The (Legal) Truth about Cats and Dogs
Maybe because dogs have never been able to hire a lobbyist to ensure that they get equal rights under the law, dogs are at a distinct disadvantage versus cats when it comes to injuries resulting from a bite.
Many years ago, there was a saying in the law: "Every dog gets a free bite." The reference was to the existing common law that if an owner or keeper of a dog (or cat) did not know of the animal's viscous tendencies, that owner or keeper could not be liable for the dog's first 'bite', as it took the first bite to establish that the dog or cat had viscous tendencies.
However, just before WWII, Michigan passed a law that referred to dogs only (commonly called the "dog bite statute"). Under this law, if a person, without provocation, is bitten by a dog while the person is lawfully where they are supposed to be (public place or lawfully on private property), then the owner is liable for the damages caused, regardless of knowledge of the dog's viciousness. Note that this law applies only to the owners of the dog (not keepers), and it does not apply to cats. Cats are only covered by the old common law strict liability principle, which requires that the person knew of vicious tendencies, or was negligent in preventing foreseeable harm to be caused by the animal.
While dogs may still be "man's best friend", the Law certainly doesn't seem to favor them.

CASH IS KING!
You have read this in various forms before in The Gavel, but it doesn't hurt to repeat it. When it comes to the viability of small businesses, Cash is King!
A line we have heard too many times is: "Our business is doing great. Our profits have never been higher!" Unfortunately, a follow up question is often: "Really? Then why haven't you been paying your bills?" The answer to this is always the same: Cash flow.
It doesn't matter how much profit a business is booking if it cannot pay it's bills. Cash flow problems are the leading cause of start-up business failures in America. According to the Small Business Administration, 76% of businesses survive the first two years, but by the fourth year, only 48% are still in business. After six years, only 37% are still around.
As we head for a new year, review your cashflow situation. If you are still scrambling to meet payroll, and are running out of excuses as to why a bill has not been paid, it's time to review your cash flow with an expert. If your accountant is not providing your small business with ideas and suggestions on how to turn your cash flow around, it may be time to get a new accountant.

Y2K: Does it matter to you?
It seems like the techies are taking away all the fun of the upcoming Jan. 1, 2000. Instead of ringing in the new millennium, we are being told that we have much to fear in the near future, all because of some 'old' technology.
First, some background. The term Y2K is shorthand for "Year 2000". The Y2K issues dates back to the early days of computers, when memory and storage capacity were in short supply. In order to save space, the early programmers used only two digits instead of four to represent years. For example, 1968 would be displayed and stored as 68. The problem will come when we turn the calendar over to year 2000. Will the programmed system know that it is January 1, 2000, or will it think that the time has been set back 100 years to 1900? Conceivably, the programmed system could now begin to generate error messages, miscalculations, and might even crash (a.k.a. "Electronic suicide").
If your reaction is like many others, your response to Y2K may be: "OK, but will this really affect me?" No one knows. Unless you got stuck on a Y2K committee at work, the effects may not be so great on the majority of us. IF you purchased your home computer or office equipment within the past few years, it is very likely that it is already compliant [TIP: if you have Windows 95 or 98, you can help your computer to continue to operate by following these steps: At the Start menu, select the following in succession: "Settings", "Control Panel", "Regional Settings", "Date", then pull down the menu for "Short Date Style". Select MM/dd/yyyy.]
However, some solutions may not be so easy. If you have or use any of the following, you may have a problem with Y2K compliance: telephones, elevators, machine controls, inventory systems, appliances, photocopier, fax machines, etc. If the list seems long, the doomsday forecasters have a much longer list.
Should you panic?
We NEVER believe in panic. Rather, you should review your programmed systems to see if they will function (e.g. store the data, then change the date to 2001 and assess the result). Most manufacturers are now attuned to the issue, and should be able to provide you with a solution. There are also websites devoted strictly to the Y2K issue, and provides links to similar sites. [e.g. http://www.year2000.com or www.support2000.com]. Since up to 5 million small businesses could be affected, managers should also check with their customers and suppliers to ensure they are compliant.
While there is no law reported yet concerning Y2K glitches, we are fairly certain that a defense of Y2K glitch will NOT be a valid defense if it causes a contract breach. Also, don't look for insurance coverage for such a problem. You'll be on your own.

Should You Convert to a Roth IRA?
By Jeffrey A. Krentz, CPA
What's different about a Roth IRA? Unlike a traditional IRA, contributions to a Roth IRA are not tax-deductible by a taxpayer. However, also unlike a traditional IRA, the money that accumulates tax free in your Roth IRA account is totally non taxed to you (or your beneficiaries) when it is withdrawn in the future. The benefit of this future tax free money is making a lot of people think about opening a Roth IRA account or converting an existing IRA to Roth form.
If you have an existing IRA account, you can convert it to a Roth IRA, but here's the bad news: you have to pay income tax on the amount you convert (that's only fair, isn't it? You deducted it as you put it in). You are given one break, however. If you convert during 1998, you have a four year spread out of conversion taxes. But, the value of this delayed payment of taxes is generally overrated, especially if you are currently in the same or similar tax bracket as you expect to be at retirement.
Deciding whether to convert still requires speculation about future tax rates, future income needs and a lot of trust that the rules won't change by the time you reach retirement age. However, there are some major benefits which haven't been given much exposure in the general media. What's been overlooked in the excitement about tax friendly ways to save for retirement is that one of the best justifications for a Roth IRA is the ability to leave money to your heirs without the necessity of probate and without immediate taxation to the beneficiary. Here are three benefits that a Roth IRA has over a traditional deductible IRA:

1. Post age 72 deferral. Unlike traditional IRAs, there are no minimum distributions required at age 72. Additional growth from withdrawing little or nothing after age 72 will increase the value of the account tremendously. In a traditional IRA the amount you must withdraw each year depends on your age and the age of the beneficiary of the account.
2. After death tax free growth. After your death, the entire balance in a traditional IRA will be taxable to the beneficiary (usually a child or grandchild) immediately. With a Roth IRA the beneficiary will be able to take tax free distributions over their lifetime, while the balance of the plan grows tax free.
3. Post 72 contributions. Unlike traditional IRAs, contributions can be made after age 72 to take advantage of items 1 and 2 above. However, you must have what the IRS calls "earned income" to take advantage of this.

CASE IN POINT: A Fool and his money are soon parted.
We have all heard the phrase that a fool and his money are soon parted. It certainly applies to an Ohio man recently. It seems that the defendant had a full blown marijuana cultivation operation going in his home. When he got busted, the Feds asked the court to grant a forfeiture of the defendant's home. The Defendant objected under the Eighth Amendment's Excessive Fines clause.
The court threw out the defendant's objections, in part because the amount of the forfeiture (his home worth approximately $220,000) was not onerous to him. Why? Because the defendant has won a $10 million lottery prize a few years before. Why does it always seem that the idiots are the ones who win the big lottery prize? United States v. Real Property known and numbered as 425 East Mitchell Avenue, sixth circuit.

REFERRALS
If you have been pleased with the service and professionalism you have received from our office, it would be greatly appreciated if you passed the good word along. Referrals are always appreciated and encouraged, and we look forward to the opportunity of being of service to your associates and friends. If we can not immediately service their needs, we will be happy to refer them to the appropriate attorney specializing in their specific area of need.
However, if you have not been pleased, contact us directly!

David B. Forest, JD, MBA
Attorney and Counselor at Law
(810) 263-5690