Should You Consider Long-Term Care Insurance?

Alzheimers (800x800)It is very difficult to predict whether you or a loved one will one day need long-term care insurance. A diagnosis like Alzheimer’s disease or another dementia can drastically change your life and your financial plans. With an estimated five million Americans currently diagnosed with the disease, and a new diagnosis every 66 seconds, Fraser Trebilcock attorney Melisa M. W. Mysliwiec says it’s important to plan ahead.

“We don’t know if we’re going to get Alzheimer’s or anything like that. I think the best thing is to have your team of advisers. 30’s, 40’s, 50’s, is a good time to meet with an attorney, get estate planning documents put in place so there’s someone to act on your behalf if you become unable to,” Melisa said in an interview with WILX News 10’s Ann Emmerich.  Other important advisors to have on your team include a financial planner, accountant, and insurance agent.

These critical estate planning documents include: durable powers of attorney and patient advocate designations. You’ll also want to closely review assets and your financial plans with a financial planner when considering an investment in long-term care insurance. Long-term care insurance isn’t for everyone and a financial planner can assist in making that determination.  This is especially important, Melisa says, because even if you decide to buy long-term care insurance, the plan you choose will affect how much the insurance covers.

“There’s a big difference between getting a hundred dollars for help with care at home, versus paying privately in a nursing home which might be $250 or $270 dollars a day. So you really want to look at how much you can get per day and then there’s usually a cap on how many years it will pay out, too,” she said.

On average, people with Alzheimer’s live ten years with the disease, or longer, according to the Alzheimer’s Association. This means that families are left to pay for additional medical and living expenses for prolonged periods of time. So not only does the disease progressively devastate the health of the patient, it also takes a financial toll on families.

To read more about long-term health insurance, and hear one woman’s personal struggle with paying for her husband’s care after he was diagnosed with Alzheimer’s disease, read News 10’s full story here.

It’s important to note that even if you have long-term care insurance, you may ultimately have to rely on Medicaid. Recent rule changes could affect how much you receive from Medicaid without any penalties. Melisa explains why your caretaker agreement should be Medicaid-compliant, even before you decide to apply for Medicaid, in this blog.

If you have more questions about putting together a plan in case you or a loved one are diagnosed with Alzheimer’s disease, attorneys Melisa Mysliwiec and Paula M. Manderfield will be presenting on Alzheimer’s Legal and Financial Planning on Wednesday, March 8 at MSU Federal Credit Union’s East Lansing Branch, from 6-7:30 p.m. Advance registration is requested.

Your IT Technician Has Just Informed You That Your Business Has Suffered a Data Security Breach… Now What Should You Do?

Security Breach IT Michigan LawData breach incidents continue to make headlines. The Yahoo data security breach—affecting more than one billion accounts—announced late last year is a recent example. Data security breaches affect companies of all sizes, and any company that maintains an electronically stored database containing personal information—such as credit card numbers, driver’s license numbers, or Social Security numbers, is susceptible to data security breach and identity theft.

If you have been informed that your business has been the victim of a data security breach, you will need to follow the breach notification requirements in Michigan’s Identity Theft Protection Act (the “Act”). This blog will provide an outline of the steps you should consider if your business has suffered a data security breach.

Step. 1: Determine the extent of the breach and what harm may result from the breach.

Under the Act, a business that discovers a security breach of personal information must provide a notice of the security breach to each affected Michigan resident, unless the business can establish that the security breach is not likely to cause substantial loss of injury to, or result in identify theft with respect to, one or more Michigan residents. Personal information means the first initial or name and last name of a Michigan resident linked to one of the following elements: i) social security number; ii) driver’s license or state identification card number; or iii) bank account or credit card number combined with an access code that would permit access to any of the financial accounts.

In order to determine whether a security breach is likely to cause injury to, or result in loss or identity theft to a Michigan resident, the Act requires that a business must act with the care that an ordinarily prudent person in like position would exercise under similar circumstances. In other words, once you have determined that a security breach has occurred, you should immediately begin a thorough, reasonable investigation into the security breach before concluding that harm is unlikely.

Step 2: You have determined that a breach has occurred. How should you notify your customer or contacts?

Once you have determined that a data breach has occurred, you will need to provide notice to customers and vendors affected by the breach. The form of notice you must give—written, electronic written, phone, or substitute notice—is largely determined by the relationship between you and your customers and vendors—the intended recipients of the notice.

Written notice. The most common and simplest form of notice you may use is written notification sent to the recipient’s postal address on file in your records.

Email notice. The written notice may be sent in electronic format if you can show any of the following three requirements: 1) the recipient has expressly consented to receive electronic notice, or 2) you conduct your business primarily through the internet, or 3) you have an existing relationship with the recipient that includes electronic mail communications, and, as a result of those communications, you reasonable believe you have the recipient’s current electronic mail address. MCL 445.72(5)(b)(i-iii).

Phone notice. If not prohibited by state or federal law, you may make notification by phone if the following two requirements are met: 1) the notice is not given in whole or in part by recorded message, and 2) the recipient has expressly consented to receive notice by phone, or, if the recipient has not expressly consented, you also provide written or electronic written notice if the notice by phone does not result in a live conversation between you and the recipient within 3 business days after the initial attempt at phone notification.

Substitute notice. If you determine that the cost of providing notice as described above exceeds $250,000.00 or that the notice must be provided to more than 500,000 residents of Michigan, you may provide substitute notice by doing all of the following: 1) providing electronic notice to all residents for whom you have an electronic mail address; 2) if you have a website, conspicuously posting the notice on that website; and 3) notifying statewide media, which must include a telephone number or website address that an individual may use to obtain additional information and assistance.

Step 3: You have identified recipients that require notification and have obtained their contact information. What information should the notification contain?

Any notifications you send out must meet all of the following requirements: 1) The notice must be written in a clear and conspicuous manner or clearly communicated; 2) You must describe the security breach in general terms; 3) You must describe the personal information that is subject to the breach; 4) If applicable, describe in general terms what you have done to protect the recipient’s data from further security breaches; 5) Include a telephone number where a notice recipient may obtain additional information or assistance; and 6) Remind notice recipients of the need to remain vigilant for incidents of identity theft and fraud.

Step 4: You have notified affected customers and vendors of the data breach.  Do you have to meet any additional notice requirements?

After you have provided notice to individual recipients, you must also notify consumer reporting agencies of the breach without unreasonable delay. The notice you provide to consumer reporting agencies, which are defined in 15 USC 1682a(p), must include the number of notices that you have provided to residents of Michigan as well as the timing of those notices.

In some limited circumstances you may not be required to notify consumer reporting agencies of the data breach. Notification to consumer reporting agencies is not required if: 1) the breach affected 1,000 or fewer residents of Michigan, or 2) your business is a financial institution subject to Title V of the Gramm-Leach-Biley Act (governing treatment of nonpublic personal information about consumers by financial institutions).

Limited exceptions to the notification requirements through compliance with federal regulations.

The Act carves out limited exceptions to the notification requirements for certain businesses complying with specific federal regulations. For example, a financial institution with notification procedures in place that are subject to interagency guidance prescribed by the federal reserve system and other federal bank and thrift regulatory agencies is considered to be in compliance with the Act. Similarly, a business that is subject to, and complies with, the Health Insurance and Portability Act of 1996 (HIPAA) and its attendant regulations is considered to be in compliance with the Act.

Penalties for failing to provide notification of a data security breach.

If you do not provide the notification required by the Act, the attorney general or a prosecuting attorney may seek a civil fine of not more than $250.00 for each failure to provide notice. The aggregate liability for multiple violations of the statute cannot exceed $750,000.00 for the same security breach.


Michigan’s Identity Theft Protection Act is complex, and the failure to comply with the statute’s notification requirements can be significant.

This article is a brief summary of a law.  Readers should not rely on the contents of this article as it is not legal advice.  Anyone affected by the law should seek competent counsel. To find out more about the laws concerning data breaches, contact Fraser Trebilcock at 517.482.5800.

Michigan Adopts New Sales and Use Tax Laws on Direct Mail

Business CutoutsNew laws on the sales tax and use tax consequences on direct mail became effective in Michigan September 7, 2016. These laws were adopted as part of Michigan’s participation in the Streamlined Sales and Use Tax Agreement, and are intended to clarify to which State sales or use tax must be sourced when mail is mailed out of State.

Some of the important points in the new laws are the following:

  1. The law makes a distinction in tax treatment between advertising or promotional direct mail and other direct mail. Advertising and promotional direct mail is defined as direct mail the primary purpose of which is to attract attention to, or to attempt to sell, a product or service, person, business or organization. Other direct mail is defined as mail that is not advertising and promotional direct mail, including  invoices, bills, statements, payroll advice, any legally required notices, and any other nonpromotional direct mail such as newsletters and informational pieces.
  2. The new laws address how services are sourced. If services are an “integral part” of the production and distribution of direct mail they have to be sourced as provided in the new laws.
  3. If services are not an integral part of the production and distribution of direct mail they do not have to be sourced as provided in the new laws and would be sourced to the buyers jurisdiction.
  4. Advertising and promotional direct mail is sourced to the jurisdiction where the direct mail is mailed.
  5. Other direct mail is sourced to the buyer’s jurisdiction.
  6. Development of billing information or data processing services that are more than “incidental” are not sourced under the new laws, regardless of whether advertising and promotional direct mail  is included in the mailing.
  7. The above sourcing rules do not apply if the purchaser gives the mailer a tax exemption certificate or a direct pay permit

Mail that is sourced outside of Michigan under this new law would not be taxable in Michigan and may be taxable under the laws of the State to which it is sourced.  The new laws do not take precedence over interstate commerce exemptions or any other state specific exemptions that would otherwise apply to the sourcing of direct mail.

This article is a brief summary of  complex new laws. Readers should not rely on the contents of this article as it is not legal advice. Anyone affected by the new laws should seek competent counsel regarding the new laws.

Castellani, EdwardTo learn more, contact attorney Ed Castellani at or 517.377.0845. In addition to having practiced law for more than 30 years, Ed is a certified public accountant. This dual background and experience provides his clients unique insight into business transactions, such as business entity formations, mergers, acquisitions, tax audits and appeals, and general business and tax planning for both profit and nonprofit corporations.

Client Alert: State Supreme Court Decision Creates Limited Tax Refund Opportunities

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Taxpayers who filed as, or were included as a member of, a unitary business group could qualify for a refund following a decision by the Michigan Court of Appeals that the Michigan Supreme Court chose to let stand on January 24, 2017.

“We are not persuaded that the question presented should be reviewed,” said the court.

Left in place is the Michigan Court of Appeals decision in LaBelle Management, Inc. v Department of Treasury that provides a potential refund opportunity for taxpayers that filed as, or were included  as a member of, a unitary business group based on the Department’s interpretation of the constructive ownership rules contained in Revenue Administrative Bulletin (“RAB”) 2010-1.

In LaBelle, the Court of Appeals reversed a Michigan Court of Claims decision upholding the Department’s conclusion that two related entities should be treated as members of a unitary business group because Labelle “indirectly” owned the other entities. The forced combination was based, in part, on the Department’s interpretation of constructive ownership rules. Citing Revenue Administrative Bulletin 2010-1, the Court of Claims looked to “contextually analogous” provisions in the Internal Revenue Code to find that indirect ownership includes situations involving “constructive ownership”.

The Court of Appeals, in a “take-the-language-of-the-statute-seriously” opinion, took issue with the trial court’s interpretation of “indirect ownership” as used in the definition of a unitary business group under the Michigan Business Tax (MBT).  LaBelle challenged the Department’s reliance upon IRC Sec. 318 to define indirect ownership to include constructive ownership or ownership through attribution. The Court of Appeals found in favor of LaBelle, holding that indirect ownership as used in the MBT definition of a unitary business group means “ownership through an intermediary” while “constructive ownership” means “ownership as a result of a legal fiction.” “Indirect ownership and constructive ownership are two different concepts,” according to the Court of Appeals.

In reversing the lower court, the Court of Appeals opined that if the Department’s interpretation, were to be accepted, it would expand the definition of the term “unitary business group” beyond what the Legislature intended.  The end result being that none of the entities involved owned more than 50 percent of any other entity, through an intermediary or otherwise, thus, neither Labelle nor any of its related entities constituted a unitary business group.

Now, as a published decision, LaBelle is binding upon the Department. Taxpayers who filed unitary Michigan Business Tax returns or who are filing combined Corporate Income Tax returns based on the interpretation of the term “indirect” in RAB 2010-1 or RAB 2013-1, should consider reviewing whether the Court of Appeals’ holding in LaBelle might reduce their liability. Taxpayers should consider amending their unitary business group returns where appropriate to do so.  Under the Treasury’s all or none theory, taxpayers may qualify for the small business credit if they do not have to file unitary.

A word of caution, taxpayers should be aware of the impact of the statute of limitations.  Normally, a taxpayer has 4 years from the date that the return was due to claim for refund.  As the last MBT year for most taxpayers was 2011, most tax years are now closed (closing in 2016).  As with most things with tax there are a number of exceptions to the running of the statute of limitations.

However, following the Court of Appeals in Labelle, the Department took the unusual measure of filing a motion to stay the effect of the court’s published opinion until the Department had exhausted all of its appellate rights. The Court of Appeals granted the Department’s motion placing the binding effect of the decision in a sort-of limbo, until the Supreme Court’s recent denial of review.  Not to suggest anything sinister, but while the binding effect of the Labelle decision was stayed, the statute of limitations to amend returns and possibly make refund claims continued to run.  As a result, only a small handful of taxpayer may still have viable refund claims based on Labelle.

The control test under Michigan’s corporate Income Tax requires “direct or indirect” ownership.  In RAB 2013-1, the Department opined that “[i]indirect ownership includes ownership through attribution” and “an ownership interest is indirectly owned by a person when that person constructively owns such an interest.” As a result of the Labelle decision, the Department’s interpretation of indirect ownership for CIT purposes is questionable.

If you have any question about the Labelle decision, please contact Paul McCord.

Fraser Trebilcock attorney Paul McCord, PaulV. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or