Pregnancy and Taxes: When does your child qualify as a dependent?

Author: Dustin Wetton

Even though the government has pushed back the tax deadline from April 15th to April 18th this year due to a government shut-down, this article is still a bit late for this last year’s tax filing season. However, because the topic is about pregnancy, this article can apply to anyone who is pregnant now, or will be pregnant the rest of the year. Did you know that most middle-income families can save up to $1,300 per year on their federal taxes by having a child? With such savings, you have to ask just how can pregnancy affect your taxes. The answer is, it really doesn’t.

Pregnancy is a momentous occasion, bringing joy, much change, and of course, life into the world. With all such potential happiness, according to the US Department of Agriculture, the average, middle-income family will spend nearly $300,000 on each child. These expenses don’t start the day of your child’s birth, but instead, start to accrue the day you find out you are pregnant, or even before that if you are planning on having a child. Pregnancy expenses are not cheap either. They can range from healthcare costs and maternity clothing, to pregnancy classes and nursery preparation. Thus, how are taxes not affected by such a change?

Normally, there are many tax benefits to having a child. First, there is the Child Tax Credit, which is a flat tax credit based upon living status, age, and income. Further, there are many expenses that beneficially affect taxes, such as healthcare costs, day-care, and education costs. While these expenses are heavily related to those costs accrued during pregnancy, the IRS does not see it that way. To claim your baby for the tax year he/she would have to be born by 11:59:59 on December 31. The IRS has made this matter very simple compared to adoption legislation and case summaries, the children are not dependents until they are actually born.

While this law keeps things simple, it may be something that should be reanalyzed by our government, you.

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Advanced Healthcare Directive: What is it and Why You Need One

Author: Dustin Wetton

How many times have you been in a serious accident, and while checking into the emergency room you are asked if you have an advanced healthcare directive and had no idea what they were talking about? That used to be me, but luckily law school and experience opened my eyes to the beauty and necessity of an advanced healthcare directive.

This often simple document wields an immense amount of power. Remember the Terri Schiavo case? If she had an advance healthcare directive, the battle between her spouse and her parents over her life would have had a chance to be solved peacefully. Unfortunately, she did not have one, and she made national news because of it. Before I go into why her case was such a mess, let me first explain what an Advanced Healthcare Directive (AHD) is. An AHD is a written document that lets your physician, family, and friends know your healthcare preferences, including the types of special treatment you want or don't want at the end of life, your desire for diagnostic testing, surgical procedures, cardiopulmonary resuscitation, organ donation, and more. It is normally recorded with your primary physician, your attorney, your appointed agent, and yourself. The document is able to tell everyone your wishes and requests you when you are unable to make them yourselves, and they are implemented by your appointed agent who has the power to make care and treatment decisions on your behalf, and give instructions about their healthcare wishes.

The AHD is not something that you should wait for. It is necessary whenever you are in a state of incapacitation, which can vary anywhere from a surgical procedure to an enduring coma. Therefore, in the estate planning world, an AHD is one of the first documents that you should have, as it is necessary once you reach 18. Also, let me be clear, that an AHD is not the same thing as a Power of Attorney or a Living Will. A Power of Attorney is another great document to have, but its powers do not extend to the medical decisions necessary for your life. Therefore, this document is often irrelevant in a critical medical situation. The Living Will document is another good document, but in recent years attorneys have been using the AHD in place of the Living Will because it gives more specific and practical authority to the agents under its power, where the Living Will was often too vague to apply in many situations.

Now that you have a better understanding of what an AHD is, let me tell you why not having one can cause many problems, as it did with the Shiavo case. Most Doctors are limited in their ability to provide upmost care to their patients because of fears of acting against the wishes of their patients, and therefore running the risk of malpractice. Consequently, physicians look to close family members and friends for advice of the wishes of their patients in many life-threatening and life-sustaining situations. Thus, problems arise where the parents, spouse, friends, and the dog disagree about what is best for their loved ones. If unmarried, common-law will have no legal authority to make any healthcare decisions on your behalf. Even when you're married, the parents may have more legal authority than your spouse. Thus, the disagreements can end up in never-ending legal battles. Most of these issues can be resolved though an AHD where the physician understands their patients wishes. Also, family and friends can feel better knowing that even if they personally wanted something else, in the end, their loved ones received what they wished for.

In closing, it is a good idea to have this document. However, be aware that these decisions are not easy to think about. How long would you like to be on life-sustaining machines? Would you like to receive artificial nutrition and hydration while in a vegetative state, if so, how long? Funeral requests? Each of these decisions are moralistic, realistic, and philosophical, and therefore take time to come to a conclusion. Yet, they are all real concerns, so put your thinking caps on and get to work.

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How to Run an Effective Zone Defense against Workplace Romance

Author: Casey Rocha

Now that the NCAA champ has been crowned, I can stop thinking about basketball and focus on non-fraternization policies. “What a random medley of thoughts,” you say. Agreed, but rather than explore the rich tapestry of my inner psyche, let’s press on. There are profound doctrinal points to be made here.

How many of you have read your employment handbooks from front to back? I’ll bet not many. Yes, it’s long and soul-crushingly boring, but if you manage to get through it without falling asleep or lighting the document on fire, you at least have a quantitative sense of your legal rights and responsibilities.

Now let’s zero in on the paragraph(s) entitled, “Non-Fraternization Policy”. What does “fraternization” really mean? The dictionary defines it as the act of associating or forming a friendship with someone. In the context of employment, fraternization is commonly extended to romantic relationships between colleagues.

How can interpersonal relationships be prohibited in an employment handbook? Is this enforceable?? As is so often the case in the law, the answer is “maybe”.

Why adopt a non-fraternization policy? Primarily, an employer does so to limit the potential for on-the-job distractions and resulting negligence, thereby minimizing exposure to liability. They promote integrity, professionalism and discipline in the workplace. They protect against claims of favoritism based on personal bias and minimize cause for professional scrutiny. They eliminate conflicts of interest, etc. These provisions have become relatively commonplace in a wide range of settings, from small organizations to the U.S. armed forces.

It seems to be a simple, straight forward tool for limiting liability, right? Nope. On the one hand, you want these provisions to be effective. However on the flip side, you don't want them to be so far-reaching that they become unenforceable. Finding the balance can be tricky. A spate of civil lawsuits has challenged the parameters of these policies, requiring that they be sufficiently narrow to avoid interference with other types statutorily protected conduct. For example, an overly broad or ambiguous non-fraternization policy may be unenforceable if it improperly discourages union activity under the National Labor Relations Board. I doubt that you want to navigate these murky legal waters unaccompanied. I recommend that you hire an attorney to draft an ironclad non-fraternization policy for you.

Non-fraternization policies are worth their weight in gold when drafted properly, but they can be worthless if not appropriately and uniformly enforced.

Imagine the following scenario: you are the chief executive at a hospital. You learn that two of your employees have become romantically involved. You foresee problems… catastrophic ones. Nonetheless, you elect not to enforce your non-fraternization policy. Now imagine that the unthinkable happens—you’re slapped with a medical malpractice lawsuit arising from injuries caused by one of those employees. An employer’s failure to swiftly and effectively end the offending behavior may contribute to the allegation that the employer was negligent in overseeing its employees. In addition, the lack of consistency may ultimately weaken the employer’s potency in a general sense.

Ultimately, your best bet for combating workplace romances is two-fold. First, you want to make sure you have a legally enforceable policy in place. Second, you should establish and implement policies and procedures for enforcing that provision. Consulting with an attorney on the matter can help you preemptively address these risks & close up the gaps in your defense against fraternization in the workplace.

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

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