Volume 1, Issue 3: JUNE 2008

In This Issue:

K&G would like to present our very own Attorney Karen K. Greenberg as the new President of the American Academy of Adoption Attorneys, a network of attorneys across the U.S. and Canada. Congratulations Karen!

Real Estate Law
When Bankruptcy Hits Home: Will A Homestead Declaration Protect You?

A Massachusetts Homestead Declaration protects up to $500,000.00 of equity in your home, protecting the home from being taken by creditors. A Declaration of Homestead must be filed with the Registry of Deeds, and can be done at any point when one owns and occupies a home as a primary residence, not just at the time of purchase.

While still a good idea, the protection a Homestead Declaration offers has been limited by relatively recent changes in the Bankruptcy Law. Bankruptcy Code Section 522(p) was introduced in 2005, and states that a debtor may not declare as exempt any amount of interest acquired during the 1215-day period preceding the date of filing a Petition for Bankruptcy that exceeds in the aggregate $125,000.00 in value in real or personal property used as a residence or claimed as a Homestead. 11 U.S.C. § 522(p).

What does this mean in plain English? In short, Section 522(p) limits the amount that a debtor may claim under a Homestead exemption to $136,875.00 (the figure has been updated since the drafting in 2005) if the property was purchased or acquired within approximately three years and four months of filing for Bankruptcy. The Bankruptcy Code essentially cuts the protection offered by a Homestead Declaration by 3/4 for people owning their homes for less than this amount of time. However, the change has no effect on the protection afforded by a Homestead Declaration to individuals who have owned their home for more than 1215 days, even if the Declaration of Homestead was filed within the 1215-day period. These changes in the law should be taken into consideration when thinking about transferring property and/or declaring Bankruptcy. For example, one should keep this limitation in mind when determining whether or not to transfer property to a family member or trustee. Should the person acquiring the property or an interest in the property declare bankruptcy within 1215 days of the acquisition, he or she will have limited Homestead protection.
Mia Rosenblatt Tinkjian ext.226

Corporate Law
Proven Ways to Recession-proof Your Business

Good companies and good products are in demand no matter what the economy is doing. The keys to riding out any recession are planning ahead, being willing to listen to everyone within your organization, and paying close attention to their ideas and suggestions.

Recession-proofing a business begins with being proactive. Remember, many of your customers will also be feeling the pinch. Listen for opportunities where you can offer a solution to their problems, i.e., propose different sizes of shipments or offer new product formats. In addition, focus on service. It is one of the best ways to add value without additional cost.

Other companies will follow the traditional approach of laying off staff during a downturn. But employees that are fired during a recession will have to be re-hired when business picks back up, often costing a lot more in the long run. Instead, consider adding employees, since some very talented people may be let go by your competitors. An aggressive approach could add their skills and experience to your organization, probably for less money.

A recession is no time to have high overhead costs associated with servicing high debt loads, especially if the debt was incurred for non-productive purposes. While you are attempting to cut costs, call in favors by asking to have payments to suppliers extended; and,
if you have old debts, compromise them.

If a contract, lease, or other obligation will soon be up for renewal, negotiate a lower price. You may also be able to make cuts; if you don't need 50,000 square feet of office space, pare down. A recession is a reality check that requires a tough look at your expenses.

Recessions are part of the economic landscape. They won’t be going away anytime soon. The best thing you can do is determine a plan of action and stick to it both prior to and during these
tougher times.
Steven S. Konowitz ext.236

Litigation Law
Litigation Risk Assessment as a Business Organization Tool

Few business owners would dispute the importance of effective business planning and sound business practices to running a successful and profitable business. As many of Konowitz & Greenberg’s business clients can attest, these principles are the mantra of this firm’s corporate law department.

However, many small businesses do not effectively use the planning tools available to them, particularly when considering and planning for litigation, which can be a valuable business organization tool. As part of our representation of small businesses in both corporate and litigation matters, Konowitz & Greenberg attorneys work with clients to routinely evaluate their businesses, helping them identify and plan for possible litigation before it occurs. The benefits of such planning are not limited to being better prepared for litigation, but include better business practices in general. The reality is that most small businesses will, at one point or another, be involved in litigation, whether as a plaintiff suing to collect on an unpaid debt, as a defendant in a suit filed by a disgruntled employee, competitor or customer or in some other type of business dispute. Companies that plan for these contingencies by adopting sound business practices can improve their chances of prevailing in litigation while minimizing the costs of that litigation and, simultaneously, strengthening their business.

Such planning, and the resulting benefits can take many forms. For example, builders and contractors of every size should adopt clear, consistent, and easily understandable accounting practices and should take particular care to document all work performed and approvals granted. Without such methods in place, companies may find it difficult, expensive, and often impossible to prove what work it has done and what it is owed if a customer refuses to pay. In contrast, if the work has been clearly and consistently documented, it becomes much easier, and much less costly, to prevail on a claim for monies owed.

Likewise, a company adding a website to sell its product should evaluate its exposure to additional liability (i.e., potential lawsuits if client data are stolen from the website) and consider taking steps to reduce its exposure, such as obtaining appropriate insurance coverage.

There are, of course, as many other examples to cite as there are business. We are always happy to discuss litigation potential and risks with our clients, and we encourage you to give us a call.
Brad A. Compston ext.225

Family Law
Understanding Mediation in a Time of Need

Mediating divorce is a means of resolving disputes that allows each party input and control over the outcome. Orchestrated appropriately, no one wins, no one loses. Rather, the parties walk away from the table knowing the results are based upon the needs and concerns of each of the parties.

Why mediate? Mediation allows both parties to reach common ground through discussion and take time to understand the other party’s position, knowing that the ultimate result is one achieved through both parties, not forced upon them by a court. Mediation allows the parties to be in charge of their Separation Agreement and its terms.

During the mediation, the parties discuss issues relating to the division of property and the payment of child support and alimony, when appropriate, with the hope and intent that all issues can be resolved by agreement. Of course, consultation with an attorney of your choice is essential to ensure that the agreement is in your best interests.

The following conditions apply in mediation:

Please call Karen if you would like more information regarding mediation.
Karen K. Greenberg ext.235

Estate & Trust
Estate Planning and Considerations for Adoptive Families

In April, Arlene Kasarjian presented the “Estate Planning for Adoptive Families” workshop at the annual conference of the Adoption Community of New England, Inc. (ACONE). ACONE is a Massachusetts-based organization that provides information, advocacy and support for all those touched by adoption.

Everyone needs an estate plan, regardless of age, marital status and financial status to provide for the disposition of assets, to provide for children, and to provide for one’s incapacity. But for adoptive families, naming a guardian for minor children is particularly critical. The chosen guardian must be sensitive to adoption issues and understand how the adoptive family has addressed adoption with the children. Guardians should also be prepared for the possibility that as the adopted children get older they may want to search out their birth parents. Guardians must be willing, ready, and able to support adopted children in that mission. In addition, the chosen guardian must be sensitive to an adopted child's heritage, if different from their own.

If you would like more information about ACONE, adoption, or estate planning, please call Arlene.
Arlene L. Kasarjian ext.228

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