FraserTrebilcock Blog

Fraser Trebilcock Named The Fastest Lansing Law Firm

February 15th, 2012

Fraser Trebilcock was named the fastest law firm in Lansing, Michigan by Arialink. Arialink is the largest fiber optic provider operating in Ann Arbor, Lansing and West Michigan. Fraser Trebilcock uses Arialink for its quick connections to make sure we are connected to our clients. Thanks Arialink for naming our law firm the fastest law firm in Lansing.

Medicare Part D Notice Deadline Approaching

February 15th, 2012

Group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” I.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

1) Within 60 days after the beginning date of the plan year for which disclosure is provided;
2) Within 30 days after termination of the prescription drug plan; and
3) Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page at:

https://www.cms.gov/CreditableCoverage/45_CCDisclosureForm.asp

The online process is composed of the following three step process:

(1) Enter the Disclosure Information;

(2) Verify and Submit Disclosure Information; and

(3) Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor. If you would like further information regarding this disclosure requirement, feel free to contact one of our health care attorneys or Elizabeth Latchana at elatchana@fraserlawfirm.com or 517-377-0826 or visit www.fraserlawfirm.com.

Michigan’s Medicaid Estate Recovery Program

February 14th, 2012

In light of Michigan’s relatively new Medicaid Estate Recovery Program, Medicaid recipients and their families should contact experienced legal counsel to help them plan ahead by implementing the tools that are currently available to avoid, or limit, Estate Recovery if possible. Further, if you are the representative or heir of a deceased Medicaid recipient and you receive a Notice of Intent to File Claim Against Estate, you should contact experienced legal counsel for assistance: before completing a Michigan Estate Recovery Questionnaire, with the timing of submission of any Application for Hardship Waiver, and with determining whether all or any portion of the state’s claim for recovery should be disallowed.

Estate Recovery is the program through which the State of Michigan is paid back for Medicaid benefits provided to certain recipients upon the recipient’s death by allowing the state to “recover” property from the recipient’s “estate.” Michigan’s Medicaid Estate Recovery law became effective on September 30, 2007, and the Michigan Medicaid Estate Recovery Program was approved by the federal government on May 23, 2011, with a retroactive effective date of July 1, 2010.

Estate Recovery is currently limited to assets that pass through probate. Therefore, advance estate planning should be done in an effort to avoid probate. Additionally, there are many limitations on what can be collected from a probate estate under Estate Recovery.

For more information, contact Melisa Mysliwiec at Fraser Trebilcock, 40 Pearl Street NW, Suite 910, Grand Rapids, Michigan 49503, (616) 301-0800, or e-mail her at mmysliwiec@fraserlawfirm.com.

Michigan Joins Nationwide Mortgage Settlement

February 10th, 2012

Michigan has joined with the 49 other states in announcing a $26 billion settlement with the federal government and the five largest banks with respect to mortgage lending—Ally Financial (formerly GMAC Bank), Bank of America, Wells Fargo, JP Morgan and Citigroup.

While all the details have not yet been revealed, the settlement will consist of $1.5 billion in payments to homeowners who were illegally or wrongly foreclosed upon between September 2008 and December 2011. While the exact settlement amount will depend on the number of borrowers who file claims, the settlement is expected to be up to $2,000 per homeowner.

In addition, the banks will receive $20 billion in “credits” that they will have discretion to apply to struggling homeowners. The banks can use these “credits” to write down the principal amount owing on the mortgage and for other aid to homeowners who are at risk of defaulting on their mortgage. $3 billion of the “credits” are earmarked for refinancing mortgages that are currently underwater.

Homeowners that have a home worth less than their current mortgage and those who are struggling to meet their mortgage obligations should be aware of the settlement and monitor it as more details emerge.

For more information, please contact J.J. Burchman at 517.377.0817 or at jburc@fraserlawfirm.com. The above information is not intended to be legal, tax, or investment advice. Please consult with your attorney and visit www.fraserlawfirm.com.

Kirby Albright Wins in Charlotte Airport Case

February 7th, 2012

In an Eminent Domain case initiated by the City of Charlotte regarding a piece of land owned by William and Marilyn Crittenden, Fraser Trebilcock attorney Kirby Albright successfully represented the landowners and obtained an award of “ just compensation” that was approximately 27 times more than the offer made by the City.

This Court case centered upon on the taking of “air rights” by the City over above approximately 4 acres of the Crittenden parcel. The total size of the Crittenden property was about 45 acres and it adjoined the Fitch H Beach Municipal Airport, owned by the City. The City put forward the position that the taking of the air rights did not significantly diminish the use and value of the parcel, since only air rights were “taken”. The City claimed that the landowners’ were only entitled to an award of $ 10, 400. The landowner countered that position by saying the taking did significantly and substantially impact the use and value of parcel, particularly in the area of the take. The landowners asserted the position that the “taking” resulted in a total loss of the value of the acreage and that “just compensation” had to be paid for the full value of the parcel.

The Crittenden family believed that the piece of property the airport was taking from them was valued at $900,000 instead of the $10,400 which was proposed by the city. The $900,000 figure was based on an offer the family received in 2006 by a commercial developer.

However, at the time of this condemnation case in 2008, the property had been down-zoned from commercial to industrial and it was zoned industrial, at the time of trial. The jury awarded the family “just compensation” of $275,000, which was based full industrial pricing for the 4 acres. Neither the city of Charlotte nor the family has chosen to appeal.

Car Shuttlers and the Michigan Unemployment Tax

December 27th, 2011

Auto dealers frequently use car shuttlers to deliver vehicles to a customer, auction, or another dealer. Dealers have historically treated the car shuttlers as independent contractors and have not paid Michigan Unemployment Tax on their compensation. The Michigan Employment Security Commission (MESC) has instructed its auditors to treat car shuttlers as employees, and compensation to them as wages subject to the Michigan Unemployment Tax. However, the MESC has acknowledged that although the MESC policy is that car shuttlers are employees, a car shuttler may nevertheless qualify as an independent contractor. In making its determination, the MESC will look at all of the facts and circumstances of each case to determine whether a car shuttler is an employee or an independent contractor. In two cases, auto dealer car shuttlers were determined by the MESC to be independent contractors and not employees.

Dealers should familiarize themselves with the criteria that will increase the likelihood that car shuttlers will be treated as independent contractors for MESC purposes, and select car shuttlers that meet these criteria.

This article first appeared in Car Shuttlers and was published by the Michigan Association of Auto Dealers, in their Fast Facts publications. To contact Edward Castellani J.D., C.P.A. of Fraser Trebilcock please contact him directly at ecastellani@fraserlawfirm.com or 517.377.0845.

(Please click here for the full article and criteria.)

TOP TEN THINGS TO CONSIDER IN YEAR-END INCOME TAX PLANNING

December 19th, 2011

Accelerate or defer income. If you have deferred compensation, consider which best suits your planning: to take your earned income now and pay taxes immediately at today’s historically low tax rates or to defer income until later and pay taxes when rates may be higher. Similarly, if you are eligible for qualified plan distributions and option grants, you need to decide whether to accelerate income recognition.
Paying deductible expenses sooner may help you in 2011. Does it make sense for you to accelerate deductions into 2011? If you itemize deductions, it might help your 2011 bottom line to pay deductible expenses like medical costs, qualifying interest, and state and local taxes before the end of the year, instead of waiting until 2012. This may include accelerating your estimated state income tax payment that would normally be due in January.
Income tax rates to remain the same in 2012. The same federal income tax rates that apply in 2011 will apply in 2012. Based upon the level of your income, the current graduated rates are 10%, 15%, 25%, 28%, 33% or 35%. Also, as in 2011, long-term capital gains and qualifying dividends will continue to be taxed at a maximum rate of 15% in 2012; and if you are in the 10% or 15% tax rate bracket, a special 0% tax rate will generally continue to apply.
Harvest gains and losses before year-end. Selling stock at a loss to offset capital gains is a classic year-end tax strategy. Harvesting gains this year also may be especially useful if capital gains rates increase in the near future; however, investors should be careful not to violate the “wash sale rule,” which disallows any loss if a taxpayer buys nearly identical securities 30 days before or after the sale.
Make sure that your deferred compensation elections are in place by December 31. You are allowed to defer salary and guaranteed or non-performance bonuses due in 2012 as long as you make the appropriate election by December 31, 2011. The election must identify the timing of any future distributions of the deferred compensation and the mode by which those future payments will be made.

Closely-held and self-employed business owners who want to create a qualified plan must establish those plans by the end of the tax year.

IRA and retirement plan contributions. Employer-sponsored retirement plans like 401(k) plans and traditional IRAs (if you qualify to make deductible contributions) present an opportunity to contribute funds on a pre-tax basis, reducing your 2011 taxable income. Contributions that you make to a Roth IRA (assuming you meet the income requirements) are not deductible, so there’s no tax benefit for 2011-they’re still worth considering, though, because qualified distributions are free from federal income tax. The window of opportunity to make 2011 contributions to your employer-sponsored plan closes at the end of the year, but you can generally make 2011 contributions to your IRA up to April 17, 2012.
IRA and retirement plan distribution requirements at age 70 ½. Once you reach age 70 ½, your are generally obligated to start taking required minimum distributions (RMDs) from any traditional IRAs or employer-sponsored retirement plans. It is important to make withdrawals by the date required- the end of the year for most individuals. The penalty is significant for failing to do so: 50% of the amount that should have been distributed. Absent new legislation, 2011 will be the last year to take advantage of a popular provision allowing individuals age 70 ½ or older to make qualified charitable distributions of up to $100,000 from an IRA directly to a qualified charity (these charitable distributions are excluded from your income, and count toward satisfying your RMDs obligation that you would otherwise have to take from your IRA for 2011).
Diversify out of a concentrated stock position. Diversifying out of a concentrated portfolio can greatly reduce risk in a portfolio, but it can also trigger a capital gains tax liability. This liability can lead individuals to defer diversification, especially if the concentrated position has a low cost basis (which is often the case). That delay, though, may cost you more. Now is a particularly good time to consider diversifying because capital gains tax rates appear poised to increase to 20% or possibly higher in 2013. Remember that the lower the basis, the higher the tax liability, and consequently, the higher the incremental return on any new investments will need to be as a way to compensate for those taxes.
Depreciation and expense limits to drop for business owners and self-employed. If you’re a small business owner or a self-employed individual, you’re permitted a first-year depreciation deduction of 100% of the cost of qualifying property acquired and placed in service during 2011. This “bonus” first year additional depreciation deduction will drop to 50% for property acquired and place in service for 2012. For 2011, the maximum amount that can be expensed under Section 179 of the Internal Revenue Code is $500,000, but in 2012 the limit will drop to $139,000.
Last chance to deduct energy-efficient home improvements. This is the last year to claim a credit for energy-efficient improvements you make to your home (up to 10% of the cost of qualifying property). Improvements can include a qualifying roof, windows, skylights, exterior doors, and insulation materials. Specific credit amounts may also be available for the purchase of energy-efficient furnaces and hot water boilers. Note, however, that there is a lifetime credit cap of $500 ($200 for windows). Therefore, if you have claimed the credit in one or more years since 2005, you will only be entitled to the difference between the current cap and the amount claimed in the past.

For more information, please contact Mark E. Kellogg at 517.377.0890 or at mkellogg@fraserlawfirm.com. The above information is not intended to be legal, tax or investment advice. Please consult with your attorney or tax advisor prior to making any tax decisions.

5 Year-End Tips for Gift and Estate Planning

December 16th, 2011

By Mark E. Kellogg and Loukas P. Kalliantasis

As another year comes to a close and we prepare for a new beginning in 2012, here are 5 year-end tips for gift and estate planning:

Review your estate planning documents. This is most important. Consider if any update should be made. It is also a good time to check titling and ownership of assets as well as beneficiary designations.
Do you have a potentially taxable estate? If so, be sure to consider making annual gifts utilizing the $13,000 annual gift exclusion for 2011. You may also want to take advantage of the lifetime gift exemption, which, for 2011 and 2012, is $5 million for individuals and $10 million for married couples.
Tis the season. The current federal gift tax rate is 35 percent for 2011 and 2012. The lowest it’s been for several decades. A gift above the exemption amount could be used to transfer wealth with tax savings.
Elect the spousal unused exclusion amount. Currently, $5 million. Does your estate plan address this election? You may consider revising your will to direct the personal representative to make the election without any payment from the surviving spouse for having made the election. If your spouse died in 2011, you must file Form 706 to utilize the deceased spousal unused exemption amount.
More charity. If you are charitably inclined, the ability to make IRA charitable rollovers still exists for 2011.

For more information, please contact Mark E. Kellogg at 517.377.0890 or at mkell@fraserlawfirm.com, or Loukas P. Kalliantasis at 517.377.0893 or at lkall@fraserlawfirm.com. The above information is not intended to be legal, tax, or investment advice. Please consult with your attorney and visit www.fraserlawfirm.com.

Do Your Employees Have the Right Stuff?

November 23rd, 2011

Using Competency Models in Strategic Human Resource Management
By: Michael P. James, J.D., M.B.A.

Human Resource Management Professionals:

Have you been asked to complete a skill or competency analysis for employees in your organization? Are you in charge of evaluating or designing a talent/knowledge-based compensation system? Would you like to create training and certification programs to ensure that employees possess the skills required for the positions they hold in your company? These responsibilities can be overwhelming, yet they are also critical to the success of your organization. Where should you start?

I recommend that you begin each of these projects by examining the competency models developed by the Employment and Training Administration (ETA). The ETA works with business and industry leaders, educators, economic developers and public workforce investment professionals to create competency models that outline the skills and competencies required for workplace success. Each model contains a number of elements to help you accomplish your skill/competency-based project. First, the models offer a detailed account of each competency determined to be relevant to the industry. Second, the models provide descriptions of the activities and/or behaviors associated with each competency. Finally, the models are visually presented in a pyramid structure divided into tiers and blocks. The tiers are categorized into the following broad competency areas, as read from the bottom of the structure to the top: Personal; Foundational; Industry; and Occupation. Within each tier, there are a number of blocks, each representing a different skill set. Ultimately, the ETA’s competency models may offer valuable guidance and potentially serve as a guidepost for external alignment with competitors in your industry.

Currently, the ETA offers 19 competency models based on the following industries:

Advanced Manufacturing; Aerospace; Automation; Bioscience; Construction – Commercial; Construction – Heavy; Construction – Residential; Energy; Entrepreneurship; Financial Services; Geospatial Technology; Health: Electronic Health Records; Hospitality/Hotel and Lodging; Information Technology; Long-term Care, Supports, and Services; Mechatronics; Retail; Transportation; and Water Sector.

Do you need assistance developing a customized competency model for your organization or business? Contact Michael James to discuss and construct a competency structure that is aligned with your organizational and human resource objectives and strategies. Michael James, an attorney at Fraser Trebilcock Davis & Dunlap, P.C., handles all matters related to business law, employment law and health care law and represents clients in complex commercial and civil litigations. For more information, you can contact Michael at mjames@fraserlawfirm.com, (517) 377-0823 or www.fraserlawfirm.com.

*Article reposted with author’s permission.