• Penalty Fees, such as late payment fees or over limit fees, cannot be more than the infraction itself (i.e. if you went over your credit card limit by $5, the penalty cannot be more than $5).
• Credit card companies can no longer charge inactivity fees for not using your card.
• Credit card companies are now required to explain the reason for any rate increase on your account.
• Credit card companies are now required to re-evaluate any rate increase every six month and reduce the rate within 45 days of the evaluation if appropriate.

For more information about the CARD Act of 2009, visit http://www.federalreserve.gov/creditcard/.

Most of us have heard the warnings about identity theft and know many of the ways to deter it.  However, in the interest of being thorough, let’s review them again.

• Safeguard your Social Security Number.  Despite the use of the word “social” in its name, a social security number should never be shared except in its official capacity.
• Verify the identity and purpose of anyone wanting your identity information.
• Cross-shred, or otherwise securely dispose of, documents containing billing or personal information.
• Select “high security” passwords—the kind that are randomly generated using as many types of characters as the program will allow (numbers, symbols, upper and lower case letters).

DETECT:

Early detection of identity theft is the key to minimizing its damage.

• Review bank statements and financial information monthly.
• Review your credit report annually.
• Be alert to the signs of identity theft:
  • Accounts you don’t remember opening.
  • Inaccurate information on your credit report.
  • Debt collection communication you don’t expect.

DEFEND:

Hopefully, most of you reading this article have not had to defend yourself against an identity theft.  However, if your identity is stolen, here are some steps you can take to “get your life back”:

• Send written fraud alerts to the credit bureaus.  Be sure to contact the Big 3:  Experian, TransUnion and Equifax. 
• Report the fraud/identity theft to all of your financial institutions.  Many companies have their own fraud reports, so be sure to fill out the proper forms.
• File a complaint with the Federal Trade Commission: 1-877-ID-THEFT or https://www.ftccomplaintassistant.gov/.
• File a police report.
• Keep copies of all of the above.

Not only will the abandonment of your home likely result in foreclosure and a big hit to your credit score… it could likely result in a deficiency judgment.  In today’s economy, the value of a home may not equal the amount of the outstanding mortgage.  Therefore, the lender may file a deficiency action against you to recover the difference.   A deficiency judgment is an unsecured lien against a borrower whose foreclosure sale did not produce enough funds to cover the mortgage in full.

You paid for private mortgage insurance (PMI)?  The PMI will pay the lender the difference between what the house sold for and what the borrower owed on his mortgage.  BUT, the PMI company can also seek deficiency judgments against the borrower for payments from the PMI policy.

If you still think you have no interest in a short sale, you should think again.  Through the short sale process, you and your realtor have much more leverage to negotiate a full release of your obligations to the lender and avoid a deficiency judgment.  A foreclosure or walk-away such as you might be considering is not negotiated and lenders and PMI companies can pursue, and are pursuing, deficiencies.

This one-time relief benefits organizations with gross receipts less than $500,000 and total assets of less than $1,250,000 only (i.e., organizations that are eligible to file Form 990EZ or Form 990-N).

The IRS website has a list of organizations at risk of losing their tax-exempt status (IRS link) because, according to IRS records, they have not filed for 2007, 2008 and 2009. The list contains the name of the organization and its last-known address.

When a corporation engages in fraud or other wrongful acts, is a sham, or is used exclusively for the personal benefit of its owners, courts may disregard the separate corporate existence and impose personal liability on the owners.  In such cases, courts look beyond the form of the corporation's actions to the substance. The facts must show some misuse of the corporate privilege. 

Courts generally require fraud, illegality, or misrepresentation before they will pierce the corporate veil. Courts also may ignore the corporate existence where the controlling owner or owners use the corporation as merely their instrumentality or alter ego, where the corporation is undercapitalized, and where the corporation ignores the formalities required by law (e.g. annual meetings, failing to identify the business as an entity with limited liability, etc.) or commingles its assets with those of a controlling owner or owners. In addition, courts may refuse to recognize a separate corporate existence when doing so would violate a clearly defined statutory policy.

If business owners take the right steps, they can protect themselves from a variety of liabilities by incorporating their business in Georgia. Proficient legal counsel can provide the help and advice to business owners to ensure their business is set up correctly and retains its veil of protection.

Speaking of money, while we can’t leave money directly to our pets in our will, we can provide for them when we are gone or can no longer take care of them.  Some of the things that you can do for your pet are:

• Choose your favorite pet’s new owner or caretaker;
• Provide funds for your pet’s care;
• Leave instructions for your pet's burial or other disposition.     

When you are deciding what you want done with your earthly possessions after your death, also give thought about what you want to happen to your cat, dog or other pet.  Choosing the new master may be the most important thing you can do to make sure your pet is well taken care of after your death. Whatever method you use, make sure that you first talk to the individual you want to take care of your pet after you are gone, to make sure they are willing and able to do so.

The best way to make sure that your pet receives the attention and care that it deserves, and is not a financial burden on the person taking care of it, is to provide the funds for your pet’s care after you are gone.

Whatever you do, make sure that your desires for your pet are legally binding. This can be done by including your desires in your Last Will & Testament or in a Revocable Living Trust (an estate planning tool that when used correctly serves the same purpose as a will, but avoids probate after your death.) Another advantage of a Living Trust is that it can take effect before your death, if you were to become incapacitated and unable to care for your pet.  The provisions of a Will, of course, don't have any legal effect until your death.

Until recently, most states didn't allow trusts for animals.  Georgia has recently adopted a new law (Senate Bill 131) which went into effect on July 1, 2010, and joined 30 other states that have adopted laws recognizing your right to set up a Pet Trust.  The Pet Trust can be included in your Will or can be set up in a Trust established while you are living.  With a Pet Trust, you can leave money or property for the benefit of your pet and put someone, called a Trustee, in charge of managing and spending the property and funds for your pet according to the written set of instructions that you provide.

If planning for your pet’s care after you are gone or can no longer take care of the pet is important to you, it is even more important that your instructions be legally binding and enforceable and that the funds you leave are used in the manner you desire. Make sure that your Will and Trust are prepared by an experienced estate planning attorney.

If you are interested in providing for your pet in your Will or in a Trust, call me or one of our other estate planning attorneys at 706-259-2586.

You can download and view the slides from the presentation in PDF format here.

The homebuyer measure would help only those that entered into binding contracts before April 30. It would give such homebuyers until Sept. 30 to close the sale. Under current law, they would have had to have closed by June 30th to be eligible for tax credits.

The measure passed the Senate by unanimous voice vote.  President Barack Obama is expected to sign the homebuyer measure, which the House passed earlier this week.

The proposed bill will extend the date of closing for eligible home buyers to September 30 to give lenders more time to process a crush of applications. 

The Home Buyer Credit can provide up to $8,000 for some first time home buyers and up to $6,500 for certain current homeowners.   It is feared that many of the qualifying home buyers will not be able to meet the June 30 closing deadline because of the surge in loan volume and delays related to home appraisals and short sales.

We’ll be following developments.