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Recent Increased Penalties for Distracted Driving Cases

Author: Kevin Mahoney


December 20th, 2013

Using a hand held mobile device while driving (phone, text, email), the penalty for a first offense still involves a maximum fine of a $150 fine plus surcharges.  The point violation increases from three to five points for offenses committed on or after June 1, 2013.

For violations that occur after July 26, 2013, a second offense within 18 months results in a maximum fine increase to $200 and a third or subsequent offense within 18 months the maximum fine increases to $400.

Drivers with probationary licenses (Class DJ or MJ) have these various penalties with the addition of a mandatory 60 day license/permit suspension.  A second such conviction within six months results in a revocation of at least six months for a probationary license or a revocation of at least 60 days for a Class DJ or MJ driver’s license or learner’s permit.

Exceptions to the law involve (1) a driver using a completely hands free device which allows the user to communicate without the use of either hand; (2) using a hand held device that is affixed to a vehicle surface; (3) using a GPS device that is attached to the vehicle for the purpose of placing a phone call to police, fire, EMS or other medical providers in the event of an emergency; or (5) when operating an authorized emergency vehicle in the performance of its official duties.

Additionally, as of October 28, 2013, the laws regarding commercial drivers are modified such that carriers must not allow or require the drivers to use these devices while driving.  Additionally, a mobile phone used by a person operating a commercial vehicle is not deemed to be “hands free” if the driver dials or answers the mobile phone by pressing more than a single button.  If the commercial vehicle is temporarily stationary because of traffic, a traffic control device or other momentary delays, use of these devices is still prohibited.  An operator of a commercial vehicle holding a device to or in the immediate proximity of his/her ear engages a presumption that the individual is using the device.

These increased sanctions are ultimately designed to prevent accidents that result from distracted driving.  Similar to drunk driving laws, this is a predictable reaction to increase public awareness over the problem, especially in light of tragic losses of life caused by distracted driving.

Be safe.

Estate Planning / Asset & Wealth Preservation

Author: Linda Grear


December 13th, 2013

As 2013 comes to a close, have you made your New Year’s resolution yet? For many of us, estate planning is something we realize we should do, but somehow manage to keep postponing. With this in mind, you consider what estate planning is really all about. In essence, estate planning is about managing and protecting your assets during your lifetime and controlling distribution following your death so you may leave a legacy for your loved ones.

Effective estate planning may reduce estate taxes, which will benefit you and your family financially. In the face of ever-changing tax and Medicaid laws, there is growing concern about how to best protect assets and secure them for future generations. Time pressures, as well as issues confronting our own mortality, make many of us reluctant to deal with these matters. However, in estate planning, timing can be critical.

Anticipating your potential estate tax liability is a great place to start planning. The estate exemption equivalent for New York State residents is currently $1 million. The first $1 million of assets are exempt from NYS estate tax and any amounts over $1 million will be subject to NYS estate tax. Estate taxes are due within nine months after the date of death. Therefore, advance planning is key to address the tax liability.

For the year 2014, the Federal estate tax exemption will be $5,340,000. Any assets over that threshold will be subject to Federal estate taxes.

Below is a brief overview of the various trusts and estate planning techniques that may potentially shield your assets from future estate tax liability.

Last Will and Testament with Disclaimer (credit shelter trust) provisions: This technique provides a married couple the opportunity to utilize the federal estate tax exemptions of each spouse while giving the surviving spouse the opportunity to elect how much he/she shall receive from the deceased spouse’s estate. Any assets disclaimed or renounced by the surviving spouse are held in trust for the benefit of the surviving spouse. The trust assets are distributed to the ultimate beneficiaries only upon the death of the surviving spouse. The use of a Disclaimer Will may result in significant estate tax savings.

Annual Gift Tax Exclusion: One of the simplest ways to reduce the size of your estate would be to begin making annual gift tax exclusion gifts. An annual exclusion from gift taxes applies to each person to whom you make a gift. In 2014, you will be able to gift up to $14,000 each to any number of individuals without those gifts being taxable.

Benefits:

  • Allows you an opportunity to reduce the size of your taxable estate.
  • No gift tax returns are required if the gifts are $14,000 or less each year.
  • You can make these gifts each year, thereby dramatically reducing the size of your estate.
  • Receipt of the gift is not taxable to the recipient (unless the item gifted was a tax-deferred asset).

Payment of Tuition and Medical Expenses: Tuition payments made directly to a medical or educational institution are not taxable gifts. The payment must be made directly to the medical or educational institution providing the services. Please note that the exclusion covers tuition payments but not books, supplies, board and dorm fees.

Benefits:

  • Allows you an opportunity to reduce the size of your taxable estate.
  • Allows you an opportunity to make additional gifts over and above the annual gift tax exclusion.
  • This unlimited exclusion can be used for all levels of education.
  • This exclusion is permitted for tuition expenses of full-time or part-time students.

Irrevocable Life Insurance Trust: A life insurance trust is a vehicle by which the grantor gifts money to the trust and the trust, in turn, buys a life insurance policy on the life of the grantor. When the grantor dies, the life insurance proceeds are paid to the trust and distributed to the beneficiaries designated within the trust. This is a good wealth replacement tool to offset projected estate taxes to be paid.

Benefits:

  • Provides a liquid pool of funds to pay estate taxes, which are due within nine months of date of death.
  • The value of the life insurance policy is not included in the grantor’s estate because it was not owned by the grantor.

Education/General Purpose Living Trust: This is a lifetime trust which allows a parent or grandparent to establish a trust to be used towards education, training and/or the general welfare of the beneficiary. A person can specify the purposes for which the assets are used, as well as utilize the $14,000 annual gift tax exclusion amount.

The above items are just of few of the available estate planning techniques. In estate planning, timing is critical for the proper protection of your assets to ensure security for future generations and starting sooner rather than later is most important. If you have any questions about the above material, or wish to speak to an attorney, please contact HoganWillig at (716)636-7600. HoganWillig is located at 2410 North Forest Road in Amherst, New York 14068, with additional offices in Buffalo, Lancaster and Lockport.

The Affordable Care Act and You

Author: Amanda Kelly


December 6th, 2013

Who is required to participate?

All taxpayers must enroll themselves and dependents with “minimum essential coverage” by January 1, 2014 or pay a penalty.

What is the cost of not participating?

The greater of:

  1. 2014 = $95.00 or 1% of income (the lesser of)
    2015 = $325 or 2% of income (the lesser of)
    2016 = $695.00 or 2.5% of income (the lesser of)
    OR
  2. 1% of the excess of the tax payer’s income over the income tax return filing threshold (2% in 2015 and 2.5% in 2016)

The penalty is capped at 300% of the adult flat dollar penalty or “bronze” level premium.

**For taxpayers under 18 years of age, flat dollar amount is one-half the amount above.
**The penalty is calculated on a monthly basis and is payable with your year-end tax return. 

What is the “Exchange”?

 In the past, most individuals obtained health insurance through their employer.  For those without this option or for those not offered affordable coverage through their employer, a Health Insurance Exchange will now be an available option for purchasing coverage.  It is best to think of the exchanges as an online marketplace. The exchanges are user-friendly and will now allow these consumers, including some employer groups, to research and shop for health insurance plans with ease and clarity.

The general public will now easily view and more importantly, compare the following for each plan:

  • Rates
  • Scope of services covered
  • Provider Networks
  • Geographic coverage by defined ranges
  • Quality ratings

Health plans on a public exchange will be given a metallic designation: platinum (covers 90%), gold (covers 80%), silver (covers 70%) or bronze (covers 60%). This metallic level will help shoppers understand the level of coverage a plan offers and how much they will need to pay out of pocket and what the plan pays.

Subsidies and tax credits will help make insurance affordable for many qualifying consumers who shop on the public exchanges.

The exchanges are due to be open for business starting in October, 2013, allowing individuals or employer groups to shop for health insurance coverage that will begin on January 1, 2014.

The health care reform law creates a new web portal, www.HealthCare.gov, that   will help individuals and small businesses find health insurance coverage.

All states are given the option to create and run their own exchange.  In the event any state does not run their own Exchange, its citizens will have the option to shop on the Exchange run by the Federal Government. All citizens will have an exchange available to them, despite their state’s offering.

There will also be private exchanges offered by private companies.

Am I eligible for a subsidy?

Consumers are eligible for a subsidy if their household income is between 100% and 400% of the federal poverty level and they purchase insurance coverage on the exchange.

Employees are not eligible for a subsidy if they are covered through their spouse’s plan that meets Affordable Care Act requirements or if they are eligible for Medicare or Medicaid.

I am uninsured with a pre-existing medical condition. How do I obtain coverage right now?

Uninsured residents with medical conditions that are expensive to treat may be eligible for the NY Bridge Plan, a new pre-existing condition insurance plan. (Until January 2014 when more options will be available through the exchange)

I am currently enrolled in Healthy New York-What are my options after January, 2014?

 As of January 1, 2014, Healthy NY will no longer be available to individuals or sole proprietors.

DON’T WAIT! Individuals and families will be able to shop for and enroll in coverage on the New York Health Benefit Exchange beginning in October 2013 for coverage starting January 1, 2014.

For additional details and information, please feel free to contact us at (716) 636-7600.

The Affordable Care Act and Employers

Author: Amanda Kelly


December 3rd, 2013

The Affordable Care Act, often referred to as “Obamacare,” has caused a great deal of confusion since enacted on March 23, 2010. We have put together the following information in an effort to relieve some of the uncertainty surrounding this health care reform, and to hopefully ease the inevitable anxiety many of our clients will face in the coming months.

What is the purpose of the Affordable Care Act?

The main objective of the Affordable Care Act was to expand health insurance coverage to over 30 million more American citizens by the year 2022, as well as increase benefits and lower overall costs for all consumers, provide new funding for public health and prevention, strengthen the country’s health care and public health workforce and infrastructure, foster innovation and quality in our system and standardize available insurance, amongst other objectives.

Who is required to participate?

“Large Employers” or employers with fifty (50) or more full time equivalent employees are required to participate and offer affordable coverage to their full time employees.

I own two different businesses with a combined total of over 50 employees, am I required to provide affordable coverage to my full-time employees?

Yes, common ownership of companies may trigger the need for compliance and you would be considered a large employer. Please note, related employers are also combined.  There are no exceptions for non-profit, church or government employers.

How is a full time employee defined?

An employee is considered fill time when employed for an average of at least 30 hours per week (this includes paid time off).  40 hours a week is assumed for salaried employees.

Full time equivalent employees are calculated pro-rata (calculated by taking the total hours worked by part time employees in a given month and dividing by 120)

How do you calculate the total number of employees for your business?

The number of full time employees is not necessarily based on how many employees are on your payroll but is based upon how many hours are worked across the board, including full time and full time equivalent employees, during the proceeding calendar year or at least six (6) month consecutive period for 2013:

  • Full time employees counted as one employee, based upon a 30 hour work week or more.
  • Part time employees are pro-rated (calculated by taking the total hours worked by part time employees and dividing by 120)

*Please note that seasonal employees do not count if they work less than 120 days per year.

Add the number of all full time and full time equivalent employees together for each month in the year and divide by twelve (12).  If this number is larger than fifty (50) employees, you are considered a large employer.

What is required for compliant participation?

Large employers are required to provide a minimum quality of coverage to its full time employees or risk paying a penalty.  Employers are not required to provide health care coverage to part-time or seasonal employees.

How do you calculate affordable coverage?

Employer’s coverage is considered unaffordable if greater than 9.5% of income (W-2 income) or not of minimum value (covers less than 60% of the cost of benefits). In other words, an employer must offer at least one option where an employee’s contribution for single coverage does not exceed 9.5% of the employee’s household income.

The safe harbor options to determine employee’s household income is based upon either W-2 income, rate of pay or the federal poverty line.

What are the penalties?

Employers that fail to offer coverage to all full time employees will be penalized at a rate of $2,000.00 per full-time employee, excluding the first thirty (30) employees.

  • Penalty will only be imposed if your employee seeks coverage in the exchange and qualifies for premium tax credit or cost sharing subsidy.

Employers that offer unaffordable coverage can still be penalized at a rate of $3,000.00 per employee that receives subsidized coverage through an exchange, accepts a premium tax credit or cost-sharing reduction, but this amount will be capped at an amount equal to $2,000.00 per full-time employee, excluding the first 30 employees.

I am an employer with over 50 employees, what are my options?

  • Provide coverage as you do now;
  • Do not offer coverage, employees can go to the exchange but you may be charged a penalty;
  • Use a private exchange.

Septic Systems

Author: Bruce Ikefugi


November 29th, 2013

For the past two years, the number one post closing issue relating to home sales has been septic system failures.  Many septic systems in Western New York seem to have reached the age of around 50 years, which seems also to be about the end of life for many of its parts – tank, leach field, filters.  If you have a septic system you should have it pumped out every two to three years.  If you are thinking of buying a home with a septic system you should check with the County Health Department and the Town Building Department to see what records they may have regarding the age and capability of the system.  Often the Health and Building Departments have no records.  This is not does not in itself create a problem, but you will want to know, whether you are the seller or the buyer, that the capacity of the system is sufficient to service the home.  This is traditionally calculated based on the number of bedrooms.  Because of the increase in failures, we are now suggesting to all our buyers that they have the septic system professionally inspected, along with the house.

Prenups on the Rise



November 22nd, 2013

A recent survey shows that more couples are opting to secure prenuptial agreements; 63% of matrimonial lawyers surveyed reported an increase in the number of prenups over the last three years.  Whether this is a result of people getting married older, having more wealth going into a marriage, or general concern for the protection of assets, a common trend among growing prenups is the desire to protect real estate.  This is evident in the survey results, which show that the most common coverage areas within prenuptial agreements are:

  • Protection of separate property
  • Alimony/ spousal maintenance
  • Division of property
  • Protection of the increase of value in separate property
  • Inheritance rights
  • Community property division

Having a prenuptial agreement essentially allows for decision making about the ownership of property and other assets; otherwise, state law ultimately dictates what happens in the event of a divorce.  Though still relatively rare, the numbers do reflect that the number of couples opting for prenuptial agreements is on the rise, especially pertaining to property.

If you have concerns about prenuptial agreements, or any other marital or real estate related questions, please feel free to contact Hogan Willig at 716.636.7600.

A Friendly Reminder for Maintaining STAR Exemption



November 15th, 2013

In order to continue to receive a Basic STAR Exception, homeowners in New York State must register with the NYS Department of Taxation and Finance by the end of this year.  Senior Citizens receiving the Enhanced STAR Exemption are not affected by this new requirement to register.

The two types of STAR Exemptions are:

Basic STAR

  • Exempts the first $30,000 of the full value of a home from school taxes.
  • Is available for owner-occupied, primary residences where the resident owner and their spouse’s income is less than $500,000.

Enhanced STAR

  • Exempts the first $64,200 of the full value of a home from school taxes as of 2014-15 (an increase from $63,300 in 2013-14).
  • Provides an increased benefit for the primary residences of senior citizens (age 65 and older) with qualifying incomes.

To register, visit www.tax.ny.gov or call (518) 457-2036.

If you have any questions about the STAR Exemption or any other real estate issues, please feel free to contact our Real Estate Center at (716) 636-7600.

HoganWillig

We Practice Law for Your Peace of Mind