McCloud Law Group Legal Blog

Thursday, April 9, 2015

What is Estate Recovery ?

What is Estate Recovery?

Medicaid is a federal health program for individuals with low income and financial resources that is administered by each state. Each state may call this program by a different name. In California, for example, it is referred to as Medi-Cal. This program is intended to help individuals and couples pay for the cost of health care and nursing home care.

Most people are surprised to learn that Medicare (the health insurance available to all people over the age of 65) does not cover nursing home care. The average cost of nursing home care, also called "skilled nursing" or "convalescent care," can be $8,000 to $10,000 per month. Most people do not have the resources to cover these steep costs over an extended period of time without some form of assistance.

Qualifying for Medicaid can be complicated; each state has its own rules and guidelines for eligibility. Once qualified for a Medicaid subsidy, Medicaid will assign you a co-pay (your Share of Cost) for the nursing home care, based on your monthly income and ability to pay.

At the end of the Medicaid recipient's life (and the spouse's life, if applicable), Medicaid will begin "estate recovery" for the total cost spent during the recipient's lifetime. Medicaid will issue a bill to the estate, and will place a lien on the recipient's home in order to satisfy the debt. Many estate beneficiaries discover this debt only upon the death of a parent or loved one. In many cases, the Medicaid debt can consume most, if not all, estate assets.

There are estate planning strategies available that can help you accelerate qualification for a Medicaid subsidy, and also eliminate the possibility of a Medicaid lien at death. However, each state's laws are very specific, and this process is very complicated. It is very important to consult with an experienced elder law attorney in your jurisdiction.

Wednesday, April 8, 2015

Confidential Settlements

Confidential Settlements

The vast majority of significant personal injury settlement offers come with a catch – the defendant wants a confidentiality clause included in the settlement agreement, barring the plaintiff and his or her attorneys from publicly discussing the facts of the case or terms of the settlement.In exchange for keeping their “mouths shut”, plaintiffs often benefit by obtaining higher compensation.  In many circumstances, the plaintiffs also have a preference for maintaining their own privacy.

Why do the defendants’ attorneys routinely insist on confidentiality clauses in their settlement agreements? Typically, defendants – and their attorneys – want to prevent evidence, such as witnesses or documents, from being accessible to future plaintiffs. In the grand scheme of things, this makes the defendant less accountable for its conduct.

Arguably, our legal system and the overall population would benefit from an outright rejection of confidential settlement agreements. Yet, most plaintiffs’ lawyers quickly capitulate; a settlement in hand is a sure thing, prevents future expenses necessary to bring a case to trial, and avoids the uncertainty regarding how much a jury might award in damages. Plaintiffs typically agree to maintain secrecy, as well. Seriously injured victims and their family members may be struggling financially and emotionally, and have a strong desire to put the matter behind them. It is understandable that they focus on their own needs and recovery, rather than how it may impact future plaintiffs’ or the public’s access to information and evidence.

Some attorneys and ethicists believe that lawyers’ rules of professional conduct provide them with sufficient grounds to reject secrecy clauses. Most states’ ethical rules favor enabling the public to have a realistic understanding of which attorneys have expertise in cases involving certain circumstances or against particular defendants.

However, those same rules of professional conduct also require attorneys to act in the best interests of the client – which often means agreeing to a speedy or generous settlement offer. Some legal ethicists suggest addressing confidentiality upfront, at the beginning of settlement negotiations. However, this approach may reduce the amount of a future settlement offer, or cause the defendant to take settlement off the table entirely. This risk, too, must be discussed with and agreed to by the client.

Furthermore, in this type of situation, the risk is borne by the plaintiff but the benefits are only realized by the general public, as mentioned above, or the lawyer who later enjoys “bragging rights” when he would otherwise be muzzled. It can be a tough sell, and one fraught with its own ethical implications. In the end, only the client can decide what is best for his or her situation. Some will agree to the risk “for the greater good” while others must do what is best for them and their families.

Monday, March 30, 2015

Important Employee Handbook Provisions

Important Employee Handbook Provisions 


An employee handbook is an instrument that is widely used by employers to communicate their expectations and policies to employees.  There are many reasons to develop and distribute an employee handbook.  These written documents enable employers to clearly outline what is expected from employees and what employees can expect from the employer.  In the event of a dispute with an employee or when a claim is made with a government agency, the handbook can be invaluable in protecting employer’s position. 

When drafting an employee handbook, certain information should be included. This includes:

Wages, Salaries and Other Compensation

An employee handbook should cover how and when employees will be paid.  It should also note how time worked it to be recorded, what taxes will be taken out and explain overtime policies.


This document should also cover daily schedules.  It should note hours to be worked, breaks, attendance, lateness, how to request time off and whether employees are entitled to paid time off and when.


An employee handbook can also be used to give employees information about benefits. It should cover what benefits are offered and how employees can qualify for them.

Employee Conduct

This manual should also be used to let your employees know how they are expected to act while at work.  It should also detail the dress code, if one exists.  You might also want to include guidelines for behavior in common situations.

Disciplinary Matters

An employee handbook should always include a section on employee discipline in the event that an employee should violate company rules or guidelines.  This section should detail any disciplinary system that is in place, and, if one is not in place, explain that matters will be handled on a case by case basis.

Safety Concerns

Your employee handbook should also cover how to respond to any and all foreseeable safety concerns.  These might include safety issues relating to work conditions, employee disputes and inclement weather.

Employment Discrimination/ Sexual Harassment

Employment discrimination and sexual harassment in the workplace are real issues that can cost businesses a great deal of money.  By including your company’s firm stance on these matter and explaining that neither will be tolerated might help you avoid conflicts in the future. Employee handbooks differ greatly depending on business structure, size and even the industry in which it operates. Some manuals are just a few pages whereas others may be dozens.  In order to create a comprehensive employee handbook and ensure maximum protection for your business, you should consult with a business or employment law attorney to advise you on these matters.

This list is NOT meant to be exhaustive.  Please consult an attorney for more detailed assistance regarding employee handbooks.

Thursday, March 19, 2015

What is a Mechanic's Lien ?

What is a mechanic's lien?


A mechanic's lien is not just for mechanics.  It is a legal tool used to protect workers and suppliers who contribute the labor and materials used to improve a property, real or personal.  Workers and suppliers can file a mechanic's lien if they do not get paid and may be able to force the sale of the property to receive payment. 


How Does One Place a Mechanic's Lien on a Property?


To place a mechanic's lien on a property, a "contributor"—someone who supplies labor or materials—must provide the property owner with notice describing the material or service contributed.  Depending on state law, the owner usually must receive this within a certain number of days of when the work began.


If the contributor isn't paid after completing a job, it can file a "claim of mechanic's lien" in the county where the property is located.  The contributor then has a few months to bring a lawsuit to enforce the mechanic's lien.  If the enforcement action doesn't take place by the deadline, the lien is no longer valid.  If the lienholder wins the lawsuit, the property can be sold at auction, with the proceeds used to pay the lienholder.


Mechanic's liens often have priority over other security interests in a property, such as a mortgage, though it may depend on when the lien was filed.  Construction loans may sometimes take precedence over mechanic's liens in certain states.


Who Can File a Mechanic's Lien?


Laborers and professionals who can take advantage of a mechanic's lien include carpenters, electricians, HVAC providers, plumbers, architects, and civil engineers.  Suppliers may include lumberyards, plumbing and electrical supply houses, and offsite fabricators of items that become part of a project.



How Can Property Owners Protect Themselves?


Property owners who are concerned that a mechanic's lien may be filed can obtain a "Release of Lien" from everyone connected to a project, relieving the owner from the threat of a lien.  Before making final payment, owners can also insist on an affidavit from their contractors listing anyone not yet paid.  The owner can then insist that those parties sign releases.


An owner can also file a "Notice of Commencement" before beginning a project listing all the contractors and subcontractors working on it, and a "Notice of Termination of Notice of Commencement" when the project is concluded and everyone has been paid and/or has signed a release. 


If a lien has been filed, in many states there is a procedure by which an owner can challenge it on technical grounds, such as improper notice or identification of the property.  Owners may also file a "surety bond"—a promise to pay backed by an insurer—with the court to protect themselves against enforcement of the lien.

Monday, March 9, 2015

Difference between Defamation, Libel and Slander

The Difference between Defamation, Libel and Slander

If you have worked hard to build and maintain a good reputation, either personally or in a business context, you likely understand the affects that damage to this reputation can have.  If someone does engage in conduct that is damaging to your reputation, tort law provides an avenue for you to take action: a lawsuit for defamation.

Defamation can arise in various forms and be claimed by an individual, business or other entity.  While defamation is the term encompassing all types of statements that cause injury to one’s reputation, you can be defamed in a number of ways. Libel is defamation that occurs in a written format.  For example, statements written in an article or book that are damaging to one’s reputation constitute libel.  With the ever expanding use of the internet, written statements in website content, social media and even chats are considered libelous if they are likely to cause injury.  Slander is defamation done orally.  It is important not to underestimate the power of the spoken word when it comes to reputation and anyone injured by this type of speech may have an action.

Although defamation can be committed in a few different ways, the elements of each action are usually the same.  In order to have a successful claim for defamation, libel or slander, it must be proven that a false statement was made.  It must also be proven that the maker of the statement had some level of intent, at the very least negligence.  This means that a statement made either with intent to cause injury, knowledge of the injury that could result or without the appropriate amount of care, can result in a claim for defamation.  The statement must also have been published in some way to at least one other person and there must be proof of damages.  You will likely not be able to determine if all of these elements are satisfied and it is therefore important to consult with an attorney knowledgeable in the field to find out whether you have a claim.  Contact us today for a consultation.

Friday, February 27, 2015

Risks of "Do-It-Yourself" Divorces

Know the Risks of “D-I-Y” Divorce

“Do it yourself” divorce is fraught with risks – even if your case is “simple” and both parties agree on all issues regarding division of property, support, and child custody and visitation. As many have learned the hard way, it is all too easy to make critical missteps today that will come back to haunt you down the road.

The proliferation of DIY websites and non-attorney legal document preparers give the impression that the process is simpler than it is. These services can help you deal with the court forms required to dissolve a marriage, including financial disclosures, motions, hearing notices and child support paperwork. It’s tempting to save money by using one of these services to prepare and file your divorce forms without using a lawyer.

Unfortunately, these services will leave you in the lurch when things do not go as planned, as they cannot offer you any legal advice or engage in any negotiations on your behalf. Worse still, they cannot point out the pitfalls contained in your paperwork which can pose risks to your financial future long after you think you’ve put the marriage behind you.

The typical do-it-yourselfer believes that everything is correctly resolved because the court accepted and processed the forms and has issued the divorce decree. However, this may or may not be the case; and any problems can remain undiscovered for years until, for example, one spouse embarks on a significant financial transaction such as purchasing a home.

A common scenario involves incomplete (or incorrect) provisions in a marital settlement agreement, leaving both spouses legally on the hook for a mortgage. What happens when the spouse who kept the home and obligated to make the monthly payments fails to do so? What happens when the other spouse applies for a mortgage on a new home, but the amount of the monthly payment of the previous mortgage is still considered when calculating the debt-to-income ratio? This is just one example of how “saving money” on the front end of your divorce can cost you greatly in the future.

Even if your divorce is “uncontested,” in that you and your spouse agree on all of the settlement terms, getting legal advice upfront will ensure the process goes smoothly and that you do not encounter any unpleasant surprises in the future. A consultation with a family law attorney can identify what issues must be addressed, point out potential negative consequences of certain decisions, and let you know what to expect throughout the divorce process.

If your divorce case is “contested,” meaning you cannot agree on terms regarding your property or children, it is important that you consult with a lawyer to obtain a realistic idea of what you can expect based on your legal rights under the circumstances. And, unlike the DIY services, an attorney can also represent your interests during settlement negotiations. If settlement negotiations are unsuccessful, your lawyer can ensure the court fully considers all information in your favor prior to making any rulings.

Wednesday, February 18, 2015

4 Ways to Obtain a "Green Card"

4 Ways to Obtain a Green Card

A green card is a document issued to non-U.S. citizens who have been given permission to live and work in the U.S. for an indefinite time period. Immigrants can acquire a green card through a variety of ways, but the government limits the number of green cards issued each year, and those seeking permanent resident status must meet certain eligibility requirements.

Below are the four ways in which a non-U.S. citizen can become a green card holder.

  1. Through family
    • An immigrant may be eligible to get a green card if they are an immediate relative of a U.S. citizen, have a family member who falls into a preference category, or a family member who is currently a green card holder.
    • A non-U.S. citizen may also qualify for a green card if they fit into a special category, including a battered spouse or child, or a widow(er) of a U.S. citizen, among other unique circumstances.

  2. Through employment
    • Green card hopefuls may be eligible to immigrate based on employment or a job offer. For this option, employers are required to obtain a labor certification and complete other documentation.
    • Investors and entrepreneurs who seek to make an investment in a business, and therefore create U.S. jobs, may qualify.
    • An immigrant may be allowed to file for themselves through self-petition if they fall within a certain category, such as Aliens of Extraordinary Ability, or if they are granted a National Interest Waiver.
    • Specialized categories of jobs may allow immigrants to acquire a green card, such as: broadcasters, Afghan/Iraqi translators, International Organization Employees, and religious workers, among others.
  3. Through refugee or asylee status
    • If someone is admitted to the U.S. as a refugee or as a qualifying member of an asylee, they may apply for a green card one year after their entry into the U.S. Those granted asylum in the U.S. may apply one year after the grant of asylum status.
    • Refugees are allowed to remain in the U.S. indefinitely.
  4. Other ways to obtain a green card
    The majority of immigrants gain permanent legal status in the U.S. through the aforementioned means, but there are other ways to acquire a green card.
    • Diversity Immigrant Visa Program, often referred to as the "Green Card Lottery" because it draws from entry selections at random. This program allows for 50,000 visas annually.
    • K Nonimmigrant, which includes those who are affianced to a U.S. citizen and their minor children.
    • Legal Immigrations Family Equity (LIFE) Act. This provision requires the immigrant to be a beneficiary of a labor certification application and other similar official procedures.
    • Special Immigrant Juvenile Status (SIJ) Status allows abused, abandoned or neglected foreign children in the U.S to acquire a green card in order to live and work permanently in the U.S.

Monday, February 9, 2015

Buy-Sell Agreements

Overview: Buy-Sell Agreements and Your Small Business

If you co-own a business, you need a buy-sell agreement. Also called a buyout agreement, this document is essentially the business world’s equivalent of a prenup. An effective buy-sell agreement helps prevent conflict between the company’s owners, while also preserving the company’s closely held status. Any business with more than one owner should address this issue upfront, before problems arise.

With a proper buy-sell agreement, all business owners are protected in the event one of the owners wishes to leave the company. The buy-sell agreement establishes clear procedures that must be followed if an owner retires, sells his or her shares, divorces his or her spouse, becomes disabled, or dies. The agreement will establish the price and terms of a buyout, ensuring the company continues in the absence of the departing owner.

A properly drafted buy-sell agreement takes into consideration exactly what the owners wish to happen if one owner departs, whether voluntarily or involuntarily.  Do the owners want to permit a new, unknown partner, should the departing owner wish to sell to an uninvolved third party? What happens if an owner’s spouse is involved in the business and that owner gets a divorce or passes away? How are interests valued when a triggering event occurs?

In crafting your buy-sell agreement, consider the following issues:

  • Triggering Events - What events trigger the provisions of the agreement?  These normally include death, disability, bankruptcy, divorce and retirement.
  • Business Valuation - How will the value of shares being transferred be determined? Owners may determine the value of shares annually, by agreement, appraisal or formula.  The agreement may require that the appraisal be performed by a business valuation expert at the time of the triggering event.  Some agreements may also include a “shotgun provision” in which one party proposes a price, giving the other party the obligation to accept or counter with a new offer.
  • Funding - How will the departing owner be paid?  Many business owners will obtain insurance coverage, including life, disability, or business continuation insurance on the life or disability of the other owners.  With respect to life insurance, the agreement may provide that the company redeem the departing owner’s shares (“redemption”).  Alternatively, each of the owners may purchase life insurance on the lives of the other owners to provide the liquidity needed to purchase the departing owner’s shares (“cross purchase agreement”).   The agreement may also authorize the company to use it’s cash reserves to buy-out the departing owners.  

Wednesday, January 28, 2015

Life Insurance and Medicaid Planning

Life Insurance and Medicaid Planning

Many people purchase a life insurance policy as a way to ensure that their dependents are protected upon their passing. Generally speaking, there are two basic types of life insurance policies: term life and whole life insurance. With a term policy, the holder pays a monthly, or yearly, premium for the policy which will pay out a death benefit to the beneficiaries upon the holder’s death so long as the policy was in effect. A whole life policy is similar to a term, but also has an investment component which builds cash value over time. This cash value can benefit either the policy holder during his or her lifetime or the beneficiaries.

During the Medicaid planning process, many people are surprised to learn that the cash value of life insurance is a countable asset. In most cases, if you have a policy with a cash value, you are able to go to the insurance company and request to withdraw that cash value. Thus, for Medicaid purposes, that cash value will be treated just like a bank account in your name. There may be certain exceptions under your state law where Medicaid will not count the cash value. For example, if the face value (which is normally the death benefit) of the policy is a fairly small amount (such as $10,000 or less) and if your "estate" is named as a beneficiary, or if a "funeral home" is named as a beneficiary, the cash value may not be counted. However, if your estate is the beneficiary then Medicaid likely would have the ability to collect the death proceeds from your estate to reimburse Medicaid for the amounts they have paid out on your behalf while you are living (this is known as estate recovery). Generally, the face value ($10,000 in the example) is an aggregate amount of all life insurance policies you have. It is not a per policy amount.

Each state has different Medicaid laws so it’s absolutely essential that you seek out a good elder law or Medicaid planning attorney in determining whether your life insurance policy is a countable asset.

Monday, January 19, 2015

Injured while on Medicare ?

Injured While On Medicare: What Happens Now?

When you are injured in an accident due to the negligent, reckless or willful conduct of another, you may be entitled to receive a settlement.  Often times, these settlements are paid out by insurance companies.  Unfortunately, if you are a Medicare beneficiary, you may have to forfeit some or all of the settlement you receive.

Medicare is federally provided health insurance.  Those that are 65 years or older and some younger people with qualifying conditions have the option to be covered by this type of insurance.  If you are injured in an accident, Medicare may cover some of the costs of your medical treatment.  But, pursuant to the Medicare Secondary Payer laws, Medicare does not have to pay for medical expenses if an enrollee is receiving a settlement or other award from an insurance company as a result of their injuries.   Medicare can ask to be reimbursed for the money it paid out for medical expenses.

Generally, if you are a Medicaid enrollee, are injured in an accident and make a claim against a defendant that has liability insurance, you must report the case to Medicare.  Once a case is reported to Medicare and they determine that they may be able to recover any of the money they laid out for medical bills, they will send you a Rights and Responsibilities letter outlining the process.  You will then usually receive a Conditional Payment Letter within approximately two months.   This letter will detail all of the claims they paid and expect to be reimbursed for once you receive a settlement.  It is important to note that the amount listed on the letter is usually not the final amount.  These letters are updated and reissued every 90 days and all of the claims on the letter may not be related to the accident.  Therefore, you must review the claims to determine which need to be deleted.  Once you do this, you can contact Medicare using the instructions included in the letter to have the amount updated.  Once you receive a settlement, you must, again, let Medicare know.  They will then issue a Demand Letter with a final amount due and the date by which payment must be submitted.

If you were injured while receiving Medicare benefits and have filed a lawsuit, you might find yourself faced with a Conditional Payment Letter.  Be sure to show this letter to your attorney as soon as possible.


Thursday, January 8, 2015

Privacy and Security in Business

Privacy and Security in Business

Almost every business collects uses and records customer information in some way, shape or form.  Your business may obtain names, addresses, telephone numbers, credit and debit card information, social security numbers or health care and insurance information in the ordinary course of business.  This data is often required in order for you to be able to serve your customers. However, you are responsible for keeping this data secure and your business must comply with Federal and state laws governing it.  The loss, theft and/or unauthorized use of this information could have devastating effects on your customer’s lives and on your business. 

New technology has enabled businesses to be more efficient and serve a broader customer base.  But, these technologies also come with the overwhelming risk of a customer data breach.  Therefore, you must be proactive in safeguarding this information.  In order to do this you should create a privacy and security policy.  The first step is to sit down and think about the type of information your business deals with and how it currently does so.  You should then consider who has access to this data.  It is also a good idea to make a list of these individuals so that you know who needs to be specially trained once you formulate a plan.  It is then imperative that you contact a business law attorney and a technology consultant, if the information is stored electronically, so that they can advise you as to the most secure, efficient and cost-effective options available to you.  A business law attorney will be able to explain the legal implications of a breach and ensure that you are in compliance with Federal and state laws.  Once you create a policy you should make it known by creating a written document to be distributed to employees and customers.

Privacy and security issues are not to be taken lightly.  If you are a business owner, you should worry about losing data, the theft and unauthorized use of information by employees and third parties, compliance actions and private litigation relating to these issues.  Your business and your customers would be best served by your attention to detail in this area.  Contact a seasoned business law attorney to discuss these issues today.

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