Ruth Brooks graduated cum laude from Illinois College with a Bachelors of Arts Degree in Political Science and English Literature. After obtaining her bachelor’s degree, Ruth spent one year working for AmeriCorps, where she focused on promoting education for low-income/high-risk youth in her community. Ruth went on to attend Southern Illinois University School of Law, graduating with a specialization in Business and Transactional Law. While attending law school, Ruth served as the Managing Editor for the Southern Illinois University Law Journal. Additionally Ruth served as a judicial law clerk for the Jackson County Circuit Court of Illinois. Ruth recently moved to Tennessee, and now resides in Johnson City. Email Ruth at: RBrooks@RatliffLawFirm.com
Friday, September 11, 2015
Friday, July 24, 2015
Tennessee is a great state to live in for multiple reasons, one of which is a favorable estate tax. In 2015, estates below five-million dollars will not be subject to a state-level estate tax. Without a change in legislation, Tennessee will not have an estate tax beginning in 2016. If you moved to Tennessee and have a will or trust created in another state now is the time to have your documents reviewed by a licensed Tennessee attorney. Many times it is logical to have your documents reflect your new domicile because it is where you live and it is likely that most, if not all, of your assets are now in Tennessee. Moreover, if you have accounts located outside of Tennessee sometimes it is best to relocate your accounts to Tennessee to take full advantage of our tax laws. Taking care of this process now is usually much cheaper than doing so after the fact. In some circumstances, Tennessee statute allows for a trust modification even after the trust settlor dies. In general, this requires drafting a petition to modify the trust, providing notice the beneficiaries, and a hearing in front of a judge. If your current estate documents are older than five years, contact our office to ensure your desires are still accomplished in an efficient manner.
This is not intended to be legal advice and does not form an attorney-client relationship with any reader.
Friday, July 10, 2015
On June 25, the Supreme Court gave PPACA its second major victory in court, ruling in a 6-3 decision that Federal Exchanges could issue subsidies to qualifying individuals. (See our old King v. Burwell post for more info on the facts of the case.) While this case is an immediate victory for PPACA with a colossal impact on the health care industry, it does set a legal precedent that chips away at the power of the presidency.
Essentially, this case confirms that PPACA is likely here to stay. All states can rest assured that their exchange may continue issuing subsidies that help certain participants pay their premiums—regardless of whether that exchange is federally-facilitated or state-run. Employers need to focus on compliance efforts and preparing to file information reporting to the IRS in early 2016. Employers must determine if they are an applicable large employer, which employees are full-time according to the regulations, whether they are offering proper coverage under PPACA, and whether they are operating at full compliance with document and record-keeping requirements. Specifically, Applicable Large Employers must submit an IRS Form 1094-C and IRS Form 1095-C to the IRS as well as provide the same notice to full time employees by early 2016, all concerning their 2015 plan year. Keep in mind that if you are an applicable large employer, whether you are assessed a penalty next year depends on your benefits strategy starting January of 2015. Employers who may have been delaying compliance, waiting to see if the law would be repealed, cannot afford to delay compliance any longer. Ratliff Law Firm stands ready to assist businesses with questions about this law.
Looking to the future and the long term legal implications of this ruling, one can observe a further step away from courts giving deference to agencies. Ultimately at issue was an IRS rule which stated “Exchange means … whether the Exchange is established and operated by a State (including a regional Exchange or subsidiary Exchange) or by HHS,” (45 CFR §155.20; see also 77 Fed. Reg. 30378 (2012)) in light of the statute, IRS §36B(b), which ties premium amounts to premiums “which were enrolled in through an Exchange established by the State.” [emphasis added].
So the question goes, can non-state-established exchanges grant subsidies? (yes)
When the court judges whether agency regulations are valid interpretations of the law, they traditionally give deference to the agency under the Chevron doctrine. Indeed, the lower courts in this case affirmed the IRS rule under the Chevron deference precedent. What is important here and interesting about this case is that the Court explicitly stated that it would not give any deference to the IRS regulation, deciding for itself whether the regulation was a valid interpretation under statute:
“When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron, 467 U. S. 837. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable. Id., at 842–843. This approach ‘is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.’ FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000). ‘In extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.’ Ibid….
This is one of those cases….
It is instead our task to determine the correct reading of Section 36B.” [emphasis added]
Legally, this is a significant limit on how much deference courts will give agencies in interpreting statutes, potentially slowing the reach of administrative agencies in the future. For more information on this observation, see A Catch in PPACA’s Court Ruling by Cass R. Sunstein.
This is not intended to be legal advice and does not form an attorney-client relationship with any reader.
Friday, June 12, 2015
As we near the halfway point in the year, it is important to remember that the Affordable Care Act (“ACA”) is in full effect. Some companies are “banking” on the Supreme Court’s decision in King v. Burwell to severely limit the employer mandate, but what if they don’t? If anything is true it is that awaiting the government to do anything (besides tax and spend) is a bad idea. This is not a situation where you should adopt a wait and see approach. Without even considering the ACA penalties, let’s look at another type of severe penalty. By not having proper documentation when the IRS or the Department of Labor come knocking on your door with an audit you are setting yourself up for massive fines. Some Employee Retirement Income Security Act (“ERISA”) penalties are $110 dollars per day….per incident….per employee. For example, you have 100 employees and you were not compliant for just a single day. The noncompliance effects all employees and you receive a letter that you are being audited. $110 penalty multiplied by 100 employees and just for the single (1) day is $11,000 in penalties for single day. Unless your business wants to send Uncle Sam a check for $77,000 per week for every week of the year (if noncompliant for a year), I recommend getting your house in order before the next year. Ratliff Law Firm can help you become compliant in the event of an audit and can also help you comply efficiently with the ACA.
This is not intended to be legal advice and does not form an attorney-client relationship with any reader.
Friday, May 22, 2015
Friday, May 1, 2015
Clients often ask where they should keep their planning documents. While there is no one answer to this question, common places include a safety deposit box at a bank, a safe, or even a filing cabinet where other important documents are kept. The most important fact is that your loved ones need to be able to locate your will after you have passed away.
When you probate a will, your loved ones need to find the original, signed document. As explained briefly below, probating copies of a will (when the original is lost) is a tedious, expensive and often unsuccessful process. This is because Tennessee law presumes that a lost will has been revoked by you, absent evidence to the contrary. Since you are no longer around to explain what happened, the law presumes that the reason your loved ones cannot find your will is because you didn't want them to. It is not enough for your loved ones simply to offer a copy to probate, they must offer evidence sufficient to overcome the presumption that you revoked your will, often demonstrated by details such as by showing that you did not have the custody and control of the instrument after its execution; that you had lost your testamentary capacity for a period before your death; that the will was in existence at the time the mental alienation occurred (see In re Estate of Leath, 294 S.W.3d 571, 575 (Tenn. Ct. App. 2008)).
Imagine the frustration your loved ones will feel when they know you signed a will—they may even have a copy of it! But because the original cannot be found, your estate will pass by intestacy or by your previous will. It is possible that simply because the will is lost, different individuals will receive parts of the estate.
So if you want to avoid the costly process of proving a copy of a will, ensure that your loved ones can find it after you pass away. This can be accomplished by simply letting your executor, attorney, or any other trusted friend know where you keep your documents. Additionally, if you keep your documents in a safe, make sure your loved ones know how to access the safe. Similarly, granting access to bank safety deposit boxes can prevent the hassle of your loved ones having to go before a judge to get a court order to drill a safety deposit box after you have passed away.
Planning ahead with simple steps such as these will help your loved ones avoid major headaches after you have a passed away.
Thursday, April 9, 2015
March Madness is a glorious time of year for most American’s. We all, albeit unsuccessfully, fill out our brackets with the hopes of winning our office pools, sometimes cheer on the underdogs even though it would be a bracket buster just because they deserve to win, and we enjoy the quality company of our family and friends, which is most important. A story emerged a few days ago that legendary coach, Dean Smith, left each of his varsity letter players $200 for “dinner out”. What a nice jester. An important lesson can be learned from this nice gift. It does not take a large sum of money to make large number of people smile. $36,000 worth of checks were sent to the 180 varsity letter players during his over three decade career at the University of North Carolina at Chapel Hill.
While $36,000 is a large amount to handout, the joy of spreading that to 180 past varsity players is the crux of this story. Estate planning is a great opportunity to make people smile. The amount does not need to be large, but the thought is what counts. Coach Dean Smith could have easily forgotten about the players he coached but, because of the bequest, great memories are revived for the 180 varsity players. Basic estate planning is a great opportunity to direct how items from your estate will be directed once you pass. This is not limited to money, but also personal belonging such as photos, family heirlooms, jewelry, etc. To take care of your basic or complex estate planning needs, contact Adam Bullock with Ratliff Law Firm today at (865) 932-3441 ext. 706.
Friday, March 27, 2015
An estate plan is one of the most important set of legal documents for a family to consider. Many individuals draft these documents and think they are set for life. However, over time, situations change; there are new people in their lives, some friends and relatives slip away, children become adults, their business outgrows their expectations, or simply their preferences change. Below is a list of items that will affect your estate plan. If you answer yes to any of the questions below it is likely your situation has changed too, and your estate plan should be reviewed.
- Have your beneficiaries changed? Since your plan documents were drafted do you have more children or grandchildren or has anyone’s marital status changed?
- Have your assets changed? Have you bought or sold a home or other personal property or has the value of any of your assets changed since your plan documents were signed?
- Has there been any change in your business? Has your business changed in size or value? Do you have new partners? Has your business incurred new debt?
- Are there any assets that you have not transferred into your Trust?
- If you have a Living Trust, are the Medicaid triggers in place to ensure that Medicaid planning will start at the appropriate time?
- Has your health changed? If there has been a significant change in your health you may need to make changes to ensure that medical and health care expenses are covered.
- Has the person you named in your plan as your Power of Attorney, Executor or Trustee had their health decline, moved or has your relationship with them changed since drafting your plan? Are they still the right person for the job or do you want to appoint someone else? Does this person have their own estate plan?
- Are there any charitable gifts that you have not clearly outlined in your plan?
- Has your Estate suffered a disaster? A flood, fire, tornado or hurricane could destroy or decrease the value of your assets or account values have changed, which can cause an imbalance in benefits among beneficiaries?
- Since you signed your plan documents, have you changed your mind about any aspect of your plan?
Again, an estate plan is not something you complete once and forget about until your death. Different stages in life and situations require updates to your documents. An estate plan is something that grows with you and your beneficiaries and should be evaluated periodically to ensure your final decisions provide for your beneficiaries as you did in life. If you are unsure whether or not your plan needs updating please contact Ratliff Law Firm at 865-932-3441 to discuss your circumstances.
Friday, March 20, 2015
As the cost of health insurance soars many businesses are looking for solutions to help offset the overall cost of health insurance. According to a recent article, over 82 percent of businesses with at least 500 employees self-fund their healthcare insurance compared to less than 30 percent of employers with under 500 employees. However, the trend of those under 500 employees self-insuring is on the rise. Self-insuring is not a new idea or concept and with the Patient Protection and Affordable Care Act ("PPACA"), it makes sense for a lot of companies to look at this strategy. I recommend looking into self-insuring if you are over or close to 100 employees. Furthermore, even if you were able to provide a minimum value plan at renewal last year this year may be different story.
Due to minimal participation in minimum value plans, the cost of providing these plans to your employees will greatly increase. Buying insurance is like buying eggs from farmer. The farmer will sell you a dozen of eggs for $2.00. However, if you want to buy 100 dozen eggs the farmer will be able to sell you the eggs cheaper. Right now there is a perception going around that the employer mandate is going to "go away", but the fact of the matter is that the employer mandate is the law of the land as of today. You should not bank on the fact that the employer mandate is going to disappear. By beginning to work with Ratliff Law Firm now you will be able to secure your spot for self-insuring and likely receive cheaper rates from third-party administrators ("TPAs"). Waiting until October or waiting until you get your first IRS bill or DOL/IRS audit is NOT what your business wants or needs to do. Self-insuring possibly saves you money, can be better for your employees, and prepares you in the event of audits or IRS bills. Do not delay to see if self-insuring your healthcare insurance can benefit you. For a more in depth conversation on how self-insuring healthcare can benefit you call Adam Bullock at (865) 932-3441 ext. 706.
Friday, March 6, 2015
As we rush headlong into the 21st century, technological advances create new issues when someone passes away. What will happen to someone’s social media presence after they pass? This question has received media attention lately after Facebook announced its new legacy feature in February.
Essentially, Facebook allows you the option of either having your account deleted at your death or memorialized. Choosing to have the page memorialized essentially freezes your account, and the word “Remembering” is added before your name. If you choose to memorialize, you must choose a legacy contact. Your legacy contact is allowed to do things like post messages, respond to friend requests. These posts will not under your name, but the name of your legacy contact. Additionally, your legacy contact cannot log into your account, remove or change past posts, photos and other things shared on your timeline, read messages you've sent to other friends, or remove any of your friends. You can select whether or not to give your legacy contact access to your account’s data archive (e.g. for downloading pictures, old posts, etc.) For more information, see Facebook’s explanation.
Having access to someone’s social media page after they pass away would allow for effective communication of memorial services or other announcements to friends and relatives. Additionally, Facebook serves as the modern day photo-album; having access to a Facebook page after death allows loved ones to download cherished family photos. While this feature is an improvement, there are still certain shortcomings. For example, as of the date of this post, it is not possible to name a Legacy contact who is not on Facebook.
Social media creates new issues for estate planning. For example, say someone names one person a legacy contact for their Facebook account, and a different person as their personal representative under that person’s will. It is an interesting question at this point who would have greater authority to control decisions related the Facebook account: the legacy contact or the personal representative? On Facebook’s page explaining the data archive they state, “Facebook may provide access to this type of information [old messages, photos, etc.] in response to a valid will or other legal consent document expressing clear consent.” How Facebook interprets as ‘clear consent’ in a will or other document may certainly prove to be a heated issue in coming years as access to Facebook accounts become a bigger and bigger part of people’s lives.
You should investigate your own estate planning documents to see if social media is adequately addressed. As social media becomes an ever increasing portion of our lives, it accordingly affects of our estates. Proper estate planning will address these issues.
Friday, February 13, 2015
Tennessee allows Community Property Trust (“CPT”) and has since 2010 when the legislature passed the Tennessee Community Property Trust Act of 2010. The advantages of having a CPT, especially if you are a business owner, are great. Essentially, the CPT allows you to pass on your business on to loved ones without a significant (or sometimes any tax burden). For example, Mom and Pop Sporting Goods Store (worth $4.5 million) has been in business for 50 years and they come to see me about their estate planning. One of their main goals is to pass the family business on to their children with as little taxes as possible. One option I let them business owner clients know about is a CPT for them together and both executing separate Revocable Living Trusts (“RLT”). The purpose of the CPT is when the first spouse dies, the other spouse will receive the business on step-up basis. That said, the icing on the cake is that when the second spouse dies, the beneficiaries also receive a step-up basis. This is outstanding news for small and large business owners alike. Proper estate planning should not be delayed. Contact me, Adam M. Bullock, at Ratliff Law Firm to secure peace of mind for your loved ones. firstname.lastname@example.org or (865) 932-3441 ext. 706.
Tuesday, January 27, 2015
President Obama laid out his proposed agenda in last week’s State of the Union address. Among the many initiatives his administration is proposing, the most significant to estate planning are the tax increases.
The President proposed eliminating what Michael Kinsley called the “Angel of Death” loophole. Under the current tax code, if you bought stock at $10/share and when you died that stock in your estate was worth $100, no long term capital gain would be owed on the $90 gain in value over your life. If however, the President’s proposal were adopted, the $90 would be taxable at applicable long term capital gains rates.
There would of course be many exemptions and complications, but that is the main idea. For example, the President has proposed an exemption for the first $100,000 of capital gains tax per individual ($200,000 for couples), which would eliminate all but the more wealthy estates. The President is proposing many other tax increases including increasing the top rate for long term capital gains tax and taxing certain 529 plan distributions, among others.
Given that Congress is under Republican control, these proposals aren't expected to be considered. Many interpret this proposal as a way to frame the political debate for the coming elections. However, Congress will do its best to prevent a return to gridlock, and this may prod some action in the tax code. This will be an important conversation to monitor this year because of its potential to significantly affect estate plans.
Update 1/30/2015: The Obama administration has dropped the 529 Plan tax from its proposal. For more information, see David Wessel’s article in the Wall Street Journal.
Friday, January 23, 2015
The latest hurdle for the Patient Protection and Affordable Care Act (“PPACA”) comes on the King v. Burwell decision. The case directly challenges the tax credit both families and individuals receive to, you guessed it, make healthcare more affordable. In a recent poll by The Robert Wood Johnson Foundation two predictions were made: (1) 9.6 million people would lose coverage if the tax credit disappears after the King decision; and (2) the total number of people who are both uninsured and nonelderly would increase to 8.2 million. Dan Cook, King ruling would reach beyond subsidies, benfitspro.com, January 23, 2015,
So why is this a big deal for everyone? Insurance premiums are generally based on the number of people in the pool. Think of insurance like buying pens for the office. If you call the office supply company and want order one pen it could be a $1.00. However, if you agree to order 500 pens the cost per pen could be reduced to 50¢. It all has to do with the number of people in the pool. Less people in the pool means higher premiums for everyone. Higher premiums equal more people, those beyond the cusp of receiving or needing a tax credit, simply will not be able to afford healthcare insurance. Moreover, this equals higher premiums for people and businesses who are able to provide health insurance for themselves and their employees. This cycle could, and may, go on forever. Until the King decision is released, all we can do is speculate.
Friday, January 16, 2015
Financial Advisors and attorneys are the two people everyone trusts the most. Okay you win, maybe not. While this isn't always the case it not only should be, but it must be. Financial Advisors need to consider the long-term benefits of working with a trusted and knowledgeable attorney to care for their clients’ estate planning needs. Clients for both professionals have needs to mutually benefit each other. For example, Financial Advisors should not only be concerned with direct clients and their financial goals, but they need to consider their clients children, grandchildren, charitable giving, tax strategies, and asset protection. Attorneys at Ratliff Law Firm work daily with clients regarding various aspects of law, but some need financial investing advice regarding retirement, annuities, life insurance, long-term care, etc., which we refer to competent Financial Advisors. At the end of the day Financial Advisors and attorneys must work together towards the common goal of client security and happiness. Allowing a client to invest their hard-earned money with no consideration after their death is not very responsible nor client driven. When Financial Advisors and Ratliff Law Firm work together they are able to achieve excellent results for clients. Invest, estate plan, and assets the way you want to without governmental interference.
Monday, January 12, 2015
As businesses begin the new year the one thing on everyone’s mind is healthcare and the costs related to it. It is of utmost importance not to forget the documents that go along with your healthcare plan such as your plan documents. Failure to adhere to these rules open employers up to a $100 fine per day per employee. Please note that this fine stems from the Department of Labor and not the IRS. If an employee asks to see the plan document and one is not in place or if the employer is audited and the plan document is not in place hefty fines will follow.
Of equal importance is understanding that governmental entities such as counties, cities, municipalities, etc., are not exempt from these laws. Further, governmental entities and any business who offers a healthcare plan should contact our offices to ensure they are compliant with these laws. The question is not whether or not you can afford to comply, but rather can you afford not to comply. The $100 penalty spoken of is a separate penalty from the Affordable Care Act (“ACA”) and a penalty under the Employee Retirement Income Security Act (“ERISA”).
Friday, January 9, 2015
A living will is an essential part of any proper estate plan. While a will or a trust deals with the distribution of the estate, a living will is a separate document and serves a completely different purpose. A living will allows you to make the decision whether to be kept alive by artificial means if you have a terminal condition and there is no hope of recovery.
According to the “Tennessee Right to Natural Death Act,”
"Every person has the fundamental and inherent right to die naturally with as much dignity as circumstances permit and to accept, refuse, withdraw from, or otherwise control decisions relating to the rendering of the person's own medical care, specifically including palliative care and the use of extraordinary procedures and treatment. The general assembly further declares that it is in the public interest to facilitate recovery of organs and/or tissues for transplantation and to provide mechanisms for individuals to express their desire to donate their organs and/or tissues.” (T.C.A. § 32-11-102)
Making these decisions through the execution of a living will let your doctor know your desires in the event you have a terminal condition and there is no hope of recovery. Having your living will in place will greatly reduce the risk of inter-family struggles and potential litigation (recall the Terri Schiavo case) because you have clearly explained your desires in a living will.
Friday, January 2, 2015
The Supreme Court set March 4, 2015 as the date for arguments in King v. Burwell. At issue in this case is whether federally facilitated exchanges may grant health premium subsidies. An adverse decision would ultimately eliminate the employer mandate in the 36 states with health exchanges run by HHS. Given that 87% of 2015enrollees on exchanges have been granted subsidies, many think that the future of the PPACA (at least the employer mandate and exchanges) hinges on this case. Just yesterday, 6 states jointly filed an amicus brief arguing that federally facilitated exchanges should not have authority to grant subsidies. With penalties going into effect in a matter of days, most employers have already put compliance measures into effect. This case casts yet another shadow of uncertainty over the implementation of PPACA. For more information, see our earlier post.