New Bill Provides Temporary Relief for the Estate Tax

Author: Dustin Wetton

On December 17, 2010, President Obama signed into law H.R. 4853, The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This important tax extenders bill includes federal tax changes for individuals, businesses, and estates at all levels of income. One of the most important facets of the bill is the part concerning the estate and gift tax.

The deadline for revamping the estate and gift tax was the first of January, 2011. Thus, if no action was taken by Congress, the estate and gift tax laws would be restored to their 2001 levels. If that would occur, the amount that is exempt from estate taxes would be $1 million, and the tax on the rest would be 55 percent. Thankfully though, Congress took action. In this recent legislation signed into law only 13 days before the deadline, congress provided temporary estate tax relief and a modification of the gift and generation-skipping transfer taxes.

To sum up the recent changes that affect the estate tax, the new law has a higher exemption and a lower tax rate. The new legislation sets the estate tax exemption at $5 million per person and $10 million per couple. Thus, if you are an individual, you will not be taxed on up to $5 million of your assets upon your death. Therefore you are able to actually give out to others the inheritance that you had planned for them. Also, there is a top tax rate of 35 percent for the estate, gift, and generation-skipping transfer taxes for two years, through 2012. Thus, if you are an individual with more than $5 million in assets at your death, then anything over the exemption amount will be taxed at a top rate of 35%. Lastly, the proposal sets a $5 million generation-skipping transfer tax exemption and zero percent rate for the 2010 year.

A new tool is granted for estates of decedents dying after December 31, 2010. Under current law, couples have to do complicated estate planning to claim their entire exemption. Yet now, under this new legislation, a couple is allowed to transfer any unused exemption to the surviving spouse without any need for a planning instrument to dictate otherwise. Thus, the first spouse to die can use an estate plan that takes little to no taxes out of their estate, while also protecting the surviving spouse from heavy taxes upon their death.

Lastly, the new bill once again reunifies the estate and gift taxes. Prior to the 2001 Bush tax cuts, the estate and gift taxes were unified, creating a single rate schedule for both. This was subject to repeal if Congress took no action. Luckily though, the recent bill unifies the estate and gift tax once again. The bill is effective for gifts made after December 31, 2010.

With all of the new changes taking place, it is a good idea to use the inspiration of Congress’ action to take action yourself. Check your estate plans to ensure that you are in line with recent changes and that the language in your will or trust allows you to take advantage of the beneficial changes that have just come into affect.

If you have any questions or comments regarding this blog email us at blog@lauruslaw.com

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Home Values and Rising Home Mortgages Rates

Author: Eric Townsend

Over the last couple of years the interest rates on home loans have been at historic lows. In recent weeks we have seen those rates rapidly rise. Those considering selling or buying a home are left wondering how rising interest rates will affect the value of homes. Here is a brief synopsis of how these changes could affect the value of housing.

Home values reflect supply and demand. Increases in supply cause prices to drop while increased demand cause prices to increase. To understand the effect of interest rates we must first understand what supply and demand is.

Supply of homes come from those willing to sell property including private home owner through a regular sale or short sale, banks with foreclosed properties, and also from owners/investors waiting on the sidelines for the right price at which to sell. Of these sellers, short sales and foreclosed properties account for the bulk of sales.

Demand for homes come from the aggregate amount everyone in a market is willing to pay for that supply. This aggregate amount is based on wages, levels of employment, availability of credit and the interest rates associated with that credit, and society’s sentiment regarding the strength or weakness of the economy in general.

So today when we look at supply and demand there are a few things we notice right away. First, supply is remaining constant. We still have several months of inventory, but that inventory remains relatively constant. With a constant inventory that is not increasing the effect of supply on the market should be nominal. Second, demand is also relatively constant. Wages and levels of employment are not going up or down either and recent surveys of consumer sentiment about the economy are improving slightly. The one thing that is not remaining constant is interest rates.

With interest rates being the one factor affecting home prices we must look at how those interest rates change the demand curve. To show the effect of rising interest rates we will use the example of the average demand (D) who is looking to buy a home. Let’s assume that the amount D is able and willing to pay is $1,340/mth. At a 5% interest rate D can buy a $250,000 home. At a 6% interest rate D can buy a $223,000 home, which means the value of the home that he can afford is $27,000 less. This is roughly a 10% drop in the value of that home. If rates rose 2% and D bought a home at 7% interest he could only afford a $200,000 home, which is roughly a 20% drop in the value of that home.

So with everything remaining approximately constant we could expect home values to level off. Unfortunately, interest rates have begun increasing. Home mortgages are based on 10 year Treasury Bonds and the rates on those bonds having increased from a low of below 2.5% just a few months ago to over 3.3 % today. With these increases mortgages rates have also begun to climb. With many new buyers subject to these higher rates principle home values should decline inversely.

On a brighter note, the effect of these higher interest rates is not reflected in values for several months. So if you are selling a home now is the time.

If you have any questions or comments regarding this blog email us at blog@lauruslaw.com

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Income Taxes and Bankruptcy

Author: Dustin Wetton

Ben Franklin once said that “the only things certain in life are death and taxes.” This quote can have many innuendos, one of which is that there is no way of getting out of paying for your taxes. However, during Mr. Franklin’s life, the United States had not yet setup a bankruptcy court or bankruptcy code. Thus, he was unaware of the ability to discharge federal and state income taxes through the bankruptcy process.

The bankruptcy code was initiated to help ease the burden of over-encompassing debt on debtors and to help create and protect the flow of credit. While most creditors are often credit-card companies, health industries, and lawsuits, in many cases, the federal and state governments are also creditors. In these situations, for whatever reason, the debtor owes their respected governments taxes, and thus is established a creditor-debtor relationship between the taxpayer and the government.

This situation is very common in bankruptcy. Yet because the creditor is the government, they have a very high priority of distribution and a more difficult burden of discharging their debt than most unsecured debtors. Thus, if you owe money on taxes from previous years, you can have your debt discharged, that is “wiped clean”, however the following six steps must be fulfilled in order to do so:

1)The due date of filing the return is at least 3 years ago
2)The tax return was filed at least 2 years ago
3)A tax assessment occurred at least 240 days ago
4)The returns are not fraudulent
5)The debtor is not guilty of tax evasion, and
6)The debtor must prove the past four years of filings had been filed.

These six steps must be followed to a tee in order to get the past years taxes discharged. If there are problems in qualifying for any of the steps, an attorney, the trustee, and the IRS are all very helpful in figuring if the debts can be discharged or not. Also, it may be a good idea to get a tax transcript from the IRS and the State for the tax years that you are going to try to discharge to make sure that your numbers are correct.

Quit First, Fired Later

Author: Dustin Wetton

During these difficult economic times, many of us are changing our employment status to seek better economic opportunities. Thus, some of you might be inspired to quit your job for whatever reason and seek employment elsewhere or just take time off. In doing so, lets say that you are respectful to your employer and you give them your 2 week notice. Yet, what happens if that employer is so insulted by you quitting that after you give your notice, they fire you instead. Does this mean you were fired or you quit? What happens if you only had one day left on your notice and they “let you go early?” Questions like these are often asked to employment law attorneys who are helping those recently unemployed receive unemployment benefits. However, I believe that the same logic can be applied to severance pay and other “benefits” of being let go from a job.

Unemployment benefits are normally only allowed to those that leave their job involuntarily. Meaning, if you quit your job because you wanted another job, or just wanted to, then you most likely are not able to receive unemployment benefits. Yet, under California law, if you give notice of your last day and your employer cuts that day short, then you are qualified as leaving involuntarily, even though you intended on leaving a couple of days, or weeks or months, later. If you give notice and they fire you prior to that notice date, “or let you leave early” then you are defined as being “fired” under California law.

In one case the Unemployment Appeals Board held that “the fact that a person may set a date for resigning from employment is not the controlling factor. The most pertinent consideration is whether the employee could have remained working for an employer on the actual date they left.” If they could have continued working, were willing and able to do so, but the employer was not willing them to do so, then they consider it as an involuntary discharge. Thus, if this would happen to you, then you would be eligible for unemployment benefits. Using this same logic, I believe it can also be argued that you would be entitled to the same benefits of severance pay and other “fire-triggered” benefits that are owed to you in regards to your employment contract. Thus, just because you were quitting, gave notice, and were “let go early”, you may still have certain important rights and decisions to make regarding how to handle any transition periods in your employment.

Scope of the Law

Author: Eric Townsend

Over the last few days I have been developing the first class of a pre-law course for students on their way to law school. As a starting off point, I thought it would be good to first categorize the law from a macro level and then go into each area of law in more depth. As I was developing this initial class I realized this might also be a benefit to anyone who was curious about our legal system, and I decided to write this blog to give my readers a brief and broad overview of our legal system.
The main aspect of our legal system can be summed up in one word, “rights”. Rights correspond with duties. Rights are derived in two ways: first, common law rights of each person as defined by case law; second, Constitutional and statutory rights of each person created through our political system. Once a right is established any breach of the corresponding duty makes the violator guilty of breaking the law. In most cases these rights and duties are simple, but in some cases they are not. An easy example, in a contract for the sale of my car to Bob I have a duty to provide the car when agreed. A more complicated example, if property law says that I am the owner of land and it is my right to be free from intrusion onto such land then all of society owes me a duty not to enter my land.
Our common law rights were borrowed from English courts that developed them over hundreds of years. These common law rights are also known as natural rights. They are used to determine the right of each in their own person and the rights of society in property. Although common law rights cover a broad number of actions, if there is a statutory right it takes precedent over common law rights.
Statutory rights derive from two sources: first, from the Federal government through the limited powers given them by the Constitution; and second, from state governments through the 10th Amendment for any other actions not reserved to the Federal government or where they have failed to take action. States can delegate their authority to local governments like cities and the Federal government can delegate their authority to agencies like the EPA. So a statute will be valid if it does not violate this Constitutional framework.
So to understand our legal system, the law has been broken down into several different areas of law to easily explain and define those rights and duties. Property law determines when a person has a right (aka interest) in property, and also the duties of all people regarding that right. Criminal law seeks to define and limit the rights people have in their actions (based on the political beliefs at that time), and uses liberty and monetary punishments to enforce those limits when that duty is breached. Tort law, like criminal law, seeks to define and limit the rights people have in their actions, and uses monetary punishments to enforce those duties. Tort law additionally seeks that the tortfeasor restore the injured party by monetary contribution in the amount of the harm caused. Contract law seeks to enforce the heightened rights created when people agree to them and to enforce breaches of those duties. Constitutional law provides the framework for our Federal government, it gives limited guidance on the framework of state governments, and it establishes the rights and duties as between the Federal and state governments, between the people and those governments, and between ours and foreign governments. Other types of law will generally be offshoots of these overarching legal areas.
From a broad view, this is our legal system.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com.

Probate Prices on the Up and Up in San Diego

Author: Dustin Wetton

New court legislation in San Diego has caused the prices of filing for probate to increase in San Diego. As of the beginning of this month, the cost to file a probate filing with the court is $395. The filing cost is just the amount needed to create a probate case, it does not include the probate code regulated attorney fees, court fees, and examiner fees also associated with probate.

Yet before indulging into these costs, let’s reflect again on what exactly probate is. The probate court is a court designed to distribute and administer a person and their properties once that person dies. This is done for every individual that does not have a trust. Even if that person has a will, they still encounter and run through the gamut of the probate process. The only way to avoid probate is to have a valid trust established.

Thus, for purposes of this article, let’s say that there is no trust established by the deceased person. To initiate the process of distributing their assets, the remaining loved ones will have to file a petition for probate and incur the recently increased costs in San Diego of $395. This is just the initial filing fee. Once the documents are gathered and an examiner or attorney is appointed, then the court will add additional fees to the process. These fees are regulated by the probate code. One such fee is the court fee. The court fee ranges from $1,000 to $3,000 dollars, depending on the amount of complexity with the case. The other fee, the more costly one, is the attorney or the examiner fee. This fee is determined by the probate code by matching a certain percentage with the amount of the estate. For instance, if the estate values at $100,000, the attorney fee is 4%. This percentage heavily increases as the estate increases. The attorney fee can quickly reach $25,000. Determining the value of the estate is done by valuing all real and personal property of the deceased person, thus, it adds up fast when there is a car, jewelry, a house, and even clothing.

Therefore, with all the fees associated with probate, either the estate itself will foot the probate bill and thus disinherit some beneficiaries, or the remaining loved ones will have to pay the fees. Yet, as mentioned above, the probate process can be side-stepped through an established valid trust and estate plan. Further, the probate court only administers to the deceased person and their assets, a whole different court and different fees will be in addition to the cost of probate if there are any minors left behind. To best side-step these fees and costs, an estate plan is needed. Contact us at (619) 796-2381 to setup a free 30-minute consultation to start your estate planning.


If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com.

Issues with Short Sales

October 31, 2010
Author: Eric Townsend

Short sales are more prevalent than ever and many Americans are using them as an alternative to foreclosure. Negative equity home owners see a short sale as a way of limiting their liability. Unfortunately, this is a mistaken belief and acceptance of the short sale by the lenders does not necessarily mean all future litigation of the remaining debt is barred. In some circumstances not only can the lender go after the short seller after the short sale, but, depending on the circumstances, the judgment could be non-dischargeable through bankruptcy.

With a myriad of state and federal laws protecting home owners most residential short sales approved by lenders will result in no future liability, but will remain in several circumstances. Some of these liabilities are created by the lenders and are strictly unenforceable under California state law. Others liabilities were created at the time the short seller created the loan for the subject property. In these circumstances it is very important to understand when there are legitimate and illegitimate liabilities places on the short seller. Once the short seller understands the legal ramifications of completing a short sale only then should action be taken.

Without understanding the liabilities a short seller may be subject to, or to assume an illegitimate liability, it is easy to place a short seller in a position of liability that could have been mitigated with adequate legal advice. In some, but not all, cases lawyers can use simple strategies to help prevent the future liability of these short sellers.

A short sale done properly should operate as a settlement because in fact the short seller is helping the lender to procure the highest proceeds through a non-distressed sale. These actions are valuable to the lenders, and should be used for bargaining the removal of the short seller’s liability, but only a licensed attorney can explain and guide these short sellers to that result.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com.

Who is to Blame, Fraud or the Market?

Author: Dustin Wetton

During the recent economic decline, many American’s lost much of their investments in the stock market. While loosing money can cause hardship, permanent damages, and harsh repercussions, by itself it does not open the door to sue somebody. After all, the main person to sue sometimes would be ourselves, as it was our decision, based upon our knowledge, to take a risk and gamble our money in a market that can be as unpredictable as earthquakes. So, why did you loose your money?

If it was based on bad luck, bad timing, or bad choice on your part, then that just comes with the territory. The capital market is know for its harsh ups and downs, and no matter how much the government may try and soften these punches, the market will continue its ocean-motion of ups and downs, and thus a good investor is a person who can see the dips and the inclines, and react smartly to them. Thus, if money was lost based on these issues, I’m sorry, but its you to blame for loosing your money, and thus, you can contact us or any other attorney to see if you have a valid suit against yourself for damages, and maybe even intentional infliction of emotional distress.

However, let’s say that you lost your money based on the faults of your financial broker, advisor, or fund manager. Were you a victim of fraud? These individuals are meant to give you financial advice, through a fiduciary duty owed to you, to help you invest your money based upon your investment profile, and given the recommendations that you knew of and knew the risk of. If they followed these steps, and gave you “bad” advice, then there is not much room for suing still. Yet there are some things that these individuals can be caught in the act and be held liable for, such as:

1) Breach of duty of care – This is a duty of a financial advisor to act with care in giving you financial advice. While this duty is protected by the business decisions exception, if your advisor gave you tips that were out of the realm of normal everyday business practices, then they can be held responsible. While this is often argued for, it is difficult to prove that the business exception rule does not apply.

2) Misrepresentation – This duty is to ensure that all information given to you is to the best of the advisors knowledge true. Thus, if they intentionally or negligently misrepresented facts to you, you bought onto these facts, and relied upon them in making your investment, and damages were caused upon you…then you have a good case against your advisor.

3) Going Against the Flow – This is not the legal term, because it mostly captures an array of suits that fall into it. If the broker did not follow contract terms, or did not listen to reports of unsuitability, or lack of diversification, then there are actions that can be brought against these individuals.

4) Breach of Loyalty – This is a duty to act in the best interest of the client in all decisions made for that client. This duty is breached when an advisor acts in their own interest, to better either themselves, or someone that they know. This is easily spotted with good evidence, and can cause many problems for advisors that went down this sour road.

These are all good actions that may apply to those of you who thought it wasn’t your fault. Also, remember that theft is always a good choice for legal action as well. If there are any signs of schemes, pyramids, or any other sketchy action taking place with your broker, be sure to seek legal help. As always though, while your advisor might have let you down, or you ran into bad luck, it’s always a good idea to be active and on top of your financial investments.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com.

Industry of Short-Sales is About to Boom under SB 931

October 05, 2010
Author: Eric Townsend

Home owners walking away from their properties in foreclosure do so at their own risk. Only certain types of mortgages allow homeowners to walk away from their properties without recourse and now those same home owners will be protected when they instead go through the short-sale process.

Home loans, where the borrower also lives in the home as their primary residence, that were obtained to initially acquire property are protected under anti-deficiency statutes. Unfortunately, these loans do not represent the majority of borrowers who have home loans.

Over the last several years borrowers have refinanced their properties to obtain lower interest rates or to delay balloon payments coming due under an adjustable rate mortgage. When a loan is refinanced it is no longer classified as a loan used to acquire property and is left unprotected under the anti-deficiency statutes.

What does this mean? This means that should a homeowner choose to exit their investment (walk away from their home and home loan) in most cases they will be liable for the difference between what they owe and the amount the property brings in a foreclosure sale. This could leave homeowners that walk away in foreclosure with tens if not hundreds of thousands of dollars in debt. But for homeowners there is an alternative.

Governor Schwarzenegger recently signed SB 931 which provides relief to homeowners, but there is a cost. Homeowners that walk away must do so through a short-sale. This legislation adds a section (e) to Civ. Code sec. 580 and protects property owners – not including S or C corporations – from a deficiency judgment if their lenders agree to a short-sale. This means many homeowners that would have had to declare bankruptcy can now be relieved of their debt if they do the right thing and help the lender sell the property in a non-distressed short-sale.

If you have any questions or comments regarding this blog email us at blog@lauruslaw.com

Black’s Law Dictionary: Abandonment - Abavia

Abandonment - Abavia August 3, 2010
author: Dustin Wetton

Another day, another top five listings in what Laurus Law Group is calling “the Book”:

1)abandonment – Here is another word from the Book with so many uses and definitions, yet it is also a very importantly used word. Abandonment is the “relinquishing of a right or interest with the intention of never again claiming it.” According to Black, it is often used by courts as a synonym for “rescission” in contract law, but it is important to note the differences. Under a contract, if the contract is abandoned, it means one of the parties has accepted the other party’s situation of nonperformance and the result. A rescission on the other hand is a termination or discharge of the contract as a whole.

Abandonment is also used in family law, where a spouse abandons or deserts the other spouse or child willfully, with or without the intent to return. In this context there is a distinction between malicious and voluntary abandonment, yet I can’t see how a “voluntary” desertion is not malicious, as it must be willfully done. Maybe an abused spouse who finally escaped the prison of her home could be a candidate for a voluntary abandonment subject.

Lastly, abandonment is used in bankruptcy law. Under bankruptcy, a trustee can release property that is part of the bankruptcy estate if it has become a burden or is inconsequential to the estate. The property is not abandoned to the streets for the mass, but is instead abandoned back to the original owner, the debtor. This is an example of an extreme word in a non-extreme case. “I’m sorry debtor, but we must abandon your vehicle in this bankruptcy, I hope you understand.”

2)abarnare – “to detect or disclose a secret crime.” This makes me think of Sherlock Holmes. Those are some great stories of detecting and disclosing crimes, more often than not, secret crimes. I guess there would be difficulty in detecting and disclosing obvious crimes. That just wouldn’t make a good detective story at all. Holmes = abarnarish (not sure if that is the correct mutation of the word.)

3)abatement– To abate is to take away from something. I first came across this word while studying for the GRE test prior to taking the LSAT…yes, I was a bit confused and had a lot of time on my hands. Although the top definition is “the act of eliminating or nullifying,” while studying for the California Bar and in learning of estate planning, this word became one of my favorite flash-cards. Under estate planning, abatement refers to a reduction of a devise, either a general or a specific, to an heir because the estate was not properly funded to pay its debts. This is a common mistake that occurs when an estate plan is not updated correctly and the deceased creates devisees that are not realistic in connection with their recent life status. Thus, before you have your heirs loose out to your debtors because of abatement, ensure that your estate plan is up-to-date!

4)Abatement clause– No, this is not related to the above definition. While it is the clause that allows tenants to abandon their obligation to pay rent, this is not due to a contract nonperformance or because of the inability to prepare better for debt owed at death. This clause is used in a lease to “release the tenant from the rent obligation when an act of God precludes occupancy.” While this is a vital clause, it is not necessarily guaranteed to be in your lease. Also, this clause normally is in association only with residential leases, not commercial. Also, there is no general idea of what an act of God is. While some may argue that an act of God is any act, it is normally understood to be the wrath of God, such as floods, lightning, wild-fires and the like of destruction.

5)abavia – if you read yesterday’s blog and were curious if abamita’s mom had a proper title too, from their great-great-great-grandchild perspective, you’re in luck because they do. It is called an abavia. This term is “a great-great-great-grandmother.” Wow. Hopefully, if your ancestors were mature enough, your abavia would be about a 100 years, or five generations, older than you. Also, if my math is correct, you should have a total of 16 abavias. That’s a lot of family. My new goal is to try and start using these terms and tell people why I have brown hair, “we’ll you see, my abavia’s…”

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com

Laurus Law Group Project: Black’s Law Dictionary, "A - Abalienation"

Laurus Law Group Project: Black’s Law Dictionary
This is a notification. Laurus Law Group, in pursuit of spicing things up, has decided to engage its blog in a new direction: Black’s Law Dictionary. The goal is to accomplish the whole dictionary, and write about it. This idea was rooted in the book The Know-it-All by A.J. Jacobs and by a recent movie titled “Julie & Julia”, with the theme in both situations being the conquering of lengthy and informative books such as Black’s Law Dictionary.

Now to the details. The exact book that will be used is Black’s Law Dictionary 7th Edition, edited by Garner of West Group. This book is huge. Not including the appendixes or prefixes, the total page count totals up to over 1600 pages. Not only that, but each page has anywhere from 1 to 20 listings of words or topics. Thus, to fulfill my due diligence in this project, Laurus Law will not report on every single subject in the book, but instead will write about the five top listings, ranked according to our lawyers. The top five listings will be written of hopefully each day, so readers try and keep up.

Why are we doing this??? Well, Black’s Law Dictionary is a corner-stone of cement in the legal community. Law students, judges, lawyers, and professors have relied upon this book since 1891 when it was first published by Henry Black. There are thousands of versions and languages that this book has been transcribed into and there are even on-line versions and pocket versions of this same book. With so much of the world depending upon this book for their legal definitions, Laurus Law believes that the lay people of the world should have their crack at understanding its terms. Thus, our project.

Therefore, with no further ado, let’s start with the five top listings of the day.

A - Abalienation August 2, 2010
author: Dustin Wetton

1) A – There are many definitions for this word, and while it may seem ultra-common and obvious, what better place to start the dictionary but with the letter “a”. One great start to defining it is how it is practically used in the legal world with the reference to “a hypothetical person.” For instance, when talking about a real estate transaction, the legal community would say “a transfer Blackacre to b.” Thus, in those situations, facts of who the people could be are of little importance, and the focus should be on the other facts of the situation.

Another definition used in the Book is “a grade as ranked by Standard & Poor’s.” With this definition, the rankings of the S&P are of AAA to C from high to low based on their opinion of a stock. Thus, to be sure not to miss anything, the Book has made sure that when A is in a document, it could be in reference to its ranking system, which is somewhere between AAA and C, but who knows what “A” ranking really stands for.

My favorite and last definition for “a” is “a scarlet letter worn as punishment by a person convicted of adultery.” Yes, this was used in The Scarlet Letter, but it was also a common practice in the colonies during the founding of America. This is a great reference to legal history and how not only adultery used to be a crime, but how the punishment matched the act committed. The secrecy of adultery was punished with the constant announcement of its action. How grand of an idea. Oh “a”, how we will miss you.

2) abacinate – “to blind a person by placing a red-hot iron or metal plate in front of the eyes.” Ouch. With my wild guess, I would have to assume that this was a type of punishment used and not a crime, yet I could be wrong. What is even more interesting to me is that the item of metal was not placed into the eye of the person, but instead was placed “in front” of their eyes to blind. It was as if they were trying to be mean, but not too mean. Also, this is the name of a modern band, with very peculiar artwork.

3) ab actis – Latin is found throughout the Book. This is because much of our legal codes have derived from Roman law and thus we have adopted many of their sayings. The word “ab” means “by” or “of.” Here, this word “ab actics” is “an officer responsible for public records, registers, journals, or minutes.” This is in reference not to a modern day clerk, but instead to an officer under Roman law. Yes, even back in the day of the empire, there were individuals recording, registering, and journaling everything in the legal system. This is a hard job, and one with a long history, thus, the next time you go into the court house, pay a little respect to these individuals.

4) ab agendo – there is that ab again. Here though, this word is relating to the inability to act, or more properly, “unable to act or incapacitated for business or transactions of any kind.” I wonder when this word was first used. It could be those with the inability to act in battle, or those who tried to sell their chicken, but were unable to act in a transaction of that kind for their spouse would not let them get rid of the family chicken. Any of which would be completely ab agendoed out.

5) abamita – “a great-great-great aunt.” Or in other words, the sister of one of your great-great-grandparents. Thank God they have a term for this. It is so much easier to say this word rather than the repetitive and confusing “great’s.” Yet, my curiosity is aroused as to whether there are many living abamita’s. The number must be small, but it is very possible to have one living. If any of you readers have a living abamita, I would love to hear all about it.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com

A Swell Season

author: Dustin Wetton

What a show. As a group composed of passion, the performance by The Swell Season at the Hollywood Bowl last night was amazing. While the venue was not as intimate as their last visit to Los Angeles, they were still able to connect with the whole audience as they blasted their sweet, sweet music over the thousands of listeners last night. Prior to their performance, beautiful Zooey Deschanel performed in her band She and Him. Her classical voice was nothing less than perfect last night and she laid the tempo for the night of great music. All in all, it was a great performance by all bands present.

When I first saw and heard The Swell Season it was before they really existed. Glen Hansard and Markéta Irglová were both doing individual things, such as The Frames. Yet in their movie Once, these two talented people joined their passions to create some great music. And thus, they formed The Swell Season. Being a local San Diegan, when I hear the word “swell” I automatically relate to the ocean and a swell, picturing the large swells being brought in from a storm far off the coast. Yet, I have also been watching some Mad Men recently and they too use the word “swell” frequently. They say it with the same meaning of “that’s great” or “that’s amazing.” And I guess this can work for this band too, The Amazing Season, The Great Season. Whatever their meaning, this band is something to look into.

How does any of this relate to law? How can this help out our clients? The whole time I was writing this I was waiting for something to click that I can draw a connection back to our practice area, but I think I won’t. I think this will be an example of the character and outside interests of Laurus Law. While we do practice law, and we are legal professionals, we also have other interest and enjoy great music. Ce la vie.

If you have any questions or comments regarding this blog, or would like to recommend some music, email us at blog@lauruslaw.com

To The Moon

author: Dustin Wetton

After a nice relaxing weekend, its good to be back to work. This week is planned with networking events at local entrepreneur and business owner network groups throughout the county, as well as meetings between our lawyers with other lawyers in the community to build upon our marketing techniques. Things are still changing here at Laurus Law Group, but its nice to see it all coming together nicely.

This blog is centered on the moon. I was listening to NPR radio on my way home one night and heard on their program “Things You Should Know” the interesting effects of the moon. The so-called "moon illusion" or "moon effect" has been discussed by many people over since our beginnings. Even Aristotle mentions it in 350 BCE. The illusion or effect is the change in the moon size when it is near the horizon compared to when it is high in the sky. There are many memories that I have looking at the full moon rising over a lake or between mountain passes and being amazed by its immensity, as I am sure you all have many similar memories. According to the radio program, some people judge the moon to be as much as twice as large, but the average estimate is 50% to 75% larger. The best part of this change in size of the moon is that no one knows why it happens. Scientists have agreed, to my great disappointment, that the moon is not changing in size every night as it passes from horizon to zenith. But they really cannot explain why our perception of the moon changes.

This illusion is very amusing to me. The moon is the moon, by definition. Its size is constant, at least mostly constant, but to our eyes it fluctuates on a daily basis. It makes me think of philosophical topics such as relativism and absolutes. It also makes me think of the myths and beliefs of perceptions. While the public at large may believe one thing to be true based on perception, the truth of a situation may be hiding behind this perceived belief. And thus, I segue into the Alter-Ego theory.

The alter-ego theory is a theory based upon a business entity being created in order to hide the owners from liability, yet its only purpose is to serve as the “alter-ego” of the owners. Therefore, to tie it to the moon, the perception of a business and holding itself out to be a business is only a façade, and the truth is that the business is just a mask for the owner to try and hide behind. When an alter-ego is found, the protections afforded to certain entities are vanished and the owners can be attacked personally for any liabilities of their business. Of course the alter-ego can be found when owners are caught to purposefully be hiding behind their business as a fraud, but there are even simpler, more innocent, ways of being found as an alter-ego business. When a business is not operating as a business, courts have found that the business is not truly a business, but is instead an alter-ego. Acting like a business is ensuring that all letterheads match, that monthly board meetings are met and minutes are taken, that correct voting at all meetings are conducted properly, that papers are recorded and organized properly. While each of these, and many other tasks, may seem minute on an annual basis, these tasks are what courts look to and litigators try to find when the alter-ego theory is being used as a weapon. Thus, governing your business properly on a daily basis is a necessity. To be sure that your business is run properly, it is often a good idea to hire an attorney to check annually, semi-annually, or quarterly that all of your business is being run properly.

In sum, the moon may look like its wavering between sizes and a business may seem to be operating as a business, yet the truth of both cases is that their perceptions do not always hold up to the truths operating behind the myths.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com

Pros and Cons of Probate

author: Dustin Wetton

It was another good week for Laurus Law Group. We have updated our website to provide more information about the services that we offer our clients, along with providing a frequently asked questions (f.a.q.) page so that we can answer the more universal questions that we are frequented by. Earlier this week, I attended a CLE at the Vista Courthouse dedicated to helping attorneys understand the probate filing process better. The seminar was hosted by the North County Bar Association and was done very well. Probate is part of estate planning and thus it was a very needed educational seminar for me to attend to better assist our clients.

Probate is a necessary process for all of us, whether we enjoy thinking about it or not, almost every one of us will have to go through the process. Actually, there are little times in which you can avoid probate. Probate is the court that addresses the estate of a person after they pass. There are basically two types of cases that a probate court finds. The first is intestate. Intestate probate is when a person dies without any will in place. Thus, the court will have to find out what property is in the estate and then it will appoint a person to be in-charge of distributing the estate according to the laws of the jurisdiction in which the person passed. This person will then pay creditors and then designate the rest of the property of the estate to the heirs according to intestate succession laws that are governed not by the interest of the deceased or the family, but instead by statutes. Thus, a pro of the probate process is that it allows the property to be dispersed, even if the deceased does not have an estate plan. Also, this process helps to keep the emotions and desires of the families out of deciding what to do with the property, which is most often a good thing.

The second type of case that a probate court sees is called a testate case. Testate cases are those in which the deceased person passed with a will in place. This will of course can open the door to the creativity of estate planning, meaning that the will can either be just the simple will of a person, or it can be a pour-over will that dumps whatever is not part of a larger estate plan into the trusts document. There are a huge variety of types of estate plans and ways to plan for a testate case, but for this blog’s purpose, I am just going to explain that there is a testate case. Through a testate case, the deceased has control over how the property will be dispersed, and the court will just have to make sure that the will is valid. If a trust is involved, then the court will just have to make sure that the trust is valid. Also, the court will hear any disputes about the validity of either documents. By creating a will, the estate can save a large amount of money by reducing the probate courts time and effort. By creating a trust and a pour-over will, the estate would save even more money.

Thus, when thinking about probate, the pros are that its great for any disputes and to ensure that some plan is created for every deceased, but the cons are the costs and time burdens that it places on those left behind. Sometimes the costs can be around 7% of the total estate, which can really be quite a lot. Thus, creating some sort of plan, even if its just your first draft, is a great idea for every person, in every situation.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com

BP's Bankruptcy

author: Dustin Wetton

Ever since the April 20, 2010 blasts that sent gallons of oil leaking into the Gulf, the BP company has been heavily under legal fire. Lawsuits for damages, ranging from environmental to loss of life, have really hurt the company. Yet according to a recent article at BreakingLegalNews, a lot more harm will have to come BP’s way for any possible consideration of bankruptcy to be discussed. According to the article, BP still has many resources and options available to itself before it has to consider bankruptcy. While it has suffered in the stock market, has many lawsuits pending against it, has been on the downside of almost every judgment declared by the court, and has many creditors that are worried about being paid, BP still does not have to file bankruptcy. Thus, for our blog’s purpose, even when a company such as BP, under the worst environmental circumstance in many years, can believe that it does not have to file for bankruptcy, the question is when should you? When should a company or an individual decide to file for bankruptcy?

Luckily for individuals, the answer is easier than for businesses. For a chapter 7 bankruptcy to be filed, an individual must pass what is known as a “means-test.” Under the current BAPCA standards, an individual can only file for chapter 7 bankruptcy if they can prove to the federal court that their means cannot afford their end. If they however show that they can afford their bills and if they just rearranged their finances, they could get out of debt, than the court will not allow for a bankruptcy.

Thus, for individuals, a good method to see when you should file bankruptcy is to do a similar test. If you take all the debts you owe and compare then to all the income you make, ask yourself if it is possible to get out of debt without filing bankruptcy. If you know that you cannot make your monthly living payments, your car payments, your student loans, your child support, and your credit card bills without sacrificing your food or clothing, than you probably should consider bankruptcy. But, if you are sitting in similar shoes to that of BP, and you have a lot of debt, but you also have a lot of options and can refocus your finances, than you probably should consider doing that first before you file for bankruptcy.

Therefore, to answer my own question, when should you file bankruptcy…you should file it when it is rational to do so. That is, the decision to file for bankruptcy should be responsible, logical, and make the best sense. That goes for both individuals and for businesses. If you are considering bankruptcy, reflect on your financial situation and decide if it’s the best decision for you and your family.

If you have any questions or comments on the blog, email us at: blog@lauruslaw.com.

What's in a Name?

author: Dustin Wetton

This has been another good week for Laurus Law. Mei and I both attended an MCLE program hosted by the North County Bar Association titled “How to Negotiate Leases.” This lesson focused on how professionals should negotiate their commercial leases during the current real estate market conditions. It was a very interesting seminar and something that I think Mei and I can definitely use in the future. Later that day, I went to a Symantec seminar for businesses at Dave and Busters. It was my first seminar/event at Dave and Busters. I was surprised by how they were able to have a showroom that clouded all the noises of the games and the bar. At this conference I was reminded of how much I really don’t know. The IT world has IT people in it for a reason, it really is a learned field. This weekend Mei and I will be out of town to celebrate the country’s birthday. I’ll be up in Lake Arrowhead, CA and Mei will be in London. It will be a great weekend. Happy Birthday America.

Today’s topic for our blog is on names. Why did we choose “Laurus” as our name? Laurus means success, triumph, and victory in Latin. The origins of the word come from the Laurel tree, in which the bay leaves of the tree were used to create the wreathes that used to crown the heads of the victors of the Olympic Games. Thus, we got our logo from that story as well. Our legal name is Laurus Law Group, LLP. But what if we wanted to be called something else? Did you know that depending upon the type of entity you are your business name must sometimes contain certain words?

If you are curious about starting your own business or have often thought about what your business/company would be called if you have one, than this is a great blog for you. There are numerous ways to form your own business. What I mean is that you can be a sole proprietor, a partnership, a limited partnership, a limited liability company, a limited liability partnership, or a corporation. And yes, there are even more options of entities to create, but I am going to keep it simple.

A sole proprietor is the simplest way of owning a business. Normally, if you do this, the name of the company is under the business owners name. If you wish to have it anything either than just your first and last name, you must file a fictitious business name with the county your business operates in. Thus, while you pretty much can be called anything you want, it must not conflict with an already registered name and must be appropriate according to the county. The same is true for partnerships.

If you wish to create a limited partnership, your business must have “L.P.” listed after it or “limited partnership.” Thus, you can be called “Dusty’s Restaurant, LP.” Therefore, if you wish to be an LP you must have the status declared in the name of your business.

The same guidelines apply to a corporation. By incorporating with the secretary of state of the state in which your business operates in, your company name must include “inc.” or “corporation” or “ltd.”

Thus, while you may wish your business to be called just “Bob’s”, you may not be able to if you are formed under a certain entity. Why all the fuss? Actually, it has a lot to do with legal notices and litigation. Because businesses are treated like individuals in the legal world, they can often be sued individually from their owners. Yet, if the owners disappear during litigation, then the business is just a ghosts with no fruits to pay out. In order to show who owns the business and how the business is protected, legislation has been written to requiring the above wording to ensure that everyone knows what type of business entity the company is. Thus, the proper notice is given to the public so that people, and their businesses, can be held accountable.

If you have any questions or comments on the blog, email us at: blog@lauruslaw.com.

Question and Answers - AVVO

Business Casual

author: Mei Ng
Casual Fridays. Some love it. Others fear it. Dressing business casual can cause so many problems because it’s hard to define. First we must define business formal (i.e., dressing for court) before we can move to business casual.
Men. Business formal means wearing a matching suit, a nicely ironed shirt and a tie. Ladies. Business formal also means wearing a matching suit and a nice blouse or collared shirt. A matching suit means a jacket and pants or skirt are made from the exact same material. No exceptions.
Now… business casual is simply business formal without the jacket (and tie, for the men). Business casual means, if there was an unexpected client meeting or run to the court, you can put on a matching jacket and tie and run out the door. Guys, make sure you have a neutral color tie handy. If you are a dressy casual dresser (explained below), always have an extra suit in the office. You don’t want to be the one associate the partners leave behind because you are not dressed for the occasion.
Save your dressy casual dress for Casual Fridays (do these still exist?). According to www.bitterlawyer.com, dressy casual means you find a nice top and pants in your closet, and your done.
Although these are the rules of thumb, always check with your employer first.
If you have any questions or comments on the blog, email us at: blog@lauruslaw.com.

The Gap in North County

Upon writing this title, I once again realized the importance of diction in creating a title. Words are powerful, not because of the letters found in them, but instead because of the meaning behind them. No, the title above is not in reference to The Gap stores of North County, sorry to disappoint those readers who stumbled upon this blog in anticipation of such. Instead, this title was chosen as a reflection of our last week here at Laurus Law.

Mei and I are part of the San Diego County Bar Association Young New Lawyer Division. I am also part of a similar group in Orange County. However, we are trying to spend most of our work time in the North County of San Diego. Therefore, we noticed that there was a lacking in North County. While there is a North County Bar Association, and we are members of such, there is no organization that caters to new and young lawyers in North County. This sounded like opportunity knocking for Laurus Law Group.

During the past week, we have met with leaders in both the San Diego County Bar Association and the North County Bar Association about creating an organization for new and young lawyers. We even had a discussion with leaders in the Orange County Bar Association about creating this group. All these meetings went wonderful and the people we met were very helpful and encouraging, offering many great ideas and tips to help us get started. So, with that, Laurus Law Group will be heading a push to get an organization formed in North County for Young/New Lawyers.

What does this mean for you, our clients? It means that we here at Laurus Law want to be involved in our community. We want to help get new and young lawyers in our community better equipped to serve their own clients, as well as providing services, fundraisers, and other events both for attorneys and for the public. Also, it means that we appreciate the uniqueness of North County San Diego. We realize that it is far from downtown San Diego and that lawyers and clients shouldn’t have to equate legal services with downtown. We hope that this organization hits the ground running and is a success. Look for its initiation this fall.

If you have ay questions or comments about this blog, please email us at blog@lauruslaw.com.

Is Florida Taking by Giving?

author: Mei Ng
Although Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, et al., 560 U.S. ____ 2010, No. 08-1151 (June 17, 2010) originated in Florida, this case hits particularly close to home to us February 2010 California State Bar takers. Specifically Question 5 of the California Bar Examination, which asked us to discuss a total taking and partial taking of a development application. This question sure took me for a loop. The only thought going through my head was “How the heck can I write for an hour on a topic we only spent a few minutes studying?” I quickly read the hypothetical, and flipped the page to Question 6 even quicker. Oh Community Property, how I love thee.
Finally during the last hour of the morning session of Day 3 of the Bar Examination, I hesitantly turned the test booklet to Question 5. I read the hypothetical again, and again. Ah… Something was finally clicking… I finally started to recall what physical and regulatory taking are. I could not hold back any longer. For better or for worse, I wrote. I wrote for an hour and didn’t look back. I am glad it was for the better.
The Fifth Amendment of the U.S. Constitution in part states, “No person shall be… deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” So what does that mean? Even the Supreme Court Justices were at a deadlock in their 4-4 decision of this case (Justice Stevens recused himself from the case because he owns property affected by the ruling).
The Florida Department of Environmental Protection implemented a project to restore 6.9 miles of eroded beaches in the Florida Panhandle by adding 75 feet of dry sand seaward to the high-tide line, adding more distance to the beach for oceanfront beach property owners. The issue was whether Florida’s efforts to restore some of its beaches rose to the level of a taking due to the restoration work’s causing former beach-front owners’ property lines to be moved further away from the ocean water. According to Rick E. Rayl from www.californiaeminentdomain.com, “the Court held unanimously that the Florida Supreme Court’s decision did not constitute a taking. The Court upheld the ruling in favor of the state, meaning those beach-front property owners whose property is now a bit further away from the ocean are out of luck.” (Click on the link above to read the entirety of the case.)
So… what does this have to do with anything? Not much. The majority of us do not own oceanfront property nor do we own ocean-view property. Most of us live in the suburbs of a major city or condominiums in downtown close to the embarcadero. The reason why I decided to blog about this particular case was because, as I mentioned in the first paragraph, this case hits close to home. Takings clause, I’m glad you and me will possibly never ever meet again.
If you have any questions or comments on the blog, email us at: blog@lauruslaw.com.

A Cheap Year to Die

Author: Dustin Wetton
With a title like that, I am sure that you just want to know exactly what I am talking about. However, before I indulge into the meaning of the title, let me tell you what Laurus Law has been up to recently. Last week, I attended the San Diego County Bar Association Young Lawyer Division’s Mixer at the Grant Grille. This event was mostly for networking and updating the YNLD members of upcoming events that are occurring. I met many nice and friendly people at the event. On the next evening, Mei attended California Western School of Law Alumni’s event downtown. There, she was congratulated many times for recently being sworn in and for forming Laurus Law Group. I did not attend the event because I was at an Orange County Bar Association Summer Mixer up in Irvine. All of these events are quite enjoyable, and eventually I think we are going to have a competition in our firm to see which event is the “best event of the year.” Be sure to keep checking our blog for a rating system and rankings.
This week has been a bit calmer for us. We have scheduled meetings around town with various associations and attorneys. We have also started to get involved with the North County Bar Association and helping create a sort of YNLD up there. Mei and I have also signed up for Softball Leagues, separate leagues, and my first game was on last Monday. If you want to see some amazing softball, keep an eye out for future listings of our games.
Now…a cheap year to die. In an article in the New York Times on June 8, 2010, the first billionaire died in recent years without paying any tax. This is due to Congress’ failure to act and the estate tax lapse. Normally, when a person dies who has over a certain amount of money, the government takes a large portion of their estate in taxes. Our government started the estate tax in 1916, and since then the rates have fluctuated tremendously. Last year, if a person died with more than $3.5 million, all money exceeding that would be taxed at 45%. Yet under President Bush, he decided that part of his tax cuts, he would have the estate tax lapse and thus signed this years lapse into law. Therefore, the billionaire who recently passed in Texas was able to pass almost $9 billion dollars to his heirs tax free.

This lapse will only last until 2011, where the tax rate is to go up to 55%. Thus, the title of the blog, it’s a cheap year to die. While only 5,550 people are normally affected by this tax, if you fall into the category where you normally get an estate tax, this year would be a good year to die, if a person was to plan such a thing. See the article here:

http://www.nytimes.com/2010/06/09/business/09estate.html?adxnnl=1&ref=homepage&src=me&adxnnlx=1276196939-uF4PNIv3hO3eyYQLNY3VLg

If you have any questions or comments on the blog, email us at: blog@lauruslaw.com.

Welcome!

Welcome to Laurus Law Group's blog. Every week we will update you with upcoming events and tell you what we have been up to. We will also provide you with interesting legal articles and general information that you, our clients, may be interested in. If you have any questions, please email us blog@lauruslaw.com.