Attorney Shannon Wynn: Avoid these five small-business-crushing scams

Consumers aren’t the only victims of fraud. Wynn at Law, LLC hears about thousands of small business scams every year. A reward of our business is being able to work with entrepreneurs to get a business off and running (see related article). It doesn’t take much more than a single scam to derail that dream.

These days it’s fairly simple to pop up an official-looking website and professional – but fake – letterhead. Aside from the possible remuneration from and legal ramifications for the scammers, if they’re caught, once the business owner parts with the money for a scam, the money is gone.

Wisconsin’s Better Business Bureau notes, “We continually see various scams against small businesses and they seem to be increasing each year.” Some of the common small business scams reported to the BBB include:

1.       Phony invoices. Businesses receive fake invoices demanding payment for product or services they never ordered or received. Often, if you look closely, you’ll see fine print that identifies the bill as an actual solicitation for business. Generally, the amount is small enough to not raise a red flag. Make sure that the business billing you is a business with whom you are familiar. If not, question it. Wynn at Law LLC’s best small business clients limit the employees authorized to place orders or pay invoices.

2.       Directory scams. A problem that has plagued businesses large and small for decades involves deceptive sales for directories. Scammers call claiming they want to update the company’s information for an online directory… when they could be using the info to set up your business for identity theft. Otherwise, they may also try to upsell your listing in a directory that’s irrelevant to you or your customers, or doesn’t exist at all. Do not give out information about your business to anyone, unless you know for what the information will be used.

3.       Charity pitches. Even new businesses are routinely asked to donate funds to needy causes. While many requests are legitimate, every year small businesses become victims of fraudulent or deceptive charitable solicitation schemes. If the charity isn’t on give.org, don’t give.

4.       Coupon books. Small business operators are often approached to participate in coupon book promotions. They seem like an inexpensive way to advertise your start-up. Problems occur if the promoters change the terms of the coupons to make them more attractive to buyers, when the books are oversold or when books are primarily distributed outside our area.

The fifth scam is among the most prolific – with terrifying outcomes. Internet & phone scams are a common nightmare. Watch out for ransomware, phishing, URL hustles, and spoofing scams. Scammers play on fear, convenience and lack of technical knowledge. Installing a protective software program like Norton or McAfee is a good start. A ‘firewall’ is recommended because it keeps your inside information inside… which includes your customers’ information. These days, you’re flirting with disaster by clicking on any links in unsolicited emails. One recent tip we heard was to shut off the preview pane on email inboxes to avoid emails a spam filter missed.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 Photo by Brian Jackson, used with permission.

Attorney Shannon Wynn: ‘By-Owner’ real estate sellers need protection

One article earlier in the Wynn at Law, LLC archives mentioned our current real estate market cycle as being a seller’s market. There’s not much supply, and plenty of demand. Even in a hot seller’s market, there’s a temptation to increase the net price received for the property by offering it For Sale By Owner, or FSBO. (Real estate pros pronounce it ‘fizzboh.’)

Professional realtors have a home-selling advantage by having access to the realty company’s ad money, marketing and presentation resources, and buyers. However, the cost of that advantage is about six percent of the sale. So, FSBO sellers take over the job of the listing agent hoping to pocket that six percent. Many solo sellers do hire professionals to appraise, stage, photograph, video, drone, design flyers, and help them with the paperwork. Some don’t, and just bank on it selling easily because of the market.

Even a realtor-oriented source like Realty Times concedes that a part of a hot market will go FSBO. That website’s tip – and ours – for those sellers is to get a lawyer: “If you have opted to do a realtor-free FSBO transaction this is definitely the time to call an attorney.”

Every real estate transaction requires a deed. It has to be accurate. It has to be on-time. Anyone can access the records at the register of deeds office to pull that off. As much fun as that sounds, can he or she also assure that deed is legally sound? No. Realtor transactions always have an attorney: The title company and lenders insist upon it for that very reason.

Something else to consider: Another way a good attorney has your back when you go solo is by being your surrogate if negotiations get sticky.

Getting a lawyer involved early – as soon as you decide to go it alone – gives the owner an edge by being ready for closing. It provides the peace of mind that comes from having trained eyes look for other factors impacting the closing… before the closing. (See our previous article)

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

 Photo by Andy Dean, used with permission.

Attorney Shannon Wynn: Form your company first

Wynn at Law, LLC counsels many business owners when a legal situation arises. However, the best opportunity for us to help a business happens at the front end, somewhere between the inspiration to start the business and the day the first customer arrives. We totally get the excitement and energy every business owner exudes when the lightbulb burns bright to start an enterprise.

Forming a general partnership doesn't require any legal paperwork, but it wouldn’t hurt to have a written agreement amongst partners. The fact is, partnerships are formed every day without even intending to do so if you and another person start working together on a business.

Other business structures require a bit more organization. A tax adviser is going to help with the tax advantages or disadvantages of organizing a business as a partnership, a limited liability corporation (LLC), or incorporate as an S-corp or a C-corp. I’ve listed these in order from the easiest to form to the more complex.

An attorney is your lifeline to help you form the business within the state guidelines while protecting your best interests. As one of my clients puts it, ‘Everything is great when it’s great… when it goes south you’re glad to have an operating agreement.’

She has an LLC, which needs an operating agreement among the LLC members. It governs the business and the members' financial and managerial rights and roles. For a corporation, they’re also known as by-laws.

Remember what the two L’s stand for: Limited Liability. The operating agreement separates the owner’s or owners’ liability from the business’ liability. In short, you separate your business finances and personal finances, shielding the liabilities of each from the other. That’s a huge deal, especially if a suit is brought against the business – or, just as crushing – at some point you face personal bankruptcy, a frequent topic of Wynn at Law LLC’s articles. (See our archive, below right, please)

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

Photo by Andrew Lobov, used with permission.

Attorney Shannon Wynn: Graduation, gifts, and financial aid

 

One of the great rites of spring is the new crew of young adults graduating high school and heading off to their futures. When I'm not at Wynn at Law, LLC, I teach at Marquette University Law School, so I may see a few of them further in their academic journeys.

 

For students, parents, and grandparents, the issue of affording tuition is best tackled a few years before high school graduation. If you're blessed with a full-ride scholarship or a generous gift from family, the Free Application for Student Aid (FAFSA) is a challenging hurdle you'll skip. For families planning to apply for financial aid, here are a two estate planning things to keep in mind long before commencement. 

 

Inheritance – Inherited income impacts a student’s eligibility for certain amounts of financial grants (which don't have to be repaid) and can affect the amount of loans (which have to be repaid after graduation). The FAFSA looks at finances of the entire family including the previous tax year’s income. Inheritance or gifted money, even to a parent, can affect the amount of financial aid for the student. 

 

Generally, one-time events, like inheritances, are handled by adjusting the income and counting the sum as an asset. The asset protection allowance (APA) allows a certain amount of money in retirement and non-retirement accounts, like an inheritance, to be spared assessment. But the federal government does expect parents to use a percentage of their unprotected assets to pay for their child’s education. The APA looks at the age of the oldest parent to determine the amount spared from assessment, assuming a younger parent has more time in the workforce before they'll need the assets.  

 

For parents, a way to legally lower the total amount of assets recorded on the FAFSA is to use any gift or inheritance to pay off credit card debt and auto loans because consumer debt is not considered when a student applies for financial aid. Paying off that high interest revolving debt in an important part of avoiding bankruptcy, a frequent topic at Wynn at Law, LLC. 

 

Savings and investments – We all hear about the tremendous burden of student loan debt new college grads have to repay. Saving up a ton of money on a summer, minimum wage job isn't likely to reduce the amount borrowed by much. However, keep in mind two things: 1) reducing any amount they'll have to borrow is a good thing, and 2) If they do save summer earnings, the government expects that 20 percent of it be used for college, so make sure savings are set aside for the teen. 

 

On that note, if parents wish to transfer to their accounts assets held in a child’s name it’s best to do so at least two years before the FAFSA. Moving assets like this could trigger other issues when it comes to both financial aid and taxes so be sure to contact professionals for seasoned money management advice. 

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

 

 Photo by Monkey Business, used with permission. 

Attorney Shannon Wynn: When building a home, get lien waivers

A casual conversation with one of the many area realtors with whom Wynn at Law LLC works revealed an interesting take on the current real estate market in Walworth County. It’s a seller’s market right now (see related article). The demand outpaces the supply. That scenario is great for sellers, and it’s also great for those wishing to build rather than buy a home.

There are plenty of subdivisions in development in the area. Visitors from Chicagoland are usually struck by the amount of larger parcels available for country living, too. When you buy one and start to build – or if you’ve already broken ground – an important pair of words for your venture are: Lien Waiver.

A lien waiver is a legal document you have your contractors and subcontractors sign. It says – I’m paraphrasing – the contractor has been paid in full and releases any future claim on the property. What this document does is protect you from the contractor coming back to say such-and-such wasn’t paid for, or they neglected to invoice you for X component.

Wynn at Law LLC works with both, contractors and property owners, and we know most of our area contractors act entirely above-the-board when working on residential or commercial projects. Sometimes, legitimate expenses for which you weren’t invoiced get lost, forgotten, or delayed. Other times, a contractor might struggle financially and return to bill you. Protecting yourself and your property from unexpected claims once the work is complete is a wise peace-of-mind move.

Roofing. HVAC. Foundations. Plumbing. The dwelling itself.  Each of those are put together on your behalf by skilled tradesmen who are owed for their work. When a builder or contractor slaps a lien on the property because of amounts unpaid, they have been to a court clerk to get that lien. That doesn’t mean they are 100 percent entitled to the amount they claim to be owed, only that they have presented evidence that something wasn’t paid in total for the work they performed. A lien waiver signed as you deliver the final check on the final invoice protects you. This goes for home repairs, additions, remodels, as well as new construction.

There are waivers you can get during the project for work performed ‘to date’ as well… feel free to talk to us about those. And don’t be uncomfortable bringing up the subject of lien waivers: This is nothing new to any contractor. Be wary of one who won’t sign it.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

 Photo by Leena Robinson, used with permission.

Attorney Shannon Wynn: Minding summer’s attractive nuisances

 

Warmer weather has at last arrived. School’s winding down. That means more kids out and about. When a kid spots something in your yard and says, ‘Wow, that looks like fun,’ there is probably the potential for litigation. Wynn at Law LLC’s team isn’t the downer you’ll neglect to invite to your neighborhood party, but we do help clients stay clear of ‘attractive nuisance’ trouble. I’m talking about a pool. A trampoline. A ladder. A junked fridge. Kids are drawn like magnets to them and other adventures.

When adventure turns into trespass, misadventure and injury and it ends up in court, the property owner is under fire… not the trespasser.

Defining an attractive nuisance is lengthy but pretty cut-and-dried. It’s anything artificial on your property you know that can cause harm, especially to people too young or inexperienced to understand the risk, and you fail to take reasonable measures to eliminate the danger. It’s a mouthful. But so is defending your attractive nuisance in a court case.

Here’s a link to an interesting piece from the American Bar on home/property owner risks, and here are three common nuisances with some remedies that will help keep summer fun, safe, and litigation free.

·         Pools – even the small splash pools – are the leader in litigation. Property owners sometimes prevail in swimming pool injury cases, when they can show a trespassing child got into pool areas despite the owners' reasonable measures (high fences, locked gates) to keep them out.

·         Home construction projects draw in little boys like moths to a flame. Loose lumber scraps in the yard or dumpster are like gold to them. Newly dug foundation holes are an invite to treasure hunt. You should wall or fence off these areas well. Courts sometimes side with or exempt builders and construction companies in attractive nuisance cases: Their very businesses require them to maintain a temporarily hazard. However, the property owner should see the risk as incentive to minimize dangers to children.

·         Play structures are designed for kids, but are a risk to them as well. A fenced yard helps keep out younger or less experienced kids when it comes to skateboard jumps, trampolines, jungle gyms, and tree forts.

See the common theme here?  Fences. There’s an old saying that good fences make for good neighbors. The minor expense of a fence also makes good sense for protecting you from litigation.

 

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

 Photo by Scott Stevens, used with permission.

Attorney Shannon Wynn: Being neighborly while protecting your rights

When you buy a property, one of the things Wynn at Law, LLC looks at closely is whether or not the property has easements. The most common easement is the right to travel over your land, like you'd give to the power company. This is known as a 'right of way.' Property owners commonly grant easements for the placement of utility poles, utility/cable/phone trenches, water lines, or sewer lines. If an easement is in place, the legal title to the property still remains in your name as the owner. The person or company granted the easement owns the right of way.

Seems pretty cut and dried. Everything is, until it isn't. With the amount of lake property, hunting land, and farmable acreage in Walworth county, there sometimes is access given to neighbors to have right of way to the water, woods, or fields. This isn't the same right of way you give WE Energies. This usually is considered 'permissive use' – best kept in writing with an attorney – or can be an actual easement. An actual easement by a neighbor over your property can devalue the property you're buying… and if you're a seller, it could scare off buyers who don't want neighbors on their land the same way you allow.

Easements are difficult to reverse, and you probably wouldn’t want to reverse it when you're talking about a utility company easement. We look at them to give you a little foresight just in case there is a conflict down the road. Permissive use, on the other hand, can be reversed. You can just revoke the permission, again, in writing.

Wynn at Law, LLC helps you walk that fine line between being neighborly and exposing your property and yourself to potential litigation. Easements do open the landowner up to some liability and some trespass you may not foresee. It's best to work with a neighbor on an airtight agreement on what you're granting, for which use, and when. Putting it in writing with signatures from all parties is the best way to protect your largest investment even when the situation for which you grant permission seems harmless at first. Verbal agreements do not stand up in court.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

Photo by John Panella, used with permission.