Stein Sperling is pleased to announce that Casey Florance received the award for Committee Chair of the Year at the Bar Association of Montgomery County’s 119th annual meeting and law day celebration on April 26, 2013.

Ms. Florance is an active member of the Bar Association of Montgomery County, serving on multiple committees and holding leadership positions within the organization in recent years. She currently serves on the Executive Committee, on the Strategic Planning Committee and as Co-Chair of the Bar’s activities associated with its legacy sponsorship of the Montgomery County Special Olympics, including the annual Inspiration Walk held last year on October 14, 2012.

The Committee Chair of the Year award, presented annually, acknowledged her work as Co-Chair of the Leadership Development Committee. In that role, she led the development of the BAMC’s inaugural Leadership Development Academy, which will welcome its first class of 16 attorneys this summer. In 2012, Ms. Florance was awarded the Bar Foundation President’s Citation for Outstanding Service.

We have an IMMEDIATE OPENING for a FULL-TIME BILINGUAL (English/Spanish) paralegal assistant for our Falls Church, VA office. This position will help with and provide backup for a variety of office duties including answering phones, greeting clients and other administrative assignments to assist our personal injury paralegals. Half day SATURDAY MORNING HOURS ARE "A MUST" for this position. Qualified applicants should have minimum 1-year previous office experience, type at least 40 wpm accurately, front desk phone system and/or customer service experience and computer experience in Word and Outlook software would be helpful. Knowledge in the medical, insurance and/or claims field, law firm and/or personal injury experience preferred. Qualified applicants - send resumes and salary requirements to us at recruiting@steinsperling.com.

Beth Irving will be presenting "Avoiding Contract Issues and Potential Litigation" to the Women's Council of Realtors. The presentation will cover the many issues can arise along the way which could keep your contract from getting to the closing table. Attendees will learn ways to avoid contract issues and how to protect themselves and their clients with the ever changing market.

Practice Area: Estates + Trusts

Stein Sperling Estates and Trusts principal, Ann Jakabcin, was recently quoted in an article on estate planning mistakes published by Bankrate.com. The article explained that one of first steps in estate planning is hiring a trusted and informed estate planning attorney.  This step is especially important for divorced individuals, particularly when children are involved.

Ms. Jakabcin elaborated on one estate planning mistake, which involves not clearly identifying who has control of the assets once someone passes. The author interviewed Susan Wilkes of Clearwater, Florida, who learned the hard way the consequences of that mistake.

"[My estate planner] left the bulk of my trust to my minor daughter 'fee simple,' meaning that if I died, my financially irresponsible ex-husband, as my daughter's guardian, would receive a check for the large residual balance of my trust," says Wilkes.

Fee simple in this situation indicates that the inheritance would be given outright to the child. "Should the mother of the child die prior to the child becoming an adult, the father of the child, and ex-spouse, would be likely appointed as guardian of the child's inherited property until the child became an adult," says Ann Jakabcin, an attorney and principal at Stein Sperling in Rockville, Md.

Ms. Jakabcin also provided valuable information on cash-deficient estate plans. Problems that some individuals have run into are paying taxes and other bills after an individual passes away. 

Joint accounts, beneficiary designations on insurance policies and transfer-on-death provisions on bank accounts all let assets jump over the probate process and land directly into the hands of the inheritor.

"That simplifies the distributions of those assets, but it may leave the executor of the estate no liquidity to pay taxes or that final income tax bill or doctor bills when you have designated beneficiaries on all of your liquid asset accounts," says Jakabcin.

In cases where the estate does not have the liquidity to pay bills or taxes, beneficiaries or heirs may have to come up with the money themselves. "Sometimes we have to see if we can allow the recipient of the IRA to loan money to the executor to pay bills. Credit card companies may be out of luck because there may be no ability for that creditor to go after the beneficiary for unpaid credit card bills, but taxes are another situation," she says.

The IRS can come after anyone involved, from the executor to the transferee -- the person receiving the assets.

As this article suggests, having a basic knowledge of estate planning techniques and hiring a knowledgeable estate planning attorney are essential to avoid mistakes later in the planning process. Read the full article, “Estate planning mistakes to avoid,” online at Bankrate.com.

Author: Darla J. McClure

Practice Area: Employment Law

If you have more than 15 employees be advised that the “Pregnancy Fairness Act” takes effect on October 1, 2013. This Act requires an employer to make reasonable accommodations, upon request, for an employee's temporary disability caused by pregnancy or childbirth, as long as it does not impose an undue hardship on the employer. "Reasonable accommodations" may include changing the employee's duties, hours or work area, providing mechanical or electrical aids, transferring the employee to a less strenuous position, or providing leave. Further, if an employee requests a transfer to a less strenuous or less hazardous job during the pregnancy, the employer must grant the request if (1) it would do so for any other temporarily disabled employee, or (2) the employee’s health care provider so advises, and the employer is able to do so without displacing employees or creating a new job. Pregnant employees will be required to support their requests with medical certifications.

This issue of the MC SHRM Newsletter is available online.

This article is reprinted with permission from MC SHRM.

Mark Schweighofer will be serving on a panel of exit strategists and business specialists at a Business Exit Forum Educational Event. The event will be covering keys to a successful employee stock ownership plan (ESOP) transition. Mark will be part of a discussion about exit strategies for business owners and the related tax implications.

A recent release of the Gazette’s special publication, "Gazette Seniors," quoted Ann Jakabcin in an article about estate planning choices.  The article focused on practical estate planning questions to consider, such as how and when to give money to family members or beneficiaries so they receive the optimum tax benefits.  Ms. Jakabcin explained portability as one gifting option where the IRS must be notified if you plan to take advantage of that provision.

“You either use the exemption or lose it,” said Jakabcin, noting that it doesn’t take as much as one might think to accrue $1 million in assets. “If you’re a single individual in the D.C. area who owns a home and has a job with a retirement plan and life insurance, it doesn’t take long to cross that $1 million threshold.”

Ms. Jakabcin also explained that state inheritance tax depends on where one resides (i.e., taxes that apply in Maryland may not be the same in D.C. or Virginia.)

"'The state inheritance tax applies to those who are not “bloodline descendants or siblings (of the deceased) and is fixed at 10 percent,' said Jakabcin. 'While the law says the recipient pays the tax, the writer of the will can shift the tax burden to the estate.' Maryland levies the inheritance tax on individuals whether or not they are state residents. There is no federal inheritance tax.”

Finally, Ms. Jakabcin touched on tax entitlements that same-sex couples currently have and possible changes in the future.

“'Although same-sex couples in Maryland can legally marry, they currently are not entitled to all the death tax exclusions available to a husband and wife. That is “because all of the (Maryland) legislation dealing with estate taxes builds off of the federal estate tax and the federal government has yet to recognize gay marriage,' said Jakabcin.”

For more information, read the whole article on the Gazette’s website.

DC Super Lawyers recognized 21 Stein Sperling attorneys in their 2013 Edition. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The Rising Star designation “recognizes the top up-and-coming attorneys in the state to attorneys who are 40 years old or younger, or who have been practicing for 10 years or less.” Once the rising star “qualifications” are met the attorney is eligible to be a “Super Lawyer.”

In 2013, Stein Sperling had nine attorneys recognized as Super Lawyers and 12 attorneys named as Rising Stars. The Stein Sperling attorneys that were recognized as Super Lawyers, included principals Fred Balkin, Millard Bennett, David De Jong, Jolie Deutschman, David Driscoll, Ann Jakabcin, Jeff Schwaber, Paul Stein and Steve Widdes. In addition to its nine attorneys named to the Super Lawyers list, Stein Sperling recognizes its two principals, three senior counsel and seven associates named to the Rising Star list. They are Monica Harms, Karen Shapiro, Ivonne Lindley, Mary Lombardo, Deanna Peters, Micah Bonaviri, Casey Florance, Caroline Ford, Jamie Hertz, Diego Rojas, Eric Rollinger and Andrew Schwartz.

In recognition of this, Stein Sperling was featured within the April 28 issue of the Washington Post magazine.

Recognizing Alternative Sources of Payment for Personal Injury Patients

Confused about what PIP and MedPay are and what they will pay for? If your practice is NOT set up to recognize which patients have access to these coverages through their auto insurance policies, you could be missing out on alternative sources of payment for your services.

This month's practice management update will help to clarify common misunderstanding about treating patients who have been injured in auto accidents. Fred Balkin and Jolie Deutschman will discuss interplay between PIP, MedPay, auto liability and health insurance coverages. They will also cover the basics of what you need to know about Authorization and Assignment agreements between your practice, attorneys you work with, and your patients.

This will be a lively discussion that will assist your practice in maximizing its revenue from treating injured patients. Fred Balkin and Jolie Deutschman will answer your questions and make recommendations for implementing procedures in your office.

Authors: Micah A. Bonaviri, Caroline Ford Bonaviri

Practice Area: Estates + Trusts

4 Common Myths about Estate Planning for Young Physicians

By Micah A. Bonaviri, Esq. and Caroline E. Ford, Esq.

Myth: Estate plans are for people with children and/or substantial wealth.

Fact: There are a number of other tax and non-tax reasons to consider an estate plan. The reality is that establishing an estate plan allows a young physician to contemplate a concern that is particularly close to a physician’s heart – asset protection.

As a physician, your chosen profession may make you more vulnerable to creditors. Accordingly, as part of the estate planning process, it is important to ensure that your assets are properly titled. In many states, including Maryland, a married couple can title their real property as “tenants by the entirety.” This form of ownership will protect the couple’s real property from a creditor of one spouse. Another commonly used method of asset protection is incorporating certain types of trusts into an estate plan.

Myth: Estate plans are less relevant because Congress increased the federal estate exemption.

Fact: Although the federal estate tax exemption is currently $5.25 million, the Maryland and D.C. estate tax exemptions are currently only $1 million. It is important to keep these state estate tax exemption amounts in mind when contemplating whether it is time for you to meet with an estate planning attorney. For example, if you currently own a life insurance policy, you may already be exposed to state estate taxes.

Myth: Life insurance death benefits can’t be included in an estate.

Fact: While life insurance death benefits are income-tax-free, many people do not realize that they are includable in your estate (for estate tax purposes) if you own the policy or have rights to it. Upon your death, life insurance death benefits can quickly use up the applicable state exemption amount. In other words, if you live in Maryland (or D.C.) and own a 30 year-term life insurance policy, with a face value of at least $1 million (which is commonly recommended for young professionals starting their careers and families), your estate will likely be subject to the Maryland or D.C. estate tax by virtue of your policy alone. This does not even include any additional assets you may have, such as retirement accounts, bank and brokerage accounts, tangible personal property, car and primary residence.

To address these issues, a commonly used estate planning technique is an Irrevocable Life Insurance Trust (“ILIT”), which can provide a number of useful estate planning benefits. Generally speaking, the primary reason to use an ILIT is to remove the life insurance proceeds from your taxable estate and, if applicable, from your spouse’s taxable estate, while allowing the proceeds to be available to meet the needs of your surviving spouse, descendants, and/or other loved ones. However, it is important to ensure that you, the “grantor,” do not retain any “incidents of ownership” over the policies that would cause the insurance proceeds to be included in your estate for estate tax purposes. Accordingly, the ILIT must be structured and administered properly.

Myth: A Will is the only document a person needs to carry out their wishes.

Fact: There is a variety of estate planning documents (including an ILIT, mentioned above) to consider. A Will does allow you to direct the manner in which you want your assets to pass upon your death. Specifically, you can ensure your assets pass to your loved ones in a way you determine is best. If you have children under age 18, a Will also allows you to designate a guardian for those children. Additionally, there are ways to keep assets in trust for those children in the event you and your spouse pass at a time when your children are young. These types of provisions can easily be incorporated into a Will.

Some assets, including insurance policies and retirement accounts, do not pass by your Will but instead pass to designated beneficiaries. It is important that your beneficiary designations for your insurance policies and your retirement accounts are coordinated with your estate plan. For example, if you have minor children you may want to allocate a child’s share to a trust created under the terms of your Will. You should also be aware that with retirement assets, the beneficiary designation must be worded properly to avoid negative income tax consequences for your beneficiaries.

Unlike a Will, a Durable Power of Attorney and Advance Medical Directive are applicable during your lifetime. A Durable Power of Attorney authorizes an agent to manage your financial affairs (usually when you are unable to do so). An Advance Medical Directive allows you to designate a health care agent to make health care decisions for you when you are unable to do so. You can give specific directions to your health care agent about the manner of treatment you would like in certain situations, such as the type of life-sustaining treatment you would or would not like.

Throughout your lifetime, your estate plan may change. As your personal wealth grows, it may increase the need for further tax planning as part of your overall estate plan. Contrary to popular belief however, regardless of your wealth, a carefully considered estate plan is prudent for every individual, particularly for a young physician.

Micah A. Bonaviri and Caroline E. Ford are attorneys with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. As members of the firm’s Estates and Trusts department, they assist individuals and families through the process of developing their estate plans, from drafting a simple will, to considering wealth preservation, succession planning and charitable gift planning techniques. Each holding a Master of Laws in Taxation, Micah and Caroline understand, and regularly implement, strategies that allow their clients to maximize tax savings through their estate plans.

Mark Schweighofer will be presenting at "Explore the Advantageous Uses and Benefits of LLCs" hosted by the National Business Institute.  The conference will provide attendee with the information they need to make informed decisions on taking advantage of LLCs.

Mr. Schweighofer will explain how LLCs comply under state laws by covering the following topics:

• Avoiding trouble with concise articles of organization
• How much protection from liability do LLCs provide?
• Handling mergers and conversions
• Proper property transfers
• Guiding clients through dissolution
• Practical uses for one person LLCs
• Why foreign LLCs?
• Special rules for regulated professionals
• Exceptions to limited liability

Stein Sperling attorneys will cover the basics of business and employment law that every business owner should know. Millard Bennett, Mark Schweighofer, Karen Shapiro and Don Sperling will guide attendees through the following topics:

• Ownership Agreements & Executive Compensation Plans
  • Owners often find themselves in trouble and without up-to-date documents. Learn how to be proactive!
• Employment Law Survival Guide
  • Employees are the lifeblood of any business. This session will update you on current federal, state and local laws!
• Exit Strategies and Estate Planning
  • No matter the transition you’re planning (buy, sell, merge), this discussion will help you anticipate what lies ahead!

The schedule for the program is as follows:

7:30 a.m. Breakfast

8:00 a.m. - 10:00 a.m. Program

10:00 a.m. - 11:00 a.m. Optional In-Depth Breakout Discussions

To register, email Helaine Guilliams.
 

As the Maryland legislative session comes to end, here is a brief update of some of the bills that have been introduced that affect employers:

1. The bill requiring an increase in the minimum wage to $8.25 in 2013, $9.00 in 2014 and $10.00 in 2015 has been rejected by the Senate Finance Committee by a vote of 8 to 3.
2. The bill providing employees with paid sick and safe leave, that would accrue 1 hour for every 30 hours worked, has officially been voted out of the Economic Matters Committee as unfavorable.
3. The bill requiring employers to compensate employees for time spent on a jury was voted down by the House Judiciary Committee.

Just recently a new bill involving pregnant employees was introduced and has already been passed by both the House and the Senate. This new bill would require employers to adjust the duties of pregnant employees who are not able to perform their normal duties because of their pregnancy. It would allow pregnant women to do less strenuous jobs because their current work might harm them or their unborn child.

We are also paying close attention to Senate Bill 51, which provides that if an employee is unemployed and has applied and is eligible for unemployment insurance benefits, the employee may not be bound by a noncompetition covenant entered into with the employer. This bill if enacted could have a huge effect on employers who must make the decision of laying off an employee and risk the employee’s competition or retaining an employee in order to keep the noncompetition covenant enforceable.

On a related front, we are also watching a few bills making their way through Congress. One is a proposed amendment to the Fair Labor Standards Act that would allow employers to offer “comp” time to employees who work overtime.

Stay tuned as the Maryland legislative session draws to a close and we find out what bills have become law. In the meantime, if you have questions about these or other employment law issues, please call 301-340-2020.

This is a reprint of Darla McClure's article from Montgomery County Society for Human Resource Management.

Monica Harms will be presenting at the Rita Rosenkrantz Basic Family Law Training at the Bar Association of Montgomery County. The training will cover the following topics:

1. Initial Interview/Retainer Agreements;
2. Pleadings & Divorce Grounds, Scheduling Hearings, Uncontested Divorce Hearings;
3. Discovery, Financial Statements, and Marital Property Statements;
4. Pendente Lite Financial Issues, Voluntary Impoverishment, Child Support, Taking Exceptions to a Master’s Recommendations;
5. Litigating a Child Custody Case; 
6. Marital Settlement Agreements. 

Bill Roberge presentation explained the tax deferred exchange, as defined in Section 1031 of the Internal Revenue Code of 1986 (IRC Section 1031) and how it can affect real estate investors. He explained the requirements and important considerations for an exchange.

Including:

• Exchanges must be completed within strict time limits with absolutely no extensions.
• The three general rules the exchanger should follow to avoid the payment of capital gain taxes
• The "like kind" property test
• Times the IRC Section 1031 does and does not apply

Author: Darla J. McClure

Practice Area: Employment Law

Darla McClure publishes MC SHRM Legislative Affairs Update for March 2013.

Legislative Update

There are many bills that have been proposed in this legislative session that will affect employers.

A few that we are watching closely are:

1. an increase in the minimum wage to $8.25 in 2013, $9.00 in 2014 and $10.00 in 2015;
2. providing employees with paid sick and safe leave that would accrue 1 hour for every 30 hours worked; and
3. unpaid parental leave for up to 6 weeks for the birth or adoption of a child; provided however if the employer has over 50 or more employees it may have to provide paid leave.

These bills are subject to modification and may even be withdrawn. We will keep you updated as more information becomes available. It is a good idea to attend the “Legislative Update” seminar in the spring where we will discuss what bills have become law and when they go into effect.

This article is reprinted with permission from MC SHRM.

Author: Donald N. Sperling

Practice Area: Employment Law

DOs and DON’Ts for Responding to an Employee’s Discrimination Complaint

By Donald N. Sperling, Esq.

Knowing how to respond to a discrimination complaint from an employee is important. As a business owner or senior human resources professional, you may be called upon to respond to numerous issues in a compressed period of time. Both preparation and organization are critical to the delivery of a well-considered and well-documented response to such complaints. After reviewing the following DOs and DON’Ts for responding to discrimination complaints, I hope you will take away practical and proactive approaches to ensure your business practices are helping – not hurting – your ability to respond to such complaints. I also hope that these suggestions help you to prepare in case you are ever faced with a complaint.

When your company receives an employee discrimination complaint:

• DO assemble a team to respond to the complaint. This should always include a senior human resources professional and legal counsel.
• DON’T dispose of any electronic documents, including e-mails, text messages and phone records. Commonly called a “litigation hold” this process will safeguard you against future claims of intentional document destruction.
• DO gather materials essential to the investigation, including: o A copy of your company handbook and any policies that are relevant to the complaint;
  • Your company’s insurance policies and a list of applicable coverage;
  • Personnel files for all parties involved in the complaint;
  • Any and all documents that pertain to the complaint – even the complaint itself; and
  • A list of possible witnesses related to the complaint.
• DO try to find out what the complaint is really about. Does it require an immediate response while the investigation proceeds? Has the complainant offered a workable solution? Is the nature of the complaint similar to past complaints received by the company? Is this a final action taken by a disgruntled employee as he or she leaves the company?
• DON’T allow “chatter” among management about the matter. As you may imagine, idle talk between supervisors or executives of your business can lead to confusion about or exaggeration of the claim at hand. You will want to avoid lending merit to meritless claims and providing any argument of retaliation.
• DO limit conversation about the matter to those who are leading your company’s investigation and response. You will want to manage this process from the top down, educating the management team about the claim and your position of no retaliation toward or promises to the claimant. In addition, take conversations offline to avoid volumes of email discussion.
• DON’T make promises. For example, you want to avoid obligations of “strict confidentiality.” We may be able to assume the company will use reasonable discretion in its investigation. However, to conduct a proper investigation, you may be obligated to disclose the nature of the claim, the identity of the claimant and the alleged circumstances.
• DO refer all inquiries about the claim to a central, responsible party – either your senior human resources professional or your legal counsel.

By addressing each of these items in advance, you will take proactive steps to protect your business in the event it receives an employee discrimination complaint. As is often the case for business owners and managers, organization and planning, as well as leadership and teamwork are fundamental to success during this process.

Don Sperling is one of the founding principals for Stein Sperling Bennett De Jong Driscoll PC, a law firm based in Rockville, Maryland. Don’s practice is concentrated in the areas of business, employment, e-commerce, technology, real estate and civil litigation. He has served as counsel to national corporations and small businesses alike, offering attention to detail and a thorough analysis of clients’ issues and objectives before pursuing their desired results. Don frequently speaks to business groups and associations throughout the region on business, employment and technology-related topics.

This article was published in US Builders Review.

Practice Area: Tax Law

With another tax season upon us, it is critical that we remind clients of the Internal Revenue Service's continued focus on the disclosure of taxpayers' offshore assets. Our firm continues to observe that many individuals are unaware of the need to disclose certain foreign assets and the staggering penalties that can apply for failure to properly disclose.

For instance, every U.S. citizen or resident who owns or has signing authority over one or more foreign bank accounts with an aggregate balance over $10,000 is generally required to file a Foreign Bank Account Report (FBAR) by June 30 of each year. In addition to any back taxes, penalties and interest on any unreported income associated with such accounts, criminal exposure can range from up to $500,000 in fines and 10 years in prison. Civil penalties can reach the greater of $100,000 or 50% of the aggregate balance of the foreign account(s) each year for a period of six years. In some cases, the penalty can exceed the value of the account.

While the FBAR gets most of the press, similar draconian penalties can apply to taxpayers who fail to:

1. Report "specified foreign assets" in excess of certain thresholds;
2. Report distributions received from a foreign trust;
3. Report gifts received from foreign persons; or
4. Disclose ownership of foreign entities.

The penalties for any of these violations start at $10,000 per violation and quickly escalate.

The Offshore Voluntary Disclosure Program ("OVDP") remains an option for individuals who failed to disclose in prior years. While the OVDP generally allows avoidance of any threat of criminal prosecution, it is not appropriate in all instances and can result, in some cases, in higher penalties than might otherwise apply outside of the program.

While the IRS has not announced an end date for the current version of the OVDP, it has cautioned that it could terminate the program at any time. Additionally, given the increased information sharing between the IRS and foreign governments, a strategy of avoidance is becoming increasingly untenable. Accordingly, time is running out for noncomplying individuals to get ahead of the IRS on matters relating to foreign asset disclosure.

Given the complexities of the issues and the magnitude of the penalties, it is important for individuals to consult with qualified counsel in connection with the disclosure of their offshore assets. In some cases, it may be possible to avoid penalties entirely. In others, it may be possible to pay a significantly reduced amount.

Mark Schweighofer, a principal of Stein Sperling's tax department, has extensive experience assisting clients in this area, and a record of success in reducing or avoiding penalties, which makes him uniquely qualified and willing to advise on such matters. If you have any questions about foreign asset disclosure, including the terms of the OVDP, please contact Mark at (301)838-3233 or by e-mail.

TAX LAW AT STEIN SPERLING
Stein Sperling's tax law attorneys counsel clients on the intricacies of business and personal taxes in order to minimize tax liabilities. Each of our tax law attorneys holds either a Master of Laws in Taxation degree or is a Certified Public Accountant or both. We participate in programs that allow us to stay on top of the rapidly changing world of tax laws, regulations, cases and rulings. We decode the tax talk and carefully guide our clients, helping them understand the big picture tax implications and tailoring strategies that benefit their short- and long-term objectives.

ENHANCING MEDICAL PRACTICE REVENUE

Alternatives to Billing Health Insurance When Treating Injured Patients

Physicians are struggling now, more than ever, to sustain and grow revenue within their practices. From the recession, to recently enacted health care legislation, to changes in health insurance payments, physicians face an uphill battle: expending more resources to collect payment for their services, but seeing A/Rs shrink at an alarming rate. The good news is that alternative sources of payment for your services may exist when billing for the treatment of personal injuries.

In its 25 years of practicing personal injury law, Stein Sperling has successfully helped medical practices incorporate treating patients injured in auto accidents into their business models. In this seminar, we will cover:

1. SOURCES OF PAYMENT. Health insurance can limit the amount of treatment a patient receives, as well as the revenue physicians can collect for their services. We’ll tell you about first party coverage (i.e., PIP, MedPay) that may pay 100% of your bills. We’ll also explain third party coverage options (e.g., liability coverage) that can also pay balances due on your bills.
2. ADMINISTRATIVE PROCEDURES. In order to identify sources of auto insurance recovery for your patients, your office must know what questions to ask. We’ll tell you what your reception and records staff need to know.
3. GETTING PAID. Concerned about how long you’ll have to wait for payment, or about not getting paid at all? We’ll explain collection procedures and how an Authorization and Assignment agreement should work, including obligations your patient and the attorney have to pay outstanding medical bills.
4. ADDITIONAL OPTIONS FOR REVENUE. Conducting independent medical examinations (e.g., for permanency or disability determinations) or being a medical expert can earn you additional revenue. We’ll tell you how to incorporate these services into your practice should you wish to do so.

In 2013, the maximum Federal exemption for combined transfers during life and at death for each person is $5.25 million, which will increase annually based on cost of living factors. Thus, if a wealthy individual gives away $5.25 million in 2013, he or she will have used up the available current transfer tax exemption and will have no estate tax exemption remaining if his or her death occurs in 2013. Annual gifts of property (that are immediately available to the recipients) of $14,000 or less (what was $13,000 in 2012) do not count against the $5.25 million Federal transfer tax exemption.

Example: Your rich uncle who has 20 nieces and nephews could give $14,000 to each niece and nephew in 2013 and reduce his estate by $280,000 ($14,000 x 20). He could make the same $14,000 gifts again in 2014 to the same nieces and nephews and reduce his estate by an additional $280,000. None of these $14,000 annual gifts would reduce your uncle’s $5.25 million Federal transfer tax exemption remaining at the time of his death.

Individuals can also make gifts by paying tuition directly to an educational institution and medical expenses directly to a medical care provider without limit. The payment of tuition and medical care exception does not reduce the donor’s $5.25 million Federal transfer tax exemption.

Unlike the Federal transfer tax system, Maryland, Virginia and the District of Columbia do not have a separate gift tax. Both Maryland and DC do, however, have an estate tax with an exemption only for the first $1 million in assets held at death. Virginia does not impose an estate tax.

Example: If your father is a resident of Maryland and dies with an estate valued at $2 million, the estate tax due to Maryland would be $99,600. Your father could have given away $1 million of his holdings to you and your siblings during his life and leave the remaining $1 million to his children upon death. This strategy would eliminate the Maryland estate tax entirely. Note that while Maryland also has an inheritance tax, transfers to children are exempt from the imposition of such tax.

It is important to note that the cost basis for income tax purposes of any gifts in the hands of the recipient is the lower of the adjusted basis or fair market value at the time of the gift. Thus, gifted assets that have appreciated before the gift might result in substantial capital gain taxes when the asset is sold by the recipient. However, the basis of assets inherited from an individual is the fair market value at the time of death. This is known as a “step-up in basis” where assets that have appreciated during life, or a “step-down in basis” where assets that have declined in value during life. Thus, the sale of inherited shares of stock that are sold by the recipient immediately after receiving the inheritance generally results in no capital gains taxes being imposed.

Gifts should only be considered if the donor is reasonably comfortable that he or she will not need the money back. Before making any gifts, donors must also consider estate and gift taxes as well as potential capital gains taxes in the future on the sale of appreciated assets.

Attorneys in Stein Sperling’s Estates and Trusts department are available to review your specific circumstances and to help you determine what gifting strategies are most appropriate for you.

Author: Darla J. McClure

Practice Area: Employment Law

Darla McClure publishes MC SHRM Legislative Affairs Update for February 2013.

Employers under Federal Contracts Must Offer Employment to Displaced Workers under the Predecessor Contract

Executive Order 13495 titled “Non-Displacement of Qualified Workers under Service Contract” was issued over four (4) years ago but did not go into effect until January 18, 2013, when the Federal Acquisition Regulatory (FAR) Council issued its regulations. Under this new regulation, when a new contract succeeds an existing government service contract, the contractors and subcontractors under the new contract are required to offer the predecessor contractors’ employees a right of first refusal of employment. This is a required obligation, however, only if the work performed by the employees under the new contract is the same or similar and at the same location as the work under the prior contract. Successor contractors are allowed to reduce the size of the workforce and to give first preference to certain of their current employees.

This article is reprinted with permission from MC SHRM.

Ann Jakabcin, David Torchinsky and Caroline Ford will present a seminar on Maryland estate and gift tax law.  

The seminar will cover the following topics:

• Gift Tax, Estate Tax, and Fiduciary Income Tax Issues
• Using Roger Wells Case Study to Illustrate Application of Tax Principles: Gift Taxation
• Using Roger Wells Case Study to Illustrate Application of Tax Principles: Estate Taxation
• Estate Tax Implications of Trusts
• Using Roger Wells Case Study to Illustrate Application of Tax Principles: Estate Taxation

David Torchinsky will be presentating "Estate Planning in a Nutshell" at the Library of Congress to government employees as part of a seminar series. He will review the importance of estate planning as well as estate planning techniques.

Authors: Fred A. Balkin, Jolie S. Deutschman

Practice Area: Injury Law

Alternative Sources of Revenue for Physicians: Using Patients’ PIP and MedPay Benefits

by Fred A. Balkin, Esq. and Jolie S. Deutschman, Esq.

For years physicians have been dealing with health insurers paying pennies on the dollar for medical services rendered. And this is after the physician spends literally months navigating the insurer’s claims process, which is a nightmare on its own. Fortunately for physicians, there may be an alternative source of payment for their services.

Many patients who have been injured as a result of an auto accident have first party coverage, regardless of fault, that pays 100% of their reasonable and necessary medical expenses that result directly from the accident. This first party coverage, commonly known as Personal Injury Protection (“PIP”) in Maryland (and as MedPay in Virginia) is essentially accidental health insurance without the fee scheduling or unique contractual disclaimers and requirements involved in the health insurance claims process. Physicians know well that these aspects make the process frustrating and time consuming, while reimbursement rates are very low.

Physicians must ensure that their administrative processes allow them to take advantage of PIP and MedPay benefits. For example:

1. Their patient forms should be written to detect whether a patient was injured by an auto accident.
2. Forms should request information about the patient’s PIP/MedPay insurer, including the insurer’s name, claim number and contact information for the adjuster handling their claim.
3. During the office visit, ask the patient if they are represented by an attorney. If so, obtain the name of the attorney as this can aid in gathering the correct information about the patient’s first party insurance coverage (especially if the patient does not know this information).
4. Have your office submit a written medical report confirming the treatment was rendered as a result of an auto accident. This report should include:

• A narrative of the examination and findings;
• A description of services rendered;
• A prognosis for treatment; and
• An itemized bill with CPT codes.

In most cases, claims will be processed within 30 days by the insurer. In fact, statutory requirements (for PIP as an example) mandate that claims be paid within this time period so insurers avoid paying statutory interest. To learn more about PIP/MedPay and how to successfully identify and incorporate patients with third party negligence claims into your medical practice, please contact us at 301-738-2222. As co-chairs of Stein Sperling’s Injury Law department, we regularly provide complimentary seminars to medical offices (physicians and staff), helping them understand first party coverage and its value as a source of revenue for physicians and their practices.

Fred A. Balkin and Jolie S. Deutschman are principals with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. As co-chairs of the firm’s Injury Law department, Fred and Jolie lead a team of attorneys and staff who are committed to guiding clients through what could be one of the most painful, frustrating and difficult periods of their lives. They handle several hundred cases each year, from wrongful death matters to serious and catastrophic injury cases resulting from auto accidents and workplace incidents.

Our firm is pleased to introduce the Stein Sperling Accident App, available on iPhone and Android platforms. It was designed by our firm’s Injury Law department to provide you with a valuable resource in the unfortunate event of an auto accident.

Why Do I Need the Accident App?
Most people don’t think of preparing for an auto accident before it happens. Our easy-to-use app will guide you through collecting valuable evidence, including photos, videos and information from other drivers and witnesses at an accident scene. It uses your device’s GPS to preserve the location of an accident and to help you find a nearby hospital, towing service or auto repair.

How Do I Download the Accident App?
If you are using your desktop computer, you may download the app, then sync it to your device.

If you are using a mobile device, visit Stein Sperling's mobile website for links to download the app directly to your device.

Author: Andrew L. Schwartz

Practice Area: Employment Law

A Physicians Guide to Employment Contract Negotiations

by Andrew L. Schwartz, Esq.

Are you about to join a medical practice? Or are you considering leaving your practice to join a medical group that is part of a larger hospital or medical system? If you answered yes to either question, there are certain provisions that you should consider when negotiating your employment contract.

Term and Termination

You should know the length of the term of your employment contract. Contracts that run from one to three years are often reasonable; however physicians should attempt to avoid contracts that extend past five years. You should also know whether the contract renews automatically or if it requires certain action for renewal. It is imperative that you, as a physician, and your employer keep track of what action is required to renew or terminate the contract. What are the terms for termination, including “for cause” or “without cause”? Are there cure periods? How much notice are you required to give to the employer if you want to terminate the contract? In turn, how much notice is the employer required to give you to terminate your employment? Thirty, 60 or 90 days is often a reasonable amount of time for notice by either party to terminate the contract.

Compensation

The compensation provision of a physician’s employment contract is often heavily negotiated and regulated. If you are joining a medical group that is part of a hospital or large medical system, those entities must comply with certain regulations and are usually limited in what they can pay physicians. A compensation provision should outline the payment structure, particularly whether you will be paid a straight salary or be paid based on your productivity. Additionally, your contract should stipulate whether you are entitled to a bonus and what factors are used to determine your overall compensation, including bonuses.

Restrictive Covenants

Restrictive covenants are also often heavily negotiated as part of physician employment contracts, which include non-competition, non-solicitation and confidentiality provisions. It is important that each of these provisions is reasonable as to geographic scope, and the amount of time a physician is prohibited from practicing or soliciting. Physicians should attempt to avoid entering into contracts that restrict their ability to practice medicine for a long period of time, or within a wide geographic area after the contract expires or is terminated.

Dispute Resolution

In general, contracts should include a dispute resolution provision and provide for an attorneys’ fees provision in the event of a dispute relating to, or arising from, the terms of the contract. Many states follow the “American Rule” relating to attorneys’ fees. This rule states that all parties to a lawsuit will pay their own attorneys’ fees, unless a contractual provision or statute provides otherwise. Without a provision in the contract stating that one party will be able to collect attorneys’ fees should that person prevail, an employer or employee that gets sued, rightly or wrongly, could be left with a substantial legal bill and no way to recover those fees through the courts or any other method.

Benefits

What benefits are you being offered? Is your employer willing to pay a portion of membership or association dues? Is your employer willing to provide time off to attend continuing medical education classes and provide financial assistance for attending such CMEs?

Legal Counsel

Whether you are an employer or a physician negotiating a contract, it is highly advisable to obtain legal advice regarding the rights, duties and obligations of all parties prior to executing the contract.

Andrew L. Schwartz is an attorney with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. Andrew handles matters related to corporate and business law, including commercial transactions and real estate matters. He also provides general corporate counseling and advice, entity structuring and formation; and services related to ownership, management and control; sale and transfer, and contracting. He gives speeches to groups of business owners on a variety of topics, such as business disputes, choice of business entity, including the use of limited liability companies, and practical and legal aspects of business succession planning.

Monica Harms will be presenting on relocation cases in the context of a child custody dispute, for the Family Law Section of the BAMC.  Ms. Harms has successfully litigated a number of highly contested custody cases where relocation is an issue.  Based on her experience, she will be providing advice and tips for attorneys representing the parent who wants to move out of the area with the child(ren) and for attorneys representing the parent who wants to prevent the other parent from moving out of the area with the child(ren).

Stein Sperling is proud to announce its sponsorship of Bags of Love (Bolsas de Amor), a charity project launched in 2009 by Elda M. Devarie. As president and CEO of EMD Sales Inc., an ethnic grocery wholesaler and distributor, Elda created Bags of Love to unite local food manufacturers, supermarkets, corporate sponsors, Hispanic media, charitable and faith-based organizations and bring food to needy families residing in the DC metropolitan area.

Since its beginnings, Bags of Love has grown by leaps and bounds. This year, the project will distribute goods to 712 families. In advance of distribution, Stein Sperling attorneys and staff volunteered their time to contact over 100 families, offering them an opportunity to participate in the program.

Stein Sperling’s Falls Church, Virginia, office will serve as one of 31 points of distribution for the project this Saturday, January 26, between 10:00 a.m. and 1:00 p.m.

Practice Area: Civil Litigation

Judy Cornwell understands the importance of having a collaborative relationship with her clients. She earns a client’s trust through careful preparation and open communication. Judy wants her clients to be confident that she is representing their best interests effectively and efficiently. She takes pride in helping clients reach favorable resolutions in commercial litigation, construction and contracts litigation.

Prior to joining Stein Sperling, Judy clerked for The Honorable Ronald B. Rubin in The Circuit Court for Montgomery County. While in law school, Judy was a staff member of the Catholic University Law Review and served as a research and teaching assistant to law school faculty.

Outside of the office, Judy is active with Girls on the Run and the Leukemia and Lymphoma Society’s Team in Training. She also volunteers with local schools and other charities.

• Admissions + Certifications

  Maryland

• Education

  University of Kentucky (B.A., cum laude, 2004)

  Catholic University, Columbus School of Law (J.D., magna cum laude, 2011)

• Memberships + Activities

  Women's Bar Association of Maryland, Member

  Capitol Hill Presbyterian Church, Service Committee

  Capitol Hill Group Ministry, Board Member

Practice Areas: Business Law, Civil Litigation, Criminal Law, Employment Law, Estates + Trusts, Family Law, Injury Law, Real Estate Law, Tax Law

Forbes magazine's December 2012 issue, and the January 2013 issues of both The American Lawyer magazine and Corporate Counsel magazine, list Stein Sperling among the 2013 Top Ranked Law Firms in the United States. To compile their list, the publications consulted LexisNexis^® Martindale-Hubbell^®, an "authoritative source for information about U.S. Lawyers since 1868." From Martindale's database of over 1 million lawyers, Top Ranked Law Firms were named based on two criteria: having 10 or more attorneys in the firm and one-third of those attorneys achieving AV Preeminent^® Peer Review Ratings. Forbes, The American Lawyer and Corporate Counsel considered more than 254,000 law firms across the country, but less than one-half of one percent of that group made the list.

An AV Preeminent^® Peer Review Rating indicates that a lawyer has been deemed by his or her peers as having demonstrated the highest level of ethical standards and legal ability. Sixteen of Stein Sperling's attorneys have achieved AV Preeminent status, including 12 principals (Millard Bennett, David  De Jong, Jolie Deutschman, David Driscoll, Ann Jakabcin, Alexia McClure, Jeff Schwaber, Karen Shapiro, Don Sperling, Paul Stein, David Torchinsky and Steve Widdes) and five of counsel (Kevin Fay, Alan Kerxton, Darla McClure and Bill Roberge).

For more information, visit Stein Sperling's Martindale profile online.

Author: Darla J. McClure

Practice Area: Employment Law

Darla McClure publishes MC SHRM Legislative Affairs Update for January 2013.

Owners of Businesses Can Now be Held Personally Liable under the Maryland Wage Payment and Collection Act

The Maryland Court of Special Appeals, in Campusano v. Lusitano Construction, LLC, has just held that an individual owner of a business can be sued personally under the Maryland Wage Payment and Collection Act (the “Act”). The Act is used by many employees to collect wages due and owing to them. In order for the business owner to be held personally liable for these amounts there must be evidence that the owner: (i) supervised and controlled the employee’s work schedule or conditions of employment, (ii) had the power to hire and fire the employee, (iii) determined the rate and method of payment to the employee and (iv) maintained employment records . If an employer is found to have violated the Act, the employee can recover up to three (3) times the amount of the wages owed and his legal fees.

This article is reprinted with permission from MC SHRM.

On January 2, 2013, President Obama signed legislation, allowing the income tax rate, capital gain rate, dividend rate and estate tax rate to rise for certain individuals.

Effective for 2013 returns and indexed for cost of living, individuals with adjusted gross income exceeding $250,000 ($275,000 for heads of household and $300,000 for couples filing jointly) will face a “phase-out” of their ability to benefit from personal exemptions and itemized deductions in determining taxable income. While exemptions are totally lost at $122,500 of additional income over the threshold, the phase-out of itemized deductions is less pronounced and results in a loss of $3,000 of deductions for each $100,000 over the threshold up to a maximum loss of 80 percent of itemized deductions.

Also effective for 2013 returns and indexed in succeeding years, individuals with taxable income exceeding $400,000 ($425,000 for heads of household and $450,000 for couples filing jointly) will pay at a marginal rate of 39.6 percent on income over the threshold, an increase of 4.6 percent. They will pay a 20 percent rate on “qualified dividends” and most long term capital gain instead of the prior 15 percent which remains applicable to individuals and couples in lower ordinary income brackets.

Interestingly, many taxpayers with incomes up to $750,000 will feel little effect from the increase in regular tax liability as their overall obligation will be offset by a dollar for dollar reduction in alternative minimum tax.

However, all individuals with earned income will feel the effect of the failure to extend the 2 percent social security rate cut – those with incomes in excess of $113,700 will pay an extra $2,274 in 2013. Also, as part of the previously enacted healthcare legislation, individuals with adjusted gross income exceeding $200,000 ($250,000 for couples filing jointly) will now generally pay a 3.8 percent Medicare tax on net investment income and an added 0.9 percent Medicare tax on wages and self-employment income over the threshold. Retirement distributions are not considered as investment income for this purpose.

On the estate side, the $5.12 million exemption indexed for cost of living in 2013 and succeeding years remains for estate, gift and generation-skipping tax purposes but with a 40 percent tax rate rather than a 35 percent rate on the excess. Portability of the unused applicable exemption of the first spouse remains available to the surviving spouse for estate and gift tax purposes. However, inasmuch as Maryland and the District of Columbia retain $1 million estate tax exemptions without portability, estate planning with proper documentation should remain a priority.

For business taxpayers, the current annual expensing limitation of $500,000 with a phase-out at $2 million of capital expenditures, 50 percent “bonus” depreciation, an additional $8,000 first year depreciation for vehicles and a 15-year writeoff of qualified leasehold improvements remains through 2013.

If you have any questions concerning the new tax law or have need of tax or estate planning, please call us at 301-340-2020.

In 2012, Stein Sperling contributed to several local charities during the holiday season.

The gift of play

For the third year, Stein Sperling honored friends and clients of the firm by making a donation to the Homeless Children’s Playtime Project. The Playtime Project provides homeless children in the DC Metro Area with weekly activities, toys and opportunities to play and learn, all in a safe place. The Playtime Project describes their mission as “providing one-on-one attention, healthy snacks and access to developmentally appropriate toys and activities designed to reduce the traumatic effects of homelessness on children and to promote learning and joy."

Toys for Tots

In preparation for the firm's annual holiday party, Stein Sperling attorneys and staff collected over 150 toys to donate to Toys for Tots. Toys for Tots’ goal is to “to deliver, through a new toy at Christmas, a message of hope to less fortunate youngsters that will assist them into becoming responsible, productive, patriotic citizens.” Attorneys and staff at the firm compiled enough toys for overflow five four-foot-tall Toys for Tots boxes. The toys were presented to a Toys for Tots Marine at the firm’s annual holiday party.

Stocking Stuffers

Attorneys and staff in the firm’s Estates and Trusts, Business and Tax departments collected supplies to be presented to women living at the Rainbow Shelter in Rockville, Maryland. They stuffed stockings with items such as shampoo, toothpaste and hairbrushes for the residents at the shelter. Rainbow Shelter is an emergency shelter and their goal "is to keep homeless women off of the streets during the winter months. Our clients receive a warm safe place to sleep, a hot dinner, breakfast and a bag lunch, shower and laundry facilities, limited storage space, limited transportation, access to case management, and referrals to local social service and treatment programs."

Practice Area: Estates + Trusts

In developing a comprehensive estate plan that is tailored both to clients’ individual circumstances and expectations, Laura Davisson listens closely and guides her clients through what is often a very personal process. Laura’s primary goal is to get the job done right, accounting for her clients’ needs and delivering value through the development of efficient and effective solutions. She assists individuals and families with all aspects of estate and trust planning, including use of trusts for the next generation, charitable gift planning and estate and trust administration.

Prior to joining Stein Sperling, Laura interned with the Office of Tax and Revenue in Washington, D.C. After graduating from law school, she worked as Assistant General Counsel for the South Carolina Department of Labor, Licensing and Regulation. She also worked as a law clerk focusing on estates and trusts with law firms in South Carolina and Washington, D.C.

Away from the office, Laura enjoys spending time with her husband and family, volunteering within her community and exploring the many beautiful nearby areas, often utilizing the local network of bike trails.

• Admissions + Certifications

  South Carolina

• EDUCATION

  Clemson University (B.S., cum laude, 2006)

  University of South Carolina, School of Law (J.D., 2009)

  Georgetown University Law Center (LL.M., Taxation, Estate Planning Certificate, with distinction, 2012)

  CALI Award Recipient in Taxation of Property Transactions

Authors: Micah A. Bonaviri, Caroline Ford Bonaviri

Practice Area: Estates + Trusts

Why Young Physicians Can’t Afford to Delay Estate Planning

by Micah Bonaviri, Esq. and Caroline E. Ford, Esq.

As a young physician, your focus on developing your career and building your practice has likely kept you from considering the importance of having an estate plan.

Many people think that to have an estate plan, you literally need to have an “estate” (i.e., significant wealth). On the contrary, every individual – wealthy or not – needs an estate plan. Typically, such a plan often includes the following:

• Will (or Revocable Trust)
• Durable Power of Attorney
• Advance Medical Directive
• Sample Beneficiary Designation Language for your Insurance Policies and Retirement Accounts (including IRAs)

A Will allows you to direct the manner in which you want your assets to pass upon your death. Specifically, you can ensure your assets pass to your loved ones in a way you determine is best. If you have children under age 18, a Will also allows you to designate a guardian for those children. Additionally, in the event you and your spouse pass at a time when your children are young, you may want to keep assets in trust for those children. These types of provisions can easily be incorporated into a Will.

Unlike a Will, your Durable Power of Attorney and Advance Medical Directive are applicable during your lifetime. A Durable Power of Attorney authorizes an agent to manage your financial affairs (usually when you are unable to do so). An Advance Medical Directive allows you to designate a health care agent to make health care decisions for you when you are unable to do so. Also, you can give specific directions to your health care agent about the manner of treatment you would like in certain situations, such as the type of life-sustaining treatment you would or would not like.

Some assets, including insurance policies and retirement accounts, do not pass by your Will but instead pass to designated beneficiaries. It is important that your beneficiary designations for your insurance policies and your retirement accounts are coordinated with your estate plan. For example, if you have minor children you may want to allocate a child’s share to a trust created under the terms of your Will. Also, you should be aware that with retirement assets, the beneficiary designation must be worded properly to avoid negative income tax consequences for your beneficiaries.

Establishing an estate plan also allows you to contemplate a concern that is particularly close to a physician’s heart – asset protection. As a physician, your chosen profession may make you more vulnerable to creditors. In many states, including Maryland, a married couple can title their real property as “tenants by the entirety.” This form of ownership will protect the couple’s real property from a creditor of one spouse. Moreover, if asset protection is a legitimate concern for you, you may want to incorporate certain types of trusts into your estate plan. Generally speaking, an irrevocable trust provides valuable asset protection.

Throughout your lifetime, your estate plan may change. For example, under federal and Maryland law, your estate becomes taxable once your assets exceed a certain amount. Therefore, as your personal wealth grows, it may increase the need for further tax planning as part of your overall estate plan. Regardless of your wealth, an estate plan is prudent for every individual, particularly for a young physician.

Micah Bonaviri is an attorney with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. As a member of the firm’s estates and trusts department, Micah guides individuals and families as they consider wealth preservation, succession planning and charitable gift planning techniques. He also assists with estate and trust administration.

Caroline Ford is an attorney with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. As a member of the firm’s estates and trusts department, Caroline regularly assists clients with all aspects of estate and trust planning, including wealth preservation, succession planning, charitable gift planning and estate and trust administration.

Practice Areas: Business Law, Civil Litigation, Criminal Law, Employment Law, Estates + Trusts, Family Law, Injury Law, Real Estate Law, Tax Law

In its 2013 edition, Maryland Super Lawyers recognized 22 of Stein Sperling's attorneys.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

Nine Stein Sperling attorneys were recognized as Super Lawyers, including principals Fred Balkin, Millard Bennett, David De Jong, Jolie Deutschman, David Driscoll, Ann Jakabcin, Jeff Schwaber, Paul Stein and Steve Widdes. David De Jong, Jeff Schwaber and Steve Widdes were listed listed among the Top 100 attorneys in Maryland. Ms. Jakabcin, co-chair of the firm's estates and trusts department, was listed among the Top 50 Women attorneys in Maryland.

In addition, the publication awards its Rising Star designation to the top 2.5% of young lawyers in the state, by practice area.In addition to its nine attorneys named to the Super Lawyers list, Stein Sperling recognizes its 2 principals, 3 senior counsel and 8 associates named to the Rising Star list. They are Monica Harms, Karen Shapiro, Ivonne Lindley, Mary Lombardo, Deanna Peters, Ron Bolt, Micah Bonaviri, Casey Florance, Caroline Ford, Jamie Hertz, Diego Rojas, Eric Rollinger and Andrew Schwartz.

Author: Darla J. McClure

Practice Area: Employment Law

The I-9 Form Expired. What Do I Do?

For right now you do nothing. We have been advised that there are possible changes being made to the latest version of the I-9 Form which expired in August of this year. Unfortunately, we have yet to see a new form or a renewal date posted on the current form which typically happens. For right now, continue to use the latest version of the I-9 Form and keep checking the website for updates.

This article is reprinted with permission from MC SHRM.

The Maryland Comptroller’s office has recently expanded its efforts to enforce consumer use tax compliance by requesting that Customs authorities relay information on the declarations of residents re-entering the country after travel abroad.

Many people do not realize that every purchase of taxable goods and services, whether in person or over the internet, is subject to either sales or use tax. Sales tax applies to purchases within the State, while the use tax applies to purchases out of the State to be used within. If sales tax is paid on an item, no use tax is due. Further, if the consumer pays sales tax in another State, use tax applies only to the difference between the sales tax rate paid in the other State and the rate in the consumer’s home state.

The Maryland rate is 6 percent or, in the case of alcoholic beverages, 9 percent. Online-only vendors such as Amazon.com, which do not have a physical presence in Maryland, are not legally required to collect Maryland tax on purchased goods in which case the obligation to report and pay the use tax falls on the consumer.

Unlike other States such as Virginia, Maryland does not have a line item on its income tax return form where residents can report and pay use tax. Instead, Maryland residents are obligated to file, on a quarterly basis, a Consumer Use Tax Return for Out of State Purchases, on Form ST-118A (or ST-118B in the case of alcoholic beverages). Use tax returns are due on the 20th day of the month following each reporting quarter. The compliance level is believed to be low.

Congress is considering legislation under its authority to regulate interstate commerce that would require most internet marketers, among others, to collect use tax for all states into which they send taxable merchandise.

This note focuses on the consumer aspects of the use tax. There are numerous other sales and use tax issues that may be relevant to business operations. If you would like to meet with one of our tax attorneys to discuss how the sales and use tax affects you or your business, or if you need assistance with any other federal or state tax matter, please call us at 301-340-2020.

Tax Law at Stein Sperling

Stein Sperling’s tax law attorneys counsel clients on the intricacies of business and personal taxes in order to minimize tax liabilities. Each of our tax law attorneys holds either a Master of Laws degree in Taxation or is a Certified Public Accountant (CPA) or both. We participate in programs that allow us to stay on top of the rapidly changing world of tax laws, regulations, cases and rulings. We decode the tax talk and carefully guide our clients, helping them understand the big picture tax implications and tailoring strategies that benefit their short- and long-term objectives.

Author: Darla J. McClure

Practice Area: Employment Law

The NLRB Strikes Again!

Employers typically include in their employee handbooks or in the acknowledgement form that “the at-will status of an employee cannot be amended, modified or altered in any way” or that “only a written statement signed by the President can alter the at-will status of the employment relationship.” The National Labor Relations Board (“NLRB”) believes that these statements violate an employee’s Section 7 rights of the National Labor Relations Act (“NLRA”) to engage in protected concerted activity. An employee could reasonably interpret such clauses to mean that no changes to the at-will employment relationship are permitted, even in situations where an employee collectively bargains through a union representative. Employers are going to be required to strike a balance between protecting themselves against oral and written representations which could be construed as promises of continued employment for a specified period and not running afoul of the NLRA.

This article is reprinted with permission from MC SHRM.

With the Republican party failing to gain a complete sweep of the White House and both houses of Congress in the recent election, it is now reasonably certain that President Obama’s healthcare reform legislation enacted in 2010 will not be repealed and remaining provisions will come into effect as scheduled. Earlier this year, the U.S. Supreme Court determined that the Act was constitutional.

While the provision expanding family health insurance coverage until a child reaches age 27 has already taken effect and the “shared responsibility penalties” for businesses and individuals aren’t in place until 2014, a 0.9 percent hike in portions of the Medicare tax is less than two months away for both employees and self-employed individuals with higher incomes. Not applicable on the employer portion of Medicare, the increase affects unmarried individuals to the extent of wage and SE income over $200,000 and married couples to the extent of combined wage and SE income over $250,000.

Additionally, filers with higher incomes will be paying the Medicare tax at the 3.8 percent rate on certain investment income. The tax will be applied to the lesser of “net investment income” or modified adjusted gross income over a threshold amount of $200,000 for unmarried individuals and $250,000 for married couples. Retirement distributions and tax exempt interest are specifically excluded from the definition of net investment income. However, the definition includes other interest, taxable dividends, rents, royalties and capital gains. It also includes flow through income from S corporations, partnerships and LLCs which are passive activities to the taxpayer. Flow through income from S corporations in which the taxpayer materially participates will escape Medicare taxation, falling outside of both this provision and the Medicare tax on self-employment income

If the Medicare tax on investment income is combined with a possible 5 percent increase in the dividend and general capital gains rate, this could mean a potential tax increase of 8.8 percent on these types of income for some individuals. Fortunately, in some situations, proper planning may alleviate this additional tax. For example, if you sold investment property or business interests this year with payment over time, it may be advantageous to elect out of installment sale treatment for tax purposes and pay the full tax with your 2012 tax return.

The healthcare Act contains many other provisions including one reducing elective deferrals for medical reimbursements under a cafeteria plan to $2,500 effective 2013. If you would like to meet with one of our tax attorneys to discuss how these changes in the tax law affect you, or if you need assistance with any other federal or state tax matter, please call us at 301-340-2020.

Tax Law at Stein Sperling

Stein Sperling’s tax law attorneys counsel clients on the intricacies of business and personal taxes in order to minimize tax liabilities. Each of our tax law attorneys holds either a Master of Laws degree in Taxation or is a Certified Public Accountant (CPA) or both. We participate in programs that allow us to stay on top of the rapidly changing world of tax laws, regulations, cases and rulings. We decode the tax talk and carefully guide our clients, helping them understand the big picture tax implications and tailoring strategies that benefit their short- and long-term objectives.

Author: Casey Weinberg Florance

Practice Area: Family Law

Special Considerations for Divorcing Physicians

by Casey Weinberg Florance, Esq.

Divorce is a daunting prospect for anyone, particularly for an already busy physician. The process can be lengthy, as well as both emotionally and financially draining. This article serves as a primer on the major non-child-related legal issues that often arise during the dissolution of a marriage in Maryland. While divorce can be difficult or even taboo to consider, let alone discuss publicly, there are important topics any physician must consider when examining his or her options for ending a marriage.

Grounds for Divorce. In Maryland, you have to be eligible to be granted a divorce before you can file with the Court seeking one. There are several grounds for an absolute divorce, which often become hotly contested in a litigated case. The most common, and the only “no-fault” ground for absolute divorce available in Maryland is the one-year separation. To be granted an absolute divorce on this ground, the parties must live in separate homes for 12 consecutive months, without sexual relations, and with no reasonable hope of reconciliation. When a couple decides to separate and is able to resolve their case by agreement, they typically agree to a 12-month separation, which is the easiest way to procure an absolute divorce from the Court.

Another commonly-sought ground for divorce is adultery. If the wronged spouse can prove adultery, by showing that the other spouse had the “opportunity” and the “predisposition” to commit adultery, the Court can grant a divorce without any waiting period. Other grounds for divorce include desertion, as well as cruelty of treatment and excessively vicious conduct. There are two types of desertion under the Maryland statute, and for either there must be at least 12 months of separation, without sexual relations, and without any hope of reconciliation. Cruelty of treatment and excessively vicious conduct require proof that the abusive conduct rises to a level that renders the continuation of the marriage impossible. Insanity and conviction of felony or misdemeanor of one party are also grounds, although rarely utilized.

Marital Property. Maryland statute defines marital property as all property acquired during the marriage, no matter how titled. Specifically excluded from marital property is inheritance or gifts from third parties (other than your spouse). For many people, the family home is the biggest asset and, if purchased during the marriage, is almost always considered marital property.

Additionally, your ownership interest in your medical practice may be marital property, depending on when you started or joined it. If you started your practice prior to the marriage, then any increase in the value of your ownership interest in the practice that took place during the marriage may be considered marital property. If you started your practice after your marriage began, then it is likely that the entire value of your interest is marital property, with some exceptions. In either scenario, a certified business valuation expert will need to value your practice in order to ascertain the value of your ownership interest in the practice, and the marital portion of that value (if not the entire value). If you do not have an ownership interest in the group where you practice, then there will be no need to value the practice.

Retirement assets, pensions, investment portfolios and liquid accounts are also marital property, to the extent monies were earned or saved during the marriage. Vehicles and other personal property acquired during the marriage are marital property, too.

In a divorce case, the court is required to identify what marital property exists between the divorcing parties, to determine the value of all marital and non-marital property, and to then make a monetary award if it is necessary to adjust the equities between the divorcing parties.

Alimony. Alimony, or spousal support, is driven in large part by each spouse’s income and financial status, their needs and their ability to be self-supporting. Maryland’s public policy is clear that rehabilitative alimony is preferred over indefinite alimony. Rehabilitative alimony is designed to give the spouse in need enough support to get him/herself into a position to be self-supporting. Indefinite alimony is only called for in cases when, after the spouse in need has made all efforts possible to become self-supporting, his/her lifestyle is still unconscionably disparate from the financially dominate spouse’s, or in the case where the spouse in need is unable to work or become self-supporting because of age, illness or infirmity. The statute requires the Court to look at a multitude of factors in considering alimony, some of which have to do with the factual background of the marriage; however, Courts generally boil down an alimony analysis to each spouse’s financial situation, and a determination about what the financially dominant spouse can afford to pay, and what the financially dependent spouse really needs in order to live. The length of the marriage and the age of the parties are also important factors the Court will consider.

Attorneys’ Fees. Many clients assume that if they are the financially dependent spouse, then the Court will require their financially dominate spouse to foot the bill for the divorce and pay for all of their attorneys’ fees. This is rarely the case. The Court is required by statute to perform an in-depth analysis when it comes to a decision about attorneys’ fees, including a review of each party’s financial resources, needs and ability to pay for his/her own fees and the other party’s fees. In short, if the other party does not have a “pot of money” to pay your fees from, you are unlikely to be awarded attorneys’ fees. If the other party does have a “pot of money,” but so do you, then you are similarly unlikely to be awarded your fees. If neither party has a “pot of money,” then each will likely have to pay his or her own fees. There are many circumstances where fees are awarded, but it is by no means a guarantee.

Casey Weinberg Florance is an attorney with Stein Sperling Bennett De Jong Driscoll PC, a Rockville, Maryland-based law firm with offices throughout the Washington, D.C., metropolitan area. As a member of the firm’s family law department, Casey diligently guides her clients through emotionally stressful legal matters such as divorce, custody, domestic violence, property distribution, child support and alimony.

Stein Sperling is proud to be a sponsor for the Montgomery County Women’s Bar Foundation 12th Annual Preparing for Success seminar. The all-day seminar will be held at Montgomery College on Saturday, November 17, 2012, from 10:00 a.m. to 4:00 p.m. Designed for high school girls who plan to attend college or enter the workplace, the program covers a variety of topics including “How to get a job and keep it,” “Community College and beyond” and "Online Safety." This year, there will be special parent sessions that include information on understanding the Free Application for Federal Student Aid (FAFSA) and safety for teenage daughters.

Stein Sperling is proud to announce that Paul Stein has been selected as a winner of The Daily Record’s 2012 Leadership in Law Award. He will be recognized at the publication’s annual awards ceremony on Thursday, November 15 at the Hotel Anne Arundel in Hanover, Maryland.

Mr. Stein is a founding principal of Stein Sperling and the co-chair of the firm’s family and criminal law departments; concentrating his practice in the areas of criminal defense, complex contested family law matters and estate litigation. He also serves as an adjunct professor in the Trial Practice Program at American University’s Washington College of Law. Mr. Stein is an elected fellow to the American College of Trial Lawyers and is board certified as a civil and criminal trial advocate by the National Board of Trial Advocacy.

The Daily Record created the Leadership in Law Awards program in 2000 to recognize outstanding professional achievement, community service and mentoring within Maryland's legal community. “To be considered for The Daily Record’s Leadership in Law Awards, individuals must have devoted time and energy to bettering the legal profession as well as the communities in which they live and work. They also must have mentored future professional and community leaders,” said Suzanne Fischer-Huettner, publisher of The Daily Record. “We applaud Mr. Stein for embodying all of those characteristics.”

Andrew Schwartz and Eric Rollinger will present "Partnership Buy-Ins/Buy-Outs: What Young Physicians Need to Know" to the Montgomery County Medical Society young physicians and guests as part of their Practice Success Series.

Co-ownership is like a marriage—it is a long-term relationship that requires a lot of work, communication, dedication and perseverance. If the buy-in is not planned and written well, it could lead to an unhappy divorce. If the buy-out is not done fairly, it could leave both parties in uncomfortable positionsand with hard feelings. It is therefore critically important to get the best legal advice in drafting the buy-in and buy-out agree-ment in order to protect the financial interests of all parties:the practice, incoming partners, and outgoing partners. Also, we will discuss all the relevant insurance products to protectyou and the practice. Learn all the right questions to ask at this important session.

Stein Sperling is pleased to announce that Laura Davisson has joined the firm as an associate.

Ms. Davisson is the newest member of the firm's Estates and Trusts department where she will concentrate on all aspects of estate and trust planning, including use of trusts for the next generation, charitable gift planning and estate and trust administration.

Prior to joining Stein Sperling, Ms. Davisson worked as Assistant General Counsel for the South Carolina Department of Labor, Licensing and Regulation. She received her J.D. from University of South Carolina, School of Law and an LL.M. from Georgetown University Law Center.

David De Jong and Don Williamson, Director of the M.S. Taxation Program at American University, will update attendees on developments in corporate and partnership taxation. Specifically, they will discuss how changes in the last 12 months affect corporations, partnerships and other businesses. This course, sponsored by CPE Update, will provide attendees with 4 CPE hours of credit.

Dave De Jong, along with Craig Bell, will be presenting "Hot Topics in Multi-State Taxation" as part of a CPE Update course. This intermediate level course will provide attendees with 4 CPE hours of credit.

Ann Jakabcin will be presenting "Integrating Retirement Plans into an Estate Plan" as part of a CPE Update course.  This intermediate level course will provide attendees with 4 CPE hours of credit.

Dave De Jong will be presenting "The 50 Best Tax Planning Strategies & Loopholes" as part of a CPE Update course.  This course is an intermediate level and will provide attendees with 4 CPE hours of credit.

Steve Widdes will present "Irrevocable Life Insurance Trust" at the Maryland State Bar Association's Basic Estate Planning CLE course.  Other topics that will be covered at the seminar include credit shelter planning, marital deduction planningand lifetime gifts.