.  The first part designates an agent for health care decisions in the event that the person who executed the PAHC is incapacitated.  The instructions for the form state:

 ”Part 1 lets you name another individual as agent to make health care decisions for you if you become incapable of making your own decisions or if you want someone else to make those decisions for you now even though you are still capable.”

 Part 2 allows for specific instructions for health care to the agent designated in Part 1 or to physicians.    Part 3 allows for the donation of organs if one cares to do so.  Part 4 provides for the designation of a primary care physician.  All of these parts are optional.  A person can fill out as much or as little of these parts as desired. Part 5 is the part in which the person filling out the form, and witnesses, sign the document.

 The statutory PAHC allows is a familiar form in California and, if properly executed, will allow a spouse for family member to make health care decisions for an incapacitated person.  Filling out a PAHC can avoid a great deal of trouble and heartache in the event of a medical emergency or catastrophic illness. 

 These are the basics of a good estate plan.  We also recommend a few others – depending on circumstances – such as a springing general power of attorney which comes into effect if one is incapacitated.  We also highly recommend that everyone review their estate planning every couple of years to ensure that it is kept up to date.

For more information about estate planning, please contact us at info@ericmortonlaw.com or (760) 722-6582.

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