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Women Need an Estate Plan

Posted: October 9th, 2014

I hate to break the news to the guys reading this, but we’re probably going to die before our wives. First off, older women (65+) have a life expectancy of 20.3 years whereas older men only have an expectancy of 17.7 years, according to the CDC.

Add that to the fact that most women marry guys that are two to five years older than themselves, and you’ve got the makings of a wife becoming a widow before the husband has a chance to become a widower.

What that really means is that part of the planning should be to make sure female spouses will be able to live out the remainder of their lives in the standard they have grown accustomed.

I understand gender equality has come a long way in the past few decades, but still, when most people think of estate planning, they think of wealthy older men such as Michael Bloomberg or John Rockefeller. But, when you take into account what was said above, estate planning is a subject which has a significant impact on women.

And to add insult to injury, on average, it is the woman of the family who will end up putting her career on hold for caregiving duties (either to care for young children or aging parents.) This means they will have, less or, no income or assets of their own. Their lower lifetime earnings also means they are far more likely to see their living standards compromised in retirement if proper estate planning isn’t done.

How can women ensure that this doesn’t happen to them? The best answer is for every woman to take an active part in planning her estate. If you are married, talk to your spouse about what will happen to your income and assets if your partner passes away first, leaving you a widow. A loss of income will mean having to spend more of your assets to maintain your lifestyle.

Most married couples that I do planning for have what is typically called “Love me do Wills.” I love you, you love me, whatever I have is yours, whatever you have is mine. When we both die, then the kids get it. And that’s fine. Taking everything we’ve discussed into account, it’s then most likely going to be the wife’s Will that will be controlling where and how the assets go to the kids.

More and more women have some assets in their name only (and if you don’t have assets in your own name, you will if your spouse is the first to pass away). It’s important not only to create a Will for these assets, but also to talk to your family about how these assets should be distributed upon your death. Because estate planning is all about the details, be sure to bring your estate planner into the conversation so you can discuss the issue in specifics, not just generalities.

There are many reasons for being reluctant to start planning your estate: you don’t have time, your partner or spouse generally takes care of the finances, you’re just not a “numbers person” and the most famous, “if I do a Will, I’m tempting fate.” But there’s one overwhelming reason to start: to protect your assets and your future. This isn’t a job anyone should leave to anyone else. Taking charge of your estate means taking charge of your life.

Suggested Handling of the Ebola Outbreak for Employers

Posted: October 9th, 2014

By Christine Malafi

With all of the recent news coverage regarding the Ebola outbreak and its entry into the United States, employers need to be prepared to answer related questions and handle related issues. The CDC has stated that the 2014 Ebola epidemic is the largest in history, affecting multiple countries in West Africa, and advises of the specific symptoms and dangers of Ebola.1

Employers should be aware of the OSHA and CDC guidance available, and should communicate with employees and customers to reaffirm that health and safety concerns are taken very seriously and that all legal actions will be taken to protect them. OSHA has specific guidelines, based on the CDC recommendations, for healthcare workers, airline and travel industry personnel, mortuary workers, lab workers, border and custom workers, emergency responders, and critical sector employees (transportation, pharmacists, etc.) which should be reviewed by employers of those workers.
The following are some steps which may and may not be taken to protect employees, customer, and the public, depending upon the circumstances: 1. Consider work-related travel destinations and require only absolutely necessary business travel to affected geographical areas. 2. Ask employees about travel plans. If an employee intends to travel to a place where they may potentially be exposed to Ebola, then an employer may ask whether the employee had contact with any infected persons, and whether the employee is experiencing any symptoms.
The questions should be limited to avoid inquiry which would require revelation of a disability and violate the Americans with Disabilities Act (ADA).
If an employee has been exposed to Ebola, an employer cannot impose quarantine.
Remind all employees of basic practices which are important during the winter flu season (i.e., washing hands often, getting a flu shot, etc.).
Notify employees of potential hazards of Ebola.
Provide employees with reasonable means to abate the hazards of Ebola. If there is a real fear of contracting Ebola in the workplace, fearful employees may be protected if they refuse to work, and legal counsel should be obtained to help to deal with such a refusal.

If you have any further questions or concerns about the information contained in this Advisory you should not hesitate to contact us.

1 United States Centers for Disease Control and Prevention, www.cdc.gov/vhf/ebola. 2 United States Department of Labor, Occupational Safety & Health Administration, Ebola Control and Prevention, www.osha.gov/SLTC/ebola/control_prevention.html.

Negotiation Skills: Confront Your Anxiety, Improve Your Results

Posted: September 14th, 2014

By: Joe Campolo, Esq. email

Tags: negotiation

A new research study confirms what many of us have suspected: anxiety about a negotiation is likely to work against you.

Published previously in the Harvard Law School Program on Negotiation Daily Blog on November 10, 2014, is an article entitled “Negotiation Skills Confront Your Anxiety Improve Your Results.” The full article can be read here.

Researchers Alison Wood Brooks and Maurice E. Schweitzer of the Wharton School at the University of Pennsylvania have taken a first look at whether anxiety affects negotiators’ outcomes.

In three experiments, the researchers induced anxiety in some of their college student participants by having them listen to frenetic music (the theme from the movie Psycho ) or watch an anxiety-producing film clip about rock climbers. Participants in a neutral condition listened to a piece of classical music or watched a video clip of ocean fish.

Next, the participants engaged in a two-party computerized negotiation simulation involving a buyer and a seller.

In one of the experiments, anxious negotiators didn’t set lower goals than those in the neutral condition, but they did have lower expectations of success, which appeared to become a self-fulfilling prophecy: they made lower first offers, responded more quickly to offers, and achieved less overall.

In another experiment, when negotiators were repeatedly given the option to end the negotiation, anxious negotiators bowed out sooner than those in the neutral condition.

In a fourth experiment, the researchers found that when anxious negotiators were led to believe that their negotiating abilities were strong (whether or not this was actually true), they were not hampered by their anxiety.

The results suggest that negotiators can reduce potentially detrimental anxiety through confidence-boosting training, practice, and thorough preparation.

Simply acknowledging your fears about negotiation is an important first step in turning anxiety into excitement.

http://www.pon.harvard.edu/daily/negotiation-skills-daily/negotiation-skills-confront-your-anxiety-improve-your-results/

September 2014 Legal Brief – Firm Newsletter

Posted: September 12th, 2014

Follow Up on Push for Trade Secret Litigation

Posted: August 22nd, 2014

Tags: intellectual property

Earlier this year, a new bill was introduced in Congress seeking to add a federal civil cause of action for trade secret theft. With the most recent bill introduced by a bi-partisan coalition in the House, there appears to be momentum for the passage of federal trade secrets legislation this fall.

The proposed new legislation would permit a trade secret owner to bring a civil action in federal court for the theft or misappropriation of a trade secret. Currently, the Economic Espionage Act only authorizes federal actions by the Attorney General, not private parties, and plaintiffs are left to bring trade secret claims in state court.

Because companies conduct business across multiple states, there are inconsistencies and differences as to their interpretations of certain key issues across the state, such as the definition of a trade secret, what are reasonable measures to secure the secrecy, damages, and the statute of limitations. Further, although the Uniform Trade Secrets Act (UTSA) has been adopted by all states, except Massachusetts and New York, some courts have differing interpretations of the UTSA. In sum, a bill to provide uniform trade secret protection and federal remedies across the United States is needed.

On July 29, 2014, the House introduced a bill similar to the Senate’s “Defend Trade Secrets Act of 2014″ entitled the “Trade Secrets Protection Act of 2014.” The House bill tracks the Senate bill, but there are only a few notable differences. First, it does not permit a civil claim under the Economic Espionage Act, but permits a civil claim for “misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce.” Also, it clarifies that it only covers misappropriation actions that occur on or after it is enacted.

There does not appear to be much opposition by the Senate to the House’s version of the trade secret bill. Therefore, we should expect to see some activity on the bills in early September.

In addition, the large number of companies and organizations in favor of the legislation, which includes IBM, 3M, Adobe, Boeing, Microsoft, Honda and DuPont, have generated a positive push for the bill.

Having a unified and harmonized law to address the discrepancies in trade secrets law will put trade secrets on the same level as patents, trademarks and copyrights. Progress of this bill through Congress will be closely monitored and followed.

Broadcast Networks Prevail in Aereo Suit

Posted: August 22nd, 2014

My January blog post reported that the Supreme Court had recently agreed to hear the case American Broadcasting Co. v. Aereo, focusing on the dispute between television broadcasters and Aereo, a start-up that distributed broadcast signals through a network of small antennas in a “cloud.” Subscribers, who paid between $8 and $12 per month, could use the service to record shows and watch live and recorded programming from their mobile devices.

When the Supreme Court heard the case in April 2014, the networks argued that Aereo (and the other start-ups that were sure to follow) threatened retransmission fees – a vital source of revenue paid to networks and their local stations by cable and satellite subscribers for access to their signals and the right to retransmit their programming. Since annual retransmission fees reach into the billions for broadcast networks, the networks did not take the threat lightly, claiming they might be forced to block access to their signals if the Court found in Aereo’s favor. Aereo’s business model, they argued, is the sale of “public performances” of copyrighted work without permission of the copyright owner.

Aereo countered that their service was today’s rabbit ears antenna, allowing subscribers to watch free broadcast television on their own schedules. The Second Circuit had agreed with Aereo’s position in an April 2013 decision, finding that “Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not ‘public performances’ of the [networks’] copyrighted works.”

The Supreme Court did not see it that way. In its June 25, 2014 decision, the Court found that Aereo’s resemblance to traditional cable companies was “overwhelming,” and that Aereo’s service conflicted with copyright law requiring the copyright owner’s permission for a public performance of the protected work. “Performance” includes retransmission to the public, and the Court was not swayed by Aereo’s argument that its retransmission was private due to the nature of the technology. The Court found that because of the service’s “overwhelming likeness” to a cable company, these technological differences were inconsequential.

Aereo suspended service shortly after the Supreme Court decision, but is now seeking to reinstate service in certain states based on theories it claims stem from the Supreme Court decision. They are unlikely to find sympathy with the broadcast networks. CBS chief executive Leslie Moonves was quoted in the New York Times following the Supreme Court decision: “For two years they have been in existence, trying to hurt our business. They fought the good fight. They lost. Time to move on.”

Sources and for additional information:
Liptak, Adam and Emily Steel, “Aereo Loses at Supreme Court, in Victory for TV Broadcasters.” New York Times, June 25, 2014. Accessible athttp://www.nytimes.com/
“Aereo Suspends Service After U.S. Supreme Court Ruling.” CBS News, June 28, 2014. Accessible at http://www.cbsnews.com/

New Pregnancy Guidelines Issued by EEOC

Posted: August 14th, 2014

By Christine Malafi

Last month, the Equal Employment Opportunity Commission (EEOC) issued its written Enforcement Guidance on Pregnancy Discrimination and related issues. The Guidance, provided in the context of the Pregnancy Discrimination Act (PDA) and the Americans with Disability Act (ADA), supersedes the EEOC’s prior writings from 1983 and 1991, and applies to all employers with more than fifteen employees.

During the last 16 years, pregnancy discrimination charges filed with the EEOC have substantially increased—3,900 such charges were filed in 1997 and 5,342 such charges were filed in 2013. Discrimination is usually based on unfounded beliefs that pregnant women are not physically capable of working or that working may harm a fetus. The EEOC has clearly stated that employees cannot be discriminated against because they are, may be, intend to be, or were pregnant. Promotions cannot be denied to an employee because she may become pregnant in the future. Pregnant employees cannot be excluded from performing job duties (i.e., handling certain chemicals) out of an employer’s fear that the fetus may be harmed. Further, the same parental leave policies must be available to both male and female employees.

Pregnancy-related conditions may be disabilities under the ADA, and will require the granting of reasonable accommodation, such as granting more frequent breaks, keeping a bottle of water nearby, using a stool, modifying work schedules to accommodate morning sickness, and/or altering how job functions are performed. While a “normal” pregnancy does not constitute a disability under the ADA, it is a serious health condition under the Family Medical Leave Act (FMLA), entitling a pregnant employee to FMLA leave. The EEOC Guidelines address the “middle” ground, and state that employers must reasonably accommodate a pregnant employee with light duty or modified assignments, even when there is no pregnancy-related condition which can be considered a disability. This is a controversial issue, one that is pending before the United States Supreme Court, in the case of Young v. United Parcel Service, a case where a pregnant worker was denied light duty assignment because her doctor told her not to lift heavy packages. She claims that UPS told her that light duty was only available to employees with job-related injuries or to those disabilities recognized under the ADA.

Additionally, the new Guidelines find both breast-feeding and lactation are pregnancy-related medical conditions for which employees must be permitted to address in the same way as other limiting medical conditions. Therefore, an employer whose policies permit schedule changes or use of sick leave to attend doctor appointments or to address medical conditions must permit employees to utilize those policies for breast-feeding and lactation issues.

As before issuance of the Guidelines, an employee’s pregnancy, childbirth, or related medical condition cannot be a motivating factor in an adverse employment action. Employment policies should not include any policy that treats pregnant workers less favorably or demonstrates pregnancy bias. Policies should not more favorably treat employees (of either sex) who are not affected by pregnancy, but who have similar ability or inability to work. The Guidelines still permit neutral employment policies or practices which do not have disparate or disproportionate impact on pregnant employees, where it may be shown that they are job related and consistent with business necessity.

Due Process Upheld for Physicians Targeted for Termination from Medicare Advantage Plans

Posted: August 9th, 2014

Tags: healthcare

Physicians who receive termination notices from insurers should learn about their rights from a recent case brought by the Fairfield County Medical Association.[1] On February 7, 2014, the Second Circuit Court of Appeals upheld the District Court’s injunction[2] enjoining United Healthcare (“United”) from: 1) terminating affected physicians in its Medicare Advantage program; 2) notifying customers that the affected physicians would be terminated from the network; and 3) compelling United to reinstate, advertise, and market the affected physicians in its 2014 Medicare Advantage Network directories.[3]

The District Court for the District of Connecticut classified its preliminary injunction as one in “aid of arbitration,” since the United provider contracts clearly required physicians to submit disputes to binding arbitration. Those arbitrations are pending.

Background

The Fairfield County Medical Association commenced this litigation on behalf of the affected physicians. Throughout October 2013, United notified 2,200 physicians that their Medicare Advantage provider contracts would expire on February 1, 2014. United’s abrupt unilateral termination of these contracts risked causing significant disruption to patient care and the affected physician practices, and the physicians fought back.

The primary issue focused on whether United’s actions constituted an “amendment” to physician contracts or a “termination” of those contracts. Under the provider contracts, United had broad discretion to amend contract terms upon 90 days written notice, but terminations without cause triggered a longer timeline for resolution. United claimed it simply “amended” the provider contracts at issue, while the affected physicians asserted that United unilaterally and unlawfully terminated their contracts.

Medicare Advantage provider contract terminations are governed by 42 C.F.R. § 422.202(d), and they provide several due process guarantees for providers facing termination. Before terminating a physician from a Medicare Advantage plan, an insurer must provide:

Written notice;
If relevant, standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the insurer;
Notice to the affected physician of her right to appeal and the process and timing for requesting a hearing.[4]

Notably, 42 C.F.R. § 422.202(d)(4), requires a Medicare Advantage insurer to provide a minimum of 60 days written notice before terminating a physician contract without cause. However, the United Medicare Advantage contracts at issue required United to send written notice by certified mail to a terminated physician at least 90 days prior to the anniversary date of a physician’s agreement. Deadline calculation using the contract anniversary date provided more time in most cases for physicians to adjust than United’s October notices provided.

For other insurance plans, New York physicians receive protection under Public Health Law § 4406(2)(a). That section is similar to 42 C.F.R. § 422.202(d), in that it requires insurers to first provide written notice to the terminated physician, which must include an explanation of the reasons for the proposed termination. Physicians also have a right under this statute to challenge the determination decision at a hearing before a panel that includes clinical peers.

Lessons

The lesson learned from the Fairfield County case is that despite insurers’ efforts to shrink their networks, federal courts will not credit strained arguments that mass terminations constitute “amendments” to provider contracts. Further, the courts will enforce the conflict resolution provisions contained within the plain language of provider contracts. In most cases, provider contracts contain provisions creating administrative hearing procedures, in addition to requirements to submit unresolved disputes to binding arbitration. Providers should routinely review their provider contracts with insurers in order to understand the prescribed remedies if they receive a termination notice.

Both federal[5] and New York State Law[6] protect physicians from insurer termination based solely because a physician has advocated on behalf of a patient, appealed an adverse coverage decision, or has filed a complaint against a health care plan. Insurers may resort to pretextual “without cause” termination clauses if possible, so physicians are well advised to seek counsel to review the underlying events leading up to a termination. Courts have entertained physician lawsuits against insurers alleging breach of an implied duty of good faith and fair dealing as well as for unjust enrichment.[7]

Insurers will continue to shrink provider networks, and physicians have means to protect themselves and preserve their patient base. The moment a physician receives a termination notice from an insurer, she should immediately engage counsel to evaluate options to protect her income source.

[1] Fairfield Ct. Med. Ass’n v. United Healthcare of New Eng, No. 3:13-cv-1621 (SRU)(D.Conn. Dec. 5, 2013).

[2] Fairfield Ct. Med. Ass’n v. United Healthcare of New Eng., No. 13-408 (2d Cir. Feb. 7, 2014).

[3] Fairfield Ct. Med. Ass’n v. United Healthcare of New Eng, No. 3:13-cv-1621 (SRU)(D.Conn. Dec. 5, 2013).

[4] 42 C.F.R. § 422.202(d)(1)(i-ii).

[5] See, e.g. 42 U.S.C. §§1395 et. seq.

[6] N.Y. Public Health Law § 4406-d (5).

[7] See, e.g. Kamhi v. EmblemHealth, Inc., 37 Misc.3d 171 (Sup.Ct. Kings, March 21, 2012).

Supreme Court Rules That Inherited IRAs Are Not Protected in Bankruptcy

Posted: August 9th, 2014

Tags: estate planning, Supreme Court

If you follow my blog, you know that I’m not much on spouting case law. But every so often a case comes along in the estate planning arena that’s worthy of passing along.

In a unanimous decision on June 12, 2014, the Supreme Court of the United States, in Clark v. Rameker (June 12, 2014, No. 13 299) 2014 US Lexis 4166, affirmed a Seventh Circuit decision and ruled that inherited IRAs are not retirement funds within the meaning of the Bankruptcy Code. For those legal geeks out there, the specific part of the Code is 11 USC §§ 522(b)(3)(C) and (d)(12).

This decision resolves a split among the Circuit courts about the status of IRAs that parents leave to their children. The courts have long held that typical IRAs are protected from creditors as they are set up specifically for retirement to the point that you’re penalized if you take out funds early. In contrast, money in an account inherited from a parent can be withdrawn at any time. Justice Sotomayor, writing for the court, said that this crucial change in the status of the account makes it less like retirement savings and more like a pot of money available to pay off creditors. Otherwise, Sotomayor said, nothing would prevent someone who declares bankruptcy from using the entire balance of an inherited IRA “on a vacation home or a sports car immediately after her bankruptcy proceedings are complete.”

To add insult to injury, if the money comes out of the inherited IRA and is used to satisfy creditors, it also becomes taxable income. So Uncle Sam gets his share first, then the creditors get the rest. Your children have now lost the ability to stretch the IRA payments out over the course of their lifetime and minimize the income tax ramifications.

Now, for most of us that have children without creditor issues, this isn’t a problem. But some children have had difficulties, and you never know what the future might bring for others. So, is there still a way to protect these assets and minimize the tax consequences? I’m glad you asked.

One way of accomplishing this is to change the beneficiary of your IRA from your children to a trust. Upon your death, a properly crafted trust would create an irrevocable discretionary trust for your children. The trustee can then stretch the IRA payout into this discretionary trust and control when those assets are then given to the child. So long as the child is not a trustee, he would have no control over when he gets any of the assets from the now inherited IRA nor how much of these assets. Since it’s now out of the child’s reach, it’s out of the creditor’s reach as well.

Keep in mind that this discretion by the trustee is to determine whether the child has creditor difficulties or not. This may cause contention between the trustee and the child beneficiary if the child wants more than the required minimum distribution from the inherited IRA and the trustee refuses. If the trustee and beneficiary are siblings, this contention may exacerbate any existing tension between them. The point is that this type of trust is not to be used lightly and only after discussions with the various family members and with a trusted estate planning attorney.