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Nonprofit Property Purchase

Depending on your mission, you may have a nonprofit that needs property to run its programs. For example, if you are a horse nonprofit, you invariably run into the issue of where to hold your programs. Having horses means there is a need for land to house those horses as well as having a safe, secure place where you can run programs with them. I have seen several scenarios where equine nonprofits have leased property and then run into difficulty when the lease ends. I have read Facebook posts from horse nonprofit leaders desperately seeking land for horses that need homes or even trying to rehome the horses themselves. Some nonprofits have even ceased functioning or had to put their programs on hiatus while a new location is found. How can you avoid these scenarios? By having your nonprofit own its own property.

Purchasing Property

Contrary to what many people think, a nonprofit can buy and own property. The first thing to know when deciding whether your nonprofit should buy property is that your board of directors must be involved. Since nobody owns a nonprofit, the board must be consulted about any property purchase. Your bylaws should actually include a provision that allows your board to make such a decision and exercise the right to buy property.

Another thing to keep in mind is that the property needs to be related to your nonprofit’s mission statement. Otherwise, you may need to pay taxes on it, and you may not be able to use grants and donations to purchase it. For example, if you rescue horses, and you purchase property, you might have to pay taxes on that property if you use it to raise Angus cattle instead. You might also have to pay taxes on the cattle sales as unrelated income. I say might because without knowing your nonprofit’s mission statement, I can’t say for certain. Selling Angus cattle might actually relate to your nonprofit’s mission.

Loans

Again, while most people think a nonprofit can’t get a loan to buy property, that simply is not true. I will caution you, though, that it may be more difficult than getting a personal mortgage. Why? As you know, when getting a mortgage, you need to assure the bank that you can pay the mortgage. Unfortunately, many nonprofits are huge labors of love, and they don’t bring in sustainable, dependable revenue. If your nonprofit has been around for many years, and you can show that you can pay off a loan, then you have a chance to get one. But if you are paying for most of the expenses out of your own pocket, or you haven’t been around very long, then you may have to make some changes before you can apply and expect to get a loan.

Grants and Donations

Another way that nonprofits purchase property is by grants and donations. This type of purchase can occur a number of ways. You can get a grant, a donation or several donations, or a combination of the two. If you are running a fundraiser for this specific purpose, then it is called a capital funds campaign. Many grants won’t allow you to use grant money for a capital funds campaign so you need to read the grant proposal carefully before you put in time to get a grant that won’t support your campaign.

You can use donations to buy property but you need to keep the idea of restricted and unrestricted funds in mind. If you receive a donation that is unrestricted, then you can use the funds for any of your programs or nonprofit work. However, if a donation is restricted, then it must be used for the purpose intended by the donor. For example, if someone donates $10,000 and says it’s for the capital funds campaign, then you must use it for that purpose. You may want to even place it in a separate account so that you are sure not to use it until you buy property. What happens if your nonprofit winds up not buying property? You either have to return the money to the donor or get permission from the donor to use it for other nonprofit purposes. I suggest you get that approval in writing, by the way, so there is no confusion at a later time concerning the purpose of the donation.

If you have more questions about purchasing property for your nonprofit or need legal services associated with it, please feel free to contact me.

The Importance of a Medicaid Trust

The October 2019 issue of The Atlantic contains an article that highlights the importance of an Irrevocable Medicaid Trust. In the article, the author discusses how older individuals may lose their homes if they need go into a nursing home and need Medicaid (also known as MassHealth in Massachusetts) to pay for it. She asserts that it is a little-known fact that most people don’t know to address unless they have a lot of assets and are doing estate planning. I am here to tell you that you need to protect your home if you think you will need to use Medicaid to pay for a nursing home in the future. With the rising cost of nursing homes – they can exceed $10,000 a month! – many people need to use Medicaid for themselves or someone they love.

Your home is perhaps your most important asset, and it CAN be protected with an Irrevocable Medicaid Trust. I draft these kinds of trusts for clients so that they can keep their homes for themselves and their families. I talk with my clients about the importance of doing this kind of trust as early as possible because there is a five-year look-back period, which basically means that you may not be protected if you use Medicaid for a nursing home within five years of putting your home into this kind of trust. There are some very specific requirements with these trusts, so you really need an attorney to make sure they are drafted properly.

Contact me today so we can talk about an Irrevocable Medicaid Trust and see how we can protect your home for you and your family. I have payment plans and discounts so don’t let the legal cost keep you from protecting your home.

An Office Action

Many people are under the mistaken impression that once they file their trademark registration for their equine business, it is automatically approved by the United States Patent and Trademark Office (USPTO). That is not the case. The USPTO can deny the trademark for many different reasons. Some are simple and easy to fix, and some are substantive. What is an office action, and what should you do when you get one?

What is an Office Action?

The USPTO considers many factors when determining whether a trademark should be approved for registration. The foundation of those factors is that the trademark must not cause confusion in the marketplace. If the USPTO has a problem with the trademark application, anything from a description it feels needs to be corrected to the likelihood that the trademark will cause confusion the marketplace because of another trademark already registered, it will issue an office action. An office action is the USPTO’s refusal to register the trademark. In this document, the examining attorney handling the matter will explain the reasons for the refusal. The applicant has six (6) months to respond to the office action.

Simple Office Action

You may receive a simple office action, which means that something relatively minor has to be corrected. This might mean you have chosen the wrong class for your trademark, an additional class is needed, or even something that may seem minor, such as a comma in the wrong place. It may not seem like a big deal to you, but it is to the USPTO examining attorney. The correction must be made or the trademark will not be registered.

Substantive Office Action

A substantive office action shows that the examining attorney at the USPTO has a real problem with your trademark. These kind of office actions should definitely be handled by a trademark attorney because a trademark attorney is familiar with the process and appropriate responses. Many substantive office actions concern the issue of confusion in the marketplace, which is called a 2d refusal. A response to this type of office action requires knowledge of the thirteen (13) factors considered by the USPTO, called the DuPont Factors, as well as relevant case law. A response to this type of office action is similar to going into court to make an argument, only it is written and is submitted electronically. The first thing the trademark attorney will do is analyze the possibility of overcoming this kind of refusal. Unfortunately, it’s not always possible to get a trademark approved. A trademark attorney will let you know your chances and then discuss how you would like to proceed. Although you have six (6) months to file an answer to an office action, you should contact an attorney as soon as possible because it may take awhile to craft an appropriate argument.

If you have received an office action, please contact me to talk about responding to the action.

 

Supreme Court Allows “Immoral” or “Scandalous” Trademarks

Back in January, I wrote a blog post about the US Supreme Court agreeing to hear a case concerning “immoral” or “scandalous” trademarks. The case concerned the attempt by Mark Brunetti to trademark the word FUCT. This summer, the Supreme Court ruled in a 6-3 decision that the law denying such marks violates the First Amendment because “it disfavors certain ideas.” In its decision, the Court cited certain marks that were allowed, such as a game called “Praise the Lord,” while other marks, such as “Bong Hits for Jesus” were denied.

The Court left open the possibility that Congress might narrow the law so that certain terms are still not approved. But absent Congress doing so, it could become a free-for-all at the United States Patent and Trademark Office concerning what marks are submitted and approved with terms that were formerly denied.

And, in case you were wondering, the Justices apparently took great care during the hearing “not to use the FUCT name out loud.”

Contact me today if you want to trademark your brand!

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

Respecting Aretha Franklin’s Wishes

You may have seen the latest headline about Aretha Franklin’s estate. Not one, not two, but three handwritten wills have been found and submitted to the court. There are several reasons why this news is so important. When Ms. Franklin died, it was reported that she had no estate planning. Generally speaking, that means she died intestate, and the state law where she was a resident, Michigan in this case, decides how her assets are divided. With the discovery of three handwritten wills, the court now has to decide if any of the wills are actually valid under state law, and if so, which one controls how Ms. Franklin’s estate is divided. Not all states recognize handwritten (and I mean actually handwritten) wills, so that will be the first question the court has to address. Next, if handwritten wills are valid in Michigan, the court will have to decide if Ms. Franklin created the wills properly under state law. For example, some states require two witnesses to a handwritten will. If that is the case in Michigan, the court will determine if the wills meet that requirement. Third, the court will have to determine which will is the one that Ms. Franklin executed last because, presumably, that will should state that all other wills are null and void.

The presence of a will also means that someone can contest the will. What that means is that a person can claim the will doesn’t really reflect what Ms. Franklin wanted done with her estate. How can that happen if she wrote the will herself? Well, there could be a claim that it’s not her actual handwriting and that someone forged the will to make it look like she wrote it. Someone could also claim that she did not have capacity to write the will, which might mean a claim that she suffered from dementia. Another claim could be that she was unduly influenced or coerced into writing the will. It will be interesting to see what happens with the wills.

massachusetts attorney online friendly convenient affordableIs a handwritten will valid in Massachusetts? Yes, if it meets certain criteria. Should you write one instead of consulting with an estate planning attorney, such as myself? Probably not. You don’t know if your will or other estate plan meets state law requirements and is valid if you don’t consult an attorney. There are also many considerations that go into deciding what kind of estate plan is best for you. Let’s look at Ms. Franklin’s situation again. Let’s assume that at least one of the wills is valid. Depending on how much her estate costs, she may have to pay a lot in federal estate tax that could have been avoided if she had the proper estate planning, such as a trust. In Massachusetts, we have a state estate tax, so you have to really be careful that your estate doesn’t have to pay that tax when you die. In addition,  wills are public documents. If Ms. Franklin had executed a trust, then the distribution of her assets would have remained private.

There are many considerations – legal, tax, and otherwise – when creating an estate plan. Contact me today, and we can discuss the different possibilities that can protect you, your family, and your assets.