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Estate Planning: Do “DIY” Wills Work?

Posted: February 18th, 2013

In today’s world of electronics and the Internet, people are turning to their computer for answers to even the most complex questions. Estate planning websites are all over the place. They all claim to help you prepare a valid will at an extremely low price. Personally, I’m a big believer in “you get what you pay for.” Is it worth it to save a few hundred dollars and risk putting your entire estate at risk? Online legal document services offer an enticing bargain. Most people realize that they need an estate plan to manage their affairs if something happens to them. But, estate planning attorneys can be expensive. That’s why many potential clients are now questioning whether it’s possible to skip the attorney fees and use a low-cost Web site to prepare estate planning documents. The short answer is that, yes, it is possible. The longer answer, in my humble opinion, is that it’s not recommended. You could save a few bucks now, but end up creating an expensive and frustrating mess for your family.

Hiring an estate planning attorney may seem overwhelming to you and you may wonder if it is really worth it. Let’s look at this on a basic level. An attorney is a live person, professionally trained in a specific area of the law, who will listen to your particular needs and goals. A computer program cannot take into account all the particulars of your circumstances and help you make strategic decisions to meet the needs of your loved ones. A Web site cannot anticipate what you may need in the future, like the appointment of a guardian or a healthcare directive or your plans to move to Florida in three years.

If you are considering using a website to create your estate plan, you should at least meet with an estate planning attorney first to discuss your options. It would be a tragedy to save a few dollars now, only to end up having documents that fail to protect your estate or fail to provide for your loved ones when they need it the most. In the end, contacting an experienced estate planning attorney today may save your family a fortune in the future.

Unfortunately, most people don’t realize what they are getting themselves into with an online document service. That’s because the online services have spent millions trying to create the impression that their services are similar to those of an attorney. They put lawyers in their commercials, hire celebrities to promote them, and parade multitudes of people who have supposedly successfully used their documents. But all the marketing in the world can’t erase the simple truth. These online services aren’t law firms. They aren’t lawyers. They can’t give legal advice. Instead, they are just “document assistants.” It’s just a mindless program typing whatever your information is into a form, whether or not it makes sense and whether or not it is a good idea. If you are stuck, they can’t help you. If you make a huge mistake, they can’t warn you. It would be a crime for them to warn you. It doesn’t matter if the guy working on your documents is an estate planning genius. He’s not allowed to give legal advice.

These companies design their generic forms so that even without legal advice, it’s hard to make mistakes. That may seem like a good thing. However, it turns out that the best way to make sure that your documents don’t do anything wrong is to make sure they don’t do anything at all. They’re just do-nothing, one-size-fits-all generic documents.

That leads to another problem with the online services. They can’t even promise you that the documents will work. Again, they can’t. They aren’t attorneys. After sitting down and discussing a particular situation, many clients are excited to learn that they can leave assets to a special needs child without jeopardizing government benefits or that they can protect a child’s inheritance from frivolous lawsuits, divorce or bankruptcy. A well-designed estate plan makes sure that your assets get where you want them and that they are used in the way you instruct. It’s about creating legally-enforceable provisions that do what you want done.

The online document services can’t promise any of that. They can’t promise you’ll achieve your goals. They can’t point out opportunities, and they can’t warn you about hidden hazards. Really, all they can do is save you a few bucks. But they play a clever price game, too. Most of the online services compare their prices to what an attorney would charge for similar documents. Their comparisons are misleading in two ways. First, they often compare the price they charge for a single document to the price that an attorney charges for an entire estate plan, which includes numerous documents. Secondly, and more importantly, there is no way to compare the prices because they aren’t even offering the same thing that you would get from an attorney. It’s like trying to compare a steak at a fast food restaurant versus a high-end steakhouse. Fortunately, most people can taste the difference and pay for (and get) what they actually want. And, that might include some ambiance and waiter service. That’s because most people have experience with restaurants, both good and bad. They know how to judge quality, and they understand the “you get what you pay for” concept.

When it comes to legal planning, most people don’t have the experience to know better. You only get to use an estate plan once. If you screw it up, you’ll never know, but trust me, your family will know. If your estate plan doesn’t work properly, your family could end up paying the price and cleaning up the mess long after you’re gone.

Split Decision – Nonpayment Proceedings Against Month-to-Month Tenants

Posted: February 10th, 2013

By Patrick McCormick

In 1400 Broadway Associates v. Henry Lee and Co. of NY, Inc.,1 the parties’ commercial lease expired January 31, 1990 and the tenant, who did not realize the lease had expired, continued to make monthly rent payments, in the amount set forth in the expired lease, for six months. The tenant learned that the lease had expired during negotiations for a new lease and during the negotiations continued to pay rent through October 1992. Tenant then stopped making monthly rent payments and landlord commenced a nonpayment proceeding. Tenant moved for summary judgment to dismiss the complaint for failure to state a cause of action. The Court granted the motion holding that a nonpayment proceeding could not be maintained against a month-to-month tenant because, “absent a meeting of the minds, no agreement exists regarding the monthly rental rate.” The Court held:

A month-to-month tenancy, by its nature, is renewable by the parties’ conduct, i.e., by continued payment and acceptance of agreed-upon amounts each month. When the parties no longer agree to continue the relationship, either party can terminate it. However, if the tenant does not voluntarily surrender, the owner must serve a statutory notice of termination at least 30 days before expiration of the monthly term, as a condition to bringing a holdover proceeding.

Thus, the Court held that “Petitioner’s acceptance of respondent’s monthly payments created a month-to-month tenancy, by operation of law, which could be terminated only by service of a 30-day notice.” A 30-day termination notice, the predicate to commencing a holdover proceeding against a month-to-month tenant, was not served and therefore a holdover proceeding was not possible.

The Court concluded that:

[t]o permit petitioner to maintain a nonpayment proceeding under these circumstances, seeking payment at the lease rate, would permit a landlord unilaterally to bind a tenant to payment at a rate predicated on a continuing agreement, even though there no longer was a meeting of the minds. Such a result would vitiate the intent of RPL §232-c.

RPL 232-c provides:

Where a tenant whose term is longer than one month holds over after the expiration of such term, such holding over shall not give to the landlord the option to hold the tenant for a new term solely by virtue of the tenant’s holding over. In the case of such a holding over by the tenant, the landlord may proceed, in any manner permitted by law, to remove the tenant, or, if the landlord shall accept rent for any period subsequent to the expiration of such term, then, unless an agreement either express or implied is made providing otherwise, the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term.

The Court’s analysis has been generally accepted.2 But, in Tricarichi v. Moran3 the Appellate Term reversed an oral order dismissing a nonpayment proceeding brought against month-to-month tenants and in its decision explicitly rejected the analysis set forth in 1400 Broadway Associates v. Henry Lee and Co. of NY, Inc.

In Tricarichi, the Appellate Term specifically held:

Real Property Law §232-c is inapplicable to month-to-month tenants, since the term of a month-to-month tenancy is not ‘longer than one month.’

The Court explained that:

Real Property Law §232-c did not abolish a landlord’s right to elect to hold a month-to-month tenant for a new term solely by virtue of his holding over. Indeed, the requirement of Real Property Law §232-b –that both a landlord and a tenant wishing to terminate a month-to-month tenancy must give a month’s notice — remains unaffected by the subsequent enactment of Real Property Law §232-c. Here, both the making of a rent demand by landlord and the commencement of a nonpayment proceeding constitute an election by landlord to treat the holdover tenants as tenants for a new term and not as trespassers (see Friedman on Leases §18:4). Their month-to-month tenancy continues on the same terms as were in the expired lease, if, in fact, the lease has expired.

This statutory analysis by the Appellate Term, at least in the 9th and 10th Judicial Districts and until a higher court weighs in, permits a landlord to commence a nonpayment proceeding against a holdover month-to-month tenant. The obvious benefit to a landlord is time. Rather than being compelled to serve a 30-day termination notice to terminate a month-to-month tenancy under RPL §232-b before commencing a holdover proceeding, the landlord may now commence a nonpayment proceeding against a month-to-month tenant upon making an oral demand for rent or serving a 3-day written demand under RPAPL §711(2).

1 161 Misc.2d 497, 614 N.Y.S.2d 704 (NYC Civ. Ct., NY Co. 1994)

2 See, Krantz & Phillips, LLP v. Sedaghati, 2003 N.Y. Slip Op. 50032(U) (App. Term 1st Dep’t 2003)

3 2012 N.Y. Slip Op. 22395 (App. Term, 9th & 10th Judicial Districts 2012)

Negotiating Strategies for Buying a Home (Part 1)

Posted: February 9th, 2013

By: Joe Campolo, Esq. email

Tags: negotiation, real estate

Negotiation strategy is different from negotiation style. From pit bull to diplomat, each of us has a personal style. But the strategy for negotiating the purchase of a home is based on facts: the real estate market at the moment and what we know about the seller’s needs and the property.

Market knowledge courses through the veins of experienced real estate agents, which is one good reason to use one. Another is that agents are experienced negotiators who speak the same lingo. That means your agent probably will find out more about the seller’s situation than you will working on your own. And for those of us who start sweating at the very thought of confronting a seller and the seller’s agent face-to-face, why not pay a commission to someone who will relieve us of the task?

Can you negotiate without an agent? Absolutely. Many buyers do. It means:
Doing intensive research about the market, the property you want to buy, and the seller’s situation
Figuring out an appropriate negotiating strategy and style based on that information

Tips for Staying Sane With or Without an Agent
1. Do your homework.
2. Ask questions constantly.
3. Share the details of your budget, emotions, and mental state only with your advocates (this does not always include your agent).
4. Find an agent with whom you feel comfortable from the start – this will save you headaches later in the process.

Setting Strategy
Market conditions are the single most important factor in negotiation strategy. And just like the weather, the landscape is a crazy quilt of micro-climates. Markets vary nationwide from place to place and neighborhood to neighborhood. The first thing you need to know is whether you’re in a buyer’s, seller’s, balanced, or red-hot, bidding war market.

Negotiating in a Buyer’s Market
You have more leverage in a buyer’s market than any other type because there are more homes for sale than buyers to make offers. For sellers, especially those who have to move for whatever reason, this is the most nerve-wracking market. Property takes longer to sell. They can’t let potential buyers slip their grasp. They may hate your demands, but they have to wrangle and they almost always have to sell for less than the asking price.

Buyer’s Market Strategy: Ask for the Moon
Make an offer at least 10 percent under the price you want to end up paying.
Ask for seller-financed closing costs and a closing time convenient for you.
You want all the appliances and the entertainment center? Ask for them.
You’d really like the gas grill and flower pots on the deck? Go for it.
Buyer’s Tip: You’re most likely to win concessions and personal property in a buyer’s market.

Negotiating in a Seller’s Market
Pit bulls beware. In a seller’s market, buyers don’t have much clout, and style matters. If the seller has a desirable home and doesn’t like your offer, he won’t invest time in negotiating with you. In a seller’s market, a good strategy is to make a straightforward, “clean” offer.

Buyers cannot procrastinate once they’ve found a home they want. Any agent worth her commission will urge you to make a quick decision, perhaps drawing up an offer the same day you tour the property. Yes, she’ll earn her money putting in fewer hours on your behalf than in a slower market, but don’t get paranoid and feel ripped off. This is how she makes her living. She wants you to get this home and knows it will sell quickly.

Seller’s Market Strategy: Keep It Simple
Getting pre-approved for a loan is an essential first step in any market.
Offer the asking price or close to it.
Ask only for the standard contingencies — financing, appraisal, inspection — to protect yourself.
Expect the seller to set the closing date to his advantage.
Don’t expect to receive the personal property you want. (But if the seller is planning a garage sale, you may be able to work a deal ahead of time.)
Buyer’s Tip: Forget the wrangling and go for the house. You’ll feel lucky to get it.

For more information, click here.

January 2013 Legal Brief – Firm Newsletter

Posted: January 30th, 2013

Covenant Not to Sue Forestalls Trademark Invalidity Claim

Posted: January 21st, 2013

Tags: intellectual property, Supreme Court

On January 9, 2013, the U.S. Supreme Court in Already, LLC v. Nike, Inc. unanimously ruled that Already could not dispute the validity of one of Nike’s trademarks after Nike agreed not to sue the company for infringement.

Nike sued Already, a designer and marketer of athletic footwear, for trademark infringement and Already counterclaimed to declare the trademark invalid. Eight months after filing suit, Nike provided Already with a covenant not to sue, and subsequently moved to dismiss all claims. In the covenant not to sue, Nike agreed to “unconditionally and irrevocably” refrain from making any claims or demands against Already, as well as its employees, distributors and customers, for any possible cause of action based on trademark infringement, unfair competition or dilution relating to the Nike trademark. In its motion to dismiss, Nike asserted that the covenant not to sue terminated the case or controversy and rendered the case moot.

The district court dismissed the counterclaims as moot and the Second Circuit affirmed. The Supreme Court unanimously affirmed. It held that the broad covenant not to sue, which covered past and future shoes, met the demanding standard of mootness by voluntary cessation, particularly as Already has no plans to develop or market shoes which infringe on the trademark. Since Nike had agreed unconditionally not to sue Already, the federal courts lacked jurisdiction over Already’s counterclaims that Nike’s trademark is not valid.

The decision here demonstrates a strategic weapon that trademark holders possess to forestall invalidity claims by promising not to sue competitors for infringing their IP rights. This provides another avenue in choosing where and when to fight invalidity battles.

Looking Over the Cliff

Posted: January 21st, 2013

By: Martin Glass, Esq. email

Tags: estate planning

Well, happy new year to all. At the 11th hour Congress decided not to let us fall off the Fiscal Cliff by passing the American Taxpayer Relief Act of 2012. But what does that mean in the world of estate planning? There are a number of things that happened (or didn’t happen). So let’s go through each one.

First, the federal exemption for gift and estate taxes was fixed permanently at $5 Million indexed by inflation, instead of reverting back to $1 Million. As of January 2013, that amount became $5.25 Million. This means that you can transfer the first $5.25 Million tax free, whether it was by gifting to people during your lifetime or to your loved ones upon your death. Of course ‘permanent’ just means until Congress changes it.

What about transfers between spouses? The IRS still looks at this as a special type of transfer. They still have what’s called an unlimited marital deduction, meaning you can transfer all of your estate to your spouse tax free, regardless how large it is! Just remember that now the surviving spouse has all of the assets and will be taxed for anything over the exempted amount when he or she dies. Also remember that this marital deduction is only available to spouses who are U.S. citizens.

The second item, which is sort of attached to the first, is that Congress raised the top tax rate on the estate tax from 35% to 40% on the amount that is greater than the exemption. This is still better than the 55% that it was going to go up to had Congress not acted.

The third item is a thing that the legal and financial world has dubbed ‘portability’ of your estate tax exemption. This is another added benefit for married couples. When the first spouse dies, the surviving spouse can elect to add any unused portion of the deceased spouse’s exemption to their own. This would then allow the surviving spouse to transfer up to $10.5 Million if the deceased spouse did not use any of his or her exemption.

Remember that portability of the deceased spouse is not automatic. The administrator of the deceased spouse’s estate must file an estate tax return for the deceased spouse, even if no tax is due. This return is due nine months after death with a six-month extension allowed. If the administrator doesn’t file the return or misses the deadline, the spouse loses the right to portability. Surviving spouses should file it even if they’re not wealthy today, because who knows what the future holds.

What about making a gift during your lifetime? Not everything is taxed, or counted against your $5 Million exemption. Every person has an annual exclusion. As of January 2013, that amount went up to $14,000. This means that you can literally stand on the street corner and give every person who walks by $14,000 and never have to tell the government about it. Now I don’t necessarily recommend doing that, but you can if you want, without paying any taxes and without telling the IRS. Anything above the $14,000 has to be reported to the IRS. They will keep tabs to see if and when you go over your $5 Million lifetime exemption.

There’s one other thing that I need to remind everyone about. Although the federal estate tax exemption has been locked in at $5 Million, New York State estate tax exemption is only $1 Million. The tax rate varies but averages around 10%-12%. So, for a $5 Million estate there may be no federal tax due, but your heirs might be paying New York up to $500,000 in taxes. New York doesn’t have any gift tax so there are ways to minimize, if not eliminate, the estate tax with proper planning.

Cuomo Signs Notice of Claim Legislation

Posted: January 10th, 2013

Governor Andrew Cuomo has approved legislation designed to streamline the process of filing lawsuits against municipalities and other government entities in New York, providing the groundwork for uniform, fair, cost-effective and straightforward statewide procedures for filing a Notice of Claim.

State law requires individuals intending to sue government entities for any tort — such as a slip-and-fall
or a malpractice at a public hospital — to file a Notice of Claim to alert a potential defendant of an
impending lawsuit. Currently, they must be filed in the county in which an alleged incident occurred.
The bill will allow plaintiffs to file notices of claim with the secretary of state in Albany, who would then notify defendants. Most of the bill’s provisions take effect in 180 days.

The legislature will also amend the bill to ensure that local governments and public authorities will not face shortened time periods within which to investigate claims if the secretary of state faces delays in notifying potential defendants.

The legislation also provides for a uniform 90-day filing deadline for all notices of claim, regardless of the type of government entity involved.

Supporters of the proposal, including the State Bar Association and the New York Trial Lawyers Association, say the current process of filing notices of claim is confusing and often leads to cases being tossed out on technicalities. They believe this bill will eliminate expensive and time-consuming litigation over unnecessarily complex issues of procedure which unnecessarily burden the courts as well as the
governmental and quasi-governmental entities involved.

Here are some highlights.

Service on secretary of state. In addition to serving a Notice of Claim directly on a governmental or quasi-governmental entity, plaintiffs will also be able serve Notices of Claim through the Secretary of State, as current law allows for service of process on businesses and corporations;
Uniform 90-day period for serving notice of claim. Notices of Claim to any entity, including public corporations and public authorities, entitled to such a notice will be subject to the current rules of the general municipal law, including a 90-day limit for filing a Notice of Claim;
Uniform one year and 90 day statute of limitations. The CPLR and other statutes are amended to state that except for wrongful death actions, all actions against public entities for damages, injuries to property, or personal injuries are subject to a one year and 90 day statute of limitations or another applicable statute of limitations prescribed by law, whichever is longer.

Learn to Spot these 10 Negotiating Tactics

Posted: January 9th, 2013

By: Joe Campolo, Esq. email

Tags: negotiation

Here’s how to spot 10 tactics that many negotiators use. These have nothing to do with the win-win successful agreements of a good negotiation. Learn what to do when somebody pulls these tricks. Awareness of these tactics can strengthen your own negotiation skills.

1.Left at the altar- The other party feigns backing out of a deal just before you are ready to complete the agreement. Hoping the tactic brings the other party closer to their position, the tactic often yields 11th-hour concessions.

Your countermeasure: Don’t fall for the bait. Let the deal drop and go through a quiet period. Try resurrecting the deal after no less than 30 days, or when the other party calls you. At that point, it will be your turn to get concessions.

2. Making balloon futures- The other party forecasts future sales growth, which is accelerated from historic averages. This is similar to the “call-girl principle,” in which a service is worth more before it’s performed.

Your countermeasure: Base your decision or price only on past history. Make future bonuses or payouts available if accelerated growth actually happens.

3. Calling a higher authority- The other party says that they are unable to make a final decision or won’t tell you who the final decision maker is.

Your countermeasure: Stop negotiating until you are discussing directly with that decision maker. You are wasting your time and energy.

4. Crunch time- The other party applies a lot of pressure by saying, “that’s nonsense, you have to do much better than that.”

Your countermeasure: Use the “flinch” tactic, showing shock and amazement that this issue has been raised. Repeat the offer you just made.

5. Bring in the dancer- This is when a member of the other party talks for a long time without saying anything substantive to the real issues. This is usually intended as a distraction. This can also be a snow job, bringing in unnecessary data to support the other party’s position.

Your countermeasure: Ask, “specifically, what does this have to do with what we are talking about?” Repeat several more times if necessary.

6. Re-trading the deal- The opposite party attempts to reopen points from the negotiation after agreement has been reached. This is also called “forgotten issue.”

Your countermeasure: Simply say no. Call them out for breaking the agreement. This may become “left at the altar” (#1).

7. Huntley and Brinkley- Two people for the other party team up against you at the same time.

Your countermeasure: If you can’t handle the pressure, get someone to join you or ask to negotiate with only one person at a time.

8. Turning Soviet- A really mean negotiator that doesn’t care if the your side gets anything out of the deal. This is the opposite of win-win.

Your countermeasure: Ask for someone else to negotiate with and don’t start again until your request is granted.

9. The walkout- Deliberately walking out of a negotiation to show disinterest.

Your countermeasure: Let them walk out. If they do not come back, leave. Do not call them for a month.

10. Roaring brains- These are people that talk a lot with no real experience in a particular area.

Your countermeasure: Do the research so you have the facts to question their experience and data.

For more information, click here.

Standard to Obtain TROs in Trademark Infringement Claims Get Tough

Posted: December 17th, 2012

Tags: intellectual property

As everyone shops for toys this holiday season, many have encountered counterfeits that are strikingly similar at first glance, but with their low price point compared to the actual licensed product, these counterfeits have lured away or even deceived consumers.

In response, toy developers and manufacturers who obtained federal trademark and copyright registrations commenced actions for trademark and copyright infringement, trademark counterfeiting, false designation of origin, and unfair competition, and sought a temporary restraining order and preliminary injunction to immediately stop the counterfeit sales.

The standard to which a court will grant a temporary restraining order and preliminary injunction requires a showing of irreparable harm. This showing, however, may have been made stricter in trademark cases by a recent decision by a District Court in California by that precluded a presumption of irreparable even upon a plaintiff’s demonstration of a likelihood of success on the merits.

The U.S. Supreme Court in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) and eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) established that on a copyright or patent infringement claim, the presumption of irreparable harm is impermissible when a plaintiff demonstrates a likelihood of success on the merits. In expanding on this standard, the District Court for the Northern District of California in Rovio Entm’t Ltd. v. Royal Plush Toys, Inc., 2012 WL 5425584 (N.D. Cal. Nov. 6, 2012) recently held that there was no principled reason why this standard should not be applied in the trademark context; thus, the Rovio Court held that a plaintiff is not granted the presumption of irreparable harm upon a showing of a likelihood of success on the merits in trademark infringement claims.

Accordingly, with the new district court decision, the standard for TROs and preliminary injunctions on copyright or patent infringement claims will likely be applied to trademark infringement claims — there is no longer a presumption of irreparable harm even when a likelihood of success is shown. Requests for TROs and preliminary injunctions should therefore be supported by substantial evidence.