What the “Fiscal Cliff” Resolution Means for Personal Estate Planning

At the end of 2012 one of the most popular media and water cooler topics was the so-called "Fiscal Cliff."  The Fiscal Cliff was such a frequent topic of discussion and debate because it referred to the serious financial ramifications that the United States would face if the Budget Control Act of 2011 went into effect on December 31, 2012.  These financial changes would have meant an end to the temporary payroll tax cuts, resulting in a 2% tax increase for employees, the end to several tax breaks for businesses, a change to the alternative minimum tax, a rollback of the "Bush tax cuts", and the beginning of taxes related to the Affordable Care Act. However, mere hours before midnight on December 31st, a deal was struck to avoid a financial crisis, and President Obama signed the American Taxpayer Relief Act of 2012 (the "Act").  Among other things this resolution impacted taxes related testamentary and inter vivos gift-giving that may impact estate planning for some.  

  

Injured on the Job: Can You Be Replaced by a Seasonal Employee?

Janet works as a server and an assistant chef at a catering company. During a big event, she slipped on the wet tile floor in the kitchen while carrying a tray of dishes. When she fell, she hit her head on the corner of the sink and was immediately sent to the Emergency Room where she was diagnosed with a concussion. The neurologist told Janet that she should take a week off from work and discuss having a lighter work load and shortened shifts with her employer. Her employer, understanding that her injury was work related, agreed to shorten her shifts and make her work load lighter when she returned after a week. Before Janet was scheduled to return back to work, her concussion symptoms worsened and the neurologist told her she should return to work at a later date. Worried about her job and a pile of bills, Janet filed for workers’ compensation to cover her lost wages; her boss told her that a newly hired seasonal employee could pick up her shifts.

The Wage Gap - Only 13% of Food Workers Earn a Living Wage

Using the 5 most populous states (Illinois – 12,875,255; Florida – 19,317,568; New York – 19,570,261; Texas – 26,059,203; and California – 38,041,430) and comparing the living wage (as calculated by  MIT's Living Wage Calculator) to the minimum wage as reported by Minimum-Wage.org, it's easy to see the wage gap – only 13% of food workers earn a living wage.