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Wednesday
Nov302016

Estate Planning NOW: Preparing for a New Government

Gift Tax, Trusts & Estate Planning Attorney

by Kira S. Masteller
818.907.3244

It’s impossible to predict what any future president will do, or what Congress will approve. But in light of comments president-elect Donald J. Trump made on the campaign trail, and given that Grand Old Party members will have a majority in both houses of Congress – certain factors in estate and succession planning should be considered.

Estate Planning for Tax Reform

Trump has promised what he calls A Pro-Growth Tax Plan, designed to reduce taxes for many groups of taxpayers.

In broad strokes, the president-elect has promised lower taxes for businesses and low to middle-income families with children. The plan also promises to close special interest loopholes, repeal estate taxes (which generates a hefty 40 percent in federal income from single taxpayer estates worth $5.45M or more; $10.9M for married couples), and reduce tax brackets down to three from seven, according to Motley Fool.

If we combine Trump's and the GOP's 2015 tax reformation plans, the changes could include the broader goals above, and: 

  • Increase standard deduction amounts from $6.3K to $12K for single tax payers; and $12.6K to $24K for married couples;

  • Eliminate personal exemptions;

  • Cap itemized deductions at $100K (single), $200K (married), which could put a damper on reaping the current benefits of charitable contributions (more information on that below);

  • Repeal AMT (alternative minimum tax);

  • Repeal NIIT (net investment income tax); and

  • Repeal generation-skipping transfer taxes.

Mortgage interest deductions and charitable contribution deductions would remain under the GOP plan, but changes may be imminent.

Estate Planning for a Trump Presidency

We looked at the broader strokes above. But here are some considerations to make for the immediate future.

Trump Tax ReformCharitable Contributions: Make them now, just in case. The GOP opted to keep them, but Trump wants to "disallow" them. Currently, you can deduct up to 50 percent of your adjusted gross income when giving cash – and anything above 50 percent can be carried forward over the next five years.

Death Tax: If the federal estate tax is repealed, those with significant assets may not need to reduce the size of their estates.

Capital Gains: On the other hand, the president-elect's tax plan would levy fees on capital gains at death if they are worth more than $5M (single) or $10M (married).

Business Planning: Now may not be the time to sell business interests. Currently, income generated from those sales is taxed at over 43 percent. But if the Trump tax reformations go into effect, the tax rate could come down to 33 percent.

Again, none of us can predict what will happen should tax reforms be enacted under a Trump presidency. The main things to remember now are that charitable contributions may be worth making in 2016, and that it may be best to hold off on selling businesses for the moment. 

 

Kira S. Masteller is a Shareholder in our Trusts & Estate Planning Practice Group. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Nov232016

Employers: Texas District Court Grants Nationwide Injunction Against DOL's Final Rule

Lawyer for EmployersEmployment Defense

by Tal Burnovski Yeyni

818-907-3224

 

In May we reported the Federal Department of Labor issued its Final Rule regarding the minimum salary level required for the exemption of executive, administrative and professional (EAP) employees.  The final rule was designed to raise the minimum salary required for the exemption from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). 

In an 11th hour ruling,  U.S. District Court Judge Amos L. Mazzant granted a motion for preliminary injunction filed by 21 States that challenged the Minimum Salary Rule and imposed a nationwide injunction against the implementation of the Final Rule that was scheduled to take effect on December 1, 2016.  

In a 20-page decision Judge Mazzant opined the DOL lacked authority to define and delimit a minimum salary threshold for exemption. Per Judge Mazzant, Congress intended for the EAP exemption in the Fair Labor Standards Act (FLSA) to depend on employee’s duties rather than on the employee’s salary.  Accordingly, the DOL’s authority was limited to define and establish the types of duties that might qualify an employee for the exemption:

While this explicit delegation would give the [DOL] significant leeway to establish the types of duties that might qualify an employee for the exemption, nothing in the EAP exemption indicates that Congress intended the Department to define and delimit with respect to a minimum salary level. 

Further, Judge Mazzant held that with the Final Rule, the DOL exceeded its delegated authority and ignored Congress’s intent by raising the minimum salary level “such that it supplants the duties test” and creates a “de facto salary-only test”.

Following the Court’s analysis regarding the DOL’s authority to promulgate the Final Rule and the likelihood of the irreparable harm and balance of hardship between the parties’ the Court decided that a nationwide injunction was proper in this case.

Implications for California Employers

As the Final Rule is currently on hold, California employers are required to comply with the California threshold for EAP exemption, which is at least two times the state’s minimum wage for full time employment (currently, $3,466.67 monthly; $41,600 annually).  Note that with the gradual raise in the State’s minimum wage starting on January 1, 2017, the minimum threshold for exemption will go up as well.

Finally, employers should be advised that the salary threshold test is merely one component of a valid exempt status. To be properly classified as an exempt employee an employee must: 

  • Primarily engage in “exempt duties” and;
  • Earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment.  

While some commentators speculate the DOL will appeal yesterday’s ruling, it still remains to be seen whether the feds will challenge Judge Mazzant’s decision. 

 

Tal Burnovski Yeyni is an attorney in our Employment Practice Group

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Monday
Nov142016

Half Baked: The Brave New World of Branding Weed

 

Franchise Agreement LawyerIntellectual Property Attorney

by Tal Grinblat

(818) 907-3284

 

In last week’s election, California voters passed Prop 64, which means recreational marijuana can be sold and used by persons over 21 within the state.

Trademark Protections PotBut don’t get excited about the gold rush just yet. Recreational users won’t be able to buy from medical dispensaries without a prescription; and cultivators won’t be able to sell marijuana until they get licensed. Barring the unforeseen, we’re looking at January 2018 for the first legal sales transactions of recreational marijuana.

Still, entrepreneurs are examining the legal concerns related to the recreational marijuana trade now; and some have been setting up for voter approval long before the November 8th vote.

Rapper Snoop Dogg for example, is already running into problems, including an opposition in the Trademark Trial and Appeal Board over his application for Leafs by Snoop. He filed the application in November 2015 with the U.S. Trademark and Patent Office (USTPO).

Leafs by Snoop is a company whose intended mark is a 7-pointed green leaf. The mark is intended to be used on cigarette lighters, clothing and hemp products, and is already being used on marijuana products in Colorado.

The company opposing the application is Maple Leaf Sports & Entertainment (MLSE), parent company of the National Hockey League’s Toronto Maple Leafs. MLSE filed an opposition in the U.S. Trademark Office on November 7, 2016 claiming there is a risk customers will confuse Snoop’s mark with their own. Below is each company’s trademark for comparison. See: Trademark Trial & Appeal Board Opposition.

California Pot Approval Up in Smoke?

No matter what individual states decide regarding recreational or medical marijuana use, cannabis is still a Schedule I illegal drug in the eyes of the Feds. Since the USPTO is a federal agency, they refuse registering marks that identify illegal products and services. The agency generally assumes an applicant’s use of a mark will be for legal goods and services, unless:

(1) a violation of federal law is indicated by the application record or other evidence, such as when a court or a federal agency responsible for overseeing activity in which the applicant is involved, and which activity is relevant to its application, has issued a finding of noncompliance under the relevant statute or regulation, or

(2) when the applicant's application-identifies goods or services that are a per se violation of a federal law." In re Brown, 119 USPQ2d at 1351; see also Kellogg Co. v. New Generation Foods Inc., 6 USPQ2d 2045, 2047 (TTAB 1988).

So what are the ways companies may obtain trademark rights in marijuana related products?

from MLSE Notice of Opposition

Intellectual Property Protections for Pot Products

Entrepreneurs who want to cash in on cannabis have a few options for now.

1. The best way to protect a brand nationally, is through trademark registration at the USPTO. Though it is currently not possible to trademark product names directly related to marijuana, it is possible to gain approval if you follow the example of the Dogg:

Sell products besides marijuana – parsley, sage, rosemary & thyme, for example, and come up with a catchy name and logo that encompasses everything. While a company would not get protection specifically for marijuana products, it could get protection for tangential legal products it sells.

2. Register the trademark in states where marijuana sales are legal. In California, the Secretary of State’s Trademark Unit handles trademark registrations.

3. Use the mark. To obtain common law trademark rights, a retailer need only use their name, such as through sales in an online store (no, marijuana can’t be sold online, but other products can be), on packaging, and in advertising. No formal registration is required to obtain common law rights. Unfortunately, common law rights are limited, in that trademark rights are only obtained in geographies where the retailer has actually used the mark. 

Accordingly, a cannabis retailer in California may have a difficult time enforcing its trademark rights outside the state, should a retailer in another state decide to use the same or similar branding.

None of these three protection methods are fool-proof. The first is the best method as it provides nationwide rights, but barring that, a combination of options two and three will also afford some protections and are better than nothing. As for Snoop Dogg…we’ll just have to wait for the smoke to clear to see if Leafs by Snoop gets crushed by the opposition.

Tal Grinblat is an Intellectual Property Attorney and Shareholder at our firm. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Monday
Oct242016

Employer Guide for Election Season

 

by Nicole Kamm & Tal Burnovski Yeyni

 

The 2016 presidential election season has provided fodder for often impassioned conversations among friends, family and co-workers.  While we may not always agree with all points of view, it is important to remember that conduct and discussion tolerated among friends or family may not be suitable in the workplace.

Employers should be mindful of the principal “dos and don’ts” when addressing political speech in the workplace

  • Do not encourage or discipline employees for their political activities.  California law prohibits employers from adopting or enforcing any policy that tends to control or direct employees’ political activities or affiliations. Employers further cannot coerce or influence employees to follow, or refrain from following, any particular line of political activity by threatening a loss of employment. Labor Code §§ 1101-1102.  

  • If heated discussions are an issue, remind employees about what constitutes acceptable conduct in the workplace.  Remind employees that all perspectives are entitled to respect, and that use of derogatory or abusive language will not be tolerated in a workplace setting.   

  • Comply with “time off to vote” rules in California. California law allows employees to take paid time off to vote (up to two hours) if employees do not have sufficient time outside of work hours to do so. Note, employees are allowed to take more than two hours to vote, but only two hours need be paid. 

Generally, time off to vote can be restricted to the beginning or end of an employee’s shift, whichever allows the most free time for voting and the least time off from the regular working shift (unless employee and employer agree otherwise). Finally, if employees know, or have reason to believe that time off to vote will be necessary, they are required to give notice to the employer at least two working days prior to the election.   

  • Post “time off to vote” notices. If not already in place (many pre-printed workplace postings reference time off to vote), employers must post an employee notice at least 10 days before a state-wide election – either in the workplace or where it can easily be seen by employees as they enter or exit their place of work. You can find a list of upcoming elections here, and sample notices here.   

 

Nicole Kamm and Tal Burnovski Yeyni are Employment Defense attorneys

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

Thursday
Oct132016

California Ballot 2016: Los Angeles County Measures A & M

Litigation AttorneyEnvironmental Litigation

 

Stephen T. Holzer

818.907.3299

 

This is the fourth and final blog in our 2016 California Election Guide Series – the first three providing brief synopses of the 17 state-wide ballot initiatives residents will see in November. In this final segment, we will cover the two Los Angeles County measures.  (For those of you looking for information regarding the city measures, go here.)

Measure A: Safe, Clean Neighborhood Parks 

This is also known as the Safe, Clean Neighborhood Parks, Open Space, Beaches, Rivers Protection, and Water Conservation Measure, which incorporates an annual 1.5 cent tax per square foot of building area on property owners. That works out to be less than $23 per year for an owner of a 1,500 square foot home.

In general, it continues funding for parks, open spaces and water resources. But more specifically, Measure A aims to: 

  • Maintain safe, clean parks and playgrounds
  • Reduce gang activity
  • Keep senior recreation centers
  • Maintain safe drinking water
  • Protect beaches, rivers and other natural bodies of water

Funding for these efforts primarily came from propositions passed in 1992 (which ended last year) and 1996 (which will sunset in 2019).

Who’s Voting Yes on Los Angeles County’s Measure A?

Various city, county and state officials; environmental groups, and the Los Angeles Times all recommend voting yes on LA’s Measure A. They claim the measure is necessary to provide safe places for a variety of child and senior activities. The initiative also protects natural areas that haven’t been developed yet; and implements water conservation efforts through recycling, capturing and cleaning rainwater, and converting landscapes with drought-tolerant plants.

Who’s Voting No on the Los Angeles Park Measure?

Organized opposition seems to be practically nonexistent, though the president of the Los Angeles Area Chamber of Commerce expressed some concern. He says for one thing, the state ballot is too crowded and so the priorities for county voters should be on transportation and homelessness problems. The tax rate formula was also at issue, as President Gary Toebben claims a levy based on square footage just penalizes business owners, which tend to have larger taxable properties.

Measure M: Los Angeles County Traffic Improvement Plan 

The goal of Measure M is simply to improve transportation via a half cent sales tax increase. The tax will cover: 

  • Traffic flow and safety on freeways (including improved interchanges)
  • Road and sidewalk repairs
  • Earthquake retrofitting of bridges
  • Synchronization of traffic signals
  • Public transportation expansion
  • Affordability of transportation fares for seniors, students and the disabled
  • Connections to jobs, schools, airports (including a new LAX station)
  • Job creation

 Who’s Voting Yes on Measure M?

A variety of LA County cities and their councils, AARP California, the American Heart & Stroke Associations, California Walks, the Green Party of California and others have all come out in favor of transportation improvement bill, according to Yes on M.

The organization claims population increases in the county require an improved transportation system, and that improvements will reduce the time commuters are stuck in traffic by 15 percent.

Who’s Against Measure M’s Transportation Improvements?

Some Measure M opponents like LA County Supervisor Don Knabe and Lakewood City Councilwoman Diane DuBois cite some concerns including a skewed list of priorities – i.e., transportation projects from Measure R passed in 2008 will take a back seat to Measure M’s goals. Or that projects will be unevenly distributed geographically. And that the Metropolitan Transportation Authority has had budgeting issues in the past – adding more revenue to the coffers will only muddy their bottom lines even more. They also complain the tax has no end date.

For information regarding state initiatives, click: Propositions 51-56, Propositions 57-61, or Propositions 62-67.

Stephen T. Holzer is the Chair of our Environmental Practice Group and a business litigation attorney. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

 

 

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