MARCH 2021
CURRENT ISSUES IN THE AREAS OF ESTATE, TAX
AND PERSONAL AND BUSINESS PLANNING
The information that follows summarizes some of the current issues in the areas of estate, tax and personal and business planning which may be of interest to you. Although this information is accurate and authoritative, it is general in nature and not intended to constitute specific professional advice. For professional advice or more specific information, please contact my office.
Indiana Super Lawyers Announcement. I am proud to announce that I have been selected for the tenth year as an Indiana Super Lawyer for 2021 in the area of Elder Law. This honor is limited to no more than 5% of the attorneys in Indiana. Super Lawyers recognizes attorneys who have distinguished themselves in their legal practice. The selection process is rigorous and results in third-party validation of professional accomplishments. I have also again been selected for inclusion in the Martindale Hubbell Bar Register of Preeminent Lawyers and as one of the Best Lawyers in America for 2021.
Planning For Paid Care In The Home. It is a goal of most people to be able to age in place at home. Accomplishing that goal, however, can be fraught with obvious as well as hidden problems. The first issue is to determine the level of care needed and how to provide that level of care. Southwestern Indiana Regional Council on Aging, Inc. (“SWIRCA & More”) may be able to help make those determinations and select from a number of options. Caregiving runs the gamut from companion care, which might be little more than a sitter, or someone who might provide transportation, meal preparation, etc., to home health aides who provide hands-on care under medical supervision. Some hands-on care must be licensed or provided by certified caregivers. There can be many dangers to result from using caregivers who are not qualified to provide the needed level of care. There are also pitfalls associated with “under the table” caregiving. Such an arrangement might save money, but there are a number of legal, ethical, and income tax issues associated with those decisions. What happens if the friendly “under the table” relationship breaks down, or if the helper suffers an on the job injury which will not be covered by workers compensation or unemployment benefits? There is also the risk that the loved one who is receiving care will be placed at risk because the caregiver or helper is not doing what should be done or with the level of care and professionalism that is needed. Imagine what can happen if your loved one suffers an adverse health event and needs emergency help and the “friendly” attendant is unable, or simply fails, to give the help that is needed in a timely manner. SWIRCA & More can help in two areas of self-directed care services: self-directed attendant care and structured family caregiving. More on the issue of in-home care will be addressed in the next newsletter.
More On Client Capacity. Several previous issues of this newsletter have addressed some of the concerns and legal issues applicable to client capacity and representing people with diminished capacity. Readers are encouraged to review those previous articles. A few final comments will be offered at this time. It should be emphasized that attorneys who work with clients having diminished capacity must be guided by the client’s known wishes and values and by what is in the client’s best interests. If a client has no legal representative able to act for him or her pursuant to a power of attorney, then it may be necessary for the attorney to consider whether a guardian ad litem, or an actual legal guardian, is necessary to protect the client’s interests. An attorney who has represented a client in the past, or who may be representing a client currently, would obviously prefer not to become embroiled in a legal action to designate a guardian to act for the client either in areas related to the client’s health or in respect of a client’s property. Attorneys are required, when evaluating alternatives, to be aware of and to advocate for the least restrictive action. The attorney’s position in such cases is an extremely difficult one. When family members contact a loved one’s attorney to address issues relating to the client’s diminished capacity, it is very important to clarify at the outset that it is the client whom the attorney must represent and act to protect, and in certain instances the attorney may be compelled to seek court direction because of concerns about what is in the client’s best interests. It is common for attorneys to receive calls from family members asking the attorney to prepare a power of attorney or some other legal document for a potentially incapacitated person. Attorneys cannot prepare documents at the direction of others, and must at some point confer with the client and confirm that he or she has the requisite legal capacity to do what is desired and has reviewed and understands the nature of that action and the potential legal consequences.
Buy/Sell Agreements – Conclusion. Several previous issues of this newsletter have addressed various aspects of buy/sell agreements. Readers should recall that a buy/sell agreement is an agreement between co-owners that controls the purchase and/or sale of a business as a result of a “triggering” event, such as death. Different concerns will mean that certain agreements might address one or more types of “triggering” events, but death, disability, or the desire to sell or transfer ownership are typical “triggers” that will activate the agreement. In general, a fair market value or price will be determined at that time, and a forced sale of an owner’s interest in the business may be required, or it is possible that the other owners may simply have an option to purchase the business at that predetermined price or a value set in accordance with a predetermined formula. For example, if an owner is also an employee, if that owner ceases to be an employee, the cessation of employment might be a triggering event which would force the former employee to sell his or her interest. The sale might occur at a particular price which was predetermined or which will be calculated based on a value set forth in the agreement. Buy/sell agreements are often entered into and then the formula for determining a value may not be reviewed again for several years; or, the value might be set at the time, and then not evaluated again until many years later. The result could be that a buy-out may occur at a value or price that no longer makes sense. Some agreements are set up to be what have been called “shoot out” agreements or “cross-fire” agreements. In the case of such an agreement, one party may make an offer to sell their shares at a price; the other party must then either accept that offer or that party will be forced to sell his or her shares at the same price. Such an arrangement works well when there may be only two owners and the time has come when the two owners can no longer work together. However, unless that agreement has been put in place, there can be nothing done to force a sale by one party or the other. Buy/sell agreements should be considered by the owners of every type of business enterprise and should be structured to meet the particular needs of that business.
Additional Information. Future issues of this Newsletter will address other issues of current interest. Please contact my office with any questions that you might have.