Posted on May 17, 2012 by Derek Dissinger

What Happens to the Money in a Joint Account After One Party Dies?

Joint accounts are often meant to make the financial lives of the parties involved easier, such as in the case of marriage or in a caretaker situation. But what happens when one party dies? Does the money automatically belong to the remaining party? For example, let's say that a man dies and leaves $20,000 to his grandson in his will. Prior to the man's death, he added his son to the account to help him pay his bills. All of the cash he had was in that account. Who is legally entitled to the money - the son, who was on the account, or the beneficiary who received the gift from his will?

A few years ago my colleague Jon Gruber wrote an article about risks with joint accounts and the law that was enacted in Pennsylvania called the Multiple Parties Account Act (MPAA). This act sets forth the rights of parties to a joint account and applies when an individual dies owning an account jointly with another person.

Under the MPAA, the law presumes that a joint account owner intends his co-owner to take the money in the joint account upon his death, and this presumption is only overcome by clear and convincing evidence to the contrary.

According to the MPAA definition, an account is "a contract of deposit of funds between a depositor and a financial institution, and includes a checking account, saving account, certificate of deposit, share account and other like arrangements." A joint account is "an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship." Therefore, unless the grandson initiates a lawsuit and comes up with clear and convincing evidence his grandfather did not intend his father to receive the money in the account upon his death, dad gets the money.

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Posted on May 3, 2012 by Aaron Zeamer

Pedestrian Accidents, Part 1: Who Has the Right-of-Way?

Each year an alarming number of people die or are injured as pedestrians in motor vehicle accidents. In fact, for 2009, the last year in which pedestrian accident data was available through the National Highway and Traffic Safety Administration, over 4,000 pedestrians were killed in automobile accidents and an estimated 59,000 people were injured as pedestrians in traffic crashes across the United States. That same 2009 study indicated that a pedestrian was killed every 2 hours and a pedestrian was injured every 9 minutes in traffic accidents.

While the number of pedestrian accidents has been trending downward in the last few years, it remains alarming that so many pedestrians are involved in accidents, and that all too often they are seriously injured or killed. Further, many times alcohol or other drugs are involved in the accident, either if the pedestrian was under the influence or more commonly, the driver of the vehicle was under the influence of drugs or alcohol at the time of the accident.

It may also may come as a surprise to many that in Pennsylvania, the right-of-way in these situations is determined by the location of the pedestrian crossing and whether there are traffic or pedestrian control devices on the street. If there are no such traffic control or pedestrian control signals, or if they are not in operation, the driver has the obligation to yield the right-of-way to a pedestrian who is crossing within a marked crosswalk or at an intersection, even if no crosswalk is designated. However, where a pedestrian is crossing a roadway at any other point besides a crosswalk or an intersection, the pedestrian has the duty to yield the right-of-way to the vehicles upon the roadway.

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Posted on May 1, 2012 by Alyson Maris

National Law Day 2012

The first of May has been National Law Day since a joint resolution of Congress in 1961 so designated the date. Eisenhower was the first president to proclaim a National Law Day, and every president since has issued his own proclamation. You can read their proclamations at the Law Day Presidential Proclamations Archive.

Why is there a National Law Day? There are so many "declared" holidays we barely acknowledge as they pass by. For example, did you know that May 11 is Eat What You Want Day? How about Cellophane Tape Day on May 27? Although cellophane tape is quite significant (even in the legal field), it's more beneficial to take a moment to think about the importance of the law. The holiday is meant to give Americans a chance to reflect on the ideals of equality and justice that our legal system protects, as well as to cultivate a respect for the law. It may come as no surprise that there is a law establishing National Law Day, under Title 36 of the U.S. Code.

The American Bar Association (ABA) is celebrating this Law Day with the theme "No Courts, No Justice, No Freedom." To read more about it and about Law Day in general, please visit ABA's Law Day 2012.

Today, be sure to wish someone you know a Happy Law Day!

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Posted on April 27, 2012 by Aaron Zeamer

The Latest in PA Liquor Sale News

Pennsylvania lawmakers are continuing in their efforts to find a way to privatize or hybridize liquor sales in the state. House Bill 11, which was introduced last summer, has undergone another round of modifications with a goal of bringing in more revenue and satisfying the interests of legislators, current licensees and the Governor. The latest round of changes would include:

  • Permitting beer distributors to sell six-packs
  • Increasing the number of retail licenses to be sold from 1,250 to 1,600
  • Allowing beer distributors to purchase up to 10 retail licenses to sell wine and liquor, then auctioning off the remainder by counties

These are just some of the changes proposed in the new version of the bill, and while they seem to be a considerable step toward privatization, there is still a long way to go and a lot of groups to convince before this bill becomes a new law in Pennsylvania. For more details about the bill, see Another round for Pennsylvania's wine and liquor store fight.

In addition to the activities in the House, Giant Food Store in Susquehanna Township received approval to sell beer from the PLCB. By the fall, this Giant location will join approximately 75 Pennsylvania grocery stores in giving customers an option to purchase a limited amount of beer.

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Posted on April 26, 2012 by Holly Filius

What Should I Do Before I Separate From My Spouse?

During my years of practice as a family law attorney, I have met with hundreds of clients who asked me the question, What do I do before I separate from my spouse? In the alternative, I have also been asked, What should I have done? For those clients who have asked me after the fact, close to 50% of them would have fared much better had they come to see me prior to separating from their spouse.

See an attorney first.  My first recommendation to someone who is considering separating from their spouse would be to see an attorney right away. There are many misconceptions about what happens in a divorce matter, and everyone seems to have a friend, relative or co-worker who has had some terrible experience, which most likely was innocently exaggerated for effect. That being said, in order to avoid the fear and speculation of inaccurate, anecdotal advice, it is always best to see an attorney first and learn your true rights and responsibilities in a divorce situation. 

In addition to simply talking to a lawyer before you separate from your spouse, you can also do the following things to save significant attorneys' fees, delay in your divorce proceedings and quite frankly, some emotional distress. 

Make copies of all financial records, including, but not limited to:

  • five years of all personal and business tax returns, supporting schedules and documentation
  • current pay stubs
  • car titles and loan payoffs
  • mortgage statements for all real estate and copies of appraisals if they are less than three years old and settlement sheets for all real estate purchases and refinances
  • three months of bank statements for all checking, savings, money markets, mutual funds, retirement and investment accounts
  • life insurance premium notices and cash value statements
  • certificates of deposit, stocks and bonds, safe deposit entry logs and loan documentation
  • credit card statements for three months and any other financial documentation relating to any asset or debt

Obtaining copies of this information at the outset can save you significant attorneys' fees by possibly avoiding formal discovery and also identifying the assets and debts contained within your marital estate preliminarily.

Take an inventory of your personal property.  You do not need to inventory every fork, spoon or towel, but try to account for all items of furniture and furnishings, as well as household items of value. A written list is helpful, although pictures and/or videotape is better, particularly if they are date-stamped to identify what items of personalty (personal property) existed at a particular time.

Understand your debt position.  You should know what obligations exist at or around separation, including the type of debt, the account number, the contact information for the lender, and most importantly, how the debt is titled. Just because an account is in your spouse's name alone does not mean that you are not obligated to pay for it. Many credit cards that are individually titled include a spouse as an authorized user, which for many creditors is the same as being the account holder. It is important to know how an account is titled so that it may be dealt with post-separation with regard to limiting your liability.

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Posted on April 16, 2012 by Matthew Grosh

Vetting Nonprofit Board Members

For most nonprofit organizations, the board of directors establishes the policies that allow the organization to carry out its mission. As a result, in a perfect world, every board would be filled with qualified individuals who are passionate about and committed to the organization's mission. 

Unfortunately, in the real world, the perfect board does not exist. Achieving and maintaining an effective board is difficult for any organization, but it can be especially tough for nonprofits. I have seen clients end up with apathetic or problematic board members who, for one reason or another, actually hinder their organizations' missions. At times, board meetings devolved into dysfunctional bullying sessions where a few directors put their own interests ahead of those of the organization. The selfish actions of a few directors were so damaging in one instance that the organization was in danger of losing its tax-exempt status. 

These cases make it clear that, when recruiting new board members, it is important for nonprofit organizations to implement effective vetting policies and thus minimize the possibility of letting a wolf into the henhouse. Here are a few tips that can help you establish such a policy:

Job Description. Adopt a job description for directors that incorporates your mission and clarifies the expectations and duties that the prospective directors will face when they join the board.

Job Interview. Treat the process just as you would a job interview. Go over the job description with candidates and ask them why your mission is important to them. This should help you weed out potential board members with self-serving motives. Ask them for references and follow through in checking them. Ask the interviewees how their skills and experience can support your mission.

Warning Signs. Asking the following questions can help your organization identify warning signs in potential directors:

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Posted on April 13, 2012 by Derek Dissinger

Mistakes to Avoid When Forming a Limited Liability Company, Part II: Certificate of Organization

This is the second part of a series that covers the most common mistakes people make when trying to form a limited liability company (LLC) themselves. The first part of the series addressed the importance of an operating agreement. This second part will discuss how to avoid common mistakes when filing a certificate of organization.

Unlike an LLC's operating agreement, a certificate of organization is filed with the Commonwealth of Pennsylvania and becomes available to the public. On the form, which comes with an instruction page, there are seven sections to complete. Although it may seem like there are few ways to mess it up, you should be mindful of certain factors while preparing your company's certificate of organization. Avoiding common mistakes can help you save money and will make the formation of your LLC a smoother process.

Business Name

If you are forming an LLC, you should pick a name that is distinguishable from other names registered in the Commonwealth. This may seem like a no-brainer, but if you choose a name that is taken by another company, you may end up wasting money, especially if you order branded products, register a domain name or start purchasing marketing items with the unavailable name. Also, the name must include the words "limited liability company," "company," "limited" or some abbreviation of those terms. An attorney can conduct an appropriate search of the name and give you an opinion as to whether or not it is available.

Registered Address

The Certificate of Organization requires your company to have a registered office in the state. This is so that the Corporation Bureau has an address to mail you documents, such as an annual registration statement or decennial filing. In addition, the address becomes public record as a formal address for your business and can be used for legal purposes such as service of process in the event of a lawsuit.

Most people who have a separate commercial space use that address. You can also choose to use a registered agent service and list that company's address. If you don't have commercial space, you'll either have to use one of these companies or your own address. If you're going into business with a partner or partners and you don't have commercial space, it may be worth it to use a registered agent service so you're not relying on a partner to relay your information.

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Posted on April 11, 2012 by Matthew Grosh

Veteran Tax Incentives and Lower Unemployment Rates

In December, I wrote about the extension of several tax incentives for employers who hire veterans. According to an article by CNN, those incentives appear to be working.

In the past month, the jobless rate for all generations of veterans has been around 7.5%, although the rate for young veterans returning from Iraq and Afghanistan is slightly higher at 10.2%. These numbers show an improvement from this time last year, when the jobless rate for Iraq and Afghanistan veterans was 12.5%.

The veteran tax incentives are in the form of two tax credits:

  • The Returning Heroes Tax Credit is a credit of up to $5,600 per employee for employers that hire veterans who were looking for employment for more than six months. If the veteran has been looking for employment for less than six months, the credit is generally up to $2,400 per employee. 
  • The Wounded Warriors Tax Credit can be up to $9,600 per employee for employers that hire veterans with service-connected disabilities who have been looking for employment for more than six months.  

Both of those credits took the place of the Work Opportunity Tax Credit (WOTC), which expired at the end of 2011. The WOTC was designed to spur employers to hire individuals from targeted groups that have a high unemployment rate, including qualifying veterans. Both the Returning Heroes and Wounded Warriors Tax Credits are currently scheduled to expire after December 31, 2012. Both credits are also available to tax-exempt employers. 

Because some of the calculations and qualification criteria related to the credits are complex, I suggest that you consider consulting with a tax professional if your business or nonprofit organization is planning on utilizing one of the credits. For more information, please see the IRS website.

Matthew Grosh is an attorney at Russell, Krafft & Gruber LLP in Lancaster, Pennsylvania. He received his law degree from Villanova University and practices in a variety of areas including Taxation and Nonprofit & Tax-Exempt Organizations.

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Posted on April 5, 2012 by Alyson Maris

Restart Retirement: The ABCs of Retirement Communities

For those who are nearing the retirement stage of life, a great resource is Restart Retirement, a blog that offers a wealth of information to retirees or those on the verge of retirement.

Recently, Attorney Jon Gruber, partner at Russell, Krafft and Gruber, guest-authored an article for Restart Retirement. With over thirty years of experience in estate planning and administration, he has helped countless clients achieve peace of mind by being prepared for their retirement years and beyond. His article, The ABCs of Retirement Communities, aims to help retirees better understand the different types of contracts under which retirement communities operate, which in turn can help them find the community that best serves their needs. The article discusses the following contracts that can be found in Continuing Care Retirement Communities (CCRCs):

  • Type A – Lifecare Contract
  • Type B – Modified Contract
  • Type C – Fee-for Service Contract
  • Type D – Rental Contract

Whether you are facing retirement or already there, you know that choosing a retirement community is a major life decision. It is imperative that you understand what different communities offer in terms of amenities, care and financial security. Having a basic knowledge of these contract types can aid you greatly in making your decision.

Please read The ABCs of Retirement Communities, and stay tuned for future guest posts by Attorney Gruber.

Restart Retirement is lifestyle-oriented and covers everything from financial matters to finding creative outlets during retirement years. It features leading authorities and retirees discussing mature living topics. If you are considering retirement or already retired, you’ll find information to help you make informed decisions about subjects that matter to you physically, emotionally, socially and financially. You will be able to read how others pursue their passions and find new zeal in your own life.

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Posted on April 5, 2012 by Alyson Maris

Matthew Grosh to Participate in Nonprofit Panel at PANO Conference

On April 17, 2012, Matthew Grosh will be a part of a legal breakout panel at the Pennsylvania Association of Nonprofit Organizations (PANO) annual conference. The session, entitled “Don’t Have Your Story Be a Scandal,” will consist of a panel of nonprofit legal experts discussing a variety of topics to clarify policies and procedures that can help organizations manage their risk levels.

Attorney Grosh previously served on PANO’s Conference Planning Committee. He is also a Preferred Consultant for Millersville University’s Nonprofit Resource Network.

See the PANO 2012 Conference Brochure for more information about this year’s conference.

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