Maintain protection for your non-business assets.

Maintain protection for your non-business assets.

An important reason for creating a business entity is to protect the owner’s non-business assets if the business fails. A business owner must be vigilant to assure that protection is maintained.

  • Avoid giving a personal guaranty for a business obligation, if possible.
  • Be certain that personal assets are not titled in the name of the business entity.
  • If you have multiple businesses it often is advisable to have separate business entities for each business. If one business fails, it will not take down the other.
  • In giving financial statements for the business, avoid the temptation to include non-business assets on the statement as a way of enhancing the financial profile of the business.

Maintaining the protection of non-business assets requires ongoing vigilance by the business owner. If you have questions about a business transaction and how it may affect your non-business assets, we would be glad to meet with you.

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How do snow and ice affect legal liability?

How do snow and ice affect legal liability?

 Although  Southern Connecticut winters are not as consistently filled with snow and ice as they once were, we still contend with snow or ice on many days and nights in the winter months. How does the presence of snow or ice affect legal liability?

  • If you are the driver of a vehicle on a road that has snow or ice, you must use a sufficient extra degree of care to keep your vehicle under control.
  • If you are the owner of a home, you must clean your sidewalk within a reasonable period of time after a storm has ended.
  • If you live in an apartment building or condominium complex, the person in control must clean sidewalks and parking areas within a reasonable period of time after a storm has ended.

 

  • If you are shopping in a complex of retail stores, the person in control of the complex must clean the sidewalks and parking areas within a reasonable period of time after a storm has ended. 

If you have been injured on snow or ice we would be pleased to meet with you. A thorough investigation of legal responsibility for an injury sustained on snow or ice almost always includes photographs of the area, weather reports showing precipitation and temperature during relevant time periods, and a determination of who is in control of the area where the injury occurred.

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January 2008


Dear Friends,
This is the fifth newsletter I have sent to clients since January, 2006. I hope you have found the topics in past newsletters to be interesting and helpful. If you have not received past newsletters and would like to access them, you may do so on our web site at www.cantorfloman.com

Personal Injury Cases: How do snow and ice affect legal liability? Although Southern Connecticut winters are not as consistently filled with snow and ice as they once were, we still contend with snow or ice on many days and nights in the winter months. How does the presence of snow or ice affect legal liability?

• If you are the driver of a vehicle on a road that has snow or ice, you must use a sufficient extra degree of care to keep your vehicle under control.

• If you are the owner of a home, you must clean your sidewalk within a reasonable period of time after a storm has ended.

• If you live in an apartment building or condominium complex, the person in control must clean sidewalks and parking areas within a reasonable period of time after a storm has ended.

• If you are shopping in a complex of retail stores, the person in control of the complex must clean the sidewalks and parking areas within a reasonable period of time after a storm has ended.

If you have been injured on snow or ice we would be pleased to meet with you. A thorough investigation of legal responsibility for an injury sustained on snow or ice almost always includes photographs of the area, weather reports showing precipitation and temperature during relevant time periods, and a determination of who is in control of the area where the injury occurred.

Medicaid planning: What if the healthy spouse dies first?


As we live longer, it is increasingly common to find a healthy spouse providing a significant level of care at home for an ill spouse. Although the expectation is that the healthy spouse will outlive the ill spouse, that is not always the case. Since the ill spouse cannot live at home without the well spouse, what steps can be taken to protect the couples’ asset base if the healthy spouse dies first?

• Retitle most family assets so that they are owned by the healthy spouse.

• Change the Will of the healthy spouse to provide that on his/her death the assets pass directly to the children or to an “income only” trust for the ill spouse.

We would be pleased to meet with you, discuss your specific family and financial circumstances, and, if appropriate, prepare the documents needed to implement this important type of protection for your assets.

Estate planning: How do I protect the children of my prior marriage?


Second or third marriages with one or both spouses having children from a prior marriage are increasingly common. How do you assure that the children of your prior marriage receive a portion of your estate when you die?

• Trust your spouse to carry out your wishes at his/her death. There is an element of risk with this approach. What if the relationship between your spouse and your children becomes strained after your death?

• Provide for an outright disposition to your children of a portion of your estate at the time of your death. This will assure that your children receive the assets designated for them immediately after your death.

• Create a spousal trust for a portion of your estate at the time of your death. The terms of the trust will provide that your spouse receives the income from the trust during his/her lifetime, but the entire principal of the trust will pass to your children after your spouse’s death.

• Enter into a pre-nuptial agreement which contractually dictates the disposition of assets owned prior to your marriage.

We would be pleased to meet with you, discuss your specific family and financial circumstances, and develop a plan that appropriately balances the interests of your children and your present spouse.

Real estate transactions: Is a reverse mortgage right for you?


If you are short on cash, have limited income, and have substantial equity in your home, a reverse mortgage may be an option to consider.

• Available to homeowners 62 or older, with limits on the amount that can be borrowed determined by your age and the value of your home.

• An attractive feature of a reverse mortgage is that no repayment is required while the homeowner is alive and living in the home.

• Money can be taken as a lump sum or as a periodic income stream.

• Interest accrues on the amount that has been borrowed, thereby reducing the equity in the home over time.

• Interest rates and loan charges for most reverse mortgage products tend to be higher than conventional mortgages or lines of credit.

• Compare a conventional line of credit as an alternative way to access cash from your home, when needed.

We would be pleased to meet with you to help determine if a reverse mortgage is appropriate for you.

Business entities: Maintain protection for your non-business assets.


An important reason for creating a business entity is to protect the owner’s non-business assets if the business fails. A business owner must be vigilant to

• Avoid giving a personal guaranty for a business obligation, if possible.

• Be certain that personal assets are not titled in the name of the business entity.

• If you have multiple businesses it often is advisable to have separate business entities for each business. If one business fails, it will not take down the other.

• In giving financial statements for the business, avoid the temptation to include non-business assets on the statement as a way of enhancing the financial profile of the business.

Maintaining the protection of non-business assets requires ongoing vigilance by the business owner. If you have questions about a business transaction and how it may affect your non-business assets, we would be glad to meet with you.<BR
Insurance Company Bad Faith: Long term disability policies.


Many people have long term disability policies, either purchased privately or offered as a benefit of employment. What happens if you believe you are disabled, but the insurance company disagrees?

• The starting point for the analysis always is the language of the policy. The definition of “disability” may differ significantly from policy to policy.

• Any ambiguity in the policy is construed in favor of you, the insured. The legal doctrine that requires this is called contra proferentem, discussed in greater detail in our January, 2007 newsletter.

• If the policy is an employer furnished policy and the insurance company turns you down, federal law provides that a court review of the insurance company’s decision is limited to determining if the decision was reasonable based on the medical evidence the insurance company had in its possession.

• On the other hand, if the policy is a privately purchased policy and the insurance company turns you down, a court review of the insurance company’s decision is not so limited; rather, the court independently reviews all of the medical evidence to determine if you are disabled.

We can help you by discussing the options you have if the insurance company has denied your request for long term disability benefits.

I hope you have found this newsletter informative and helpful. Please do not hesitate to call us if you, a family member, friend, or colleague requires legal services in any of the practice areas handled in our office. As always, we are here to serve our past and present clients, and we also welcome new referrals.

Very truly yours,
STEVEN P. FLOMAN

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The importance of adhering to time limitations specified in the inspection contingency.

The importance of adhering to time limitations specified in the inspection contingency.

Residential real estate Purchase and Sales Agreements almost always contain an inspection contingency.The purpose of the inspection contingency is to allow the buyer time, after signing the Agreement, to have a professional inspect the property and report on actual or potential problems discovered. The reported results of the inspection often lead to additional negotiations, and, on occasion, an adjustment of the sales price. The Agreement will contain strict time limitations for conducting the inspection and reporting the results. Failure to adhere to the time limitations specified in the Agreement may constitute a waiver of the Buyer’s right to conduct the inspection or request a price adjustment based on the results.

Whether you are a Buyer or a Seller, it is our responsibility to assure that the applicable time limitations are adhered to so that your rights pursuant to the  Agreement are protected.

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Should you give your home to your children now?

Should you give your home to your children now?

As with many legal questions, the answer is an annoying “sometimes you should, and sometimes you should not—-it depends on the individual family circumstances.” Here are some of the considerations:

  • If one spouse is in a nursing home, but the other spouse remains at home, the family home is an excluded asset any way.
  • If one child has lived with you for at least the past two years, giving the home to that particular child may have no negative Medicaid consequences, but giving it to all children may have negative Medicaid consequences.
  • What is the likelihood that one or more of the children who own your home will experience financial difficulty?
  • What is the likelihood that one or more of the children who own your home will experience marital problems?
  • If your home is sold by your children before your death, there almost certainly will be state and federal capital gains taxes that could have been avoided if you had not given the home to the children.    

We would be pleased to meet with you to review your individual family circumstances and determine whether giving the home to your children, now, makes sense for you.

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Will the closing really take place on the closing date?

Will the closing really take place on the closing date?

If you are buying or selling a house, you assume that the closing date stated in the Sales Agreement means the closing actually will occur on that date. That is not always the case. Connecticut courts consistently have concluded that unless the Sales Agreement says “time is of the essence” there is a reasonable period of time after the date specified in the Sales Agreement within which to close. If it is essential for you that the closing occur on the date specified in the Sales Agreement, the Sales Agreement must, at a minimum, say that closing on that date is of the essence.

If we meet with you before the Sales Agreement has been signed and you tell us that time is of the essence, we will assure that the appropriate language is included in the Sales Agreement.

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Who do you tell?

Who do you tell?

Estate planning documents such as Wills, Revocable Trusts (“Living Trusts”), Durable Power of Attorney Instruments, and Health Care Instructions are private documents.  Unlike the deed to your home or the title to your car, your estate planning documents are neither recorded nor registered anywhere. The only people who know of the existence, content, or location of these documents are you, the attorney who supervised their execution, and anyone you choose to tell. In order to avoid confusion and uncertainty, it is advisable to tell the executor named in your Will, and the financial and health care agents named in your Durable Power of Attorney Instrument and Health Care Instructions where the original documents are located, and the name, address and phone number of the attorney who prepared the documents for you. It also is advisable to give your primary care physician a copy of your Health Care Instructions.

We retain a copy of all estate planning documents you signed at our office in your client file, either as a paper copy or as a scanned electronic copy.

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What happens if an owner dies or becomes disabled?

What happens if an owner dies or becomes disabled?

A written Agreement among business owners concerning what happens following the death or disability of one of them is critically important for both the family of the deceased/disabled business owner and the remaining business owner(s). This is true whether your form of business is a partnership, a corporation, or a limited liability company. Connecticut trial courts and appellate courts regularly describe cases involving disputes among business owners following the death or disability of one of them. A written Agreement spells out the rights and responsibilities of all owners in those circumstances, and, as a result, often avoids the uncertainty and disagreement that otherwise may arise when one owner dies or becomes disabled.  

We would be pleased to meet with you to review your individual business circumstances and help you formulate a workable agreement among the business owners. 

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What if the driver who hits you has no insurance or inadequate insurance?

What if the driver who hits you has no insurance or inadequate insurance?

If the person who hits you has no automobile liability insurance or has only $20,000.00 of insurance (the minimum amount required by Connecticut law), your own insurance company steps into the shoes of the at fault driver. This insurance coverage is called “uninsured/underinsured motorists’ coverage”.  It often is referred to by the shorthand “UM/UIM Coverage”. Literally, UM/UIM Coverage means that your own insurance company assumes the responsibility that should have been assumed by the at fault driver for any personal injuries you have sustained. When your insurance company makes a UM/UIM payment to you, it does not affect your rates.

  • As an example, if you have $50,000.00 of UM/UIM Coverage, the at fault driver has no insurance, and the damages for your personal injury are $50,000.00, your insurance company is obligated to pay you $50,000.00.

 

  • As another example, if you have $50,000.00 of UM/UIM Coverage, the at fault driver has $20,000.00 of insurance, and the damages for your personal injury are $50,000.00, your insurance company is obligated to pay you $30,000.00.

There are time limits for notifying your insurance company that you are making a UM/UIM claim. An important responsibility of our office is to assure that those time limits are complied with.

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July 2007

Personal Injury Cases: What if the driver who hits you has no insurance or inadequate insurance?


If the person who hits you has no automobile liability insurance or has only $20,000.00 of insurance (the minimum amount required by Connecticut law), your own insurance company steps into the shoes of the at fault driver. This insurance coverage is called “uninsured/underinsured motorists’ coverage”. It often is referred to by the shorthand “UM/UIM Coverage”. Literally, UM/UIM Coverage means that your own insurance company assumes the responsibility that should have been assumed by the at fault driver for any personal injuries you have sustained. When your insurance company makes a UM/UIM payment to you, it does not affect your rates.

• As an example, if you have $50,000.00 of UM/UIM Coverage, the at fault driver has no insurance, and the damages for your personal injury are $50,000.00, your insurance company is obligated to pay you $50,000.00.

• As another example, if you have $50,000.00 of UM/UIM Coverage, the at fault driver has $20,000.00 of insurance, and the damages for your personal injury are $50,000.00, your insurance company is obligated to pay you $30,000.00.

There are time limits for notifying your insurance company that you are making a UM/UIM claim. An important responsibility of our office is to assure that those time limits are complied with.

Medicaid planning: Should you give your home to your children now?


As with many legal questions, the answer is an annoying “sometimes you should, and sometimes you should not—it depends on the individual family circumstances.” Here are some of the considerations:

• If one spouse is in a nursing home, but the other spouse remains at home, the family home is an excluded asset any way.

• If one child has lived with you for at least the past two years, giving the home to that particular child may have no negative Medicaid consequences, but giving it to all children may have negative Medicaid consequences.

• What is the likelihood that one or more of the children who own your home will experience financial difficulty?

• What is the likelihood that one or more of the children who own your home will experience marital problems?

• If your home is sold by your children before your death, there almost certainly will be state and federal capital gains taxes that could have been avoided if you had not given the home to the children.

We would be pleased to meet with you to review your individual family circumstances and determine whether giving the home to your children, now, makes sense for you.

Wills, trusts, and estate planning: Who do you tell?


Estate planning documents such as Wills, Revocable Trusts (“Living Trusts”), Durable Power of Attorney Instruments, and Health Care Instructions are private documents. Unlike the deed to your home or the title to your car, your estate planning documents are neither recorded nor registered anywhere. The only people who know of the existence, content, or location of these documents are you, the attorney who supervised their execution, and anyone you choose to tell. In order to avoid confusion and uncertainty, it is advisable to tell the executor named in your Will, and the financial and health care agents named in your Durable Power of Attorney Instrument and Health Care Instructions where the original documents are located, and the name, address and phone number of the attorney who prepared the documents for you. It also is advisable to give your primary care physician a copy of your Health Care Instructions. We retain a copy of all estate planning documents you signed at our office in your client file, either as a paper copy or as a scanned electronic copy.

Real estate transactions: Will the closing really take place on the closing date?


If you are buying or selling a house, you assume that the closing date stated in the Sales Agreement means the closing actually will occur on that date. That is not always the case. Connecticut courts consistently have concluded that unless the Sales Agreement says “time is of the essence” there is a reasonable period of time after the date specified in the Sales Agreement within which to close. If it is essential for you that the closing occur on the date specified in the Sales Agreement, the Sales Agreement must, at a minimum, say that closing on that date is of the essence. If we meet with you before the Sales Agreement has been signed and you tell us that time is of the essence, we will assure that the appropriate language is included in the Sales Agreement.

Business entities: What happens if an owner dies or becomes disabled?


A written Agreement among business owners concerning what happens following the death or disability of one of them is critically important for both the family of the deceased/disabled business owner and the remaining business owner(s). This is true whether your form of business is a partnership, a corporation, or a limited liability company. Connecticut trial courts and appellate courts regularly describe cases involving disputes among business owners following the death or disability of one of them. A written Agreement spells out the rights and responsibilities of all owners in those circumstances, and, as a result, often avoids the uncertainty and disagreement that otherwise may arise when one owner dies or becomes disabled. We would be pleased to meet with you to review your individual business circumstances and help you formulate a workable agreement among the business owners.

Insurance Company Bad Faith: What happens if the company says they won’t cover you?


When you purchase liability insurance as an automobile driver, homeowner, or business owner, your expectation is that if you injure someone who makes a claim against you your insurance company will both defend you and, if necessary, pay the claim. What do you do if your insurance company says the claim that has been made against you is not covered by the policy? Your only recourse may be a suit against your own insurance company in which you ask a court to order your insurance company both to defend you against the claim, and, if necessary, pay the claim. If a court finds that your insurance company has acted in bad faith, the court has the discretion to award you attorney’s fees. If your insurance company says the claim that has been made against you is not covered by your policy, seek legal advice immediately—the insurance company may be incorrect in taking that position.

Very truly yours,
STEVEN P. FLOMAN

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