June 3

Obtaining Loan Forgiveness through the Payment Protection Program

One of the major provisions of the CARES Act is the Payment Protection Program (PPP), a loan program created to incentivize the retention of employees in small businesses. Under the PPP, small businesses can obtain loans to pay for payroll, mortgage interest, rent, and utilities. The deadline for submitting a PPP loan application is June 30, 2020, but because the loans will be disbursed on a first-come, first-served basis, applicants are encouraged to apply as soon as possible. A major selling point of the PPP is the opportunity to obtain total or partial loan forgiveness. If a business does not meet the criteria for total loan forgiveness, i.e. by using at least 75 percent of the loan funds for payroll expenses, and maintaining at least 75 percent of its workforce and salary, the unforgiven loan amount will be converted into a two-year loan payable at a 1 percent interest rate.

On May 15, 2020, the Small Business Administration (SBA) released the PPP Loan Forgiveness Application. This application must be completed and returned to the same lender that issued the PPP loan. In conjunction with the frequently asked questions previously published by the United States Department of the Treasury, this application provides much-needed guidance for taking advantage of the loan forgiveness benefit.

Though the rules in this area are constantly changing, these are the most important things to keep in mind as you seek PPP loan forgiveness:

  • Determine how much money you have spent on payroll expenses. The amount of loan funds spent on payroll is one of the most important factors in determining how much of a PPP loan can be forgiven. In order to obtain total PPP loan forgiveness, at least 75 percent of the loan funds must have been used to cover payroll expenses. As a result, it is important to review your accounting to ensure that you have allocated your funds primarily to paying wages and salaries.
  • Follow the guidelines for calculating your employees. Properly calculating how many employees you have is a critical portion of the application. If your workforce or the salaries provided to them have been reduced by more than 25 percent, the amount of the loan eligible for loan forgiveness will be decreased. To account for a workforce that includes part-time employees, the PPP Loan Forgiveness Application provides a formula for calculating  “full-time equivalent employees” (FTEE). The FTEE calculation essentially creates a way to count aggregate hours worked by part-time employees toward the calculation of how many full-time employees you have. The PPP Loan Forgiveness Application includes a worksheet for calculating FTEE workers for purposes of completing the required Schedule A.
  • Monitor and adhere to PPP time frames and deadlines. Adhering to stated dates and time frames is critical for obtaining PPP loan forgiveness. The funds issued are intended to cover an eight-week-period that begins when the loan was received. Loan forgiveness is limited to expenses paid during this time frame. However, if a business’s payroll calendar does not completely align with the eight-week period, the PPP will still cover payroll expenses paid outside that period under the Alternative Payroll Covered Period exception. This exception is limited to payroll expenses. All other expenses must be incurred and paid for during the specified eight weeks. Lawmakers have hinted at expanding the eight-week period in order to assist businesses that have faced challenges operating during this time and navigating expenses within this limited time frame. Accordingly, there may be changes to some of these time frames.
  • Document everything. The PPP Loan Forgiveness Application explicitly states that businesses should provide documentation that shows the eligible cash compensation and noncash benefits incurred during the eight-week period. This documentation can include bank account statements, third-party payroll reports, tax forms, payment receipts, canceled checks, or other similar documents. Additionally, businesses must provide documentation to support their average FTEE calculation.

Given the complexity of the calculations and documentation required for PPP loan forgiveness, many small business owners have expressed concern that obtaining funds through the PPP will result in increased scrutiny and audits. The government has created a safe harbor for loans less than $2 million under which the good faith efforts of borrowers and lenders are not subject to additional scrutiny. This means that those who have borrowed less than $2 million will not be required to prove their inability to access other liquidity resources, as is typically required for SBA loans. The SBA considers the uncertainty of the current economic climate sufficient proof, rendering additional audits unwarranted.

With the frequent passage of new legislation and the regular issuance of related guidance, navigating the relief options and requirements can be very complicated. It is important to have a business law or tax professional in your corner. You do not have to sort through this alone. Our office is available to assist you as you complete the required applications to obtain a PPP loan and subsequently seek loan forgiveness.

May 19

Protecting Your Digital Asset – Facebook Legacy Contact

Digital assets are a fast-developing area of concern for many individuals because of the vast array of complications that can arise from them. While determining who has the right to inherit your assets is a critical aspect of Estate Planning, determining who has the right to access online accounts is just as critical. 

What are digital assets?

Digital assets are, in essence, any content that is stored digitally. This can include, but is not limited to, photos, videos, blogs, social media accounts, seller accounts (Amazon, Etsy), etc. Many of the social media platforms we use today are digital assets, and the information we post on our accounts create our content.

Have you ever thought about what will happen to your accounts after you pass away?

If you haven’t, that’s okay. Thinking about who will manage your digital assets once you’re gone isn’t something someone generally has at the top of their to-do list. Nevertheless, it is something people should consider. If you know who or how you would like your assets to be managed, you can leave behind instructions expressing your wishes. In doing this, you can help ensure that your accounts are being looked after and handled the way you would have wanted.

While the steps to handle your digital assets varies from platform to platform, they each have a policy outlining what happens to a member’s account upon their passing. For instance, Facebook has created a way for you, and everyone else, to ensure that your account is looked after once you’re gone—the Facebook Legacy Contact.

Originally, Facebook offered two options for an individual’s account once they passed away: (1) the account would be deleted; or (2) the account would become  “memorialized” in which the individual’s account would become locked and essentially frozen in time. Now, after your account has been memorialized, Facebook allows your account to be managed by a trusted individual (the legacy contact).

So, what exactly does a legacy contact mean for you and your digital asset?

A legacy contact is someone you can select to not only look after your account, but also make decisions regarding your account in the event you are no longer able to. For instance, the legacy contact can write a tribute post to your profile, update your profile picture or cover photo, decide who can also post tributes and even request the removal of your account. However, bear in mind, that your legacy contact will have limited access to your account in the sense that they cannot access any of your private information. They cannot log onto your profile or access your Facebook messages or make friend requests on your behalf.

Regardless, when deciding who you want your legacy contact to be, remember to choose someone you trust. Having access to your account, no matter how great, is still a privilege and is considered a serious responsibility.

How do you set up a legacy contact?

It’s actually quite easy, but remember that the person you choose also needs to have a Facebook account. All you have to do is complete the following steps:

  • – Go to your “Settings”
  • – Under “General Account Settings” go to “Manage Account” and click “Edit”
  • – Type in the contact’s name where it says, “Choose a friend” and press “Add”

After completing the above steps, you will have successfully set up a legacy contact to ensure your account is looked after and will memorialize your life. While it may not be the most important thing you do, it will allow you to ensure your legacy lives on. Even more, it will provide you and your loved ones peace of mind knowing that your online presence is being looked after.

May 12

How to Reopen Your Business After COVID-19

Despite the uncertainty that has accompanied the COVID-19 pandemic and that still lies ahead, one thing remains certain: most businesses will eventually reopen. On April 16, 2020, President Trump set forth guidelines for the reopening of businesses in the United States. Additionally, governors from various states continue to roll back statewide stay-home orders in the hopes of restarting economies that have been crippled by this pandemic.

Business owners navigating this new landscape must figure out how to restart their operations while keeping their staff and customers as healthy as possible. Specific plans of action must be put in place for the safe and effective reopening of businesses. These plans require careful deliberation as well as strong leadership to implement. If your business is starting on the path to economic recovery and attempting to regain some normalcy, the following are some important objectives to keep in mind.

  • Maintain a Hygienic Environment. The nature of this global pandemic necessitates maintaining a clean and healthy environment. For brick-and-mortar businesses, this may mean hiring cleaners for the physical premises more often and requiring more stringent disinfecting practices. In addition to increased cleanings, high-traffic common areas should be closed off to the extent possible in order to comply with social distancing measures. For employees who cannot work from home, masks and gloves should be required and provided.
  • Maximize Technology.  During this period of shut down, many businesses have relied on technology to stay connected with their workforce. The technology and skills used should be tools that a business maintains as the pandemic runs its course. For example, teleworking strategies should be extended for employees whose physical presence is not required or who are considered part of the more vulnerable population. As you continue to discover and implement ways to connect, you also reduce your business’s chance of liability pertaining to the spread of COVID-19.
  • Respond Appropriately to Protect Employees and Customers. As a business owner, you may be liable for not taking action if an employee exhibits COVID-19 symptoms. For instance, the family member of a deceased Walmart employee has brought a wrongful death lawsuit against the company, alleging that managers failed to respond appropriately when the employee exhibited symptoms of the virus. As a result, it is important that your business employs proper methods to protect your employees and customers. Social distancing practices should also be implemented. What type of liability business owners may face if employees or customers contract the virus due to their interaction with a company remains to be seen.
  • Monitor the Legal and Medical State of Affairs Closely. The current situation is volatile, and requirements and recommendations seem to change from day to day. As a business owner, you must closely watch how this pandemic is influencing your local community. Additionally, you can find helpful guidance regarding best practices during the pandemic by visiting the websites of the Occupational Safety and Health Administration, Centers for Disease Control and Prevention, and World Health Organization. By doing so, you position yourself to take swift, deliberate action that could save lives and money.

Next Steps

The impact of COVID-19 will continue to be felt over time, and will likely come with a series of challenges. However, you do not have to face them alone. Our team is dedicated to providing care and assistance. Schedule a virtual meeting with our team to discuss how we can assist you.

May 8

Four Reasons Your Will May Be Contested in Court

Having an updated Last Will and Testament is more important than ever, especially now. However, a Will that is poorly created or not frequently updated can be vulnerable to contestation. What is contestation? It is the formal objection to a Will’s (or Trust’s) validity because it either: a) doesn’t reflect the wishes of the person who created the Will, or b) because the Will does not meet legal standards.

Will contests should be avoided at all costs. Not only can a contest derail your final wishes, but it can also rapidly deplete your estate and wreak emotional havoc on the family members left behind. Fear not. With proper planning, you can prevent that from happening.

Who can contest a Will?

Will contests are usually brought on by individuals (could be family members, close friends, or business partners) who believe they have been wrongly disinherited. However, not all of your family or friends have the ability to contest your Will in court. They must have legal “standing” to file a lawsuit. Standing means that a person involved in a lawsuit will be personally affected by the outcome of the case.

The following people have the ability to contest a Will in probate court:

  • Current beneficiaries that are named in the Will
  • Previous beneficiaries who were disinherited but were included in a previous Will
  • – An individual not named in the Will, but who would be eligible to inherit property based on a state’s intestacy laws (typically a biological child or spouse)

If a Will is successfully contested, then the court will declare the Will invalid and “throw it out.” If there is a previous Will, then the court will abide by those terms. If there are no other Estate Planning documents, the state’s laws of intestacy will decide who inherits what property. As you might expect, this can be a disastrous outcome for your intended beneficiaries.

Planning tip: Depending on your circumstances and goals, a Trust can have superior benefits to a Will; like offering better asset protection and enhanced privacy by keeping your personal information out of probate (a public process all Wills must go through). If you’d like to learn more about the differences between Trusts and Will, and see what is a better fit for you, call our office at (203) 446-4725 or email us at Admin@WileyLegal.com.

What Are the Legal Grounds for Contesting a Will?

If a person does have the legal standing to challenge your Will, they must prove that the Will is invalid due to one of the four reasons below:

  • The Will is incomplete or faulty. Each state has specific laws that dictate how a Will or Trust must be signed in order for it to be legally valid. A Will that has not followed these rules—signed without the proper number of witnesses, signatures missing, or omitting important text—could be contested.
  • Lack of mental capacity. Having the capacity to make a Will means that the person understands (a) their assets, (b) their family relationships, and (c) the legal effect of signing a Will. Each state has laws that set the threshold that must be overcome to prove that a person lacked sufficient mental capacity to sign a Will.
  • The person making the Will was unduly influenced into signing it. As people age and become weaker both physically and mentally, others may exert influence over decisions, including how to plan their estate. Undue influence can be exerted on the young, and the not so young. Undue influence is more than just nagging or verbal threats. It must be so extreme that it causes you to give in and change your Estate Plan to favor the undue influencer.
  • The Will was procured by fraud. A Will or Trust that is signed by someone who thinks they are signing some other type of document or a document with different provisions is one that is procured by fraud.

How to Avoid a Will Contest

Considering the time and expense, Will contests are something you’ll want to avoid at all costs. Not only would it jeopardize your final wishes, but it also causes unnecessary and painful conflict among your loved ones during an already emotionally trying time.

To avoid these disastrous and painful scenarios, consider the following:

  • Do not “do it yourself”! Even the smallest mistake can leave your wishes vulnerable to being contested by an unhappy relative or business partner. Only an experienced Estate Planning attorney will be able to help you create and maintain a plan that will discourage lawsuits.
  • Discuss your wishes with your family. It’s important to discuss your wishes with your family. You don’t have to discuss all of the intimate details of your Estate Plan, but letting beneficiaries know of your wishes and setting expectations for your agents can help avoid future will contests.
  • Don’t just disinherit wayward child(ren). Instead of completely disinheriting a beneficiary who may squander their inheritance or use it against your wishes, you can hold their inheritance in a lifetime discretionary trust, which would be overseen by a trusted individual or third party. Your beneficiary would then receive distributions over time instead of outright cash in a lump sum.
  • Keep your Will up to date. Life changes—people are born and die, property is acquired, marriages happen, and your wishes may change. Your Will is only effective when it reflects these changing circumstances. Having an updated Will/Estate Plan that encompasses your current goals will be better at discouraging any future challenges.

The Bottom Line on Will Contests

Will and Trust contests are on the rise. Putting together an Estate Plan that is designed to head off challenges will go a long way to giving you and your loved ones peace of mind.

While it is easy to assume that a Will or Trust signed in an attorney’s office is valid, this is not always the case. Attorneys who do not specialize in Estate Planning may be unfamiliar with the formalities required to make a Will or Trust legally valid in their state. Therefore, it is important for you to work with an attorney who is familiar with the Estate Planning laws of your state. Ensuring that an Estate Plan is protected against these legal grounds is particularly important if you wish to disinherit or favor one part of your family.

Our office can help you create and maintain an Estate Plan that will be difficult to overturn. Give us a call today.

[Alternative blog post title: How to Protect Your Will From Unhappy Relatives)

May 5

How To Create a Valid Will in Connecticut

In light of recent events, many Americans are becoming aware of the importance of creating or updating their Estate Planning documents. With the extension of some states’ stay in place orders, it may be tempting to create your own documents all on your own. Whether you are considering writing your own Will or using an online “do it yourself” (DIY) document creator, there are many reasons why this is one project you shouldn’t undertake without the help of a professional.

What is a DIY Estate Plan?

A DIY Estate Plan is something that you “do yourself,” without the advice of an Estate Planning attorney. Someone who DIYs their own legal documents could be:

  • – Handwriting a “Will” themselves;
  • – Downloading a “fill in the blank” document that they got on the internet; or
  • – Using an online document generator that asks pre-set questions.

Below are five common mistakes associated with DIY Estate Plans.

1.    DIY Estate Plans may not conform to the applicable law

Forms that can be found on the internet may claim to conform to your state’s law, but this may not always be the case. The laws that apply to Estate Planning are determined by each state—and there can be wide variations in the law from state to state. In addition, if you own property in another state or country, the laws in those jurisdictions may differ significantly, and your DIY Estate Plan may not adequately account for them.

2.    A DIY Estate Plan could contain inaccurate, incomplete, or contradictory information

If you attempt to create a Will using an online questionnaire, there is the possibility that you may select the wrong option or leave out important information that could prevent your Will from accomplishing your goals. Potential problems could be made even worse when do-it-yourself services allow users to insert additional information not addressed by the service’s preset questionnaire: the information added by a DIYer could contradict other parts of the automated Will.

3.    Your DIY Estate Plan may not account for changing life circumstances

For example, if you create a Will in which you leave everything to your two children, what happens if one of those children dies before you? Will that child’s share go entirely to his or her sibling—or will it go to the child’s offspring? What if one of your children accumulates a lot of debt? Is it okay with you if the money or property the indebted child inherits is vulnerable to claims of the child’s creditors? What if your will states your daughter will receive the family home as her only inheritance, but it is sold shortly before you die? Will she inherit nothing? As opposed to a computer program, an experienced Estate Planning attorney will help you think through the potential changes and contingencies that could have an impact on your Estate Plan– and help you design a plan that prevents unintended results that could frustrate your Estate Planning goals.

4.    Mistakes in executing the plan can be easily made

Under the law, there are certain requirements that must be met for Wills and other Estate Planning documents to be legally valid. For example, a Will typically requires the signatures of two witnesses, but state law differs regarding what is necessary for a Will to be validly witnessed. Some states require not only that the Will be signed by the Will-maker and the witnesses, but also that they all sign the Will in each other’s presence. In other states, witnesses are not required to be in the same room when the Will-maker signs the Will, and they can even sign it later if the Will-maker tells them his or her signature is valid. 

Similarly, for a valid Power of Attorney, some states require only the signature of the principal (the person who is granting the Power of Attorney) to be notarized, but some states require the signatures of both the principal and the agent (the person who will act on behalf of the principal) to be notarized. In other states, one or more witnesses are required—and these requirements may also differ depending upon the type of Power of Attorney (financial vs. medical) you are trying to execute. If you seek the help of an Estate Planning attorney, you can rest assured that all of the “i’s” are dotted and the “t’s” are crossed, and that your intentions will not be defeated because of mistakes made during the execution of your documents.

5.    Assets may be left out of your Estate Plan

Many people do not realize that a Trust is frequently a better Estate Planning tool than a Will because it avoids expensive, time-consuming, and public court proceedings that would otherwise be necessary to transfer your money and property to your heirs after you pass away. Even if you have created a DIY Trust, if you do not “fund it” (i.e., transfer title of your money and property into the name of the Trust) it will be ineffective and your loved ones will still have to endure the probate process to finish what you started.

Further, if you do initially transfer the title of all your assets to the Trust, it is likely you Will acquire additional property or financial accounts over the years that must go through probate if the titles are not transferred to the Trust. Regular meetings with an Estate Planning attorney can help ensure that your plan accomplishes your goals and that your grieving family members are not left with major headaches after you die.

We Can Help

A DIY Estate Plan can lead to a false sense of security because it may not achieve what you think it does. If your DIY will is not valid, your property and money will go to heirs specified by state law—who may not be the people you would have chosen. An unfunded Trust will be ineffective. Banks may not accept a generic Power of Attorney you found on the internet. Laws affecting your Estate Plan may change.

These are just some of the mistakes or unforeseen issues that could cost your family dearly. An experienced Estate Planning attorney is aware of any trends in the law that could dramatically affect your Estate Plan and has the expertise needed to help you design and create a comprehensive plan.

Call an Estate Planning attorney today so that you and your family can have the peace of mind that comes from knowing you have an Estate Plan that accomplishes your goals and will avoid unnecessary attorneys’ fees, headaches, or conflict for your grieving family when you pass away.

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