Of the People

Stir Occasionally to Prevent Sticking

I was cooking a rice dish recently when I was struck be one of the instructions:  “Stir occasionally to prevent sticking.”  The phrase stayed with me, and after giving it some thought, I realized that it is good advice beyond the confines of a rice recipe.

“Stir occasionally to prevent sticking.”  This is essentially the same advice I give to my estate planning clients.  When a will, trust, or any other estate planning document is created, it is based on your life at that moment.  Of course we try to anticipate the future, but life often has a way of going in a direction you don’t expect.  Even if your life turns out exactly as you expected, the law changes.  So an estate plan that was perfect ten years ago may not fit your life and family any more.

One example:  In 1996, Congress passed the Health Insurance Portability and Accountability Act (“HIPAA”).  Among other things, this Act regulates the disclosure of “Protected Health Information.”  This can affect your estate plan in many ways.  For instance, if you have a trust, and a trustee becomes unable to manage the trust properly because of mental and/or physical health problems (we call this “incapacitated”), it may be hard for the backup trustee to get the evidence they need to prove these health problems to the court.  Special language can be put in a trust to address HIPAA – but if you have a trust that was created before 1996, it won’t have this language.  It can be amended to add the language.

So if it has been a few years since you’ve created or updated your estate plan, dust it off and read through it to see if it still reflects your wishes.  An attorney can evaluate it to see if it needs to be updated because of changes in the law.

“Stir occasionally to prevent sticking.”  This advice also applies to child custody.  Do you have a parenting plan that has been in place for several years?  What may have worked when your kids were younger may need to be adjusted as they age and become more involved in school and social activities.  Many courts offer mediation that can help you and the other parent create a new parenting plan that fits your kids and your life.

Recession Opportunity

The news lately seems full of bad news, at least when it comes to the economy. Layoffs, cut backs, and grim predictions of doom and gloom. It seems that everyone has been affected in some way by the recession.

As sad and frightening as this can be, there is an upside: great opportunity may be hiding behind the pessimistic headlines. To illustrate this, take a look at some of the companies that were founded during the Great Depression: Motorola, Hewlett-Packard, Xerox, Revlon, Converse, and Interstate Bakeries (it is somehow fitting that the Twinkie is related to the Great Depression). These companies innovated and found ways to meet the needs of the consumers during that time.

One of the ways that innovative companies can take advantage of the recession is to watch what holes are being left by large companies that are pulling back into their shells. For instance, many companies are cutting their marketing budgets or eliminating their marketing departments all together. This is like an employee who decides to save gas money by not going to work – eventually, the paychecks will stop showing up. With other companies scaling back their marketing efforts, yours are more likely to stand out and be noticed by consumers. As this Slate article points out, “it is exactly the tough economic times when you must be marketing yourself, as potential customers are going to be more picky about where they spend their money; these are also the times when you can most efficiently and easily cut in on your competitors and improve your market share.”

This may also be an excellent time to start a business or expand an existing one, taking advantage of discounted prices on equipment, fuel, and real estate. It is also a fantastic time to hire employees. Many workers, often with years of experience, have been laid off and are job hunting.

It is important to remember that – regardless of the economic climate – you shouldn’t dive in and start a new business or do a significant expansion of an existing business without fully exploring the benefits and risks. I highly recommend speaking to an accountant, a business consultant, and/or an attorney before beginning.

For more notes on how companies weathered the Great Depression, check out this slide show from BusinessWeek.

** note:  this blog entry has been edited to correct coding problems **

Problems with your Dell computer?

If you purchased a Dell computer after April 1, 2005, and had problems getting repairs under the warranty or problems with financing or rebates, you might be entitled to some settlement money.

In Oregon, you'll need to file a claim within 90 days (so, by April 12th).  Here's a web page with more information about the settlement:

Oregon DOJ Settlement Announcement

Essentially, you need to call Enforcement Officer Sally O'Neil at (503) 373-0374 and request a claim form.  I just called this number and got Ms. O'Neil's voice mail, which instructed me to leave my name, address, and phone number to be sent a claim form.  I've requested a claim form - I have two Dell computers and I had warranty problems with one - and if the claim form contains any more information about who is eligible, I'll write another blog post.

Don't forget, if you want to make a claim, you'll need to do so by April 12th.

The Paper Chase, Part 3: Filing systems and options.

In the last two posts, I discussed what papers you need to keep, and which of those should be kept in secure storage.  In this post, I’ll discuss the options available to store the rest of the papers that you are keeping.

A popular option is to store the papers in hanging files in boxes or drawers.  This is a great way to keep important documents close at hand and easy to access (assuming, of course, that they are in some kind of order).  However, they are still vulnerable to fire, flood, spilled coffee, and other calamities.  You’re keeping them for a reason, so you don’t want them destroyed, but keeping your entire filing cabinet in a safe is not a viable option for most people.

An increasingly popular option for dealing with this problem – an option that I utilize every day in the law office – is to scan the documents and save them on your computer.  You can then keep the originals in files or shred them.  It is important to keep off-site backups of the computer files, as a fire or flood can be just as devastating to a hard drive as it can be to paper.

Scanners come in basically two flavors:  flat-bed and sheet-fed.  The sheet-fed is faster to load, especially if it has a document feeder attached, but the flat-bed is more affordable (starting under $100).  If you have many documents to scan, especially documents with many pages, a scanner with a document feeder is a huge time-saver.  I use the Fujitsu ScanSnapin the law office, and I highly recommend it.

As I mentioned above, you’ll want to make regular backups of the computer files.  The best practice is to keep a backup at your home as well as one off-site.  You can store a backup off-site by mailing it to a trustworthy person (parents, siblings) in another state, or you can use one of the many internet options available.  I use Genie-Soft– it’s backing up my computer as I type this – but there are many other options, including the data protection giant, Iron Mountain.

If you’d like more information about any of the topics in this series of posts, feel free to contact me and I can send you links to more in-depth articles on the topic of your interest.

The Paper Chase, Part 2: Where do I store the papers I’m keeping?

In the last post, I discussed what papers you should keep and what you should toss.  Now that you’ve decided what you’re going to keep, you need to decide whether to keep papers in secure storage or not.

First, what is “secure storage”?  When I say “secure storage,” I’m referring to a place that has protections against theft, fire, flood, and other destructive forces (like spilled coffee!).  The two common options are a safe deposit box at a bank and safe in your home.  A safe is a one-time investment, whereas a safe deposit box requires a yearly fee.  On the other hand, a box at a bank is more secure than a safe at your home.

When deciding which option to use, it is important to think about whether a document would be needed by your family in an emergency.  If the answer is Yes, that document is probably better kept in a safe at your home, as your family members will not be able to immediately access a box at a bank if you are not available.

For more information on how to choose a safe for your home, check out this article that discusses how to evaluate home safes.

Secure storage should be used for the following:

- Papers that are impossible or difficult to replace.  This category might include important documents (birth certificates, etc) from foreign countries, large amounts of cash, and old government documents.  Microfilm, better known as microfiche, was invented in the mid 1800’s but did not gain widespread use until 1930-1940.  Government documents from before that time period – and even some after that – may still be only stored in paper form and the government’s copy could be destroyed by fire or flood.

- Important papers with a long replacement waiting time.  Most important documents, such as birth certificates, deeds and titles, and social security cards, can be replaced if lost or destroyed.  However, it can take significant time to replace these documents, and you may need them in the meantime to prove your identity or your ownership of property, so it is best to keep them in a secure location.  It is also important to note that the Social Security Administration will only issue 10 replacement cards during a person’s lifetime.

- Papers that need to survive a disaster (fire, flood, etc).  Keep your insurance policies (copies are okay) in a secure location, along with supporting documentation such as home inventories, receipts for major purchases, etc.  As with the previous category, these items may be replaceable, but it is best to have them immediately available in an emergency.

- Estate planning documents, such as wills and trusts.  The originals of these documents should be kept in secure storage.  If you would like to have them accessible for reference, make a copy to use as a reference.  When originals have been destroyed, courts will sometimes accept copies of wills and/or trusts, but this can cause additional expense and frustration for your family.  In a case last year, a couple had stored their documents in their basement.  A flood destroyed them, and because the attorney who drafted them was no longer in business, the couple had to pay for new documents to be created from scratch.

Next time, I’ll talk about what to do with the documents that don’t need to go into secure storage.

Happy New Year!

The Paper Chase, Part 1: What do I keep?

A topic has been popping up over and over recently in conversations I’ve had, both with clients and with acquaintances:  what papers and files do I need to save, and what can I toss/shred?

The simple answer is that you need to save anything that you’ll need access to in the future.  Of course, knowing in advance what those items are is the hard part.

To get you started, here’s two articles that discuss when to shred the various papers that fill up file cabinets:

Unclutterer, Paper Clutter Begone Part 4

Real Simple, 5 Steps to Simpler Record-Keeping

The central theme of these articles is fairly basic:  save information that isn’t stored elsewhere, and shred papers once the information on them is either out-of-date (ie, the warranty for the toaster you just threw away) or is correctly summarized on another piece of paper (ie, get rid of your pay stubs once you’ve confirmed that your W-2 for that year is correct).

One of the most common categories of confusion is tax documents.  If the IRS – or your state revenue office – pays you a visit, having all of your papers available and in order can make the process much easier on everyone.  Generally, you can only be audited on the past three years – but there are exceptions!  The best practice is to keep your tax returns and papers (ie, W-2s, 1099s) forever.

What about proof of what you’ve deducted – receipts, checks, etc?  Obviously you’ll want to keep these for at least three years, in case of an audit, and it would be best to keep them for at least seven years.  If you have deductions for business expenses or extensive personal deductions, such as for medical expenses, you should talk to an accountant or tax attorney about what to keep and for how long.

What about emails, letters, and other non-financial documents?  It is impossible to have a comprehensive rule for these kinds of papers.  Anything related to a dispute or a possible dispute – for instance, an email to a neighbor about a new fence – should be kept. 

In future installments, I’ll discuss where and how to store the papers you decide to keep.

Attack of the Plastic Packaging

Amazon has launched a new product line, "Frustration-Free Packaging."  The idea behind this is to offer products that are packaged in a way that doesn't inspire screams of rage when you try to open it.  You probably know exactly what they are talking about - products encased in a hard plastic shell that turns into a razor-sharp death trap when you try to open it.

Okay, maybe I'm exaggerating a little about the "death trap" part...but the "razor-sharp" description is pretty accurate, and those packages can be very dangerous.  Jokes abound about the McDonald's hot coffee lawsuit (a case I'll discuss in a later post), but product liability can be a serious issue, and I'm surprised that no one has been seriously injured by one of these packages.

So kudos to Amazon for taking this step, and hopefully other companies will follow suit.  The offerings at Amazon are fairly limited right now, but I expect they'll be expanded before the holiday season gets into full swing.  Another huge benefit to this packaging is that it seems far more environmentally friendly.

Another company that has been offering this type of easy open, mostly-recyclable packaging for a while is IKEA.  Most of their products are packaged in basic cardboard containers.  If you know of other companies with consumer friendly packaging, post them in the comments!

Don't let the lawsuit goblins get you this Halloween!

With Halloween rapidly approaching, here are some quick tips about how to prepare your home for the onslaught of little ghosts and witches – from a legal perspective:

Go out to the front of your house at dusk and look at it through the eyes of a child.  Are there any hazards?  Can you fix them or cover them up?  Some examples:

- Bumps or cracks in the walkway that little feet could trip on.  Consider fixing them or at least making sure the walkway is well lit.

- Items that may be enticing to children but that are dangerous, such as a pond.  Try to shield these from view with decorations, or perhaps drain the pond for the night.

- Low branches of trees or bushes that encroach on the walkway that might scratch a child.  It might be wise to trim the plants back – in the excitement of Halloween, a child may not be looking where they are going.

If you have pets, keep them in another room when you are answering the door.  Even a pet that is normally quite calm can be startled or frightened by a costumed, excited child.

Here’s some more Halloween info:

Safety tips for the kids from the Red Cross

Last-minute costume ideas from Real Simple magazine

Fun pumpkin decorating projects from Better Homes and Gardens

Have fun!

I’ve sold my car – now what?

When you sell a car to someone, there are a few steps you should take to protect yourself from future liability.

- First, collect information from the buyer – their name, address, phone numbers, their driver’s license number (a copy is even better).  Write this all down on a piece of paper, along with the vehicle information (make, model, year, plate number, VIN, etc) and the date of sale, and keep it in your files.

- Write a sales contract.  It doesn’t have to be complex, but it should contain the pertinent details – who is buying and who is selling, what is being sold (include the VIN), how much is being paid, the date of the sale, and anything else that you and the buyer agreed upon.  Both the buyer and seller should sign the contract, and each should keep a copy.

- Sign the title and write in the odometer reading, and give it to the buyer, keeping a copy for your files.

- Your state may require you to fill out a form notifying DMV that you have sold the car – check the website for the DMV in your state to find out what you must file.  For Oregon, go to this web page:  http://www.oregon.gov/ODOT/DMV/vehicle/sell.shtml

- The final and most important step is a bit unorthodox, but it has the potential to save you from a large amount of frustration and hassle in the future – I’ll explain that more below.  The most important step is this:  go with the buyer to the DMV and watch them put the car in their name.

This final step is very important because until the buyer goes to DMV and registers the car, your name will remain in the DMV computer system as the owner of the car.  What this means is that if the buyer gets into an accident, gets a ticket, or otherwise does something with the car to incur liability before registering the car, you will have to prove that you no longer owned the car – and that can be much more difficult than it sounds.  Take the extra step now and save yourself the headache down the road.