How Divorce Impacts How You File Your Income Tax Returns

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A majority of married couples file their tax returns jointly, but what are your options when you are divorced or in the midst of getting divorced?  If your divorce is final by the last day of the calendar year you can no longer file jointly.  In that case, you must file either “single” or “head of household”.   A head of household filing typically allows a party to be taxed at a lower rate, but you must meet the following criteria to claim head of household status: 1. you paid more than ½ of the cost of maintaining your home for the tax year, these expenses include mortgage, taxes, homeowners’ insurance, utilities and food eaten in the home, 2. your spouse did not live with you for the last 6 months of the tax year, 3. your home was the main home of your child, stepchild or eligible foster child for more than ½ of the year and 4. you could claim a dependent exemption for your child.  If you file head of household your spouse must file married filing separately.  Once you are divorced you can file head of household if you pay more than half of the costs of maintaining your home for the tax year and your children live with you more than half of the tax year. 

If you are in the process of getting divorced, you may file jointly.  However this should be agreed upon by the parties in advance and include consultation with both your accountant and your attorney.  Oftentimes professionals advise clients to continue filing jointly because the tax burden is reduced; however this is dependent upon each party’s income, deductions and credits.  The primary disadvantage to filing jointly is that now both parties are jointly and severally liable for any tax deficiencies, interest and penalties.  Your Separation Agreement (or Judgment if your case is litigated and decided by a judge) should address how the parties deal with any tax refunds and/or liabilities.  In the interim, the parties should enter into a stipulation (i.e. agreement) regarding tax indemnification.  Such an indemnification agreement states that one spouse will be liable for any amounts due on previously filed joint returns and protects the spouse who didn’t prepare the return.  While an indemnification agreement is helpful to the spouse not preparing the taxes, if that spouse has concerns about the other spouse’s ability to accurately prepare the tax returns s/he would be better off filing separately.

As for any available dependency exemptions, the Internal Revenue Service (“IRS”) presumes that the parent with primary custody of the child(ren) will claim the exemption for the dependent child(ren) on his/her tax return.  However, most couples share the exemption by each claiming a child or children when there are more than one or alternating the years if there is only one child eligible.  Before deciding if it makes sense to share the exemption equally, first it must be determined that the exemption is beneficial to both parties.  For instance, a high earner may “phase out” from the benefit of the exemption while a low earner may derive no benefit from the availability of the exemption.  Regardless of which parent has the dependency exemption, a parent that incurs medical expenses on behalf of the minor child is permitted to seek a deduction on their tax return for these expenses.

Divorces are difficult, both emotionally and financially, the team at Baker, Braverman and Barbadoro has attorneys available to guide you through all phases of a divorce case. – Lisa Bond.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/07/11/how-divorce-impacts-how-you-file-your-income-tax-returns/

You have been named Executor/Executrix of a Will – What now?

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Although it is still a widely used term, Executor/Executrix is the former name of the position that is now called Personal Representative in Massachusetts. When creating a Last Will a Testament, the Testator/Testatrix, or person creating the Will, must choose one or two trusted people to make sure that their wishes will be carried out. This trusted person is the Personal Representative. If you have been named as the Executor/Executrix in a Will and the Testator/Testatrix passes away, you are now the Personal Representative in charge of the Decedent’s estate; what do you do now?

First you need to determine if there are any probate assets, and if so, the value of those assets. Probate assets are any assets held in the Decedent’s name alone. This does not include any jointly held assets or assets that have contractual beneficiary designations such as a life insurance policy. If there are assets held in the Decedent’s name only, then you will have to file with the Probate Court of the county in which the Decedent resided. What needs to be filed depends on the value of the assets in the Decedent’s name. If the value of the Decedent’s assets is less than $25,000.00 plus one vehicle, then you can file an expedited Probate called Voluntary Administration. If there is more than $25,000.00 plus one car in probate assets, then you must file an Informal or Formal Petition for Probate. The difference between the two forms of filing is the amount of court oversight along the way. The more complicated the situation you find yourself in, or if there is real estate to be sold, you may want to file a Formal Petition.

As Personal Representative, you are responsible for paying the debts of the Decedent when claims are properly filed with the Probate Court. You are also responsible for filing the Decedent’s last Federal and State Income Tax Return, as well as any required Estate Tax Returns.

After one (1) year from the date of death of the Decedent, you can begin to think about closing the estate. This is done by ensuring that all assets that were to be liquidated have been cashed out, all proper claims of debt have been paid, and all items of the Decedent have been distributed to the appropriate people. If these tasks are completed, you can file a first and final account with the Probate Court detailing all the assets that came into the estate, all the debts that were paid out, and how much is being distributed to those taking under the Decedent’s Will. If these tasks are incomplete, you may want to consider filing a yearly account from year to year until the estate can be closed. Your liability to the estate as Personal Representative does not conclude until the Probate Court enters a decree approving your final account.

If you find yourself as the Personal Representative of an estate or if you are a beneficiary concerned about the manner in which an estate is being administered, contact one of the Estate Administration attorneys at Baker, Braverman & Barbadoro, P.C. to get the expert legal advice you need. – Elizabeth A. Caruso.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/06/30/you-have-been-named-executorexecutrix-of-a-will-what-now/

SBA Small Business Loans in a Nutshell

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Many business owners have heard the term “SBA”, particularly in relation to SBA loans, but are unsure of exactly what the SBA is, how it can help small businesses owners and the types of loan programs that the SBA offers. This article will provide an overview of the SBA, an explanation of typical SBA loans, a summary of the three key SBA loan programs and a description of important legal considerations involved in SBA financing.

What is the SBA?

Created in 1953 by President Eisenhower, the Small Business Administration (“SBA”) is an agency of the federal government whose purpose is “to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses”. SBA programs are designed to support small businesses and entrepreneurs by providing access to capital, contracts and counseling. The SBA is governed by an Administrator (who must be confirmed by the Senate) supported by a team of deputy and local administrators. The current SBA Administrator is Linda McMahon, the former co-founder of the World Wrestling Federation (WWF).  Although its loan programs are the SBA’s most visible feature the agency also offers business owners free entrepreneurial development programs through a series of centers, including Women’s Business Centers, the Service Corps of Retired Executives (SCORE) Centers and Veteran Business Outreach Centers. The Massachusetts SBA District has offices offering programs in both Boston and Springfield.

SBA Loans Small Business Loans Quincy South Shore Massachusetts

What is an SBA Loan?

Rather than providing direct capital to small businesses, the SBA partners with lenders (typically commercial banks and credit unions) to guarantee portions of eligible loans against default. By receiving the SBA’s guarantee, the lender has more flexibility to provide loans to small businesses they may otherwise deny as the bank no longer fears 100% exposure if the SBA loan ends up defaulting. As a result, when considering a loan to a small business that is SBA eligible, the lender can have less stringent underwriting requirements, the loan can have longer repayment periods and better interest rates, and the down payment required to purchase commercial property can be reduced. SBA loans can be for up to a maximum of $5 million, although the typical loan is much smaller – $375,000 was the average loan amount in 2016.

It should be noted that the word “small” in the context of “small business” does not mean the business has to be a start-up or be not financially valuable to qualify for an SBA loan. In fact, the restrictions on financial eligibility are quite broad: the business must have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes in the two years prior to applying for financing. For more information on eligibility requirements, visit the SBA’s website: https://www.sba.gov/loans-grants/see-what-sba-offers

  How Do the SBA Loan Programs Differ?

There are three key SBA loan programs: the 7(a) program, the 504 program and the SBA Express program.

  • 7(a) Loans: The most common SBA loan program, 7(a) loans can be used to start a business, purchase a business or assist in the acquisition, operation or expansion of an existing business. They can also be used for equipment or commercial real estate. The SBA can offer guarantees of up to 85% on 7(a) loans under $150,000, and up to 75% on 7(a) loans over $150,000. The typical repayment period on a 7(a) loan is 25 years for real estate, 10 years for equipment and seven years for other business purposes. As of May 2017, the maximum interest rate on a 7(a) loan of more than $50,000 with a repayment term of 7 years or more was 2.25% over the prime rate.
  • 504 Loans: Businesses looking to purchase or refinance commercial property or equipment usually chose the 504 loan program. In the 504 program, the SBA utilizes a Certified Development Company (“CDC”) to partner with the Lender on the loan. Typically, the lender loans the business 50% of the total cost, the CDC funds 40% of the total cost and the business contributes 10% as a down payment. This structure allows for 90% financing (significantly lower than the 20% typically required in a commercial property loan), as well as longer loan amortizations and the option of fixed interest rates. Repayment periods are usually 10 or 20 years and interest rates are correlated with the prime rate for 5 and 10 year rates issued by the U.S. Treasury.
  • Express Loans: The Express loan program offers an expedited process and is a very convenient choice for business looking to establish a line of credit. The maximum amount of an Express loan is $350,000 and the SBA guarantee is 50%. The maximum interest rate for loans over $50,000 is 4.5% over prime (which is significantly higher than a traditional 7(a) loan maximum of 2.25% over prime). The benefit here is the quick turnaround and ability to establish a line of credit.

What are the Legal Issues involved in SBA Loans?

Whenever a business seeks to obtain financing, there will always be a variety of legal issues that will surface. With SBA loans, it is particularly important that the business owner retains an experienced attorney to guide them through the process and ensure that the business owner understands the impact of certain elements of the transaction. Below is a list of some of the key legal considerations:

  • Corporate Records and Authorizations: In order to close and fund an SBA loan, the business will need to provide corporate records certifying ownership of the business, the business organizational documents and structure, and a good standing certificate. The business will also need to produce correct authorizations to show that the transaction is being entered into lawfully by the business. Finally, a legal opinion will need to be issued by an attorney attesting to the good standing of the business entity and due authorization of the documents by the business. Waiting until the last minute to consult with a business lawyer to ensure all of the corporate records and authorizations are in order can significantly delay the closing and funding of the loan.
  • Prepayment Penalties: Depending on the loan program and the lender, the Promissory Note may contain prepayment penalties that would result in a fee if the business owner paid the loan off or refinanced it within five years. Depending on the projected growth of the business, assessing the implications of a prepayment penalty is important.
  • Financial Covenants: In certain SBA transactions, the lender may seek to include particular financial covenants in the Loan Agreement that the business owner must comply with or risk being in default. For example, a “debt service coverage ratio” covenant will require the borrower to have a certain ratio of available liquidity sufficient to cover the annual debts. Recognizing and understanding financial covenants is critical to helping the business stays in compliance with its obligations.
  • Asset Liens: The lender and the SBA will seek to obtain collateral for the loan, which almost always includes a lien on the assets of the business. Understanding and assessing the impact of the asset lien is important as the business plots their growth strategy and may require more credit or seek to purchase additional equipment or real estate in the future.
  • Commercial Mortgage: If the loan is being used to purchase real estate, a commercial mortgage and assignment of leases and rents will be recorded against the property. The business owner must know and comprehend the terms of the mortgage and how the assignment of leases and rents works.
  • Personal Guarantees: All SBA loans require that the principal owners of the business provide a personal guaranty in the event that the business stops paying the loan. Business owners need to understand the implications of a personal guaranty and how it affects their personal finances and credit.
  • Personal Residence Mortgages: In some instances, the business collateral is not sufficient for the lender to agree to make the loan unless the business owners agree to allow a mortgage on their personal residence in favor of the lender. Again, this warrants careful consideration and if the home is owned jointly with a spouse, the spouse will also be required to enter into certain legal documents.

As with any legal transaction, having an experienced attorney review and negotiate the financial documents, evaluate the potential risks and rewards of each aspect of the deal and discuss how the transaction fits in with the growth strategy of the business is invaluable.  The SBA attorneys at Baker, Braverman & Barbadoro, P.C. have represented both business owners and lenders in all manner of SBA loan transactions. Our SBA lawyers are here to guide you through the process and ensure a smooth transaction so that you can focus on growing your business! – Theresa Barbadoro Koppanati.

 

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/06/16/sba-small-business-loans-in-a-nutshell/

Minimize the Pain of Capital Gain

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Many people are vaguely aware that if they sell their primary residence they will get some sort of tax break, however many are not sure what the tax break is, how it is calculated or when it applies.  Given the frequent changes to the rules regarding the taxation of capital gain, particularly in regard to one’s home, it is no surprise that there is confusion regarding this topic.

Capital Gain Tax Attorneys South Shore Massachusetts

Generally when a single person sells their primary residence they can exclude up to $250,000.00 in equity from capital gain (for couples who are married and filing jointly the exclusion is up to $500,000.00).  In other words you do not have to pay any taxes on the first $250,000.00 (again $500,000.00 for married couples) in profit from the sale of your primary residence.  Of course to qualify for this exclusion the homeowner must have lived in the house as their primary residence for 2 out of the last 5 years immediately preceding the sale.  Some complications arise if you have more than one residence or if the property was used as rental property in that time frame.

There is also some confusion as to how exactly the gain portion of the sale is calculated.  Capital gain is the difference between your tax basis in the property and the sale price or fair market value of the property upon disposition.  Your tax basis in real property is your original cost of the property plus the costs of any capital improvements made to the property over the course of your ownership less any depreciation taken on the property on your tax returns.  It is these costs of capital improvements that most people do not track and do not account for in determining their capital gain liability.

In this region, where families own houses for generations and real estate values are skyrocketing, oftentimes your primary residence exclusion will not encompass all of your capital gain.  It is therefore very important to keep track of expenses you have incurred improving the property over the course of your ownership.  For example, both the new roof that was put on in 1970 and the replacement for that roof completed in 2005 are capital improvements.  Oftentimes tracking these expenses is difficult or impossible resulting in an inaccurate and artificially low tax basis in the property.  In that case you end up paying more capital gain taxes than you otherwise would have if you were able to accurately track these costs.

If you are considering selling your property that has appreciated significantly over the years, prepare for your capital gain liability ahead of time.  If you are unable to locate records, contracts, receipts or any other evidence you can find of expenses you have made, such records can be rebuilt with a little extra time and investigation.  This time spent locating or recreating these records will make sure you are not leaving anything out that can increase your tax basis and decrease your tax liability at the end of the year.   Do not let yourself be caught unaware and end up paying more than you need to come tax time.  The tax attorneys at Baker, Braverman & Barbadoro, P.C. are ready to assist you to ensure that you are maximizing your tax savings. – Brandi S. Cerasuolo.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/06/14/minimize-the-pain-of-capital-gain/

Massachusetts Private Employees are Not Entitled to Paid Vacation Time, But If It Is A Benefit Offered By An Employer, Accrued Unused Time Must Be Paid Out Upon Separation

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Although Massachusetts private employers are not required to grant vacation time to their employees, many do as benefit to employment. When an employer decides to offer paid vacation time they must be aware that the vacation time accrued or earned under an oral or written agreement with the employee is treated the same as an earned wage under the Massachusetts Wage Act. Therefore, when an employee separates from his/her employer, the employer must determine how many vacation days are accrued, and unused, and the employer must include the accrued, unused vacation pay in the final payment of wages to the employee. When an employee is involuntarily discharged, this means that accrued, unused vacation time must be paid out, along with any other accrued wage, at the time of termination.

Massachusetts Private Employees are Not Entitled to Paid Vacation Time

Although an employer cannot enter into a special contract with an employee that would have the effect of exempting the employer from having to pay out the accrued, unused vacation time to an employee, the employer may limit its exposure to pay out unused vacation time by implementing a “use it or lose it” policy that requires employees to use all of their accumulated vacation time by a certain date or forfeit all or part of it or by capping the amount of vacation time an employee may accrue or earn. If the employer decides to implement one of these policies to limit its exposure to payout vacation, these policies must be in writing.

Baker, Braverman & Barbadoro, P.C. recommends that employers have a yearly review of its employee handbook to make sure that company policies are compliant with the ever changing laws governing employee earned time. Additionally we suggest that prior to terminating an employee, if there are any question or hesitation as to what is owed to the employee, that you consult an employment attorney to avoid violating the Massachusetts Wage Act, as such violations can result in treble damages. – Susan M. Molinari.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/05/13/massachusetts-private-employees-are-not-entitled-to-paid-vacation-time-but-if-it-is-a-benefit-offered-by-an-employer-accrued-unused-time-must-be-paid-out-upon-separation/

Checkup For Your Docs

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As a litigation attorney at Baker, Braverman & Barbadoro, P.C., I am often asked to review documents after a problem arises with an employee, partner, shareholder, vendor or deceased relative.  More often than not, I am explaining to the client that the documents that will serve to control the path of the litigation are outdated or ambiguous.  Business owners and individuals know what they want to control in their professional and personal lives.  They usually tell their partners, employees or loved ones what their wishes are, but over the course of time the operative documents don’t always match their expectations.  Only when an unexpected event occurs does the problem usually come to light, for example when a partnership or LLC breaks up or becomes dysfunctional; a loved one passes and his or her business is not mentioned in their will; or a key employee leaves and takes a substantial amount of the company’s business with them.  These, and many other scenarios, are common occurrences and should be expected in the course of one’s professional and business lives.  Unfortunately, however, too few of us are prepared for them.

Legal Documents Litigation Attorneys

At Baker, Braverman & Barbadoro, P.C., our corporate, estate planning and real estate attorneys strive to make clients aware of the necessity of having all their important documents up to date.  That way if you have to consult with any of our litigation attorneys, you will not be a victim of your own documents. – Paul N. Barbadoro.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/05/09/checkup-for-your-docs/

Estate Planning Isn’t Just For The Wealthy!

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Everyone over the age of eighteen should have an estate plan, regardless of your net worth. An estate plan consists of documents that control decisions over your person or your affairs if you cannot make those decisions for yourself, or if you pass away. It includes not only the documents that everyone thinks about such as a Will or Trust, but it also includes important documents such as a Health Care Proxy, Power of Attorney, and beneficiary designations.

The wealthy may have a more complex estate plan, but everyone should have the basic documents; Health Care Proxies, Powers of Attorney, and a Will. A Health Care Proxy gives someone trusted the power to make health decisions on your behalf if you are incapacitated. While a Health Care Proxy controls health decisions, a Power of Attorney controls business decisions. A Power of Attorney appoints someone you trust to make financial decisions on your behalf. A Will directs how your assets will be distributed after you pass away.

Estate Planning Isn’t Just For The Wealthy Quincy

Everyone, no matter your level of wealth, should consider the following as part of their estate plan:

  1. Healthcare Proxy and Power of Attorney: Health Care Proxies and Powers of Attorney will save your loved ones time and money in a time of crisis. No one wants to become incapacitated; everyone wants to have control over their own affairs, unfortunately life doesn’t always work this way. Without a Health Care Proxy or Power of Attorney, if you become incapacitated, your family would need to petition the Probate Court in order to make medical and financial decisions on your behalf. Imagine the frustration of going to court multiple times in order to obtain this permission on top of the stress and sadness that your family is already going through due to whatever the circumstances are that led to your incapacitation.
  2. Last Will and Testament: A Will can nominate someone to be the Guardian of your children if you pass away. This is the reason many people have Wills drafted. Without this designation in your Will, the Probate Court will decide who becomes the Guardian of your children. This Probate Court action can lead to fighting among family members who are already grieving. Additionally, a Will allows you to control who will inherit your assets. This is especially important if you are in a long-term relationship, but have not officially married. Pursuant to Massachusetts law, if you pass away and are legally single, your estate would first go to your children, parents, or siblings, in that order. As an unmarried couple, your significant other has no rights to your estate, making drafting a Will to include them vitally important.

If you have any questions about basic estate planning documents, please contact the estate planning attorneys at Baker, Braverman & Barbadoro, P. C. We can sit down with you and draft an estate plan that fits your needs and goals. – Elizabeth A. Caruso.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/04/17/estate-planning-isnt-just-for-the-wealthy/

Massachusetts Appeals Court Decides Burden of Proof for Evergreen Clauses

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The Massachusetts Appeals Court recently analyzed the burden of proof applicable to automatic renewal clauses, otherwise known as evergreen clauses, and concluded that the party seeking to prove performance of the acts required to stop the automatic renewal had the burden to prove compliance with the terms of the contract.  Although the underlying dispute involved a commercial lease, the holding is applicable to any contact containing an evergreen clause.

The landlord and tenant in Patriot Power, LLC v. New Rounder, LLC, Mass. App. Ct. No. 16-P-420 (March 13, 2017), had disagreed as to whether the term of their commercial lease had automatically renewed. The landlord had filed a complaint seeking a declaratory judgment that the tenant had not effectively terminated the lease. The disagreement was purely factual, and the resolution depended on whether the jury believed the tenant’s assertion that it had included a termination letter in an envelope containing other correspondence or whether the jury believed the landlord’s assertion that there was no termination letter in the envelope received from the tenant.

The landlord raised the issue of burden of proof early in the dispute, and a judge concluded that the landlord had the burden of proof because it was the moving party. Executive assistants for each party testified in direct contradiction. The jury was instructed that the landlord had the burden of proof, and the jury returned a verdict in favor of the tenant. The landlord appealed. The Appeals Court reversed the jury verdict and remanded after concluding that the tenant had the burden of proof on this essential issue.

Massachusetts Appeals Court Decides Burden of Proof for Evergreen Clauses

The Appeals Court recognized that the burden of proof in a declaratory judgment action depends on the nature of the underlying dispute, not on the party that initiated the action. Citing a case every Massachusetts law school graduate remembers, Gray v. Gardner, 17 Mass. 188 (1821) (burden of proof for delivery of sperm whale oil), the court concluded that the tenant had the burden to prove performance of the condition that would avoid the automatic renewal. In other words, the tenant was required to prove that the termination letter required by the lease was contained in the envelope that it sent to the landlord during the applicable notice period.

This decision reinforces the principle that parties should understand the requirements for compliance with their contract conditions, ensure full compliance with any conditions, and extensively document any notifications sent to the opposing party.

If you have any questions about evergreen clauses, please contact the business attorneys at Baker, Braverman & Barbadoro, P.C. – Kim Kroha.

 

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/04/10/massachusetts-appeals-court-decides-burden-of-proof-for-evergreen-clauses/

What’s the difference between PIP and Med Pay coverage on your automobile insurance policy?

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In the Commonwealth of Massachusetts, Personal Injury Protection (PIP) coverage is mandatory. PIP pays reasonable expenses for necessary medical services, lost wages, and replacement services to you, your household members, and your vehicle occupants if injured or killed in an auto accident regardless of fault.

PIP pays the first $2,000.00 in automobile accident related medical bills and will usually cover up to a total of $8,000.00 if the injured party either does not have private health insurance coverage, has a private ERISA-covered health insurance plan, has MassHeath or Medicare, or has had his or her claim denied for non-covered services by the health insurance company. Once the initial $2,000.00 in coverage is exhausted, any remaining outstanding and future medical bills are deferred to your private health insurance company. The remaining $6,000.00 in PIP coverage is reserved for lost wage reimbursement (75% of gross earnings) and/or any medical expenses not covered by your private health insurance carrier, such as cosmetic and dental services, co-payments and deductibles.

It is important to understand the difference between PIP and Medical Payments (Med Pay) coverage when you are selecting your auto insurance coverage and optional coverage packages. Since Med Pay coverage is optional, it is in excess of your PIP coverage and cannot be carried without PIP coverage. The limit of liability you purchase for the Med Pay policy applies to each person who sustains bodily injury in one accident. Your Med Pay coverage moves with you, whether walking, riding in another vehicle, or on public transportation, or in or out of the Commonweath of Massachusetts, as well as with your insured vehicles, regardless of who’s driving and it carries no deductible or co-pay.

The benefit of Med Pay is that is covers myriad of other out-of-pocket costs that your typical health insurance policy will not cover, including chiropractic, dental, prosthetics and, in a worst-case scenario, funeral expenses. Additionally, after you have exhausted your PIP coverage you can tap into the Med Pay policy without ever needing to use your private health insurance.

What’s the difference between PIP and Med Pay coverage on your automobile insurance policy

In Metropolitan Property and Casualty Ins. Co. v. Blue Cross and Blue Shield of Massachusetts, Inc., 451 Mass. 389 (2008), the Massachusetts Supreme Judicial Court held that when the health insurance policy specifically defers payment to Med Pay coverage, then, after the initial $2,000.00 in PIP is exhausted, instead of your medical bills being submitted to your health insurance provider, your bills will be submitted for payment under your Med Pay policy.

Since your health insurance provider is entitled to reimbursement for all benefits paid on your behalf resulting from the accident and will attach a lien to your personal injury case for the repayment of same, having a Med Pay policy can avoid such a lien up to the amount of coverage you have purchased.

When searching for ways to lower your car insurance premium, you may be tempted to drop the Med Pay coverage from your policy because it is not a mandatory policy requirement.  Keep in mind that a basic premium for a Med Pay policy is minimal.  A $5,000.00 policy is likely going to cost between $20.00 and $25.00 per year.  Med Pay coverage can be purchased in increments of as little as $5,000.00 or upwards of $25,000.00 or higher, the benefits of which far outweigh the premium.

If you have been in an accident and you are unsure of your coverage selection and benefits, contact Baker, Braverman & Barbadoro, PC and we will review your benefits and assist you in filing a claim to ensure you receive immediate use of your PIP and other benefits under your insurance policy.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/04/04/whats-the-difference-between-pip-and-med-pay-coverage-on-your-automobile-insurance-policy/

Estate Planning isn’t just for the wealthy!

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Everyone over the age of eighteen should have an estate plan, regardless of your net worth. An estate plan consists of documents that control decisions over your person or your affairs if you cannot make those decisions for yourself, or if you pass away. It includes not only the documents that everyone thinks about such as a Will or Trust, but it also includes important documents such as a Health Care Proxy, Power of Attorney, and beneficiary designations.

The wealthy may have a more complex estate plan, but everyone should have the basic documents; Health Care Proxies, Powers of Attorney, and a Will. A Health Care Proxy gives someone trusted the power to make health decisions on your behalf if you are incapacitated. While a Health Care Proxy controls health decisions, a Power of Attorney controls business decisions. A Power of Attorney appoints someone you trust to make financial decisions on your behalf. A Will directs how your assets will be distributed after you pass away.

Everyone, no matter your level of wealth, should consider the following as part of their estate plan:

  • Healthcare Proxy and Power of Attorney: Health Care Proxies and Powers of Attorney will save your loved ones time and money in a time of crisis. No one wants to become incapacitated; everyone wants to have control over their own affairs, unfortunately life doesn’t always work this way. Without a Health Care Proxy or Power of Attorney, if you become incapacitated, your family would need to petition the Probate Court in order to make medical and financial decisions on your behalf. Imagine the frustration of going to court multiple times in order to obtain this permission, on top of the stress and sadness that your family is already going through due to whatever the circumstances are that led to your incapacitation.

Power of Attorney

  • Last Will and Testament: A Will can nominate someone to be the Guardian of your children if you pass away. This is the reason many people have Wills drafted. Without this designation in your Will, the Probate Court will decide who will be the Guardian of your children. This Probate Court action can lead to fighting among family members who are already grieving. Additionally, a Will allows you to control who will inherit your assets. This is especially important if you are in a long-term relationship, but have not officially married. Pursuant to Massachusetts law, if you pass away and are legally single, your estate would first go to your children, parents, or siblings, in that order. As an unmarried couple, your significant other has no rights to your estate, making drafting a Will to include them vitally important.

If you have any questions about basic estate planning documents, please contact the estate planning attorneys at Baker, Braverman & Barbadoro, P.C. We can sit down with you and craft an estate plan that fits your needs and goals. – Elizabeth A. Caruso.

from QUINCY ATTORNEYS-Baker, Braverman & Barbadoro P.C. 300 Crown Colony Dr #500 Quincy, MA 02169 (781) 848-9610 https://bbb-lawfirm.com/2017/03/17/estate-planning-isnt-just-for-the-wealthy/