January 2010

Personal Injury Cases: New law effective as of October 1, 2009.If you have been involved in an automobile accident that is not your fault, an important practical question is whether the at-fault driver has insurance, and, if so, how much? The minimum amount of liability insurance required in Connecticut is only $20,000.00 per person and $40,000.00 per incident. Often, that is insufficient to cover damages sustained in a collision. A new law in Connecticut requires the at-fault driver’s insurance company to tell you exactly how much insurance the driver has. Prior to the passage of this law, many insurance companies refused to do so. This new law is important because it fosters prompt settlement of claims, often without the need to initiate a lawsuit. The new law applies to accidents occurring after October 1, 2009.

If you have been involved in an automobile accident, contact us immediately. We stay current on all changes in personal injury law and know what to do to protect your interests.

Medicaid planning: Can you complete the Medicaid application without professional help? If a family member needs Medicaid (Title XIX) to pay for care in a nursing home or at home, a Medicaid application will be required to initiate the process. The Medicaid application is filed with the Department of Social Services (“DSS”) where it is reviewed by an intake worker. The Medicaid application process can be quite daunting. As an example, in most cases, the application requires the production of all of the applicant’s bank statements for the prior four years. A review of the bank statements by the intake worker often results in follow-up questions concerning specific transactions. The job of the intake worker is to scrutinize the applicant’s past transactions (potentially as far back as five years) and verify that nothing has occurred that affects eligibility. A family member may have difficulty assembling the required documents or knowing how to respond to inquiries about past transactions.

Please contact our office if you need help with a Medicaid application. We can help you get through the potential mine field of issues that may be raised by an intake worker.

Estate planning: What is the current status of the Connecticut and federal estate tax?

The 2009 session of the Connecticut Legislature increased the Connecticut estate tax exemption for property passing to non-spouse beneficiaries from $2,000,000.00 to $3,500,000.00, effective as of January 1, 2010. On the federal level, there is no federal estate tax applicable to the estate of anyone dying in 2010, but in 2011 the federal exemption for property passing to non-spouse beneficiaries returns to $1,000,000.00. Everyone expects the federal law to be changed by Congress, but when and how is anyone’s guess. Both the Connecticut and federal estate tax have unlimited exemptions for property passing to a surviving citizen spouse.

If you have questions regarding how the Connecticut or federal estate tax may apply to you, please contact us.

Real estate transactions: Change in federal law will affect residential real estate closing process. For many years, federal law has required the Buyer and Seller of residential real estate to sign what is referred to as a “HUD-1” closing statement. The purpose of the HUD-1 is to disclose all costs associated with the transaction and all adjustments between the Buyer and Seller. It has not been uncommon for the figures on the HUD-1 to change, often at the last minute. The change in federal law requires a mortgage lender to give the Buyer/Borrower a Good Faith Estimate of all closing costs at least 10 days prior to the closing. In most cases, the closing costs disclosed on the Good Faith Estimate cannot be changed at the closing. This change in federal law puts a premium on accurately determining all closing costs much earlier in the process.

Whether you are a Buyer or a Seller, we will explain the HUD-1 and Good Faith Estimate and assure that your interests are protected by the terms of the Purchase and Sale Agreement and at the closing.

Business entities: Seller/Owner financing. When a business is sold, it increasingly is common for the Seller to take back what is referred to as “Seller/Owner financing”. This means that part of the purchase price for the business will not be paid in cash at the closing; rather, it will be paid by the Buyer to the Seller over time. In today’s economic climate it often is difficult for a potential Buyer to obtain the amount of Bank financing needed to permit the purchase of the business for the contract price. In those circumstances, there is a strong incentive for the Seller to finance the short fall. If this occurs, it is critically important that the Purchase and Sale Agreement spell out the terms of the financing, the security for the financing, and the remedies in the event of a default.

Whether you are selling a business or buying a business, we have the experience needed to assure that your interests are protected by the terms of the Purchase and Sale Agreement and at the closing.

We hope you have found this newsletter informative and helpful. Please call us if you, a family member, friend, or colleague requires legal services in any of the practice areas covered in our office. As always, we are here to serve our past and present clients, and we welcome new referrals.

Very truly yours,