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In Uncategorized

Law FAQ: What is an estimated tax payment, and who is required to make them?

Law FAQ: What is an estimated tax payment, and who is required to make them?

What is an estimated tax payment?

Estimated tax payment is the method used to pay tax on income that is not subject to withholding.  Functionally-speaking, you can view estimated tax payments as a substitute for employer withholding for any income you might receive for which there is no “employer” who is withholding taxes out of your paycheck.  For example, if you are self-employed, or if you earn meaningful income from side jobs for which there is no employer who is withholding taxes, then you would generally be required to make quarterly estimated tax payments as to that income.

Who is required to make an estimated tax payment?

From the IRS website: “If you [file your tax return] as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.”

If you are a salaried employee who has filled out your W-4 form … Read the rest

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September 14, 2011
In Estate Planning

Law FAQ: Questions About Revocable Living Trusts

Law FAQ: Questions About Revocable Living Trusts

What is a revocable living trust?  A revocable living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die.  But, unlike a will, a living trust can avoid probate at death, control all of your assets and prevent the court from controlling your assets if you become incapacitated.

How does a revocable living trust avoid probate and prevent court control of assets at incapacity?  When you create a revocable living trust, you transfer assets from your name to the name of your trust, which you control.  Legally, you no longer own anything; everything now belongs to your trust.  So there is nothing for the courts to control when you die or become incapacitated.  The concept is simple, but this is what keeps you and your family out of the courts.

Do I lose control of the assets in my revocable living trust?  Absolutely not.  You keep full control.  As trustee of your trust, you can do anything you … Read the rest

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September 13, 2011
In Civil Litigation, Contracts, Personal Injury

Smoke Detectors in Apartments

Smoke Detectors in Apartments

Let’s talk about the law on smoke detectors in apartments and rental homes in Tennessee. What should a landlord do? What about a tenant? Do you have a case? Below are questions some of you might have:

Q:  I own and lease a rental house in in Memphis, Tennessee.  Am I required to provide smoke detectors for the tenants who live in the house?

Q:  I rent a house in Germantown, Tennessee, and there was a fire at night.  There were no smoke detectors in the house, and by the time I woke up and called 911 the fire had spread so far that the firemen weren’t able to save anything.  What are my legal rights?

Law on Smoke Detectors in Tennessee

Under Tennessee law, a landlord must install and maintain smoke detectors in any residential unit offered for lease or rent.  Specifically, Tennessee Code Annotated 68-102-151 provides that it is:

unlawful to…[o]wn or operate a one-family or two-family rental unit without installing an approved smoke detector in each living unit; when activated, the detector

… Read the rest Continue Reading
September 9, 2011
In Estate Planning

Probate Process: How long does it take?

Probate Process: How long does it take?

How long does the probate process take? I often pose this question at seminars and get a variety of answers. Two of my favorite answers are “years” and “forever.” While neither answer is correct, it typically indicates that someone in the room (or perhaps a friend or neighbor) has had a bad experience with Probate Court at some point. In Tennessee, a Probate Estate must remain open for a minimum of four (4) months from the time of first publication. This period is designed to give creditors time to come forward and assert a claim against the Estate.  An Estate must remain open the full four (4) months regardless of whether the deceased person had any debts.

Time Starts to Run on the Date of “First Publication”

When an estate is opened in Shelby County Probate Court, the clerk’s office notifies The Daily News, and they publish a public notice regarding the opening of the Estate, typically within a week of the opening of the Estate. This first publication marks the start of … Read the rest

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September 8, 2011
In Estate Planning

Law FAQ: Doesn’t joint ownership avoid probate?

Law FAQ: Doesn’t joint ownership avoid probate?

Not really. Using joint ownership usually just postpones probate.  With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate.  But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the beneficiaries.  Click here  to read my post from last week about the problems with a probate court administration.

Watch out for other problems associated with jointly-owned assets.  When you add a joint owner, you lose control.  Your chances of being named in a lawsuit and of losing the asset to a creditor of the new joint owner are increased.  There could also be gift and/or income tax problems.  And since a will does not control jointly-owned assets, you could disinherit your family (click here to read a post by Lindsay Jones about unintended heirs).

With some assets, especially real estate, all owners must sign to sell or refinance.  So if a joint owner becomes … Read the rest

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September 6, 2011
In General

Law FAQ: NFL & NBA Labor Issues – what is a “CBA” and a lockout? And why would players want to decertify their own union?

Law FAQ: NFL & NBA Labor Issues – what is a “CBA” and a lockout? And why would players want to decertify their own union?

What is a Collective Bargaining Agreement?

The NFL and the NBA players belong to unions which negotiate with owners to establish, among other things, player wages and working conditions.  The contract between the owners and the union is called a Collective Bargaining Agreement, or “CBA” for short.

What are the owners & players fighting about?

There are various issues at the margins – e.g. free agency rules, trade rules, maximum player contract amounts, etc.  However, the big dispute is over money – i.e. the amount of the salary cap that has historically been in included as part of the CBAs for the NFL and the NBA.

What is a salary cap?

A salary cap is the limit on total payroll a team can pay to all players combined.  For example, the salary cap for an NBA team was $58.044 million for the 2010-11 season. There are different types of salary as well, ranging from what … Read the rest

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September 2, 2011
In Estate Planning

Law FAQ: What is Probate and why is it bad?

Law FAQ: What is Probate and why is it bad?

What is Probate and why is it bad?  (a.k.a. Why simply having a will might not be enough.)

Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will.  Indeed, a will is a “ticket” to Probate.  If you don’t have a valid will, your assets are distributed according to state law.  But….

Probate can be expensive.  Legal fees, executor fees and other costs must be paid before your assets can be fully distributed to your beneficiaries.  If you own real estate in other states, your family could face multiple probates, each one according to the laws in the state where real estate is owned.  These costs vary, but a good rule of thumb is the cost of Probate will be 6% of your total estate.

Probate takes time, usually nine months to two years, but often longer.  During part of this time, assets are normally frozen so an accurate inventory can be taken.  … Read the rest

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August 30, 2011
In General

Law FAQ: I run a small landscape business. Do I need a contractor’s license?

Law FAQ: I run a small landscape business. Do I need a contractor’s license?

In Tennessee, The Board for Licensing Contractors enacts and enforces administrative rules pertaining to the licensing of various contractors operating within the state.  Typically most of us think of a contractor as being someone who builds or remodels a home, perhaps a roofer or brick mason.  But the Board has recently started enforcing certain provisions against smaller companies that until recently have been overlooked or otherwise ignored by the Board.

The most common type of business to get the attention of the Board is the small to mid-size landscape company.  Now, depending on various factors, even small companies that do nothing but cut grass in the summertime may need to obtain a contractor’s license from the Board.  Specifically, grass cutters need the “BC-29” license.  Failure to obtain the license can be costly.  Indeed, I have represented multiple landscape companies after they have been cited and fined by the Board for operating without the required license.  The fines imposed can be expensive – i.e. several thousand dollars.… Read the rest

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August 26, 2011
In Estate Planning

Law FAQ: My mom’s will leaves everything equally to me and my sister. Why am I not getting anything?

Law FAQ: My mom’s will leaves everything equally to me and my sister. Why am I not getting anything?

A person’s will only applies to assets or accounts that are in the person’s sole name or are payable to the person’s estate.  Typically, we are dealing with assets in someone’s sole name name if we are looking at someone’s will.  I frequently tell clients that assets are often payable to someone’s estate on accident.  For example, assume mom’s husband was named as beneficiary on her life insurance policy.  He dies several years before her, and she never added another beneficiary and does not have a contingent beneficiary on the policy.  In most cases, that policy will say her estate is the beneficiary by default.

The important thing to note is that jointly-owned assets and assets with a beneficiary designation do not pass pursuant to mom’s will.  They pass upon death by operation of law, which means that jointly-owned assets pass to the surviving owner and accounts with a beneficiary designation pass to the named beneficiary on the account, regardless of … Read the rest

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August 24, 2011
In Personal Injury

Law FAQ: Will my insurance premium go up if I get hit by a uninsured driver and have no choice but to submit a claim on my own UM coverage?

Law FAQ: Will my insurance premium go up if I get hit by a uninsured driver and have no choice but to submit a claim on my own UM coverage?

I explained in a recent blog post about how Uninsured/Underinsured (UM) insurance coverage works, and how your UM coverage basically kicks in to protect you in the event you are involved a car wreck or auto related accident with someone who has little or no insurance.

We’ve found that our clients who find themselves in this situation are frequently worried about making a claim on their own insurance.  Indeed, clients often say something along the following lines:

“The car wreck wasn’t my fault, so why should I have to put this on my insurance?  That’s not fair.  I can’t afford for my insurance premium to go up, or worse yet — what if they cancel my policy?  I mean, I can’t afford the medical bills and damage to my car either, but maybe I’d be better off in the long run just doing the best I can and forgetting the … Read the rest

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August 24, 2011