New laws proposed to reinforce the rights of residents in residential care facilities

Senate and Assembly committees are in the process of reviewing nine bills intended to reinforce the rights of residents in residential care facilities. The package of bills, introduced earlier this year under the collective title of the RCFE Reform Act of 2014, is sponsored by California Advocates for Nursing Home Reform. The bills seek to provide better scrutiny of residential care facilities by the State Social Services Department, promote residents' rights through enactment of a bill of rights and of onsite resident and family councils,  enforcement of rule violations and enhanced sanctions, better investigation of complaints, and enhanced training of staff members of facilities.

For more information, go to the CANHR website (www.CANHR.org) and click the Legislation tab.

The bills are:  SB 894 and 895 (Corbett); SB 911 (Block); SB 1153; SB 1218 (Yee); AB 1554 (Skinner), AB 1571 and 1572 (Eggman), and AB 2171 (Wieckowski).

SEC Sets New Fee Rate for Securities Transactions

SEC Sets New Fee Rate for Securities Transactions

The SEC recently announced an increased fee rate applicable to most securities transactions, as determined in accordance with Section 31 of the Securities Exchange Act of 1934. Effective Tuesday, March 18, 2014, the fee rate will be set at $22.10 per million dollars. The assessment on security futures transactions will remain unchanged at $0.0042 for each round turn transaction.

Daniel Alexander, Attorney www.dalexander.com

Wiki-bill, a new frontier

A wiki-bill?  Make laws like creating and changing a wiki page, REALLY? 

 

Assemblyman Gatto has proposed introducing legislation in the trusts and estates area through a “wiki-bill”. A “wiki-bill” is created in a similar manner to entries made in Wikipedia: additions and comments made by interested individuals in the subject-matter.

Any member of the public can participate in this process by going to www.mikegatto.wikispaces.com

 

Daniel H. Alexander recognized as "Top Lawyers In California"

Attorney Daniel H. Alexander has received recognition once again in the 2014 edition of The Legal Network as being one of the "Top Lawyers In California" with the "Highest in Ethical Standards & Professional Excellence"

New 2014 California LLC Rules May Impact You

Effective January 1, 2014, if you conduct business through a California limited liability company(“LLC”), the LLC will be subject to a new set of laws called the California Revised Uniform
Limited Liability Company Act, or RULLCA.

This new law will completely replace current law and will apply to all LLCs formed in California, including those formed prior to January 1, 2014.

While much of the new law is similar to current law, significant changes include:

• Clarifying fiduciary duties and identifying when those duties may be altered or eliminated in an operating agreement;

• Defining conditions for dissociation of a member from an LLC, including when a member may withdraw from an LLC and the resulting impact on the member and the LLC;

• Enacting new provisions governing LLC capitalization;

• Changing the priority between the operating agreement and the LLC’s articles of organization when a conflict exists between the documents;

• Establishing limitations and restrictions with regard to the indemnification of members and managers from liability for money damages arising from a breach of duty, and;

• Providing a more detailed set of default rules that will go into effect when an operating agreement is silent.

What Should You Do?

To avoid unwanted consequences, the operating agreements of existing California LLCs should be reviewed as soon as practicable and, ideally, before January 2014, to identify any provisions that may (i) not be in compliance with the new law; (ii) need to be clarified or changed to eliminate ambiguity as a result of the new law taking effect; or(iii) raise issues wherein alternatives to the new law should be considered.
Further, any inconsistencies between the operating agreement and the LLC’s articles of organization should be assessed and resolved.

Give our office a call if you have any questions or concerns regarding your LLC.

Law Offices of Daniel H. Alexander, PLC / www.dalexander.com / (800) 530-4529

Advantages of Incorporating (Series #3 out of 7) - Tax Savings

Advantages of Incorporating (Series #3 out of 7)- Tax Savings.

When you incorporate there are numerous tax advantages at your disposal that are virtually impossible to accomplish with other business entities. By incorporating you create a separate and distinct legal entity.

Because of this, there are many transactions that you can structure between you and your corporation to save big money on taxes. For instance, if you own a building, you can rent office facilities to your corporation and claim depreciation and other deductions for it and your corporation can then claim the rental expense. Not with a sole proprietor or a partner in a partnership.

Also, after paying yourself a reasonable salary, your corporation can then pay dividends to you, which is taxed at a capital gains rate (approximately 15%). Compared to the self employment tax and regular income tax that a sole proprietor or a partner in a partnership pays which is usually 30% to 40%. Therefore, in the above example, the corporation saved the shareholder at least 15% in taxes.

These are just a few example. Give Attorney Daniel Alexander a call at (800) 530-4529 or check out our webpage at www.dalexander.com for additional information

Does the "due on sale" clause in a Mortgage apply to a transfer to a relative from a trust or through Probate?

I have heard a lot of misinformation regarding the treatment of mortgages at the death of a loved one.  Some people think they will have to qualify for the loan in order to keep the mortgage and house, or that there is a "due on death" clause and the mortgage is due at the death of the loved one, or that the "due on sale" clause applies in this situation.

All the above are false.

There are several exceptions to the "due on sale" clause which can be found in The Garn St. Germain Depository Institutions Act of 1982, (U.S.C.) 1701j-3(d)(8). 

The term “due-on-sale clause” means a contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the lender’s security instrument if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent. 

Some people call this an acceleration clause where the loan is accelerated and becomes due immediately.

One exception in the Garn St. Germain Act is that the "due on sale" clause will not apply to: a transfer to a relative resulting from the death of a borrower.

(e.g. – a transfer from a trust or in probate to a relative, such as a spouse or child)

So this means that the mortgage company cannot call the loan, cannot start foreclosure, etc. just because the property is being transferred to a relative in a trust or probate process. 

You as the relative receiving the property can either continue to keep making the required payments or you can ask the bank to add you on to the loan / assume the loan and then continue to make payments.

Now this does not mean you do not have to pay the mortgage payment.  Of course you have to make the mortgage payment.  If you don't then they can foreclose on the property.

Remember, be sure to get good advice from a attorney that practices Estate Planning and Probate!

For more information contact Attorney Daniel H. Alexander at (800) 530-4529 or review other articles on our website - www.dalexander.com or see the blog http://www.dalexander.com/node/88

This does not constitute legal advice.  Talk to an attorney in person or on the phone.