How to handle your taxes in a blended family

This is part two of a series of 5 articles discussing the following case hypothetical from the various professional perspectives:

A and B are about to be married. A has two kids from a previous marriage. B has one child from a previous marriage. They plan to have children together. A receives child support from an ex-spouse. A’s mother also lives with them and helps to care for the children. B’s only child works in B’s business and both A and B hope their joint child(ren) will one day join the business as well. A and B have a lot to discuss!

This family situation may not be too unusual but it does create complicated tax issues. It would be wise for the couple to consult with advisers before the wedding to help prepare for issues that are likely to arise.

In this case, a CPA would want to meet with the family’s decision-makers for an initial fact-gathering session. The CPA would then assign homework for them to prepare for a second meeting during which a strategic tax plan would be developed.

The marriage and the blending of the family will impact how tax returns are prepared and the resulting taxes. For instance, questions would be asked about the children to see if they qualify as a dependent on either spouse’s tax return.

To be claimed as a dependent, a child must be the taxpayer’s child, under the age of 19, lived with the taxpayer for more than half of the year, did not provide more than one half of the child’s own support, and not be a qualifying child on someone else’s tax return. In this scenario, it looks like A’s children would meet all of those qualifications. It would be important to know, however, if A’s former spouse was claiming each child as a dependent.

If B’s child is over 19, the child might still be a qualifying child if in school full-time and under age 24. If that doesn’t apply, the child might be considered a qualifying relative if the child lived with the parent all year and the gross income of the child is less than $4,150.

There are a couple of tax credits that may apply to these children if they meet all of the requirements:

Child tax credit: This credit increased to $2,000 from $1,000 per qualifying child for kids under 17 years old. The child must be a dependent of the taxpayer and must have lived with the taxpayer for more than six months of the year. Up to $1,400 of the credit can be refundable for each qualifying child. There are phase-out thresholds on this credit.

Other dependent credit: Dependents who can’t be claimed for the child tax credit may still qualify for the new other dependent credit. This is a nonrefundable credit of up to $500 per qualifying person. These dependents may be dependent children over the age of 17 or other qualifying relatives supported by the parent.

In this case study, the child tax credit may apply to A’s kids while the other dependent credit may apply to B’s child.

A’s kids are younger since her mother helps to care for them. There is a child and dependent care dredit that may apply for their care. Both parents must have earned income and the expenses must be paid so that the parents can work. The expenses can cover household employees to take care of the child, but that employee needs to be paid wages and payroll taxes would need to be withheld. The employee’s name and Social Security Number is required to be reported to the IRS. The credit cannot exceed $8,000 for two children. The credit may be enough to justify giving A’s Mother some wages.

Child support is not taxable but the dollar amount received might affect the support test for the child being a dependent of the taxpayer if it is more than half of the support of the child.

B’s child works in the business. If the amount the child earns is over $12,000, there will have to be an individual tax return prepared for the child. That tax return will then have to be compared to the parent’s tax return to see which return would have the biggest benefit of claiming the child as a dependent.

A & B should carefully consider, then choose whether to file married filing separate tax returns or file a joint return. Normally, a joint return will result in lower tax liability or a bigger refund than two separate returns.

Reasons to file separately would include the fact that each parent wants to keep their tax liability separate, or one spouse has back taxes, student loan payments or child support owed.

Filing separate also has disadvantages such as both being forced to claim standard deductions or itemized deductions as the other taxpayer even if it is not advantageous to them. It also means a higher tax rate than on a joint return and they may not be able to take any tax credits or education expense deductions and may have other limitations.

Couples getting married, especially those with children, should discuss the tax ramifications and the possible unequal economic effect of filing their tax returns well ahead of time to avoid any surprises.

Next week we’ll write about an estate planning attorney’s perspective of this case study.

Related: Merging Family A and Family B: Who gets what?

 

Marcia L. Campbell has worked as a CPA for over 25 years specializing in seniors, trusts, estates, court and trust accountings and probate litigation support. You can reach her at Marcia@MCampbellCPA.com.

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Merging Family A and Family B: Who gets what?

This is part one in a series of five columns discussing a hypothetical case from various professional perspectives:

A and B are about to be married. A has two kids from a previous and B has one. They plan to have children together. A receives child support from an ex-spouse. A’s mother also lives with them and helps to care for the children. B’s only child works in B’s business, and both A and B hope their joint child(ren) will one day join the business as well. A and B have a lot to discuss!

Blended marriages have complexities that are not often considered until the wedding bliss has passed and the new reality becomes the norm. Meeting with your advisers before the marriage is a smart approach to mitigating future problems.

Will your existing certified financial planner, certified public accountant and estate planning attorney all understand the dynamics of your new blended marriage and plan for the family members’ best interest, or is it time to find a new team?

Your team will ask questions and think about solutions that you may not have considered. Questions that immediately surface in this case study are:

— Are the individual estates equal in size? Will one member bring more assets to the marriage than the other? If so, how do you address this?

— Is the age of the spouses a consideration in the planning? Is one future spouse considerably older than the other?

— How do you leave a fair legacy for the children who were born before this marriage vs. the children born into the marriage?

— Will the adult child who works in the business continue to work in the business if the parent passes, or will the company be sold? Does the adult child have ownership in the business? What type of business succession planning is in place? Does this planning need to be changed due to the marriage?

— How do you provide liquidity in an estate if the business is the largest asset? What type of life insurance is in place? What type of life insurance needs to be purchased to fill in the liquidity holes to help equalize the estate or offset estate tax?

— If client A were to pass or become incapacitated, would the mother still provide care for the minor children? Does the mother have the means to support herself, or is she dependent on her adult child to support her? Can you claim her on your tax returns? Do you pay her a monthly salary?

While there may be many solutions to the following questions, finding the best solution for the family will take brainstorming, then many discussions to reach the best outcome. A team of advisers will address the topics and solutions, then work in their specialized area on the specific solutions related to their fields.

The CFP can coordinate the professional advisers, ensuring the objectives of the overall financial plan are accomplished. During this process, they will coordinate the life insurance needed to provide for the children or fund the buy-sell agreement. They also can review all beneficiary designations on the existing life insurance policies, retirement accounts and annuities to confirm they align with the planning. They should also run retirement projections based on the current assets to determine if the assets and savings strategies will meet the retirement goals and future objectives of this family.

An attorney will address the premarital agreement, business succession planning and estate planning. This planning may be very complex and take months to complete. B’s exit from the business (especially if it’s unexpected) will have an impact on B’s employees, B’s family, B’s assets, and tax obligations. Establishing a method of transferring control of your business is a crucial part of your business plan and estate plan.

A CPA helps individuals, businesses, and other organizations plan and reach their financial goals. CPAs are well-respected strategic business advisors and decision-makers. They act as consultants on many issues, including taxes and accounting and will address the pros and cons of decisions that will impact your income tax obligations.

An executive coach can help you with the “mindset” issues and teach you and your family strong communication skills. They can also help you to learn in a systematic way how to evaluate and update your current business strategic plan and exit strategy. A coach will help you to turn your strategic plan and exit strategy into a plan of action that can be easily broken down and applied at every level of your organization. Your company’s divisions, departments, and key areas of responsibility will be aligned and working together to meet your goals and objectives.

Over the next month, our writers (two CPAs, an estate planning attorney, and an executive coach) will discuss this case study and the solutions specifically related to their fields. Stay tuned.

Teri Parker CFP® is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Contact her via email at teri.parker@captrustadvisors.com

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Comfort planning: Tips on how to prevent strangers from taking over if you’re incapacitated

I was at a meeting with a client and her attorney when the lawyer asked the client, “What do you absolutely need to do for your estate planning?” The client shrugged her shoulders and looked puzzled. The attorney said, “Absolutely nothing. You will no longer be here!”

The attorney’s macabre joke was only partially true. A comprehensive estate plan can include instructions that will impact your well-being while you are living, during a long recovery, or at the end of life. I call this “comfort planning.”

None of us wants to talk about our eventual deterioration and demise. We often use humor and stories to help our clients open unpleasant dialogue with their family members and to encourage our clients to seek legal advice.

One in three adults over age 50 will die within 12 months of experiencing a hip fracture, and 2.8 million seniors will report to the emergency room this year due to a fall. Here are three true stories of seniors who fell and how comfort planning could have helped them.

Utilize all available benefits

Don and his wife Gail worked hard, saved to have a modest nest egg and paid off their small mortgage before retiring. Gail fell last year and broke her hip, and her health quickly deteriorated.

After the Medicare benefits suddenly expired, Don brought Gail home to care for her himself. Social Services found his care was inadequate, intervened, and demanded Don pay for a facility that cost over $6,000 a month.

Don estimates their life savings will be gone within 18 months. Don has cut back on necessities, including food. Not having Gail home to care for him has caused his health also to decline.

Don and Gail did not know Medicaid (called Medi-Cal in California) includes an entitlement program for long-term care, and it is not just for the poor. Don and Gail may qualify for Medicaid benefits so Gail can stay in a more comfortable nursing home, and Don can still have funds for his care and savings for the future. Had they discussed planning with an attorney previously, they could have retained even more of their savings.

Do not give up your rights

After traveling the world several times over, Judy, a successful photographer, happily became a homebody in her retirement. Her neighbors knew her as kind and a little forgetful. She fell and broke her hip and suffered a concussion. While in the hospital, a fiduciary, whom she had never met, went to court and had herself named Judy’s conservator.

Her neighbors visited Judy and found that, although she had substantial resources and could afford care at home, she was in a sub-par nursing facility. The neighbors complained that the people living in Judy’s home (who happened to be related to the fiduciary) had “trashed” her house and thrown most of Judy’s life’s work in a dumpster.

Had Judy discussed with her attorney the different types of power of attorneys and had she chosen a friend or family member to be in charge of her affairs in the event she became incapacitated, a stranger would not have been named as her conservator. Judy probably would have recovered comfortably in her own home with all of her belongings and savings intact.

Reduce unnecessary pain

Delores fell and suffered from a broken hip and complications from diabetes and an infected port catheter. In the waiting room of the hospital, her grandchildren were calling family members exclaiming, “They want to kill grandma!”

The grandchildren did not understand the doctor wanted to talk with the family about a DNR (Do Not Resuscitate) order. A DNR order allows you to choose whether you want CPR in an emergency and can sometimes spare a patient unnecessary pain.

Delores’ small chest was severely bruised from the previous resuscitations, and she was noticeably suffering. She had not discussed her medical wishes with her family and had not prepared a medical directive that could have included a DNR order.

Had she done “comfort” planning, her medical directive could have encompassed anything to soothe and relieve her suffering. Her instructions could have included limiting medical testing and procedures; dietary restrictions and food likes/dislikes; whom she would like to visit with and when; spiritual and emotional counseling; and medicating pain, anxiety, nausea, or constipation.

What do these three stories have in common? At some point, others had to make decisions on behalf of the person who did not have comfort planning in place. While we cannot eliminate the risk that we will eventually suffer from an injury or grave illness, discussing our wishes with family and friends and paying for relatively inexpensive planning can help ensure we subsequently receive the best care possible.

Michelle Herting, CPA, AEP, specializes in estate and trust taxes and trustee support, and she performs valuations for estates and gifts. She recently celebrated her 30th tax season. Contact her via email at michelle@yourowncpa.com.

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On death and taxes: Necessary and tough family conversations

During the past few weeks, our Women, Money & Mindset series has focused on who in your life needs to be informed about matters that belong to you which may affect them in the future.

Items can include things like desires for oversight for fiscal and medical matters when you are no longer able to care for yourself, and inheritance decisions you have made about your estate holdings.

Family dynamics and communication patterns, however, may keep you from readily addressing these critical decisions. In fact, many avoid these conversations, fearing negative reactions or awkward feelings about your choices. As a result, when a major change within a family circle occurs, those affected will be caught by surprise. Hurt or angry feelings can arise not only about you but also toward the others within the circle that they feel have been “favored” by your decisions.

Sadly, many families experience rift and conflict that may never again be reconciled. What once felt like a warm and caring clan has now broken apart.

If you truly want to leave a legacy, consider getting the tough stuff out of the way so it’s a smoother future for your circle later on.

How then, can you get more comfortable with being uncomfortable? How do you approach these tough, but important conversations?

  1. Give the conversation the respect and importance it deserves. Set a time with the family member involved and have the conversation in a neutral place. Be sure it isn’t a noisy restaurant or other atmosphere that detracts from focusing on the importance of the conversation at hand.
  2. Tell those involved why you are having the conversation. Let your family member know that you have made plans for the future. Acknowledge that conversations around such a topic can be sensitive and that even though this may feel awkward, you want to leave them with peace of mind and fully equipped upon your passing or possible infirmity.
  3. Tell them why you are sharing now. Tell them that you would like to outline your wishes at this time so that in case they have questions, you can answer these to avoid confusion while you are still healthy and available.
  4. Be equipped. As you outline your desires, be sure you provide copies of any directives or a copy of where to find important papers and the names of any professionals you may have appointed to oversee the process.
  5. Prepare to listen. Ask them if they have any questions and reassure them that you will keep them (or the files!) updated in case of further business pertaining to them. Tell them you are available to talk more about it if they need to do so.

Talking about your eventual passing or possible infirmity is delicate and many do not want to conduct a conversation around the subject, feeling it can be depressing. Quite the opposite! Assume the courage and responsibility to back up your decisions by sharing these details with those who will be affected is the key to your family’s future cohesiveness.

By sharing with those affected at the appropriate time, you provide your family with the knowledge they need to plan. You also remain on hand to manage conflict, any misunderstandings or hurt feelings resulting – an important gift.

Make sure your wishes are honored while releasing your loved ones from the concern of having to make some difficult emotional and decisions. Set the tone while keeping things on the bright side as you share your plans, and follow up in writing to help clarify. You are uniquely positioned to leave a positive and caring legacy for your family by doing so.

Patti Cotton works with executives, business owners, and their companies, to elevate and support leadership at all levels. Her client roster includes privately-owned businesses and such entities as Bank of America, Boeing, Coca-Cola, Harvard University, Sysco, Edward Jones, Morgan Stanley, Girl Scouts of America, and more. Contact her via email at Patti@PattiCotton.com.

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Poor retirement planning puts housing catastrophe on horizon

Several recent studies are shedding light on the state of retirement for those who are nearing their post-working years. Today in America, everyday an average of 10,000 individuals are turning 65. And by 2030, the 50-and-over cohort is projected to expand by 20%, reaching 132 million individuals.

For generations, the retirement years have been promoted as a time of relaxation and fulfillment. And, even as many are now rethinking the definition of retirement, the desire for a secure and stable home as we grow old remains the same.

Unfortunately, recent research is revealing many Americans are not adequately prepared to meet their needs as they grow older. So, what if you find yourself in the category of someone nearing your senior years, or simply wanting to be prepared for retirement at some point in the future?

The following are a few of today’s trends that can teach us some valuable lessons when preparing for tomorrow.

First, a 2018 study by the Federal Reserve Bank of St. Louis shows that not all employees have access to an employer-sponsored retirement plan and those that do participate at low levels. Specifically, 56% of respondents had access to an employee-sponsored 401k, 403b, or similar plan.

For those who do not have that option, a meager 20% were investing in an IRA or other retirement accounts. For those aged 56-61 years old, the median retirement account was valued at just $25,000.

Even more concerning is the finding from a February 2019 survey of 1,315 adults age 50 or older by the Nationwide Retirement Institute that 44% of older Americans who are retired or plan to retire within 10 years see Social Security as their main source of retirement income. The average American worker can expect to receive annual Social Security income of just $17,064, or $1,422 a month.

We can draw two lessons here.

First, regardless of where you are in your career journey, begin contributing to a retirement account as soon as possible and be sure to take full advantage of any employer-sponsored matching programs. Secondly, to maximize Social Security benefits, delay taking payments until age 66 if at all possible.  Although benefits can begin as early as age 62, monthly payments will be notably larger if you can wait until age 66.  Of course, with this or any major financial decisions, be sure to consult with a trusted financial or tax advisor.

Secondly, one in three Americans over the age of 65 are spending more than the recommended one-third of their income on rent or a mortgage payment and other property expenses, according to Harvard’s Joint Center for Housing Studies’ 2018 Housing America’s Older Adults. “High housing costs force millions of low-income older adults to sacrifice spending on other necessities including food, undermining their health and well-being,” the study says.

And in California, this need is even greater as housing costs continue to skyrocket.  Already, it’s estimated an additional 2.5 to 3.5 million housing units are needed to relieve today’s housing demand. And with a rapidly aging population, the need for quality, affordable senior housing will continue to grow. So, as a region, we need to commit to producing new housing of all types, including smaller units for seniors in walkable areas, to meet the growing demand.

Over the coming years, I believe our attention needs to shift toward better preparing for our later years and creating communities that empower seniors to live comfortable and vibrant lives.  Taking these trends as a cue, let’s learn some lessons and begin moving in that direction today.

Gregory Bradbard is an advocate for breaking the cycle of poverty as President of the SoCal-based Hope Through Housing Foundation, www.HTHF.org.

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Hello, tax season! 6 tips to help you find a CPA

It’s a new year and you might be looking to make a change in your business or personal “team” for this year. That team might include your CPA, life coach, attorney or financial planner.

Today, let’s look at the CPA. A CPA is distinguished from other accountants by stringent state licensing requirements which include required hours of college credit earned, the successful completion of a standardized uniform national examination, an experience requirement and mandatory minimum education classes each year.

You might be quite comfortable with your CPA, but it’s still a good idea to take stock of your situation and see if that person is still a good fit for you. If circumstances have changed, or you have never used the services of a CPA in the past, you might want to look for someone new.

Review your CPA’s professional experience

For instance, your past choice of a CPA may have been based on the business you owned at the time. However, if the nature of your business has changed, you may require additional knowledge or experience from your CPA. Other changes such as pending retirement, a sale of a business, a divorce, estate planning or the death of a family member may require a CPA who has experience in those areas and can prepare the required tax returns.

Does your CPA communicate well?

Do they call you back or respond to your e-mails within 24 hours? Do they talk to you using technical language such as the IRS tax code sections or do they use plain English and simple terms? They should take the time with you to answer your questions without continually looking at their watch to see the time or talk about their next appointment arriving.

Are you looking for a large or small firm?

Large firms might have the experience and expertise you need for your particular situation. If you have an unusual issue that comes up, they probably have someone else in the firm that can help with that particular area. For some people, a small firm is more comfortable where they know all of the staff and are greeted by name when they walk into the office. A small firm might not be able to meet every one of your needs, but they probably know other CPA specialists that they can refer you to easily.

Do you really need a CPA?

If you need an audit of your financial statements, then you do need a CPA. Only a CPA can report on financial statements prepared by AICPA standards. If you are looking for someone to do your bookkeeping, maybe there is an internal bookkeeper that you can hire, or a bookkeeping service that would fit your need instead of hiring a CPA. For tax purposes, you can find enrolled agents, registered tax preparers and even tax programs such as Turbo Tax to do simple tax returns. With the new tax law, it is projected that an increased number of people will be doing their own tax returns this year instead of using a CPA.

How much does a CPA cost?

Large firms usually charge more. Small firms have lower overhead costs, and, therefore, less costs to pass on to you for their services. Both large and small firms charge for the experience level of their staff or partners.  Also, if the individuals have special expertise in special fields, they will charge more for those services. Make sure that you find a CPA that will meet your needs and then make sure that you are comfortable with the fees they will charge you for their services.

What services does the CPA offer?

For businesses, they can help you set up your accounting systems, and accumulate, analyze and report financial and operations information for management decision-making. They can prepare audits, reviews and compilations required by the people you do business with, and provide management consulting services for your individual business.

For individuals, they can help with financial plans, budgets and retirement planning, developing an estate plan, and assessing insurance needs. They can also work with seniors, act as a trustee and prepare court/trust accountings.

There are many other services a CPA can offer for a business or for individuals that are not listed here.

Before you make a selection, interview at least three CPAs. Ask the same questions of each one, and be sure to request references.

Next week we will be looking at another team member for your business or personal team.

Marcia L. Campbell, has worked as a CPA for over 25 years specializing in seniors, trusts, estates, court and trust accountings and probate litigation support.  You can reach her via email at Marcia@MCampbellCPA.com.

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Five ways to motivate employees and drive results

How do you motivate employees and drive results at the same time?

When we think about a results-driven leader, we picture someone who is driving with an intense focus toward a goal. Eyes front. No nonsense. A person who embodies the message, “Get out of my way, I will win!”

On the other hand, motivation requires a leader possess a high degree of people skills, directing his or her energy toward inspiring and building positive relationships with their team. This requires taking the time to help employees develop new skills and talents along the way to success.

This is a lot to ask!

How do you, as leader, manage all this without losing your own focus or momentum?

Here are a few simple shifts that will help you both drive and motivate your team.

1. Leverage is your best friend – embrace it.

As a leader, you may feel as though you bear the burden of full responsibility to achieve the goals that have been placed before you. Not so!

Your job is to set the vision, map out the course, assign responsibilities, teach people the right steps to excel, and coach them to the finish line. If you feel as though you are pulling and dragging people to reach this finish line, you are carrying weight that doesn’t belong to you. You have disempowered your team. Your team wants to feel valued and that they contribute toward the larger picture. Put on your coaching “hat” and get out of the way.

2. Your foundation is everything.

Your foundation consists of your plan, your people, and the resources to do the job.

A. Is your plan solid? Does it contain the “teeth” to leave no room for question? If your people are stalling at certain points, this means you need to clarify how to move forward. And are you regularly checking to see if the plan is moving your team in the right direction? This tells your team you care about them and their success.

B. Do you have the right people in place? If you have a chronic underperformer, the finger should point back at you. What does this person need in order to perform more effectively? Have that conversation and if you discover that you are part of the problem, adjust and rewind. If, on the other hand, you find that the person simply isn’t the right fit, do yourself, the employee, and the rest of the team a favor and have the critical conversation that has been looming for some time.

C. Are you providing your team with the resources they need to do the job? This is a big item. If you are asking them to reach the seemingly impossible, you also need to identify what they will need in order to achieve this. A runner can’t run without a well-mapped out course and the right amount of energy bars and water. Likewise, your team member can’t perform to capacity unless he receives the right kind of support and resources. What do your team members need in order to work more effectively? Ask! This helps them to see you have their best interests in mind and want to see them win.

3. “Rinse and repeat” should be your mantra. It’s not how many steps; it’s how many right steps.

Be careful that you don’t throw your team off course if you aren’t seeing big results quickly. Check your direction, and check the steps you have outlined to get there. I recall leading a multi-million dollar campaign that had never before been achieved. As I learned to put together the strategic plan that ultimately helped us reach and exceed $21.3M in four years (unprecedented!), it was a real eye-opener to realize that just five steps, when repeated over and over, reaped the lion’s share of our results.

Have you identified your own multi-step formula? When you do, and you allow your team to flex and grow while working these steps, it allows them to master these, as well, because they must repeat them many times.

People love learning, and they love achieving. This is motivating. And that is what this does.

4. Evaluate often and collaboratively. You need to have regular meetings set up to evaluate progress – no surprise (but I’m astounded at the number of leaders who don’t do this).

However, if you want to motivate your people, if you want to help them learn and grow, you will want to conduct your evaluations in a different way.

First, be sure you begin these meetings with celebrating what has gone well. Identify what is working and recognize people for their efforts.

Secondly, identify the “points of learning.” What didn’t work as well as you had hoped? Have your team dissect this with you and keep the focus on the moves and tactics that needing adjusting. No finger-pointing.

Third, address any big concerns, and allow the team to give input as to how these concerns might be addressed. You are allowing them to participate in creative problem-solving and to give them a “voice” in the solution. Again, feeling as though you are part of the solution and that your thoughts count is very motivating and reminds people that they are important to the larger picture.

5. Celebrate. It is always a sad sore spot with me when leaders are recognized for achievements and efforts, and the team goes unrecognized.

Begin with your team – recognize them for efforts even if you can’t recognize for results.

Identify what about their contribution was helpful – get specific. In other words, saying “Good job on last week’s efforts, Dan,” rings hollow. But “Good job on your efforts to negotiate with our competitor, Dan. I believe your connecting with them will bear fruit,” is much different. Tell them why you are recognizing them and be sincere.

And when it comes time for you as leader to be recognized in bigger meetings, don’t forget to call out how your team helped to win. You truly could not have done this yourself – and you need to recognize this with others.

If you truly want to motivate and inspire your people, let them know they are an integral part of the success.How do their contributions make a difference? And then, allow them to use these gifts to do so.

Your job is not to run the course alone – it is to coach an entire team to break that ribbon at the finish line. It is when you finally embrace this that you will reach those great results.

Patti Cotton works with executives, business owners, and their companies, to elevate and support leadership at all levels. Her client roster includes privately-owned small businesses and such entities as Bank of America, Boeing, Coca-Cola, Harvard University, Sysco, Edward Jones, Morgan Stanley, Girl Scouts of America, and more.  Reach her by email at Patti@PattiCotton.com

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Ask the Lawyer: How do dishonest lawyers sleep at night?

Q: We know lawyers are very smart people, but yet the law allows lawyers to lie in court since they are not under oath. How do lawyers sleep at night, and how do they really feel when they get guilty clients off?

-D.K., Torrance


Ron Sokol

A: You say the law allows lawyers to lie in court, but that is false. Lawyers are officers of the court, and are not permitted to engage in misrepresentation. A lawyer who does so could well be in very serious trouble, with the court alone the State Bar.

Your question also asks how a lawyer can have peace of mind when he or she may know the client is guilty; still, the lawyer is acting zealously to try to show that the client is not guilty. In such instance a lawyer may justify the defense on the basis that each person is entitled to competent and vigorous representation.

Our system allows all parties to have counsel, if they choose to do so, and in some instances will provide counsel even if the person is resistant.  Bottom line, being a lawyer comes with very solemn responsibilities, one of which is real candor, not deceit, and another which may include handling a task that others would choose to avoid.

Q: My son is thinking of going to law school. It is expensive, very hard work, and there already are an awful lot of lawyers. Is it really worth it?

-P.Q., Manhattan Beach

A: There are good reasons for going to law school, sticking with it, and becoming a lawyer. First, what you learn you can use whether or not you practice law. If you become a lawyer, you can also teach, and/or you can write. You can be a lawyer who works primarily in the office (handling wills and trusts), or you can get into the trenches with criminal or family law matters. In addition, you can work in the public or private sector. Over time, you may become a judge. Another option is to work for a company, not just a firm; or you can go solo. Being a lawyer also is rewarding – not just monetarily, or monetarily alone. You can be involved with helping the community, help people in need, change things for the better, and thus serve a higher purpose.

Ron Sokol is a Manhattan Beach attorney with more than 35 years of experience. His column, which appears on in print on Wednesdays, presents a summary of the law and should not be construed as legal advice. Email questions and comments to him at RonSEsq@aol.com or write to him at Ask the Lawyer, Daily Breeze, 21250 Hawthorne Blvd., Suite 170, Torrance, CA 90503.

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