Even if you don’t need estate TAX planning, you still need estate planning!

Wednesday, December 8, 2010

http://www.marketwat … fects-you-2010-12-08

With the recent announcement of a deal made between President Obama and the GOP leadership in Congress, many Americans are asking about the relevance of estate planning if their net worth is well below the proposed $5 million exemption from estate taxation.

While it may be true that the average American does not need to plan for minimizing his or her tax burden–better said, his or her heirs’ tax burden–everyone, and that means EVERYONE, needs some form of estate planning. This includes a simple will or trust, an AB trust, and/or pour-over wills; it also includes planning for mental and physical incapacity in the form of power-of-attorney agreements for health care and asset management.

Many people questioned whether they needed to worry about estate planning until the statutory dust settled on December 31, 2010. If Congress did not act to amend the estate tax code by that date, the exemption from taxation per individual returns to $1 million on January 1, 2011. The tax had been incrementally increasing from $1M over the past 9 years to reach infinity in 2010. Now, that provision will be sunsetting on December 31, and the deal struck by the White House and GOP leaders this week could replace it.

With a $5 million exemption, over 90% of Americans would be shielded from estate tax liability. Throw in the proposed “portability” provision–which allows a surviving spouse to combine with the decedent spouse’s exemption–and 99% of Americans would have no estate taxes due upon death. In 2009, with a $3.5 million exclusion, only about 16,000 decedents filed a federal estate tax return.

Long story short, whatever happens to the estate tax law, it is likely not to impact the vast majority of Americans. This is perhaps one of the strongest arguments in favor or eliminating the tax altogether: it is simply not a viable revenue stream for the federal government. Since 1945, receipts from estate and gift taxes collected in the US have accounted for only 1-2.5% of total revenues. http://www.cbo.gov/f … te_GiftTax_Brief.pdf

It is still relevant and necessary to get basic estate plans in place. Make things easier for your loved ones by preparing an estate plan that provides not just for the disposition of your assets but your healthcare and financial security.

Social Security Disability and Fibromyalgia

Tuesday, November 23, 2010

(Adapted from http://www.disabilit … ty_fibromyalgia.html, with edits to spelling and grammar.)

At the moment, there is no federal entry in Social Security Disability’s Listing of Impairments manual for the condition known as Fibromyalgia, also known as fibromyositis and Myofacial Pain Syndrome (the disability listings, of course, provide the approval criteria for a number of different impairments ranging from amputations to seizure disorder). However, California placed fibromyalgia on the list of qualifying disabilities in 2010.

Many claimants with fibromyalgia apply for disability, and many go on to win their cases. For this reason, the fibromyalgia disability claimant who’s been denied should not give up on their case. Instead, they should pursue their disability claim through the appeals process, keeping in mind how the Social Security Administration views this particular impairment.

Exactly how does Social Security Disability view Fibromyalgia?

As with all disability claims, after a person files at the Social Security Office, their case is transferred to DDS (Disability Determination Services), the agency responsible for making decisions on Disability cases.

When a case arrives at DDS, it is assigned to a specialist, or Examiner, who orders medical records and uses these records to make a determination. In other words, approve a disability claim, or deny it.

Unfortunately, when an Examiner receives a case in which the only allegation (reason for disability) is Fibromyalgia, the outlook for approval is not good. In fact, Social Security Disability will generally give little weight to such a claim unless another condition is involved, such as arthritis or degenerative disc disease.

Why is this? Part of the problem has to do with the nature of Fibromyalgia itself. Fibromyalgia is an impairment whose causes are not fully understood. And though it may be a legitimate disability in and of itself, because its symptoms and speculated causes vary so much from one person to the next, disability Examiners are never sure how to classify such cases. Therefore, it helps a social security case considerably if a Fibromyalgia diagnosis has been made in conjunction with another diagnosis, preferably one of a musculoskeletal nature.

For example, if a claimant makes a disability claim and the chief impairments are either Fibromyalgia and Rheumatoid Arthritis, or Fibromyalgia and Degenerative Disc Disease, the Fibromyalgia allegation will automatically carry more weight. This is because, in such cases, Fibromyalgia will be seen as a logical and plausible extension to what are generally thought of as “more proven” impairments.

Additionally, and this is very significant, a Fibromyalgia diagnosis made by an Orthopedist or Rheumatologist will seem very logical to a disability Examiner and, as a result, will also strengthen a Social Security disability claim.

This is in direct contrast to situations where the Fibromyalgia diagnosis has been made by an Internist, or “family doctor”.

When a personal physician renders a Fibromyalgia diagnosis, without a corroborative diagnosis by a specialist, it has the appearance to a disability Examiner of a label that’s been used by a doctor…simply for lack of a better way to label a patient’s pain.

And, often, and unfortunately, this is exactly the case. Many times when family doctor’s are unable to find reasons for the pain their patients feel, they diagnose “Fibromyalgia” as the cause. Disability Examiners see this routinely in the records they review.

The effect this has is not helpful for a Social Security Disability case because it dilutes, in the eyes of the disability Examiner, the significance of this particular ailment.

Obviously, this is not the fault of the disability claimant who is suffering from Fibromyalgia and is struggling to get their case approved. But it is helpful to understand how the disability process works in this regard and to consider how Social Security Examiners sometimes view applications where this illness is alleged.

Special Needs Trust: Who, What, Why, and How

Tuesday, November 9, 2010

What is the function of a Special Needs Trust?
Special Needs Trusts (hereafter, SNT) are used primarily as a means of preserving a disabled person’s access to government-subsidized health care and SSI benefits. The SNT is a well-accepted estate planning technique that is logical - even essential - in our country’s health care system. Many people who do not qualify for Medicaid are left with serious financial burdens from health care costs. For example, if parents leave money directly to an adult disabled child, the gift, if large enough, will disqualify the child from SSI and so from Medicaid until the money is used up. This is where the special needs trust comes in. It allows a person with special needs to enjoy the benefits of property received from others without losing SSI and Medicaid.

To qualify for SSI and Medicaid (MediCal in California), a person’s monthly income usually must be no more than about $600 to $900, and the person must own less than $2,000 worth of liquid assets (bank accounts, securities, and the like) and many other types of property. Someone whose property is worth more than the limit is not eligible for benefits.

How does the SNT protect the disabled person’s benefits?
The beneficiary of a properly drafted special needs trust never has a legal claim to property in
the trust. This means that the money will not be counted as the beneficiary’s resource, and so it will not interfere with eligibility for benefits. The funds from the trust can be used the disabled person’s benefit for any good or service except food or shelter.

A special needs trust is an arrangement under which a person (called the “grantor” or “settlor”) places property in the hands of a manager (the “trustee”). Typically, the grantor of a special needs trust is also the trustee while he or she is alive and names one or more other persons to be successor trustees, to take over as trustee when the grantor dies or becomes incapacitated. All persons who serve as trustee are legally obligated to follow the terms of the trust document to use the property for the benefit of the disabled person identified in the trust document (the “beneficiary”).

What are the basic characteristics of the SNT?
1. The trust document gives the person serving as trustee absolute control over when and how the trust property is spent, as long as it is spent for the sole benefit of the beneficiary, and
2. The trust document expressly states that the grantor intends for the property in the trust to supplement, but not replace, the basic benefits and services provided by SSI and Medicaid.

By including these two provisions in the trust document, we ensure that SSI and Medicaid will not treat the property in the trust as a resource of the beneficiary.

How can SNT assets be used?
An SSI grant is intended to provide only food and shelter. Expenditures for anything else are
supplementary and do not affect the beneficiary’s eligibility for a full SSI payment. Generally, trust funds are used for services (hiring a personal attendant, for example) or experiences (travel, for example) rather than to buy items of property. That is because a beneficiary who owns too much valuable property will go over the resource limit and become ineligible for SSI and Medicaid. A trustee who used trust funds for a vacation home would not be doing the disabled person a favor — it would result in termination of public benefits. That is directly contrary to the express terms of the trust; therefore, such a purchase is not authorized.

How can SNT assets NOT be used?
A trustee sometimes may desire to use trust funds for items classified as food and shelter. In some cases, buying these items with trust money is perfectly fine. For example, the SSI program does not pretend to provide adequate assistance for special dietary needs. So if a beneficiary needs unusually pricey food or nutritional supplements, this extra cost can often be met from the special needs trust without affecting the SSI grant.

Shelter is a special case. Special needs trusts commonly allow the person serving as trustee to pay for rent or any other basic need that the trustee deems necessary for the beneficiary’s health and welfare under the circumstances if it isn’t already being met by SSI or Medicaid, and if it doesn’t make the beneficiary ineligible for those benefits altogether.

How and when is the SNT terminated?
The special needs trust ends when it is no longer needed — commonly, at the beneficiary’s death. There are four reasons to end a special needs trust:
• Trust funds are depleted.
• The beneficiary no longer needs government benefits.
• The beneficiary is no longer eligible for government benefits.
• The beneficiary dies.

(This information adapted from nolo.com and Advising the Elderly or Disabled Client, 2nd Ed., Lawrence A. Frolik and Melissa C. Brown.)

OUR MISSION STATEMENT - FARRELL, FRAULOB & BROWN

Friday, October 29, 2010

OUR MISSION STATEMENT

At Farrell, Fraulob & Brown, our mission is to take a genuine interest in our clients, understand their objectives, and make every effort to meet or exceed their expectations. We work harder than other law firms, and for this reason we are the best.

We dedicate ourselves to these values:

For our clients, we will work hard to provide superior legal services timely, effectively, and efficiently. We will maintain the highest standards of professional integrity. We will give our clients the information they need to form realistic expectations. We will help each client understand the process, likely outcome, and law pertaining to his or her case. We will strive to be transparent and forthcoming with relevant information. When you hire Farrell, Fraulob & Brown, you are not getting just one attorney but an entire team of dedicated professionals.

For our firm, we will foster an enjoyable working environment, based on open communication and mutual respect. We will encourage initiative, innovation, teamwork, and loyalty. We will strive to recognize and reward excellent performance.

Because we too are members of this community, we will continue our long tradition of service, civic involvement, and leadership, always reaching out to members of the community who are underserved.

The Durable Power of Attorney for Asset Management (DPOA): 13 Lucky Questions Answered

Thursday, October 14, 2010

An essential part of any complete estate plan, whether it is for a very large or very small estate, is a Durable Power of Attorney.

The following are 13 commonly asked questions and brief answers about Durable Powers of Attorney, or DPOA for short. They are also called Powers of Attorney for Asset Management, to differentiate from powers of attorney for health care (previous FFBLaw post). For more information, please feel free to call Farrell, Fraulob & Brown at (916) 442-5835, and one of our estate planning attorneys will be happy to discuss your questions and concerns.

This post is adapted with acknowledgement and thanks to Consumer Affairs. You may access their article by clicking here:

http://www.consumera … sumerism/POA_4.htm#1

1) How is a “durable” POA different from other kinds?
A “durable” power of attorney (DPOA) gives your agent broad powers and remains in force even if you become incapacitated. A “general” or “regular” POA can contain many powers, but expires if you become disabled. Special or limited POAs are most often used in a specific situation. Say your mother, who’s too old for the Magic Kingdom, wants to sell her Orlando home and move to an oceanfront condo. You are co-owner of the house, but can’t attend the closing. Cousin Chad in Fort Lauderdale, via a POA, can sign papers on your behalf.

2) When should I make a durable POA?
D.C. attorney Cindy Lynn Wofford of Ravdin & Wofford, P.C. who specializes in estate planning, points out that “It’s never too early for an adult to execute a health care power of attorney. Accidents and serious illness can happen at any age.” Married people assume that their spouse can handle things, but even if you and your spouse own assets jointly, he or she won’t have power over anything that belongs to you alone, so it’s important to make your spouse your agent.

3) Who’s entitled to rely on my durable POA?
For your financial POA, banks, brokerage firms, credit card companies, and anyone else you regularly carry on business with should get a copy. One warning: most banks and other financial institutions have their own DPOA forms, and may be wary of a “generic” one, so ask if yours will be honored. Give copies of your health-care DPOA to your doctor, your agent and close family members. “Don’t just put it in a drawer,” warns Mercer Univ. Law Professor Adam Milani, “you want the hospital or other treatment center to know about and honor your DPOA.”

4) How does my agent assume power?
You decide — it can be effective immediately or in the future. Suppose you state that your attorney-in-fact will step in if you become “incapacitated.” You can name two doctors who must agree that you are no longer capable. This is sometimes called a “springing” or “contingent” POA. A doctor or your attorney-in-fact can make this decision. Obviously, he or she must be someone you know well and trust.

5) What are some important powers to include in my financial DPOA?
Any powers authorized by your state law that you think will be needed to handle your personal or business finances. Two powers often overlooked are 1) the power to deal with the IRS and 2) the power to give gifts, which could reduce taxes on a substantial estate.

6) Is one DPOA good for the rest of my life?
Technically, it’s good until death unless revoked. Review your document every five years or so to make sure your needs and wishes are still the same. If you have a major life change, such as divorce, remarriage, or a move to another state, think about revising it.

7) What are some “human” problems associated with these pieces of paper?
Few people enjoy being out of control at any age. So if an older friend or relative who’s still functional signs a POA, he or she may keep a hawk eye on things. Attorney Cindy Lynn Wofford recalls a case in which an elderly man lived alone is a state far from his son. The man was gave his son permission to sign checks on only one account, although he had several. “So if Dad went into a nursing home,” said Wofford, ” when the checking account ran out of money, the son would have no choice but to apply for a conservatorship.” Wofford advises that to prevent suspicion or misunderstanding, “keep [the principal] in the loop, even if it means repeating information over and over.”

8) What changes can I make after signing a POA?
Most state laws let a capable principal substitute agents or revoke POA. If you do revoke a POA, notify all interested third parties immediately. Unless someone knows about the revocation, he can rely on the POA.

9) Does an attorney-in-fact get paid?
That depends on who you name and how complex your affairs will be. If your attorney-in-factis a close relative, he or she won’t normally be paid. But you can decide to pay them.

10) Can I appoint more than one person as my attorney-in-fact?
You can appoint one person (naming another as successor if the first can’t serve), or name several people to act as co-attorneys. Sometimes this is a good idea, notes attorney Andrew Hook if several adult children are responsible and willing to serve. “I frequently recommend that the client appoint multiple agents. The participation of more than one child in decision making seems to reduce the number of disputes. It also provides a safeguard against abuse… by having multiple parties involved in reviewing records and transactions,” said Hook. If you appoint more than one person at a time, specify whether the co-agents can act independently or must act together. Also state how you’d like disputes resolved.

11) Is my attorney-in-fact liable for mistakes?
An attorney-in-factis expected to do whatever is reasonable to run your personal or business affairs.
Sandra Foster, president of the Carat Connect, a Toronto financial services company, points out that “your agent need only act in what they BELIEVE is your best interests - not do exactly what you would do.” Foster advises anticipating situations and discussing them with your agent. You can limit liability to “willful misconduct or gross negligence”, which implies intentional or dishonest acts. And a substitute agent isn’t responsible for mistakes made before he took over.

12) Is there anyone who SHOULDN’T have a durable power of attorney?
Yes. If your list of friends and relatives contains no one trustworthy enough or emotionally tough enough to make health-related or financial decisions, you may want a court-appointed conservator or guardian. While appointing a conservator may be a hassle, it assures that someone is watching the checking accounts. If you don’t have a DPOA, you may want to place some assets in a living trust, especially if property to be transferred includes real estate. Consult your lawyer.

13) I found a great form book at the library. Why not just fill in the blanks?
A form might work if compatible with your state laws and properly executed, but that can be a trap as well as a bonus. No two lives are identical, and one size rarely fits all (as Cinderella’s stepsisters found while trying to squeeze outsized feet into a glass slipper.) Give thought and discussion to your POA before signing. Consulting a professional can make the difference between a plan that smoothes the rest of your life and one that turns it into a bad episode of “The Practice.”

Please call us at (916) 442-5835 today to discuss your durable power of attorney for asset management. You’ll be glad you did.

Health Care Power of Attorney: No Better Time Than Now

Monday, October 4, 2010

Powers of attorney take two general forms: health care and asset management. In this post I will discuss the power of attorney for health care (health care POA).

What Is a Health Care POA?
A person is entitled to maintain control of his or her end-of-life health care, even after losing mental capacity to do so. This is accomplished by executing a valid health care POA while the person is of sound mind.

The health care POA grants decision-making power to a trusted agent regarding hospitalization, life-saving treatments, resuscitation attempts, and disposition arrangements (i.e. whether the remains will be buried or cremated after death).

Who Is Who?
The person granting power is the grantor or principal, while the person being given the power is the agent.

What Are the Advantages of Executing a Health Care POA?
There are at least four reasons to execute a health care POA.

1. Maintain control over end-of-life issues

Your wishes for how to spend the final days and weeks of life may be different from the wishes of those who love you and believe they know you best. Your health care POA speaks when you no longer are able, because, once signed, notarized, and witnessed, it becomes a binding document that attests to your desires. It must be followed. Some people are concerned that health care providers disregard even validly executed, clearly written POA documents. To avoid this problem, give your primary doctor and the local emergency room a copy of it.

2. Minimize stress and confusion

Emotions are especially charged among loved ones during the final days and weeks of life. Unfortunately, one of the sources of stress for many families is their lack of knowledge of the desires of the dying family member. If those desires are clearly stated and communicated through a valid health care POA, much of the confusion and stress can be avoided. Again, just as you ought to share this document with your doctor, you should give a copy to your agent(s) and other trusted family members for their information. The time for questions about what it contains is now, not after you have lost the ability to express your wishes.

3. Enjoy peace of mind for yourself and loved ones

Having a valid health care POA can be a source of comfort for you, as well as for the person(s) to whom you are giving power to make decisions on your behalf. Knowledge of your desires regarding end-of-life care is a powerful antidote to fear and apprehension.

4. Avoid court-supervised conservatorship/guardianship process

Perhaps the biggest reason to execute a health care POA now is to avoid the court-supervised conservatorship process. In other states, it is also called a guardianship. The court oversees a petition process and ultimately grants a person authority to make decisions on behalf of an incapacitated person. The process is lengthy, complicated and expensive, and it creates a mountain of paperwork. It often ends after the death of the person needing conservatorship, making the process nearly worthless. This nightmare is easily avoided if a person creates a valid health care POA while he or she has mental capacity.

What is mental capacity?
When attorneys and physicians speak of mental capacity, they refer to a person’s ability to think and process information rationally, such that he or she is able to comprehend information and appreciate the effects of his or her decisions. Capacity does not necessarily have to be constant and unwavering; there are instances where a person’s capacity comes and goes. It becomes apparent, therefore, how a person might be abused.

Certain safeguards have been built into valid health care POA documents. First, they must be signed and dated by the person giving power-of-attorney. Second, they must be signed in the presence of two adult witnesses who attest to the mental capacity of the principal. Finally, they must be notarized and stamped with an official notary seal.

Can I have more than one agent?
It is possible–in fact, common–to grant power-of-attorney to more than one person. They act together as co-agents. It is also possible (and recommended) to name a successor or two in the event the first chosen person is unwilling or unable to act.

For more information
Please call (916) 442-5835 to discuss powers of attorney in more detail, and to have one drawn up for you today.

HIPAA - What does it mean?

Thursday, September 23, 2010

In this day of access to a vast wealth of information through the Internet, it is concerning to some that personal privacy may not always be protected.

This issue comes up in workers’ compensation cases regularly, when insurance companies and attorneys request access to information contained in an injured worker’s medical records.

It arises in Social Security Disability cases, because proof of the applicant’s or claimant’s disability must come from medical records spanning often the majority of a person’s lifetime.

In estate planning, access to medical and health records becomes an issue when one decides it is appropriate to give powers of attorney to another person to oversee one’s end-of-life healthcare needs.

In the United States, a series of laws have been enacted to help secure and protect the privacy interests of people seeking healthcare. One such law is the Health Insurance Portability and Accountability Act, or “HIPAA”, which was passed by Congress in 1996. Some of the most relevant portions of the law are explained as follows, courtesy of the US Department of Health and Human Services (HHS) website www.hhs.gov.

Who Must Follow These Laws

We call the entities that must follow the HIPAA regulations covered entities.

Covered entities include:

Health Plans, including health insurance companies, HMOs, company health plans, and certain government programs that pay for health care, such as Medicare and Medicaid.

Most Health Care Providers—those that conduct certain business electronically, such as electronically billing your health insurance—including most doctors, clinics, hospitals, psychologists, chiropractors, nursing homes, pharmacies, and dentists.

Health Care Clearinghouses—entities that process nonstandard health information they receive from another entity into a standard (i.e., standard electronic format or data content), or vice versa.

What Information Is Protected

Information your doctors, nurses, and other health care providers put in your medical record

Conversations your doctor has about your care or treatment with nurses and others
Information about you in your health insurer’s computer system

Billing information about you at your clinic

Most other health information about you held by those who must follow these laws

How Is This Information Protected

Covered entities must put in place safeguards to protect your health information.

Covered entities must reasonably limit uses and disclosures to the minimum necessary to accomplish their intended purpose.

Covered entities must have contracts in place with their contractors and others ensuring that they use and disclose your health information properly and safeguard it appropriately.

Covered entities must have procedures in place to limit who can view and access your health information as well as implement training programs for employees about how to protect your health information.

What Rights Does The Privacy Rule Give Me Over My Health Information

Health Insurers and Providers who are covered entities must comply with your right to:

*Ask to see and get a copy of your health records
*Have corrections added to your health information
*Receive a notice that tells you how your health information may be used and shared
*Decide if you want to give your permission before your health information can be used or shared for certain purposes, such as for marketing
*Get a report on when and why your health information was shared for certain purposes

If you believe your rights are being denied or your health information isn’t being protected, you can
File a complaint with your provider or health insurer
File a complaint with the U.S. Government

You should get to know these important rights, which help you protect your health information.

You can ask your provider or health insurer questions about your rights.

http://www.hhs.gov/o … consumers/index.html

You can learn more about HIPAA in a pdf publication from the HHS, accessible here:

http://www.hhs.gov/o … /consumer_rights.pdf

The Federal Estate Tax: Past, Present & Future

Tuesday, August 31, 2010

As announced on FF&B’s Facebook page, we are once again offering a full line of estate planning tools.

http://www.facebook. … 6704932708353?ref=ts

2010 is a special year for estate planning attorneys and those interested in creating trusts and wills, because Congress must decide whether to keep the repeal of the estate tax (also affectionately called the death tax) created in 2001. Read on.

The following information is from http://www.ca-trusts.com/repeal.html

The federal estate tax has been repealed as part of a 10-year bill that steadily increased the exclusion from the tax, and then repealed the tax in its tenth year. Whether it will stay repealed is up to the U.S. Senate, which is expected to consider a House bill that was passed last year. That bill will permanently extend the $3.5 million exclusion.

The bill, H.R. 4154, will exempt estates of less than $3.5 million from the estate tax on a permanent basis. It is the same exemption that we have had for 2009, and about 99.5 percent of the estates in the U.S. are no longer subject to the tax under the $3.5 million exemption. For larger estates, an A-B trust can double the exemption to $7 million.

Other Provisions of the House Bill: The current tax rate of 45 percent will remain in place, instead of increasing to 55 percent in 2011. This tax rate applies only to estates greater than $3.5 million for unmarried decedents, and estates greater than $7 million for married decedents who have tax planning.

The new carryover basis rules that are planned to go into effect on Jan. 1, 2010, will be repealed. Also known as a step-up basis, these rules have been in effect for many years and have saved taxpayers a fortune in capital gains taxes. The law that was passed in 2001 put substantial limits on the amount of step-up that could be used after 2010. The law was also unclear about how the reduction in the step-up was to be applied in larger estates.

The following is an explanation of former estate tax law:

Under current estate tax law, the exemption amounts will be increased until 2010 as shown in the table below:

Year of Death
Exemption Amount

2002 $1,000,000
2003 $1,000,000
2004 $1,500,000
2005 $1,500,000
2006 $2,000,000
2007 $2,000,000
2008 $2,000,000
2009 $3,500,000
2010 Repealed
2011 $1,000,000

Before the 2001 tax bill was enacted, estate tax rates ranged from 37 percent to 55 percent, and some estates paid a higher percentage. The current tax rate is 45 percent, which is still among the highest tax rates in this country. (For comparison purposes, the highest income tax rate for individuals is 35 percent.) The rates included in the 2001 bill are as follows:

Year of Death
Maximum Tax Rate

2002 50 %
2003 49 %
2004 48 %
2005 47 %
2006 46 %
2007 45 %
2008 45 %
2009 45 %
2010 0 %
2011 55 %

The gift tax will not be repealed. Although the estate tax is being repealed, the gift tax will not be repealed. A new $1,000,000 lifetime exclusion from the gift tax will be allowed per person (starting in 2002), and the tax rate will be the same as the highest income tax rate in effect at the time the gift is made. In 2010, assuming that the estate tax is repealed at that time, the gift tax will be 35 percent. Why wasn’t the gift tax repealed along with the estate tax? Congress is well aware that estate planners would welcome an opportunity to shift assets from older to younger generations if there was no gift tax.

Depending on the size of the estate, not all appreciated assets will get a new basis at death, starting when the estate tax is repealed in 2010. Currently, assets owned by a decedent are appraised at death, and the basis changed to the new appraised value. For example, if someone bought a house for $50,000 many years ago (and has not made any improvements to it, or depreciated it), the basis for capital gains purposes is $50,000. But if the owner dies, the basis is stepped up to the fair market value of the property as of the date of death. If the appraisal shows that the fair market value is $2,000,000, for example, that becomes the new basis under current law. Under current law, the decedent’s children could inherit the property, sell it for $2,000,000, and pay no capital gains taxes.

As of 2010, that step-up in basis would be eliminated, except that $1,300,000 in transfers to beneficiaries (other than a spouse) would receive a step-up in basis, and $4,300,000 in transfers to the decedent’s spouse would receive a step-up in basis. Transfers in excess of these amounts would have a carry-over basis.

Courtesy of Law Office of Stephen C. Gruber (http://www.ca-trusts.com/

Medical Provider Network (MPN) List

Below please find links to many of the Medical Provider Networks (MPNs) available online. For a workers’ compensation case, select the MPN you were provided when your claims adjuster contacted you. Or, if the adjuster has not informed you of the appropriate MPN, contact the adjuster directly for this information. Then search any of these lists for a provider near you.

Anthem
https://directories. … user=mem&netid=bccwc

Blue Cross Blue Shield
http://provider.bcbs.com/
Broadspire
http://www.broadspireppo.com/

Care West
http://statusmedical.com/carewest/

Chartis (AIG)
http://www.talispoint.com/aig/com/

Cigna
http://cigna.benefit … et/cigna/docdir.aspx

Comp Partners
http://comppartners.com/ppo.html

CNA
http://www.talispoint.com/cna/campn/

Corvel
http://www.corvel.com/California/

Dept. of Industrial Relations – Division of Workers’ Compensation
http://www.dir.ca.go … /ListApprovedMPN.pdf

EIA
http://www.eiampn.csac-eia.org/

Farmers Insurance
http://talispoint.com/farmers/com/

FirstHealth
http://www.geoaccess … mstat=M&plancode=120

Golden State Physicians
http://www.mpnfinder.com/

ICW Group / Medex
http://www.talispoint.com/medex/icw/

Intracorp
http://talispoint.com/intracorp/

Liberty Mutual
http://www-sg.talisp … DQ5T-72989-30884.txt

Los Angeles County
[url/http://ceo.lacounty.gov/mpn/mpn_default.htm[/url]
Pacific Comp
http://www.pacificco … ProviderNetwork.aspx

Private Healthcare Systems
http://www.phcs.com/

Professional Dynamics
http://www.professio … dynamics.com/MPN.php

SafeCo Insurance
http://www.talispoint.com/srtw/campn/

Seabright
http://www.geoaccess … any=1&client_ID=SBIC

Specialty Risk Services (SRS)
http://talispoint.com/srs/

State Compensation Insurance Fund (SCIF)
http://www.statefund … m/MPN/MPNsearch.html

Travelers
http://www.travelers … s/californiampn.aspx

The Zenith
http://www.zenithnat … dr/ca/page31679.html

The Zenith (alternate location)
http://www.talispoin … com/zenith/external/

US HealthWorks
http://www.ushealthw … com/CA-Networks.html

WellComp
http://www.wellcomp.net/

Who Is Spying on Me? Tips About Sub-Rosa Surveillance

Wednesday, August 11, 2010

Workers’ Compensation insurance companies engage in various practices to reduce their indemnity to injured workers. One of their tactics is to try to catch the injured worker in the act of doing something that they supposedly should not be doing with the injury they claim to have suffered on the job. A classic example: Joe the plumber is receiving temporary disability payments and medical treatment, as well as taking time off work, because he has two herniated disks in his lumbar spine. Pretty common injury. Two months after the injury, the insurance company suspects Joe might not be as hurt as he claims; i.e. they suspect Joe is committing insurance fraud.

The insurance company can hire a private investigator (P.I.) to snoop on Joe while he is at home, the grocery store, driving his car, or anywhere else a telephoto lens or a video recorder with a strong zoom will reach. The footage captured on film is called “Sub-Rosa”, which is Latin for “under the rose.” The rose has historically signified secrecy and privacy (do a quick Google search and you’ll find plenty of historical vignettes). Nowadays, the term “Sub-Rosa” has been applied to the work of spies and snoops, particularly P.I.’s who are seeking evidence of insurance fraud.

The P.I. can even interview Joe’s neighbors, take statements from his friends, and otherwise invade in Joe’s privacy. About the only thing the P.I. cannot do is speak to Joe directly if he is represented by an attorney.

This post is intended to warn injured workers with pending claims about the “etiquette”, for lack of a better term, with respect to Sub-Rosa surveillance.

Do Not Be Alarmed

The following link will direct you to an article by a P.I. company offering advice to the insurance companies:

http://www.insurance … ontent&do_pdf=1&id=5

In the article, the author says: “Investigations are critical to evaluating the validity of a worker’s compensation claim. Videotape, photograph, or eyewitness testimony provides valuable evidence to support or impeach a claimant’s testimony.”

Do not be alarmed if you receive a notice that your trip to the Citrus Heights Safeway or the South Sacramento/ Elk Grove Costco was videotaped. If you are represented, the insurance company must send the P.I.’s footage/photos/report to your attorney. It must meet certain evidentiary requirements if it will be admissible against you. The judge determines whether to allow the evidence.

“I’m Not Dead!”

From the same article mentioned above: “…[I]nvestigators typically spend 8-10 hours a day on a given Sub Rosa investigation. Investigators arrive early in the morning to determine if the claimant appears to be working at home or employed by a third party. If the claimant is inactive for an extended period of time, surveillance may be discontinued until the afternoon or another day. However, if the claimant is active, the investigator remains in observance until activity ceases or darkness prohibits further documentation.”

You may get the sense that Big Brother is watching you. Usually, however, if the P.I. is doing his/her job correctly, you will not realize you are under surveillance. After you receive the footage and have the opportunity to review it, you will likely be furious that they have invaded your privacy in this way. The footage will probably show you getting into and out of your car, carrying grocery bags, or doing other normal daily activities.

Some clients ask if this footage will hurt their cases. The answer is usually no. Judges recognize that you are not dead; you have to go on living your life as normally as possible. Even after a fairly significant injury, you still can probably do many normal daily activities, though with great pain or discomfort. However, it may hurt you if your skydiving or water skiing adventure was recorded.

Remember This

Employers are well equipped with information and funds to try to deprive injured workers of benefits. For example, see this article giving tips on how to discredit the injured worker’s claim:

http://www.2mypi.com … %20Investigation.pdf

Remember that the workers’ compensation system is a no-fault system. This means that if you were injured on the job, your injury is presumed to be covered by the employer’s insurance unless and until the employer proves otherwise. Sub-Rosa surveillance is a tool they use to prove you are not hurt as you claim.

If you need advice, please contact a competent workers’ compensation attorney.

The Working Family Estate Plan

Thursday, June 17, 2010

THE WORKING FAMILY ESTATE PLAN

Who Needs An Estate Plan? Why Should I Do It Now?
Many people believe estate plans—which include wills, trusts, powers of attorney, and so on—are only for the rich. This is simply not true. There are several reasons why you need an estate plan, regardless of your income or your net worth.

ESTATE PLANNING HELPS AVOID PROBATE

If you could imagine the worst possible legacy to leave your spouse, children and grandchildren after your death, it would invariably include the court system. Most people who have ever stepped into a courthouse come away less enthusiastic about returning there: they find the process slow, cumbersome, and frustrating. One major reason to get your estate plan in place now is to avoid a court-supervised process known as probate.

The Probate Process
An estate must be probated when a person dies leaving more than $100,000 in probatable assets, which include any property—real or personal—that have not already been devised. This means that the property stays in the decedent’s name after death with no named beneficiary. One asset that usually does not go through probate, because a beneficiary is already named, is life insurance. However, most property—think of your house, cars, bank accounts, the heirloom china set—is in your possession, and you hold legal title to it. The court will be left to oversee the distribution of your assets and paying off any debts of the estate. It is costly, burdensome, and lengthy—usually thousands of dollars, and months, or even years, in court.

How to Avoid Probate
By executing a last will and testament (will for short), you can leave your property to the person or persons you choose. However, this is not enough to avoid probate. Essentially, your wishes are made known through your will, but another step is required to keep your matters out of court. What you need is a trust, which is a modern invention of the law that creates a fictitious “person” that holds your assets because you put them there. It doesn’t change your ability to buy and sell, trade or make income off your property, it merely transfers ownership from you as a person to you as Trustee of your living trust. It’s a clever way of ensuring that after you die, a “living” entity—the trust—owns your property and thus can avoid probate, because technically, you are not the owner of your property – your trust is.

How It Works
You create a trust, and then you create a deed that transfers your house into the trust. You notify the bank that your accounts should be held by the trust. You keep living in the house and paying bills with your bank accounts, but the trust owns your assets and you are the “operator” (Trustee) of the trust. Then, when you die, your house and bank accounts (and any other property you put into the trust) pass to your beneficiaries without court involvement, if your trust is set up correctly.

Call Us
There is a bit more to it than this, so please call (916) 442-5835 to set up a phone appointment with an attorney at Farrell, Fraulob & Brown. We will be happy to answer your questions.

ESTATE PLANNING HELPS YOUR LOVED ONES CARE FOR YOU

More and more people are falling victim to Alzheimer’s disease and dementia, which prevent millions of Americans from making decisions regarding their own lives, property, and health. Please see some startling statistics from the Alzheimer’s Association website:

http://www.alz.org/alzheimers_disease_facts_figures.asp

Power of Attorney for Health Care
Having an estate plan in place now is the only way to ensure that your loved ones are not guessing as to your wishes for your health care, your assets, funeral and burial/cremation arrangements, and other important decisions. Advance health care directives, also known as Powers of Attorney for Health Care, put decision-making power into the hands of someone you trust (the agent) in the event you can no longer act for yourself. These documents can be written to give immediate power to the agent, or the powers lie dormant until you choose to hand over the power or a doctor determines you cannot act for yourself. In addition, a living will gives you the ability to decide what kind of medical procedures you wish to be given to save your life. Please call (916) 442-5835 to discuss the details with one of our attorneys.

Power of Attorney for Asset Management
In addition to health care planning and decision-making, think of the financial decisions that need to be made. A Power of Attorney for Asset Management gives power to someone you trust, to make decisions regarding your property in the event you cannot act for yourself. Keep in mind that these powers are effective only while you are alive but cannot act due to your incapacity, or if you voluntarily relinquish your powers. The Power of Attorney can be held by the same person who will act as your Trustee. Call (916) 442-5835 to see if this document is right for your estate plan.

AN ESTATE PLAN GIVES YOU PEACE OF MIND

Your estate plan will contain the necessary provisions for your end-of-life care, how your property will be divided, and who will act for you should you lose the ability to do so. Making these decisions now will give you great peace of mind, because you can rest easy knowing that whatever happens, you are prepared.

AN ESTATE PLAN KEEPS PEACE AMONG YOUR LOVED ONES

How many times have you heard about fights erupting in otherwise peaceful families after Mom or Dad passes away? It is sad but true: when a loved one dies without having made his or her wishes known, the survivors can act irrationally, and conflicts arise. Emotions run high for those who are grieving a loss. But when estate planning documents are in place, much of the confusion and disagreement is replaced with order, structure, and harmony. Do yourself and your loved ones a favor, and get prepared.

Prepare Now
The time to act is now. Call Farrell, Fraulob & Brown at (916) 442-5835 today to speak with an attorney about your working family estate plan. You’ll be glad you did.

Discrimination NOT Allowed in Determining Permanent Disability Awards

Friday, May 28, 2010

Lois Vaira, one of Melissa Brown’s workers’ compensation clients, broke her back in 2003. She then discovered she had osteoporosis, but it was found that her back injury was work-related. However, the Workers’ Compensation Appeals Board (WCAB) awarded her much less permanent disability because of her osteoporosis.

Melissa Brown successfully argued before the Court of Appeal that such treatment was age discrimination, because osteoporosis occurs more frequently in older people. Thus, it was inappropriate to consider the osteoporosis in determining Ms. Vaira’s permanent disability award.

Please paste this link into your browser for the story in the Sacramento Business Journal from March 14, 2008.

http://sacramento.bi … 7/story2.html?page=1

How to Choose the Best Workers’ Comp / Disability Lawyer for YOU

Thursday, May 20, 2010

When you are injured, it is even more difficult to keep your perspective about important decisions. One of the most important decisions you will need to make is whether to retain an attorney to represent you, and, if you so choose, which attorney to hire. Consider several factors when choosing a workers’ compensation or Social Security disability attorney: geography, competence/expertise in the field, reputation of the attorney and the firm, experience, track record of favorable decisions and awards, and attorney/staff accessibility.

GEOGRAPHY
What is meant here is the proximity of the attorney’s office to your place of residence or where you spend most of your daytime hours. Keep in mind that it won’t be necessary for you to go to the attorney’s office very often; in fact, with email, telephone, fax, and regular mail, many clients find that they don’t need to visit the attorney’s office more than once or twice. It may have been more important in the past to choose a lawyer closer to home, but now you have greater flexibility to shop in a larger geographical area.

COMPETENCE AND EXPERTISE
At Farrell, Fraulob & Brown, our attorneys are recognized state- and nationwide for being some of the most competent and knowledgeable practitioners in the fields of workers’ compensation and Social Security disability law. Three of our attorneys hold special certification from the State Bar of California in worker’s compensation.

REPUTATION
What do other attorneys think of your lawyer? Getting a sense of your lawyer’s reputation may be the hardest part of choosing someone to represent you, because it requires that you know who to talk to. In most cases, people are in such dire straits that they don’t have time to research the best lawyer. Instead, they consult the yellow pages or conduct an Internet search. These searches yield little information about an attorney’s reputation among fellow lawyers - the people who have seen their peers in action and can speak to their skills, knowledge, competence, and ethics.

You are invited to see our firm’s Facebook page, where you will find links to many of the accolades our attorneys have received. Copy and paste this link into your browser to view the page:

http://www.facebook. … ts&ajaxpipe=1&__a=18

EXPERIENCE
The four attorneys at FF&B have over 100 years of combined experience. Donald Fraulob has been practicing for over 40 years and is our managing partner. He was admitted to practice before the Supreme Court of the United States in 1973. Melissa Brown was admitted to the Bar in 1983 and has extensive experience in workers’ compensation, Medicare / Medicaid / MediCal, Social Security, and Elder Law. She co-authored a complete reference guide on advising elderly and disabled clients. David Belden was admitted to practice in California in 1978 and has represented injured workers in their workers’ compensation cases for over 25 years. Christine Craft was admitted to the California Bar in 1995 and represents clients in their Social Security disability claims.

TRACK RECORD
You hire an attorney for one reason and one reason only: to get results you wouldn’t get if you were unrepresented. It doesn’t matter how well liked your attorney is if you don’t get the benefits to which you are entitled or a resolution you desire. And it doesn’t matter how many certificates, diplomas, or awards your lawyer has if he or she can’t deliver for you.

Ask your potential lawyer’s office about how many cases they have resolved to the clients’ favor during the past year. Treat the initial consultation (which many attorneys offer at no cost to you) with the attorney as a job interview; after all, you are considering a hiring decision. At Farrell, Fraulob & Brown, our attorneys win the hard cases. We take pride in going the extra mile, finding the “hidden” or lesser-known benefits, and not backing down from a fight to secure what is rightfully yours. As a result, over 90% of our Social Security disability cases end in a favorable decision to the client, meaning they collect the benefits they so greatly need. In workers’ compensation cases, our attorneys turn down settlements other attorneys would jump at, because they know how much more the case is worth. Put your future in competent, caring hands.

ACCESSIBILITY
Being injured or disabled is scary. Insurance companies, employers, and doctors can be intimidating. You need someone who understands your concerns and can provide useful information to reassure you. Your lawyer should take the time to listen to you when you make reasonable requests. At FF&B, our attorneys and their staff are courteous, friendly, and patient. We try to assist you in any way we can, but we also ask that you do the same. Together we can succeed!

Finding the right attorney can be challenging if you are looking for excellent representation. Take into account the items mentioned above to find the lawyer who is best for you.

Sprains and strains most common workplace injury

Tuesday, May 4, 2010

Sprains and strains, most often involving the back, accounted for 43 percent of the 1.3 million injuries and illnesses in private industry that required recuperation away from work beyond the day of the incident in 2003.

When sprains and strains, bruises and contusions, cuts and lacerations, and fractures are combined, they accounted for nearly two-thirds of the cases with days away from work.
Sprains and strains were the leading nature of injury or illness in every major industry sector in 2003, with 33 percent of these cases occurring in the trade, transportation, and utilities major industry sector and an additional 19 percent in the education and health services major industry sector.
The three occupations with the overall greatest number of injuries and illnesses were laborers and material movers; heavy and tractor-trailer truck drivers; and nursing aides, orderlies, and attendants. Laborers and material movers, and heavy and tractor-trailer truck drivers often suffered sprains and strains to the trunk or lower extremities, stemming from overexertion or contacts with objects or equipment. Nursing aides, orderlies, and attendants predominantly suffered sprains and strains to their trunk (typically their back), due to overexertion related to lifting or moving patients.
These data are from the Injuries, Illnesses, and Fatalities program. To learn more about workplace injuries and illnesses, see “Lost-Worktime Injuries and Illnesses: Characteristics and Resulting Days Away From Work, 2003” (PDF) (TXT), news release USDL 05-521. The 2000 Standard Occupational Classification (SOC) Manual is now used to classify workers by occupation. Prior to 2003, the survey used the Bureau of the Census occupational coding system. Substantial differences between these systems result in a break in series for occupation data. Users are advised against making comparisons between the 2003 data and the results from previous years.

From http://www.bls.gov/opub/ted/2005/mar/wk4/art05.htm

Helpful Information for Injured Workers

Wednesday, April 28, 2010

March 29, 2010

The California Department of Industrial Relations website has a lot of helpful information for people who are injured on the job. You can access the Division of Workers’ Compensation website using the following link:

http://www.dir.ca.go … wc/InjuredWorker.htm

Here you will find answers to many of your questions about the workers’
compensation system. See the “I Want To…” section on the top left of the screen, and click the links for more information on topics such as “Know my rights” and “Know what to do when I get injured on the job.”

At Farrell, Fraulob & Brown, we want you to be educated, to know your rights, and to feel empowered with information to make informed decisions.
It is the best way you can help us to help you receive the benefits and treatment you deserve.

The Myth of Workers’ Compensation Fraud

March 8, 2010

People will try to convince you that many (as high as 20 percent or more) workers’ compensation claims are fraudulent, meaning they are attempts to collect money for nonexistent injuries, or injuries claimed to be much more serious than they are. In 2000, PBS created a documentary that debunks the misinformation that many critics of the workers’ compensation system continue to spread.

In reality, very, very few claims are actually inappropriately filed (estimated at 1 or 2 percent of total claims filed), and contrary to what the critics would have us believe, taxpayers are not the victims of this fraud. Insurance companies charge hefty premiums to employers to carry their workers’ compensation indemnity coverage, and even if an employer has no such insurance, there is a specific fund to cover the injuries of those workers.

Please click on the link below to read a synopsis of the PBS documentary, “The Myth of Workers’ Compensation Fraud”, by Lisa Cullen.

http://www.pbs.org/w … place/etc/fraud.html

TOP TEN WAYS TO KNOW YOU NEED AN ATTORNEY TO HANDLE YOUR WORKERS’ COMPENSATION CASE

February 15, 2010

10. It’s “workers’ comp”, not “workman’s comp.”
9. I’m drowning in a sea of acronyms, and I’m getting dizzy trying to keep TD, PD, PTP, and TPD straight.
8. I have no idea what “Qualified Medical Evaluator” means, and I have no desire to find out.
7. Letters from my employer’s insurance company, while appearing to be written in English, are not in any language I understand.
6. I have been unable to work for months, but I have not received any Temporary Disability payments.
5. I was just notified by the insurance company that Temporary Disability payments are ending, and I don’t know why.
4. I was seriously hurt while on the job, but my employer looked the other way.
3. I believe my employer is responsible for my injury because they didn’t follow safety protocols.
2. I was fired from my job or treated very poorly after I filed my worker’s compensation claim.
1. I have more than one work-related injury in multiple body parts, and they are all serious.