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January 7, 2013 In Estate Planning

American Taxpayer Relief Act of 2012

American Taxpayer Relief Act of 2012

Happy New Year!  We hope this finds you having enjoyed a joyous and relaxing holiday season.  As you may know, on Wednesday, January 2, 2013, the President signed into law the American Taxpayer Relief Act of 2012. The new law contains some favorable provisions for taxpayers and donors and provides some certainty, for at least another year, and in some cases, permanently.  Below we have included some highlights of changes in effect for 2013 in the areas of charitable and estate planning:

The IRA Charitable Rollover

As we expected, donors age 70½ or older are once again eligible to transfer up to $100,000 from their IRAs directly to qualified charities without having to pay income taxes on the qualified distribution in 2013. In addition to the extension of the IRA Rollover provision for 2013, Congress provided two special transition rules:

1) Qualified distributions made by February 1, 2013, may be counted retroactively for the 2012 tax year.  This means that it is possible for those who act in a timely manner to make IRA Rollover gifts of up to $200,000 in 2013.

2) Another unexpected but welcome feature of the new law is the “do-over” provision.  Taxpayers who took a withdrawal from an IRA (mandatory or otherwise) during December 2012 may make a cash contribution to a qualified charity before February 1, 2013, and treat the gift as if it had been a direct distribution to charity that qualified as an IRA Rollover gift for 2012.

Estate, Gift and Generation-Skipping Tax Exemptions

The new law permanently preserves the current individual gift, estate and generation-skipping tax to a unified $5 million exemption level. This amount will be indexed for inflation – the inflation adjusted amount for 2013 is $5,250,000. The top gift, estate and generation-skipping tax rate was increased to 40 percent from the previous 35 percent. The new law also makes the portability of exemption between spouses permanent.  The higher exemption amount will certainly limit the number of estates subject to the federal estate tax which could provide opportunities to simplify estate plans.

However, keep in mind that Tennessee still has an inheritance tax.  The Tennessee inheritance tax will be phased out over the next three years.  For the remainder of 2013, the inheritance tax exemption will remain $1,250,000.  Beginning January 1, 2014, the exemption will increase each year  as follows:

$2,000,000—2014

$5,000,000—2015

Repealed—2016

As of January 1, 2016, the Tennessee inheritance tax will be eliminated, while the Tennessee gift tax was repealed last year.

Charitable Deduction Remains

Throughout 2012, a number of proposals were made to limit the charitable deduction.  Fortunately, the legislation as passed does not address or specifically limit the charitable deduction.

Individual Income Tax Rates

The new law permanently extends tax rates set by the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 for taxpayers earning less than $400,000 a year and married couples earning less than $450,000. It increases the tax rate for high-income households earning more than that to 39.6 percent. The 2013 tax rates will be 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent.

Capital Gains Tax Rates

The capital gains and dividend tax rates for high-income households ($400,000 a year for single taxpayers and $450,000 for married couples) will increase to 20 percent. There will be no capital gains tax for taxpayers whose income falls in tax brackets below 25 percent. The capital gains tax rate will be 15 percent for taxpayers whose income falls at or above the 25 percent tax bracket but below the new 39.6 percent rate.  A medicare contribution tax of 3.8% on capital gains, dividends, interest and other unearned income will also come into play in 2013 for those with adjusted gross income over $250,000 ($200,000 for single taxpayers).  With higher capital gains rates and the addition of the Medicare contribution tax, gifts of appreciated stock or other appreciated property (either outright or to fund a charitable remainder trust or charitable gift annuity) will once again provide taxpayers with the opportunity to diversify out of appreciated assets in a tax efficient manner.

The next logical question is, “How does the new law impact me and my family?”  Of course, it depends.  Certainly, the climate for gifting is excellent.  People with potentially taxable estates can make large gifts to take advantage of the high federal exemption amount without paying Tennessee gift tax.  Thus, the combination of a high federal exemption and no Tennessee tax can yield extremely favorable tax and other results for your family.

We would love the opportunity to talk with you about how these changes impact your estate plan.  Please contact our office to learn more about potential opportunities for you and your family with this new legislation.

October 22, 2012 In General

Halloween Safety — Homeowners, Trick-or-Treaters, and the Law

How to Prepare This Halloween

Halloween is a great time of year – costumes, hayrides, haunted houses and candy!  However, homeowners should be mindful of the legal responsibilities they owe visitors to their property.

Later this month, homeowners  will have a variety of ghosts, princesses, vampires, and angry birds trick-or-treating at their doorstep.  Halloween night poses many risks for homeowners because you are essentially opening your home and property to the public.  As you may or may not know, you owe what lawyers call a ‘duty of reasonable care’ to each child or visitor that comes onto your property.

Here are some commonsense tips to fulfill your duty of care and protect visitors to your property this year:

  1. Keep Your Property Well-Lit – Be mindful that trick-or-treaters will be cutting through all parts of your property to find your front door, so try to make sure that your front porch is adequately lit for them to easily find their destination.  By keeping the path to your home and front step well-lit, you can prevent potential slip-and-falls by trick-or-treaters wondering into other parts of your yard.  Also, those who are up to no good on Halloween are typically less likely to bother well-lit property.
  2. Keep Property Unobstructed – Keep your property unobstructed since trick-or-treaters will seek the most direct path across yards to get to the next house.  This includes such ideas as picking up yard debris, filling gopher holes, putting up hoses, and picking up toys left in the yard.
  3. Restrain Pets – Keep your pets away from the front porch, as they might get excited and jump on, knock down, or bite trick-or-treaters.
  4. Pumpkin Safety – The traditional Jack-O-Lantern presents many potential hazards.  For example, it is often very easy for a guest or child to kick the pumpkin and candle over if they’re not looking where they’re going.  This type of accident could cause a slip-and-fall or present a fire hazard.  One way that you could protect the trick-or-treaters, your family, and your home is to consider purchasing a battery-powered light for your pumpkin instead of a traditional candle.
  5. Use Your Home Security System – Halloween presents a prime opportunity for vandals and burglars to damage your property.  Thus, it is recommended that you make sure that you have a reliable home security system that can deter others from causing harm to your home.
  6. Check Homeowners Insurance – Lastly, Halloween is a good time to contact your insurance agent and discuss your policy limits, needs, and any changes or additional homeowners coverage that you might need.

Halloween is a great and fun holiday.  Just make sure to eliminate the potential risks for injury to a child by keeping your property clean and safe.

Have a fun and safe Halloween!

October 9, 2012 In General

Chancellor Overturns Election, Rules that Millington Referendum Passed (Court Order attached)

Chancellor Overturns Election, Rules that Millington Referendum Passed (Court Order attached)

As we earlier hoped and predicted in previous blog posts here and here, the Chancery Court today overturned the Election Commission’s initial certification and finding that the recent Millington Sales Tax Referendum failed.  The Court further declared that after accounting for the unlawful votes that were cast during the election, the Referendum did, in fact, actually pass.

The Memphis Commercial Appeal report is here.

 

September 14, 2012 In General

CA Update: Millington election lawsuit – There may be no need for a re-vote.

CA Update: Millington election lawsuit – There may be no need for a re-vote.

The Commercial Appeal ran a story today about the status of the election challenge lawsuit that the attorneys at Patterson Bray are handling on behalf of the City of Millington.

We’ve spent the last several days reviewing election commission records and tabulations, and we are hopeful and believe that ultimately the City of Millington will be able to avoid a re-vote.  Indeed, as quoted in the story:

“We’re not ready to concede that once you throw out the invalid votes that it doesn’t conclusively prove that, in fact, it prevailed, and you can prove that to a mathematical certainty,” he said. “So, there is no need for a revote. We believe that will be the case, and that’s what we are prepared to argue.”

In other words, once the improper votes are identified and isolated, we believe that we’ll be able to show with mathematical certainty that the municipal schools sales tax referendum did, in fact, actually pass.  We hope to have a motion filed in court within the next 7-10 days with more detail outlining the basis for our contention.

Stay tuned…

August 18, 2012 In Business Litigation, Civil Litigation, Contracts, General

Why it Pays for Small Business to Use a Small Law Firm

small business lawyer

Why it Pays for Small Business to Use a Small Law Firm

If you run a small business, you have no doubt heard the usual reasons why you should consider taking your legal problems to a small law firm instead of a mega-firm:

  • Lower hourly rates (no subsidization of fancy offices, boxes at FedEx Forum, flashy overhead, etc.)
  • Better responsiveness (no “big shot” partner egos to deal with)
  • More attention (smaller pond = bigger fish)

All of which is true.  But how about this one:  BETTER SOLUTIONS!  We are a small law firm for small business.

Small Business + Small Law Firm = SUCCESS

Here is a real-life example of how a small law firm ended up being a better fit for the needs of small business.

A construction contractor client came to our firm with a problem.  Business had gotten slow, and the business decided to terminate a few employees, including one of its carpenters.  The client allowed the employee to finish out the workweek and went ahead and cut his final paycheck through the end of that week.  Unfortunately, the employee injured himself on the job just a few days later (his second-to-last day at work).  He understandably filed a workers compensation claim for his injury, to which the client had no objection.

However, the employee later went on to file a federal lawsuit alleging that he had actually been fired in retaliation for filing a workers comp claim – a claim which was patently untrue.  After all, the decision to terminate the employee was made before he had ever even injured himself.

The key piece of evidence ended up being the final paycheck which was dated prior to the date of the injury.  The employee claimed, however, that the check had been forged and backdated.  This allegation was potentially troublesome because it basically boiled down to a “he said, she said” dispute that would normally be a classic question of fact for a jury.  This meant the client was potentially staring down the barrel of a long, drawn out lawsuit ending with a trial.

Which is where the benefit of having a small law firm kicked in.

Small law firms think like small businesses because we ARE small businesses.  And so we know a thing or two about the practical, hands-on side of payroll and accounting software.  We use it ourselves every day.  And so we knew, for example, that most small business software packages contain built-in, anti-fraud features including a hidden, tamper-proof transaction log.  And while the actual purpose of having a tamper-proof transaction log is to protect the small business itself (by preventing bookkeeping employees from having the ability to manipulate financial records in order to hide embezzlement), the information proved invaluable for our client in this particular situation.  Indeed, we knew the client could access the transaction log which ultimately proved with a precise date/time stamp that the employee’s final paycheck had indeed been cut before he was  injured.

This single piece of information was ultimately sufficient to convince the employee’s attorney that the case had no merit, and so the lawsuit was literally resolved within mere days.  Which was all the more important because the client’s annual audit was only weeks away, and it desperately wanted to avoid having to disclose a pending lawsuit.

WE ARE SMALL BUSINESS.

Small law firms have a different, and arguably more relevant, knowledge base and experience than mega-firms.  We better understand the needs and perspective of small business, because we ARE small business. If you are a small business, let our small business help you. Call us today at 901-372-5003 or email us here.   Or visit the Business & Commercial Litigation page on our website to learn more.

We’re conveniently located near the intersection of Walnut Grove and Germantown Parkway in Memphis. Easy access to our office means you are in and out when you need to visit us, so you can get on with running your business.  Oh, and there’s free and plentiful parking here. No parking garages necessary!

August 13, 2012 In Business Litigation, Civil Litigation, Estate Planning, General

Legal Problem Solving: Does Your Lawyer Merely Work the Problem? Or Solve the Problem?

Legal Problem Solving: Does Your Lawyer Merely Work the Problem? Or Solve the Problem?

legal problem solvingLet’s discuss legal problem solving. Does your lawyer merely work the problem, or solve the problem? There’s a difference, you know.

  • A cookie-cutter response vs. a creative solution
  • Reaction vs. a plan of action
  • “Winning” the lawsuit vs. avoiding the lawsuit
  • Churning legal fees vs. finding a cost-effective solution up front

I saw a blog post once detailing a masterful stroke of legal genius by the lawyers for Jack Daniels, and wanted to share it. It’s a prime example of the type of culture and approach we cultivate at Patterson Bray– solving the problem vs. merely working the problem.

Legal Problem Solving at Patterson Bray

Our clients don’t just want legal answers.  They want solutions.  So at every stage our goal is to focus on the following question to the client:

“What do you ultimately want to accomplish?”

Sometimes that means we have to act not just as legal advisors, but also legal counselors – asking questions, raising issues the client may not have considered, and then sometimes even gently prodding and steering clients to think beyond their immediate short-term emotions and goals.

In virtually every case, our clients appreciate our focus on long-term solutions.  That might mean, for example, our client accepting a short-term loss in exchange for saving a relationship with a customer and securing new business, renegotiating as opposed to litigating a contract, and realizing that the cost of vindication might sometimes outweigh the perceived benefits. Many clients have even remarked how unusual it is that a lawyer would suggest an option that they weren’t even aware of, and that would generate less in billed fees for the lawyer.

But, then again, that’s how we internally answer the very same question we put to our clients:

“What do WE ultimately want to accomplish?”

We want to uniquely serve the best interests of our clients so that they ultimately come back.  And refer their peers, colleagues, friends, and family.

And they do.  And we’re confident you will, too.

May 22, 2012 In Auto Accident, Personal Injury

Partially at Fault in a Car Wreck in Tennessee?

Partially at Fault in a Car Wreck in Tennessee?

partially at fault, car wreck lawyer in memphisLaw FAQ: I was in a car wreck in Tennessee, and I may be partially at fault. Do I still have a legal claim?

ANSWER:   Maybe.

You can take comfort in the fact that “slam dunk” cases rarely exist.  There are 2 sides to almost every story.  Indeed, real life is never quite so neat and tidy.  Many car crashes are the result of a number of related factors, circumstances and events on both sides that – when combined together – cause accidents to occur.

For example, someone might have run a red light and pulled out in front of you; however, you might have contributed to the problem by speeding, or not wearing your seat belt, or not paying as close attention to the road as perhaps you should have been.  Thus, while you didn’t necessarily cause the wreck, you may be wondering whether your own speed or inattention may have increased the amount of damage or injury caused.

And so the question is: do you still have a legal claim for your car accident or personal injury?

Well, the answer is: it depends.  Many people are partially at fault and some of them are still able to recover damages in a car wreck case.

Doctrine of Comparative Fault

Under Tennessee law, a defendant in a car wreck case is entitled to point the finger at another person (or multiple persons), including the plaintiff.  In other words, a defendant can ask a jury to assign fault for an accident, either in whole or in part, to someone else.  Legally, this is referred to as the “doctrine of comparative fault” – i.e. the jury is asked to literally compare the fault of the parties.

In practice, this means that the jury will listen to all of the competing evidence and then assign a percentage of fault or negligence to each person alleged to have contributed to the accident.   The total of the percentages must add up to 100%.  The jury is then asked to affix the amount of total damages suffered/incurred.

These fault allocations and damage findings determine whether, and to what extent, a plaintiff is entitled to recover.  Specifically, the damages recoverable by the plaintiff are based on the percentage of fault assigned to the defendant.

  • Example: If the jury finds that there were total damages of $100, and the defendant is assigned 75% of the fault compared to only 25% fault for the plaintiff, then the plaintiff would recover $75 (75% x $100).  The plaintiff wouldn’t be entitled to recover the percentage of damage that he himself caused.

Modified Comparative Fault

Note also that Tennessee follows the doctrine of modified comparative fault.  This means that if the plaintiff is found to be  50% at fault for an accident, then he or she is prohibited from recovering any damages at all. So, even if you are partially at fault for an accident, as long as you’re not 50% at fault, you can still recover.

  • Example:  Using the scenario above involving damages of $100, if the jury were to find the plaintiff and defendant equally at fault (50/50), then the plaintiff would recover $0.

Pure Comparative Fault in Other States

By comparison, some states like Mississippi utilize the doctrine of pure comparative fault, which means that the plaintiff can recover for any fault of the defendant, even a mere 1%.

  • Example:  Using the scenario above, if the car wreck  occurred in Mississippi and the defendant was 1% at fault, then the plaintiff would be able to recover $1, even though the plaintiff was 99% at fault.

Partially at Fault But Think the Other Driver was Responsible?

Each case is unique. It sounds cliche, but it’s the truth. At Patterson Bray, we will look at your case and advise you on the best way to proceed. If you have a question involving a  car or trucking accident or a wreck involving serious personal injury, please feel free to call our office at (901) 372-5003 for a FREE consultation.

We Represent Victims of Car Wrecks.

Visit our website to learn more about our work for car accident victims. You can meet our team by clicking here.

April 26, 2012 In General

Law FAQ: Negligence – Is the Other Driver At Fault for the Car Wreck? (Part II)

Law FAQ: Negligence – Is the Other Driver At Fault for the Car Wreck? (Part II)

In yesterday’s blog post, I listed the 5 basic elements for a negligence claim: duty, breach, injury, causation, and proximate/legal cause.

Today’s post will focus on the first 2 elements which, for the most part, comprise the most interesting and difficult issues that arise in connection with negligence claims:  duty and breach.

Negligence is commonly referred to as the “reasonable man” standard.  Stated differently, a driver involved in a car wreck would be considered negligent if taking some action that most average people would deem unreasonable under the circumstances.  Negligence can be predicated both on acts of commission (e.g. running a red light), as well as acts of omission (e.g. failing to pay appropriate attention to the road).

Basically, the rules of negligence boil down to requiring people to follow society’s basic “rules of the road” for reasonable conduct.  For the most part, it’s commonsense-type stuff.  The law of negligence is about reasonableness and balance.  It does recognize, for example, that some injuries are simply unforeseeable and/or sometimes unavoidable.

Stated in legal terms, a court will consider the issue of legal duty in terms of what is known as “reasonable foreseeability.”  This means that if your conduct would create a “reasonably foreseeable risk of injury” then you would naturally have an obligation to avoid the conduct, or to take reasonable precautions to protect innocent bystanders from the risk.  The rule is really nothing different than The Golden Rule that churches, mothers and fathers teach their children every day.

For example, will a driver be held liable if the brakes on his truck suddenly and without warning fail, and he winds up in a car accident?  Probably not, because the risk wasn’t necessarily foreseeable.   By comparison, though, if the brakes had been acting up previously, and the driver just ignored it and kept on driving the truck instead of taking it to the shop for repairs, then he probably would be deemed negligent in that situation.  Indeed, there was a known risk and he failed to take reasonable steps to protect others against a foreseeable risk of harm.

In other words, that driver would have breached his duty to those around him, and therefore he should rightfully be expected to make good on the injuries and damages unilaterally imposed on an innocent person.

This same analysis would apply to all sorts of things such as speeding, texting while driving, weaving too quickly in and out of traffic — i.e. things which impose an unreasonable and foreseeable risk of harm.

Note that the law of negligence is a far cry from the daily dose of nonsense you get from TV advertising, and from politicians.  Indeed, it is NOT the type of automatic, jackpot money grab that the ambulance-chasing TV lawyers seem to imply, and that the so-called tort reformers would likewise have you believe as part of selling their grossly exaggerated claim that “the sky is falling with lawsuits.”  To the contrary, the law does not provide for automatic liability whenever an injury occurs.  Likewise, it does NOT impose a duty to eliminate each and every one of life’s many risks.

The law of negligence is simply about the common sense “reasonable man” standard which is very much akin the Golden Rule — “Do unto others as you would have them do unto you.”

Stay tuned for more about the question of how the law determines the winner of a lawsuit when — as is often the case in real life situations — both parties are somewhat negligent.   This is referred to as the issue of comparative fault.  Stay tuned.

April 25, 2012 In Auto Accident

Car Wreck Case- What is negligence by the other driver?

Car Wreck Case- What is negligence by the other driver?

car wreck case lawyer in memphisIn a car wreck case, or any other case, “negligence” is the legal term for failing to exercise reasonable care and caution under a given set of circumstances.  It is commonly referred to as “the ordinary, reasonable person” standard.  Legal liability is assessed when a person fails to follow society’s most basic “rules of the road” so to speak.

Examples of negligence

Some examples of negligence might include:

  • Running a red light and causing a car wreck.
  • A hurried doctor who fails to follow correct protocol and thus fails to diagnose a curable disease.
  • A nurse who fails to check the medical chart and who then dispenses the wrong medication.
  • A store owner who fails to mop up a known puddle on the floor.
  • A pharmacist who dispenses the wrong dosage of medication.
  • A contractor who fails to adhere to building plans or skirts building codes.
  • A child care center that fails to conduct background checks before hiring employees to care for children unsupervised.
  • A lawyer who fails to file his client’s lawsuit before the statute of limitations expires.

Elements of Negligence in a Car Wreck Case

In a negligence case, a plaintiff is required to prove five elements:

  1. that a duty of care was owed by the defendant;
  2. that the defendant failed to live up to that duty (i.e. referred to as a “breach of duty”);
  3. that an injury or loss occurred;
  4. that the breach of duty actually caused the injury or loss; and,
  5. proximate or legal cause.

Would you like to talk with a Car Wreck Case Lawyer?

Please call our office at 901-372-5003 to speak with one of our experienced car wreck case lawyers. We would be honored to represent you.

Visit our website to learn more about the work we do representing victims of car accidents.  We even have a “Frequently Asked Questions About Car Accidents” page you can visit to get answers to your basic questions.

 

Patterson Bray PLLC

8001 Centerview Parkway, Suite 103

Memphis, Tennessee 38018

(901) 372-5003 Office

(901) 383-6599 Fax

 

March 30, 2012 In General

Politics in the Workplace: Wiseman Quoted in Memphis Daily News

Let’s talk politics. Or not. Regardless of the outcome, the 2016 Presidential Election is set to go down in history.  You have probably learned about (or are inundated with!) the political positions of many of your friends through social media accounts like Facebook and Twitter.

But what about politics in the workplace?

In 2012, Reporter Andy Meek wrote an insightful article for the Memphis Daily News about the need for employers to carefully monitor the discussion of politics in the workplace. It’s worth pointing out again during this election cycle.

Patterson Bray PLLC

8001 Centerview Parkway, Suite 103

Memphis, Tennessee 38018

(901) 372-5003 Office

www.pattersonbray.com

The Attorneys of Patterson Bray handle personal injury cases, auto accidents, apartment crime cases, estate planning, asset protection, charitable planning, business litigation, business organization, business counseling, and many other general legal services.  Please visit our website to learn more about our attorneys and the work we do for our clients.