Do you have an advanced health care directive?

Do you have an advanced health care directive? If not, you have plenty of company as only 30% of Marylanders have an advanced health care directive in place. An advanced health care directive allows you to name an individual (and often a backup) to make health care decisions for you if you were unable to communicate your decisions to a health care provider. Many people are familiar with the term “living will” as well. Health care directives can offer your family and friends some comfort in knowing what your wishes are, and aid in making difficult and emotional decisions.

How do you choose your agent/decision maker? For married people, spouses are a common choice, though it is certainly not required. Adult children and siblings are also very common, but a close friend can also be a good option. When choosing among one’s children or siblings, you may want to consider geographical proximity, any specialized training or experience the person may have, and your own comfort in discussing the issue with that person. You should always first talk with the person who you would like to be your decision maker, and many people also choose to give a copy of the document to the agent.

Have you been putting off getting your health care documents in order? Healthcare decisions day is April 16th, make it a goal to complete your documents by then!

For more information on advanced health care directives, please contact Heather L. Sunderman at (301) 664-7710 or hlsunderman@mirskylawgroup.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC

Employers Need To Be Aware Of Potential Retaliation Claims

Most employers are well aware that they cannot make employment decisions based upon a person’s race, disability, sex, age, national origin, religion and other classes protected under federal, state or local law. However, many employers seem to run afoul of the employment discrimination laws not because they engage in discriminatory conduct based upon a person’s membership in a protected class, but rather by retaliating against the individual for raising a possible discrimination issue.  In fact, the U.S. Equal Employment Opportunity Commission recently announced that in over 45% of the workplace discrimination charges it received in 2016 involved, at least in part, a claim of retaliation was raised by the complaining party.  https://www.eeoc.gov/eeoc/newsroom/release/1-18-17a.cfm

Therefore, it is extremely important that in addition to immediately commencing an investigation into any discrimination allegation, the employer must take appropriate steps to safeguard the complaining party from retaliation. The employer’s personnel policies should make clear that retaliation will not be tolerated and this should be reiterated to all individuals involved in the alleged discrimination. Generally, taking any adverse action against a complaining individual is not a good idea.  However, for reasons totally unrelated to the fact that the employee raised a complaint of discrimination, it is sometimes necessary to terminate an employee who has complained about discrimination.  This decision should only be made after consultation with competent legal guidance, as the employer will need to demonstrate that the adverse employment decision was not motivated by retaliation or discrimination.   The closer the “temporal proximity” is between the complaint of discrimination and the adverse employment action, the harder it will be for the employer to satisfy its burden.

Again, terminating an employee after he/she has raised a complaint of discrimination is generally ill-advised. It is important to remember that even if the underlying complaint of discrimination turns out to unsubstantiated, the retaliation claim will not disappear and will have to be addressed.

For more information on retaliation claims, please contact Scott A. Mirsky at (301) 664-7710 or samirsky@mirskylawgroup.com.
Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

SIZING UP IN VIOLINS AND INVESTMENT REAL ESTATE

If you have ever attended an elementary school instrumental music concert, you may need your parental pride to outweigh the general cacophony that is inflicted on your ears. Sometimes, however, you may find a group of violins that sound pretty good. Why is that?

Well, for technical reasons, string players can start younger[1]. As supply meets demand, violins can range from a 1/32 size up to full size.  Therefore, a child can start playing the violin on a tiny instrument at a very young age and “size up” on violins as he/she grows.

There are two strategies for obtaining violins for a child: rent or own. If you rent, you just pay each month for your child’s entire career.  If you choose to buy the violins, you will keep buying and disposing of increasingly more expensive violins.  I looked at the math and decided to buy my son’s violins.

My son started at age three playing a 1/32 size violin, which with an eight-inch body looked more like a toy than a violin. At age five, when he moved to a 1/10 size, we also found a need to move up a step in quality (and therefore, price) with each size increase.  A few months ago, my son traded in his ¾ size violin for a 7/8 size instrument, which is valued at 20 times the price we paid for that original 1/32 size violin nearly nine years before.

When we made the most recent violin purchase, I realized how our “investment” in violins is like real estate investment. A real estate investor might start small, with a single duplex.  That duplex might be sold and the money reinvested in a four-plex, and the four-plex might in turn, be sold and the proceeds reinvested in a more expensive three-story office building.  Eventually, through a series of purchases, sales, and reinvestments, the real estate investor may own multiple large apartment complexes, office buildings, or even high-rise mixed-use buildings.

Unlike with violins purchased for my son, a real estate investor has to think about taxes with every “trade up.” There are two ways that an investor might owe taxes upon sale of investment real estate – increase in value (i.e. the property is sold for more than what is invested in it) or a “recapture” of depreciation expenses that the investor took while he/she owned the investment real estate.  Although land cannot be depreciated, buildings can be, so there can be a significant tax liability upon sale of the investment.

One thing that helps real estate investors accomplish growth in is to use a Section 1031 exchange to defer taxes each time they sell an investment property and reinvest the proceeds in another “like-kind” investment property within 180 days.

When it was first created in 1921, a Section 1031 exchange required a literal swap of the two properties, as would occur if my son were to literally trade in his small violin at the violin shop for a larger sized violin.   For a direct swap, tax deferral makes a lot of sense.  It can be difficult to determine the “sale prices.”  Plus, unlike a sale and reinvestment, a sale doesn’t result in a cash payout from which taxes could be paid.

Therefore, over the years, Section 1031 exchanges have evolved so that they are more useful to real estate investors.

For instance, another option with violins, is to sell the smaller violin to another student and then use the money to buy the larger sized violin from the violin shop. Likewise, a real estate investor might choose to sell that duplex to Company A and use the proceeds to buy the four-plex from Company B.

For the past 30+ years, the tax law has allowed real estate investors to use what is known as a “qualified intermediary” to do the real estate equivalent by for instance, exchanging an apartment building sold to Company A with an office building purchased from Company B.   Without going into the detailed rules for this 1031 exchange, this would roughly equivalent to selling the smaller violin to another student, then putting the proceeds of the sale in a special savings account that could only be used to buy a new violin, once the desired instrument was located.

1031 Exchanges, however, are seen by some as a tax loophole for real estate investors. The Republican tax proposal “A Better Way” would significantly change the tax laws, including those on investment real estate. The proposal includes a full and immediate expensing of investment in place of depreciation.

Although this proposal might simplify the tax laws, it is likely to complicate the tax situation for many real estate investors. 1031 exchanges are not specifically mentioned in “A Better Way,” but some believe that 1031 exchanges might be abolished along with depreciation.  If that were to happen, real estate investors likely would be taxed on their proceeds upon sale of their real estate.  This would limit available cash for real estate investors’ to “trade up” and potentially could slow down the recovery of the real estate market.

Therefore, although it seems likely that there will always be a crop of younger violinists in need fractional-sized violins as you “trade up” to larger instruments, tax laws may not always make it as easy to “trade up” your real estate investment.

© 2017 by Elizabeth A. Whitman

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[1] Geek fact: A partial explanation is that strings of different length can reach the same pitch by changing the tension, while wind instruments require a certain length of the air column to produce a pitch.  So if you want to start your five-year-old on a bassoon, you may need to stretch him a bit first. Also, wind instruments require a developed mouth and certain number of permanent teeth, which are not required for string instruments.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Do You Need a Pre-Nuptial Agreement?

Valentine’s Day is just around the corner and plenty of people have engagements and weddings on their minds. Besides the perfect ring, what else do you need? Everyone plans for their marriage lasting forever but sometimes circumstances happen beyond your control. Knowing that you can’t protect yourself from divorce, any steps you can take to avoid litigation and provide security is key. Many people are unaware that even property titled in their own names, can be considered marital property, depending on the circumstances.

Pre-nups can specify ownership as well as each parties’ rights to property upon death or divorce, as well as determining whether there will be alimony. The parties have a large degree of flexibility as to the terms of the pre-nup, although provisions regarding children will not be enforceable because the court always retains the ultimate authority regarding the best interests of children.

What if you’re already married? You may still be able to reach a valid agreement on these issues, which would be considered a “Post-Nuptial Agreement.” Any agreement regarding marital assets should be discussed with an attorney however, there are numerous pitfalls for the unwary.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Not Such a “Veiled” Threat

One type of veil is an article of clothing some women wear out of modesty to protect against unwanted attention.  Another is a religious cloth used to protect an item of particular religious significance.  The word veil also can be used to describe the divide between the bodily or corporate and the spiritual worlds – a sheath, of sorts, which separates the known from the unknown.

Corporations and limited liability companies can also be thought of as wearing a “veil.” The corporate veil protects what is underneath – the shareholders, manager, and members – from undesired personal liability for company obligations.  The corporate veil also separates what may be unknown owners from obligations that the known corporate or limited liability company has assumed.

At a wedding, a bride’s veil may be lifted to reveal the bride’s face.  In a church, a chalice veil may be lifted to give access to sacramental wine.  Some people believe that spirits can pass through the veil between the bodily and spiritual worlds.  Likewise, a company’s creditors may be able to lift, pass through or “pierce” the corporate veil to impose liability on the company’s owners.

Typically, this occurs where business owners have failed to observe the separateness of the company from the owners. This can easily can occur with single member limited liability companies set up as special purpose entities.  Other times, the corporate veil may be pierced where the company’s owners have removed assets from the company or have committed fraud or other wrongful acts.

A business can minimize the likelihood of someone piercing the corporate veil through careful business operations, including the following:

  1. Start out with adequate capitalization so that the business can support its needs. If additional capital is needed, obtain it through well-documented loans or formal capital contributions from the owners.
  1. Hold the business out to others as a separate company, with separate letterhead, business cards, contracts, and leases.
  1. Assure that the business’ assets are not co-mingled with those of the owners or any other business. Open a separate bank account for the business and make sure that business revenues and expenses are deposited into and paid from that bank account.
  1. Work with the company’s attorney to assure not only that appropriate by-laws or operating agreements are in place, but that appropriate corporate governance, such as minute books, stock ledgers, board meetings, corporate resolutions, and other business formalities, are observed on an ongoing basis.
  1. Do not make distributions to owners if that would result in the business being unable to pay its obligations.
  1. If an affiliate’s employees are expected to perform services for the business, have the business’ attorney prepare written contract that describes the services and the amount to be paid for them. Make sure the contract is honored.

Corporations and limited liability companies are formed because their owners wish to limit their liability for business obligations. However, forming the business is just the beginning.   Retaining that limited liability requires the guidance of a business attorney, good legal documentation, and careful business operations.

Elizabeth Whitman

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

What Will 2017 Bring to Family Law?

As with other areas of the law, family law is regularly changing to keep up with new developments in families’ needs. The trend in the last few years in family law is to streamline and simplify the grounds for divorce.

When I first began practicing law in Maryland, there was a two year waiting period of continuous separation before filing a divorce if you and your spouse didn’t agree to separate. On top of that, it is not unusual for the divorce to take a year to be final if the parties didn’t agree on the financial issues of the divorce. In the last few years, that waiting period was reduced to one year, and there has even been a new mutual consent ground for divorce which does not require separation. (Other conditions apply, of course!)

New this year is the removal of the requirement for corroboration of the grounds for divorce. In the past, even amicable divorcing couples had to be sure to bring someone to court with them who also had knowledge of the grounds for divorce, whether it was separation, adultery, etc. It required another adult to make themselves available, take time off work and to publicly state details of the couples’ private life.

What will 2017 bring? Possibly an expansion of the mutual consent divorce availability, stay tuned for updates from Maryland’s General Assembly.   – Heather L. Sunderman

For more information on Family Law, please contact Heather L. Sunderman at (301) 664-7710 or hlsunderman@mirskylawgroup.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.