Indiana Continuing Legal Education Forum (ICLEF)

Welcome back to the Law Tips series on Elder Law.  I hope you were informed by our Medicaid Estate Planning segment last week.  In case you missed it, Click Here.

As we continue our discussion on Elder Law, an expected question might be: What are the latest  Power of Attorney issues? Some very relevant answers are available to you thanks to our faculty members, Bob Fechtman, Fechtman Law Office, Indianapolis,  Rebecca Geyer, Drewry Simmons Vornehm LLP, Carmel  and Keith Huffman, Dale Huffman & Babcock, Bluffton.  Following are a few of the issues pointed out by Bob, Rebecca and Keith.

POA Gifting Authority

• Consult with the client to determine if POA should authorize authority to transfer property of unlimited value to the client’s spouse. IC 30-5-5-9 limits gifts to the annual gift tax exclusion which could limit the ability to do Medicaid planning, especially if all assets must be transferred to the client’s spouse for purposes of Medicaid planning.
• Discuss with client whether the attorney-infact should be permitted to make unlimited asset transfers to children or other persons. Consider limiting this authority to require the approval of all living children or that the authority can only be exercised if recommended by an attorney in conjunction with a plan to qualify for Medicaid or other governmental benefits.

POA Compensation Clauses

• Many Powers of Attorney prohibit the attorney-in-fact from charging a fee for services. If the attorney-in-fact can charge, then a reasonable fee could be charged to help spend down assets for Medicaid qualification.
• Consider providing language for the attorney-in-fact to be reimbursed for reasonable expenses incurred and paid, including transportation costs, as a result of carrying out any provisions of the Power of Attorney. Compensation agreements must be signed by the principal, not by the attorney-in-fact, to avoid a transfer penalty.

POA Authority to Make TOD Transfers

• See IC 30-5-5-7.5
• Client may wish for attorney-in-fact to have authority to create TOD transfers to potentially avoid estate recovery.
• Limit the attorney-in-fact’s authority to designate himself directly or indirectly as a beneficiary to receive a greater share or proportion of any asset that attorney-infact would have otherwise received unless such change is consented to by all other beneficiaries in writing who would have received the benefits but for the proposed change.

POA Authority to handle Life Insurance, Annuities, and Retirement Accounts

• Many old Powers of Attorney do not reference the Indiana Code and may not include powers with respect to retirement plans, annuities and life insurance.
• Attorney-in-fact likely needs authority to annuitize, make withdrawals, cash in insurance, designate beneficiaries for purposes of Medicaid planning.

POA  Authority – Balancing

• Recognize that in order to do effective Medicaid planning, your attorney-in-fact may have to engage in self-dealing.  Acknowledge the potential for self-dealing in the document and provide for its acceptance in certain circumstances.
• Strike a balance between authority of the attorney-in-fact/self-dealing/other family members. The actions should not override the overall estate plan of the individual.

For your reference, our speakers provide this POA sample provision:

“Authority to make a gift or gifts of at any time or times of any or all of my assets, cash, property or interests in property, to those persons and in the same proportions as set forth in the residuary clause of my Last Will and Testament or revocable trust agreement, and without regard to any restrictions on aggregate or yearly value of a gift to an individual as set forth in Ind. Code§ 30-5-5-9. To the extent that my Agent is a beneficiary of the residue of my estate as set forth in my Last Will and Testament or revocable trust agreement, then he or she is specifically authorized to receive a proportionate share of any gift made of my assets.”

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Thanks again to our Elder Law panel for their valuable presentations and for contributing also through Law Tips.  We hope you gained some helpful insights for application in your practice from these Power of Attorney tips, or last week’s Medicaid Estate Planning Law Tip.

If you would like to see the complete presentation by the referenced faculty, there are Video Replays of the 3-hour CLE “Leaping Ahead: 20 Hot Tips in Elder Law Practice”  - Click Here.

Let us know what you are thinking about this blog or any ICLEF-related topic by emailing nancy@iclef.org or commenting on www.facebook.com/ICLEF.  Law Tips next week brings a new topic sifted from the treasure trove of ICLEF faculty materials.  Thanks for your time.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Providing advice in Elder Law presents its own unique hurdles. Practitioners often find themselves preparing clients for late-life decisions that can be emotional, while critical to the client’s own and to their families’ piece of mind. And, of course, looming overall are the financial impacts surrounding each decision.

Recently, the CLE entitled “Leaping Ahead: 20 Hot Tips in Elder Law” provided background to assure Indiana attorneys are properly equipped to assist in this process. The program faculty coalesced their expertise resulting in a top-notch package. I want to give credit all around for the content upon which this two-part Law Tips series concentrates. Appreciation goes out to Robert W. Fechtman, Fechtman Law Office, Indianapolis; Rebecca W. Geyer, Drewry Simmons Vornehm, Carmel and Keith P. Huffman, Dale, Huffman & Babcock, Bluffton. 

One of the primary areas of import that the Elder Law panel reviews is Medicaid Estate Planning. Specifically, they provide some key pointers on the effective use of “Transfer On Death:”

• Transfer On Death (TOD) Act is a valuable tool to utilize in Medicaid estate planning to avoid probate and estate recovery.
- You can TOD real estate, tangible personal property, bank accounts, retirement accounts, etc. These are not considered gifts because transfer is not complete until death.

• If you set up a transfer on death designation after Medicaid eligibility is established, make sure to report the change to FSSA. - See IC 12-15-9-0.6(b)
“(b) Enforcement of a claim against assets that are not included in an individual’s probate estate must be commenced not more than nine (9) months after the decedent’s death. This limit does not apply to any assets that were not reported to the county office of the division of family resources.”

• Review the tax charging clause in estate planning.
- The standard tax clause calls for all death taxes to be paid from the residuary estate.
- Medicaid planning often involves the use of non-probate transfers including POD accounts, TOD Deeds, and beneficiary designations on accounts.
-  If some or all of the non-probate assets pass to beneficiaries who are not beneficiaries under the will’s residuary clause, those residuary beneficiaries find themselves paying death taxes generated by assets which pass to other people if the entire tax liability falls on the residuary estate.

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I hope you found an application that benefits your practice in this Medicaid Estate Planning segment of Elder Law Tips. If you would like to see the complete presentation by the referenced faculty,  there are video replays of the 3-hour CLE “Leaping Ahead: 20 Hot Tips in Elder Law Practice” - Click Here.

Your suggestions for this blog or other ICLEF-related thoughts are always welcome. Send them along to nancy@iclef.org or post a comment at www.facebook.com/ICLEF.  You are also invited to sign up for the RSS feed here on the website to receive the blog weekly in your reader. Stay tuned for another Elder Law discussion next week. We appreciate you reading Law Tips.
To read additional Law Tips Click Here.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

You can destroy a valuation expert witness! So says William C. Wagner, Taft Stettinius & Hollister LLP, Indianapolis, our faculty contributor for Law Tips this week.  Bill provided his expert guidance on “Cross-Examining the Valuation Expert Witness” for ICLEF’s recent seminar on Intellectual Property Valuation.

His straight-forward advice begins with an overall look at the task at hand: Cross-examining a valuation expert can be a daunting challenge. The valuation expert witness is intimately familiar with the terminology of the industry and the many different methodologies that can be employed in the valuation process. That experience allows the expert to know how to game an opinion to drive damages up or down. The expert has often had several decades of experience and has been selected as your opponent’s valuation expert because of his or her excellent communications skills.  Finally, don’t be surprised to find that the expert has more courtroom experience than you. All of that said, you can still destroy a valuation expert witness at trial through detailed preparation. 

First, remember to use your common sense. When preparing to cross-examine a valuation expert at trial, remember to think about the case from the jury’s perspective.

The judge will instruct the jury to judge the expert’s testimony in the same way they judge the testimony of any other witness. The fact that such person has given an opinion does not mean that they are required to accept it. The jury will hear that they should give the  testimony whatever weight it deserves, considering the reasons given for the opinion, the witness’s qualifications, and all of the other evidence in the case.

In other words, Mr. Wagner reiterates: “create your cross-examination using your common sense.”

Also, he reminds attorneys that: what your jury thinks is important may not be the same thing that your client thinks is important…. Studies of hundreds of focus groups have determined that when it comes to experts, juries spend their time deliberating on the following elements from the least time (4) to most time (1) as follows:

4. Credentials

3. Expertise

2. Credibility

1. Objectivity

In other words, juries listening to well-credentialed experts believe that all the initials representing their credentials after their name tend to cancel each other out. They do not spend significant time deliberating whether a CVA is better or less well-credentialed that an ASA. Juries also tend to value real-world experience and expertise over book knowledge.

The second most discussed item for juries during deliberations are the experts’ credibility. That is, juries relate more to experts who explain complex principles simply. Valuation experts who drill down to the minutia and make theories more complex than they need to be are not as well received.

Finally, the most important item juries discussed in deliberations was the experts’ objectivity. In other words, did the expert look at both sides of the arguments and explain why he or she chose the evidence they used to arrive at their opinion and why they rejected certain evidence the other expert relied upon.

Another important tip that our speaker emphasizes: Remember the trial lawyer’s advantage.

What we lack in valuation expertise and experience, we as trial lawyers make up for through our mastering of the facts and evidence to be presented at trial. We need to use our own valuation expert to help us prepare for the opposing expert’s deposition and cross-examination at trial. Most importantly, we should use our right to ask leading questions on cross. We control the show on cross-examination.

Lastly, just for Law Tips, Bill provided us with a  summation of his thoughts:

“The most important takeaway for cross-examining business valuation experts is that you have to find out all of the assumptions the expert is relying on and then find the evidence that undermines each assumption.

The second most important takeaway is that business valuation experts use one of two basic methodologies – the “before-and-after” approach (comparing the future to what happened in the past) and the “yard stick” approach (comparing the subject company’s damages to market or industry data). The great recession has taught us that the past is no guarantee of future success and no company is really the average (just because the average player in the industry earns 20% net profit doesn’t mean this company would). This is where a lawyer can create fodder for cross-examination.”

We sincerely appreciate the contribution of Bill Wagner.

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The referenced, “INTELLECTUAL PROPERTY VALUATION: Manner, Methods, Litigation, Enhancing Value & Portfolio Development” is no longer available as a Live In-Person Seminar. However, you can still view the Video Replay, the Online/On Demand Video or purchase the e-Publication of this seminar by Clicking Here.

Let us hear from you about Law Tips or any ICLEF related topic by posting a reply to this Law Tips blog, by email nancy@iclef.org or  www.facebook.com/ICLEF.
Thanks for reading Law Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Focus, Focus, Focus!  Not just in bungee jumping and tightrope walking, but this is great advice when using social media in your legal practice.  Returning this week to the subject of ICLEF’s recent CLE on Social Media for Attorneys, Law Tips brings you a few more pointers on the positive effects of using these tools.

Our reference for these tips is the CLE presentation by Ryan Bowers, Barnes & Thornburg, Indianapolis, on “The Best Practices on How to be Successful, Practical and Most Effective.”  Ryan applies social media continually in his practice in the areas of commercial litigation and appeals, with a concentration on construction, environmental liability, insurance coverage, product liability, and antitrust matters.

His recent CLE session kicked off with interesting background on the direct impact of social media on the law profession.   For example, the 2012 Greentarget Survey of in-house counsel shows that 76% of the respondents attribute importance to a lawyer’s blog when deciding which firms to retain.  Another relevant bit of information out of the survey is that the legal industry is using social media as a client services mechanism at an 8% year-over-year increase.

Getting into practical uses for lawyers, Ryan provides CLE participants with background on one of the popular social media avenues used in the legal industry, Linkedin. He points out the benefits of this social network as a professional resource for connecting with people, for referrals, to share content and to drive people to a law firm’s website.  Mr. Bowers recommends that if you are using Linkedin you take advantage of all of the features, such as, structuring your online resume with specific content for online clients, completing the summary section, personalizing your invitations and using the news feed to discover content and post blog links. He does provide an alert, however, to be aware for any ‘specialties’ designations that may pop up in Linkedin that Indiana lawyers should avoid.

Ryan uses news feeds to share blog posts and is alert to opportunities for referrals.  The groups within Linkedin is another area that can help you target industries and engage potential clients.  Here’s an example of possible content: Ryan Bowers Linkedin

Emphasizing his overall message again, Ryan advises that to be effective in social media attorneys need to “Focus, Focus, Focus.”  He suggests that you use the media to market narrowly to a specific niche.  Focus on a few networks, identifying your target audience. For instance, those using Twitter and Google+ would be more tech or IP oriented and in-house counsel are more concentrated on Linkedin. He also includes  a reminder that social media is social; to avoid obvious advertising and to focus on finding interesting and useful content to share.

Social media tools  can offer effective and economical solutions for various business situations.  Thanks again to Ryan Bowers for allowing us to draw on his expertise in focusing social media successfully in the legal profession.

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The CLE program on “Social Media For Attorneys: How to Use It Correctly and Effectively Now That It Is More Than a Fad” covers many aspects of this rapidly-changing environment, including presentations from the chair, Anthony Rose of Indianapolis and Chuck Kidd’s ethics update from the Indiana Disciplinary Commission.  This program is no longer available as a Live In-Person Seminar. However, you can still view the Video Replay, the Online/On Demand Video or purchase the e-Publication of this Seminar by Clicking Here.

We appreciate you reading Law Tips.  Your comments are always welcome:  nancy@iclef.org or www.facebook.com/ICLEF.  Look for updates on Facebook or sign up for the RSS feed here on ICLEF’s website for the  “Law Tips Blog” as we continue to sift through the treasure trove of knowledge of our legal experts.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN