Saturday, December 31, 2011

Happy New Years! Please celebrate responsibly

While we value the relationship we have with our clients and look forward to representing you in the future, there are some situations that can be avoided. At Wolf, Baldwin and Associates we hope you enjoy your New Year's celebrations, but would ask that you do so responsibly. If you find yourself having a few too many, be safe and contact one of the services such as Designated Driving Services that operates in both Bucks and Montgomery counties.

Wolf, Baldwin and Associates does offer a variety of legal services including both DUI/DWI and Traffic Offenses. We are always happy to serve our clients. However, we hope that you celebrate this holiday safely and responsibly. Thank you for your business in 2011 and here is to a prosperous 2012!

Thursday, December 8, 2011

NON-COMPETE COVENANTS: REASONABLE RESTRICTIONS OR UNREASONABLE RESTRAINTS OF TRADE?

Non-competition covenants – agreements by which employers seek to contractually restrict employees from later working for a competitive business, often for a year or two after leaving their current employment – are an ever-increasing part of the business landscape. Historically, these covenants were legitimately used to provide employers with critical protections against the taking of important parts of their business by key employees. More recently, however, the blanket and indiscriminate use of these covenants to bind all sorts of employees, from CEOs to entry-level sales representatives, has become an increasingly onerous and unreasonable limitation upon the activities of both employers and employees alike.


Non-competition covenants are, by their very nature, restraints on trade, contrary to the basic notions of the American free-market system. When properly used to prevent an employee from taking an employer’s trade secrets and using those secrets for the benefit of a subsequent employer, non-competition covenants can provide valuable and legitimate protection. However, these protections can almost always be provided with more narrowly written restrictions against the use of trade secrets and non-solicitation covenants.


The persistent and increasing use of non-competition covenants for non-key employees, and employees without the recipe to the “secret sauce,” is increasingly creating unreasonable restraints on trade, without actually protecting any legitimate interest of employers. In these cases, the primary effect, and sometimes the far more questionable and pernicious goal of the covenants, is to simply prevent employees from leaving their current employer rather than protecting that employer from legitimate risks of unfair competition after they leave.


This trend creates problems not just for the employees who are unable to take jobs in the only industries they know, but also for prospective employers who customarily must ask, in the current climate of non-competition covenant overuse and abuse, whether their prospective hires are bound by non-competition covenants. Increasingly, employers cannot hire experienced employees because those experienced employees are routinely bound, for a year or two or more, by questionable non-competition covenants.


Generally speaking a non-competition covenant is enforceable under Pennsylvania law if it was signed at the start of employment. And while continued employment is generally not sufficient consideration for a non-competition covenant signed well after the start of employment, covenants signed after the start of employment will be binding if the employee was given some additional consideration for signing that covenant after the start of employment. Non-competition covenants signed after the start of employment will often be deemed binding even where the additional consideration given is questionable or illusory, as where a company with no discernible stock value or no prospect for increased stock value awards an employee essentially worthless stock options in consideration for signing a non-compete covenant.


However, even though a non-competition covenant is theoretically enforceable if an employee receives some consideration for its signing, it is not always the case that a court will actually enforce that covenant. In the context of a request for an injunction to enjoin an employee from competing with the former employer, a court should not and generally will not enforce a non-competition covenant unless the former employer can establish that the employee’s competition is actually causing the former employer irreparable harm. Otherwise, the sole effect of the covenant (and often the primary motive to have such covenants signed in the first place) is to simply prevent an employee from leaving employment, which is plainly not a legitimate purpose for non-competition covenant under Pennsylvania law. The guiding principle of law is that non-competition covenants are restraints on trade and on the ability of a worker to earn a living, and are therefore not favored by the law. As a result, such covenants will not be enforced except to the extent necessary to prevent significant harm to the employer.


For employees who possess no particular trade secrets and who can cause the employer no harm beyond the short-term disruption that inevitably follows when an employee quits a job, the primary effect of a non-competition covenant is to prevent an employee from ever leaving employment, thus requiring that employee to put up with whatever pay cuts or onerous job restrictions the employer may seek to impose. Plainly in that case, the non-competition covenant limits the employee’s future job prospects while serving no compelling interest of the employer. In all likelihood, no court would enforce a non-compete covenant with an injunction under those circumstances.


Even so, the very existence of that non-competition covenant, however unenforceable, may be enough to scare off other prospective employers, particularly in the current economy – unquestionably an employer’s market. That is, given a choice between two equally qualified employment prospects, one of which is saddled with a non-compete and the other of which isn’t, a prospective employer is likely to avoid hiring the restricted employee and the associated headaches of having to deal with a possible lawsuit, and instead hire the unrestricted free agent.


What goes around comes around. The employer who gets the benefit of a non-competition covenant this year may be the employer looking to hire someone bound by a non-competition next year. For this reason, and also in order to not unnecessarily restrict the freedom of individual workers, employers may be well advised to reconsider the blanket use of non-competition covenants, and instead consider using less restrictive employment agreements, such as covenants restricting solicitation of customers and fellow employees, and covenants against the use of trade secrets. Not only are these covenants less burdensome and often more reasonable than non-competition covenants, they are also more likely to be enforced by a court, precisely because they are less burdensome and more reasonable. Employers and employees seeking advice on restrictive covenants should contact experienced legal counsel.

Wolf, Baldwin & Associates, P.C. is a general practice law firm in Pottstown, PA, founded by Jack F. Wolf in 1972. The firm’s areas of practice include Workers’ Compensation matters, Business and Corporate Law, Family Law, Estate Planning, Estate Administration and Probate, Real Estate, and General Civil Litigation. For more information, call 610-323-7436 or visit the firm’s website at www.wolfbaldwin.com.

Wednesday, November 30, 2011

Penn. Court Strikes Down Workers’ Comp Exclusion in UIM Policy

Pennsylvania Supreme Court stuck down an exclusion in an employer’s underinsured motorist policy. The policy from Penn PRIME had excluded underinsured motorist (UIM) coverage for a local police officer because he was injured during his employment and received workers’ compensation benefits.

The Pennsylvania high court reversed the appellate court’s ruling on the case. Pennsylvania Supreme Court’s ruling was issued on Oct. 19.

The case involves Sugarcreek Borough resident Frank Heller. He was working as a police officer at the borough when he got into an auto accident with an underinsured motorist on Oct. 31, 2002. Heller sustained severe injuries.

Workers’ compensation covered Heller’s medical expenses and two-thirds of his salary. Sugarcreek Borough paid him the remainder of his salary, according to the court documents.

Heller recovered the $25,000 policy limit from Allstate Insurance, the insurer for the driver responsible for the accident. However, Heller’s losses and damages far exceeded the liability coverage.

Accordingly, Heller notified his insurer of a potential UIM claim and sought UIM benefits from the borough pursuant to a policy issued by Pennsylvania Pooled Risk Insurance for Municipal Entities (Also known as Penn PRIME). The borough’s policy provided UIM coverage up to $100,000 per person or per accident.

But Penn PRIME denied Heller’s claim pursuant to a policy exclusion, which states that UIM coverage does not apply to any claim by anyone eligible for workers’ comp benefits that are the statutory obligation of the member.

Violation of Public Policy
The high court disagreed with Penn PRIME. It stated in the ruling, “we conclude that a workers’ compensation exclusion in an employer-sponsored insurance policy violates public policy and is, therefore, unenforceable. Accordingly, we reverse the order of the Commonwealth Court.”

The court also noted that if the exclusion is upheld the UIM coverage would be illusory. The court cited Heller’s contention that “virtually all” UIM claims will be made by the borough employees eligible for workers’ comp, leaving a “shallow pool” of individuals to whom coverage would apply. Heller maintained that Penn PRIME received a windfall by charging a premium for “illusory coverage.”

Heller also argued that the recovery of UIM benefits is essential for him to be made whole because workers’ comp provided only a partial benefit.

Illusory Coverage
Pennsylvania Supreme Court sided with Heller. The court stated, “we find that while the exclusionary provision does not facially violate the cost containment policy of the Motor Vehicle Financial Responsibility Law, its inclusion in an employer-sponsored policy operates to foreclose the majority of expected claims. Thus, the exclusion renders the coverage illusory, and the insurer receives a windfall by charging a premium for the coverage.”

Moreover, the court stated, where a third-party tortfeasor causes a work-related injury, the state law dictates that the ultimate burden for the payment of benefits must rest upon the tortfeasor or the UM/UIM carrier.

The court said Penn PRIME’s exclusion reverses this legislative priority by frustrating the right of subrogation, thereby ensuring that the burden for the payment of benefits remains on the employer and its workers’ comp carrier. “Since the workers’ comp exclusion operates to render the instant UIM coverage illusory and runs counter to the intended compensatory scheme established by the state’s General Assembly, we find it void as against public policy.”

Monday, September 26, 2011

Preparation for Divorce in Pennsylvania

In Major League Baseball, a respectable batting average exceeds .300. Currently Shane Victorino of the Phillies is averaging .315. For all you non-baseball fans, this means he will get a hit a few more than three out of the ten times he’s up to bat. Unfortunately in our society divorce has a higher batting average so to speak – statistically about five out of ten first marriages will end in divorce.

The emotional toll of divorce is of obvious and immediate concern to anyone facing that prospect. Almost as significant as the emotional toll is the impact a divorce will have on one’s financial situation. Obviously each divorce, like each marriage, is unique; however there are ways in which one can prepare and educate him- or herself when facing divorce.

There are two key terms that are often heard in association with divorce: equitable distribution and alimony. Pennsylvania is an “equitable distribution” state, as opposed to a “community property” state. This means that all marital assets and debt will be distributed equitably (but not necessarily evenly) to each spouse in the event of dissolution of marriage, based on a number of factors spelled out in the Pennsylvania divorce law. Examples of assets which are frequently subject to equitable distribution are:
  • Homes and other real estate
  • Retirement plans
  • Bank Accounts
  • Stocks, bonds, and mutual funds
  • Personal property such as home contents, antiques or collectibles
  • Business interests
  • Vehicles
  • Inheritances
  • Life Insurance Policies
  • Stock Options
  • Tax refunds
  • Personal injury or workers’ compensation settlements

Pennsylvania divorce lawyers engage in a careful analysis of what is and what is not “marital property” when attempting to determine how any given marital estate should be split. In general, marital property includes any assets acquired by a couple between their date of marriage and date of separation, including the increase in value during the marriage of premarital property. Many assets can be excluded from consideration, however, and any particular situation should be reviewed with an experienced family law attorney.

In addition to equitable distribution of assets, divorcing parties frequently bring claims for spousal support, alimony pendente lite, or temporary or permanent alimony. In general, spousal support can be claimed by a lower-earning spouse while the parties are separated, and alimony pendente lite (“for the course of the litigation”) can be awarded when one party has actually filed for divorce. Temporary or permanent alimony can be awarded for a time after the parties’ divorce is final.

The amount of spousal support or alimony is determined by many factors spelled out in the Pennsylvania divorce and support laws. The earnings and earning capacities of the parties are the most significant factors used to determine both entitlement to and the amount of a support award. Spousal support and alimony pendente lite awards, if the parties cannot agree, must be litigated at first in the county Domestic Relations offices. Typically, the Domestic Relations conference officer at a support hearing uses paystubs, W-2 forms or 1099 forms as well as tax returns to determine the income of the parties. Several factors come into play as to what qualifies as income and sometimes parties are not as forthcoming as they should be in disclosing their earnings, but discovery tools are available to litigants to expose required financial information. Occasionally expert testimony is needed to help the court determine earnings or earning capacity.

Alimony, unlike spousal support, is determined either by the agreement of the parties or by the master or judge as part of the divorce process. In determining an alimony award, a main question is whether the party seeking alimony is incapable of self-support through appropriate employment. Other factors include the ages and health condition of the parties, the expectancies and inheritances of the parties, the length of the marriage, the standard of living of the parties established while married, the relative education of the parties, and relative needs, assets and liabilities of the parties.

It may be helpful in the event of an impending divorce to have access to copies of pertinent financial information so that the process of proving assets and income becomes easier. Some of these documents may include:
  • Bank account, brokerage, and retirement account statements
  • Recent tax returns
  • Recent paystubs
  • Real Estate appraisals
  • Insurance appraisals
  • Life Insurance policies
  • Health insurance policies and cards
  • Wills and Powers of Attorney
  • Trust documents
  • Information regarding both spouses’ accountants or tax preparers
  • The approximate family income for the previous year
As mentioned above, no divorce is the same. If you find yourself contemplating divorce, remember that your situation may not be at all similar to that of your neighbor or co-worker. A long and expensive divorce can and does happen, but today many people choose to settle their issues on their own or engage in voluntary mediation or arbitration to resolve their disputes, rather than going to court. Litigation is costly on both parties in terms of time, money, and emotional strain. On the other hand, working through a divorce amicably can save you time, money, and stress. Settling a divorce without litigation or court involvement offers the parties more control in their negotiations. Agreements reached outside of court can be memorialized and ordered and enforced by the court

We all wish that batting averages will someday be higher than the divorce rate in Pennsylvania. However, with careful planning and good advice from experienced divorce counsel, you can avoid one of life’s curveballs, and reach home safely.

The lawyers at Tri-County Family Law and Wolf, Baldwin and Associates, P.C. are a general practice law firm in Pottstown, PA founded by Jack F. Wolf in 1972. You can visit the family law website to read more about Divorce, Child Support, Spousal Support, Protection from abuse and Custody issues.

Friday, August 12, 2011

Are You Misclassifying Your Employees As Independent Contractors?

On October 13, 2010, former Governor Ed Rendell signed into law House Bill 400, establishing the Construction Workplace Misclassification Act (CWMA). This new law went into effect on February 10, 2011, and will have a dramatic impact on all construction companies utilizing independent contractors. For years a much-debated issue in Workers’ Compensation, employment, and tax law has been the treatment of workers as independent contractors. This new law will further shape whether workers are considered employees or independent contractors.

Generally, if a worker is an independent contractor, workers’ compensation benefits are not available for any injuries sustained on the job. The independent contractor must have his or her own insurance. The practical effect of this is that many employers would classify, or misclassify, their workers as independent contractors, when they were actually employees. By calling workers independent contractors, employers can avoid the cost of carrying expensive workers’ compensation benefits, and can be kept out of long and costly litigation over work injuries. This practice is especially prevalent in construction businesses, such as roofing and general contracting, where workers compensation insurance is prohibitively expensive, and injuries are often quite severe and debilitating.

For many years, the workers’ compensation courts have muddled by with a relatively vague test which basically came down to how much control an employer had over a worker to determine whether that worker was an employee or an independent contractor. However, under the CWMA, an individual who performs construction work may be considered and paid as an independent contractor only if:


  • The individual has a written contract;


  • The individual is free from control or direction over performance of such services, both under the contract and in fact; or


  • The individual is customarily engaged in an independently established trade, occupation, profession, or business.


Thus, a written contract seems to be essential; however, this aspect alone certainly would not suffice. For years, many employers have simply written up Employment Agreements which name employees as independent contractors. However, the addition of codified degrees of control over services and the addition of an “individual (who) is customarily engaged in an independently established trade,” certainly clarifies things even further.

Before the CWMA, employers seeking to be free of the liability and costs of workers’ compensation insurance could attempt to do so by simply having each worker sign a contract labeling each worker as an independent contractor. However, under the new law there must be a definitive lack of control over a true independent contractor, and there would likely need to be a showing that this worker is not simply performing a task for the employer, but rather, that the worker performs this task independently as part of an established trade or business. Thus, a showing that the worker performs the same task for numerous employers would be an ideal way to meet the above requirement.

With respect to the third criteria above, the CWMA states that an individual is customarily engaged in an independently established trade, occupation, profession, or business only if:

  • The individual possesses his/her own tools;


  • The individual's arrangement is such that he/she can realize a profit or suffer a loss as a result of the individual’s performance of services through a business in which the individual has a proprietary interest;


  • The individual maintains a separate business location; or


  • The individual previously worked as a bona fide independent contractor (as defined by the CWMA) or holds him/herself out to the public as a bona fide independent contractor.


These requirements basically codify the factors that workers’ comp lawyers have used for many years. When workers supply their own tools, the typical conclusion is that they are not just employees, but outside contractors, who clearly possess a skill and specialized knowledge that requires tools to perform that service. For example, an electrician who is hired by a contractor to wire a home and comes with his own tools to do so is clearly an independent contractor. However, an electrician who wires a home with tools provided by the contractor would certainly be more likely to be considered an employee.

The second requirement regarding profits or losses seems to indicate that while an employee gets paid for a job whether performed well or not, an independent contractor would be more likely to lose money on a poorly performed job, or conversely make more of a profit on a job performed well and under budget.

Under the CWMA, there are many hurdles to clear in order to establish that a worker should be classified as an independent contractor. The overwhelming majority of workers in the construction industry in Pennsylvania who are currently classified as independent contractors will now be considered employees. Further, the failure to withhold Federal or State income taxes or pay unemployment compensation contributions or workers compensation premiums will not be considered in determining whether an individual is an independent contractor.

Under the CWMA, the consequences for misclassifying an individual as an independent contractor are severe. Administrative penalties may be up to $1,000.00 for the first violation, and up to $2,500.00 for each subsequent violation, and each misclassification of a worker is considered a separate offense. In addition, violations of the CWMA can lead to a "stop work" Order requiring the cessation of work by misclassified individuals within 24 hours, individual liability, and criminal sanctions. Thus, it is clear the Pennsylvania legislature means business, and plans to stomp out any abuse of the classification of workers as independent contractors to avoid the liability under the Workers’ Compensation Act. Questions about this new law and its impact on workers’ compensation or employments issues should be directed to competent counsel.

Wolf, Baldwin & Associates, P.C. is a general practice law firm in Pottstown, PA, founded by Jack F. Wolf in 1972. The firm’s areas of practice include Workers’ Compensation matters, Business and Corporate Law, Family Law, Estate Planning, Estate Administration and Probate, Real Estate, and General Civil Litigation. For more information, call 610-323-7436 or visit the firm’s website at www.wolfbaldwin.com.

Thursday, June 30, 2011

Estate Planning Under New Tax Law

Congress recently enacted a new law which radically alters estate tax law, but only for a period of two years. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, signed into law on December 17, 2010 increased the amount which can pass to heirs Federal Estate Tax free to $5,000,000 per spouse, and established a top estate tax rate of 35%. This is an increase from the $3,500,000 Exemption Equivalent in 2009, and a big leap from the $1,000,000 Exemption Equivalent that was set to become law on January 1st, had Congress not acted.

Additionally, surviving spouses can now utilize any unused amount of their deceased spouse’s $5,000,000 if certain elections are made on a timely estate tax return. Again, this new “portability” provision seems like a great planning opportunity, but it also expires December 31, 2012, so unless both spouses die within the next two years, it could disappear.

While many families may now feel their estates are “untaxable,” the new law presents the need for estate plan reviews, despite the perceived tax relief.

It must be stressed again that the law as it is written will expire on December 31, 2012 if no additional Congressional action is taken. Without Congressional action, the exemption equivalent will be reduced to $1,000,000 with a top tax rate of 55%. Considering the uncertainty of the future of tax legislation, it is more important than ever to have flexibility in your estate plan.

If you have an estate that is less than $1 million, you should consider having your plan reviewed. You probably don’t need complicated plans with trusts and formulas. You don’t want to place the bulk of your assets in a complicated trust that is expensive to administer, and which ultimately offers no tax advantage. However, if you have assets less than $1 million, you may still need planning to address insurance ownership, guardianships, powers of attorney, medical directives, and other matters.

Many clients with estates between $1 million and $5 million have current wills that are written as an A/B trust structure wherein assets in the amount of the exemption equivalent are allocated to a credit shelter trust. Assets placed in this trust, as well as any appreciation, are generally not subject to estate tax upon the death of the second spouse. During the surviving spouse’s lifetime, he or she is entitled to the income of the trust with discretionary distributions of principal in the judgment of the trustee. For a decedent with an estate value of less than $5 million and a surviving spouse with limited assets of his or her own, using a formulaic credit shelter trust may restrict the surviving spouse’s use of these assets.

Conversely, the Generation Skipping Transfer Tax Exemption for 2011 and 2012, while also $5 million, is not portable. If couples do not make GST transfers during their lifetimes, and rely on portability by passing all property outright to the surviving spouse, GST tax sheltering opportunities may be missed.

Also, a credit shelter or family trust may be beneficial to families in the event of a widowed spouse remarrying. The predeceased spouse controls the disposition of the trust, and may wish to protect the interests of his or her children in the case of remarriage. The trust also provides creditor protection for the beneficiaries, and in Pennsylvania can continue in perpetuity without limitation.

Those who wish to have more flexibility may choose to utilize a disclaimer trust. With a disclaimer trust, a married couple’s will or revocable living trusts leave the deceased spouse’s entire estate to the surviving spouse. The family trust is funded only if the surviving spouse then disclaims (refuses) part of the deceased spouse’s estate. This enables the surviving spouse to decide how much to keep outright (to be taxed at the second death) and the amount to be allocated to the family trust (which is shielded from estate tax at the second death).

In making an informed decision to disclaim and how much to disclaim, one must examine the size of the combined estate, the surviving spouse’s age and health (which impacts the spouse’s needs for funds), whether minor children will be beneficiaries of the family trust, the potential appreciation of the assets not disclaimed, and the implication of Pennsylvania inheritance taxes (currently 4.5% for transfers to children, but can be as high as 16% for transfers to certain beneficiaries).

In addition, the actual disclaimer must meet certain legal and filing requirements, and the surviving spouse must not accept any benefits from the assets disclaimed before filing the disclaimer.

Business owners should also keep in mind that while the new tax legislation freezes the current 15% maximum capital gains tax rate through 2012, unless Congress acts to change the law, in 2013, long term capital gains will increase to a maximum of 20% with an additional 3.8% in Medicare tax on all capital gains income. With interest rates currently remaining historically low, it is a great environment to be considering a combination of gifting and business succession strategies such as sales to defective grantor trusts. If structured properly, business owners can receive income from these trusts for life, while passing business interests onto family members outside of the taxable estate.

Although the high Exemption Amounts and low rates seem to simplify and eliminate the need for estate planning, the reality of the situation is that what will happen in two years is anyone’s guess. The current law provides numerous reasons to review your current estate plan with your professional adviser and make sure you don’t miss out on this temporary window of opportunity to transfer wealth and reduce tax liability.

Wolf, Baldwin & Associates, P.C. is a general practice law firm in Pottstown, PA, founded by Jack F. Wolf in 1972. The firm’s areas of practice include Workers’ Compensation matters, Business and Corporate Law, Family Law, Estate Planning, Estate Administration and Probate, Real Estate, and General Civil Litigation. For more information, call 610-323-7436 or visit the firm’s website at www.wolfbaldwin.com.

Monday, June 13, 2011

Levi Wolf named to Pennsylvania Rising Stars 2011

Levi Wolf of Wolf, Baldwin and Associates has been named to the Pennsylvania Rising Stars of 2011 by Superlawyers!

Mr Wolf is licensed to practice before all Pennsylvania courts and the United States District Court for the Eastern District of Pennsylvania. He is a full member of the Montgomery County Bar Association and an Associate Member of the Berks County Bar Association. Mr. Wolf is also a member of the Pennsylvania Bar Association, where he was the former Treasurer of the Solo and Small Firm Practice Section. He has lectured at the PBA Bar's Solo and Small Firm Practice Section Retreat and numerous Continuing Legal Education seminars through the Pennsylvania Bar Institute.

Tuesday, May 31, 2011

Wolf, Baldwin and Associates, PC announce the addition of our new associate Beth Silverman

Beth Silverman was born in Pittsburgh, Pennsylvania, and grew up in Annville, Pennsylvania where she attended Annville-Cleona High School and the Lawrenceville School, from which she graduated in 1997.

Ms. Silverman attended Gettysburg College as an English Literature major. She graduated cum laude with a Bachelor of Arts in English in 2001. Following her undergraduate work, she attended Villanova University School of Law, where she served as President of the Sports and Entertainment Law Society, and earned her Juris Doctor in 2004. She continued her legal studies at Villanova?s Graduate Tax Program and earned her LL.M in Taxation and a Certificate in Estate Planning in 2006.

Ms. Silverman was admitted to practice in Pennsylvania in 2005. Upon completion of her Graduate Tax Program, she served as in-house counsel for Valley Forge Financial Group where she designed complex estate plans for high net worth and ultra high net worth clients.

Ms. Silverman spends her free time enjoying the company of her husband and two dogs, reading, and spending weekends in the mountains with her extended family.

Beth R. Silverman is one of Wolf Baldwin & Associates, P.C.'s lawyers in West Chester. Other Pottstown lawyers include Jack F. Wolf,Bruce L. Baldwin, Levi S. Wolf, Daniel E. McCabe, Susan J. Vandegrift, and Kristen Doleva-Lecher.

Wolf, Baldwin & Associates, P.C. is a general practice law firm in Pottstown, PA, founded by Jack F. Wolf in 1972. The firm’s areas of practice include Workers’ Compensation matters, Business and Corporate Law, Family Law, Estate Planning, Estate Administration and Probate, Real Estate, and General Civil Litigation. For more information, call 610-323-7436 or visit the firm’s website at www.wolfbaldwin.com.

Friday, April 29, 2011

Estate Planning for Pets

Pets are a beloved part of the family; have you thought about what will happen to them in the case of your disability or death? You probably have created a Will or Trust that provides for your family, but have not included your pets in those documents. The good news is that in addition to being able to provide for someone to receive your pet as a gift in your Will, in 2006 Pennsylvania became the thirty-second state to enact a Pet Trust statute, allowing for the creation of a Trust by Will or during lifetime to care for pets owned during your lifetime.

Because animal law is a relatively new concept, and one that is even newer to estate planning, many people are only aware of pet planning through sensational reports like the story of Leona Helmsley who left $12 Million in trust to her dog, Trouble. It may seem like only the rich would take such steps to provide for the care of their pets, but pet estate planning is gaining popularity across the United States where 44 states currently have pet trust statutes enacted.

Prior to 2006, one of the risks in leaving money outright to a beneficiary to take care of a pet was that the beneficiary could take the money, and give up or euthanize the pet. Family and friends can be very well meaning, but simply incapable or unwilling to care for the pet of a deceased friend or loved one. In Pennsylvania, a pet is considered property, and if no one is willing or able to take care of it, it becomes subject to the (sometimes very lengthy) probate of the Will, the same as a piece of furniture. Further, since a Will is only effective upon death, what would happen to the pet should its owner become disabled and no longer able to care for it? The new law may have the answers.

Pennsylvania adopted the Uniform Trust Act in 2006, and with it adopted standard provisions for establishing statutory trusts for the benefit of pets. This can be done within the owner’s Will, or as a standalone Trust. It is a very simple provision that allows for the basic funding of a Trust with only as much as is reasonably needed to care for the pet or pets, and does not require the owner to direct how the funds should be spent or what care is desired for the pet. If the court feels that the Trust has been overfunded, it will adjust the amount contributed and pass the rest through the owner’s estate according to his or her Will. The Trust may be overseen by a person named in the document, or if there is none, one may be appointed by the court. The Trust will terminate upon the death of the last pet for which the benefit of the trust was created.

Another form of the pet trust, the traditional pet trust, gives the pet to a trustee, and names a caregiver as a beneficiary to receive funds from the Trust which are to be spent for the benefit of the animal. Because the actual beneficiary is a human, he or she has power to enforce the Trust provisions, and it avoids any problems related to making gifts to non-humans. These Trusts may also provide further assurance that the owner’s wishes will be carried out as planned because they can contain more specific instructions than the typical statutory trust. Naming a trustee also further protects the animal because there will be someone to oversee the care and spending by the caregiver. Like the statutory trust, the traditional pet trust will terminate upon the death of the pet. The pet owner should designate who will receive the remaining property in the Trust at that time. Usually, the owner will select a charity and may be able to advantage of the estate’s charitable deduction at death. Naming the beneficiary caregiver as the remainder beneficiary should be avoided because the beneficiary would have little to no incentive to ensure that the pet survives.

These Trusts can be created during the life of the owner, or upon death through the owner’s Will. Creating a Trust during the owner’s life can provide that the pet remain with the owner through disability or nursing care by including a provision in the Trust that allows for payment of the remainder of the Trust property to the nursing care facilities for the privilege of allowing owner and pet to remain together.

If a Trust sounds too complicated and too expensive, an alternative is to draft an agreement which provides for care of the pet, should the owner no longer be able to take care of it. New York pet law attorney Rachel Hirschfeld has created The Pet Protection Agreement, which is a legally enforceable agreement between a pet owner and a pet guardian. It is a “check-the-box” and “fill-in-the-blanks” form to allow pet owners to specify their wishes in a comprehensive, effective and quick way.

At the very least, a pet owner should take the following steps, which can be prepared for free and without assistance. First, carry an “animal card” in your wallet. It should contain information about the type of animal, its name, where it is located, and special care instructions. Second, fill out an animal information sheet with more specific instructions on the special care and wishes for your pet. Third, place an emergency sticker on the door or window of your home, indicating the number of animals inside. All of these materials are available through the Humane Society of the United States, and should be kept updated and stored with the owners’ Will or other estate planning documents, where appropriate.

Estate planning takes care of those we love, and who loved us, after we die. Many times pets provide an unmatched amount of support and friendship, and they deserve the same preparation for our deaths as our human loved ones do. By consulting an estate planning attorney familiar with pet planning, you can make sure your trusted companion is well cared for after you are gone.

Thursday, March 31, 2011

Follow Wolf Baldwin Around The Internet

The law firm of Wolf, Baldwin and Associates, P.C. has been serving the people of Pennsylvania for more than 30 years. Over that time, we have always found new ways to reach out to the people in our community.

As times have changed, we too at Wolf, Baldwin and Associates, P.C. have changed to make services more available to the people of Pennsylvania. In that spirit, we can now be found at a variety of locations and social media services around the internet. Below is a list of some of those accounts. Please click on the hyper-link to visit our locations. If you are on Facebook, feel free to become a fan of the practice so you can stay up to date with the latest news from Wolf, Baldwin and Associates, P.C.

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Tuesday, February 8, 2011

Wolf, Baldwin and Associates, PC announces the addition of new associate Kristen Doleva-Lecher



Wolf, Baldwin & Associates, P.C. is pleased to announce the addition of Kristen Doleva-Lecher to their firm as an associate attorney. Ms. Doleva-Lecher will practice at the firm’s Reading office at 606 Court Street. She will also be available for appointments in the firm’s Pottstown office two days per week. She will focus on general litigation, family, and business and corporate matters, as well as alternative dispute resolution and mediation.

Ms. Doleva-Lecher earned her undergraduate degree from University of Pittsburgh. She obtained a Juris Doctor from Nova Southeastern University – Shepard Broad Law Center in Ft. Lauderdale, FL.

As a life-long resident of Berks County, Mrs. Doleva-Lecher is proud to be joining a firm with such a strong commitment to community. “Practicing law in a county in which I spent approximately 30 years of my life is very important to me. One of the aspects of practicing law that I enjoy most is assisting local business owners with their legal issues while leading them to success with their company. The success of local business owners is ultimately the success of our community.”

Ms. Doleva-Lecher was most recently associated with Ryan, Russell, Ogden & Seltzer in Wyomissing, PA. She had a solo practice, also in Wyomissing, from 2005 to 2007, and has also practiced with Mette, Evans, Woodside in Harrisburg, PA and Golden, Masano, Bradley in Wyomissing, PA.

“After practicing law in Pennsylvania for approximately 7 years on my return to the legal arena, I carefully targeted the type of firm with which I wanted to associate. My criteria included a firm where the attorneys are very experienced, ethical and who truly care about their clients. I also sought out a firm where there is a sense of internal loyalty. In Wolf, Baldwin, I found all of this.”

“I met Jack Wolf while we were both completing a mediation certification course. It is not often that I have met the caliber of an attorney like Mr. Wolf who didn’t come off as unapproachable. Within a few days I was bending his ear for legal advice. I am humbled to be able to say I work for him now. It is a rarity to have not only an extremely intelligent and successful mentor but one that is also business savvy.”

“We are excited about Kristen joining the firm,” said Jack Wolf, founder of Wolf, Baldwin & Associates. “Our firm has had a presence in Berks County for a long time, and we are looking forward to being able to grow in that region. Kristen’s roots in that community will be an asset to developing our offerings there.”

Mr. Wolf and Ms. Doleva-Lecher have both completed 50 hours of training as certified mediators, Mr. Wolf in Montgomery County and Ms. Doleva-Lecher in Berks & Montgomery counties.

“Mediation is an attractive alternative to litigation in many kinds of cases,” said Mr. Wolf. “It offers clients a cost-effective, speedy, and private alternative to resolving disputes through the courts.”

Wolf, Baldwin & Associates, P.C. is a general practice law firm in Pottstown, PA, founded by Jack F. Wolf in 1972. The firm’s areas of practice include Workers’ Compensation matters, Business and Corporate Law, Family Law, Estate Planning, Estate Administration and Probate, Real Estate, and General Civil Litigation. For more information, call 610-323-7436 or visit the firm’s website at www.wolfbaldwin.com.