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What’s that funny French word? Force Majeure. It roughly translates to “major” (as in overwhelming) force. What’s it for? Unforseen circumstances, big events like strikes, wars, acts of terrorism or large natural occurrences like hurricanes, earthquakes, tornados–that sort of thing. It excuses you if any of these occurrences make it impossible to meet your contractual obligations. Okay, fine, whatever, stick it in the back of the lease.

Now, with the Covid 19 pandemic, more commercial tenants are becoming aware of this provision. Guess what? In most cases, you still have to pay rent no matter what. The majority of leases after all are written by the Landlord’s counsel. I have recently been negotiating new leases and although a pandemic is accounted for, the Shopping Center still wants my client to pay rent in the event of a “Force Majeure” event. That is helpful to no one. Rent can’t be paid if the government shuts down your business or limits you to curbside business. Impossible is as impossible does. On the Landlord’s side, what is it going to do? Evict? And then who will be the new tenant during or after the pandemic while the economy is still reeling?

This is an unprecedented event. It could be very beneficial for you to review the Force Majeure provision in your lease agreement. The directive to pay rent under any circumstances may not be in there. I doubt very much that global pandemic is included as a Force Majeure event but there may be language so a good faith argument can be made that the provision covers the pandemic. In any case, communication with the Landlord is important. If rent can’t be paid, it can’t be paid. Negotiation is always better than litigation. Depending on where you are located in Virginia, the courts are shut down or seriously slowed. They all may be shut down at some point. When contacting your Landlord however have your ducks (legal and financial) in a row. Know your rights under your lease and be able to show your financials in regard to the drop off in business in a clear, concise and easy to understand manner.

Additionally, take a look at your insurance. There may be relief under the business interruption provisions. Not surprisingly, the insurance industry is balking at this. Again, know your rights. You contracted for them and paid for them.

Finally, look for the relief programs that are out there and more are coming. You may be able to get low interest loans for pay roll and rent. Some loans for payroll may be forgiven. Here is the link to resources the SBA is offering.

https://www.sba.gov/funding-programs/loans/covid-19-relief-options

Stay well. Stay safe. It may feel like the end of the world. It is not. Call me. I am providing complimentary telephone and video conferences during this difficult time.

Recently I was with a client before a state agency. It was what the state agency called an “informal fact finding conference”. It was not set up, (at least I believed) for any negotiation or the advocacy of any particular position but just to find out what my client still had to do in order to be approved in the next stage of receiving a certain license. The representatives from the State knew I was an attorney representing my client. I wanted to make sure that my client knew what the State representatives were saying in reference to certain regulations and I wanted to make sure that the State representatives knew how my client was complying. In other words, “getting everyone on the same page”. Done right, government oversight can be a collaborative process with mutual cooperation to protect the public interest. Well, the head of this particular department proceeded to give us a lecture on the stringent nature of the requirements and all the bad actors who had come before … and during the middle of his harangue stated “and you can file as many law suits as you want to…”.

You can file as many lawsuits as you want to? Really, Sir, did you say that for my benefit? This is not the first time I have run across this attitude. While I may think I am at a meeting to look for points of agreement and ways to cooperate, because I am an attorney so many think I am looking for conflict. I even get jokes about how I get what I want because I am an attorney. Like I can wave my hand and some poor unsuspecting non-lawyer finds himself in court being cross examined while he sweats and trembles. If people only knew what goes into a lawsuit.

Years ago I was General Counsel for a firm which became the subject of a shareholder’s dispute for control. There was a lot at stake. I am not exaggerating when I say that each side spent about one million dollars on legal fees. Very large law firms were on each side. There were interrogatories, depositions, and hearings all before the trial even began. Ultimately, the matter was concluded after a marathon mediation session which continued for 23 hours non-stop.

Most lawyers know the work and stress involved in a lawsuit and the great emotional and financial toll associated with it. I gave up litigation years ago. It is one of the worst ways I know of to settle disputes. I do admire colleagues who try cases in Court as a substantial part of their practice. It is a science and an art requiring long hard hours, dedication to detail, passion and great presentation skills. Even though I stated it is one of the worst ways to settle disputes, I do admire those who go to Court for a living including judges. Here’s a news flash– after becoming familiar with the facts of a case in a very brief period of time, most judges render the right decisions. We only hear about injustices, not the vast majority of cases where the decision was handed down correctly in a thoughtful manner.

Perhaps we would be less confused if like the English we had different terms. From what I have gathered in my immense research on the British justice system (having watched Masterpiece Theater), they have solicitors and barristers. The barristers are the ones who wear the robes and the curly white wigs. They argue in court. The solicitors are the ones who can dress like normal people and draft wills, contracts and advise clients on legal matters. Maybe over there I would not be harangued with “you can file as many lawsuits if you want to…” unless I was wearing a wig. Query: as we know they are not real, must the wigs always be white? Can we liven it up with green, purple or florescent red?

Now, make no mistake. I think about Court. Not about suing someone but how can what I write prevent Court from happening. Is the contract clear? If it is litigated will it, as the expression goes “stand up in Court”. Is this Trust document clear so no future family member would ever have to ask a judge for “aid and direction” in its construction? Having been in and around Court in a previous incarnation of my professional life, I know how these matters are examined. I will tell you that when I went to Court it was not of my choosing. I have worked in law firms and I was sent there. This is why I work for myself. I do what I want and impart my own values into my work — and I am not about suing people. The small business owners and the every day people we see all around us, are the heart and soul of this nation. Helping them in what ever way I can is my mission. What I think about and write, is inspired by the wonderful people I meet and work for.

Estate Planning should be a collaborative effort and not conducted alone. I know there are a lot of “do it yourselfers” and web sites, self help books and the like which folks turn to because they have “heard” that attorneys are so expensive. Here’s the question. After having worked a lifetime to develop all you have, your wealth, your name, and your values, and if you wish to leave your loved ones in a good condition when you die and establish your legacy, is this really the time to “economize”? Believe me, no matter where you turn for assistance you will be doing a lot of work yourself, as I will point out below, but having some guidance is very worthwhile. Do not be swayed by the stock statements one hears which have no foundation, such as “you must avoid probate” or “if you have a trust, you don’t need a will”. The first statement may be true, depending on your situation, and the latter statement is never true.

There are a number of aspects to an estate plan such as medical considerations for serious illness; handling your financial life if you become incapacitated; guardianship for minor children; passing down business interests; how assets with beneficiary designations or transfer on death provisions effect your overall plan; imparting your values to your children and grandchildren; leaving bequests to your most important charities; dealing with blended families ,which are increasingly common, leaving funds for a child who does not have good financial management habits and working with assets which present their own set of unique considerations and possible complications such as real estate, digital assets, pets and firearms.

Clients sit down with me personally, and together we review the entire financial and family situation and plan for a host of possible contingencies. In the end, if I am not hired, it costs all of $100.00. If I am hired, all funds collected are credited towards the fees for my work.

Now, no matter the extent of my help and guidance, there is a lot of work the clients must do themselves. Each individual life is unique as are each individual’s families. The thought and planning which goes into the desired outcome of an estate plan, I can not do. Additionally, even after the plan is organized and the documents are signed and duly notarized, work is not over. It is never over. Life goes on and events occur. There are marriages, divorces, remarriages, deaths, births and occasional changes to the law which we all must keep our eye on. I have written a previous article about when you should review your will and trust. Moreover, now that you have all these excellent estate documents such as a will, power of attorney, advance medical directives and perhaps a trust, disposition of remains power, or a transfer on death deed, who can find them and other important documents when you are gone? Will they know what to do with them?

I have a friend/client (many clients have become my friends) who at the end of each year, works to get his important documents together to be placed into his fireproof safe. As far as I know, he is still working on finding all his documents so he can tell his children what they are and where to find them. The list includes 529 documents; health care instructions; durable financial power of attorney, escrow mortgage accounts, instructions for funeral and burial, property deeds, IRAs, Life Insurance policies, user names and passwords, bank accounts, medical history, business agreements, stock certificates, savings bonds and brokerage accounts, a will and trust documents, and automobile titles. I hope he will complete the list and instructions soon and I think he will. It just takes some uninterrupted time to focus. This is not something I can do for him.

I share the list so you all can begin thinking of what is important and how to make the life of your loved one’s easier when you pass. How would you want them to spend time remembering you? I think you would want them remembering the good times and the lessons you have wanted to impart rather than running around dealing with the headaches of cleaning up after you. Take the time, it is well worth it, and everyone who has had a planning session with me has found it to be very worthwhile.

Being a founder of the Greater Warrenton Chamber of Commerce and its Business Assistance Team which was launched in the middle of the recession in 2009, I have seen many small and struggling businesses. The business owners who survived and thrived understood that they could not do, know and learn everything themselves, at least not in time to keep the ship from sinking.

I work as a team player. This is one of the reasons I remain active in the Chamber of Commerce, not just to grow my own business but to meet other processionals of good quality and character who can assist my clients.

Nearly every small business owner will need the assistance of an accountant, attorney, banker and insurance agent at one time or another. Also, in my view, smart business owners also know that they need to hire a management consultant and a marketing consultant.

Finding and putting together a good team should be one of the first steps taken in starting a new business. For example, some of the first steps you’ll be taking, deciding on the form of your business, for example, will be easier if you already have professionals lined up.

Here’s a quick look at the types of assistance key members of a business team can provide:

Attorney: Let’s get this out of the way first. Hiring an attorney after a business runs into legal problems is like running to the store to buy a fire extinguisher after the house is on fire. Initially, an attorney helps choose the right form of business; makes sure the proper papers are filed; drafts and interprets contracts and leases; helps with establishing a human resource system (a sensitive area of vulnerability) and provides on going legal advice for the operation of the business. Good planning, well-drafted legal agreements and well-documented intellectual property protection helps avoid potentially hundreds and thousands of dollars in litigation expenses.

Accountant: Sets up your books; prepares your taxes; provides you with tax advice related to the operation of your business, such as how to choose the best retirement plan and how to take advantage of tax deductions. A business accountant helps to decide on the best choice of business entity. In fact, this may be the first person to be seen. From my perspective, all limited entities, especially in Virginia, protect a business owner’s personal assets from business liabilities provided the entity is fully organized and best practices are followed. An accountant however, provides the best perspective on strategies for growth and development and which entity is the best for the type of business chosen and the future plans.

Banker: Helps you get financing; helps you establish credit card accounts; works, in many cases, as your silent partner, providing you with business operation advice. A good local business banker is also an excellent gateway into the business community for he or she knows many of the key players and centers of influence.

Insurance Agent: Evaluates your insurance needs; provides you with advice on which types of coverage you need. A good insurance agent can also assess all businesses vulnerabilities and possible liabilities depending on the line of business chosen. Also, as I state that a firm legal foundation reduces the chances of unwanted lawsuits, I have unfortunately witnessed too many frivolous suits being brought. Even though the business owner is likely to have the frivolous suit dismissed, it costs precious money just to get to that point. A comprehensive insurance policy would pay for those legal defense costs.

Management Consultant: Provides basic business operation advice; provides pricing and inventory advice; provides sales and advertising advice. A management consultant should also review the business plan. A business without a business plan is like a boat without a rudder. A business plan will also be critical if investments or loans are needed.

Marketing Consultant: Finally, but not least, if you have a good product or service, how are you going to sell it? In these days of changing demographics and the ever expanding and changing social media landscape being seen and up to date is critical.

With a good business team, the chances of success are greatly enhanced.

I have written before about life events which should prompt a review of ones will and trust. You can read the article here. One item I did not mention in that article which continues to be brought to my attention as I review estate plans are documents which contain an estate planning tool used quite often in previous years, called a “credit shelter” or “bypass” trust.

During the dot.com era in the 90’s, I drafted plenty of these trusts. In lieu of salaries, executives of dot.com start-ups were provided large life insurance policies and stock incentives. They were literally “worth more dead than alive”. Now however, with the passage of the American Taxpayer Relief Act of 2012, having a credit shelter trust may now be unnecessary and burdensome. If your estate plan includes one, it would be wise to, as soon as possible, have your documents reviewed and quite possibly updated.

The credit shelter trust was created as a strategy to avoid or reduce federal estate taxes. When I obtained my license to practice law in 1987, any estate value exceeding $600,000 was subject to a death tax rate of 50%. That is a huge tax, and of course most people found it objectionable. Attorneys for many years had a method to double the exemption to $1,200,000, saving a married couple up to $300,000 in federal estate taxes, plus additional savings at the state level. The idea was that when the first spouse died, that spouse would not leave all the assets outright to the surviving spouse. Instead, part of the estate was placed into a bypass or credit shelter trust in which the surviving spouse maintained an interest, but it was a limited interest. Therefore, it was subject to estate tax as the transfer was not to the surviving spouse but to a trust in which the surviving spouse has a limited interest and control. There would be no tax however as the transfer was under the exemption amount. The part of the estate which transferred directly to the surviving spouse was tax free due to the unlimited marital deduction provided if the surviving spouse was an American citizen. On the death of the second spouse, the funds in the credit shelter trust has already been subject to tax and the remaining estate would receive another $600,000 exemption upon death.

For several decades, that idea was embraced by many married couples whose estates exceeded the $600,000 exemption amount. Now, the exemption amount has reached $5.45 million which has eliminated the need for any estate below $5.45 million to have a bypass trust in order to avoid estate taxes. In fact, the idea of doubling the exemption for both spouses has now become part of federal law, so up to $10.9 million can pass free of estate taxes without the need for a bypass trust at all. This new legal strategy is called “portability,” which allows the unused exemption amount of the first spouse to die to be preserved for use by the second spouse to die.

With a credit shelter trust, the surviving spouse does not have complete control over the assets in the trust. The surviving spouse’s right to use assets in the credit shelter trust is limited and requires the filing of a separate tax return. Also, if the credit shelter trust is created as part of a will (as opposed to being drafted as part of a revocable living trust), the trustee of the credit shelter trust will have to file detailed and tedious annual accountings with the court for the remaining lifetime of the surviving spouse.

Credit Shelter trusts generally require that the maximum amount be transferred into the trust when the first spouse dies. Today, that would be $5.45 million, in most cases, all the money in the deceased spouse’s estate.

Even though the tax motive for the credit shelter trust is gone in most cases, this trust still exists in many estate plans and may be an outdated ticking time bomb ready to go off upon the death of the first spouse. For most married couples, it is unnecessary, burdensome, and expensive. This is why many couples should modify their estate planning documents to eliminate the credit shelter trust, because it won’t go away on its own. If you leave it in place, instead of saving money, it could add time, expense, and burden to the administration of your estates. On the other hand, some estates may benefit by keeping the credit shelter trust in place but perhaps modified to meet the present needs of families. Again, as I state repeatedly, one size does not fit all and as I also tell clients, changes in the law which may affect estate plans should prompt a review of your documents.

For the past several decades, wills and trusts have addressed three kinds of property, tangible property (items which one can touch and feel), real estate and liquid assets (money, accounts).

With the advent of the digital age, it is increasingly important to account for a new type of property known generally as digital assets. The term digital assets is actually misleading for it refers not only to property but to the manner of storing and accessing more traditional forms of property. It can involve texts, images, information stored electronically, words, characters, codes, access to accounts and so forth. The term itself is ever changing as the pace of technology moves faster than laws can ever adapt. So the term, “digital assets” while not fully accurate is actually the best the law can do at this time. As more people are storing property in a virtual environment or creating access to property through digital means, estate planning which does not take digital assets into account is incomplete. Imagine the steady and persistent loss to an estate if the executor or family can not access accounts which were only paid on line or the deceased conducted a business on line.

We are all familiar with the terms of service agreements which pop up when downloading software or signing onto an electronic platform. At the end of the agreement, you must click to “agree” or you can not move forward with downloading or entering the platform. Most users do not read all the sentences which come before “click here to agree”. Many terms of service agreements have placed road blocks before an executor or trustee’s ability to do all that the will or trust requires due to stringent privacy concerns which are indeed justified while the user is living and also for many reasons after the account user passes away. Additionally, without being given explicit permission to access accounts, an executor, trustee or family member may be in violation of federal law such as The Stored Communications Act or Computer Fraud and Abuse Act.

Virginia recently passed the Privacy Expectations and Afterlife Choices Act. (effective July 1, 2015) which provides some relief for properly planned estates. This Act allows a court to
order a service provider to disclose to the personal representative of an estate the deceased user’s records for the 18-month period prior to the date of death, but not the contents of the user’s electronic communications or stored contents.

To achieve this, the representative must file a motion accompanied by an affidavit which states that:

The user is deceased and was a subscriber of or customer of the provider;

the account belonging to the deceased user has been reasonably identified;

there are no other authorized users or owners of the account, or if there are other authorized users, that all such users expressly consented in written or electronic form to disclosure of the records to the personal representative;

the request for disclosure is for the purpose of the estate administration of the estate; and

if the user has a will, that the request is not in conflict with the will.

Upon demonstration of need, it is possible for the personal representative to receive permission to access records older than 18 months. Further, provided that the deceased user authorized the personal representative to access the information, the Court may authorize the provider to reveal the contents of the communications. To satisfy the Court, a will should state that the executor have access to these digital assets. It can identify the accounts by name but it should not provide detailed account information and passwords. A will is a document which gets filed publically upon the death of its maker. Account details are better placed in a trust agreement which remains a private contract between the trust maker and the trustee.

What is evident is that while the Privacy Expectations and Afterlife Choices Act provides some relief, it has its limits and involves the time and expense of going to Court. Seeking judicial relief is a last resort in estate administration. With proper planning there are methods to avoid the time, expense and stress.

Individuals with a substantial amount of digital assets may want to consider a trust for digital assets. The maker of the trust could provide the trustee with detailed information in a private document with instructions for management and the disposition of those assets upon death.
As more assets are obtained, they can be titled in the name of the trust. This also avoids the problem with licenses which expire upon the death of the user.

A user may also provide access in more practical manners. First, he/she should maintain an updated inventory of digital assets. This would include liquid accounts which are accessed electronically. He/she should then keep the inventory and all passwords in a safe and secure place. Access with instructions should only be provided to the most trustworthy family member or agent named in a power of attorney document. A power of attorney document should specifically allow the named agent to access this information. The information can be sealed and provided to the executor or trustee upon death. Additionally, a user may wish to consider encrypting this information and keeping the key sealed and locked separately. User agreements should be reviewed so that a violation of these agreements does not occur if another individual is provided access. This is why having a trust be a user and a license holder may be the safest route.

With the advent of the problem with providing for digital assets, a host of after life on-line service companies have been created. Some may be very good while others may be “fly by night”. Full due diligence of these companies should be provided. How long have they been in business? Who are the owners? Are there reliable user reviews and experiences?

The only thing which is clear about dealing with digital assets and estate planning is that there is no clear and solid answer. As technology is changing, problems arise faster than solutions in this regard. Not taking any account for digital assets at all however, provides no solutions and leaves an estate spinning the proverbial roulette wheel hoping everything comes out alright. On that note, the last time I checked, nearly half of Americans have no will or estate plan at all including those with minor children and that, my friends, is truly reckless but I will leave that soap box for another time.

Boots N Beer, “a drinking club with a hiking problem” received a federal service mark registration for its logo and tag line on March 1, 2016. This is a significant step for this tax exempt non-profit organization. The logo and tag line are a result of “tongue in cheek” banter amongst some of its founding members which took place on the trail and in a pub over frosty brews as drafts of the logo were drawn on tavern napkins. Nevertheless, it will enable the organization which is a Virginia corporation called Boots N Beer Charities, Inc. to expand its charitable endeavors and create more awareness about its underlying mission.

The organization started as the brain child of Jim Carson, the President of Carson Land Consultants a Warrenton based civil engineering, land planning and land surveying firm. It was an opportunity for local Warrenton area businessmen for one day a month to get away from obligations and the press of life and business to reconnect with themselves, their friends and the beauty of the Virginia hills and country side. Business talk was absolutely prohibited.

Now, Boots N Beer organizes several hikes each month from the original “Pilsner” Hikes to the more challenging “Stout Hikes” and hiking clinics and family outings. Most significantly, is that the organization is continuing and expanding its charitable activities such as blood drives and supporting organizations which raise funds to combat cancer and conduct environmental restoration projects such as Finley’s Green Leap Forward which was founded by Finley Broaddus the daughter of charter member, Ike Broaddus, a principal owner and co-founder of Old Bust Head Brewing Company. Boots and Beer Charities, Inc. exemplifies the great network for good which exists in the Virginia Piedmont region.

The federal registration of the logo and tag line, prosecuted by Bert van Gils, another charter member, will enable the organization to greatly expand its charitable efforts. While the problems of the world can seem overwhelming, reconnecting with your true self and doing good in your local community can bring about great and positive change you may not have imagined when you started.