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Searching for Articles published in January 2013.
Found 18 Results.

EEOC Not Candid about Cameras: Uncertainty About Risks of Video Interviewing Remains

Posted on January 25, 2013, Authored by Dean R. Dietrich, Filed under Employment

A recent letter from the Equal Employment Opportunity Commission refused to give any guidance on whether it would be acceptable for a company to use a video interview to select candidates for hire. The EEOC refers to a number of articles and advice given by the Agency on its webpage, but refuses to provide guidance on whether it would be acceptable to require all candidates for hire to be subject to a video interview. Employers are trying every method they can think of to find the best individual to hire. The hiring decision is critical to the company and especially for those companies in the service industry. Obviously, there is concern that a video interview will result in an employer gaining more information about an individual and perhaps using that information to discriminate against an applicant. I do not see any difference between a video interview or a face-time interview. Employers should be allowed to make some judgments about suitability for employment based on direct contact with an applicant by in-person or video interviews. The EEOC enjoys investigating and bringing charges against employers, but now is refusing to give any advice to help an employer comply with federal law. I think we will be experiencing a high level of investigations and claims from federal agencies over the next several years.

Denial of Facebook Access is a New Employment Law Issue

Posted on January 3, 2013, Authored by Dean R. Dietrich, Filed under Employment

A teacher's aide in Michigan was disciplined for not giving her Facebook password to her boss. The boss wanted to look at her Facebook page because a picture of her coworker had been posted to the employee's Facebook page. The refusal to provide the password formed the basis for disciplinary action against the employee. Personally, I am not excited about the use of Facebook postings for discipline of employees. Both public and private sector employers do have the right to exercise some level of control over the postings of employees that negatively impact the reputation of the company. Unfortunately, this is a very subjective standard and could lead to further controversy over whether or not the employer had a reasonable basis to investigate the employee and determine if the employee had been abusing Facebook postings and damaging the reputation of the business. I think employers are going to be better off avoiding this type of activity when looking to investigate the off duty conduct of an employee, however, the case law surrounding this issue is very unclear. This will be the next level of challenge that will be subject to court review.

Act 10 Seventh Circuit Update

Posted on January 25, 2013, Authored by Kevin J.T. Terry, Filed under Local Governments and School Districts

As we wait for the Wisconsin Court of Appeals to weigh in on many fundamental principles of Act 10, the Seventh Circuit recently announced that it believes the entirety of Act 10 passes constitutional muster. While this decision certainly does not signify the end of the fight, it is likely to be the last time the Feds weigh in on the issue. Here is a link to the summary of the case I provided on our website. It will be interesting to see whether an appeal is filed and whether this case will impact the State Court of Appeals analysis of the Colas' decision. Stay tuned!

Can You Require An Employee To Be At Work?

Posted on January 9, 2013, Authored by Dean R. Dietrich, Filed under Employment

I am often asked whether attendance at work can be considered an essential requirement of a particular job. Logic would suggest the answer to that question, but of course, court decisions would suggest differently. A recent decision by the 9th Circuit Court of Appeals related to an employee who suffered a serious medical condition that limited the employees sleep and caused chronic pain. The employee sought to be relieved from the strict attendance policy of her employer. When the company did not provide extra accommodation, the employee sued under the Americans with Disabilities Act. The 9th Circuit Court of Appeals held that the company was required to show that attendance was an essential function of the job, but the Court also acknowledged a number of prior court cases that held that an employee must be at work in order to be part of a team. The Court ultimately held that because of the nature of the job performed by the employee, the employee must be at work. The Court did acknowledge that other jobs could be viewed differently if the job could be performed from home or there was not an established requirement for teamwork with other employees in order for the job to be properly performed. Employers must be careful when establishing attendance policies to make sure they are reasonably related to the jobs being performed by each of its employees.

Conflicts of Interest when Representing a Family Business?

Posted on January 15, 2013, Authored by Dean R. Dietrich, Filed under Employment

I recently spoke at the State Bar Business and Real Estate Transactions Institute on the topic of conflicts of interest when representing a family held business. This is a very difficult area because of the potential for conflicts between the individual clients and the business entity. The representation is made even more difficult because the individuals expect the company to pay for the representation even though the lawyer is providing advice for the individual that benefits the individual and not the corporate entity. Many times, the representation has a common interest and the parties are not adverse  this requires careful review of whether there is adversity in the representation of the corporate entity and the representation of the individual owners. Lawyers need to look beyond the specific question being asked to make sure that the advice to be given is not creating a benefit for one party to the detriment of the other party. It is always best that the lawyer be open about the potential for adverse consequences and make sure that the individual client understands that the lawyer is providing advice in relation to representation of the corporate entity. In some instances, it may be necessary to obtain a waiver of conflicts of interest after the lawyer has clearly explained that there are interests relating directly to the individual and interests relating directly to the corporate entity that must be considered. Lawyers must be very careful to ensure that they are not violating the conflict rules when representing a family held business and individuals from the family held business.

Cleanup In Aisle "Fore:" NLRB Likely To Use Roundy's Inc. Case to Wipe Away Bush-era Standard for Union Access to Employer E-Mail Systems.

Posted on January 22, 2013, Authored by Ruder Ware Attorneys, Filed under Employment

In 2007, the Bush-era Board (in a 3-2 vote) established a property-right based standard through which employee use of company-owned [including non-union companies] email systems for union solicitation may be restricted. Through the Register Guard decision, 351 NLRB No. 70 (December 16, 2007), the Board made clear that impermissible discrimination in violation of the National Labor Relations Act means "unequal treatment of equals," or treating communications of "similar character" differently based on union status or content. In other words, under Register Guard, employers are free to prohibit access to email systems in connection with certain non-work-related solicitations like those involving unions, while at the same time allowing other non-work-related solicitations of a dissimilar character, such as jokes, baby announcements, offers for sports tickets and solicitation on behalf of charitable organizations. Significantly, under Register Guard, pro-union solicitations must be compared to anti-union communications or solicitations involving other non-charitable organizations. Thus, employers cannot prohibit access to email systems in connection with non-work-related, "pro union" solicitations while at the same time allowing access to email systems for non-work-related "anti-union" solicitations, or allow solicitations on behalf of other non-charitable membership organizations (i.e., Toastmasters International)this would constitute "unequal treatment of equals." In Roundy's Inc., the Board is expected to decide whether the grocery company's attempts to prohibit union solicitation and distribution at its physical store locations while permitting similar solicitation and distribution by non-union groups [i.e., the Girl Scouts or the Salvation Army] violates the National Labor Relations Act. The Board is likely to consider prior Board law that established the principle that it is illegal to deny union solicitation on physical property while allowing non-union solicitation on the same physical property. Although Roundy's Inc. does not involve alleged discrimination in connection with Roundy's email systems, "its virtual property", the Board nevertheless invited briefs addressing how the Register Guard discrimination standard applies in the Roundy's Inc. case, giving rise to speculation that the Board may use the Roundy's Inc. case as a vehicle to eliminate the Register Guard standard. If the Board eliminates the Register Guard discrimination standard, employers will no longer be free to prohibit access to email systems for solicitation related to union activities unless employers prohibit employee access to email systems to engage in any form of non-work related communication, including baby announcements and party invitations. Employers have historically struggled with this sort of "all or nothing" approach, but, given the historically low rate of private-sector unionization, it appears the Board is primarily interested in restocking the shelves (sorry, I couldn't resist).

NLRB Issues Another "DISH" appointing Social Media Decision

Posted on January 25, 2013, Authored by Ruder Ware Attorneys, Filed under Employment

In a rerun of a tired episode we've all seen before but wish to forget (e.g., like any episode of Three's Company, however, regrettably, there's a fan club), a National Labor Relations Board (Board) administrative law judge has once again determined that a company's social media policy is illegal this time, it was DISH Network's policy that violated the National Labor Relations Act. DISH Network's social media policy reads, in pertinent part, as follows: DISH Network regards Social Media blogs, forums, wikis, social and professional networks, "as a form of communication". When the company wishes to communicate publicly it has well-established means to do so. Only those officially designated by DISH Network have the authorization to speak on behalf of the Company through such media. You may not make disparaging or defamatory comments about DISH Network, its employees, officers, directors, vendors, customers, partners, affiliates or our, or their products/services. Unless you are specifically authorized to do so, you may not participate in these activities with DISH Network resources and/or on Company time. According to the Board's administrative law judge, DISH Network's social media policy was unlawful on two grounds. First, it banned employees from making disparaging or defamatory comments about DISH Network, which, according to the Board, without further clarification or "examples" of defamatory comments that would violate the policy, would reasonably be construed by employees to prohibit or "chill" activities protected by the National Labor Relations Act.  Believe it or Not (in my humble opinion, Ripley's Believe It or Not reruns, much like the Board's recent social media decisions, is something else we could stand to do without although I'm admittedly a fan of Dean Cain). Second, according to the administrative law judge, the policy is unlawful because it bans employees from engaging in negative electronic discussion during Company time, without clearly conveying that solicitation may still occur during breaks and other non-working hours. Social media policies will continue to receive close scrutiny by the Obama Board. Existing social media policies should be reexamined, and any first-time social media policies should be crafted, while carefully considering the philosophy to which the Board now subscribes (pun intended).

For Obama NLRB, Recess is Not as Fun as it Once Was: Federal Court Holds President's Recess Appointments to the NLRB are Unconstitutional

Posted on January 30, 2013, Authored by Ruder Ware Attorneys, Filed under Employment

On January 25, 2013, the federal D.C. Circuit Court of Appeals issued an opinion finding that President Obama's January 4, 2012 recess appointments to the National Labor Relations Board (Board) were unconstitutional (appointments made after the Senate began a new session on January 3, 2012 and while this session continued). The case is Noel Canning v. NLRB, Case No. 12-1115, (D.C. Cir. Jan. 25, 2013) and a full copy of the opinion is available here. In Noel Canning, the Court held that the Board lacked the required three-member quorum when it issued its decision in the case in February 2012 because certain Board members (Members Block, Flynn and Griffin) were not appointed during "the recess" of the Senate. For Bill Clinton fans out there, you'll be excited to learn that the Court carefully scrutinized the meaning of the word "the" in connection with its analysis of the proper application of the so-called Recess Appointments Clause in the Constitution. Ultimately, the Court determined that the Recess Appointments Clause refers exclusively to "intersession" recesses, or when the Senate is not in session, not "intra-session" recesses, or during breaks within an ongoing session. Significantly, the Court concluded that President Obama's January 4, 2012 appointments to the Board did not occur during an actual recess, but only during a break in an ongoing session of the Senate. This opinion potentially has broad implications, it could mean that Board decisions on and after January 4, 2012 are invalid (it could also mean that some Board decisions prior to January 4, 2012 are invalid because former Member Craig Becker was also not appointed during an "intersession" recess, as construed by the D.C. Circuit Court of Appeals). Also, the Board could continue to enforce its post January 4, 2012 decisions in federal jurisdictions other than the D.C. Circuit (if those courts disagree with the D.C. Circuit's Noel Canning decision). Unfortunately, there is uncertainty because everyone expects the Board to appeal (first to an en banc panel of the D.C. Circuit Court of Appeals and, if necessary, to the Supreme Court). We will continue to monitor this situation closely.

Rock My World - Geology Field Trip

Posted on January 2, 2013, Authored by Russell W. Wilson, Filed under Community

Russ Wilson is a member of a committee that is developing an outdoor geology exhibit for the Mead Wildlife Center that is owned and operated by the Wisconsin Department of Natural Resources in Wood County. The committee is gathering a variety of rock specimens from a 100-mile radius of the Mead in order to demonstrate the wide variety of geologic activity that has taken place in this neck of the woods over the past 2.8 billion years or so. Russ organized a field trip on April 14, which included retired geology professor Gene LaBerge, who mapped much of the bedrock in northern Wisconsin and who wrote the book on the geology of the Lake Superior region. The specimen shown in the pictures was formed from lava that erupted on the ocean floor in a rifting event. A rift occurs when tectonic plates diverge and basaltic lava flows out with the viscosity comparable to that of olive oil. The lava was very hot, but it cooled quickly when it hit the cold sea water. Much later, about 1.85 billion years ago, tectonic plates converged to form a mountain chain that geologists call the Penokee Range. That range has long since been eroded, buried by sedimentary rock deposited by rising sea levels, and then exhumed when the highland area of northern Wisconsin was raised up about 1.1 billion years ago when a rifting event took place that formed Lake Superior. A small remnant of the Penokee Range remains in Iron and Ashland counties. When the most recent glaciation took place, it moved this rock from some-where in northern Wisconsin to its present location in the terminal moraine that runs east-west north of Highway 64. That glacier receded roughly 12,000 to 10,000 years ago just a blink of the eye in earth time  to reveal the rock.     

Legal Advice on a YouTube video? It happened.

Posted on January 18, 2013, Authored by Dean R. Dietrich, Filed under Employment

Something has happened in my law practice that has never happened before. I have given legal advice to a client based upon a YouTube video. Peter Davis, legal counsel for the Wisconsin Employment Relations Commission, was included in a video post on YouTube. In that video post, he indicated that public employers should calculate base wages and use as the base wage for an employee in a position that requires a master's degree, the master's column on the teacher schedule and the wage rate for the experience of that particular employee. The employee would not get credit for additional master's credits, but the calculation would start from the master's column of the old teacher schedule. This is different than the advice given by the WERC Commissioner in her dissent to the new base-costing rule. I never thought I would be giving legal advice based on a YouTube video. The legal practice is certainly changing.

Federal Court is Asked to Hold Enforcement of Act 10 Order

Posted on January 6, 2013, Authored by Dean R. Dietrich, Filed under Employment

The Western Federal District Court, in a recent decision, held that several provisions of Wisconsin Act 10 were unconstitutional. The provisions included the section that required public unions to recertify every year by a majority vote of all employees eligible to vote to be in the union. The decision also struck down that provision of Wisconsin Act 10, which prohibited the deduction of voluntary dues payments from an employee paycheck. Last week, the Wisconsin Attorney General, on behalf of the state of Wisconsin, sought a stay from the Federal Court judge of his order striking down provisions of Wisconsin Act 10. The Wisconsin Attorney General indicated that there will be an appeal of the district court decision and ask the judge to stop the enforcement of his order pending the appeal. It is unlikely that the Federal District judge will stay his order. As a result, the prohibition against annual recertification elections will likely stand. Further, public employers will be required to deduct dues from the paycheck of those employees that submit a voluntary dues statement. What is not clear is whether those unions who chose to not seek recertification are not automatically deemed the bargaining representative for public employees that were in the union in the past. It is likely that this issue will be litigated further by the parties.

Act 10 Upheld by Federal Appellate Court - What Now?

Posted on January 18, 2013, Authored by Ruder Ware Attorneys,

Today, the US Court of Appeals for the Seventh Circuit has upheld Wisconsin Act 10 in its entirety. The Court affirmed the District Court's ruling that the collective bargaining provisions in Act 10 satisfy the rational review test and are thus constitutional. The Act 10 provisions challenged by the unions in this case were: (1) limitations on the permissible collective bargaining subjects of general employees; (2) stricter recertification requirements for general employee unions; and (3) a prohibition on the payroll deduction of union dues for general employees. The Seventh Circuit decision recognizes all of these provisions as constitutional. First, the Seventh Circuit held although it "may have been a poor choice," Act 10's distinguishing between public safety unions and general employee unions with regards to permissible subjects of bargaining is not unconstitutional. Second, the Seventh Circuit noted that the state clearly has an interest in annual recertification requirements. This interest is furthered by the annual recertification provision by "imposing a recertification burden that impacts unions' influence over employees who are less passionate about union representation." Finally, the Court held that the prohibition on payroll deduction of union dues for general employees is constitutional because it does not infringe upon any First Amendment speech rights of such employees. Many questions remain regarding the impact of the Seventh Circuit decision on the state court lawsuit brought by the Madison teachers union which is currently on appeal before the Wisconsin Court of Appeals. Generally, state courts must follow the federal courts' lead on issues of federal constitutionality. However, while this decision may impact the state court of appeals' analysis, there are freedom of association arguments raised by the plaintiffs in Madison Teachers and recognized by the circuit court judge which were not raised by the plaintiffs in the Seventh Circuit case. It is difficult to predict how these constitutional challenges will be affected at a state level. While the full impact of this decision is unclear, the Municipalities, and School District & Educational Institutions Focus Team attorneys at Ruder Ware are working diligently to analyze the implications this may have on our clients. If you have questions regarding the above, please contact any of the attorneys on the the Local Governments Focus Team, or the School Districts Focus Team of Ruder Ware.

Inaccurate Background Checks Lead to $2.6 Million Reality Check for One Company

Posted on January 12, 2013, Authored by Russell W. Wilson, Filed under Employment

Wow, the second largest civil penalty obtained by the Federal Trade Commission against a private company for violations of the Fair Credit Reporting Act caused me to take notice. Recently, the FTC for the first time charged an employment background screening firm with violating the federal Fair Credit Reporting Act (the federal law that governs "consumer reports" and "investigative consumer reports" generically referred to as "background checks"). According to the FTC's allegations, HireRight Solutions, Inc. committed "multiple violations" of the FCRA by: (1) failing to use reasonable procedures to assure the maximum possible accuracy of the information it provided; (2) failing to give consumers copies of their reports; and (3) failing to reinvestigate consumer disputes. According to the FTC's allegations, HireRight, in many cases, furnished reports to employers about prospective employees that were not current reports that allegedly did not contain information such as the expungement of criminal records. In other words, according to the FTC, HireRight generated reports that erroneously listed criminal convictions for certain applicants, or that included the records of the wrong person. According to the FTC, HireRight's mistakes caused applicants to be denied employment or other employment-related benefits. The U.S. Department of Justice filed suit against HireRight (in federal court in D.C.), on the FTC's behalf, on August 8, 2012 the case was settled shortly thereafter (the settlement/consent decree is subject to the court's approval). Not that employers need another "gut check" (sorry, I couldn't resist), but the HireRight consent decree is further evidence of the FTC's increased enforcement activity. Like consumer reporting agencies, employers also have obligations under the FCRA which are often misunderstood. I have personally observed many unintended, common employer missteps in this area (e.g., forms that go too far). With the FTC scrutinizing Fair Credit Reporting Act compliance, employers have every reason to be alarmed and should think about revisiting existing documents and procedures.

Final Regulations Issued Under the HITECH Act

Posted on January 23, 2013, Authored by John H. Fisher, II, Mary Ellen Schill,

A final rule containing a wide range of changes to the privacy and security provisions of HIPAA was released last Thursday (January 17, 2013) by the Department of Health and Human Services Office for Civil Rights (OCR). The final regulations include a variety of implementing provisions for three primary rules that were required by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH). In addition to changes required under the HITECH Act, the final regulations address guidance made necessary by the Genetic Information Nondiscrimination Act which clarifies that certain genetic information is protected under HIPAA. The final rule combines finalization of several previously released proposed regulations under one "omnibus" final regulation. Most, but not all, of the changes will come into effect 180 days after the March 26, 2013 effective date.   The changes are characterized as being "sweeping" by some sources, but for those who have been following the proposed regulations and regulatory process, there are very few big surprises. Briefly, some of the items covered by the final regulations include: Expanding the government's enforcement capabilities and penalties with respect to violations of HIPAA and HITECH; Provisions clarifying that Patient Safety Organizations (PSOs) must be treated as business associates. These organizations provide analysis of patient safety issues based on reports that are received from health care providers. Certain changes to the "breach notification rule" which in many cases simply provides clarification of some of the open issues that were present under existing law. Additional limitations on use of PHI for marketing and fundraising. Prohibition on the sale of PHI without specific individual authorization from the patient. Expansion of an individual's right to receive electronic copies of their PHI which has the effect of making access much less costly to the patient. Expansion of an individual's ability to restrict disclosures of their PHI to health plans in some circumstances. Ruder Ware's Health Care Industry Focus Group is in the process of dissecting the specifics of the final regulations and will be releasing more updates on some of the specific provisions of the rule that will have an effect on our health care clients. Please look for additional Ruder Ware legal updates and feel free to access more frequent updates on our health law blog;http://www.healthlaw-blog.com/. If you have questions regarding the above, please contact John Fisher or Mary Ellen Schill, the authors of this article, or any of the attorneys on the Health Care Focus Team of Ruder Ware.

Estate Planning is About More Than Estate Taxes

Posted on January 21, 2013, Authored by Mark J. Bradley, Amy E. Ebeling, Shanna N. Yonke,

After a flurry of last-minute negotiations to avoid the so-called "fiscal cliff," Congress passed, and President Obama signed, the American Taxpayer Relief Act of 2012. Among other things, it makes permanent the $5 million amount that may be transferred tax-free through a combination of lifetime gifts and transfers at death. For both gift and estate tax purposes, that amount is indexed for inflation. Thus, in 2013, in addition to being able to give any one recipient up to $14,000, a person may make total lifetime gifts of up to $5,250,000 before being liable for a 40% gift tax and a person's estate may transfer up to $5,250,000 of assets (less the value of the decedent's lifetime gifts) before being liable for a 40% estate tax. According to the Tax Policy Center, under these rules 99.9% of the deaths that will occur this year will trigger no estate tax. A client asked last week whether we were concerned about not having enough to do as a result of the new law. The question was no doubt prompted by the common misconception that most of what estate planners do concerns planning to minimize or avoid estate taxes. While that is an important part of the job of estate planning attorneys at Ruder Ware, it is only a part. We are called upon to do many other things for our clients and their families that will not be affected by the higher gift and estate tax exclusion amounts. The question was a good one and it caused us to sit down and make a list of the services our clients regularly rely on us to provide that are not directly related to gift and estate tax planning. The following are the top-20 items on our list: 1. Planning for the disposition of a client's assets at his or her death. This may include specific gifts, gifts to charities, outright transfers to children and other beneficiaries, or transfers to trusts for children and other beneficiaries. 2. Planning for incapacity. Insurance company statistics show that we now have a six-times greater chance of becoming incapacitated before we die than at any other time in our history. Because of this telling statistic and the fact that Americans are living longer, incapacity is something that should be addressed in every estate plan. 3. Planning for minor children. Courts have the authority to appoint guardians for minors. In making that decision, courts first consider who the parents may have nominated for that important responsibility. Parents with minor children should have wills in order to nominate their first and second preferences for who will be the guardians of their minor children. Parents also should make a provision in their wills for someone to administer a minor's inheritance until a specified age. We find that parents are greatly relieved to learn how flexible these arrangements can be with a properly structured will or trust document. 4. Planning for children with disabilities. Parents with a child who has a disability can protect assets, and preserve the child's eligibility for government assistance programs, through the use of a properly structured trust. This can be a trust established during a parent's lifetime or upon the parent's death. Our work in structuring and administering special needs trusts for persons with disabilities has more than doubled in recent years. 5. Planning for spendthrift children. Increasingly, parents and grandparents are deciding to leave their children's and grandchildren's inheritances in protected trusts so that the assets will provide an income stream for many years and be available in the event of health emergencies or other special circumstances. As one concerned father put it: "I can't control what my children do with their money, but I can control what they do with my money and I want my money to provide long-term benefits." 6. Asset protection planning. This may include planning to protect assets from the claims of the client's potential creditors or planning to protect an inheritance from the potential claims of a beneficiary's creditors, including claims of a divorcing spouse. 7. Business succession planning. According to research conducted by University of Iowa Extension and Outreach, the myth that the burden of having to pay the federal estate tax has caused family businesses and family farms to fail is just that - a myth. The fact is that family businesses fail primarily because of poor successor management. As the saying goes, the failure to plan for succession is a plan for succession to fail. 8. Planning for marital and other dissolutions. Based on data from the National Survey of Family Growth, PolitiFact.com estimated in 2012 that the lifelong probability of marriage ending in divorce is 40% to 50%. While inherited assets that a child or grandchild owns outright may be subject to division at divorce, inherited assets held in a properly designed trust are not. 9. Planning to pay education expenses. This includes work for parents and grandparents who want to establish education trusts or so-called Section 529 plans, now or in the event of death. 10. Charitable giving. Most charitable giving techniques will still be used to accomplish specific objectives. Beyond giving for givings sake, income tax considerations of charitable giving will still be relevant to many clients, especially those who now find themselves in a higher income tax bracket. Trusts that provide benefits to people during their lifetimes and to charities upon death will still be attractive to some clients as part of a plan to defer taxes on the sale of a business or other appreciated asset and to facilitate diversification of their assets. Our work in this area also involves helping families to create and administer their own private foundations. 11. Life insurance planning. No one ever complains about having too much cash. Life insurance is an essential part of many estate plans where cash will be needed for things other than paying estate taxes, including paying off debts, replacing lost wages, providing for minor children, replacing a key employee and providing funds to surviving business owners to purchase a deceased owner's interest in the business. We accomplish these objectives by working with our clients and their insurance agents to incorporate the use of life insurance proceeds into their estate plans. 12. Retirement planning. If the topic justifies companies spending millions of dollars of television advertising to get our attention, then it's a big topic. That includes cars, trucks, carbonated beverages, prescription drugs and, yes, retirement planning. We help clients figure out what they will need in their retirement and how to minimize income taxes on their retirement income. We also help parents and grandparents transfer their IRAs and retirement plans to minimize income taxes and protect those assets from the claims of their beneficiaries' creditors. 13. Medical assistance eligibility planning. If you need to go into a nursing home and do not have enough money or other liquid assets to pay for your care, no government agency comes and takes your remaining assets. That is and always has been a myth, or at least a misconception of how the Medical Assistance Program operates. Rather than taking your assets, the people who administer the Medical Assistance Program do just the opposite - they refuse to give you theirs, unless you are eligible for the program. Thus, unless you have long-term care insurance, and maybe even if you do, in many cases there is a premium on planning to assure that you will be eligible to receive Medical Assistance benefits, if needed. 14. Using family-owned business entities to accomplish non-tax objectives. This work includes properly structuring corporations, partnerships and limited liability companies. It may involve the creation of voting and non-voting interests to obtain valuation discounts on the transfer of business interests to the next generation. It also may involve the creation of a voting trust to differentiate between children who have management ability and experience and those who do not. 15. Planning to preserve the family cottage. Whether it's a family cottage, cabin, compound, hunting shack or recreational land, transferring it to children outright exposes it to the risks associated with the unavoidable messiness of life - incapacity, bankruptcy, death, divorce and disagreement. Transferring ownership to a properly designed entity, such as a family limited liability company, greatly enhances the likelihood that family members will be able to use and enjoy the property for generations. The property you want to preserve and protect is owned by the entity. Members of the entity can come and go, get divorced or go bankrupt. Those events will affect the members, but they will not affect the property. 16. Fiduciary litigation. Estimates are that trust and estate litigation will increase because with less estate tax liability, there will be more assets for beneficiaries to fight over. If there is a dispute, our experienced litigation attorneys can handle it. Better yet, our estate planning attorneys can eliminate or greatly reduce the likelihood of disagreements that lead to litigation through proper drafting of documents and clear and consistent communication with the estate's beneficiaries. 17. Planning for clients with real estate in more than one state. This work involves careful planning regarding ownership, asset protection, state income taxation, spousal rights, and probate avoidance issues. In the case of several states, this also involves planning regarding that state's estate tax. 18. Planning for clients who own property in other countries. America is still the great melting pot and many of our clients own or expect to inherit property located in other countries. As a charter member of Meritas, a world-wide affiliation of law firms across 70+ countries in seven global regions, we have access to experienced attorneys who can assist with property transfers and interpretations of local law. 19. Planning for non-resident aliens with assets in the U.S. A non-resident alien can be a resident of a state, own property and create a will or a trust. However, some gift and estate tax rules apply differently to non-resident aliens. Without knowing those rules, planning for a non-resident alien can have disastrous unintended consequences. 20. Administering an estate or trust. It is relatively easy to make a will or establish a trust. You can purchase standard forms at a bookstore or download them from the Internet. If you are at least 18 years old, you may complete the forms and sign them. (Of course, you also may perform your own foot surgery.) It's one thing to draft a will or trust. It is another thing to properly administer the terms of the document when the person dies or becomes incapacitated. This work requires expertise in several areas, including the law of trusts, estates, trust accounting, real property, tax, creditors rights and business organizations. It is also very intimate work that requires a great deal of discretion, mutual trust and compassion. Some of the specific activities required for the proper administration of an estate or trust include inventorying and valuing assets, paying debts (and sometimes resolving disputes as to debts), paying expenses of last illness and administration, communicating the process and expected timetable to the beneficiaries, resolving disputes among the beneficiaries, if necessary, filing final individual income tax returns, filing income tax returns for the estate or trust, filing estate tax returns, if necessary, resolving disputes with taxing authorities regarding income, gift and estate tax issues, selling assets, making various tax elections that will affect the beneficiaries, and, finally, distributing assets outright or transferring them to continuing trusts. Attorneys and paralegals in our Trusts and Estates practice group have been providing these types of services to clients for 93 years. Regardless of changes Congress makes to the estate and gift tax laws, we are prepared to continue to serve the needs of our clients in these important areas. If you have questions regarding the above, please contact Mark Bradley, Amy Ebeling, or Shanna Yonke the authors of this article, or any of the attorneys in the Trusts & Estates Practice Group of Ruder Ware.

Congress Strikes Deal To Avoid Tax Changes

Posted on January 2, 2013, Authored by Shanna N. Yonke,

Congress passed the American Taxpayer Relief Act of 2012 overnight. President Obama has not yet signed the bill into law, but he is expected to sign the bill as proposed. The bill proposes some increases in tax rates, but the changes are not as significant as they could have been if Congress had failed to reach this deal. The highest tax bracket for ordinary income, including wages, interest, and rental income, will return to 39.6% for taxable income in excess of $400,000 for a single person or $450,000 for married persons filing jointly, in place of the former highest bracket of 35%. In addition to the tax increase for ordinary income, the payroll tax will revert to 6.2% for all wage earners in place of the former tax holiday rate of 4.2%. The tax rate for dividends and capital gains will increase to 20% for taxable income in excess of $400,000 for a single person or $450,000 for married persons filing jointly, in place of the former flat rate of 15%. Dividends and capital gains up to those threshold amounts will continue to be taxed at the rate of 15%. In addition, the Patient Protection and Affordable Care Act add-on tax on net investment income will be 3.8% on the lesser of (1) a taxpayer's net investment income, or (2) the taxpayer's modified adjusted gross income in excess of $200,000 for a single person or $250,000 for married persons filing jointly. The add-on tax applies to unearned income, including interest, dividends, annuities, royalties, and rents. The add-on tax does not apply to earned investment income, such as distributions from individual retirement accounts (IRAs). The highest tax bracket for estate tax will increase to 40% in place of the former rate of 35%. The gift, generation-skipping, and estate tax exemptions will remain at $5,000,000 (adjusted for inflation to $5,120,000 in 2013). This bill avoids the return to pre-Bush era tax rates, including the application of ordinary income tax rates to income from dividends and capital gains, an estate tax rate of 55%, and a decrease in the gift and estate tax exemptions to $1,000,000 If you have questions regarding the above, please contact attorney Shanna Yonke, the author of this article, or any of the attorneys in the Trusts & Estates Practice Group of Ruder Ware.

Ruder Ware Launches Blog, "The Blue Ink"

Posted on January 22, 2013, Authored by ,

In the words of one of our bloggers, "Our attorneys are dedicated to being more than just trusted legal advisors to our clients - we pride ourselves on being considered true business allies." Ruder Ware's aim of launching this blog is to be accessible to clients, prospective clients, and friends of the firm by providing valuable, timely information. Our goal is to sift through the plethora of information available to you and give our distinctive perspective without the legalese. "The Blue Ink" is a perfect marriage of Ruder Ware's rich history and our firm's innovative thought leadership. Content on the blog will be changing, new sections will be added, videos of our attorneys commenting on various industries or areas of law will be posted. It will not stay the same for long. We hope you find it timely, useful ... and entertaining. We are interested in your feedback, so please drop us a line and let us know what you think. Follow this link to "The Blue Ink."

Physician Pay Cut Avoided By the Fiscal Cliff Legislation

Posted on January 7, 2013, Authored by John H. Fisher, II,

Physicians can breathe a sigh of relief for at least another year. The "fiscal cliff" legislation that was passed by Congress on New Years Day and signed by President Obama Wednesday night (January 2, 2013) averted the planned cut in Medicare payments for physicians that were scheduled to take place on January 1, 2013. The press has primarily focused on the income tax aspects of the American Taxpayer Relief Act of 2012. However, the legislation included several provisions relating to health care and the Medicare program, not the least of which was the "doc fix" provision that averted the "physician pay cut."   On January 1, 2013, the rate that Medicare pays physicians was scheduled to be cut by approximately 26.5%. This is what the health care industry has labeled the "physician pay cut." In actuality, the physician pay cut would have been a reduction in reimbursement for providing services to Medicare patients. If it would have been allowed to take place, the physician pay cut would have resulted in significant reduction in revenues for physician services provided to Medicare patients. Physicians who have practices with high percentages of Medicare patients would have been most affected. Implications may have gone further as some private payors have reimbursement rates that are tied to Medicare rates.   The American Taxpayer Relief Act of 2012 contained a number of other provisions affecting health care providers which will be summarized in additional e-alerts over the next few days.   Health care attorney John Fisher has posted a video blog covering the "doc fix" portions of the Fiscal Cliff Legislation which you can access via this link. If you have questions regarding the above, please contact attorney John Fisher, the author of this article, or any of the attorneys on the Health Care Focus Team of Ruder Ware.