Wednesday
10Mar2010

Do You Need More than a Will?

Do you need a trust, power of attorney, or health care directive in addition to a will?
Most Americans don’t have a will, to say nothing of a more comprehensive plan to avoid probate, save your family time, money and stress or save on estate taxes. Do you need to start planning what happens to your estate when you die? Yes. The sophistication of your plan depends on your age, health, wealth, and innate level of caution.

You're in Your Twenties and Single
At your age, there's not much point in putting a lot of energy into estate planning. Unless your lifestyle is unusually risky, you are already wealthy, or you have a serious illness, you may not need anything but a will. A will is a must-have document.

You Have Young Children
First and foremost, you must have a will to protect your family. A will allows you to leave your property to whomever you choose and, more importantly, names a guardian to care for your children. The guardian will take over if both you and the other parent are unavailable. If you fail to name a guardian, a court will appoint someone, possibly one of your parents.  Note that if you don’t have a will, two-third (2/3) of your property may go not to your spouse, but directly to your children. The problem with the children inheriting directly is that the surviving parent may need to get court permission to spend or invest the money -- a waste of time and money in most families. First, get a will.  Second, think about buying life insurance to replace your earnings, just in case. Term life insurance is relatively cheap.

You're in Your Forties
This is the time when most people consider estate planning in earnest. Keep in mind that your assets and what you want to do with them may change in 5 or 10 years -- be prepared to revisit and change your estate plan at least every 5 years. First, create a will, and then consider some of these other planning options:

Revocable Living Trusts
To save your family the cost (and hassles) of probate court proceedings after your death, think about creating a revocable living trust. It's more complicated than a will, but it avoids probate. It lets everything you put in the trust go directly from your trust to your heirs after your death without having to go through probate court.  While you're alive, the trust has no effect, and you can revoke it or change its terms at any time. But after your death, trust property can be transferred quickly, according to the directions you left in the trust document. Remember though, only the assets you actually transfer into the trust are controlled by the trust.

Payable-on-Death Accounts
There are other, even easier ways to avoid probate for some types of accounts: You can turn any bank account into a "payable-on-death" account simply by signing a form (the bank will supply it) and naming someone to inherit whatever funds are in the account at your death. You can do the same thing, in almost every state, with securities and retirement accounts. CAUTION:  If you add someone to an account for convenience, most banks will treat your account or CD as a "payable-on-death" account, even if that is not what you intended.

Reducing Estate Taxes
If you have enough property to worry about federal estate taxes, think about tax avoidance as well. In 2010, there is no estate tax; however, congress has indicated that they will reinstate the estate tax in 2010, retroactively to January 1st. It is speculated that if reinstated the estate tax law will tax only estates worth more than $3.5 million, but in the current political climate, Congress is expected to revise the estate tax laws and it could be much lower (e.g. estates worth over $1 million are taxed! If congress does nothing before 2011, that is exactly what the law will be.) If estate tax does take a bite, it can be a big one: 45% to 55% of everything over the exempt amount. Here are some ways to reduce estate tax:  Give your property away before death. One way to reduce these taxes is to give away property before your death. After all, if you don't own it, it can't be taxed. Gifts larger than $12,000 per year per recipient are subject to gift tax, at the same rate as estate tax. Still, an annual gift-giving plan can reduce the size of even a big estate, especially if you have a covey of kids and grandkids. Gifts to your spouse (as long as he or she is a U.S. citizen), direct payment of tuition or medical bills, and gifts to a tax-exempt organization are exempt from gift tax.  Create an AB trust (also called a credit shelter or bypass trust). Another way to cut estate taxes is with trusts. Many couples use an AB trust to leave the maximum amount of property exempt from taxes to each other for life, and then to their children. The surviving spouse can spend trust income and, in some circumstances, principal. An AB trust can shield up to twice the exempt amount from estate tax.  Create a charitable or other trust. Charitable trusts, which involve making a gift to a charity and getting some payments back, can also save on both estate and income tax. There are many other complex trusts; learn about them on your own and then have an experienced estate planning lawyer draw up the documents you want.

You're Over Fifty or Ill
If you have not done it before, now is the time that you must take concrete steps to establish an estate plan with more than just a will. First, the basics: Consider a probate-avoidance living trust and, if you're concerned about estate taxes, a tax-saving trust. (These devices are discussed just above.) Get a will, or update an old one.  Then take a minute to think about the possibility that at some time, you might become unable to handle day-to-day financial matters or make healthcare decisions. If you don't do anything to prepare for this unpleasant possibility, a judge may have to appoint someone to make these decisions for you. No one wants a court's intervention in such personal matters, but someone must have legal authority to act on your behalf.  You can choose that person yourself, and give him or her legal authority to act for you, by creating documents called durable powers of attorney. You'll need one for your financial matters and one for health care. You choose someone to act for you (called your agent or attorney-in-fact) and spell out his or her authority. You can even state that the document won't have any effect unless and until you become incapacitated. Once signed and notarized, it's legally valid, and your mind can be at ease.  We will discuss the need for a Power of Attorney in more detail later, but in my opinion, no matter your age or health, it is best to have one.

wbell@mbnlaw.com

Wednesday
10Mar2010

Open Meetings Revisited

What business can a governmental agency conduct in a properly called closed meeting and not run afoul of the Georgia Open Meetings Act? That is a question that has been a source of confusion for many Georgia public officials. Can you take a vote or not? In a very recent case the Georgia Court of Appeals offered some clarification. A county commission was sued for open meetings violations when voted to authorize the purchase of real estate in closed meetings. Relying on precedent under Georgia’s first open meetings law, the court determined that a covered agency may decide a question in a closed session if the subject matter of the meeting fell within an exception to the open meeting requirement. That is not to say that every subject matter that is exempt from an open meeting may be voted on in a closed session. If the Act specifically says that a public vote is required, then that mandate must be followed. So, if the closed meeting concerns the purchase of real estate, then a vote may be taken in the closed session. If, however, the subject matter of the closed meeting is an employment issue, then the vote must be in open session. If you have questions concerning this blog or any of governmental law issue contact jbisson@mbnlaw.com.

Wednesday
24Feb2010

Jourdain and Bledsoe Selected to Georgia Super Lawyers

William F. Jourdain and Jonathan L. Bledsoe of the Minor, Bell & Neal law firm in Dalton have been selected for inclusion in the 2010 edition of Georgia Super Lawyers magazine.

 Georgia Super Lawyers named Jourdain one of the top attorneys in Georgia for 2010, with only five percent of the lawyers in the state being selected for this honor.  Jourdain, a 1986 graduate of the Walter F. George School of Law at Mercer University has practiced in northwest Georgia for over 23 years and is also licensed in Tennessee.  He is the chair of Minor, Bell & Neal’s litigation section and focuses his practice on the defense of medical malpractice cases, business litigation, general litigation, employment litigation and health care law.

 Bledsoe, a 2002 graduate of the Walter F. George School of Law at Mercer University, is a partner in the Firm’s litigation section in Dalton and is also licensed in Tennessee.  He was named by Georgia Super Lawyers magazine as a Rising Star, one of the state’s top up-and-coming attorneys.  Bledsoe concentrates his practice in the area of business litigation, medical malpractice defense and general litigation.

 The selections for Georgia Super Lawyers are made by Law & Politics, a division of Key Professional Media, Inc. of Minneapolis, Minn. Each year, Law & Politics undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by Law & Politics’ attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check.  Super Lawyers can be found online at superlawyers.com, where lawyers can be searched by practice area and location.

Tuesday
16Feb2010

Avoid the Pitfalls Associated with Social Networking - Lunch & Learn

Judy Poag and Theo Lu will present a free Lunch & Learn on the Employment Law Pitfalls Associated with Social Networking.  Learn how to develop policies to protect your company.  The luncheon is scheduled for Wednesday, February 24 at the Dalton office of Minor, Bell & Neal.  Reservations are required.  Click here for more information or to reserve your spot.

Monday
08Feb2010

2010 Employment Law Preview

Most employers know all too well that the landscape of employment law is constantly changing.  Employers can stay ahead of the curve by keeping an eye on the following issues and trends in 2010.

Employment Litigation Boom

Employment litigators have been busy the past few years and should expect that trend to continue in 2010.  The statistics from last year show that employment litigation is on the rise:

Type of Litigation    2009 Filings    Increase from 2008
Non-disability Discrimination    13,964    7%
ADA Disability Discrimination    1,230    8%
ERISA    9,055    4%
Wage & Hour (FLSA)    6,165    16%

Type of Litigation

2009 Filings

Increase from 2008

Non-disability Discrimination 13,964 7%
ADA Disability Discrimination 1,230 8%
ERISA 9,055 4%
Wage & Hour (FLSA) 6,165 16%


Increased unemployment is commonly cited as a cause of this rise in employment litigation. Experts believe this trend will continue in 2010 unless we see a sudden economic turnaround of historic proportions.

New Federal Legislation

The economy, wars in Afghanistan and Iraq, and health care reform have drawn the Obama administration’s attention away from labor and employment issues.  Thus, many of the reforms promised by the President are poised to become priorities in 2010.

Obviously, at the forefront is the controversial, pro-union, Employee Free Choice Act.  While it appears the card-check provision – which eliminates secret ballot elections from the unionization process – will not be part of the bill after all, some form of legislation will likely be passed that makes union organization easier than ever.

Also working their way through Congress are bills that would: (1) overturn a recent Supreme Court case and make age discrimination cases easier for plaintiffs to win; (2) make binding arbitration agreements unenforceable in employment contracts, and; (3) make discrimination based on sexual orientation illegal under Title VII.  Although these bills are in the early stages of the legislative process, their potential impact on employment law is immense.

Georgia Constitutional Amendment

For years Georgia has been one of the most difficult states in which to enforce non-compete clauses in employment contracts because of a provision in the Georgia Constitution that prohibits the General Assembly from passing laws that would “lessen competition”.  This same provision has been interpreted to mean contracts which lessen competition are against public policy.  Thus, Georgia courts refuse to enforce non-compete provisions unless they are very specifically and narrowly tailored.

A recently passed law changes all this by clearly defining the terms of enforceable non-compete clauses and allowing courts to change or "blue pencil" clauses that are overly restrictive, instead of tossing them out altogether.  However, this law will not take effect unless the voters of Georgia, in the November, 2010 general election, elect to amend the Georgia Constitution to allow the General Assembly to pass such a law.

MBN’s employment law section will be hosting a Lunch & Learn on February 9, 2010 to update our clients on these and other important employment law issues for 2010.  If you have any questions regarding this information, or would like further information on attending the Lunch & Learn, please contact Theo Lu.

Theo Lu
706-259-2586