Life After DOMA

In the wake of the Supreme Court's decision striking down Section 3 of the Defense of Marriage Act, Lambda Legal has prepared a helpful guide to legal rights and benefits.

Topics covered include taxes and Social Security benefits, Medicaid and student loans, military spouses and immigration issues. Also included are legal topics for specific states, including Maryland, where same-sex couples have been permitted to enjoy the benefits of marriage since January 1, 2013.

Lambda Legal is the largest national legal organization dedicated to achieving full recognition of the civil rights of lesbians, gay men, bisexuals, transgender people and those with HIV through effective litigation, education, and public policy work.

—Summerfield, Willen, Silverberg & Limsky, LLC

Please remember that the information contained on this blog is intended to provide general information about legal topics and should not be construed as legal advice.

Avoiding Pitfalls in Employer-Employee Relations

How Dentists Can Protect Themselves

Without proper planning, dentists may find themselves at odds with their own employees. The potential problems are many and include misunderstandings, resentments, and even lawsuits.

As a Maryland attorney with 25 years of experience representing dentists and other medical professionals, I have seen firsthand the various pitfalls a typical employer-employee relationship may suffer. By taking proper precautions, however, many of these problems can be prevented.

When counseling current and prospective clients, we often advise the following:

• Maintain good personnel records. Maintaining thorough and accurate records of all employees and independent contractors is the first step toward avoiding problems. These records should include the terms under which the individual is employed, including compensation amounts, bonus calculations, vacation allowances, continuing education provisions, and other benefits. Detailed information about any personnel problems, such as the nature of the matter, the date of each incident, and any disciplinary action taken, should also be included.

• Avoid written office policies and employee manuals. This may seem counterintuitive, but we generally discourage clients from providing employees with written office policies or employee manuals. The problem is that employers may unwittingly deviate from the procedures specified in these documents. Especially when matters like compensation and termination of staff are involved, such deviations can lead to lawsuits, with your own employee manual as a primary exhibit.

• Require employment agreements with restrictive covenants. We strongly urge employers to have their professional and administrative staff sign employment agreements that include an adequate and enforceable restrictive covenant. Without these covenants in place, a dental practice may face unfair competition from a current or former employee whose activities were not properly limited for the benefit of the employer. For example, an employee could leave the practice and attempt to hire one of your other employees, market to your patients, or make off with office records.

• Provide required post-termination compensation. If an employee’s compensation includes a percentage of his or her collections, then as a matter of law, the employee may continue to receive such compensation after leaving the practice. Although the employee would no longer receive any base pay, he or she should still receive the percentage of collections attributable to his or her work. Employers who fail to provide such post-termination compensation may be subject to treble (“triple”) damages.

• Be cautious about “independent contractors.” Employers should be extremely cautious when attempting to hire someone as an independent contractor. Simply calling the individual an independent contract may not be enough; the IRS may conduct an investigation to determine whether the classification is appropriate. If the IRS concludes that the individual is not an independent contractor but an employee, the employer may be found liable for any deficiency in withholding taxes and the accrued interest and may be subject to stiff penalties. Before classifying a new hire as an independent contractor, the employer is strongly advised to seek the advice of an attorney or CPA to avoid running afoul of IRS rules and regulations.

• Avoid common-sense problems. Avoiding some pitfalls in the employer-employee relationship should be a matter of common sense. The following problems, however, occur often enough to make them worth mentioning:

Intimate relationships in the workplace. Employers should discourage their staff members from engaging in intimate relationships with other employees, especially between supervisors and subordinates.

Cash payments to staff. Providing staffers with cash payments for compensation, reimbursement, etc., should be avoided. Issuing checks instead ensures a traceable paper trail in case a problem arises later.

Inconsistent treatment of staff. All staff should be treated with the same degree of professional courtesy and respect.

Denying overtime pay. Be sure to follow state law requirements for overtime pay, which may include certain exceptions.

Discriminatory practices. Decisions about matters like terminating an employee, providing bonuses, or giving promotions should not be based on characteristics such as age, gender, disability, religion, race, sexual orientation, etc.

 

• Retain specialized professional advisers. Before retaining an attorney, CPA, or other professional, look for someone who has extensive experience serving dental practices and whose client base is made up largely of dental practitioners. This experience and familiarity will be an essential benefit as you navigate the legal and professional intricacies that distinguish dentistry from other enterprises.

 

Working with dentists over the years has shown how often problems can arise between an employer and the staff. More importantly, it has enabled us to develop effective ways to prevent many of these problems before they occur. By taking sensible precautions, dentists can save themselves time, money, and a lot of stress.

Michael R. Limsky is a partner at the Maryland law firm of Summerfield, Willen, Silverberg & Limsky, LLC. His extensive experience as a business and corporate lawyer includes a special emphasis on the unique needs of dentists and other medical professionals.

Please remember that the information contained on this blog is intended to provide general information about legal topics and should not be construed as legal advice.

How Much Are You Leaving Your Ex?

The Importance of Keeping Your Beneficiaries Up to Date

Sally had it all—a comfortable home, a successful husband, and two promising young children. When her husband, Andrew, died in a tragic skiing accident, Sally was devastated. How would she manage without Andrew’s support?

Even in her grief, however, Sally knew that Andrew’s Will left her everything. As difficult as the loss of her husband was, she thought, at least she would be well provided for.

Or would she?

Andrew’s Will did leave everything to Sally, but the story didn’t end there. His life insurance policy named his parents as the beneficiaries, and on his 401(k), the beneficiary was his ex-wife. Andrew had made these designations before he and Sally met, and he never thought to update them.

 

The results were heartbreaking. Sally was left with the house, Andrew’s car, and the money in their joint checking account. The life insurance proceeds and retirement account—Andrew’s most significant assets—went to others.

 

When it comes to estate planning, having a current Will is only half the battle. Your Will controls only your “probate estate.” This includes the assets that you own in your name alone and that do not list a beneficiary—assets like bank accounts without a co-owner and household items. Any asset that is jointly owned or that names a beneficiary transfers outside of probate. These are your “non-probate assets.” Life insurance, retirement accounts, and jointly held real estate are foremost among them.

 

In other words, no matter what your Will says, your non-probate assets will belong to the surviving joint owner or beneficiary. There are far too many stories of couples like Sally and Andrew who had current Wills but out-of-date beneficiaries. Unfortunately, once a spouse dies, it’s simply too late correct the problem.

 

The good news? Updating your beneficiaries is easy. Simply call your life insurance company or retirement plan provider or visit their websites. Verify that your beneficiary designations and your Will work together to provide for the people you care about most.

 

The forms for making these designations are often available online but may need to be printed out and mailed to the provider with an original signature.

 

If your Will includes a Disclaimer Trust or Children’s Trust, it may be necessary to list the “Trustee under my Last Will and Testament” as a primary or secondary beneficiary. If you have any questions, ask your attorney for help.

 

—Summerfield, Willen, Silverberg & Limsky, LLC

Please remember that the information contained on this blog is intended to provide general information about legal topics and should not be construed as legal advice.

The State of Our Unions

Estate Planning for Same-Sex Couples

Estate planning for unmarried couples has always been tricky. If one partner dies without a will, the law makes few provisions for the survivor. Having a valid will can go a long way toward protecting the survivor, but wills can be challenged, and the simple fact is that most people die without one.

Even with a will, the surviving partner must pay a hefty 10 percent tax on the assets he or she inherits. The consequences of this tax can be severe. The surviving partner may have to tap into his savings, invade his 401(k), or even take out a home-equity loan just to pay the tax. This may be especially true when the estate includes real property but few liquid assets.

Is Marriage an Option?

How then can same-sex couples protect themselves from the inevitability of death? Marriage is a possible solution, but for same-sex couples, marriage is tricky, too. A gay or lesbian couple can’t get married in Maryland, but they can be married here.

Despite expectations to the contrary, the Maryland Legislature is ending its 2011 session without having legalized same-sex marriage. Last year, however, Maryland Attorney General Doug Ganzler issued a legal opinion stating that Maryland should recognize same-sex marriages performed in states where such unions are legal.

Having your marriage legally recognized in Maryland would offer a long list of state-level benefits, including the right to inherit from each other while avoiding the inheritance tax and the right to title your house as “tenants by the entirety”—a form of ownership that offers important creditor protections. (Until the Defense of Marriage Act is repealed, however, there would be no benefits at the federal level, including any exemption from the federal estate tax or the right to file joint state or federal tax returns.)

The attorney general’s opinion on out-of-state same-sex marriage is binding on state agencies, and there have been few reported problems with its implementation. But action by the courts or the Maryland Legislature could defeat the opinion at any time, returning a couple who thought they were married to the status of legal strangers.

A Multi-Layered Approach

In the face of such uncertainty, the best solution for same-sex couples is to take a multi-layered approach toward estate planning. At a minimum, a couple’s plan should include the following essential documents:

·    Last Will & Testament, which lets you designate who will settle your estate, who will  inherit, and who will serve as the guardian of any minor children.

·    Durable Power of Attorney, which can authorize your partner (or someone else you choose) to make financial decisions on your behalf.

·    Advance Directive, which is like a power of attorney, but applies to medical decision making. This document also allows you to choose in advance what kind of end-of-life care you wish to receive.

·    Affidavit of Domestic Partnership, which allows an unmarried couple to document their relationship. The affidavit can work with your Advance Directive to allow you to visit your partner in the hospital or ride in an ambulance together. It can also exempt you from the inheritance tax for your primary residence as long as it is titled as “joint tenants with right of survivorship.”

Getting married in another state would add another layer of protection for same-sex couples. During your lifetimes, it would mean being recognized as each other’s next of kin, being prevented from testifying against each in court, enjoying the creditor protections that accompany certain types of joint ownership, avoiding the inheritance tax, and enjoying certain inheritance rights that are restricted to married couples.

The legal benefits of marriage are usually a secondary concern for a couple deciding whether to tie the knot. But regardless of your marital status, having a comprehensive estate plan is an essential way to protect yourself and your partner, no matter what lies ahead.

—Summerfield, Willen, Silverberg & Limsky, LLC

For small business, getting a lawyer is a question of when, not if.

As a litigator (courtroom attorney), I am often called when a client has an urgent problem. Whether the client has been sued or simply threatened with a lawsuit, the crisis could probably have been avoided if the client had called sooner. The simple reality is that consulting an attorney before making an important business decision can save you time, money, and a lot of frustration. Of course, it’s impossible to insulate your business from litigation completely. But a trusted attorney can help illuminate the hidden risks—and opportunities—that lie behind the choices your business may face.

For example, many businesses have their employees sign restrictive covenants, or noncompete agreements. These agreements restrict the activities of an employee after she leaves the company. Employers usually require these agreements when a new employee could compete directly with company after leaving—either by going to an existing competitor or by opening her own business.  A noncompete agreement typically restricts the former employee from attempting to hire other employees away from the company, opening a competing business nearby, or soliciting the company’s customers.  Properly drafted, these agreements are legally enforceable. An employee or former employee who violates a valid noncompete agreement can be subject to heavy penalties.

Many former employees think they should not have to abide by the noncompete agreement. The employer treated them badly, they say, or the customers they worked with are rightfully theirs and do not belong to the company. Feelings like these are understandable, especially if the relationship between the former employee and the company soured before the departure. From a legal standpoint, however, the employee is still obligated under the terms of the agreement.

An employee who does what she believes is right— without appreciating the legal consequences—can find herself in a difficult situation. Employers often move aggressively to enforce noncompete agreements. That can mean attorney’s fees, court appearances, and the possibility of paying the employer monetary damages.

In cases like these, consulting an experienced attorney is essential. The employee can be informed of her rights and come to understand her best options. In some cases, the agreement may be too broad or written in a way that makes it unenforceable. The employee who takes the time to investigate a possible course of action with an attorney will be better informed and may be able to avoid costly litigation.

Consulted in advance, an attorney can also help you set up a new business, form a corporation, or simply protect your interests as you move forward in the business arena.  Providing this type of advice is often much less time-consuming—and less costly—than defending a lawsuit that could have been avoided.

http://www.swsl-law.com/

Despite Ricketts, Separation Still the Way to Go.

The information contained on this blog is intended to provide general information about legal topics and should not be construed as legal advice.
 
Separation and Ricketts v. Ricketts, 393 Md. 479 (2006)
 
When a marriage is coming to an end, often one of the most difficult and painful parts of the process is the initial physical separation. Even in an amicable situation, where both spouses agree that it is time to split, the logistics and economics of achieving the physical separation can be daunting at least. Many times, there is not enough money to carry the burden of an apartment for the exiting spouse, while still paying the mortgage and the other pre-existing marital expenses. Other times, spouses cannot agree on who should be the one to leave, how the bills should be divvied up, and what should be done with the assets. The inability to agree can often lead to deadlock.
 
Oftentimes, a potential client will come in and say, “My spouse and I are separated; I have been living in the basement for four months.” In these situations, a person is often hopeful that the Court may help them achieve what they have been unable to, a physical separation on terms more favorable to them.
 
But Maryland law has long held that a physical separation of the parties in necessary to begin the running of the mandatory one-year period required for what may be called a “no fault” divorce. If circumstances that would entitle a spouse to an immediate absolute divorce, such as abuse or adultery do not exist, parties seeking final severance of their marriage must live apart for at least one year. As difficult as it may be to make the physical break, it has been a clear requirement for many years.
 
The 2006 case of Ricketts v. Ricketts (393 Md. 479) appears to have created loophole in the steadfast requirement for a physical separation. In that case, the husband and wife had moved to separate bedrooms after one spouse had stated that she would never resume marital relations with the other.
 
The Court allowed the divorce to proceed, even though they had been living under the same roof, under the theory of constructive desertion, stating: it is “constructive desertion, as ground for divorce, when the misconduct of one spouse makes it impossible for the other to continue to live with the erring spouse without loss of his or her health or self-respect or gives reasonable apprehension of bodily injury, justifying the innocent spouse in leaving the other.” The Court found that the final decision by one spouse to never be intimate with the other again created a situation of desertion. The Court went on to state that constructive desertion, where there was an emotional rather than a physical removal of one spouse from the marriage, could be grounds for a divorce even though the parties still resided on the same house.
 
But while the Ricketts decision seems to indicate that a couple may be able to begin a legal separation while residing in the same home, Maryland Courts have been reluctant to adopt this holding as a matter of practice. At a recent meeting in Howard County I was informed that the judge’s there have stated that they would not follow the Ricketts decision.
Therefore, what might seem a boon to a spouse seeking separation, can in fact complicate the process. Litigants who rely on Ricketts do so at their peril, and may end up expending greater resources in advancing a losing position, and then being forced to physically split anyway. Due to the uncertainty of outcome of a divorce proceeding based on Ricketts, the best way to achieve a “no fault” divorce is still to begin with a physical separation.

http://www.swsl-law.com/