Los Angeles California Estate Planning Blog

Because my practice is a mix of serving small businesses and families, I am separating these two facets of law into separate blogs, so that going forward posts of interest to entrepreneurs and businesses will continue to be posted here, posts concerning estate planning, wills, trusts, etc. will be posted at my new Los Angeles Estate Planning Blog. The first post on trust protectors is up now. For now, past articles on estate planning will remain here, but I may migrate or duplicate these to the new blog at some point.

When to Update Your Estate Plan

A recent Forbes article written by Deborah L. Jacobs serves as a helpful reminder as to when one may want to consider updating an existing estate plan:

These documents, along with the rest of your estate plan, should be reviewed at least every five years–more often if there is a change in the law, your finances or personal circumstances. The following important developments may require action on your part.

Estate Planning: Choosing A Guardian for Your Children

Choosing a guardian for one's children is but one consideration and purpose of estate planning. According to Forbes, Beastie Boy Adam Yauch, who died in 2012, and his wife, struggled with the issue and reached what appears to have been a compromise solution. Because Yauch and his wife used a trust in their estate planning, most of the rest of the details of their estate plan remain private.

"A guardian’s responsibilities range from the mundane to the monumental: everything from tying shoelaces and drying tears to selecting schools and medical care. Like Yauch, you should designate more than one person, so if your top choice is not available, your second preference is clear.

While you’re at it, you’ll probably want a testamentary trust (one created by your will at your death) to hold any assets you’re leaving minor children. In some states, if you have not made arrangements for both functions, the court will appoint a separate person to deal with the child’s money."

Yauch's will also prohibits the use of his image or music in advertising, but portions of these provisions he handwrote into his will may not be valid.

Misleading Trademark Solicitations (USPTO)

The United States Patent and Trademark Office (USPTO) is now warning trademark applicants and registrants about misleading solicitations sent by private companies based on the publicly available information contained in trademark office filings. Some of these solicitations offer legitimate, albeit possibly unwanted, duplicitative, and confusing commercial offerings, while others seek to profit by deception. The safest course of action for trademark applicants and owners is to refer any communications to your trademark attorney. The text of the warning, which is being provided by the USPTO to all new registrants:

WARNING: Non-USPTO Solicitations That May Resemble Official USPTO Communications

Be aware that private companies not associated with the United States Patent and Trademark Office (USPTO) often use trademark application and registration information from the USPTO’s databases to mail or e-mail trademark-related solicitations. Trademark applicants and registrants continue to submit a significant number of inquiries and complaints to the USPTO about such solicitations, which may include offers: (1) for legal services; (2) for trademark monitoring services; (3) to record trademarks with U.S. Customs and Border Protection; and (4) to “register” trademarks in the company’s own private registry.

These companies may use names that resemble the USPTO name, including, for example, the terms "United States" or “U.S.” Increasingly, some of the more unscrupulous companies attempt to make their solicitations mimic the look of official government documents rather than the look of a typical commercial or legal solicitation by emphasizing official government data like the USPTO application serial number, the registration number, the International Class(es), filing dates, and other information that is publicly available from USPTO records. Many refer to other government agencies and sections of the U.S. Code. Most require “fees” to be paid.

Some applicants and registrants have reported paying fees to these private companies, mistakenly thinking that they were paying required fees to the USPTO. So, be sure to read trademark-related communications carefully before making a decision about whether to respond. All official correspondence will be from the “United States Patent and Trademark Office” in Alexandria, VA, and if by e-mail, specifically from the domain “@uspto.gov.”

If you receive a trademark-related solicitation that you believe is deceptive, you may file an on-line consumer complaint with the Federal Trade Commission (“FTC”), at www.FTC.gov. Although the FTC does not resolve individual consumer complaints, it may institute, as the nation’s consumer protection agency, investigations and prosecutions based on widespread complaints about particular companies or business practices.

The USPTO encourages recipients of misleading communications to contact the USPTO about them by emailing TMFeedback@uspto.gov. When notifying us about a misleading communication, please also:

Include a copy of the misleading communication (including the envelope it came in) if available;
Indicate whether the recipient thought the communication was an official U.S. government communication or had to ask an attorney or the USPTO whether it was legitimate;
Indicate whether fees were mistakenly paid in response to the communication and, if so, provide a copy of the cancelled check. Please also specify what services, if any, were provided in exchange for the payment made.

This document is an example of a private company solicitation about which we have received numerous recent complaints. We contacted the company (which was doing business under the name “United States Trademark Registration Office”) and have received assurance that this company has, as of March 12, 2012, ceased sending solicitations under that name. If you have received a solicitation from this company after March 12, 2012, please let us know at the above-listed email address

Los Angeles Superior Court Filing Fees Increase

Los Angeles Superior Court (LASC) and all other California counties' filing fees are being increased, in accordance with a series of budget bills just signed into law by Governor Jerry Brown. Each court system may implement the new civil case fee schedule at different times; LASC has not made the switch yet, but is expected to shortly.

Of interest to many will be the following:

Unlimited civil case and unlimited unlawful detainer case ($25,000+ demanded) filing fee increases from $395 to $435;

Answer or first responsive pleading filed by defendant in an unlimited civil case filing fee increases from $395 to $435; and

Probate filing fee (letter of administration or letters testamentary) and probate objection/contest filing fee each increase from $395 to $435.

See also Los Angeles Superior Court: Expect Delays

Update 7/8/2012: The new fee schedule is already in effect in Orange and San Bernardino Counties and will go into effect in Riverside County 7/9/2012, Los Angeles County 7/10/2012, and Ventura County 7/16/2012.

Are Employees Working From Home Really Working?

What employees do while telecommuting or working from home apparently isn't all work, but that may not matter all that much, according to this recent article reporting on a study of employees who work from home:

What People Really Do When They're 'Working From Home' by Vanessa Wong, BusinessWeek, June 25, 2012

Incorporation and LLC Formation for Overseas and Foreign National Clients

A new page has been added to the website providing information of interest to potential foreign national incorporation clients regarding LLC and corporate formations, as well as other legal services. The content also links to this 2011 Los Angeles Times article, which features both a firm client and a preferred immigration attorney: E-2 visa helps many non-U.S. citizens start small firms

New Law Helps Combat Corporate Minutes Scams

A 2012 law is helping small businesses (corporations and LLCs) avoid getting scammed by the corporate minutes solicitations that were the subject of one of this blog's earliest, and by far its most popular and commented on, post. The law requires more notices on such mailings, the idea presumably to help these stand out from official mailings from the Secretary of State regarding Statement of Information filings. The jury is still out on effectiveness.

Secretary of State: Stronger Laws to Prevent Fraudulent Solicitations

Advice for Selling or Developing A Film Script

Some advice for screenwriters from Filmmaker magazine: 15 Steps to Take After You Finish Your Script, Scott Macaulay, May 2, 2012.

Los Angeles County Superior Court: Expect Delays

The Los Angeles County Superior Court ("LASC"), the largest unified trial court in the United States, has announced it will cut staff and close courtrooms. This is sure to exacerbate the situation at an already crowded local court system, and perhaps will also encourage attorneys and litigants to make heavier use of alternative dispute resolution methods such as mediation and arbitration, or in some cases pressure them into settlements versus going to trial. The Secretary of State's staff cuts which took place several years ago are still being felt in slower processing times, and presumably staff cuts at LASC will have a similar slowing effect. LASC's press release follows:

The Los Angeles Superior Court today announces plans for the most significant reduction of services in its history. By June 30, 2012, the Court will reduce its staff by nearly 350 workers, close 56 courtrooms, reduce its use of court reporters and eliminate the Informal Juvenile Traffic Courts.

According to Presiding Judge Lee Smalley Edmon, “Staffing reductions due to budget cuts over the past 10 years have forced our court to reduce staffing by 24%, while case filings continue to increase. This has created incredible pressures on our court to keep up with our work. We cannot endure these pressures for much longer.”
In the current year, additional staffing reductions are required to deal with the fact that the state’s budget crisis has resulted in a reduction to the California judicial branch of $652 million. The Court has managed its share of these cuts by spending down year-end fund balances, freezing wages, furloughing court staff, and eliminating staff positions, achieving $70 million in ongoing savings as of last fiscal year.

“This year, the state cuts are forcing us to reduce our spending by an additional $30 million – on top of the $70 million in reductions we have already made,” notes Edmon. “There will be as many as 350 dedicated, skilled court workers who will no longer be serving the residents of Los Angeles County. When we lose those people, we will no longer be able to shield the core work of the court – the courtroom – from the budget crisis.”

The $30 million reduction plan, which will take effect by June 30, 2012, has four components:

First, the Court is closing 56 courtrooms, a move made necessary by the depth and breadth of the reductions.

The courtrooms being impacted include 24 civil, 24 criminal, 3 family, 1 probate, and 4 juvenile delinquency courts. The caseloads of those courtrooms are being distributed among the remaining courtrooms. Judicial officers whose courtrooms are impacted will be reassigned to fill vacancies, to share staff or to handle settlement conferences to resolve cases without trials.

Second, on May 15, 2012, the Los Angeles Superior Court will no longer provide court reporters for civil trials. In addition, after June 18, 2012, court reporters will be available for civil law-and-motion matters on a limited basis. (No changes are being made to the provision of court reporters in criminal, family, probate, delinquency or dependency matters.)

Third, the Court is again making significant reductions to its non-courtroom staff. Having made 329 layoffs and lost another 229 court staff through attrition over the past two years, the Court anticipates making more than 100 additional non-courtroom staff reductions by June 30, 2012. “Our judges and staff have shown incredible dedication and commitment in keeping the court running during these past two years. But these new reductions will not allow it to be business as usual. There will be longer lines at clerk’s windows across the county and slower responses to the public’s needs across the court,” said Edmon.

Fourth, the Court will eliminate its Informal Juvenile Traffic Court program (IJTC). IJTC is an innovative program in which minors who commit low-level offenses are held to account for their actions by the court and by their parents – but outside of the traditional delinquency system. “These courts have allowed us to address tens of thousands of offenses in a more appropriate forum than delinquency court,” said Assistant Presiding Judge David Wesley. “We are losing a crucial element of the juvenile justice system to lack of funding.”

“It saddens me to have to make these layoffs,” notes Presiding Judge Edmon. “These actions are affecting people who have made a commitment to public service, to justice. We have had incredible cooperation of all our staff and our labor representatives through the past few years of these trying economic times. We should be in a position to reward them, not to have to inflict further pain.”

“These extraordinary actions,” says Presiding Judge Edmon, “cut into the core work of the courts. With risks of more reductions on the horizon, we are already rationing justice. The Judicial Council must find fiscal relief for the trial courts – from any and all sources. The public cannot tolerate any further major service reductions.”

Notices to litigants and to attorneys regarding these changes are proceeding. Pursuant to statute and rule of court, relevant notices to attorneys and the public regarding the moving of case types, and changes to filing locations, can be found through the court’s website: go to www.lasuperiorcourt.org, click on “News and Media”, then click on “Notices to Attorneys.” For relevant judicial orders, click on “Court Rules” and look under the “Special Notices” tab.

No cases are being dismissed because of these actions.

"Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser - in fees, expenses, and waste of time." - Abraham Lincoln

California Employers Not Liable for Employees' Work During Meal and Rest Breaks

California employers are hailing a rare labor law victory in California courts. Brinker International, Inc., which operates chain restaurants such as Chili's and Maggiano's Little Italy, successfully defended a claim by employees relating to work performed during meal and rest breaks. The court ruled that employers are obliged to provide meal and rest breaks mandated by California law, but are not required to monitor empoyees to ensure they do not perform any work during these breaks. If employees do voluntarily work during their breaks, the employer is not liable to these employees for such work. Employers continue to be liable for monetary penalties if meal and rest breaks are not provided.

Working Through Lunch? Not the Boss' Problem, Court Rules, Los Angeles Times, April 12, 2012.

New NLRB Workplace Poster Requirement

Effective April 30, 2012, all employers must add one more workplace poster to their existing workplace postings: a National Labor Relations Board (NLRB) poster regarding employees' rights to organize and bargain collectively.

California Commission-Based Employees Must Be Under Written Contract By January 1, 2013

California employers of employees whose compensation includes commissions should be aware that, per Labor Code Section 2751, they need to enter into written agreement with such employees stating how commissions will be computed and paid.

See also New 2012 California Employment Laws

Social Media Accounts After Death

As people's online personas become an increasingly important part of their lives, families and friends are encountering confusion and frustration in trying to manage the Facebook, Twitter and email accounts of their deceased loved ones.

State probate laws, which govern how a deceased's next of kin or estate executor can access things like property and bank accounts, generally weren't designed with today's online lives in mind. So, lawmakers in several states—including Nebraska and Oklahoma—have tried in recent years to tackle the complex question of who can manage the online presence of the deceased, and what legal authority they should have. ....

But legal experts say that the terms of service users must agree to when they sign up with social-media sites, which typically dictate what happens to an account after the user dies, could take precedent over the state laws. An Oklahoma lawmaker involved in legislation on the topic says the risk is creating laws that are "toothless."

Facebook, for example, has extensive user agreements and privacy policies that cite various state and federal laws, including the federal Electronic Communications Privacy Act, which generally forbids it from "providing access to any person who is not an account owner." ....

Deaths Pose Test for Facebook by Steve Eder, Wall Street Journal, February 11, 2012

California Now World's 9th Largest Economy

California is now the world's ninth largest economy. Which is quite something and remains the U.S. state with the largest economy ranked by GDP, but it was until recently, the eight largest, a rank now assumed by Brazil, and was even fifth on the list in the early 2000s:

Stephen Levy, Center for Continuing Study of the California Economy director and senior economist, said the California-Brazil swap is more about Brazil rising than California falling. Brazil’s vast population advantage (190 million to California’s 37 million) and the increasing prices of commodities that Brazil exports are just part of the country’s rise, he said....

Levy said California’s economy could soon surpass Italy’s, because of a recession in Italy and a falling euro.

"Report: California slips to world's 9th largest economy" by Jason Hanna, CNN, January 13, 2012

Governor Brown Proposes Tax Increases for Californians

California Governor Jerry Brown is proposing increased taxes as the solution to the state's budget problems:

Brown, a 73-year-old Democrat, wants to raise income taxes on individuals making at least $250,000 a year to 10.3 percent from 9.3 percent, and would boost sales [tax] levies to 7.75 percent from 7.25 percent.

Brown Seeks 7% California Spending Boost, Michael B. Marois and James Nash, Bloomberg, January 5, 2012

See also current California sales tax rates.

Small Estates Probate Limit Increased

Effective 1/1/2012, Califorina's small estate limit is increased from $100,000 to $150,000, meaning that, where the decedent has a will or died intestate (without a will), and the gross value of the estate is $150,000 or less, and does not include real property (real estate), a simplified affadavit procedure may be utilized instead of a full probate.

The limit for transferring real property withour probate increases to $50,000 - likely making little difference in most instances in Los Angeles County, but possiby of some occasional application with regard to unimproved land and timeshares.

Under the new law, a surviving spouse may also collect up to $15,000 in wages owed to his or her deceased spouse without a formal probate proceeding.

Note that assets held in a living trust avoid the time and expense of probate, and that the value of the estate is calculated without regard to any mortgages or other indebtedness. For example, a $450,000 market value house with a $400,000 mortgage counts as $450,000 of estate value, and therefore would not qualify for the small estate procedure.

2012 New California Employment Laws

Among the new employment laws in California for 2012 are:

• Employers are now generally prohibited from using consumer credit reports to screen candidates for employment. Exceptions exists for employees with access to trade secrets or $10,000+ of cash of the employer, or to confidential information or $10,000+ of cash of others, executive employees, etc.

• Genetric discrimination is now prohibited.

• Upon hire, an employer must now provide the employee with a written notice specifying certain information about the employer and the employee's job, including workers' compensation insurance carrier information.

• Penalties for wilfully misclassifying workers as independent contractors instead of employees are increased (a new civil penalty of $5,000 to $15,000 per violation is added to existing penalties).

• The minimimum salary for exempt computer professionals increases, as does the minimum hourly rate for physicians paid hourly.

• Employers covered by the pregnancy disability leave law must maintain and pay for group health insurance during the leave, up to 4 months in a 12-month period.

• Moving in the opposite direction from much of the nation, California now prohibits state and local governments in most instances from requiring employers to use the federal E-Verify system to ensure candidates are legally permitted to work in the United States. (Effective today, Georgia, Lousiana, Tennessee, and South Carolina joined a minority of other states already mandating the use of E-Verify. While other states were cracking down on illegal immigrants, California has now enacted the Dream Act, allowing in-state tuition to some illegal immigrants.) California employers may voluntarily choose to use E-verify, however, and must do so if it's a condition of federal law or the receipt of federal funds. The new law appeared to be aimed at a number of conservative-leaning Califoria cities who had already, or who were considering passing, local mandatory E-Verify laws.

• San Francisco becomes the first city in the nation mandating a minimum wage greater than $10 per hour. While the wage rate is new, the law was actually passed years ago, but requires adjustements each year to keep pace with inflation. The minimum wage for most California cities without a higher local rate remains at $8.00 per hour for 2012.

• As is common, some required work place posters have been updated.

See other new California laws for 2012.

California Flexible Purpose and Benefit Corporations

Enacted in October 2011 and effective today, January 1, 2012, Corporations Code Section 2500 et seq. and Section 14600 et seq. create two new types of business entities, the flexible purpose corporation and the benefit corporation. Both allow the organization of corporations which are, while not non-profit, encompass both economic profit, as well as social welfare, objectives. In short, these are hybrids between traditional for-profit corporations, and traditional nonprofits. Or, if you prefer, socially conscious stock corporations.

Flexible purpose corporations may pursue social welfare objectives without liability to directors for not maximixing profit; one or more "special purposes" must be specified in the Articles of Incorporation. Benefit corporations must pursue social welfare objectives and have more transparency requirements that traditional stock corporations.

Benefit corporations permit corporate directors to take into consideration and to pursue general or more specific social welfare goals, in addition to the tradtional profit motive, and will not be liable on account of pursuing these objectives for not maximizing shareholder return.

These are new and untested entities in California, and therefore are obviously not right for all incorporations, but benefit corporations are already in existence in other states, and more states still have bills proposed and pending. Neither form will offer tax exemption.

See also Berkley Law: New Corporate Forms
Q&A on Flexible purpose corporations

Update: California businesses seeks new 'benefit corporation' status, Marc Lifsher, Los Angeles Times, January 3, 2012

New California Laws for 2012

Ringing in a new year means news laws, and this year, new California laws include:

• Perhaps most controversial, the Dream Act allows in-state tuition rates for qualifying illegal immigrants.
• Public schools must include lessons about historical achievements of gays/lesbians and the disabled
• Cough syrup and other products containing dextromethorphan, e.g., Robitissin DM and Nyquil, will now require a prescription for purchase by minors.
• Sale and distribution of shark fins is prohibited. This law targeted a Chinese delicacy, shark fin soup.
• Beer with caffeine is also outlawed.
• Parents must keep children in a car seat until the earlier of the age of eight, or the child reaches the height of four feet, nine inches.
• Crossing double white lines on the highway is now illegal.
• Open carry of unloaded firearms is now prohibited.
• Tanning bed use by those under the age of 18 is now prohibited.
• Internet retailers must collect California sales tax on transactions if the retailer has a presence in the state.
• Contractors are now allowed to do business with LLCs instead of only corporations

See also -

New California Employment Laws for 2012;
New Probate Laws for 2012;
Jery Brown Signs California Dream Act, Patrick McGreevy and Anthony York, Los Angeles Times, October 9, 2011;
Dream Act is a nightmare for California tax payers, Jose Gizzardi, Lodi News Sentinel, December 31, 2011;
CHP List of New Traffic Laws