[1/20/2022 Zoom Meeting] Ethical Traps for the Unwary

Ethical Traps for the Unwary

Jonathan Arons will cover various California rules of professional conduct and related statutes, including:

  • Rule 1.2 – Scope of Representation and Allocation of Authority
  • Rule 1.4.2 – Disclosure of Professional Liability Insurance
  • Rule 1.8.5 – Payment of Personal or Business Expenses Incurred by or for a Client
  • Rule 5.5 – Unauthorized Practice of Law, Multijurisdictional Practice of Law
  • Rule 8.5 – Disciplinary Authority, Choice of Law

Please note this video is not offered for MCLE credit. We are only authorized to give credit to those who attend at the time of the presentation.

Mid-Level Associate/Junior Partner.

Mid-level associate – junior partner position open with four person San Carlos firm specializing in general and corporate litigation, real estate, landlord tenant, and transactional work. A plus if the candidate brings some amount of business. Salary negotiable including compensation for clients brought over.

Please let me know if you are interested. Of course, if you know of someone else for whom this is a fit, I would appreciate the referral.

Mark Gainer

Legal Additions LLC (24th year)
– Attorney Search and Recruitment/Law Firm Mergers
– Business Dispute Mediation

Contact:

mgainer@legaladditions.com

Ph./Fax: 415 472.5550

www.legaladditions.com
LEGALADDITIONS®

The Most Important Things Lawyers Can Do in the Wake of COVID-19

The COVID-19 pandemic has exacerbated the already terrible inequality we have in the United States. Prior to the outbreak, income inequality was the highest it had been in fifty years. Now, with more than 30 million people unemployed, it’s likely to get even higher for the foreseeable future.

This inequality is not only an economic problem, but it’s also a legal one. The bigger the disparity in resources, the more the wealthy will be able to consolidate power. The more power they have, the more they are able to influence the law to work in their favor. And the more the law works in their favor, the greater inequality becomes. I consider myself an optimist, but I worry that if we don’t do something major to stop this trend soon, we will end up living in a feudal society.

Lawyers will have a huge role in determining how this plays out.

On a micro-scale, the rich are better able to afford legal services, which means they have an advantage in negotiating contracts, handling lawsuits, or exploiting the law to work in their favor. As someone who has been party to a handful of lawsuits over the course of my career, I know exactly how much value a good lawyer can provide. And while the other parties in these situations usually had more resources than me, I know that, as a successful business owner, I have an advantage over most other people who find themselves in these situations.

At the most sophisticated levels, we see wealthy individuals and corporations donating money to influence elections, appointments, and our education system so that those in charge of setting law and policy will do so in a way that favors their personal interests. This imbalance has been playing out for decades but is likely to get worse if we don’t intervene.

What you can do to reverse inequality

As lawyers, you have the power to help reverse this course. Here’s how.

Educate the public

As lawyers, you understand the gravity of your role in interpreting the law. And your beliefs about how the law is supposed to work will naturally influence this interpretation. People naturally want to work with lawyers who interpret the law in a way that favors their interests. And since the wealthy have inherently more access to legal services, we end up with a legal–and by extension an economic and justice–system that heavily favors them.

Over time, people can begin to misconstrue these interpretations as truths so that those who are less educated in the law will assume that the way things are is the way they’re supposed to be. For example, the law in Washington State does not explicitly say that a corporation must act in the best interest of shareholders, but many people assume that is the case. As such we have a society in which business leaders are taught this is the only right way to do business and have created a system in which those who choose to do business otherwise are at a disadvantage.

The best way to combat this is through education. What do people tend to misunderstand about your practice area? What is fact and what is opinion? What does the law actually state and how does that differ from how people discuss it? Education creates empowerment, and only when everyone is empowered can we create a truly just society.

Strive for sustainability, not profitability

As mentioned above, we as a society have been led to believe that a business’s number one priority is to make as much money as possible. But if you’re not legally required to do so, what is the purpose of maximizing profit? Of course, a business needs to make money in order to survive, and the more money it makes, the more it can invest back into providing the products, services, and innovations that help consumers.

But at a certain point, a business simply doesn’t need to make any more money in order to fulfill its function. And the more it focuses on making money at all costs, the more it neglects other considerations. How often do executives choose to harm customers, employees, communities, or the environment in the name of profit?

It’s no secret that the law can be an extremely lucrative profession. But in order to maximize your profits, you have to ally yourselves with those who have the most money. Of course, in certain cases, this may be the right thing to do (the wealthy are not inherently less worth defending than the poor), but when you make decisions based on money, you will inevitably be forced to make decisions that make our society less equal and more unjust.

When considering which clients to take on, ask yourself why you’re doing so. And when thinking about finances, consider only what you need to be sustainable instead of what you need to be the most well off.

Remove harmful incentives

Money is a powerful motivator, but it often motivates people to make the wrong decisions. Several years ago, we decided to stop paying commissions to our sales team. We knew that if someone was worried about how they were going to pay their mortgage, they would not be incentivized to make the best decision for our clients, which would ultimately hurt everyone involved. When considering pay or other incentive structures at your firm, ask yourself how they affect people’s decision making. Are people being rewarded for making decisions in line with your firm’s values, or are they doing so in order to make the most profit?

Go against the grain

The only way to prove there’s a better way of doing something is to prove it. In 2015, when I decided to raise the minimum wage at my company to $70,000 a year, people told me it wasn’t possible. But I believed that our business would be better off if we paid our employees a living wage than it would if we simply paid them market rates. A lot of people talk about raising the minimum wage or the problem of inequality, but few people actually take steps to do something to fix it. What problems do you wish you could fix in society? How can you take a small step in doing so through your own work?

What about your clients? What do they value and how do they want to run their business? What would be the legal ramifications of doing so? Often, the main reason people don’t act is because of fear. But knowing that they are legally protected and/or understanding the legal ramifications of a policy or program they want to enact might be enough to convince them something is worth trying.

People like to joke about lawyers, but good lawyers are essential to creating a just and prosperous society for all. There are countless ways you can use your knowledge and influence to make the world a better place. How you do so is up to you.

Dan Price is CEO of Gravity Payments. He is best known for implementing a $70k minimum salary for everyone at the company and other unorthodox business practices. Through the Gravity Legal payments platform, Dan and Gravity help law firms reduce the cost and administrative burden of accepting client payments and trust deposits.

Be Calmly Strategic, Not Reactive

The response to COVID-19 of quarantining and social isolation has begun to impact virtually every aspect of global commerce – and it has not taken that long! Fast-changing business environments have brought a number of new challenges to virtually all business owners and managers. They may include a newly observed lack of integrity amongst partners, unaccustomed challenges with customer acquisition and retention, not to mention the most obvious and unprecedented supply chain interruptions all are seeing. Uncertainty has a lot of business owners reacting in a panic to the situation their operations are facing rather than more calmly analyzing, strategizing and acting for the longer term. And make no mistake about it: This global situation will not resolve back to ‘business as usual’ within just a week or a month. The ramifications will be long term.

There are a few strategic things that business owners can do right now in a calm response to this situation. One of them is to identify and assess the risks and develop a clear plan of mitigation related to the existing contracts. ‘Mitigation’ in law means that a party who has suffered a loss takes steps to reduce the loss – to minimize the losses incurred.

The best way to start this mitigation process is to review all the existing contracts your business has entered into. It is time to assess the parties’ legal rights and obligations by taking these four steps:

1.) assessing contractual provisions that have been or may be affected as events unfold.

2.) identifying and abiding by any relevant notice requirements: A ‘notice clause’ of a contract defines how the parties will communicate with each other in written form; following the directives makes sure the other party won’t claim you did not communicate.

3.
) analyzing the risks and consequences of a default or breach under the agreement, and

4.)
determining alternative (‘work-around’) means of performance under the contract, or proactively (re)negotiating where possible.

Such a thorough contract analysis will make it clearer if you have an opportunity to be excused from the performance of the contract. Will performance be possible – but tardy or partial for a period of time? Is performance impossible in all foreseeable cases?

Events seen to block execution of a contractual obligation might include ‘frustration of purpose’ or ‘commercial impracticability’. In civil law jurisdictions, doctrines like ‘hardship’ and ‘changed circumstances’ may be invoked.

While reviewing agreements, business owners should keep in mind that a party may be excused from performing under ‘force majeure’ doctrine and other legal doctrines dependent on the governing law of the contract.

In every business transaction, extreme events commonly referred to as ‘force majeure events’ – those beyond the control of the obligor – may arise to prevent the impacted party from performing the contract. The general rule is that a force majeure clause must include the event in question in order to excuse performance or, in some cases, merely suspend performance.

However, some force majeure provisions include a reference to an ‘action’ or ‘order’ from the government, while another group of force majeure clauses are highly generalized and only refer to “any Act of God or other circumstance beyond the control of the parties.” Still, other clauses list specific examples (“fires, floods, earthquakes, tsunamis, wars, terrorist attacks, strikes, civil unrest…”) but then conclude with a catch-all phrase such as “or any other circumstance beyond the control of the parties which they cannot overcome through reasonable and diligent efforts.”

Therefore, while analyzing the agreement, the business owner has to find out if the language of the provision captures COVID-19-related disruptions and if so, whether performance is excused, suspended or call for further evaluation.

Most force majeure clauses require the side seeking to avoid performance to give notice or otherwise inform its counterparty that it will not be able to satisfy its obligations under the contract. NOTE: Please strategize and act rather than react without preparation. Companies should resist the urge to issue a rote or terse notice. They should instead layout in some detail exactly why they cannot perform and why they have not been able to find some way over, around or through the problem. Write it all up and submit it to the other party. Then, if the other side should sue over the contract, that force majeure notice you have carefully thought through and wisely drafted becomes a crucial piece of evidence that the court will closely scrutinize. Telling a convincing and thorough story upfront will go a long way in any eventual dispute.

If COVID-19 clearly doesn’t qualify as force majeure because of some combination of your specific situation, the words of the contract, and relevant law, that is not the end of the line. Performance by one or both sides may still be excused under other legal doctrines like ‘frustration of purpose’. And for contracts that are governed by the laws of a civil law jurisdiction, other doctrines like ‘hardship’ or ‘changed circumstances’ may apply.

Analyzing the contract is about doing a strategic analysis that helps businesses understand the scope of risks related to the termination or nonperformance of the agreement by other parties. Getting clear on the nonperformance risks of the other party helps business owners be proactive about initiating the mutual renegotiation or termination of these agreements.

It is important to note that while analyzing the contract governing business operations, it is not just about trying to get out the contractual obligations that are not beneficial to the business specifically in these weeks of global quarantining and distancing. It is about planning for the future, maintaining good relationships and protecting the business in all its interactions.

New Tax Law Alert – Please Review Your Trust

Happy New Year! Late December brought us new tax laws. From an estate planning perspective, the biggest issue is the treatment of retirement savings. Most of the trusts prepared by De Fonte Law PC contain “Conduit Trusts”. Under the new laws, this mechanism will not provide your successor trustees with sufficient control over when and why your beneficiaries will receive their inheritance.

I know that we are all coming off of the holiday season and heading into the tax season, so estate planning might not be at the top of your mind. However, if you feel uncomfortable with the thought of your beneficiaries being forced to cash out a retirement account within ten years of your death, please contact me for a review and perhaps a revision of your trust.

This article from Kiplinger has some good tips and background on the SECURE Act.

Tips:

    • As your annual statements for your retirement accounts arrive, please make an extra copy.
    • Review the beneficiary designations on all retirement accounts.
    • Review your trust (information below on what type of language to look for).
    • Review your tax exposure with your CPA and financial advisor so that you understand your personal tax profile under the new laws.

The SECURE Act and Your Estate Plan

On December 20, 2019, the president signed the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The SECURE Act, which is effective January 1, 2020, is the most impactful legislation affecting retirement accounts in decades. The SECURE Act has several positive changes: it increases the required beginning date (RBD) for required minimum distributions (RMDs) from your individual retirement accounts from 70 ½ to 72 years of age, and it eliminates the age restriction for contributions to qualified retirement accounts. However, perhaps the most significant change will affect the beneficiaries of your retirement accounts: The SECURE Act requires most designated beneficiaries to withdraw the entire balance of an inherited retirement account within ten years of the account owner’s death.[1]

The SECURE Act does provide a few exceptions to this new mandatory ten-year withdrawal rule: spouses, beneficiaries who are not more than ten years younger than the account owner, the account owner’s children who have not reached the “age of majority,” disabled individuals, and chronically ill individuals. However, proper analysis of your estate planning goals and planning for your intended beneficiaries’ circumstances are imperative to ensure your goals are accomplished and your beneficiaries are properly planned for.

Under the old law, beneficiaries of inherited retirement accounts could take distributions over their individual life expectancy. Under the SECURE Act, the shorter ten-year time frame for taking distributions will result in the acceleration of income tax due, possibly causing your beneficiaries to be bumped into a higher income tax bracket, thus receiving less of the funds contained in the retirement account than you may have originally anticipated.

Your estate planning goals likely include more than just tax considerations. You might be concerned with protecting a beneficiary’s inheritance from their creditors, future lawsuits, and a divorcing spouse. In order to protect your hard-earned retirement account and the ones you love, it is critical to act now.

Review/Amend Your Revocable Living Trust (RLT)

Your trust may have included a “conduit” provision, and, under the old law, the trustee would only distribute required minimum distributions (RMDs) to the trust beneficiaries, allowing the continued “stretch” based upon their age and life expectancy. A conduit trust protected the account balance, and only RMDs–much smaller amounts–were vulnerable to creditors and divorcing spouses. With the SECURE Act’s passage, a conduit trust structure will no longer work because the trustee will be required to distribute the entire account balance to a beneficiary within ten years of your death (or if your beneficiary is a minor when you pass away when they reach the age of twenty-eight).

We should discuss the benefits of an “accumulation trust,” an alternative trust structure through which the trustee can take any required distributions and continue to hold them in a protected trust for your beneficiaries, allowing you to retain control over when and for what reasons a beneficiary can receive a distribution from your trust.

Consider Additional Trusts

For most Americans, a retirement account is the largest asset they will own when they pass away. If we have not done so already, it may be beneficial to create a trust to handle your retirement accounts. While many accounts offer simple beneficiary designation forms that allow you to name an individual or charity to receive funds when you pass away, this form alone does not take into consideration your estate planning goals and the unique circumstances of your beneficiary. A trust is a great tool to address the mandatory ten-year withdrawal rule under the new Act, providing continued protection of a beneficiary’s inheritance.

Review Intended Beneficiaries

With the changes to the laws surrounding retirement accounts, now is a great time to review and confirm your retirement account information. Whichever estate planning strategy is appropriate for you, it is important that your beneficiary designation is filled out correctly. If your intention is for the retirement account to go into a trust for a beneficiary, the trust must be properly named as the primary beneficiary. If you want the primary beneficiary to be an individual, he or she must be named. Ensure you have listed contingent beneficiaries as well.

If you have recently divorced or married, you will need to ensure the appropriate changes are made because at your death, in many cases, the plan administrator will distribute the account funds to the beneficiary listed, regardless of your relationship with the beneficiary or what your ultimate wishes might have been.

Other Strategies

Although this new law may be changing the way we think about retirement accounts, we are here and prepared to help you properly plan for your family and protect your hard-earned retirement accounts. If you are charitably inclined, now may be the perfect time to review your planning and possibly use your retirement account to fulfill these charitable desires. If you are concerned about the amount of money available to your beneficiaries and the impact that the accelerated income tax may have on the ultimate amount, we can explore different strategies with your financial and tax advisors to infuse your estate with additional cash upon your death.

[1] If a beneficiary is not considered a designated beneficiary, distributions must be taken by the fifth year following the account owner’s death. Common examples of beneficiaries that are not designated beneficiaries are charities and estates. See Treas. Reg. § 1.401(a)(9)-3, Q&A (4)(a)(2) and 1.401(a)(9)-5, Q&A (5)(b).

Land Use Position in East Bay

A small Oakland firm that specializes in public sector, as well as some private sector work, seeks an attorney with 3 – 4 years of land-use experience or perhaps more. The attorney needs to have the following background:

    • Transactional land use and environmental (CEQA, NEPA, Cal Planning & Zoning)
    • Municipal Law (Brown Act, Political Reform Act, Public Records Act)
    • Affordable Housing (SB 35, Housing Accountability Act)
    • Commitment to the public interest which is the firm’s core practice area.

Are you or do you know someone who might be interested?

This East Bay firm would only pay about 130K but there is some compensation flexibility. Please let me know.

Mark Gainer

Legal Additions LLC

415 472 5550

 

What I Learned About Visuals While Serving On a Jury

Have you ever wondered whether the advice you give to clients is always as sound in practice as it is in theory? Recently I was selected to serve as a juror on a 3-week medical malpractice trial. I had always wanted to serve on a jury. I felt it would be a golden opportunity to see what the visual presentation of a case looks like from the perspective of a juror – as opposed to the creator. Somewhat like a doctor who suffers injury or illness might experience treatment from the point of view of a patient, instead of their usual mindset as a medical professional.

Both the plaintiff’s attorney and defense attorney were experienced trial lawyers with excellent oratory and tactical skills. Their visual presentations could have been significantly improved, however, by adhering to the basic principles we preach as visual presentation experts. These include:

LESS IS MORE
Both lawyers packed too much information into each slide. On their timelines and document slides, the text was too small, so the jury couldn’t read it. In addition to rendering these visuals useless, a number of my fellow jurors expressed irritation with the lawyers. Some wondered if they might be trying to hide something. In general, we felt burdened by information overload. Strive to include on a slide the minimum amount of information needed to convey the intended point.

CHOOSE YOUR MEDIA WISELY
One of the attorneys used a PowerPoint slide deck for all of his visuals. When experts were on the stand, he would cycle back and forth until he landed on the desired slide, sometimes taking a minute or two. While PowerPoint is sequential and appropriate for a step-by-step opening or closing, it is not nimble enough for direct or cross-examination. TrialDirector software is the way to go (if your budget allows, hire a courtroom technician to run it for you). Neither attorney used poster-boards. Key graphics should be printed on them and left displayed on an easel while the PowerPoint is also displayed. The combination can be an effective way to mix media and keep jurors’ attention.

WELL-DESIGNED GRAPHICS BEST TELL YOUR STORY
During the trial, we were inundated with documents, with just a few images from anatomy books sprinkled in between. A handful of well-conceived, understandable graphics using icons or illustrations would have been considerably more impactful and persuasive than what we saw. Neither attorney was effectively able to focus and communicate his case themes. Both sides would have benefitted from using use text callout graphics – aka “text pulls” – where the key language is enlarged, instead of highlighted document pages, whenever possible.

USE HIGHLIGHTING JUDICIOUSLY
On a typical document page shown by the plaintiff’s attorney, he had highlighted in yellow numerous lines. On top of that, he had underlined in red some of that already highlighted text, presumably to add additional emphasis. The result was that we didn’t know where to direct our attention. Ask yourself what the key point of an excerpt is and highlight only the text that is truly necessary to make the point. Consider using red bold text instead of yellow highlighting. Avoid using both at the same time.

COLOR CHOICE IS IMPORTANT
The plaintiff’s attorney used a style template with a black and red background. While black can be associated with power and strength, more often than not it carries a negative connotation (fear, death, the unknown). Similarly, while red may be used to attract attention, it is often associated with bad, evil, or danger. A better choice might have been the use of blue tones, which project trust, strength, and confidence. Color subconsciously influences our thinking and is a subtle yet powerful thing. Either rely on a professional designer for appropriate color choices or familiarize yourself with basic color psychology.

DON’T FORGET ABOUT CLOSING
One of the lawyers used no demonstratives during his lengthy closing, and the other had a standard bullet point PowerPoint presentation. As good as their arguments may have been, it was difficult to focus without having visuals. Closing arguments are the perfect time to illustrate analogies, use comparison charts, summary graphics, etc. In your last opportunity to sell your case to the jury, why not place it in an attractive package that jurors will want to buy?

Seeing visuals through the eyes of a juror was a valuable opportunity. As expected, I learned that the core principles that guide trial graphics experts are as true in practice as they are in theory.

Talk to Your Family over the Holidays About Your Estate Plan

Many of us labor a lifetime to build up our assets and fight for causes that matter to us. Few things are more fulfilling than the thought of sharing wealth and legacy with our family.

Of course, it’s impossible to plan for every eventuality, but careful planning can mitigate against the two primary risks:

a) Your intentions regarding your estate weren’t made clear, resulting in the potential for costly, time-consuming conflict.

b) Your family did not understand or share your wealth management vision, resulting in the possibility of asset dissipation.

The good news is both of these issues can be prevented through honest communication with your family now. While it’s not necessarily comfortable to broach this topic, a family gathering at the holidays might be the best time to have a conversation with your children and loved ones about your estate plan.

Why is it important to talk to your family?

Passing along our wealth is one thing, but what about passing along the values of work ethic and generosity that enabled us to acquire and grow that wealth in the first place? Too many fortunes built by one generation are lost by the next, not due to bad luck or the IRS, but due to a lack of understanding of wealth management and preservation. Also, when your family doesn’t appreciate the rationale behind your estate planning choices like the use of lifetime trusts, this lack of understanding can lead to conflict and resentment among family members. In a worst-case scenario, your heirs end up suing one another. No one relishes the idea of family being torn apart over antiques, heirlooms, or who gets the house on Long Island. Nevertheless, it happens far more often than anyone cares to admit.

Should you tell your children about their inheritance?

The question of whether to tell the children about their inheritance is the subject of ongoing debate. Many people express concern that this information might reduce a child’s work ethic or make them feel otherwise entitled, killing their motivation to seek a career and a “normal” life. Depending on the child’s temperament, this might be a legitimate point. On the other hand, inexperience and lack of understanding about wealth can result in a quickly lost inheritance, only because your heir didn’t know what to do.

The best path for most of us is a “happy medium,” sharing your plan in general terms with your heirs, without necessarily telling them the dollar values. You might even entrust some heirs with some responsibility for investment and entrepreneurial opportunities now before they inherit anything. This way, they begin to share your guiding values, and they are therefore better prepared to handle, manage and even grow their inheritance when they ultimately receive it.

Communication now prevents conflict later.

You have put careful thought into which assets go to which beneficiaries and why. But, when the details of a plan are sprung on people, especially during a time of grief, differing opinions can create conflict. If your family unexpectedly discovers upon your death that there is a significant amount of money to be distributed, and you haven’t shared your rationale behind the decisions you’ve made, then you’ve set the stage for conflict and infighting – possibly even a costly and lengthy lawsuit.

To overcome these challenges, frame your estate planning around your guiding principles, communicate your intentions thoroughly in the trust, and explain your vision clearly to your trustees and beneficiaries while you’re still around to explain things. By attaching your values to your estate planning and involving your family in the process, your estate plan now becomes a family plan, minimizing the risk of conflict.

What should you discuss at the family meeting?

Once you’ve committed to discussing your estate planning with your family, what should you share specifically? Should you detail the entire plan with them or just an outline of it? Should you go into detail about who gets what?

The specifics of what should and should not be discussed about your estate will depend on your family, your circumstances, and your overall level of comfort with how much knowledge they possess. You don’t necessarily have to violate your privacy, and there’s typically no need to reveal specific dollar amounts at this meeting. One big caveat – if there’s anything in your plan that might stir controversy, concealing it now serves to invite conflict later. Thus, a good basic rule of thumb is to share as much as is necessary to get everyone on the same page.

Tips for a successful estate planning family meeting.

When you hold your family meeting, a bit of awkwardness is to be expected at first—after all, no one in your family (presumably) is likely eager to discuss what will happen when you die. Likewise, you need to be prepared to talk through some of the choices you’ve made that are likely to generate some pushback. However, the end of the meeting is often more comfortable than the beginning. The following guidance can help you get there.

    • Plan the meeting after the holiday, if possible. If you’re gathering the family at a holiday like Thanksgiving or Christmas, try to arrange the actual meeting to take place after the holiday itself, so a potentially uncomfortable conversation doesn’t spoil any planned festivities.
    • Invite your financial advisor, estate planning attorney, and accountant to be in attendance. (More to this point momentarily.)
    • Schedule the meeting in a quiet place that encourages candid conversation. A public place is probably not appropriate for this discussion. Your financial advisor or estate planning attorney might have access to space if you need it and prefer a “neutral” site over your living room.
    • Arrange for childcare. This meeting should be an adults-only gathering so everyone can participate without distractions from babies and children.
    • Set an agenda. Encourage open conversation, especially on any controversial points, but have a clear list of points to be covered, so you don’t forget anything in the midst of emotional moments.
    • Set a start and stop time. This step will help the meeting stay on track without meandering away from the main points. If something significant comes up, you can always continue the discussion later.
    • Strike an inclusive tone. While you should not suggest that your decisions are open to challenge or discussion (it is your estate plan after all), try to convey that you are inviting the family to share your vision and goals. If you can get them on board with you at the outset, the risk of disputes will be significantly reduced later.

Why involve your financial advisor, attorney, and accountant?

Some people might have misgivings about having a third party advisor present at an otherwise private family gathering, and it’s certainly not a mandatory step. However, you might want to consider inviting your financial advisor, estate planning attorney, or accountant to the meeting for the following reasons:

The presence of your financial and legal team can add a sense of authority to the conversation, reinforcing that your choices have not been arrived at lightly.

With your permission, your team can review the structure of your estate plan with your family, highlight its benefits, and make the meeting easier for you to conduct.

In some cases, there might be questions from your family. Your team can, with your permission, answer questions, especially those of a technical nature.

Tailor the role of your financial advisor, attorney, and accountant in your family meeting to your specific needs. Whoever you include can give a brief presentation of your estate plan as part of the proceedings, or simply be on hand to clarify points. When appropriate, someone from your team can even act as a facilitator or moderator for the meeting itself.

What San Francisco Renters Should Know About Airbnb

Airbnb, the SF-based home-sharing site privately valued at a whopping $38 billion, isn’t universally beloved in its hometown. In fact, activists and local governments here in the Bay Area have been battling the rise of short-term rentals for well over five years. Local legislators (and most of us tenant lawyers) argue that Airbnb has exacerbated our housing crisis, making it harder for renters to find a home. Long-term tenants might feel effects, too, as data compiled by the Anti-Eviction Mapping Project indicate a connection between short-term rentals and eviction rates.

In cities all over the world, economists, social scientists, and housing activists have found that so-called home-sharing sites make homes more expensive for the rest of us. Short-term rentals cause units to be taken off the rental market, leading to tighter housing supplies as former homes are converted to de facto hotels. Researchers have found that the rise of Airbnb caused every single New Yorker’s rent to increase by an average of $400 per year. That’s a pretty significant effect for a single company to have on the housing market. What’s more, Airbnb can have devastating effects on individual neighborhoods, as long-term residents are replaced by “a revolving door of strangers.”

What’s the state of Airbnb in San Francisco today? Here are the laws as they currently stand.

San Francisco’s Current Short-Term Rental Restrictions

All rentals for terms under thirty days are overseen by the Office of Short-Term Rentals and governed by fairly strict regulations. All hosts must register as a business with the city’s tax collector and short-term rental office. Hosts must pay taxes like any other business, including a 14% hotel tax that they collect from their guests.

Furthermore, all hosts must be permanent residents of the unit they rent out. So no absentee landlords here. Whether they’re renting out the entire home or just a room, all hosts have to spend at least 275 nights per year in the rented unit.

“Unhosted rentals” — that is, the rental of an entire unit, versus an individual room or suite within an apartment or house — are more tightly regulated. Unhosted rentals are limited to a maximum of ninety nights per year, per host.

How are the Laws Enforced?

Until as recently as 2018, San Francisco’s Airbnb regulations were generally considered toothless. The city placed limitations and tried to collect taxes, but Airbnb and other hosting companies shielded their data from the city and flouted all attempts at regulation.

Things changed a bit in early 2018. In response to the city’s demands, home-sharing companies purged all unregistered San Francisco hosts from their sites. As a result, the number of listings fell by more than half. On Airbnb, short-term listings fell from nearly 9,000 in August 2017 to just over 4,000 in February 2018.

Now, all short-term rentals advertised online must include their city registration number with their listing. That helps the city verify that all hosts are actual residents of the units they rent out and that they’re not exceeding annual limits on short-term rentals. Hosting platforms are also now required to verify their users are properly registered and collecting taxes.

Finally, neighbors or others who suspect an Airbnb is operating illegally can file a complaint with the city.

Are the Regulations Working?

What has the effect of these new regulations been? Housing markets are incredibly complicated, so it will likely take years — and a lot of research — to say with any certainty whether the city’s new regulations have helped stabilize rental prices or keep tenants in their homes.

One thing we know for sure? There are still an awful lot of San Francisco units listed on Airbnb. While the number of listings dropped off to around 4,000 in February 2018, they’ve been climbing back up ever since. The data-visualization site Inside Airbnb currently estimates there are 7,000 active listings in San Francisco alone.

Further, Inside Airbnb’s data suggest that many of those listings may be breaking the law. Inside Airbnb estimates that the average unit is rented for 153 nights per year — well in excess of the city’s 90-day limitation.

What’s Next?

It’s no accident that current information on Airbnb’s rental rates must be cobbled together by activists and ordinary folks working with groups like Inside AirBnB and the Anti-Eviction Mapping Project.

Short-term rental websites have had a huge impact on local housing markets — and yet they still refuse to allow the city or state regulators access to their enormous stores of data. This means the city still has to rely on self-reporting by the hosts and platforms to make sure they’re following the law.

At every step of the way, and in every city and country, Airbnb especially has done its utmost to avoid transparency and openness, engaging in what a journalist has called a “guerilla war” against city governments.

With extremely tight housing markets in San Francisco and the Bay, even a small number of apartments and individual rooms given up to the short-term rental market may make life more difficult — and expensive — for residents. Whether San Francisco’s next steps involve tighter regulations or better enforcement of existing rules, there’s no doubt the city will continue to struggle with short-term rental platforms.

A version of this article first appeared on Broke-Ass Stuart. For more articles about landlord-tenant issues check out our website, www.wolford-wayne.com

Estate Planning Tips for Commitment Without Marriage

Advice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage.

In fact, our cultural norms are shifting, and quickly.  Consider the following:

  •  Per the U.S. Census Bureau, approximately 112 million people in the U.S. are unmarried.
  •  45 percent of our country’s households are “unmarried households.”
  •  In 2013, the CDC found that “cohabitation [without marriage] is now a regular part of family life in the U.S.”

Unfortunately, the law has not kept up with these societal trends. If you and your significant other love each other but don’t want to tie the knot, you need an estate plan that takes into account your specific situation while protecting you both, along with any other family members or loved ones you wish to include.

Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan.

1. Living Trusts

Living trusts allow you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. A trust can also allow someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is a superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

2. Wills

A pour-over will can be an effective “backup” and compliment to a revocable trust. When you die, your assets get funneled into (or “poured-over” into) your trust and then distributed to your beneficiaries per the terms and instructions of that trust. The pour-over will keeps things simple, making the process less stressful (and prone to error) for your executor and trustee. It also helps wrap up loose ends, in case you didn’t transfer every last asset to your trust before you die.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term unmarried partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you.

3. Beneficiary Designations

Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

4. Power of Attorney, Designation of Health Care Surrogate, and Similar Documents

These documents allow you to designate your significant other as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options, or you’re just beginning a family with a person who has not formally and legally been recognized as your wife or husband, you probably have questions. How should you protect yourself and your family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance — what contingency plans can be put in place?