New Laws in Arizona Summer 2017

The following new laws become effective in Arizona on August 9, 2017:

The Motor Vehicle Division cannot suspend the licenses of those who fail to respond to their citations. 

Dog racing is now illegal across the state. 

For spouses or dependents of military members killed in the line of duty, free car registrations become available.

The minimum wage will be increasing for workers, who can now expect $10 an hour. 

Homeowners with short-term rental homes on sharing websites like Airbnb and Homeaway will now have state taxes collected from the companies. The website companies will then forward the taxes to the Department of Revenue. 

In upcoming elections, pamphlets must be mailed to every household with registered voters showing what will be on the ballots. 

Got one of those plastic covers on your license plate to thwart photo radar?  They are now illegal.

Other laws range from expanding who can teach in Arizona classrooms and when police need warrants to track cell phones to exactly how much of someone’s foot a podiatrist can amputate (it’s a toe — not a foot).

Legislation to bar the state’s newest drivers from using cell phones does not take effect until July 1, 2018.

And a bill to set up procedures for people to argue about what they are charged by out-of-network hospitals does not become law until Jan. 1, 2019.


Paid Sick Leave Is Now The Law In AZ

Arizona’s new law mandating paid sick leave starts July 1. Businesses and non-profit groups could face penalties for failing to keep records, post notices and could incur damages for failing to provide paid sick time. Employers who retaliate against workers exercising their rights could face fines of at least $150 per day.

The law mandating as many as 40 hours of paid sick leave, which was approved by voters in November of 2016 that also raised the state’s minimum wage, applies to almost all businesses and non-profits with at least one Arizona employee including entities not headquartered in the state. The only exceptions are those employed by Arizona’s state or federal government and sole proprietors. So, whether full-time or part-time, temporary or seasonal, all will receive paid sick time. They will be able to use this benefit for a variety of reasons. There are a number of reasons where an employee may require sick leave. One of the reasons could be that an employee experienced an injury whilst working, meaning that they needed some time off. Whilst they probably should be entitled to sick pay, the employer should also try and organize some worker’s compensation to help the employee return to work easily. To learn more about this compensation, employers may want to visit FFVA Mutual to find out more.

The minimum requirements are 24 hours of paid sick time off annually for businesses with 14 or fewer workers, or 40 hours off for entities with 15 or more people. Employees are entitled to receive paid sick-time off; independent contractors are not. The general rule is that if you issue a W-2 to a worker, that person is an employee entitled to the benefit.

The law allows paid leave for various reasons besides sickness or injury such as domestic violence, sexual abuse, stalking or the closing of a child’s school owing to a public health emergency. Additionally, reasons include taking time off to meet with an attorney, arranging shelter services or securing safe housing, as well as issues on behalf of family members. The definition of family members is quite broad including siblings, grandparents, in-laws and others. Significantly, an employer can request proof or documentation only after a worker has been absent for three days in a row. And, when proof is required, it can come in a variety of forms such as a doctor’s note, a police report, a letter from an attorney or simply a worker’s own statement that he or she needed time off. Employers generally will be required to grant the time off. Penalties and damages await companies that ignore the new law.


1964 Civil Rights Act Applies to Gays

A U.S. appeals court has ruled that federal civil rights law protects lesbian, gay, bisexual and transgender employees from discrimination in the workplace.

The ruling from the 7th U.S. Circuit Court of Appeals in Chicago, Illinois represents a major legal victory for the gay rights movement. The name of the case is Hively v. Ivy Tech Community College.

In its 8-3 decision, the court reversed decades of rulings that gay people are not protected by the milestone civil rights law because they are not specifically mentioned in it.

“For many years, the courts of appeals of this country understood the prohibition against sex discrimination to exclude discrimination on the basis of a person’s sexual orientation,” Chief Judge Diane Wood wrote for the majority. “We conclude today that discrimination on the basis of sexual orientation is a form of sex discrimination.”

The ruling also allows a lawsuit to go forward in Indiana where plaintiff Kimberly Hively alleges she lost her community college teaching job because she is a lesbian. I mean seriously what’s next losing your job because you visited a gay porn site like more help is what’s needed so these laws must change.

“I have been saying all this time that what happened to me wasn’t right and was illegal,” Hively said in a statement released by the gay rights legal organization, Lambda Legal, which represents her. In so doing, the full appeals court overruled a decision by a smaller panel of its judges to uphold the district court’s decision in the college’s favor.

To reach its conclusion, the court examined 20 years of rulings by the U.S. Supreme Court on issues related to gay rights, including the high court’s 2015 ruling that same-sex couples have a right to marry, Wood wrote.






States With Estate Taxes

Nine states are making estate tax changes for 2017.  Altogether, eighteen states plus the District of Columbia impose either estate or inheritance taxes or both. They are Oregon, Washington state, Minnesota, Illinois, New Jersey, New York, Vermont, Hawaii, Kentucky, Nebraska, Iowa, Maryland, Pennsylvania, Connecticut, Massachusetts, Maine, Rhode Island, and Delaware.

As an example, New Jersey has had a long time $675,000 exemption from the state estate tax but now it will be $2 million dollars.  Similar changes are in effect for the other states.  Because the federal estate tax exemption amount is indexed to inflation, it rose from $5.45 million dollars for 2016 to $5.49 million dollars in 2017.  So, for a married couple the exemption amount is a little shy of $11 million dollars.

How much money you can leave to your heirs free of state tax levies depends on where you live and own property, whom you’re leaving your money to, and whether your estate planning is up to date.  Any doubt about this, please see an estate planning attorney for assistance.



What is “per stirpes” & “per capita” and What do They Mean?

Per Stirpes

“Per stirpes” means taking “by representation.” In the estate planning world, this means that if the beneficiaries are to share in a distribution “per stirpes,” then the living member in the class of beneficiaries who is closest in relationship to the person making the distribution will receive an equal share.

However, if a member in the class of beneficiaries who is closest in relationship to the person making the distribution is deceased and survived by any descendants, then that deceased beneficiary’s descendants will take “by representation” what their deceased parent would have taken.

The easiest way to explain the concept is by a few examples. Let’s assume the following:

  1. You have two children, Mark and Eve
  2. Eve has two children, Yvonne and Julie
  3. Mark has no descendants

If your Last Will and Testament or Revocable Living Trust states that your property is to be distributed to your then living descendants, “per stirpes,” here’s what happens in different scenarios:

  1. Assume that Mark and Eve have survived you:
  2. Mark and Eve each receive half
  3. Yvonne and Julie receive nothing
  • Assume that Eve has predeceased you and Mark has survived you:
  1. Mark has half the estate
  2. Yvonne and Julie share the other half of the estate, each get ¼, because they take the share that Eve would have taken had she lived – one half

“Per stirpes” is used in estate planning so that a child of a beneficiary receives that beneficiary’s share in the event the beneficiary predeceases you.  You can also put in your estate planning documents whether “descendants” includes individuals added to the family by adoption.

Per Capita

In the estate planning world, “per capita” means that if the beneficiaries are to share in a distribution, then all of the living members of the identified group will receive an equal share.  However, if a member of the group is deceased, then a share won’t be created for the deceased member and all of the shares of the other members will be increased.  So, if your estate is to be distributed to your then living descendants, “per capita,” here’s what happens in the same scenarios described above:

  • Assume that Mark and Eve survived you – each gets half
  • Assume that Eve predeceased you and Mark survived you.  Mark gets the entire estate and Yvonne and Julie receive nothing.

“Per stirpes” is used more commonly in estate planning than “per capita” because it covers the typical family situation.  If you prefer to use a “per capita” distribution, then you’ll need to see that your estate plan addresses any generation-skipping shares that may be created by this type of distribution. Leaving direct shares to grandchildren and great grandchildren through a per capita or other type of direct distribution while your children have also survived you will trigger the generation skipping transfer tax on the grandchildren’s and great grandchildren’s shares. So, work with a tax attorney to avoid this.



What is a Trust Protector?

A trust protector is a party designated in a trust agreement with certain limited powers intended to protect the trust.  A trust protector is not needed while you are alive, if you are the trustee and beneficiary of your own living or revocable trust.  However, eventually you will die and the successor trustee will step in to administer the trust. 

This new trustee may not have your best interests at heart when administering the trust.  For instance, the trustee may start to milk the trust for fees and reimbursement of expenses for whatever reason, draining the trust assets.  Another bad scenario involves the trustee with a grudge against one or more beneficiaries, where the trustee has no intention of treating the beneficiary properly.  A trustee has a duty to treat all beneficiaries in a fair and impartial manner, but you will not be around to see that they do.  The only recourse is expensive litigation. 

How does a trust protector help in these situations? By using his or her powers to change trustees.  A trust protector provision should have three sections:

(1) Empowering the protector to terminate the trustee and appoint a new trustee;

(2) Empowering the protector to appoint successor protectors; and

(3) Stating that the protector is not a trustee and owes no fiduciary duties to anyone and has no duty to act.

Needless to say, you need to nominate a person to be a trust protector only whom you greatly trust.  Any trust agreement may benefit from a trust protector provision including irrevocable trusts.


AZ Adopts Fiduciary Access to Digital Assets Act

Many people believe their heirs will inherit their digital photos, business documents, social media accounts, websites, texts, or other digital property through their Will or by law. No.

Prior to the governor signing the Fiduciary Access to Digital Assets Act (FADAA) in May, companies that store those assets such as Facebook, Google or Yahoo, determined who could receive the items if a person became deceased or incapacitated. The website’s terms-of-service agreements superseded Wills and trusts preventing heirs from gaining access to the digital property. Under the new law, a fiduciary or other person with legal authority to manage another person’s property will have the ability to access and distribute the deceased or incapacitated person’s digital assets. It appears the legislation is effective August 6, 2016.

FADAA provides a three-tiered system for distributing digital assets. First, if the company holding the digital assets, like Facebook, provides an online tool that allows the user to name another person to have access to the user’s digital assets, FADAA makes the user’s online instructions legally enforceable.

Second, if the company does not provide an online planning tool, or if the user does not use it, the user may give legally enforceable directions for the disposition of digital assets in a Will, trust, power of attorney or other written record.

Third, if the user has not provided any direction, either online or in an estate plan, the terms-of-service for the user’s account will determine whether a fiduciary may access the user’s digital assets.

If the terms-of-service do not address fiduciary access, the default rule will be to require that the company holding the digital assets to provide a catalogue of the communications showing the addresses of the sender and recipient, and the date and time the message was sent.  However, if the decedent has an estate plan, power of attorney or notarized written statement, they can direct the company to give the fiduciary full access to the content to distribute to named heirs.

To obtain the digital assets, the fiduciary must send a request to the company with a certified copy of the document granting the fiduciary authority, such as a letter of appointment, court order, or certification of trust. Thus, individuals should make a provision in their Will, trust, power of attorney or other written document to distribute digital assets.  They should also be aware that any directions made through an on-line tool will supersede their trust or Will.


How To Change an Irrevocable Trust – Decanting

Just like you decant a fine wine from a wine bottle into a new one, you can decant the assets of a not-so-fine irrevocable trust into a new trust. A revocable trust is, by definition, subject to revocation or amendment, so no need there. Decanting means changing, updating and modernizing an irrevocable trust.

The trust agreement itself may allow this, but in Arizona, the law addressing decanting is found at Arizona Revised Statutes 14-10819, “Trustee’s special power to appoint to other trust.” Essentially, it states that unless the terms of the instrument expressly provide otherwise, a trustee who has the discretion to make distributions for the benefit of a beneficiary of the trust may exercise — without prior court approval — that discretion by appointing the estate trust in favor of a trustee of another trust if the exercise of this discretion:

  1. Does not reduce any fixed nondiscretionary income payment to a beneficiary.
  2. Does not alter any nondiscretionary annuity or unitrust payment to a beneficiary.
  3. Is in favor of the beneficiaries of the trust.
  4. Results in any standard applicable for distributions from the trust being the same or more restrictive standard applicable for distributions from the recipient trust when the trustee exercising the power is a possible beneficiary under the standard.
  5. Does not adversely affect the tax treatment of the trust, the trustee, the settlor (the original trustmaker) or the beneficiaries.

Typical reasons to decant include correcting ambiguities or drafting errors, changing the trust’s situs to a more favorable place, splitting up or combining trusts to achieve administrative cost savings, or broadening a trustee’s powers under the new trust. This would include the power to distribute income and principal to beneficiaries resulting in certain tax savings. A trust can also be decanted from a settlor trust to a non-settlor trust or vice versa, reversing the responsibility of who pays income taxes.

Arizona Revenge Porn Law Unconstitutional

U.S. District Judge Susan R. Bolton ordered Arizona state prosecutors last week to stop enforcing Arizona’s so-called “revenge porn” law. Whilst the intent was to keep sites like free from content uploaded without consent, her decree came as she approved the settlement in the case of Antigone Books v. Brnovich which challenged the law as unconstitutional.

The revenge porn law, called the “Unlawful Distribution of Images” statute, was signed by former Governor Jan Brewer last year and made it a felony “to intentionally disclose, display, distribute, publish, advertise or offer a photograph, videotape, film or digital recording of another person in a state of nudity or engaged in specific sexual activities if the person knows or should have known that the depicted person has not consented to the disclosure.”

Those who sponsored it were trying to prevent nonconsensual pornography-particularly nude images posted on the internet by an angry ex-lover, commonly called “revenge porn.” On websites like this type of content can be found but there is also plenty of legal consensual adult content on here and its important to differentiate. But a group of Arizona booksellers, publishing companies, newspapers, librarians, and photographers sued the state arguing that the language was “an unconstitutionally overbroad and viewpoint-based restriction on protected speech.”

Whilst the intent is to ensure that sites like remain free from such unwanted material being uploaded, Arizona’s revenge porn law would make it a felony to publish certain educational materials about breastfeeding, or newsworthy photographs like those taken at the Abu Ghraib prison. It “could have led to the conviction of someone posting a nude photo with no intent to harm the person depicted,” notes the ACLU, which served as co-counsel for the plaintiffs.

“More than half of the states have passed some form of revenge porn law, and certainly not all of them are unconstitutional” Lee Rowland, senior staff attorney for the ACLU, told the New Times magazine of Phoenix, Arizona. “But because they tend to regulate free speech, we at the ACLU look at them closely.” The law may be revised and resubmitted by its sponsors. It won’t be illegal though to upload homemade porn movies as long as all who participate give consent, you can see adult movies like these on websites like

No Discharge in Bankruptcy, Student Loans

Monica Stitt, a 45-year-old woman, is unemployed, disabled, and living far below the poverty line. Still, a federal district judge decided last week that she could not cancel more than $37,000 in student debt in bankruptcy, because she hadn’t made a good-faith attempt at repaying the loans.

Her entire income- about $10,000 per year – consisted of Social Security disability benefits and public assistance. She has been unemployed since 2008.

She had borrowed $13,250, which had increased with interest to $37,400 by the time she filed for bankruptcy. After the bankruptcy judge ruled she couldn’t discharge the debt, Stitt appealed to the U.S. District Court in Maryland without a lawyer, and a district judge upheld the bankruptcy court’s ruling on June 9.
The debtor didn’t meet the “undue hardship” test required by the bankruptcy code. Unlike credit card debt, student loans can almost never be discharged in bankruptcy. There are alternatives to bankruptcy, such as debt consolidation, but this can be difficult to manage if cashflow is not adequate enough. The only way people who have filed for bankruptcy can get rid of the debt is by proving that repaying them would impose “undue hardship” on their lives.

That standard is not defined in the law, so it has been left to the courts to decide how bad someone’s circumstances need to be to qualify for relief. U.S. courts use a three-pronged test to decide whether paying back a student loan would be too difficult. First, a borrower must prove that she can’t maintain a “minimal standard of living” while also repaying the debt. Then the debtor must prove that the current destitute circumstances will last for quite a long time. Lastly, the debtor has to show s/he has made “good-faith efforts” to repay the loan in the past.

Stitt met the first two criteria, but she flunked the third part of the test-showing a good-faith effort to repay the loan-in part because she held a government-sponsored job for a few months in 2008, when she earned $11,000. The bankruptcy judge criticized her for not using some of the income to pay her student loans. Stitt said she used the income to pay credit card debt and other expenses.

The judge stated that Stitt was eligible for two federal loan-consolidation programs in which no payments would be required since her income was so low. After 25 years in the program, the debt would be forgiven even if she had made no payments, as long as her income hadn’t risen. In upholding denial of discharge of the loans in bankruptcy, the judge encouraged her to participate in the consolidation program. There are many options from Debt Consolidation USA which help people with loans that are piling up and are likely to never be paid. The consolidation process can help someone get their finances back on track and regain control of their money.

If you are looking to file for bankruptcy, you could go ahead and file bankruptcy without a lawyer. However, seeking the guidance of a qualified bankruptcy attorney may be very helpful because of the long-term financial consequences of a bankruptcy filing. If you wish to do so in North Carolina, you may want to speak with Sasser Law Firm.

If you’re concerned about how you’re going to fund your time at college, you might want to look at student loans by Sofi to see how they can help you out.