Main Street Merchants Celebrated at Governor’s Mansion

Lee and Terry Owsley of Latitudes Fair Trade Store on Main Street, Old Town Warrenton, will join a select group of business leaders from across the Commonwealth and Governor Terence R. McAuliffe on Friday, April 29, to announce a month-long celebration of Virginia’s business community.

As businesses play a key role in strengthening Virginia by job creation, innovative technologies, and employing a diverse workforce, it is important to recognize Virginia businesses for the essential role they play in keeping Virginia’s economy strong.

The Owsley’s, through their company, Latitudes Fair Trade L.L.C. own two fair trade stores, one in Warrenton and one in Old Town Fredericksburg. Their company was recommended by the local Main Street organization in Fredericksburg and the Virginia Department of Housing and Community Development as their business is an integral contributor to the local economy and community.

Not only do they have a positive impact on the local economies of Warrenton and Fredericksburg, as a fair trade business, specializing in hand-made, artisanal goods from around the world, the Owsleys foster positive economic relationships between American consumers and marginalized artisans from developing nations. The connections made by Latitudes Fair Trade Stores go beyond an economic impact. They also interweave our stories with the stories of industrious artisans abroad. The Owsleys believe in social justice and bringing fair trade fashion and sweat-shop free merchandise to our local communities. As is so eloquently stated on their web site, “money is one of the most powerful forms of influence, especially when it comes to impacting the global economy, basic human rights and the environment. By using it thoughtfully we can have great positive impact on the lives of others around the world.”

I am proud to know these people and play a small part in the good they do as their business counsel. This is truly one of the ultimate examples of why I do what I do.

Estate Planning is for Everyone

Some people seem to have the impression that estate planning is only for the very wealthy. Everyone has an “estate”, no matter how humble it may be–and there is no place like home and no one more important than your loved ones. No matter who you are, a well drafted estate plan is a gift to your family.

Although the increase in the estate tax exemption in the American Tax Relief Act of 2012 (“ATRA”) was raised dramatically to $5.34 million (with portable exemptions for married people), estate planning should still take place. It does not have to be complicated but it is always important.

Most people just need a simple will, a durable financial power of attorney and an advanced medical directive with the appointment of a health care agent. Virginia probate is not onerous but it is a public proceeding. Not all wills are the same and there are times, especially in these days of blended families that a revocable living trust is more appropriate and effective. There are also trusts which can be written within wills, (testamentary trusts) which take effect upon death.

There are several strategies to choose from to ensure assets are distributed according to specific desires in a timely fashion. One size does not fit all. The right strategy depends on your individual circumstances and having an attorney who takes time to listen and truly care. I enjoy my consultations because they are not about death but about life. People tell me about their children and grandchildren and their hopes and aspirations for them. It humbles me to play a small part in making those aspirations come true. There may also be specific items of personal property which one wishes to assure goes to specific people and there may be non-profit organizations which are of importance to people. If someone wanted to have an impact and express his or her values during life, charitable trusts are an effective way to see to it that such positive effects continue after the person has passed on.

Estate planning for business owners does not involve only the usual wills and trusts but the business documents as well. The estate documents should be harmonious with business documentation which can effect the succession of business property and interests.

Not one size fits all. Each one of us is unique and special. With careful planning we can make certain those attributes are remembered and that which is important to us will continue to be cared for after we can no longer be here in person.

Warrenton Highly Rated for New Business

Virginia is consistently rated, by Forbes and other business surveys, as one of the best states in the nation for business. Recently, published its survey of the top ten places within Virginia to start a business. Warrenton, my home and the home base of The Van Gils Law Firm, was ranked third in the entire state. The survey described Warrenton as follows:

The town of Warrenton, about an hour west of D.C. near Shenandoah National Park, has 21.2 businesses per 100 people, fourth highest among Virginia communities, and 40.1% of its businesses have paid employees. The Greater Warrenton Chamber of Commerce offers a business assistance team whose mission is to “support and educate local businesses towards sustained profitability and success.” The chamber provides free professional guidance, expertise and resources to its members.

As a founding member of the Greater Warrenton Chamber of Commerce (“GWCC”) and its Business Assistance Team, I am very proud of this ranking and the achievements of our business community. The GWCC was started in 2009 in the midst of a historically difficult recession. Remember “Main Street vs. Wall Street” and “Too Big to Fail”? Well, literally on Main Street, Warrenton and in other parts of Fauquier County, businesses were dying at an alarming rate. It appeared to us who work with businesses that direct help was needed and fast. We formed an assistance team dubbed “The Triage Unit”. We gathered from among our business colleagues, experts in various aspects of business such as finance, insurance, marketing, law and business consulting. Several businesses were counseled and saved. Seeing the mistakes some people made from the very start of their business, the Triage Unit became the Business Assistance Team as it is more helpful to assist a business as early as possible. To date, the Business Assistance Team has assisted more than 30 businesses and non-profits.

The two places ranked ahead of Warrenton, Tyson’s Corner and Fairfax, are in Fairfax County. Three other places ranked in the top ten, Falls Church, Merrifield and Vienna are also in Fairfax County. I am very familiar with Fairfax County having lived a long time in Fairfax City and having worked six years in Tyson’s Corner. I believe that the addition of Metro’s Silver Line will, over time, truly transform Tyson’s Corner into a magnificent place for business but with all due respect to the aforementioned places, where would you rather live?

As stated by the authors:

NerdWallet evaluated each city’s business environment and local economy when forming this list, and noticed that adjacency to Washington, D.C., helps Northern Virginia cities a great deal.

What was not evaluated was lack of traffic congestion, low crime, beauty of the environment, a small town atmosphere and interpersonal relationships in business. If you mix even just a few quality of life issues with the business and economic factors, Warrenton would rise swiftly to the top of the list. That is important because businesses need people and people want to live in nice places.

I encourage anyone thinking of starting or relocating a business to tour Old Town Warrenton, Vint Hill and the other business districts in and near Warrenton. Reach out to the Greater Warrenton Chamber of Commerce, The Fauquier County Economic Development Department and the Economic Development Manager for the Town of Warrenton. You can tell them Bert sent you. Truly, the use of my last name will not even be needed. If you take me up on my recommendations, you will see what I am so proud of and what no survey can adequately measure.

Be Aware of Unintended Consequences in Commercial Lease Agreements

As the areas covered by my practice are business and estate planning, I try to be especially sensitive and counsel my clients about keeping the documents in both these areas of their lives “harmonious”. For example, in terms of succession planning for a business owner, a will or trust should not conflict with an LLC’s operating agreement or the bylaws of a corporation. It is good to conduct a periodic review of such documents to make sure that the same plan is being followed.

I have also noticed more and more commercial lease agreements containing prohibitions against assignment and subletting which, if the tenant is a business entity, consider any transfer of ownership in the business as an assignment. First, we are all used to the usual procedure of the commercial landlord presenting the lease agreement which is prohibitively one sided and displaying a “take it or leave it attitude”. Business owners should know that all provisions are negotiable and that if a landlord does not want to partake in reasonable negotiations, that should be a precursor to what kind of landlord you may be going into business with.

When a commercial landlord tells a prospective tenant that it can not have any transfer of ownership without approval, that landlord is injecting itself into the internal business of the tenant and may seriously impede the business’s opportunity for obtaining investment needed for growth. Commercial leases typically run for about five to ten years. At the very least, the prohibition against the transfer of an interest in a business should be limited to the transfer of a majority interest. In that manner, the Landlord will still be dealing with the same principals of the business as it had before and the business will still be able to sell shares of its business provided they do not change management.

Be aware of all the ramifications of each provision before signing a commercial lease agreement which can impact your business for several years. For more information Email our Office.

More Caution Flags for Trustees

As more baby boomers are taking care of aging parents and are aging themselves and many families have children with special needs, a variety of planning strategies have come into use from power of attorney documents, to special needs trusts and joint accounts.

A recent and notable decision by the Virginia Supreme Court in Ayers v. Shaffer, 286 Va. 212 (2013) has thrown up caution flags for all those in a position of trust who are responsible for the assets of someone who relies upon them. While the decision to overturn the granting of a demurrer and remand the case for further proceedings may be correct given the circumstances, the statements published by the Court in making its rulings creates troubling ramifications for those who find themselves in positions of fiduciary responsibility.

In this case, the estranged great grandchildren and beneficiaries under a will of an elderly woman, Elsie R. Smith, accused her care givers, who were friends and neighbors and a sister of the decedent, of fraud and undue influence. The great grandchildren had not lived with their great grandmother for years and lived in a different state. As Elsie aged, she needed assistance and turned to her friends Toni and Bruce Shaffer. Elsie was 80 when her husband died and her health declined rapidly. She suffered from diabetes, dementia and other medical problems. The Shaffers provided continuous care for her. Just before her death, the Shaffers and Elsie’s sister took her to an attorney to execute a power of attorney which named Toni Shaffer as her agent and later took her to the same attorney to execute a last will and testament which referenced a contract which was also signed on that day. Under the terms of the contract, the Shaffer’s would provide care for Elsie and be paid $500 per week and would receive $8,000.00 for the prior four months. The agreement provided that the Shaffers would receive these funds from Elsie’s estate rather than during her life time. Additionally, Elsie’s sister and the Shaffers accompanied her to a number of banks where she engaged in various transactions such as making the Shaffers joint account holders and signing “pay on death” form. The overall result was that Elsie’s estate was depleted in excess of $400,000 to the financial benefit of the Shaffers.

The Shaffers filed a demurrer to have the lawsuit against them dismissed because they claimed that Elsie had capacity; knew to whom she wanted to give her estate and that she was competent and personally participated in the banking transactions in question. Moreover, the Shaffers did not use there role as agent and attorney-in-fact under the durable financial power of attorney to prompt any of the banking transactions.

In overturning the trial court’s granting of the Shaffer’s motion, the Supreme Court bypassed the technical argument that the power of attorney was not used to transfer the assets from Elsie’s accounts to the Shaffers. The Court stated that “A confidential relationship springs from any fiduciary relationship, and when such a relationship is found to exist, any transaction to the benefit of the dominant party and the detriment of the other is presumptively fraudulent”. The Court went on to say that a finding of undue influence can be supported by finding that either one party had great weakness of mind while the other obtained a bargain for grossly inadequate consideration or under some other circumstance of suspicion or that a confidential relationship existed at the time of the transaction which benefitted the dominant party.

By using phrases like “some other circumstance or suspicion”, the Court has created more uncertainty and burden on fiduciaries. In sum, whenever assets belonging to a person who relies upon another, such as a trustee, an agent in a power of attorney or generally someone in a fiduciary role, are transferred to the fiduciary, a presumption of fraud exists. This creates an even greater need for clear documentation and evidence of justifying each transaction which may even appear to benefit the trustee, caretaker or other fiduciary.  For more information Email our Office.

Navigating the Online Environment

Every business should also be aware of preventive legal measures to manage brand reputation in the online environment. The Internet and the proliferation of social media platforms have transformed the marketplace. Information and opinions are instantly and widely shared, much of it with very little vetting or concern for the truth or the proprietary rights of others.

A business should monitor online postings to remain aware of what is being said about it and to protect its reputation and intellectual property. It should also be careful and have a well defined policy and practice of what posts are made by the company or its employees.

I previously wrote an article which is also on my website entitled “What’s in a Name? (And Is It Really Yours?)” wherein I briefly advised about protecting intellectual property business assets. Once they are secured by proper registration however, they must be diligently protected.

Although many social media sites prohibit the improper use of trademarks, copyrights and protected material of others, infringing pages and posts still exist which can harm a firm’s reputation. It is important to monitor social media platforms for misuse or unauthorized use of a company’s intellectual property. Abuses should be reported to the service provider to demand their removal. Not taking action if a firm’s trademarks or copyrights are used without authorization can appear as acquiescence.

Additionally, false or misleading statements can further harm a company’s reputation and good will. While there may be times that “taking the highroad” and not responding at all may be the best tactic in a given instance, continual acquiescence without any response may only allow the negative image to grow in the mind of the viewing public. A company should develop a strategic communication policy which includes how it will push its positive agenda and how it will combat ill founded negative commentary. Blustery “cease and desist” letters have their place but not on every occasion. Sometimes a more subtle “push back” which contains the truth is more effective.

While it is not possible to control what may be said about your business, it is equally important to police that which can be controlled, namely, a company’s own practice of using websites and social media. Just as a business should not remain rudderless without a well drafted business and marketing plan, a firm engaging social media should have a clear and accessible media policy which imparts the company’s core values and provides guidance to navigate the possible pitfalls of the social media landscape including the negative consequences which may befall to the firm and its employees when the policy is violated. If the company already has a policy in place, it is a good practice to audit it periodically to ensure it covers the main objectives and serves to protect the needs of the company.

Online posts should not contain false, misleading, defamatory or disparaging statements which could subject a firm to liability. Moreover, posts should be monitored to keep confidential or proprietary information from being shared. Items to be placed on the company webpage or in social media should be reviewed before going out and a select group of individuals within a company should be the only ones conducting such postings. If a third party media company is being employed, the social media policy and the core values and concerns of the company should be clearly conveyed. There should be a responsible individual within the firm to approve of any proposed postings.

The Internet and social media is a good tool to spread the positive image of a company provided there is a clear plan and careful monitoring of the online environment.  For more information Email our Office.


Let the Wedding Bells Ring

I started conducting marriage ceremonies for family members, first for a nephew, then for a niece, then a close family friend whom my wife and I consider an “honorary niece,” and then another nephew. It appears I am not too bad at this “wedding thing.” The weddings have been a lot of fun and meaningful. In a life story, a wedding is one of the “good chapters.” People in love make a commitment to each other and loved ones draw close to celebrate and be part of this deeply significant event. I decided to share this good will with the greater community in general and have recently been added to the Fauquier County, Virginia Circuit Court list of those authorized to perform Civil Marriage Ceremonies. 

Lately, I have come across some misconceptions about the legal aspects of marriage pertaining to my business and estate planning practice. I get questions from those taking risks in business asking me if their spouses will be liable for their business debts. Couples I have seen for estate planning often do not realize that when it comes to important documents, they can not just “sign for” each other.

It is easy to understand why there is so much confusion. When lives are intertwined and intimate, separate legal identities can become blurred. This is especially true when a couple owns most property jointly and as the years go by. One spouse may indeed be liable for the debts of the other but not because they are married. Quite often both partners have signed for a liability, such as a loan or a guarantee, or they may be joint owners of property which is attached by a creditor. Generally, in Virginia, a spouse is not otherwise responsible for the debts of the other. The exception is encompassed in the common law doctrine of necessaries. What is necessary depends on the situation and a judge’s interpretation but critical medical care to save the life of one’s spouse is an example of what would be considered a necessity.

Marriage does not remove the separate legal identity of a person. This is why a durable financial power of attorney is needed so one spouse can act for the other, in the event of disability. While I am on the subject, there also seems to exist a misconception about the use of power of attorney documents. As more “baby boomers” are taking care of aging parents, I have had folks ask me to draft power of attorney documents for their parents to sign. I have also seen power of attorney signed by children with special needs, who are turning eighteen years of age, providing their parents the power to attend to their financial and educational needs. While the impetus behind these documents may be very well intended what often appears to not be given enough deference is one critical fact. A power of attorney, like a last will and testament, requires absolute free will and capacity. In a power of attorney document, one who has legal capacity and free will gives the powers described in the document to another person who is usually called an agent or attorney in fact. Without full capacity and the knowledge of what the document contains along with free will, the power of attorney is not valid and will fail when challenged. Lest I be misunderstood, the power of attorney for an aging parent or a special needs child can be a good idea but free will and capacity is key.

During my wedding we incorporated the three candle ceremony. Each of us was represented by one lit candle which were both used to light the third middle candle representing the two of us together in marriage. Each of us shines our own light and what we share is a matter of choice. The strength of our individual candles make the marriage candle burn even brighter.  For more information Email our Office.

Minding the store “inside and out” Employers can be liable for harassment of employees by third parties such as customers and clients.

In a significant ruling for employers and any business which has employees, the U.S. Court of Appeals for the Fourth Circuit, which covers Virginia, has published precedent which holds that an employer can be liable for creating a racially or sexually hostile work environment, based on the actions of a third party with whom the employer conducts business. In other words, the responsibility an employer owes its employees has expanded from keeping its own staff from exhibiting abusive or oppressive racially or sexually charged behavior towards other employees to responsibility for third party visitors.

In the case of Freeman vs. Dal-Tile Corporation (U.S. Ct. of Appeals 4th Cir. No. 13-1481, April 29, 2014) the behavior of a sales representative from another company to an employee of Dal-Tile was outrageous, frequent, abusive and conducted over a period of time. Additionally, the employee, Lori Freeman, complained to her immediate supervisor and when the supervisor failed to take action she reported an incident of abusive conduct to the Human Resource department of Dal-Tile. Freeman eventually took a medical leave of absence due to stress and then resigned her position. Her lawsuit against Dal-Tile in the U.S. General District Court was dismissed on a motion for summary judgment but the Court of Appeals reversed in part and remanded the case for trial.

While the actions of the third party sales representative were outrageous and the employer should have done more, this published opinion has significantly changed the landscape for employers. In a 2-1 opinion, the Court noted that for the first time it was publishing a negligence standard to an employer’s liability for third party harassment stating that “Similar to the reasoning we set forth for employer liability for co-worker harassment, an employer can not avoid …. “liability for third party harassment by adopting a see no evil, hear no evil strategy”. The Court went on to write that “once an employer has notice of the harassment, it must take prompt remedial action to end the harassment”.

For years now, an employer has had the duty of providing a non-hostile work environment internally, safe from harassment of supervisors and co-workers. An employer should now be aware of harassment by customers, clients and other outside parties visiting the business. When abuse is reported, prompt, remedial action must be taken. This could include banning certain customers or clients from the employer’s place of business. Additionally, many businesses have astutely implemented training programs for staff in regard to sexual harassment. That training should now be expanded to include how to prevent and stop abuse from third party visitors.  For more information Email our Office.

The Business of Nonprofits

(Published in the Piedmont Business Journal column “Parting Shots”,  Summer 2014)

Recently a friend of mine recoiled when I said a nonprofit is a business. This is a common reaction. Certainly a nonprofit is organized to do good beyond providing for the profit of owners, so therefore the recoil may be understandable. Other than no one taking home any profits however, a nonprofit organization is a business or at least should be operated like a good business.

Lately, more nonprofit entities are coming into existence, all with wonderful intentions. Creating the organization and obtaining tax exempt status is only the first step. There is competition for finite resources and public generosity. This is especially true when the economy has slowed. Who would not rather provide time and dollars to a nonprofit with clear goals; financial transparency; a sound conflict of interest policy; good governing documents; a system of tracking and measuring results; and a firm legal foundation for its financial, contractual and employee interactions?

I have had the pleasure of working with organizations with great purpose and well managed direction to achieve their purpose. In the space remaining, I will draw attention to three great local nonprofit organizations and encourage your support.

The Shop With A Cop Program in Fauquier County operated by Fauquier Cops For Children (FCFC) was organized by volunteers from the law enforcement community to support the youth of Fauquier County. First impressions from childhood stay with us and influence our lives. Too many children have first impressions of law and authority which are negative. As children grow into tomorrow’s adults they have choices to make. They can become productive law abiding citizens or they can go the other way at great costs to themselves and society. The Shop With A Cop Program makes positive first impressions on about 80 children every Christmas. Volunteers raise funds through private donations to take children and teens shopping for Christmas. They are then treated to breakfast with fun social activities, a visit with Santa and gift wrapping.

Hoofbeats to Hope is organized by volunteer equestrians whose mission is to raise awareness of the devastating disease of ovarian cancer. For the past two years, this organization has put on a musical freestyle challenge horseshow as well as a silent auction to raise money for the cause. This year the event is on September 20th. Please visit for more information. Ovarian cancer is an under-recognized threat to women’s health. Over 21,000 women will be diagnosed in 2014 and over 14,000 women will die. It is the 5th leading cause of cancer related death in women but the leading cause of death of the all the gynecologic cancers. Presently, most women are diagnosed after the disease has spread which results in lower survival rates.

Casey’s Place has been created to meet the growing and urgent need for residential care in our community for young adults with autism and other developmental disabilities. According to a March 15, 2013 report by The Sage Crossing Foundation, within the next 15 years about 395,000 current U.S. school children diagnosed as autistic will be in need of adult services. The annual cost to governments for their care will increase by 2028 to an estimated $18 billion in current dollars in addition to the cost for adults already in the system today. Such an imposing bill exceeds that of the U.S. Commerce Department and Environmental Protection Agency combined. If a new city were created to house only this new autistic adult population and their care givers, it would be about the size of Louisville, Milwaukee, or Portland (Oregon).

Casey’s Place has been created to provide residential housing and facilities to assist young adults with autism and other developmental disabilities in Fauquier County. It is overwhelming to imagine the cost to our local resources if these needs are not addressed.

The business of nonprofit organizations is serious and important. It is essential to run them well and those who care about the health of their community should care about them.  For more information Email our Office.


When should you review your will (and trust)?

I congratulate clients who see me and complete the estate planning process. Talking about death, taxes and disability is not an activity most people put on their list of “fun things to do.” My clients must think hard about possible sad events in life, such as “who should my children live with if my spouse and I die an untimely death?” or “who do I trust with my life savings?”.

I tell people when they are done that they’ve taken care of a very important task for themselves and their family but unfortunately, I can’t tell them they don’t have to think about it anymore. Events happen and life changes. I generally tell folks that if life proceeds without much incident to review their estate documents at least every three to five years and also to keep an eye on the news. Has Congress or the state legislature passed any law which may affect their estates? Additionally, there are some events that necessitate taking out the documents from the safe place you are keeping them and looking them over. Here are a few.

You move to another state. Although federal tax laws have the greater impact on a person’s estate in most cases, the law which governs estates is the law of a person’s home state. Have your documents looked over by an attorney in the state you move into.

You purchase property in another state. The estates of many Virginians are adequately addressed by what I call a “simple will package,” that consists of a will, power of attorney document, and an advance medical directive with the appointment of a health care agent especially if most property or assets are held jointly or have beneficiary designations. For simple estates, probate in Virginia is not burdensome. I can make no such representations about the probate process or the law of inheritance in other states. You may want to establish a trust to avoid probate in another state.

Your Spouse dies. At this sad event, thinking about your will or trust is, what I would venture to say, not on your mind. When your grief clears a little, however, you have to wake up to the reality that your life has changed dramatically. Your spouse was probably a major part of your estate plan. You are now a single person, perhaps with children.

You divorce. Similar thoughts as the sad event above, but there may be payment obligations stemming from this divorce which also affects your estate plan. You also should examine the effect of the divorce upon your children’s inheritance. Additionally, if you have a child who divorces, examine where your child’s inheritance could go. Is it safe from your child’s obligations?

You remarry. Now you may have a blended family, children from two marriages. You want to make sure your estate documents are still effective under the new circumstances. You may wish to consider a trust for your children or grandchildren in the event of a remarriage. Your children may not be included in your estate should you remarry and predecease your new spouse. Speaking of marriage, if your spouse is a non citizen, they are treated differently under the U.S. tax law. It may be necessary with special tax planning to transfer property to a non citizen spouse during your life or upon your death. Your child marries. If your child or other beneficiary should marry, this may also require changes in your estate. What effect does the new member of the family have on your estate?

You come into a lot of money or you suffer a financial set back. Either way, your financial world is a different place.

You enter into a new business. I first got into estate planning as a business attorney. Succession planning or plans for the unexpected are as important as any other parts of the business plan.What? You don’t have a business plan? You are walking in the jungle my friend without a map or a compass but that is the subject of another article.

You become a parent or grand parent. For parents of minor children, do you have a guardian chosen and named in your will? In your situation a trust may benefit the child or grandchild.

An immediate family member becomes disabled or contracts a disabling disease. Special needs such as disability or illness or other infirmity, will likely require planning to meet that family member’s needs without claims from creditors. Public assistance is also available with special planning.

The death of a significant person in your estate plan. The death of a family member or executor, guardian, or a trustee will also require changes in your estate plan. If you think of your estate plan as a chess board with pieces in place to effectively manage your estate and significant pieces are gone, you will need to add pieces.

Life does happen and I know how busy it gets. Life’s highways become smoother if time is periodically taken for reflection and planning.