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The Basics of Maternity Leave

There comes a time in everyone’s lives, where they want to start a family. But how do mothers manage childbirth and caring for a newborn, along with their job? Shouldn’t mothers be nervous that they may get terminated from their position because they have to take a couple weeks off to care for their child? Well, JUSTLAW is here to tell you that you do not have to be nervous! That is because of the simple fact that New York law provides all mothers with maternity leave.

What is Maternity Leave?

Maternity leave refers to the period of time in which a mother may take off from work in order to care for their newly born child. In particular, legal protection is afforded to a mother right before they give birth and for a period of time after they give birth.

On another note, it is important to understand that based on federal and state laws, fathers can receive paternity leave for a newly born child as well. In addition, both parents are afforded family leave in the case of an adoption. However, for the purposes of this article, we will solely inform you on maternity leave.

How many weeks of maternity leave are mothers afforded under NY Law?

First and foremost, this article is under the assumption that your employer does not offer any maternity leave. However, if they do, that does not mean you are locked out of the leave provided to you under New York law. You most likely can receive both because your employer cannot interfere with your rights under NY law. Therefore, if you are unsure if your employer offers maternity leave, either check your benefits package or talk to your employer.

pregnancy law

Now time to answer the million dollar question. The answer is 10 weeks in 2020 and 12 weeks in 2021. Under a recently created program called New York Paid Family Leave (“NYPFL”), you are entitled to legal protections for the designated amount of time above.

The NYPFL works as an insurance benefit. By triggering a qualifying event, the birth of your child, you can apply for leave through your employer’s NYPFL insurance carrier. Once you are approved, you will receive your benefits through the insurance carrier.

Can you still get paid? And if so, how much?


If the amount of time you may go on leave is the million dollar question, this is the billion dollar question. In 2020, you are entitled to 60 percent of a worker’s average weekly wage. In 2021, this will increase to 67 percent as the NYPFL phases in.

The average weekly wage is annually determined. It is based on the average wage a worker receives in New York. It is currently set at $1,401.17, therefore it is capped at $840.70 (60%). Unfortunately, if you are receiving a high salary where you may make more than $1,401.17 a week, it will have no effect on your weekly benefits under the program. Your weekly benefit will be capped at 60%. However, if you make less than the average weekly wage of all New Yorkers, your weekly benefits will be calculated based on your salary.

When can you begin maternity leave?

The unfortunate answer to this question is that you cannot take maternity leave when you are pregnant. The benefits only start to flow once your child is born.  Despite that, that does not mean that you have to take your 10-12 weeks of maternity leave right after your baby is born. You can receive those benefits and simultaneously take off from work for any 10-12 week period in the first 12 months of your child’s birth.

Can your spouse or partner receive leave as well?

Yes, most certainly! Both parents are entitled to parental leave. In fact, many parents strategically take their leave so that once the first parent’s leave is up, the other parent can use their leave to take care of the newborn.

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Maternity leave, and even paternity leave, are some of the most important laws that New York offers its citizens. Caring for a newborn should be encouraged as families raise their children and build bonds forever. We hope that if you run into any issues in securing maternity leave or just want any legal advice for it, that you come to JUSTLAW for it.

COVID-19 Waivers: The Benefits and Drawbacks

COVID-19 has re-shaped the way Americans conduct business. In an age where masks, social distancing, and personal hygiene separate the sick from the healthy, we all have a responsibility to each other to be extremely careful in our daily lives. That same responsibility applies to businesses all over America, as we begin to withdraw from state quarantines. However, businesses have a valid concern of “COVID” liability with every hour of operation they are open to the public. If a customer, vendor, or other constituents contract COVID after visiting a business, they may sue that business or run to social media to damage the business’s reputation. JUSTLAW is deeply concerned about this unfair treatment of businesses. Therefore, we urge all businesses to draft COVID-19 waivers.

What is a contractual waiver?

Before we dive into COVID waivers, we should first introduce the concept of a waiver. Liability waivers are contractual provisions by which one party agrees to surrender their right to sue for particular injuries. Generally, liability waivers are governed by state law. Therefore, a waiver in New York may look entirely different from a waiver in Kentucky.

Ordinarily, businesses use liability waivers to protect themselves against customers, vendors, or other patrons who may come into contact with them for business purposes.

covid and business law

Why should businesses have a COVID-19 waiver?

As you open up for business in light of your local state governments lifting quarantine restrictions, you begin to open your business to liability. Therefore, all businesses should be mindful of the impact the spread of COVID at your business could have on your company. A COVID waiver would protect you from customers or vendors suing you for contracting COVID while they interacted with your business.

As a quick note, notice, we do not mention employees. You generally cannot contractually waive an employees right to sue you for COVID exposure. Employment law will, in most instances, pre-empt such a waiver.

How can you maximize your chances of an enforceable COVID-19 waiver?

  1. Understand your states’ laws on waivers
    States vary on how businesses can draft a valid COVID waiver. Therefore, be aware of the requirements for a valid waiver in your state.
  2. Clearly identify the waived claims
    To have a valid waiver, you should explicitly express the claims that a party is waiving. Therefore a valid COVID waiver should include explicit language on waiving any negligence on behalf of your business relating to COVID. Keep in mind, you customarily cannot waive gross negligence, a higher standard than ordinary negligence.
  3. Be as conspicuous as possible
    This is one of the most important factors in having an enforceable waiver. The more conspicuous a waiver, the more of a chance a party agreeing to a contract will notice the COVID waiver. To make the waiver as conspicuous as possible, try setting it apart from the rest of the contract, bolding the lettering of the waiver, putting the waiver in capital letters, requiring a special separate acknowledgment and signature for the waiver, or drafting the waiver with such a distinct textual effect that the reader cannot miss it. If you include some of the aforementioned tips above, no one can claim that they did not see the waiver.

What drawbacks should I be aware of if I plan to include a contractual provision for a COVID waiver?

While you have solved a major legal issue relating to COVID by drafting a COVID-19 waiver, you may take on a business risk. If you use a COVID waiver, you could potentially damage relationships with vendors or push away customers. Do they begin to lose your trust if you have them sign such a waiver? Something to keep in mind if you begin to consider such.

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COVID waivers are starting to become more and more common for businesses in America, amidst the pandemic. If you want to join those businesses in having COVID waivers, let JUSTLAW help you in effectively drafting such a waiver.

In addition, check out a sample waiver that JUSTLAW attorneys could potentially use for your business:

COVID-19 WAIVER (READ CAREFULLY, AS IT AFFECTS YOUR LEGAL RIGHTS)

I acknowledge the contagious and dangerous nature of the Coronavirus/COVID-19 and that the CDC and many other public health authorities still recommend social distancing. I further acknowledge that ________ has put preventative procedures in place to curtail the spread of the Coronavirus/COVID-19. I further acknowledge that ______ can not guarantee that I will not become infected with the Coronavirus/Covid-19. I understand that the risk of becoming exposed to and/or infected by the Coronavirus/COVID-19 may result from the actions, omissions, or negligence of myself and
others, including, but not limited to, employees, other customers, and their families. I voluntarily seek the products and/or services provided by _____ and acknowledge that I am increasing my risk to exposure to the Coronavirus/COVID-19.

I authenticate that:

      • – I am not experiencing any symptoms of illness, not limited to the following, such as

 

      • cough, shortness of breath or difficulty breathing, fever, chills, repeated shaking with

 

    • chills, muscle pain, headache, sore throat, or new loss of taste or smell.
    • – I have not traveled internationally within the last 14 days.
    • – I have not traveled to a highly impacted area within the United States of America in the last 14 days.
    • – I do not believe I have been exposed to someone with a suspected and/or confirmed case of the Coronavirus/COVID-19.
    • – I have not been diagnosed with Coronavirus/Covid-19 and not yet cleared as noncontagious by state or local public health authorities.
    • – I am following all CDC recommended guidelines as much as possible and limiting my exposure to the Coronavirus/COVID-19.

I hereby release and agree to hold _____ harmless from, and waive on behalf of myself, my heirs, and any personal representatives any and all causes of action, claims, demands, damages, costs, expenses and compensation for damage or loss to myself and/or property that may be caused by any act, or failure to act of the salon, or that may otherwise arise in any way in connection with any services received from _____. I understand that this release discharges _______ from any liability or claim that I, my heirs, or any personal representatives may have against the salon with respect to any bodily injury, illness, death, medical treatment, or property damage that may arise from, or in connection to, any services received from __________. This liability waiver and release extends to the salon together with all owners, partners, and employees.

Why a Prepaid Legal Plan IS Right for Everyone?

Prepaid legal plans ​are right for everyone. How so, you may ask?

  1. Prepaid legal plans add value and peace of mind whether you are an individual or a business owner.
  2. Prepaid legal plans are extremely affordable.
  3. Prepaid legal plans are perfect for your basic legal needs as well as any unforeseen legal issues that may arise with the blink of an eye.
  4. You are not just paying for one attorney, you are paying for a whole network of attorneys with vast legal experience across almost every area of law imaginable.
  5. As an added bonus, at JUSTLAW, we essentially do anything your heart may desire including, but not limited to: bankruptcy, divorce, family law, forming a corporation, labor law, real estate law, traffic violations, trust & estates, etc. The list goes on and on. If you think there is truly no attorney in the world who could take your case, think again with JUSTLAW.

How does a pre-paid legal plan operate?

If you sign up for a prepaid legal plan, you may be curious as to how you will interact with attorneys and eventually proceed through the various stages of your particular legal issue. Here is a general overview of how the plan operates:

    1. You will likely first engage in a consultation with an attorney.
      This will ordinarily consist of a quick telephone call or office visit with the attorney. The attorney will ask to hear a brief version of the main facts of your case. Upon an initial consultation, most attorneys will generally get a good understanding of your case and subsequently decide the next steps to take.

      Speak with an attorney with a pre-paid legal plan

 

  1. Miscellaneous steps beyond the consultation.
    After the consultation, the attorney will aid you through a legal procedure that is available to you under your plan. A few procedures include:

      • a. Legal research (limited to a certain amount of hours)
      • b. Document review (limited to a certain number of pages)
      • c. Legal writing of a demand letter, contract, lease, etc. (limited to a certain amount of pages)
      d. Defense counsel for you at a trial (extra charges may apply)

What benefits do individuals and businesses receive when they sign up for a pre-paid legal plan?

Individuals and businesses benefit in a plethora of ways including but not limited to:

  1. Cutting down on attorney costs.
      – Some attorney’s charge you hundreds and hundreds of dollars per hour. Prepaid legal plans permit you to save a vast amount of money.
  2. Reduce the amount of time you spend attempting to retrieve an attorney.
  3. Avoid representing yourself or in other words, ​pro se​.
      – If you are not an attorney and do not have any experience in the field of law you have a legal issue in, you could risk a serious mistake that could cost you your case. Therefore, if you are representing yourself because you believe you cannot afford an attorney, then a prepaid legal plan is perfect for you.
  4. Don’t wait days and months for a response from your attorney.
      – Get immediate help from attorney’s under prepaid legal plans.

Choosing the right one!

To determine which prepaid legal plan is the best for you, follow these guidelines:

  1. Look at the vendor’s online presence. Do people generally leave them positive or negative reviews? Some of the better known plans consistently receive terrible reviews, with customers reporting upsell tactics and the run-around each time they take advantage of the free consultations. Checking these reviews will help you gain insight into how people viewed their services to be under the plan.
  2. Speak to current customers about the services. If you know someone who has mentioned or used the prepaid legal service, talk to them directly to get valuable insight.
  3. Check the price. If you are going to sign up for a pre-paid legal service plan, ensure it is affordable for you.

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JUSTLAW offers a Peace of Mind plan as its signature pre-paid legal plan. Check it out here!

What are visitation rights?

Written BY NABEELA TAREEN

Visitation Rights are an important part of child-custody proceedings. It refers to those rights
which are granted to the non-custodial parent to visit and meet their children by the order of the
court. In a course of separation or divorce, the matter in relation to the custody (physical and legal) of
an issue (child) involved, is either decided by the parties themselves or by the Court. Where the
decision is left to the discretion of the courts, many factors are considered before deciding which
parties will be awarded the custody of the child and which party will be allowed visitation rights. The
child’s preference, mental and physical conditions of the parents, lifestyle, age, and sex of the child
are among the important factors which the court reflects upon before awarding custody. Thus, those
parents who are not awarded physical custody (physical location of where the child will be) of the
children are granted with certain visitation rights. These rights include the right to spend time with the
children, either under a supervised or unsupervised arrangement.

While deliberating on the custody proceedings, the welfare of the child is a matter of paramount
concern. Divorces are an exhausting process, which could result in a traumatizing experience for the
parties, especially the children involved. The children are forced to witness the separation of their
parents and disintegration of their household. Therefore, in order to prevent any further mental and
emotional discontent and to make sure that the child’s welfare is upheld, co-parenting is preferred.
Both parents are allowed to be a part of their children’s life, thereby making visitation rights very
important. The visitation rights have a positive effect on the child as active participation of parents in
the parenting process help children thrive more[1].

Generally, the scope of the visitation extends to the non-custodial biological parent. Some
countries’ guidelines for custody pertain to traditional gender-specific roles, granting the mother
custody as the presumed caretaker. However, most countries have advanced to a gender-neutral
approach. The scope of the rights now extends to grandparents, other non-parent entities such as
foster parents, caregivers, etc. The U.S. Supreme Court did not per se declare the non-parent
visitation as unconstitutional, thereby rendering some scope of extension of the visitation rights to
others.[​2] ​Furthermore, parental rights cannot be reduced because of a disability of a parent[3].​ It is the
child’s welfare and interest which is considered a priority while making such a decision. The
Washington Rev. Code -26.10.160(3) permits “[a]ny person” to make such petition for the visitation
rights to the children “at any time” and also grant authority to the state superior courts to award such
rights wherever such rights are serving the best interest of the child[4]. (We provide you with this
information of cases and statutes, so that you have the ability to do research of your own, but
remember JustLaw attorneys can do all that for you under a JUSTLAW membership!)

The length and kind of visitation rights granted is often determined by the age of the child. A
parental agreement of visitation rights may generally include allowing the non-custodial parent to
spend time with their child on specific weekends, overnight, pick and drop offs from specified
locations, and on given times as agreed upon. The visitation rights will also determine whether the
exchange between the child and parent will be supervised or not, as well as time allowed during
special occasions, holidays etc.

As a general rule, visitation rights are permitted. However, the court may also deny or restrict
the visitation rights for the interest of the child. Therefore, in a child custody case, it is imperative to
appoint a good attorney to represent the interest of the non-custodial parent.

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Running into this problem? Contact JUSTLAW to access our attorneys specializing in this area of the
law.

1. ​https://www.nationalfamilysolution.com/why-visitation-rights-important/​ ( last visited 7:36 AM {IST}, dated 9/12/2020)
2. Troxel et vir v. Granville (2000) No 99-138, (argued: January 12,2000 Decided: June 5,2000)
3. Re. Marriage of Carney, 598 P.2d 36 (Cal. 1979)
4. 4https://caselaw.findlaw.com/us-supreme-court/530/57.html​ ( last visited 7:58 AM{IST}, dated 09/12/2020)

The FMLA and why should all business owners be aware of it

What is the FMLA?

The FMLA stands for the Family Medical Leave Act. Under this act, qualified employees
are entitled to take time off in order to care for their families.
Before the COVID-19 pandemic struck the world, the FMLA ordinarily provided qualified
employees with up to 12 weeks of unpaid leave for various reasons. Such reasons include
caring for a newborn, caring for a new adopted child, or caring for a family member with an
illness.

What are the requirements to meet the FMLA?

The FMLA applies to employers with fifty (50) or more employees. The employer must
have had 50 or more employees for at least a period of twenty or more weeks.
In addition, employees must have worked for 1,250 hours over a 12 month,
non-consecutive period.

How has the FMLA changed due to the COVID-19 pandemic?

Due to the COVID-19 pandemic, the Senate passed the Families First Coronavirus
Response Act into law on March 18, 2020. The purpose was to help those who were forced to
miss work because they have to care for a loved one with an illness, specifically COVID-19.
Furthermore, it applies to employees who are forced to quarantine, caring for a child who does
not have school due to the COVID-19 pandemic, or was told to stay home due to the doctor’s
orders.

The act provides employees with partially paid leave for twelve weeks. For ​f​ull-time
employees who have to stay home due to a COVID-19 related reason, they are eligible for their
regular pay rate for a period of two work weeks, which is capped at $511 for each work day and
$5,110 over the whole two weeks. Part time employees will have their paid leave adjusted
accordingly depending on how many hours they work a week.

Under this act, the requirements for an eligible employee have dropped in terms of how
long they have had to work in order to receive paid leave. Under this act, an employee would
have had to have worked for 30 work days or more. However, this still only applies to employers
with 50 or more employees.

Finally, the moment that all you business owners have been waiting for. You can get
reimbursed through a tax credit. If you would like more information on this, set up a quick20-minute consultation with us and we will help you determine how to access your
reimbursement.

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The FMLA and the subsequent legislation, Families First Coronavirus Response Act, will
act as a lifesaver for your employees and will not leave you hanging. Don’t forget, as mentioned
above, that your friends here at JustLaw are here to help you along the way as we all navigate
through these unprecedented times.

Why is Divorce so Expensive?

Divorce is an expensive affair. This account may be correct to some extent as the emotional discontent of separation often results in the involvement of an enormous amount of money. Broadly, the term divorce refers to the termination or a dissolution of marriage. The Merriam Webster Dictionary defines ‘divorce’ as ‘the action or an instance of legally dissolving a marriage’. It is ofttimes true, that such a dissolution is resulted from a conflict and persistent disagreement between parties.

Ascertaining a universal cost of divorce is not possible as charges involved vary from not only region to region, but from one case to the other. Some cases may result in spending a fortune for attaining a divorce while others may cost comparatively less. In a recent research survey conducted by Martindale-Nolo on divorces in 2019, it was observed that an average cost of divorce was around $12,900 in the United States. Further, the average cost of a divorce in the United Kingdom stood at 14,561 pounds. In the presented analysis, it is highlighted that even on average a divorce is very costly.

It becomes imperative to explore what makes a divorce so expensive. Many factors can be attributed to an expensive divorce. One of the most important factors which tersely upsurge the cost of a divorce is the level of conflict or disagreement between the parties. The cost of divorce ultimately depends on the parties. If the divorce is born out of mutual consent then the cost would be lesser.

The cost of divorce is influenced by the complexity of the marriage. If factors such as  duration of marriage, custody of children, the division of assets, division of debts, and the rates of alimony, are impugned, then costs will increase. For example, under  Indian law, there is no fixed maintenance or alimony rate therefore, the amount depends on the discretion of the court and can be any varying amount.

Another factor which heavily affects the cost of divorce is the fee charged for attorney service. An average charge for an attorney for a divorce case would amount to around $100-200 per hour and these charges can also increase up to $400 or more per hour. Apart from these, there are some other miscellaneous charges which may include the court fee, paper work charge etc. A contested divorce which is likely to last longer in duration turns out to be a costly affair in consideration of the above-mentioned factors.

There are certain processes which can be adopted to avoid the pricey nature of a divorce and reduce the cost to a minimal. A non- contested divorce or a divorce by mutual consent is likely to decrease the cost of a divorce. Hiring an attorney for basic consultation and avoiding a full-time attorney can also help cut costs. Signing a prenuptial agreement, online divorce, mediation between parties etc. are some of the methods to minimize the charges associated with a divorce.

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If you are facing an impending divorce or are in the midst of one, consider JustLaw in your endeavors!

What is a Buy-out Clause?

So you read our posts on The Verdict about all the different business entities that you can create. You read through them all and compared them, yet the one that struck you as the most attractive for your business is a partnership (or limited liability company/LLC). Well, now that you decided you and your business associates are going to create a partnership, you will need to, among other things, include a buy-out clause in your partnership agreement. In this post, we are going to refer to LLC’s and partnerships interchangeably, as these learnings apply to both.

What is a Buy-out Clause?

A buy-out clause is a binding contract between partners that must be placed in the partnership agreement. The clause will control future ownership of the business in the event that a partner leaves.

The clause will include a few key pieces of language that will decide how a partner’s share of the company will be divided amongst the remaining partners.

  1. The clause should include the price that will be paid for the interest of the departing
    partner.
  2. What occurrences or circumstances will prompt a buyout.
  3. Who has the ability to buy that partner’s interest? Is it just limited to other partners or can outsiders buy the interest as well?
  4. Does a departing partner have to be bought out?

Thus, if you have a partnership agreement, ensure that a buyout clause is included in it and ensure that these 4 elements are explicitly considered as well.

Why do you need a Buy-out clause?

The main reason you need a buy-out clause is because a departing partner could dissolve your business. In other words, if a partner leaves, the remaining partners may be forced to divide the assets of the partnership. They can always start a new partnership, but it would be much more efficient to just include a buy-out clause.

In addition, without a buy-out clause, how will you decide who will get the departing partner’s interest? It may create serious tension if you and your partners fight over that leftover interest.

What events may trigger a Buy-out Clause?

There are a few events that may occur in a partner’s lifetime that may force him or her to leave a partnership. Here are a few to mention:

  1. Death, disability, or incapacity of a partner.
  2. A partner enters into personal bankruptcy.
  3. A divorce settlement that would entitle a partner’s ex-spouse to an interest in the partnership.
  4. Retirement or resignation of a partner.
  5. An offer from an outsider to purchase a partner’s interest in the partnership.

If any of these occur, you will be so happy you included that buy-out clause in your partnership agreement.

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We hope you never create or enter into a partnership/LLC without a buy-out clause in the partnership agreement after reading this. If you decide you want to create a partnership or limited liability company, let your friends at JustLaw and our highly experienced, 5-star corporate attorney’s handle the creation of your agreement.

What type of business entity is right for you?

To create the right business, you need to start off with the right entity. There are a variety of business entities available to utilize. For the purposes of this article, we will focus on Limited Liability Companies, C Corporations, S Corporations, Partnerships, and Sole proprietorships.

Sole Proprietorship

A sole proprietorship is the simplest of the entities. If you are looking to create your own business, this is the business structure for you. Unlike the others, creating a sole proprietorship does not require any state filings. Moreover, you have the ability to create your own hours and the operation of the business is controlled solely by you. In terms of revenue and taxes, you must report profits and losses on your own personal tax return.

However there is a downside to sole proprietorships that you should be aware of. If someone sues you, your business will not protect you. To the contrary, you are personally liable. For example: you decide to open up your own cleaning service. You are mopping the floors of one of your customers. If the owner of the house slips,  ue to the wet floors you created, he or she may attempt to sue you. Skipping past whether you are liable or not, if the case is decided in their favor, you are personally liable. Stated more directly, they can come after you and your assets. Therefore, keep this in mind if you decide to go this route.

Partnership

A partnership is just as it sounds, two or more people coming together to form a business. The foundation of a partnership is similar to a sole proprietorship. They are easy to form and operate, all partners in the partnership are personally liable, and profits and losses are reported on each partner’s personal tax return.

One aspect of a partnership that we feel is necessary to highlight for you is joint and several liability. This means that all partners are jointly liable for any lawsuit filed against them. However, the partners also have full liability themselves. This means that if a lawsuit is filed, the damaged party could seek recovery from any of the partners individually. Despite that, you may still then subsequently seek recovery from your other partners.

Limited Liability Company

Unlike a sole proprietorship and partnership, a Limited Liability Company does not create personal liability on your behalf. Alternatively, you are only liable for your investment. If liability is your main concern, corporations and limited liability partnerships also afford business owners the same protections as a Limited Liability Company.

The Limited Liability Company (or LLC) offers maximum flexibility with low costs of operation. For gig workers, self-funded small businesses, investment vehicles and other such arrangements, the LLC is an ideal entity type. This is a separate legal entity from the owners, unlike a sole proprietorship and partnership. In other words, you can avoid personal liability and only have your business assets subject to liability. In addition, you are only taxed once on your personal tax return. Finally, form an LLC with as many others as you want; there are no limits to the amount of owners.

The one downside to an LLC is that some outside investors do not like them due to the pass through nature of their tax treatment. If you plan to raise venture capital or other outside funds, you should probably consider a Corporation instead.

Corporations

For the purposes of this article, we want to draw your attention to S corporations and C Corporations. For a full list of similarities and differences between the two, please take a look at this post. However, for the purposes of this article we feel it is vital to address their taxation differences. Above you read how partnerships and sole proprietorships are taxed once on the partners/sole owners personal tax return. S Corporations are taxed the same way; only one time. However, C Corporations are taxed twice. C Corporations are taxed once on the corporate tax return and again on the personal tax return. Therefore, if you are a small business, we recommend avoiding C Corporations to avoid hefty, double-taxation.

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We hope this helps you decide which business formation to pursue. Here at JustLaw, we have a large group of attorneys skilled in business matters, and we pride ourselves on speedy results, fair prices and straight talk. So do not be afraid to reach out for help!

 

Critical Issues to Consider Before Filing Bankruptcy

Falling behind on your debt can be one of the most stressful experiences a person has to endure. Whether you are behind on your mortgage, your car payments, or student loan payments, falling behind on any payments is tough to fix. Bankruptcy may offer you a way out. And you’re not alone. In fact, according to the United States Courts, 773,361 people and businesses filed for bankruptcy in 2019. This post explores the key issues you should consider before taking that step.

What is Bankruptcy?

Bankruptcy is a legal process that permits individuals and businesses to receive a fresh start. Bankruptcy may have an impact on other legal proceedings in your life. Upon filing, you will receive, in legal terms a “discharge”, and it will essentially wipe out all of your debts. In addition, any foreclosure or legal action against you will be halted. On top of that, creditors cannot seek payment. Here is your moment where you can finally take a second to breathe.

What are the types of Bankruptcy? Chapters 7, 11 & 13.

For individual debtors, you have the option of filing for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is simple and will wipe out most of your debts through a process of liquidation. A Chapter 7 trustee will seize your property, sell it, and use those proceeds to pay off your debts. Therefore, it is key to note that Chapter 7 bankruptcy could potentially seize all your most valuable assets such as your home and car.

To be eligible for chapter 7 bankruptcy you must meet the means test, or in other words have an income that is low enough to meet the means test formula. If you have a higher income, then you will have to file for chapter 13 bankruptcy. Chapter 13 bankruptcy is for those with a salary or regular income that have the ability to pay their debts through a repayment plan. You also can keep most of your property under this form of bankruptcy. Also keep in mind; your property in either chapter could be kept under certain exemptions. Discuss exemptions with your attorney.

For businesses looking to file for bankruptcy, you will look to Chapter 11 for your needs. This will permit businesses to reorganize themselves and their debt.

What not to do in the early stages of Bankruptcy?

The 90 days before bankruptcy are crucial to a successful filing for bankruptcy. Many people think that because they are filing for bankruptcy in a month or two, they
can just go on a spending spree. They will rack up high credit card bills and more. Doing so is not advisable, especially in the 90 days before you file for bankruptcy because a creditor can claim fraud.

Furthermore, bankruptcy filings forbid fraudulent transfers. Therefore, don’t gift your house to your nephew right before bankruptcy so as to avoid it being liquidated during your bankruptcy case to repay creditors. Trustees, if authorized by the court, can seize the property and you will have a case of fraud on your hands.

Does all my debt get “discharged”?

Unfortunately no. Your credit card bills will get discharged. But your child support payments and taxes? Nope. You still have to pay that.

Worth noting thought, one of the most litigated areas of dischargeable debts is student loans. Whether they can receive approval for discharge is argued around the US, regularly. In order to receive a discharge for student loan debt, you must meet certain standards that show an “undue hardship”. In other words, you will have to show that you cannot maintain a healthy standard of living, your current situation of extreme debt will persist for a significantly extended period of time, and you are doing everything in your power in order to maximize your income.

Your credit will be affected!

Your credit score will be affected unfortunately. It will exhibit that you have filed for bankruptcy. Thus, you will have a tough time receiving a loan in the future. Stay patient though. And take the time to balance whether filing for bankruptcy will be worth it in the long run. Bankruptcy attorney’s will be extremely helpful in this respect.

Finally, be honest!

When filing for bankruptcy, you must provide your income and assets, truthfully. If you try to conceal your assets, you will get in a lot of trouble and most likely have a tough time filing for bankruptcy again. Or you could face severe penalties for a serious crime of fraud. So be honest, please.

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If you decide that you would like to learn even more about a possible bankruptcy, Justlaw is here to help! Speak with one of our attorneys before you do. We have an exhaustive arsenal that you might consider before filing for bankruptcy. Lets get rid of your debt together!

Prenuptial Agreements: Why should I get one?

Ever wonder why so many people say, “I hope they had a prenup”? Maybe you heard it referring to celebrities. Or maybe you heard someone utter that when Jeff Bezos divorced his wife. The classic conception of prenuptial agreements is that it’s only for the rich, but we are here to tell you, that is simply not true. Every couple should get one and here is why.

What is a Prenuptial Agreement?

First off, a prenuptial agreement is a written document that is created by a couple before they are married. The agreement permits them to control their legal rights during the marriage, but more importantly allows them to plan ahead in case of a divorce or death to a spouse. Prenuptial agreements exhibit the drafters intent and thus will prohibit the default rules of NY from determining key aspects of your property in the event of a divorce.

Default rules will inevitably control your division of property, retirement benefits, savings, child support, alimony, and much more.

Why Should I Get a Prenuptial Agreement?

There are a variety of reasons why you should get a prenuptial agreement. Here are just a few of those reasons:

1. Avoid arguments in the case of divorce

Divorce can get ugly. We have all witnessed them on television, in movies, from people you know, or even possibly yourself. Thus, when you are getting ready to marry your significant other, you should seriously consider a prenuptial agreement. In the agreement, you can specify how you want your property to be divided and what to do with various aspects of your lives including savings, retirement benefits, etc. This will save you and your ex-spouse, dreadful arguments over property and finances that are unnecessary during those stressful stages of your life.

2. Get protections from debts

A prenuptial agreement can also shield you from the debts of your spouse. Essentially, the prenuptial agreement will protect creditors from pursuing the debts of the deceased spouse from the surviving spouse.

3. Establish your financial rights

The prenuptial agreement can even document the financial rights of each spouse. On top of their financial rights, you can even include financial and general responsibilities of each spouse. You can also protect the financial well-being of others through the agreement. For example, if one spouse has children from a prior marriage, they may protect them in the agreement. One spouse can specify that if they die, part of their property will go to their surviving children, including the children from a prior marriage.

4. Preserve your legacy

The prenuptial agreement could act as a way to safeguard all your family heirlooms as they pass down generation to generation. Thus the agreement can act as a way to keep the family together through cherished belongings.

What happens if you don’t get a Prenuptial Agreement?

So is it a big deal if you never get around to creating a prenuptial agreement? The honest answer is: yes.

If you do not create a prenuptial agreement, the default rules of NY will determine how your property, retirement benefits, savings, and much more will be split between you and your ex-spouse in the event of a divorce. In some instances, the default rules will not be favorable to you. Are you willing to lose a family heirloom to your ex spouse? Are you willing to lose full control of your business?

In addition, in some instances a spouse may pass away prematurely. If you do not have a prenuptial agreement, marital assets will still be subject to the default rules of NY as they would be in the event of a divorce. Therefore, you may still lose control of your beloved family heirloom or business. A well-drafted will on the part of the premature spouse would supersede the default rules of NY, however if your premature spouse did not create a will, then you are out of luck and cannot avoid the default laws.

What are the considerations against drafting a prenuptial agreement?

Here at JustLaw, we don’t just present you with one side of the argument. We want you to feel that you take everything into consideration before you make a decision.

Thus you should understand that making a prenuptial agreement may not be easy. It could drive couples apart. It may divide you and your significant other apart because it is essentially a document that is used to protect yourself in a divorce.

Moreover, if you and your spouse do not have a lot of assets, then a prenuptial agreement may not make sense. This is because there wouldn’t be much to put in the prenup if you don’t have any valuable assets.

Drafting a prenuptial agreement truly depends on your individual circumstances. Therefore, speak to a JustLaw attorney and determine whether you should get a prenuptial agreement!

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There you have it. Just another article of your friends at JustLaw trying to help you and your future out. Hope this helps!