Thursday, October 11, 2018

Life Insurance Options

Life Insurance Options

Life insurance can be an important part of estate planning, especially for the parents of young children or a disabled child. The purpose of an insurance policy is to provide cash for the beneficiaries upon the premature death of the policyholder. For a person that does not receive regular income from investments or other assets, an insurance policy can replace lost earned income.

The following is an overview of some of the available life insurance options.

Term Life Insurance

Pros

  • It is relatively inexpensive
  • Various policy terms of coverage are available

Cons

  • It is subject to cancellation
  • Premiums become more expensive as the policyholder ages

The policyholder of term life insurance receives coverage for a certain amount of time specified in the policy. Because it only covers a specified period and the premium only pays for the insurance policy, this is the least expensive type of insurance available. Terms of coverage, for instance, may range from 5, 10, or 20 years. Once the term ends, the policyholder may have the option to renew the policy beyond the original term but the premium usually increases with each renewal.

Depending on the insurance company, a policyholder may have several options under term life insurance. For instance, many policies can be:

  • Renewed: Upon termination, a policyholder may continue coverage by paying a new premium and renewing coverage for a new term.
  • Converted: During the policy term, the policyholder may change from term life to a permanent life insurance option offered by the insurer.

Term insurance is not appropriate for all types of policyholders. For instance, term life insurance may be most beneficial to a person with young children or for a person with temporary expenses, such as a home mortgage or an auto loan. Term insurance is less desirable for a person living off investments and retirement income.

Permanent Life Insurance

Pros

  • It is not subject to cancellation unless the premium is not paid
  • It endures for the life of the policyholder
  • It is a type of investment
  • Tax benefits may apply

Cons

  • It is expensive
  • Commissions and fees may be high
  • Policies are complex

Permanent life insurance is more expensive than term life insurance because it is effective during the entire life of the policyholder (as long as the premiums are paid) and the excess paid into the policy is invested. In general, the premium remains the same over the entire length of the policy. The excess that accumulates from the premium may yield dividends or interest; the policyholder will receive some of this return. The policyholder can choose to apply the investment income to the reserves, borrow against the cash value, or terminate the insurance policy and receive the cash surrender value. The growth in the value of the reserve is tax deferred under federal tax law, unless the policyholder receives the money. In some cases, a partial withdrawal will escape tax liability. In making these determinations, you should always speak with an estate planning lawyer so all of your needs can be addressed and you can be on the right track.

Permanent life insurance is beneficial for someone with a child with special needs or for someone that expects estate taxes to be high.

The following are the various types of permanent life insurance options:

Whole Life Insurance

Whole life insurance provides the policyholder with lifelong coverage as long as they pay the fixed premium amount throughout their life. In general, the younger the policyholder is when beginning coverage, the less expensive the annual premiums will be. As the policyholder pays into the life insurance policy, the cash reserve continues to build. The policyholder may borrow from the cash reserve at the current policy loan interest rate or surrender the policy and receive the cash value of it.

Universal Life Insurance

Universal life insurance combines flexibility with the accumulation of investment income. The following are the benefits of universal life insurance:

  • Can change the amount of life insurance
  • Can adjust the death benefit and premium payments within the limitations of the policy
  • The account value earns tax-deferred interest
  • The net cost of the policy is less than whole life insurance
  • Can borrow or withdraw money from the cash reserve

Variable Life Insurance

A variable life insurance policy allows the policyholder to invest cash reserves into stocks, bonds, and securities. The policyholder will bear some of the risk, but the insurance company will guarantee a certain return on the investment. Consequently, the death benefit depends on how well the investments perform.

Variable Universal Life Insurance

Variable universal life insurance is a combination of the flexibility of universal life insurance with the investment strategy and the risk factor of variable life insurance.

Single Premium Life Insurance

The policyholder of single premium life insurance will pay the entire premium amount in one up-front payment. The benefits include the immediate accumulation of cash value, the elimination of cancellation, and the distribution of tax-free proceeds to the beneficiaries.

Survivorship Life Insurance

Survivorship life insurance, also referred to as “second to die” insurance, is a single policy that insures two people, usually spouses, for a single insurance benefit. When the first person on the policy dies, the survivor continues making payments on the premium. Only after the survivor dies does the insurance company pay the beneficiaries of the policy.

This insurance policy is appropriate for wealthy couples that expect substantial estate taxes or for people with non-liquid assets like a family business. In this situation, the proceeds from the insurance policy can be used to buyout an ownership interest.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Wednesday, October 10, 2018

Tips for Business Loans

Tips for Business Loans

Securing financing is often one of the first steps to successfully owning and running a business, as our resident business lawyer has often said. But even savvy borrowers can get trapped in a bad loan situation. A few precautions can help prevent common mistakes.

Get Everything in Writing

All the terms and details of the loan need to be specified in writing. A lender may make oral promises and agreements, however borrowers should rely only upon written documentation. A legal doctrine called “parol evidence rule” disallows any evidence of oral agreements in court if they conflict with the written loan documents.

Be Careful What You Offer as Security

Although there are few specific rules that can be applied universally to actual terms of a loan, one general guideline is: never offer something as security that you cannot live without. Cautious lenders may ask for more security than necessary. All assets pledged as security are at risk of loss should the loan default. Oftentimes lenders ask not only for security from the borrower, but also a guarantee from a corporate officer of the business, perhaps a deed of trust on their property. In such a case, if the loan should default, both the borrower and the guarantor are at risk of losing their collateral because the terms of the loan legally allow foreclosure.

Understand the Loan Agreement Before Signing

Legal doctrines intended to prevent fraudulent lending can sometimes inhibit the borrower’s legal remedies should something go wrong. Therefore it is imperative to fully understand the agreement before signing it. Lawyers are among the few people besides bankers who can readily sort through and understand the details of a loan. If you have questions about the loan or your rights, find legal counsel. Lawyers can be expensive, but you are hiring an expert who will protect your best interests. The downside of hiring a lawyer is, should there be litigation, the bank may say that because a lawyer examined the documents, they could not have taken advantage of you.

Avoid Signing Releases, Jury Trial Waivers or Arbitration Clauses

Loan agreements often contain a jury trial waiver or an arbitration clause. When agreeing to such terms, know that you are giving up possible significant legal recourses. Similarly, if a lender is worried about a possible claim, they may ask the borrower to sign a liability release. By signing such a release, the borrower forfeits rights to a claim, so it is important that if there is suspicion of improper activity, consult a lawyer about the matter before signing a release.

Take Action if Something Doesn’t Seem Right

Under a legal doctrine called “waiver of fraud,” if a borrower suspects a lender of wrongdoing but continues to receive substantial benefits from the same lender (such as funding from loans) the borrower may lose the ability to later pursue a fraud claim. This doctrine places the borrower in an uncomfortable situation. If you complain to a lender about a questionable practice, you may lose your funding, but to not do so may result in losing your claim. In addition, the statutes of limitation set deadlines for filing claims. If a claim isn’t filed within the proper amount of time, it will be rejected.

Know Your Rights

Basic legal information on borrowers’ rights can be found in libraries and online at Web sites such as ours but perhaps the most important thing is to call a business lawyer at our office with expertise in banking and finance law.

Not every business loan is riddled with problems, but they are not all cakewalks either. Securing a loan that fulfills your business’ financial requirements while retaining your rights can be complicated. Exercising an element of caution and foresight can save headaches later on.

Free Consultation with a Utah Business Lawyer

If you are here, you probably have a business law issue you need help with, call Ascent Law for your free business law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Child Visitation Rights

Child Visitation Rights

When a couple going through a divorce has children, a family law court may need to get involved in decisions regarding child custody and child visitation rights.

In a divorce, these two issues are typically determined at the same time. In some divorce proceedings, it is determined that it is in the child’s best interest for one parent to have sole custody. In this case, the court can decide that the parent without custody of the child has a right to visitation. In some situations, the court will decide that the noncustodial parent does not have any right to visit the child.

Filing for visitation rights

A child’s parents, grandparents and siblings may file for visitation rights. Filing for visitation is a first step toward gaining rights to spend time with a child. However, just because a person files for visitation does not mean the court will grant them visitation rights. Additionally, in some cases, family members of the child may wish to enter into mediation to determine an agreeable visitation schedule for all parties.

Modifying visitation rights

Either of the child’s parents may make a request for modification of a visitation order. Modifications are commonly requested because a parent’s schedule has changed or because a parent has relocated. More serious changes to visitation rights may occur because of a parent’s failure to adhere to their court-ordered visitation schedule. Finally, a visitation order may change because a child would like to increase or decrease the amount of time he or she spends with one parent.

A Hard-Won Case Defending a Father’s Rights

In a unique and groundbreaking decision, the court has transferred custody of a ten-year-old girl from the custodial parent (the mother) to the child’s father. The court has also prohibited the mother from contacting the child.

For more than one year, the court limited the father’s visitation to supervised therapeutic visitation only. The mother still was not happy and continued to obstruct the supervised visitation. After a lengthy hearing with testimony from an expert forensic psychologist, two treating therapists, the parties, and their relatives the court stated that the father’s allegations that the mother was interfering with reunification was supported, and justified an immediate change in custody. In fact, the court stated that the mother’s behavior was so inconsistent with the best interests of the child that it raised the probability that the mother was unfit. There was testimony that the child’s symptoms (and acting out) were a direct result of the mother’s influence. In this case, the mother caused the child to act in a mentally ill fashion and to display a deep hatred and hostility toward her father. Through expert testimony, I was able to show that the child acting out and directing aggression toward her father was actually an effort to “please” her mother.

The court-appointed law guardian (the attorney for the child) argued strenuously against the transfer of custody, according to his client’s wishes.

The treating psychologist and the law guardian testified that it went against the child’s best interests to be transferred to the father. Whenever a mother’s attorney presents an expert, the case becomes an uphill battle. Furthermore, the judge relayed in his decision that when the child was able to speak to the judge in private, she vehemently refused to have anything to do with her father.

Nevertheless, we won this one in dramatic fashion. It was through expert testimony, questioning, and cross-examination that the judge was swayed to make an extreme decision: immediate transfer of custody from a mother to a father whom the child has not visited without supervision in over a year.

It is against all odds that this dramatic change of custody has occurred. Within twenty-four hours, it was brought to the Appellate Division but custody remains, as it should, with the father pending the outcome of this matter.

Free Consultation with Child Visitation Lawyer

If you have a question about child custody question or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will aggressively fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Tuesday, October 9, 2018

Shareholder Rights and Derivative Actions

Shareholder Rights and Derivative Actions

Sometimes a CEO or other corporate insider puts the value of a company at risk by committing crimes such as wire fraud or embezzlement. When a shareholder believes that a director or officer has harmed the corporation by breaching a contract or breaching their duties, the shareholder can assert their rights and seek relief. One option is to file a derivative lawsuit. This article discusses shareholders rights and derivative actions, including information on the following:

  • The shareholder’s role in the corporation
  • The requirements for filing a derivative action
  • Shareholder activism

Corporate Roles

The shareholders (also called stockholders) are investors who own shares in the corporation. The directors have obligations and duties to both the shareholders and the corporation itself. This role differs from that of the officers and executives who handle corporate governance by running the operations of the corporation, although the roles can overlap.

Derivative Actions and Shareholder Rights

Being a shareholder comes with certain duties, responsibilities, and rights. Shareholders have a general range of rights concerning the corporation, which include:

  • ownership in a portion of the company;
  • ownership transfer rights;
  • voting rights; and
  • an entitlement to dividends.

One of the most significant shareholder rights is the right to sue an officer or a director who has harmed the corporation. This type of litigation is referred to as a shareholder derivative action or lawsuit. Unlike a securities class action suit, where individual investors and shareholders are seeking relief, the derivative action includes the interests of all shareholders and permits them to file on behalf of the corporation.

Shareholders often bring derivative suits against their corporation to try to resolve conflicts between the shareholders and the officers, directors, or board members who have harmed the corporation through mismanagement or other wrongdoing. For instance, a shareholder of the fast food corporation Wendy’s filed a derivative action against its directors and officers for its security practices that ultimately led to a massive data breach.

Requirements for Shareholder Derivative Lawsuits

Many states require that a plaintiff must be a stockholder at the time of the alleged improper conduct in order to file a derivative action. Others require that the shareholder own stock at the time of the improper conduct and continuously throughout the resolution of the lawsuit; this is referred to as the “continuous ownership requirement.”

Notice Requirements

Prior to filing the suit, the affected shareholders must demonstrate that they informed the company’s management of the problems in writing and that the directors decided against pursuing any action. If management fails to comply, the shareholders must show that the management’s conduct adequately harmed their position and that they refused to resolve the issues.

The shareholder must give notice (on their own or at the expense of the corporation if ordered by the court) to the other shareholders that the action has been initiated, providing them the opportunity to join the lawsuit.

Damages for the Corporation

If a shareholder prevails, they won’t recover individually; any recovery obtained from a derivative action is for the corporation only. However, a shareholder will generally receive legal expenses from the corporation.

Shareholder Activism

While a derivative suit is a very specific way to affect corporate governance, shareholder (or stockholder) activism is another more broader means to promote interests through shareholder rights, especially voting rights. Shareholder activism occurs when shareholders attempt to use their power to pressure management and affect a corporation’s behavior resulting in favorable results for the shareholder or to promote broader political or social causes, As an example, some Apple investors have sought to pressure the company to address smartphone addiction, especially among children. This can be achieved through various actions including litigation, proxy contests, publicity campaigns, and more.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Estate Administration Law

Estate Administration Law

When a person dies, all of his or her possessions – real estate, money, stocks, personal belongings, etc. – become a part of his or her estate. This really isn’t a part of estate planning but it may be a part of probate law, if the person who passed away didn’t leave a will or a trust.

Estate administration refers to the process of collecting and managing the estate, paying any debts and taxes, and distributing the remaining property to the heirs of the estate. The heirs of an estate are determined by will, and if there isn’t a will, by the intestacy (which means dying without a will) laws of each state.

What Is the Process for Administering an Estate?

Put simply, estate administration is collecting, managing, and distributing a deceased person’s estate. Each state has its own probate laws, which govern the requirements and process for administering an estate. In some cases, an estate may need to be administered in more than one state. Generally, the state in which the person lived in at the time of death is where the estate goes through probate. However, real estate is governed by state law, so real estate in another state might have to be probated in that state. Several states have adopted a version of the Uniform Probate Code, which is designed to simplify the estate administration process and provide similarity among probate laws from state to state.

The Duties of an Executor

The executor is responsible for locating and collecting all of the deceased’s property, making sure any debts and taxes are paid off, and distributing the remaining property and money to the entitled parties. Although anyone can be an executor, the executor must perform with diligence and in good faith. Usually the executor is designated in a will. If the deceased didn’t leave a will, an administrator is appointed by the probate court. If the probate process is complicated, the executor is entitled to hire an attorney – at the expense of the estate – to help him or her with the process. While the executor is not entitled to any proceeds from the sale of property of the estate, generally he or she is entitled to a fee as compensation for administering the estate.

Who Is Responsible for a Deceased Person’s Debts?

Generally speaking, once a person dies, his or her debts are paid off from his or her estate, and if there isn’t enough money to repay the debt, the debt dies with the person. Relatives or beneficiaries of the will are usually not responsible to pay the deceased person’s debts. However, if the relative or beneficiary owned part of the debt or received substantial benefits from the debt, he or she would be responsible for repaying the debt. For example, credit card debt belongs to the account holder. If, however, a relative co-signed on a loan or the credit card was from a joint account, the co-signor or other account holder would have to pay the debt. It’s important to note that in community property states – where property acquired during marriage is considered jointly owned – the surviving spouse may be liable for the debt.

Hiring an Attorney

If you’re in charge of administering an estate and have questions about it, you may want consult with an estate planning attorney. It would also be a good idea to contact an estate planning attorney if you have questions or concerns regarding the debt left by a person who has passed away.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with. Whether you need to probate an estate, do your own estate planning, or administer a trust, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Monday, October 8, 2018

Wages and Benefits Law

Wages and Benefits Law

Wages and benefits make up an employee’s compensation package – the key is to find a balance that is both attractive to top talent and sustainable for your business. As an employer lawyer, we see this over and over again. Benefits may include health insurance coverage, retirement plans, or other perks sometimes offered along with salary.

Federal and State Wage Laws

Both the federal government and state governments have laws that are meant to ensure that workers are paid fairly. Probably the two biggest laws relating to wages are laws that set a minimum wage for workers and laws that govern overtime pay. There is a federal minimum wage, and each state is entitled to set its own minimum wage, as long as it’s not lower than the federal minimum. The minimum wage can vary depending on the age of the worker and the category of work. For example, if waiters receive a certain amount of tips per month, they may be paid less than the minimum wage.

The specifics of overtime pay will depend on the laws of each state, but generally, overtime pay is required for workers who work over 40 hours in a week, or more than 8 hours in a day. Not all types of employees are entitled to overtime pay, so it’s important to check the laws of your state to figure out which workers should be paid overtime. In addition to the minimum wage and overtime pay, employers must also comply with meal and rest period laws. Failure to comply with any of these laws can be quite expensive for employers.

Garnishment of Wages

In some instances, a court order may require an employer to withhold a portion of an employee’s wages. This is known as wage garnishment and it occurs when a person is delinquent on a debt – very often with child support – and the creditor obtains a court order to have that debt paid. As an employer, it’s important to know that there are limits to how much money can be withheld per pay period. Generally, the court order will indicate how much to withhold and where to send the withheld amount. Employers should also be aware that they are not allowed to terminate a person’s employment because of one wage garnishment order. But, if the employee has more than one order for wage garnishment, the employer is entitled to terminate his or her employment.

Employee Benefits

Employee benefits can be a way to attract employees to your company. There are certain benefits that are required by law and others that are optional. Two benefits required by federal law are Social Security and workers’ compensation. There may be other benefits that are required by your state or even county or city, so it’s important to check local laws as well. Employers that meet certain criteria are also required to comply with the Family Medical Leave Act and provide health insurance. Non-mandatory benefits include life insurance policies, paid time off, and retirement plans. If you’re not required by federal law to provide health insurance, this can also be provided as an optional employee benefit. Employee benefits can help boost employee morale and performance, and can also allow you to pay less in wages.

Free Initial Consultation with a Utah Lawyer for Employers

We represented businesses, companies and employers in Utah. When you need legal help, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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How Much Child Support Is Right?

How Much Child Support Is Right

Raising children, it is sometimes said, takes an open heart, an open mind and an open wallet. The inevitable financial strains of a Long Island divorce can create some big questions when it comes to sharing the expenses of parenting.

What can I expect for child support?

According to Utah Child Support Standards guidelines, the costs of supporting a child are calculated as a percentage of the combined adjusted income of both parents (after taxes, spousal support and other child support), capped at $130,000 and broken down as follows:

  • One child: 17 percent
  • Two children: 25 percent
  • Three children: 29 percent
  • Four children: 31 percent
  • Five or more children: at least 35 percent

This figure is then divided according to each parent’s share of the total income. Non-custodial parents may also be expected to contribute to child care expenses, allowing the custodial parent to go to work or school, as well as the children’s health care and education costs. The percentages are only guidelines. A settlement agreement made between the spouses, as long as it is fair and in keeping with the technical standards of Utah’s Child Support Standards Act, is acceptable.

What if child support is not paid?

Failure to pay child support results in enforcement proceedings against the non-custodial parent. Your attorney can help you seek enforcement through Utah’s Office of Temporary and Disability Assistance.

What if I can no longer afford to pay my court-ordered child support?

Pursuant to the October 14, 2010 update of Utah Child Support laws, if your income has dropped at least 15 percent, your attorney can petition the court to have the support order modified.

Is Mediation a Better Choice than Divorce If You Have Children?

Divorce is hardest on children. Regardless of how young kids are, they know when something is wrong between their parents. However, when a couple uses traditional divorce methods, the process of separating can be even harder on children. In addition to being more cost-effective, mediation enables a family to sustain a divorce in a gentler manner.

Mediation is a positive process that focuses on moving forward instead of arguing over mistakes from the past. The process takes place in a comfortable environment agreed upon by each spouse. While this may not seem like a big change, a venue other than a courtroom can significantly reduce hostility between spouses.

Mediation occurs over several short sessions that focus on cooperation rather than conflict. A third-party mediator guides the couple toward making mutually beneficial decisions. In other words, spouses take control of their future, instead of allowing the court to make decisions for them.

You and your spouse determine the pace of mediation. The process can take as long as you want it to. Additionally, in mediation, you and your spouse can outline a parenting plan for your children. You can discuss custody and visitation rights and determine when each parent will spend time with your children.

The ending of a marriage is an emotional event. However, with mediation, you have the option of reducing the impact the event has on the lives of your children.

Free Consultation with Child Support Lawyer

If you have a question about child support or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will aggressively fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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