Posted by: Robin Gronsky | May 7, 2013

I’ve Moved My Blog

Hi everyone,

I will not be posting on this blog for the foreseeable future.  All of my new blog posts can be found on my website at http://www.gronskylaw.com/gronskylaw-blog.html.  I hope you will check out my new posts at my website and see if the information I provide there can be helpful to you.

Thanks for reading,

 

Robin Gronsky

 

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Posted by: Robin Gronsky | April 5, 2013

Selling or Buying a Home That Has Lead Paint

My house was built in 1958.  Most houses that were built before 1978 were painted with paint that contained lead.  Under federal law, if you are selling your home, you must disclose whether you know if your home has lead paint, either on the inside or on the exterior.

If your house exterior has lead paint on it, you need a lead-certified painter who will take special precautions when painting.  My house has lead in the paint around the windows, a fact that I was not aware of when I first hired my painter.  When you are painting the exterior of your home, the painter will scrape off the old paint before new paint will be put on.  However, a neighbor alerted my town’s health department and they came running to my house and asked my painter to test for lead.  That’s how I know where the lead is.  I did not have a lead-certified painter and he could not continue with the job of painting of my house.  I had to hire a new painter who did everything necessary to comply with the law and I will disclose this information when I sell my house in the future.

If you find that you have lead paint anywhere in your home, you must disclose it to any potential buyers.  Most of my sellers have no idea whether they have lead paint in their homes and that is what they disclose.  If you are a buyer, you have the right to inspect the home you want to buy for lead in the paint.  I have never had a buyer client actually test for lead paint but if you are at all concerned (and especially if you have young children), it might be worth it to spend a few hundred dollars for peace of mind.

Talk to your real estate attorney whether you are selling or buying a home to discuss your lead paint issues.  Even if there is lead paint present, there are ways to deal with it.

I love working with start-up business clients.  They are excited about opening up their new businesses and their enthusiasm is always fun to watch.

However, when I go over their plans (as part of their start-up package), I notice that usually their budget for expenses does not include many expenses that I know they will need to spend money on.

You will need to have cash in the bank to tide you over for at least the first 6 months of your first year in business.  Also assume that you need more money in your budget for expenses.  When I review a start-up budget, I frequently see no money for business insurance, bookkeeping or accountant fees, lawyer fees, and marketing costs.  In order to get your business started on the right foot, you need to pay certain professionals who will show you a roadmap to profitability.

In terms of timing, getting that first client can take much longer than you have planned.  So, expect that there will be no income coming in while expenses are mounting.  Do not panic.  It is an unusual business that opens its doors with a big client or a flood of customers.

It will take a few years of being in business to accurately budget your income and expenses.  Be somewhat conservative on the income and over-estimate your expenses and you should be in better shape to start your first year in business.

Posted by: Robin Gronsky | April 2, 2013

Estate Planning for Singles

Posted by: Robin Gronsky | March 28, 2013

Spring Cleaning for Your Business (Part II)

I hope you read my previous blog post where I outlined for you what your business spring cleaning should start with.  Once you are past the first steps of your spring cleaning, you should continue with a crackdown on getting rid of business practices that didn’t work for you in the past year.

Review your marketing.  Was it done on a consistent basis?  Did you track your results to know what was working and what was a waste of your money?  Did you try anything new or are you using the same methods you’ve used since you opened for business?  Make a decision to throw out what didn’t work and do more of whatever did work.  If you are not sure, spend some money finding a good marketing coach.  If you are thinking that you can’t spend the money, let me put it to you this way:  if you spend $2,500 and you get $10,000 worth of new business, can you now find the money?

Schedule a meeting with your accountant for after tax season.  This meeting will not be just to go over your taxes for the next year.  You want an accountant who can help you look at your business and suggest strategies for making and keeping more money.  These kinds of accountants are out there and you should be regularly consulting with one of them.  Call me if you need a referral.

Take a look at your employees and independent contractors.  Who is working out well and who is mediocre?  There is a lot of good talent out there looking to move on to a better opportunity.  If you have employees that aren’t top notch, fire them (unless they have a contract with you and their performance does not meet the definition of default).  Same with independent contractors.  When their contract comes to an end, do not renew their services.  Look for someone better.

Also, while you are thinking about employees, check your employee handbook (you do have one, don’t you?).  When was the last time it was updated?  Have you instituted new rules and procedures that need to be added to your handbook?  Call your lawyer now and schedule an appointment for an updated employee handbook.  Having everything in writing protects you from various expensive lawsuits that your employees can start.

Finally, track your actual performance from the projections that you made a year ago.  If you are not doing as well as you had hoped, zero in on what area of business did not work well.  If you can’t figure out where you are coming up short, consult with a business strategist.  Again, would you spend some money on advice if you thought it could bring in twice as much as it cost? I would do that every day of the week.

Most business owners spend most of their days putting out fires and wearing all the hats in their business.  It will be worth it for you to take the time, at least once a year, to clean out what isn’t working and think of how to do things differently to make more money.  If you don’t change things, nothing in your business will change.

Posted by: Robin Gronsky | March 27, 2013

Spring Cleaning for Your Business (Part I)

It’s spring and lots of us are scrubbing our houses and cleaning out our garages from top to bottom in that annual ritual known as spring cleaning.  Start a new habit with your paperwork and do an annual spring cleaning for your business.

First step is to take care of your legal requirements.  Are you a corporation or a limited liability company (LLC) in New Jersey?  If so, you need to file an annual report and pay franchise taxes.  Does your county have any annual filings or are you due for a renewal of your Assumed Business Name filing (also known as a DBA filing)?

Second step, were your corporate stock certificates properly issued?  Are there any changes that need to be recorded in your stock ledger?  If you are an LLC, your operating agreement (you do have one, don’t you?) should have an Exhibit to the agreement which lists who is a member and the percentage ownership each member has.  Is your Exhibit up-to-date?

OK, the third step for corporations is checking whether you held your annual meetings in the past 12 months.  You should have written minutes of the annual shareholders’ meeting, even if it was you sitting in a park with a cup of coffee, mentally voting on you as the sole director.  Immediately after your annual shareholders’ meeting you should have held your annual directors’ meeting to elect officers.  You should have written minutes of that meeting, as well.

If you have more than one owner in your business, you should have a buy-sell agreement.  This type of agreement describes what will happen if one of the owners wants to leave voluntarily, if the other owners want to kick another owner out, if one member becomes disabled or dies.  If you have a buy-sell agreement, does the business have enough money and life insurance to buy out an owner?  If your buy-sell agreement is more than 1 year old, is the way you value the business (if you need to buy out one owner) still a valid method?

Tune in for my next installment of what you should be doing to have a  spring cleaning for your business.

Posted by: Robin Gronsky | March 26, 2013

Annual Spring Cleaning For Your Estate Planning

It’s spring and lots of us are scrubbing our houses from top to bottom in that annual ritual known as spring cleaning.  Start a new habit with your paperwork and do an annual spring cleaning for your estate planning.

First step is to locate your estate planning documents.  Are they with your lawyer (that’s safe but do your loved ones know who your lawyer is), in your safe deposit box at the bank (not a great spot if your loved ones don’t normally have access to the box), a drawer in your desk or filing cabinet (a better choice) or in a fireproof box somewhere in your house (I think this is the best choice)?  If you can’t find your estate planning documents, you may as well start over and create new ones.  You really don’t have an estate plan if your loved ones can’t produce it for the courts.

OK, suppose you found your documents.  Are all of them there?  Do you have a Will, a Durable Power of Attorney, and a Health Care Directive (also may be known as a Health Care Proxy or a Living Will)?  If you don’t have all of these documents you need to get the ones drafted and signed that you don’t have right now.

Next step – read your documents.  Are the persons you named as your executor or your agent for financial or medical affairs the persons you still want to act in those roles?  If so, you’re on to the next step.  If not (maybe one of these people is not married or close to you anymore), you need a codicil or to re-do these documents.

If you have minor children, re-read who you have named as the guardians of your children.  Would you still want them to act as the guardian?  Do you need to re-write that section of your Will?

Now take a look at your Health Care Directive or Living Will.  Are your instructions to your health care agent still what you would want done until different medical scenarios?  If you have changed your mind, you may need to either change this document or talk to your health care proxy about how you would want them to act differently on your behalf.

Next step – check all of the accounts and documents that have beneficiary clauses.  These include 401(K)s, IRAs, life insurance policies, bank accounts, maybe brokerage accounts.  Do you still want the same beneficiaries (this is very important if you got married or divorced since you last looked at these accounts)?  If you need to change anything, call the bank, brokerage or life insurance company involved and get the proper paperwork.  Complete the necessary paperwork and send it back to the company.  Don’t let it sit on your desk for weeks or months.

Lastly, you should have a complete list of your doctors, accountant, attorney, broker, life insurance agent, etc. and their contact information, in case an emergency requires your loved ones to need to know who to call.  You should also create a list of your online accounts – bank and brokerage accounts for which you don’t get a paper statement anymore, and your Facebook, Pinterest,  Instagram and other social media accounts.  Write down your user names and current passwords.

The first time you do an annual spring cleaning of your estate planning documents, it will take a few hours.  As you repeat this chore every year, you will find it will take maybe a half hour, tops.  It will save your loved ones hours of searching and maybe never finding things you wanted them to have.  Is that worth your time?  I think so, don’t you?

 

 

 

Posted by: Robin Gronsky | March 22, 2013

Real Estate Issues For Blended Famillies

There are lots of couples who have been previously married, with children, who want to buy a house with their new significant other.  When you are part of a couple who has children from a previous marriage, your buying a home together raises issues that you may not have thought of.

If you and your honey each own a house, should you move into one house and sell the other?  Should you move into one house and rent out the other?  Should you sell both and buy a new house for your new family?

What happens if one of you owns the house you both live in and you are not put on the title?  Can you get kicked out of what you consider to be your home after your significant other dies?  Does the answer change if you are married?

How do you title the real estate the two of you own if you each want your kids to inherit the house?  Do you have a claim to your honey’s house if you pay part of the mortgage and repair expenses?

There are many stories out there of couples who did not consult a lawyer about title issues or money contribution questions before buying real estate together.  If you don’t want the answer to your real estate question to be a nightmare for you or your children, talk to a real estate lawyer before you go house-hunting together.  Know what your options are and talk it out with everyone involved so you get the solution that works for everyone.

Posted by: Robin Gronsky | March 21, 2013

Why Your Small Business Should Use Employment Agreements

If your business has people working for you, you should have a written agreement with them to define their responsibilities, their wages, and their benefits.  You can have one form of employment agreement for each employee or you can tailor the agreement to each employee’s personal situation.

If you don’t think your business needs a huge employment agreement with each employee, then use a more limited contract.  Think of whether each employee is exposed to company secrets or company customer lists or anything else that you don’t want your competitors to know.  If your employees have access to this information, you want them to sign a confidentiality agreement which can be part of a more comprehensive employment contract or a separate agreement.

If an employee is particularly valuable to you, you may not want them working for your competition.  To ensure that they cannot leave you with your company secrets and work for your competitors, you can have them sign a non-compete agreement.  These agreements must be carefully drawn or a judge will not allow you to enforce their terms.  See a lawyer, this is not a do-it-yourself project.

Does your business involve creating new things or do you welcome your employees doing things differently?  Unless your employment agreement explicitly states who owns your employees’ inventions, new processes, new business ideas, your employees will take their ideas and make money from them at your expense.  A paragraph in your employment agreement that states that any invention or new idea that an employee has belongs to your business gives you protection.

You may also be concerned that your employee not take on a second job that will so exhaust him/her that he/she will not put in his/her best efforts at your business.  To prevent your employees from moonlighting, you can add a clause in your employment agreement that they agree to not work for any other business while they work for you.  You will probably need to pay them very well for them to give up the right to earn extra money on what is normally their own time but it’s all a matter of negotiation.

You will also want to define the conditions under which an employee can be terminated.  It could be for cause or your employee could be an “at will” employee who can be fired for no reason.  As long as your employment agreement defines the conditions under which an employee can be fired, you are protected.

A written contract is not necessary for each employee but the more necessary an employee is to your business, the more your business needs a written employment contract.   Consult with your business lawyer to have one drafted for you that includes the protections that your business needs.  It is always cheaper to pay for a contract than to have an employee steal your company secrets, work for your competition or have a question about whether this employee can be legally terminated.

Posted by: Robin Gronsky | March 19, 2013

Keep Your Estate Planning Documents Up-to-Date

Our lives change, our minds change, the law changes.  I know you spent good money to get your estate planning documents done and you thought you were finished.  For many of you, that will hold true for several years, maybe even decades.

But if you change your mind about your executor, your power of attorney agent, who you want to give your money to, you get divorced or remarry, whether your son or daughter can be trusted not to squander his/her inheritance or you make so much money that you decide you want to do some estate tax planning so the government doesn’t get a penny of it, you should consult with your estate planning attorney again to get the changes made.

It could be that the changes are minor so you can add a codicil rather than get a whole new will done.  But don’t guess whether you need new documents or check it out on the internet – call your lawyer and let him/her give you the correct answers.

 

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