Advice Archives - Morris Law Center

3 Choices for Seniors Looking to Downsize Their Current Homes

Written by: Jim Vogel of ElderAction

One of the most pressing, and often emotional, decisions that seniors can face when looking to downsize to a smaller home is how to handle their current home. That home can be filled with so many memories and so many financial options, but it can also be filled with added burden for seniors looking to retire. So if you are thinking about downsizing your home during retirement, here are some ways you can deal with your old home:

 

Rent Out Your Home to Earn Some Extra Income

 

Are you planning on moving into an assisted living facility? If so, you should research local facilities and prices before you handle your current home. Many assisted living facilities provide the same services for seniors but come with different costs. It’s also helpful to keep in mind that assisted living communities are designed to provide independent living arrangements for seniors in apartment-style homes, alongside beneficial assistance with daily living tasks, such as bathing, cooking or taking medications. So if you don’t need help with your daily care or routine, then an alternate senior community may be a better fit for you and your retirement budget.

So what do all these choices have to do with your current home? Well, if you decide to move into an independent living community or an assisted living facility, you could always rent out your home to pay for the monthly costs and build more equity. If you play your real estate cards right, you could turn a nice profit by renting out your current home. Before you take this major step, though, you need to be aware of the potential costs of turning your home into a rental property. Aside from the costs to maintain your home, you may also be responsible for additional tax payments on that additional income, and you could end up spending a small fortune attracting potential occupants to your new rental property.

Sell Your Home to Gain Retirement Freedoms

 

If freedom is the focus of your downsizing move, you may want to just sell your current home outright. To avoid the headaches of having your home sit on the market for months, you should use a few real estate tricks to up the appeal to potential homebuyers and help it sell faster.  Start by picking the right real estate pro to list your current home and take care of any needed repairs, so you don’t have any surprise expenses pop up on inspections. By selling your home before you downsize, you can possibly retire mortgage-free to save yourself some stress.

Keep Your Home in The Family to Preserve Memories

 

There are so many reasons to hold onto the family home, and there are several ways to pass your home onto your family members. If you want to relieve yourself of financial burden, you could always sell your home to loved ones, but treat this home sale like any other by using brokers, lawyers and assessors to ensure that everyone walks away feeling like they were treated fairly.

You could also gift your home to family members, but this comes with some special considerations, too, like tax burdens for those family members or even income implications for yourself. Consult with an Attorney and a CPA to obtain further information on this subject.  According to Attorney Sarah Morris, “Depending on your needs, desires, and financial situation, a Trust may be the answer. Each client is unique, which makes a strategy session with an Attorney and a CPA critical.”  So, keep these in mind before you decide to give your children the gift of your family home.

Lastly, you may be thinking of just holding onto your old home, in order to keep it in the family. Owning a second home can come with additional burdens and costs, though, so weigh all of your options carefully before you make your ultimate decision.

Deciding what to do with your current home can stir up some strong emotions. What’s most important, though, is keeping those personal feelings from hindering your ability to make a practical decision about your current home. Making the wrong choice could derail your downsizing plans, or at least make the process of moving to a new home more stressful.

Do Wills Help You Avoid Probate?

I receive a lot of questions from potential clients about wills and there’s a common misconception that if you have a will then you will avoid probate. That’s not necessarily true in most cases.

You wouldn’t do a will in order to avoid probate. What a will is, is a document that outlines your wishes and what will happen when you pass away. In that document, you have the ability to name―what’s called a personal representative of your estate―which is the executor of your estate or the manager of your estate. This is only a temporary position until everything has been distributed to the heirs, so it’s not a long-term commitment.

This representative will go by the terms of your will and make sure everything is distributed accordingly. So, a will gives you the ability to control where your assets go. A lot of people do this just to make sure that everything goes where they want it to because if you don’t have one of these, the court is going to have to look to the statute to determine how your assets are distributed.  This is called intestate succession. There are intestate succession statutes in every state, including Nevada, that guide the court as to who will receive your stuff when you pass away. For example, if we have a married couple that has one child and the husband passes away and there’s no will, then what’s going to happen by Nevada statute is that 100% of the community property will go to the wife, 50% of the separate property will go to the wife and 50% of the separate property will go to the child, whether the child is a minor or not.

To expand on this, Nevada is a community property state, so the community property would automatically go to the wife. But the separate property of the husband is what would be distributed 50/50 to both the wife and the child. It goes down from there. So, if you aren’t married and you don’t have any children, then it would go to your parents. If your parents aren’t alive, then it goes to any siblings you have. If you have no siblings, then it goes down the line. And at the end, if you have absolutely no heirs that the Court can determine, then the court has to give your assets to the state of Nevada. It doesn’t happen very often, but it can happen. This is why people do wills because they want to make sure that their assets go to the people, they want them to go to.

In sum, with a will you have the ability to name the manager of your estate and decide who gets what. That’s the benefit of having a will versus just going by the statute because then you have absolutely no control.

Many people also have certain heirlooms that they want to go to certain people. If that’s the case, then that’s something that you can do within will as well. You can also include lists. Let’s say you have a Rolex and you want it to go to your daughter or your son then you can include that in the will and it’ll go to the right person. The reason to do this is because it helps your heirs, in other words, the people that you leave behind. Because if you don’t, then a lot of times, unfortunately when someone passes away, everybody gets very upset and there’s inner family fighting about who gets what. So at least if you have a will in place, they have a guideline and they have to abide by it.  It prevents or at least controls some of the fighting. And that’s another reason if you do have heirlooms to go ahead and designate who they go to rather than leaving it up to everybody to decide because there may be some fighting involved.

So that is why you would want to will―it’s the most basic estate plan that you can have and most attorneys, including my firm, provide it as part of a package. If you get a will, then you’re also going to have two other documents in this package. One is called a power of attorney over health care and one is called a power of attorney over financial decisions.  I will discuss these two other documents in another blog.

6 Tips & Tricks for Depositions

A deposition is testimony, under oath, outside of the courtroom, and recoded by an official court reporter. It can be very intimidating to sit across from the opposing side’s attorney to answer questions about what you know regarding a case. Aside from the obvious things to get ready for a deposition, like preparing with your attorney and dressing appropriately, we wanted to provide you with some tips and tricks for answering questions once you’re in the deposition.

1. LISTEN

First, always make eye contact with the individual asking you the questions and listen carefully and intently on what he or she is asking you. If at any point you are confused by the question, or do not understand, politely ask the questioner to repeat or rephrase the question. It is important that you fully understand the questions being asked of you, therefore, if anything is confusing it is okay to say so in order to have the question asked in a way you do understand.

Listening to the way the question is asked allows you to determine if the attorney is being overly friendly or aggressive to attempt to get additional information out of you. These are two of many tactics employed by attorneys to get information out of a deposed person. The overly friendly attorney will want you to think of them as a friend, so you want to provide additional information, whereas the aggressive attorney might try intimidating you into doing the same.

2. BREATHE

After each question asked, stop and take two deep breaths before providing your answer. This pause allows you to comprehend and contemplate the questions being asked. It also provides your attorney an opportunity to object before you provide any information. It is okay to take your time in answering the questions. The official court record will not provide the amount of time it took you to answer, so take the time if you need it.

3. YES OR NO

Many of the questions will allow yes or no answers. If asked a yes or no question, provide a yes or no answer, and then stop talking. You do not need to provide any explanation for the questions, and in fact doing so can hurt your case. Which leads us to our next topic…

4. DON’T TALK TOO MUCH

Talking too much during a deposition will not help anything. Providing additional information is not required. You are only required to provide a truthful answer to the specific question asked of you. Avoid long explanations or stories that are off topic. Tell the truth in the fewest amount of words possible, and then, again, stop talking.

5. DON’T PLAY GAMES

This means don’t do things to aggravate or annoy the opposing counsel. Saying you “don’t recall” or “don’t understand” for every single question (when you really do) is also not helpful during a deposition. Evading the questions will not prevent the questions from being asked, and the requirement that you answer them truthfully. It’s best to just be straight forward, answer the questions, and get through the process.

6. ALLOW SILENCE

Another well known tactic that an attorney may employ to obtain additional information is to ask their question, wait for an answer, then lean back in their chair and be completely silent while maintaining eye contact. The idea here is that people generally do not like awkward silences and will fill the silence by talking more. The attorney wants you to give your answer, and then fill the following awkward silence with more details on the answer you just provided. Don’t fall into this trap. If you have given your true, complete answer, allow the silence!


Depositions can be a stressful experience, but the more you know about what to expect allows you to be better prepared. If you need assistance in preparation, or just have questions about being deposed, feel free to contact us for a complementary consultation.

And finally, as we always say, “If you think you need an attorney, you probably do.” Contact us before anything is set in stone. We love answering questions!

Things To Look Out For In Marital Trusts

The following blog has been transcribed from our podcast Around the Gavel: Episode 2. Look up “Around the Gavel” on Spotify, Soundcloud, Google Play, and iTunes to listen in.


SARAH: Hi, and welcome to our new show Around the Gavel. I’m Sarah Morris and attorney partner, as well as the CEO, of Morris Law Center. Today we are going to be talking about the pitfalls of marital trusts. Estate Planning is one of my favorite areas of practice, so I’m very excited to get going on this. As always, please subscribe and leave us an honest review on your podcast platform.

Today we’re going to talk about the possible pitfalls of marital trusts and generally what a marital trust is in Nevada in particular. Let me say, I am not talking about any other state. If you wanted to dive deeper into this, you can always give us a call.

So marital trusts- sometimes this term is used, and people don’t really know what they’re talking about. It’s not a completely defined term, but what I wanted to talk about today is something that’s come up twice now in the last two months. I’ve had clients bring me old trusts that are marital trusts. When I say marital trusts, I simply mean that the two people who created the trust are married. That, to me, signifies it’s a marital trust of some sort.

So I’ve recently received two marital trusts that were done, you know, 10 to 15 years ago where one of the spouses has already passed away, and now the remaining spouse has come into my office and says, “Okay, a lot has changed since we drafted this thing, and I want to change some stuff.” Well, the problem that has presented itself in both these situations is that because one of the spouses has passed away, we are very limited in what we can do in terms of amending the trust because of the way these particular trusts were written. A lot of times marital trusts in the past were written because they were trying to avoid taxes upon the first spouse’s death. It’s not like that so much anymore because the tax laws have changed, and particularly in Nevada we do not have an estate tax. The federal estate tax exemption is so high that most clients are not going to qualify over and above that anyway, so they don’t have to worry. So that isn’t a reason to do it now. Now, of course, the tax laws are probably going to change and maybe we’ll go back to that, but for the moment it’s not an issue. So a lot of times, historically speaking, people would do it for tax advantages.

One of the things I’ve run into lately with these older trusts is a situation where we’ve got a husband and a wife who’ve set up a trust. Nevada’s a community property state, so they may put in both a separate property and a community property into this trust. So what happens when one of them dies? The trust dictates. The trust says, Okay, when one of the spouses dies, the trust is split into two separate trusts. Within these two separate trusts, there is one for the deceased spouse- his 50% of the community property interest of whatever he put in, plus his separate property interests. That’s the deceased spouse’s trust; it is now unchangeable. You can’t do anything different with it. It’s going to sit there, and the trustee he designated 15 years ago is the trustee for that trust. You can’t change it because he’s gone.

Then the other trust, which is called the survivor’s trust, is for the spouse that is still alive. This trust is for his or her half of the community property interest, plus his or her separate property. Since he or she is still alive, they can amend this trust. This means they can change their trustees, and they can change the beneficiaries of their trust. However, in regards to the other trust, they can’t do anything with it.

So in the latest example, the client actually designated the successor trustee, meaning the trustee that would be in place after both of them passed away, to be Bank of America. Normally in these simpler trusts we don’t see someone designating an actual professional trustee. This is usually because you have to pay a certain fee, which might make it more costly for the heirs and the trust. So usually people will designate a family member, or a friend, or a CPA. However, in this case, they designated the bank, which is fine. It’s just now we’ve got a bank trustee for the husband’s portion, and the wife wants to switch her trustee and her beneficiaries. What I had to tell her was she can absolutely do it for her portion, but she cannot not do it for his portion.

That is one of the major pitfalls in marital trusts. Again, I hesitate to even use that terminology because it’s a certain kind of trust, but there are people who use that term for different things. So I’m not saying every trust is like that. I’m just saying to watch out for it.

A pro for why people use a marital trust is because sometimes we’ve got husbands and wives, and it’s our second or third marriage. They’re coming in with kids from one marriage and then kids from another. In these cases, they usually want to make sure their own children that they didn’t have with their current spouse, simply put, gets their stuff. In that respect, these trusts are good because we can always write in that their portion in the community property does split into two trusts. This is where the two trusts work. So if one spouse dies, we can split it into two trusts now. We don’t want anything to change for the one that died because we want to ensure that their wishes are carried out. It doesn’t mean they don’t necessarily trust the other spouse, but sometimes that is the case. Sometimes it also means that they simply want to make sure their heirs are taken care of. So it can be a pro, and it can be a con. It’s just something to think about when you’re considering a marital trust.

So like I said, if you have any other questions, or if you want to dive deeper into it, or if you’re interested in marital trusts, please feel free to give us a call and we can discuss it further.

Should You Go To Law School?

The following blog has been transcribed from our podcast Around the Gavel: Episode 1. Look up “Around the Gavel” on Spotify, Soundcloud, Google Play, and iTunes to listen in.


SARAH: Hi, welcome to Morris Law Center’s podcast. I’m Sarah Morris, and today we’re talking with my partner, Brian Morris, and Sydney Soder, who is a paralegal at our firm. She’s actually the managing paralegal. So the big question today is: Do I want to go to law school?

SYDNEY: [laughs] Yes, so a lot of people consider going to law school. A lot of people think it’s something they should do but don’t necessarily know why they should do it. I think the big question is, why did you both choose to go to law school?

BRIAN: Well, my story is probably not one I would want others to emulate. My undergraduate degree is in business, specifically information technology. During my final year during undergrad, I took real estate law one and two. The professor was a lawyer. I got to know him and went to his office hours. We talked about it. I decided it sounded like a good idea, so I applied. I went for it, which in retrospect was not very well thought out [laughs]. I really did not have a solid understanding of what it meant to be an attorney until well after graduating from law school.

SARAH: Yeah, it’s funny because I have a sort of similar story in that it’s not necessarily the way to do it at all [laughs]. I went for my undergraduate degree, and I had a double major in classical history and art history, which I love both of those subjects dearly. However, there wasn’t much to do with those. When you have a degree in those subjects, you either keep moving for a PhD, go to a Master’s program and get a PhD, or you do something totally random and unrelated. I didn’t know what else to do, so I went to law school, not really thinking it through at all. I thought, Okay, I’ll take the LSAT. If I do well, I have really good grades, and if I get into enough law schools and one that I like, then I’ll go. So that’s what I did.

However, I had no idea what it was about. I’d never worked in a law firm. My grandfather was an attorney, but I didn’t even know him because he passed away before I was born. So there really was no knowledge going into it [laughs]. So I would not necessarily recommend it, although it is a nice foundation to have in general. I value the law education, whether you’re a lawyer or not, just to be able to understand the system and how it operates.

SYDNEY: So would you guys say that you enjoyed law school?

SARAH: I think I could have enjoyed it more. I was so determined because I went straight from undergrad to law school. I did not take a break at all. I went through undergrad in three and a half years, and I went through law school in two and a half because I did summers. I just tried to race through it and get it over with. I didn’t necessarily enjoy it, but I got through it, like it was a job basically. In retrospect, I would have definitely tried to take my time more. I would have taken the full three years and really tried to enjoy it as much as you can enjoy law school.

BRIAN: For my own experience, I certainly had some good times with my friends in law school as far as making friends, getting to know people, and things like that. As far as law school itself though, I did not like it at all. The reality is that it’s taught by law professors, not by attorneys. It’s taught by academics. It’s an intense academic setting, and they make, in my view, very little attempt to apply the theories in a practical way that is useful to what you’re going to be doing after law school.

SARAH: Yeah, I would echo that because I did not learn anything there about being a real attorney. It was all academic, which is great except that you get out there and you have no idea what you’re doing. It’s like learning it all over because the practice of law is very different from going to law school. It’s a great foundation to have to be a lawyer, but it doesn’t teach you how to be a lawyer. So there’s that big distinction.

BRIAN: I want to mention law school full time is three years. The usual process is to spend the entire summer after law school studying for the bar exam. You would then take the bar exam at the end of the summer. I spent the first two weeks of bar study getting myself rather upset about the fact that we would have a year long class on constitutional law. Then in the bar review, they did a four hour course, told you everything you needed to know, all the practical pieces of constitutional law, what you needed for the bar exam- done [laughs]. So the difference of spending an entire year talking about obscure academic theories that aren’t even on the bar and don’t end up being useful in any way- it actually shocked me how the bar review course was able to condense years at a time into a couple hours.

SARAH: Yeah, I agree completely because there were even things- I’m sure you’ve had the same experience- that weren’t taught in law school but you were expected to know for the bar. These things probably weren’t taught because there wasn’t enough time since we were talking about all the obscure stuff. Again, not to say that this stuff isn’t important and that it doesn’t contribute to society as a whole and that people don’t need to know all this stuff, but the reality is that law school doesn’t teach you how to how to actually be a lawyer. It just gives you that foundational basis. I think it also weeds out a lot of people, which is important as well. We don’t want to have an over abundance of lawyers. We already have that, but we got to limit it somewhere [laughs].

BRIAN: There were certainly people that really enjoyed the academic exercises. Normally they would be sitting in the front row, and you would call them gunners because they would shoot their hand up before the professor even asked the question [laughs]. You know, they would want to talk about what they think about it and whether they think it’s fair or not. So there are people that really enjoy the theory and the academics of it. I just think that the two of us are much more practical.

SARAH: Yeah, and to be fair, the two of us are practicing attorneys. The people that are more interested in the academics are usually the ones that go on to be professors, but the people that actually want to be lawyers, I think they just try to get through it, and they then hopefully go on to be successful attorneys. They always say when you go to law school, and I think it’s really true, that the- I forget what the A and B students are. They’ve got to be, like, professors. But the B minus, the C plus, and the C students are all the actual attorneys [laughs].

BRIAN: I think the joke was that A students are professors or work at really big firms, while the people that are actually practicing on average are not those academics.

SARAH: Right, so I don’t think, you know, if you get B’s and C’s in law school, you’re not going to be successful. That’s crazy. You actually might be really successful. You might be more successful than the A’s and B’s.

SYDNEY: So focusing less on the theory and more on the overall practicality.

SARAH: Yes.

SYDNEY: So if you had to name it, what do you think the purpose of the obscurity of the education is? Why do you think it focuses on the obscure theory versus the practical application of law?

SARAH: I think to weed people out, so there’s less people that become attorneys, which thank you, that’s fine with me [laughs]. I mean, it’s already hard enough. There’s already enough attorneys. I really do think it’s probably to weed people out, so it’s not over abundant.

BRIAN: I guess what that raises for me is that there’s a certain desire by the law school system as a whole to maintain appearances. What I mean by that is a law degree is a juris doctorate, so we’re sort of pretending to be doctors, like medical doctors. Like, I technically have a doctorate. So I’ve heard there’s been a lot of debate- well, I don’t think there’s been a lot of debate, but I have heard the debate about whether the third year of law school is necessary at all. In mine and Sarah’s opinions, it is not necessary. I’m assuming in Sarah’s opinion; it’s not necessary in my opinion. You’re not really learning. The sort of curve of diminishing returns has probably flattened out by the end of the second year. However, the dean of the law school wants to make sure that everybody knows that a law degree is more of a big deal than a Master’s degree in biology or something like that.

We’re actually jumping from an undergrad degree supposedly to a doctorate. So they spread it out over three years. It’s super academic, which requires them to go in depth into obscure things that really aren’t practical and that you won’t ever use. However, that could be remedied to some extent if there were changes made in law school to where it was practical to practicing. There could be classes in the third year about how to run a firm, how to bill, how to actually practice. There really just aren’t practical classes in law school.

SYDNEY: Something else I wanted to talk about- Brian, you mentioned this before, and you sort of touched on it earlier when you were talking about how you learned more in your bar prep course than you did in certain classes in law school. Would you recommend taking a bar prep course before going to law school?

BRIAN: Yeah, I’m not going to say I would recommend it to the extent that I think it’s necessary, but certainly I think that it’s a good idea. I would have liked to have taken it because you end up with, you know, you have that bar study book, and it has the outline of every class with everything you basically need to know already in it. You can be prepped on the classes and kind of be ahead of everybody there, trying to study more for the bar as you go. When I actually ended up finishing law school and googling articles and blogs about bar study, I really didn’t use my outlines from law school. I didn’t use anything from law school. I completely started over with bar study and did my outlines in a completely different way, which would have been nice to think about ahead of time.

SARAH: Yeah, I don’t know the answer because I don’t remember. It’s been 16 years, which is longer than Brian, so I don’t know. All I know is I spent eight hours a day for three or four months and treated it like a job, studying for the bar. So I suppose it might be helpful. I guess I’m sort of not in the same boat as him. I agree it might be helpful, but at the same time I would wait until you take the courses [laughs].

SYDNEY: I just have one last question. If you weren’t practicing, what would you use your legal education for?

SARAH: That’s a tough question [laughs]. Well, I don’t know. Yes, you’re right- it can be used as a basis for other things if you’re starting out. Since I run the firm, it’s a really good basis for running a business. It’s not necessary, of course. There are plenty of successful people that run businesses that don’t even have a college education, but it does help in running a business.

BRIAN: As far as the question is seeking, a specific response of a position that is not as a lawyer-

SARAH: Now you’re sounding like a lawyer [laughs]. Go ahead.

BRIAN: Maybe running a marketing firm for lawyers or something like that. I think I could do really well in high end residential real estate or commercial real estate because those types of transactions would normally need an attorney. That would be something where I would be able to read the contracts and handle them myself. In almost any position, you’re going to need an attorney. Even here at this law firm, we reach out to other attorneys outside of our practice area to ask questions about running our business on a regular basis. You’re going to use your experience from practicing. I don’t know if you’re going to use the academics of law school.

Sarah, if someone came to you and said, I’m considering going to law school. What should I do?

SARAH: I would tell them not to do it [laughs] unless they really had a passion and if I saw that passion, like I do in Sydney. To be clear, I see passion.

BRIAN: But I’m talking about somebody off the street.

SARAH: I would tell them no way. No. The reality of the situation is most attorneys are miserable. They hate practicing law. It’s true. Check the stats and do your Google research, but most people are miserable doing it. It’s a hard career path to take. People think lawyers make a lot of money, and that’s not true at all. There are plenty of lawyers that don’t make a lot of money. If you want to make money, go into business. Don’t be a lawyer. There’s only the top few that actually make the big bucks, so don’t do it for money. That’s not the reason to go to law school. However, if you have a passion for the law and you’re genuinely interested, then it’s worth it. Otherwise, I would say absolutely not. Go find something else.

SYDNEY: What about you, Brian?

BRIAN: I guess my initial response would be to gain some experience with the legal field. Not everyone has the opportunity to be the managing paralegal at an award winning law firm like Morris Law Center, but there’s no excuse. Just call up a law firm and ask them to let you come in and work for free. Go volunteer at the district attorney at the public defender, the criminal side of the law, or volunteer at a real estate law firm. You’ve got to actually go and see what it’s going to be like.

The other major factor, which is more on the economics, you have to give up at least three years of your life- maybe four if it’s part time, which is also possible. You can do law school part time for four years. You have to give up three years of your life, three years of income, and take on debt. The UNLV law school, I think, is $30,000 a year right now. Even if you were able to earn $30,000 a year during that time and you give that up, plus you go $30,000 a year into debt, you’re giving up three years of your life and $200,000 worth of opportunity costs because not only are you not working, but you’re paying tuition. So does that really pay off in order to go work at the legal aid center? [Laughs] Maybe you’re going to end up with a ton of debt.

SARHA: Yeah, I think the real question is why do you want to go to law school? You know, that’s the kicker. Like, okay, should I go to law school? Why do you want to go? It’s all about why you want to go. As long as it’s not that you want to go because you want to make money, then we might continue the conversation. If it’s because you want to make money or you just want the status of being a lawyer, don’t do it. It’s not going to work for you.

BRIAN: The other thing to mention, which I’ve said to Sydney before, is if your passion really ends up there, there is no excuse for not going to law school. There is a way to make it happen. It’s little known. I didn’t know this until I was finishing law school, but it’s much easier to transfer into a school than apply there directly. So maybe you can’t get into Harvard, but if you go to a lower rank school the first year, they’ll probably let you transfer in the second year because they want your money and you’re not on the statistics. It comes down to how bad you want it, not whether it’s possible. You can go live in an apartment in Arizona for a year or some other place that has a lot of schools.

SARAH: Michigan has a lot of law schools you can get into, by the way. Thomas Cooley- everybody can get into Thomas Cooley [laughs].

BRIAN: Michigan has, I think, the lowest ranked law school. So anybody can go to law school in Michigan [laughs]. But what are you willing to give up to go to law school? If this is what you’re committed to, then move to Michigan [laughs], get an apartment, go to the first year of law school, and then transfer to UNLV the second year. But there is no ‘can’t’ about it. It’s either you want to do it or not. What are you willing to give up to do it?

SARAH: Agreed. I think that’s a great note to end on- a very positive, upbeat note because that’s totally true. If it’s something you want to do, there’s a way to do it. So thank you guys! Thank you for tuning in, you guys that are listening. Be sure to leave any comments.

BRIAN: Review us on the podcast platforms, Spotify, iTunes, etcetera. We’re also on all the usual social media channels. We’d be very happy to have you follow us on any of them.

SARAH: Let us know if you have any topics that you would like discussed.

Skip Counterfeit and Go With the Dupe

A common myth is that it is illegal to purchase and use counterfeit goods. There have been at least a few urban legends of tourists being seized at U.S. customs for carrying fake Gucci handbags. In reality, it is not illegal to purchase counterfeit items for personal use in most countries.[1] If you happen to own a fake Hermes scarf, you don’t have to worry about the FBI busting down your door to seize it, or being arrested on your way through customs. Having one of each category of fakes on your way through U.S. customs is acceptable, so long as you aren’t traveling with an abundance of counterfeit goods, and don’t seem like you are planning on selling them (in which case they will likely be confiscated).[2]

Breaking the law.

In general, laws against counterfeit items apply to the supply side, and not the demand side.[3]  However, there are two notable exceptions in the homeland of high fashion; France and Italy penalizes buyers as well as sellers. If you’re on vacation in Paris, buying a fake Chanel bag could land you a € 300,000 fine and up two three years in jail.[4] However, there are plenty of reasons to not partake in the counterfeit market, outside of France and Italy, even if it may not be illegal.

Counterfeit, or just a dupe?

Under federal law, counterfeit goods are defined as items that bear protected trademarks that are “identical with or substantially indistinguishable from” the genuine mark.[5] Inherent in the act of counterfeiting is the intent to produce an item that will deceive consumers into believing it is the real thing. Producing counterfeit items is a form of trademark and intellectual property infringement, which is why the “mark” (logo or trademark) is so important. For example, there is a difference between items that are truly counterfeit, and items we colloquially refer to as “dupes.” If a company sells a trench coat that is similar to a Burberry coat, it would simply be a dupe. However, if the trench coat was made with Burberry logos, and passed off as a genuine Burberry coat, that would be considered counterfeit.

Hidden costs of purchasing counterfeit.

If you happen to come across that fake Burberry coat at a U.S. flea market, it wouldn’t be illegal to buy it for personal use, but that doesn’t mean it’s a good idea to do so. Counterfeit items are sustained by the black market and are made in unsafe conditions that harm both consumers and producers. Because they are illegal to produce, there is no regulatory oversite. They are often made using child-labor and can be hazardous to consumers (counterfeit toys have been found to contain unsafe levels of various toxic compounds that can cause, amongst other things, cancer and vomiting[6]). They do not have to undergo rigorous testing to ensure consumer safety. Furthermore, by buying counterfeit items, you are supporting illegal activity and creating a demand for illegal items.

The Commission on the Theft of American Intellectual Property estimated in 2017 that the annual cost of intellectual property theft to the U.S. economy is between $225 and $600 billion per year.[7]  So in addition to being unsafe, it damages U.S. businesses, and by extension the U.S. economy. IP theft and trademark infringement have the additional threat of pricing the original, high-quality products out of the market.[8] This should be of concern to everyone, not just the companies, because in the U.S., IP-intensive industries directly and indirectly support 30% of all employment, and contribute substantially to the GDP.[9] Only with strong trademark and intellectual property laws, and knowledgeable consumers, can the value that comes from these IP and trademark heavy industries be sustained.

Go with the dupe.

While it may not be directly illegal for one to buy a fake Chanel bag on a trip to New York, the aggregate of these consumer decisions can lead to larger legal and economic problems. At Morris Law Center, we suggest you steer clear of counterfeit goods. Besides, you can never truly know how that counterfeit item was made, or whether it is safe to use. On the other hand, when you come across a dupe at fast fashion stores like H&M or Zara, go for it!

At Morris Law Center, we love answering questions about intellectual property, so if you have anything you’d like to discuss, contact us and let us know your thoughts!


[1] 18 U.S.C. § 2318, subsection 2320(d)

[2] Schultz, Jennifer Saranow. The Legality of Buying Knockoffs. (October 28, 2012). The New York Times. Retrieved from https://bucks.blogs.nytimes.com/2010/10/28/the-legality-of-buying-knockoffs/.

[3] Id.

[4] Tourists warned over fake goods. (August 22, 2009). BBC News. Retrieved from http://news.bbc.co.uk/2/hi/uk_news/8215519.stm.

[5] 18 USC § 2320(f)(1)

[6] Hickey, Shane. Whether you’re unaware or don’t care, counterfeit goods pose a serious threat. (December, 2018). The Guardian. Retrieved from https://www.theguardian.com/technology/2018/dec/02/whether-youre-unaware-or-dont-care-counterfeit-goods-pose-a-serious-threat.

[7] The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy. (2017). The Commission on the Theft of American Intellectual property by the National Bureau of Asian Research.

[8] Counterfeit Products. (2010) United Nations Office on Drugs and Crime.

[9]Lee, Michelle K, and Antonipillai, Justin. Intellectual Property and the U.S. Economy: 2016 Update. (2016). United States Patent and Trademark Office.

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Is There a Likelihood of Confusion Between “RUN DMC” And “RUN MLC”?

The United States Patent and Trademark Office (“USPTO”) will not register a new trademark if there is a likelihood of confusion between the new trademark application and a currently registered live trademark. 15 USC § 1052(d). To determine whether there is a likelihood of confusion between two possible marks, the USPTO considers a number of factors, namely:

1. The similarity or dissimilarity of the marks in their entireties as to
appearance, sound, connotation and commercial impression.

2. The similarity or dissimilarity and nature of the goods or services as
described in an application or registration or in connection with which a
prior mark is in use.

3. The similarity or dissimilarity of established, likely-to-continue trade
channels.

4. The conditions under which and buyers to whom sales are made,
i.e. “impulse” vs. careful, sophisticated purchasing.

5. The fame of the prior mark (sales, advertising, length of use).

6. The number and nature of similar marks in use on similar goods.

7. The nature and extent of any actual confusion.

8. The length of time during and conditions under which there has
been concurrent use without evidence of actual confusion.

9. The variety of goods on which a mark is or is not used (house mark,
“family” mark, product mark).

10. The market interface between applicant and the owner of a prior
mark:
– a. a mere “consent” to register or use.
– b. agreement provisions designed to preclude confusion, i.e. limitations
on continued use of the marks by each party.
– c. assignment of mark, application, registration and good will of the
related business.
– d. laches and estoppel attributable to owner of prior mark and
indicative of lack of confusion.

11. The extent to which applicant has a right to exclude others from
use of its mark on its goods.

12. The extent of potential confusion, i.e., whether de minimis or
substantial.

13. Any other established fact probative of the effect of use.

These factors are often referred to as the Du Pont factors since they originated from the 1973 Supreme Court case of In re E. I. Du Pont de Nemours & Co. The importance of the elements will vary from case to case.
As an example, we could compare the well-known logo for the band RUN DMC with a possible “RUN MLC” Mark.

https://www.instagram.com/p/BsrnHZBn6yh/?utm_source=ig_web_button_share_sheet

The “RUN DMC” Mark is registered under IC 009, IC 025, and IC 041 and is
registered for use with, among other things, musical recordings, clothing, and live musical performances. “RUN MLC” would hypothetically be used in connection with the provision of legal services.

If this Firm were to apply for a trademark on the “RUN MLC” logo the USPTO would consider those Du Pont factors which applied. Under the first factor, there is a strong similarity of the marks in their appearance which weighs in favor of a likelihood of confusion and thus against registration. On the other hand, since Morris Law Center provides legal services, there would likely be a finding that there was no similarity in the goods and services offered which would weigh in favor of registration and against
possible confusion. The third factor would likely not apply, but the fourth factor deals with the circumstances under which sales are usually made of the products in question and would likely favor registration since consumers of legal services are usually careful and sophisticated. A trademark examining attorney would likely decide that under this
scenario the remaining factors were simply inapplicable.

Taken together, a trademark examining attorney would likely find that there was no likelihood of confusion that would prevent this Firm from registering the hypothetical “RUN MLC” logo. However, this would be a close call and it would depend largely on which factors the trademark examining attorney decided were predominant. If the examining attorney believed that the first factor was predominant over the second and fourth factors, then registration would be denied. This also assumes that MLC only tried to use the “RUN MLC” in advertising legal services. If it were to put the logo on T-shirts then the nature of the goods would be identical to one of the uses registered for “RUN DMC” and registration would almost certainly be denied for that category.

If you have an intellectual property question, call us now to set up a complimentary consultation before anything is set in stone. We love answering questions!

Can you have a short-term rental in Unincorporated Clark County?

By Timothy Wiseman

Many homeowners wish to make additional money by renting out their home or some portion of their home on a short-term basis. Some internet services help facilitate the process. Different jurisdictions have taken different approaches to regulating this activity. Unincorporated Clark County bans such short-term rentals in residential areas. Clark County Code § 30.44.010(b)(7)(C) states “Transient commercial use of residential development for remuneration is prohibited in all residential zoning districts, or in any miscellaneous zoning district of this Title, except as otherwise expressly permitted.” This deals with zoning and so applies only to Unincorporated Clark County. Incorporated cities have their own zoning laws.

This section does not apply to short-term rentals which may be located in an area zoned for commercial usage, such as areas where hotels are located. However, other restrictions may be imposed by the lease or restrictive covenants, such as CC&Rs, affecting commercial property. Many personally owned units within hotels for instance come with restrictions which either limit or forbid short term rentals. Additionally, short term rentals must be licensed and pay appropriate taxes. Clark County Code § 6.12.982.

And finally, as we always say, “If you think you might need an attorney, you probably do.” Contact us with questions as soon as you possibly can.