New California Employer Workplace Poster and Pamphlet

Effective October 8, 2010, two new regulations impacting California employers go into effect:

1. All employers must post the new Notice to Employees, Injuries Caused by Work

2. Each new employee who begins work must be provided with the new Worker's Compensation Pamphlet, available here.

For more on employer workplace posters or to retain an employment attorney to advise and counsel you on California or Nevada business law issues, please click here.

Debt Collection Scam Phone Number 760-284-1423

Please note that if you have received a call from an alleged paralegal or other person claiming to work at, with, or from the Law Office of Jonas M. Grant, and demanding the payment of an alleged debt, and threatening "prosecution" or anything else if payment isn't made, note that these calls are not originating from this office, which does not practice consumer debt collection law and does not employ paralegals or others to make calls on behalf of debt collection agencies or creditors.

Calls have been reported to originate from 760-284-1423, an area code in which this law office does maintain an office, employees, attorneys, paralegals. Nor does this office have or use any 760 area code telephone. Note that the number displayed on the caller ID may be spoofed, and therefore the owner(s) of this telephone number may or may not be involved in this scam.

Furthermore, the United States abolished debtor's prisons more than a century ago; all collections and debtor-creditor matters are civil in nature, there is no jail time or criminal prosecution for failing to pay a debt (unless there's also fraud or other criminal activity involved).

Please do not cooperate with these individuals, and report to them to appropriate authorities. If you have any additional information about their whereabouts or identity, or aren't sure if a call is originating from this office, please contact the office.

Here's what others have reported about the nature of calls from this number. In sum, it's always a scam, but the scam and the alleged name of the caller varies from call to call.

Estate tax remains unresolved

It has come to this: Congress, quite by accident, is incentivizing death.

When the Senate allowed the estate tax to lapse at the end of last year, it encouraged wealthy people near death's door to stay alive until Jan. 1 so they could spare their heirs a 45% tax hit.

Now the situation has reversed: If Congress doesn't change the law soon—and many experts think it won't—the estate tax will come roaring back in 2011.

Not only will the top rate jump to 55%, but the exemption will shrink from $3.5 million per individual in 2009 to just $1 million in 2011, potentially affecting eight times as many taxpayers.

The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.

Of course, there is a "death incentive" whenever Congress raises the estate tax. But it hasn't happened in decades; the top rate has held steady or fallen since 1942, according to tax historian Joseph Thorndike of Tax Analysts, a nonprofit group. In fact, the jump from zero to 55% would be "the largest increase in a major tax that we've ever seen," Mr. Thorndike says.

Too Rich to Live? The estate tax is set to come roaring back in January. That sets the stage for a perverse calculus: End it all—or leave a massive bill for your heirs to deal with. WSJ.com, July 10, 2010

Do It Yourself Estate Planning Pitfalls

The pros and cons of DIY estate planning are discussed in yesterday's article in US New and World Report:

"Unless you are single and have absolutely no money," says Brooklyn-based estate planning and tax lawyer Hani Sarji, you need an estate planner, because people tend to make mistakes when they fill out their own forms online. "People might get a false sense of security from DIY estate planning," Sarji adds, and answering one question incorrectly or overlooking something such as appointing a guardian for children can lead to major problems down the road.

On her blog, estate planning lawyer Leanna Hamill writes about a colleague who had a client who used an online do-it-yourself will that he failed to update after some of his beneficiaries died and he opened new bank accounts that weren't mentioned on the form. "That is the reason to have an attorney assist you with this process. We know the questions to ask, and we know what to do with the answers," she writes.

"Without a lawyer, you might not understand the terms," says Deborah Jacobs, author of Estate Planning Smarts. Therefore, you could inadvertently give someone more power than you want to when creating a "durable power of attorney" document, for example. That document essentially gives someone else the power to take care of your finances if you become incapacitated. Jacobs says that if that person isn't trustworthy, he or she could steal from you. She also warns that if the document isn't executed properly—in some states you need witnesses to your signature—then it might not even be valid.

Another risk, says Jacobs, is that when it comes to transferring your money to family members after you pass away, a self-written will might contain holes that lead to errors.

As with other areas of the law, other lawyers, who don't practice estate planning law, have hired me to assist them with their estate plan; if they know they can't tackle an incorporation or an estate plan without some advice and counsel, do you believe you can do better?

LegalZoom.com Faces California Class Action Over Estate Planning Documents

Legalzoom.com has been accused in California of the unauthorized practice of law, as well as providing ineffective estate planning documents.

January 8, 2012 Update: The case now has apparently settled, as most class actions and indeed most lawsuits of any kind are.

Tax Audit Risk Among Reasons to Incorporate Side Business

CPA Michael Hanley, who specializes in working with small business, advises:

"The #1 most overlooked tip by people running side businesses is that they fail to setup a business entity because they still view their business as a little side business that they will incorporate when things take off."

Sole Proprietorships (the business structure you default to if you fail to setup a Corporation, LLC, etc) are subject to the highest audit risk out of all the business structures. The reason for this high audit risk is that all Sole Proprietorships report their business income and expenses on Schedule C (the second most highly audited form that you can attach to your tax return). By setting up an S Corporation, you become nine times less likely to be selected for a random IRS audit (audit risk decreases from 2.7% to .3%, making it very possible that you can go your entire life without ever being selected for an audit).

Setting up a Side Business Can Be Risky Unless You Do it Right, Mithcell York, About.com: Enterepreneurs

Los Angeles Business Tax Break Proposed

Los Angeles' mayor today proposed an expansion of the City of Los Angeles' new business tax exemption, from two to three years, assuming gross revenues of less than $500,000:

Tax Break for New Businesses Proposed, Los Angeles Business Journal, June 15, 2010