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January 13, 2012 In Estate Planning

Reminder: Estimated Tax Payments due Jan. 17 (for self employed persons, etc.)

Reminder: Estimated Tax Payments due Jan. 17 (for self employed persons, etc.)

For all you estimated tax filers, here’s a friendly reminder that your next payment (using Form 1040-ES) is due next Tuesday, January 17, 2012.  (The ordinary deadline of the 15th is extended because the 15th falls on a Sunday, and the next day is the MLK holiday which is also a postal holiday.)

NOTE:  Estimated taxes are generally paid by self-employed persons, although others are potentially required to file. According to the IRS website instructions: ”Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.”

MORE: Previous Blog Post —  What is an Estimated Tax Payment?

January 12, 2012 In Estate Planning

Law FAQ: What is Digital Estate Planning?

Law FAQ: What is Digital Estate Planning?

Death in the digital age is a lot more complicated than it used to be.  In the past, it was easy to search paper records and watch the mail for bills and account statements to gather information about an estate.  It’s not so easy today.  Now many, if not all, records are filed or transmitted electronically, online.  And unfortunately, people have not left the passwords and location for the electronic records that the surviving family members will need.

In many cases, survivors may not even be aware of the existence of accounts or assets, prompting a load of questions: Can we find this stuff? Which computer is it on? Is it stored in the cloud? What about the smartphone? Can we circumvent the password or decrypt the data?

But there are other potential pitfalls, too. What, for example, happens to your social-network accounts when you die? Some people want them perpetuated while some people them destroyed.  Instructions should be provided and included with the list of passwords that are going to go to their survivors.

You should also consider potential liabilities lurking in your digital estate. For example, what if you have trade secrets or other sensitive information on your computer and, after your death, your family donates the computer for recycling without wiping the hard drive clean? If that trade secret falls into the wrong hands, your estate might be liable.

Digital-savvy estate planners advise clients to take three basic steps. First, do a complete inventory of all digital accounts and assets (see Digital Assets Checklist below) so that your estate administrator will know just what you have of potential value (or liability) and where it is. Second, assemble a list of all passwords. Third, select a fiduciary and give them the proper power to administer your estate and follow through with your wishes.

Digital Assets Checklist

• Home-security systems

• Smartphones

• Computers

• Voice mail

• Email accounts

• Cloud storage

• Social-network accounts

• Web pages and blogs

• Financial accounts (banks, stock trading, tax, etc.)

• Online sales and purchasing accounts

• Domain names

• Intellectual-property rights (manuscripts, music, photographs, etc.)

• Video games and virtual worlds

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January 9, 2012 In Uncategorized

Texting while driving… some practical solutions

Texting while driving… some practical solutions

Every cell phone owner has repeatedly heard about the dangers of texting while driving, yet texting continues to be one of the major contributing factors in vehicle accidents.  Here are some eye-opening facts that show the true dangers of texting while driving:

  • Five seconds is the average time your eyes are off the road while texting. When traveling at 55mph, that’s enough time to cover the length of a football field. (2009, VTTI)
  • A texting driver is 23 times more likely to get into a crash than a non-texting driver. (2009, VTTI)
  •  Of those killed in distracted-driving-related crashes, 995 involved reports of a cell phone as a distraction (18% of fatalities in distraction-related crashes). (2009, NHTSA)
  • Drivers who use hand-held devices are four times as likely to get into crashes serious enough to injure themselves. (2005, Insurance Institute for Highway Safety)
  • 49% of drivers with cell phones under the age of 35 send or read text messages while driving. (2011, Harris Poll)
  • 60% of drivers use cell phones while driving. (2011, Harris Poll)

While the best solution is to turn your cell phone off as you drive, here are a few free smart phone apps that have been designed to lessen the dangers associated with texting while driving:

  • http://www.parkthephone.org/ – This free app is great for parents of teenage drivers.  It has the ability to detect when a person is in a vehicle, and if the person is driving, the app will silence the phone, auto reply to text messages, send calls to voice mail, and monitor speed and report speeding exceptions [Note: this app is not yet available for the iphone].
  • http://www.drivesafe.ly/ – DriveSafe.ly™ is a free mobile app that reads text (SMS) messages and emails aloud in real time and automatically responds without drivers touching the mobile phone.
  • http://www.vlingo.com/ – This app has been likened to Siri on the iPhone 4S.  For driving purposes, this app will allow you to speak a text message or ask for directions without having to type anything on your phone.

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January 5, 2012 In Estate Planning, General, Uncategorized

25 Documents to have before you die

25 Documents to have before you die

I ran across this Wall Street Journal list today and am reminded of how important it is to get certain life affairs in order.  The start of the new year is as good of a time as any.

Number one on their list should come as no surprise.  An original will is the most important document to keep on file.  If you don’t have a will and you do have kids, call a lawyer and make an appointment.  If you do have a will, pull it out and read it.  You may want to update certain provisions or maybe even remove certain beneficiaries who haven’t been as nice to you as you would like.

If you need help organizing your estate, call us.  There is no fee for our initial estate planning meetings.

January 4, 2012 In Personal Injury

Law Talk Series: The Legal Issues in the Sandusky-Penn State Saga

Law Talk Series: The Legal Issues in the Sandusky-Penn State Saga

I regularly follow the Litigation & Trial Blog of Pennsylvania lawyer Max Kennerly.  He frequently provides tips and discusses legal issues relevant to the work of trial lawyers.

Being on the ground there in Pennsylvania, Mr. Kennerly is uniquely positioned to follow and explain the Pennsylvania law applicable to the various civil and criminal aspects of the sordid tale of Jerry Sandusky and Penn State.  His most recent post summarizing the current state of events is a must-read article for those interested in understanding the saga as seen through the eyes of a Pennsylvania lawyer.

January 3, 2012 In Business Litigation, Civil Litigation, Contracts

Credit Application and Small Business

Signing a Credit Application on Behalf of a Company Could Subject You to PERSONAL Liability

Most small business vendors and suppliers require a company officer to sign a Commercial Credit Application or Agreement to buy goods and supplies on account.

Watch out, though!

Carefully examine the language of the Credit Application or you may find yourself personally liable for the debt even if you don’t have any ownership in the company!

In 2011, the Tennessee Supreme Court considered a credit application in  84 Lumber Company v. Smith that contained the following language:

BY SIGNING BELOW I HEREBY … UNCONDITIONALLY AND IRREVOCABLY PERSONALLY GUARANTEE THIS CREDIT ACCOUNT AND PAYMENTS OF ANY AND ALL AMOUNTS DUE BY THE ABOVE BUSINESS….

Mr. Smith signed the Credit Application as “R. Bryan Smith, President.” This manner of signing is typically referred to as signing in a “representative capacity” to denote that it is being executed by the company only, as compared to signing your name without a title to indicate that it is being signed personally.

However, the  Court ruled that the attempt to sign in a representative capacity did NOT  trump the unmistakable language of the Application, and held that Mr. Smith was personally liable for the debt as well.  This same logic would presumably apply not just to company presidents like Mr. Smith but also even to junior employees who might have signed such an agreement.

Credit Application Best Practices

So what should you do if faced with this situation?

  1. Strike through offending language. In order to avoid personal liability, you would at a minimum need to physically strike through the personal guarantee language AND then also sign the document in a “representative capacity” (i.e. name + title).
  2. Make an Informed Decision.  Many suppliers and vendors require a personal guarantee in order to do business, and so you may have to decide whether to go ahead and sign the agreement, shop around, or try to negotiate a better deal (e.g. perhaps provide for a maximum limit on the guarantee, or secure a bank letter of credit instead, etc.). At least you will be making an informed decision.
  3. Ask a “Higher Up” to Sign. If you’re just an employee or junior officer of the company then you should probably take the agreement to a superior to make certain that the right person is signing the agreement. A regular employee (i.e. someone with no ownership interest) should not fairly be expected to personally guarantee the obligations of his or her employer.
  4. Go see an attorney! The above tips are intended only as general legal advice. Each agreement, contract, and situation is different, and you should seek legal advice tailored to your specific situation.

We are Small Business Lawyers.

Check out our team at Patterson Bray.  If you need help with your small business contracts, agreements, or forms, or if you have a question about business litigation, please call us at 901-372-5003 or email us here. We have offices in Memphis and Nashville TN.

December 19, 2011 In Uncategorized

Law FAQ: I bought a car yesterday but now think I made a bad decision. I have 3 days to get my money back, right?

Law FAQ: I bought a car yesterday but now think I made a bad decision. I have 3 days to get my money back, right?

No.  There is no “cooling off” period in Tennessee that gives you the right to back out of a car purchase simply because you’ve had a change of heart.

Of course, if the Dealer offers a return policy – i.e. a money-back guarantee or a “return with no questions asked” policy – then you may indeed have a contractual right to return the vehicle, but that would have nothing to do with a so-called “cooling off” law.  You should remember to get a written copy of the policy when you purchase the vehicle and then read it very carefully.

If you’re talking about a defective vehicle, or a vehicle that doesn’t live up to its warranty, then you’re not necessarily dealing with a “cooling off” issue, but rather a warranty claim.  Speak to the Dealer to see if your complaint can be resolved, or perhaps even the manufacturer if necessary.  If your new vehicle has had to have the same part repaired 3 times in the first year of ownership, you may even have a lemon law claim.  For more information concerning Tennessee’s Lemon Law, please refer to my blog post last week.  Be diligent in your efforts to correct the problem and speak with an attorney so that you don’t miss any deadlines to pursue your claim.

While there is a Tennessee “cooling-off” law and a federal “cooling-off” law, they only apply to home solicitations.  In addition, both “cooling-off” laws specifically exclude automobiles.

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December 16, 2011 In Auto Accident, Business Litigation, Civil Litigation, Contracts, General, Personal Injury

What is a Deposition? Law FAQ

What is a Deposition?

A deposition is similar to a witness testifying in court, except that it occurs in an out-of-court setting.  A witness at a deposition is referred to as the “deponent.”  A deposition usually takes place in a lawyer’s conference room, although I’ve personally been involved in depositions that took place in homes, hospitals, and even over the telephone.

It’s a chance for lawyers to ask questions and get answers from a witness under oath.  A court reporter is present to make a record of the questions and answers, which is then usually reduced to writing in what’s called a “transcript” of the proceedings. Sometimes a videographer will also be there to film the testimony.

Depositions are part of the “discovery” process of a lawsuit.  Each side has the right to discover information about the other side’s allegations. This is accomplished by things like written questions, production of documents, inspection of property, independent medical exams, and depositions.  Rule 30 of the Tennessee Rules of Civil Procedure governs depositions in Tennessee.

Do we really need a deposition? Isn’t it expensive?

A deposition can be expensive, but it’s perhaps the most useful tool in a lawyer’s discovery toolbox because it allows for real-time follow-up and feedback.   One of the most useful benefits is that, with some exceptions, it can be used to preserve and/or “lock in” crucial testimony.  A transcript can be admitted as evidence in court if the witness later becomes unavailable for trial (e.g. death, incapacity, outside the reach of court’s jurisdiction, immune from subpoena, etc.).  A transcript can also be used to impeach and cross-examine a witness who shows up for trial with a different version of events.

Depositions are Serious Business.

A deposition is a very serious matter with serious potential consequences.  Remember, the transcript may be used in court. If you are the deponent, you should treat your deposition as if your testimony is occurring right in the courtroom in front of the judge and jury.

Need a lawyer in Memphis?

We’d be honored to represent you. Call us at 901-372-5003 or email us here.

December 12, 2011 In Uncategorized

Law FAQ: Is my car a lemon?

Is my car a lemon?

Tennessee’s Lemon Law is intended to protect new car purchasers from the occasional vehicle that, for some reason or another, has problems that are beyond repair.

The core of the Lemon Law is at T.C.A. § 55-24-102, which states as follows:

If a new motor vehicle does not conform to all applicable express warranties and the consumer reports the nonconformity, defect or condition to the manufacturer, its agent or its authorized dealer during the term of protection, the manufacturer, its agent or its authorized dealer shall correct the nonconformity, defect or condition at no charge to the consumer, notwithstanding the fact that the repairs are made after the expiration of the term. Any corrections or attempted corrections undertaken by an authorized dealer under this section shall be treated as warranty work and billed by the dealer to the manufacturer in the same manner as other work under warranty is billed.

[Note: many internet sites wrongly reference the old law: T.C.A. § 55-24-201 et seq.

Please be careful when following this statute, as it contains many specific provisions that could make or break your case, such as which particular consumers or vehicles are protected by the Lemon Law.  Indeed, I would recommend that you consult with an attorney before proceeding with a Lemon Law claim.

Here are some of the important highlights from Tennessee’s Lemon Law:

  • Basically, you MAY have a Lemon Law claim if you purchase a new motor vehicle or motorcycle that is ‘substantially impaired.’
  • A ‘substantially impaired’ vehicle is one with problem(s) so pervasive that it is unreliable or unsafe for normal operation, or that reduce its resale market value below the average resale value for comparable vehicles.
  • A vehicle is presumed to be ‘substantially impaired’ if either:
    • The vehicle is out of service by reason of repair for a cumulative total of 30 or more calendar days during the term of protection; OR
    • The manufacturer, its agent, or its authorized dealer has made 3 or more repair attempts for the same nonconformity and the nonconformity remains.
  • In order to claim that a vehicle is substantially impaired, the owner must notify the manufacturer of the need to correct or repair the problem via certified mail.  After the notice has been sent, the manufacturer has 10 days to correct or repair the nonconformity.
    • If the manufacturer has an approved informal dispute settlement procedure, the vehicle owner MUST participate in the procedure.  Yet, the decision reached is nonbinding, therefore if the owner is not happy with the result, he/she may simply file a lawsuit under Tennessee’s Lemon Law.
    • If the manufacturer does not have an approved informal dispute settlement procedure and it does not correct or repair the nonconformity within 10 days, the vehicle owner may file a lawsuit asserting the Lemon Law within the applicable time period.
  • A consumer must file a lawsuit asserting the Lemon Law within 6 months of the expiration of the express warranty term or 1 year following the date of the vehicle’s original deliver to a consumer, whichever is later.  The limitations period does not include the time during which a consumer participates in a manufacturer’s informal dispute resolution procedure.
  • In the lawsuit, a consumer may request either a replacement vehicle or reimbursement of the purchase price.
  • Lastly, even if a consumer has an otherwise valid claim, a manufacturer can defeat the claim if it proves either of the following:
    • That the nonconformity does not ‘substantially impair’ the vehicle; or
    • That the nonconformity was caused by a consumer’s abuse, neglect, or unauthorized modification or alteration of the vehicle.

If you think that you may have a Lemon Law claim, feel free to contact our office.

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December 6, 2011 In Estate Planning

Law FAQ: What is a HEET?

Law FAQ: What is a HEET?

A HEET is a Health and Education Exemption Trust.  This time of year many clients are making gifts to their children and grandchildren.  They often forget that gifts in excess of the $13,000 annual gift tax exclusion amount will be subject to Tennessee gift tax and affect their Federal Estate Tax exemption amount.  However, gifts made for a beneficiary’s health or education paid directly to the provider of services or to the educational institution are statutorily exempt and do not count against the annual gift tax exclusion amount.  And there is a code section that specifically authorizes a trust for the beneficiary’s health and education, a HEET.

A HEET enables clients to make completed gifts to beneficiaries for qualified health or education expenses.  Gifts to HEETs are not limited to the annual gift tax exclusion amount.  HEETs can provide a powerful planning tool for parents or grandparents who want to provide for their younger beneficiaries’ health or education needs, and who don’t want to be limited to annual exclusion gifts, don’t want complexity of more sophisticated gifting strategies, and don’t want to deal with the restrictions of strategies like 529 plans.

If you have questions regarding a HEET or how this trust could benefit your estate plan, please contact our office.