Lessons of March Madness as Applied to the Real World

Photo of BasketballCabulous plays, amazing game-ending shots, stifling defense, dominating offense, collaborative teamwork. We have just observed another installment of March Madness.

Whether you are a die-hard sports fan, a casual observer or a novice, it is hard not to get caught up in the excitement and drama of March Madness. As you watch your favorite team win or lose, root for the underdog or just enjoy the overall experience of the tournament, we can all learn from the various attributes and elements of what it takes for each team to get the opportunity to participate on the biggest stage of college basketball.

Success is not easy and does not happen overnight. The teams that had the opportunity to participate in March Madness share many of the same attributes and characteristics, in varying degrees.

These attributes and characteristics can lead to success in any endeavor, job or profession, including the practice of law, and include the following:

Preparation (individually and as a team). There is a saying that athletes develop individually in the off-season, and teams improve during the season. Preparation is achieved through continuing improvement of your skills, practice and repetition.

Similarly, as an attorney, you need to continuously prepare to be successful. Preparation may be through participation in continuing legal education, mentoring or being mentored, or practice and preparation in advance of your big trial, transaction, meeting, or other project or presentation. This preparation must occur prior to your time to shine.

Discipline. Success in sports requires a certain level of discipline: discipline to work hard, to prepare, to practice (especially on your own when no one is watching); discipline to do what it takes to achieve your goals, and thereby success. This discipline is equally necessary to realize your goals and success in any role, job or profession.

Experience. Experience can have a direct correlation to the level of success achieved by a basketball team. Experience is essential to understanding what it takes to compete and be successful at the highest levels. Seniors (in this era of “one and done”) provide crucial mentoring and leadership, on and off the floor, to the younger phenoms who must learn quickly for a team to achieve success.

To appreciate the value of experience, you need not look any further than the Wolverines and Spartans this season. Due to injuries, MSU had no seniors actively participating at the end of the season, and U-M relied on such senior leadership to win the Big Ten Tournament title and make a run to the Sweet 16.

Experience is equally valuable and important in any job setting, including the legal profession. Experienced attorneys understand what it takes to be successful in the practice of law in general, and with regard to success in the courtroom, transaction, or in any other legal setting and discipline. I encourage all senior attorneys to mentor younger attorneys when the opportunity presents itself, after all they represent the future of our profession.

Similarly, I strongly recommend younger attorneys to seek and take advantage of all opportunities to observe and learn from more senior experienced attorneys.

Teamwork. Despite the individual talents of athletes on teams throughout the country, the most successful teams understand the importance of working together, buying into the offensive and defensive philosophies of the program/coach, learning that the achievements and success of the team must be put before the individual accomplishments of the athletes; in other words, each collective group of talent from the coaches, to the starters, to the bench players, to the team managers, and beyond, all must learn to operate, cooperate and perform as part of a TEAM. Every participant must accept his or her role, and everyone has a role to play to contribute to the ultimate success of the team.

Success in any business or profession, including success in the practice of law, requires working collaboratively and successfully with your colleagues, assistants, co-workers, and all those who are part of, and contribute to, your team.

During the next March Madness, as you cheer on your team, or root for the underdog, or just enjoy the talent and teamwork being displayed, and that is required to be a national champion, the pinnacle of sports success, consider how what you observe may be transferred or applied to your own job or profession, and contribute to the success of your company or firm.

Fraser Trebilcock Attorney Mark E. Kellogg

Fraser Trebilcock Attorney Mark E. Kellogg chairs Fraser Trebilcock’s Business and Tax Law practice, and has devoted his nearly 30 years of practice to the needs of family and closely-held businesses and enterprises, business succession, and estate planning. In addition, Mark is a certified public accountant. He is the current President of the Ingham County Bar Association. Contact Mark at 517.377.0890 or mkellogg@fraserlawfirm.com.

Loss of Value Insurance May Prove Valuable for Athletes

According to CBS Sports, former Notre Dame linebacker Jaylon Smith recently collected on a loss of value insurance policy. Smith was projected to be a high first-round NFL draft pick but dropped to the second round, the 34th pick overall, after suffering a devastating knee injury in the 2016 Fiesta Bowl. His policy payout is believed to be $700,000.

A loss of value insurance policy protects an athlete’s future contract value from decreasing below a predetermined amount due to a significant injury or illness suffered during the term of the policy. If an athlete signs a professional contract which falls below that threshold which was a direct result of an injury or illness, the insurance company must pay the difference between the contract’s actual value and the policy’s predetermined value.

CBS Sports reports that Smith’s insurance policy covered him for a loss of value if he did not receive an NFL contract that was at least $7.2 million for four years. The contract Smith eventually signed with the Dallas Cowboys was for $6.495 million over four years. Thus, resulting in the reported $700,000 payout.

Payment for Smith’s loss of value premium was $55,000, according to CBS Sports. How this amount was paid has not been reported. The NCAA allows its member institutions to use the NCAA Student Assistance Fund to purchase a loss of value policy for a student-athlete. In addition, a prospective draft pick may take out a loan against their future earnings to pay the loss of value policy premium.

Prior to Smith, only three players have been able to collect on their loss of value insurance policy after filing a claim. For this reason, the NCAA does not directly offer loss of value insurance. Indeed, merely purchasing the insurance does not guarantee protection and it can often prove extremely difficult to demonstrate an athlete’s drop in the draft was “solely and directly” related to an injury. Keep in mind, all loss of value policies will include exclusions for pre-existing injuries, drug and alcohol use, criminal acts and/or psychological disorders and others. More unpredictable factors can also affect whether a loss of value claim is paid, including off-field issues, poor performance during the season or at pre-draft workouts and changes in professional team’s needs.

Not all professional prospects need loss of value policies. Given the difficulties in proving loss of value claims, only the very highest of draft picks would seem to benefit from purchasing the insurance. For Jaylon Smith, the loss of value policy proved valuable.

To learn more, contact an attorney at Fraser Trebilcock at 517.482.5800 or by clicking here to fill out this form on our website.

Top Trends in Business Law that You Need to Know for 2017

Macy’s and Kmart are each closing a Lansing location – but did you know that retail spending is up?

It’s easier than ever to collect customer data, but business owners beware: you need to protect that data or you could be on the hook for a breach.

And, get ready, driverless cars are definitely coming – and sooner than you might think!

In what has quickly grown into one of the most popular presentations in the Lansing Regional Chamber’s Small Business Education Series, Fraser Trebilcock business attorney Mark Kellogg joined a panel of experts for a rapid-fire session on top business trends for the coming year.

“Business owners are busy enough running their businesses,” said Tom Donaldson, Regional Director of the Capital Area for the Small Business Development Center. “It’s hard to keep up with everything going on in the world, too.”

To give business owners a snapshot of what’s happening now and what’s to come in 2017, area experts provided: a look at legal and business changes, financial forecasting, technology trends, a public policy preview, and what’s on the horizon in marketing for small businesses.

Administrative Law & Regulatory Changes

As with any changes in leadership on Capitol Hill, small business owners can anticipate a number of administrative law and regulatory changes ahead in 2017. Attorney Mark Kellogg said that while President Trump has not discussed his plans in detail, the President has said that he will “unburden” small business owners.

What exactly does this mean? From changes to labor and employment laws to key legislation like the Affordable Care Act (ACA), Mark said the only certainty we have is that change is coming.

Health Care Reform 2.0

Top of mind for many is health care reform. In January, President Trump signed an executive order titled, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”. Then, just last week, Republicans in Congress introduced the “American Health Care Reform Act of 2017” to overhaul the Affordable Care Act. The bill rolls back some of the ACA’s taxes, replaces insurance subsidies with tax credits, and makes big changes to Medicaid.

As the legislation evolves, Mark urged business owners to keep an eye on possible mandate changes, as the new administration modifies the Affordable Care Act. Updates are posted to our Fraser Trebilcock Employee Benefits Blog

Employee Overtime Rules

Changes once anticipated to labor and employment laws under the previous administration, may now be off the table. For instance, the rules that would have made more workers eligible for overtime is likely now to disappear altogether, said Mark. If the new administration decides to move forward with the change, he said the rules will likely be altered to include a lower salary cap than the original $47,476. This is something that our labor and employment attorneys will be watching closely.

Two-for-One Regulation Repeal

Another major change coming out of Washington, is a change to the process of how regulations are enacted. In an Executive order issued by President Trump, for every new regulation put into place, two old regulations must be repealed.

Attorney Mark Kellogg said this could have a big impact on emerging markets, such as drones rules and regulations. This is an area, he said, which will likely need more regulations as the technology evolves. However, in order to create these potential new regulations, the Federal Aviation Administration would need to repeal other rules.

Sick Leave Requirements

In the state of Michigan, changes to employee sick leave are also under consideration. Michigan lawmakers are debating a requirement for employers to give employees paid time off for sick leave. This could be especially critical for small business owners, Mark said. He shared that as a franchise owner himself, he will be watching this legislation closely as it develops in Lansing. With the current-make up of the State Legislature, this type of legislation may be difficult to advance at this time.

Businesses Succession & Sales

Expect to see more businesses for sale in 2017.

“10,000 people a day in the U.S. are turning 65,” said Mark, and as baby boomer business owners retire, we are finding that many do not have succession plans in place. Mark said that he has closed on three business sales transactions in just the last month and a half, a trend he expects to continue. He elaborates further in a recent article.

Data Security

Data breach incidents continue to make headlines, and unfortunately this is a trend not likely to go away in 2017. Any company that stories sensitive information, like customer credit card data, driver’s license numbers, or social security numbers, is susceptible to theft. Mark explained that it’s important to have a plan in place in case that data is compromised. Michigan has specific breach notification requirements under Michigan’s Identity Theft Protection Act that all businesses, regardless of size, must follow. These steps are outlined for you in a recent blog post.

Marketing Tips

Despite the security considerations, data collection is more important now than ever, added panelist Amanda Stitt of Change Media Group. Collecting and using data about customers adds to the creation of more personalized marketing, she explained. For example, companies can create ads that target returning customers and then use data to make sure only returning customers will see that ad. If you have ever put something in your online shopping cart and decided not to buy it, then been haunted by advertisements for that product elsewhere online, you have experienced this kind of targeted advertising. She said that messaging has to be more authentic and demonstrate the values of the company, pointing to the 2017 Super Bowl ads as examples. And, If you’re a fan of long-form writing, you’re in luck. Amanda said we will see a resurgence in longer videos, news articles, and even social media posts.

Public Policy Preview

Public Sector Consulting’s Chief Executive Officer Jeff Williams gave a deeper dive into upcoming public policy changes. This year, watch for major changes to come out of Washington. In the last several decades, he explained, we have seen the executive branch of government take more power; expect the legislative and judicial branches to respond with a push for a more equal division.

Next year, he believes the biggest changes for Michigan business owners will happen at the state and local levels. The state will elect a new governor, lieutenant governor, attorney general, and many new legislators, while Lansing will elect a new mayor. No matter where on the political spectrum you fall, Jeff said, it’s going to be a wild two years for all of us.

Technology: Protection is Key

Changes in technology have historically driven the evolution of business. Personal computers and the internet have forced most companies to move online, to change marketing and business strategies, and more. Now, according to Matt Scott of Dewpoint, business will begin driving changes in technology. As companies face the need to get more work done faster, more accurately, and at a lower cost, we can expect to see the tech sector working to create the products needed to make that possible.

Companies are also evolving the way they seek to solve problems. Matt believes that in 2017, more companies will look to outside tech experts to tell them how to develop new strategies, and to demonstrate what tech tools are needed to accomplish new goals. In that same vein, more businesses are looking to outsource complicated IT problems to technology specialists, instead of relying on in-house IT employees. All of these changes in technology will require small business owners to become more and more invested in technology.

Optimistic Economic Outlook

Fifth Third Bank Vice President Tom Ruis says there is a lot to be optimistic about with our current economy. Consumer confidence is up, as are retail sales and the stock market. What about big box stores closing locations? That’s all a part of the growth in online sales instead of the traditional storefront, he said, so don’t let it trick you into thinking that retails sales are down.

Tax reform that would reduce income taxes could help consumer spending increase even more, Tom said. Interest rates will probably increase slightly over the next year, and loans will get a little more expensive, he said, but he doesn’t think it will have a dramatic impact on small businesses.

One exciting innovation that’s closer to your driveway than you might think – self-driving cars.

“If you just bought a car, your next car will be almost fully automated in terms of parking and other features,” Tom said. He says virtual reality is making it much easier for automotive companies to test self-driving technology, and that will make road-ready versions available sooner than you might think. “Overall, this is a very positive, exciting time.”

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Fraser Trebilcock is proud to co-sponsor the Business Education Series, along with Fifth-Third Bank. Programs are free for members of the Lansing Regional Chamber of Commerce. Click HERE to view upcoming events.

Fraser Trebilcock Attorney Mark E. Kellogg

Attorney Mark E. Kellogg has devoted his nearly 30 years of practice to the needs of family and closely-held businesses and enterprises, business succession, and estate planning. In addition, Mark is a certified public accountant. Contact Mark at 517.377.0890 or mkellogg@fraserlawfirm.com.

Alzheimer’s Legal and Financial Planning Tips

If you or someone you love has Alzheimer’s disease or another dementia, it is important to put legal and financial plans in place as soon as possible.

Fraser Trebilcock Elder Law attorney Melisa Mysliwiec says that proper planning helps to ensure that the person with the diagnosis is able to contribute to important decisions about health care and long-term care, finances and property, and deciding who will make decisions on his or her behalf if he or she becomes unable to do so.

“If plans are not made early,” she says, “it may leave the family of the Alzheimer’s patient to guess as to what their loved one would have wanted or worse, it may ultimately be up to the courts to decide.”

Melisa spoke recently to a group of Alzheimer’s and dementia caregivers during a presentation at MSU Federal Credit Union. As an attorney who also volunteers with the Alzheimer’s Association, Melisa emphasized that early planning is key.

INFOGRAPHIC - Alzheimers-Legal-Financial-Planning


Some of the areas where our elder law attorneys can help you include:

  • Preparing Durable Power of Attorney for financial matters.
  • Exploring ways to defray long term care costs.
  • Assistance with Medicaid Planning and the Medicaid Application process for long term care benefits.
  • Protecting against elder abuse, neglect, and financial exploitation.
  • Handling various nursing home issues (payment, admissions, transfers, discharge, resident’s rights, and quality care).
  • Preparing Designations of Patient Advocate for health care matters.
  • Preserving assets to avoid spousal impoverishment when one spouse must enter a nursing home.
  • Guardianships, Conservatorships, and Protective Orders.
  • Exploring options for housing and living arrangements.
  • Estate planning through use of wills, trusts and other documents.

When it comes to Alzheimer’s disease or other dementias, these decisions must be made early in the progression of the disease because, in later stages, the person with dementia may lack the legal capacity to make decisions. An elder care attorney can best assist you through the process.

Additional Resources:

Mysliwiec, Melisa

If you would like to talk with an attorney about putting legal plans in place, contact attorney Melisa M. W. Mysliwiec. Melisa focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800.

Employer-Sponsored Plans Take Note: The Legislative Process to Amend, Repeal, and Replace Aspects of the Patient Protection and Affordable Care Act has Begun

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Employer-plan sponsors need to be ready to act as changes to the landscape of the Patient Protection and Affordable Care Act (“PPACA”) as applied to employer-sponsored group health plans are looming on the horizon.

On January 20, 2017, President Trump signed Executive Order 13765 titled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (the “Executive Order”).  The Executive Order indicates a clear intent to repeal the PPACA in the future and in the meantime urges federal government agencies to take legally permissible leniencies in enforcing certain aspects of the PPACA: “To the maximum extent permitted by law, . . . [executive departments and agencies] . . . shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”  A copy of the Executive Order is available at: https://www.gpo.gov/fdsys/pkg/FR-2017-01-24/pdf/2017-01799.pdf

While the Executive Order serves as a general mission statement for the new administration, it does not provide an instantaneous change to the PPACA (the President cannot, by unilateral action, repeal final regulations).   Furthermore, while the Executive Order provides a clear overall goal, it does not include details regarding how this goal will be achieved.  Moreover, the Executive Order does not specifically mention any relief for employers or plan sponsors, nor does it discuss if and how any PPACA provisions regulating employers and employer-sponsored plans are expected to be impacted.  Since the release of the Executive Order, all eyes in the benefits community have been on the status of the PPACA.

In the wake of the Executive Order, in February 2017, the IRS became the first agency to follow the Executive Order’s directive to start unwinding certain provisions of the PPACA.  Specifically, the IRS released a statement indicating that individual tax returns will not be automatically rejected during processing merely because the taxpayer fails to indicate his or her health coverage status.  This IRS statement appears to have loosened the IRS’ enforcement of the individual shared responsibility mandate.  The IRS’ statement related to the individual shared responsibility mandate can be found at: https://www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision

It is important to note that the IRS statement did not indicate that the IRS would waive penalties for individuals who fail to maintain compliant health insurance coverage: “However, legislative provisions of the ACA are still in force until changed by Congress, and taxpayers remain required to follow the law and pay what they may owe.”   And, again, the IRS statement does not address anything about its enforcement of the employer shared responsibility mandate or other PPACA provisions regulating employer-sponsored plans.  Thus, the Executive Order and IRS statement have left the employee benefits community uncertain as to how the new administration intends to address the PPACA as it relates to employer-sponsored plans.

Yesterday, however, the House Republicans addressed this looming issue.  On March 6, 2017, the House Ways and Means Committee and the House Energy and Commerce Committee each released proposed legislation to repeal and replace certain aspects of the PPACA, entitled the American Health Care Act (the “Proposed Legislation”).  The Proposed Legislation provides insight into how the landscape of the PPACA may be altered with respect to employer-sponsored plans.

If enacted as drafted, the Proposed Legislation, as summarized, would dismantle certain taxes imposed under the PPACA, eliminate both the individual and employer shared responsibility mandate penalties, while keeping other portions of the PPACA in place, such as prohibiting pre-existing condition exclusions from coverage and allowing dependents to continue coverage under their parents’ health plans until the age of 26.

Other provisions of the Proposed Legislation establish a patient and state stability fund to provide states financial assistance to design programs aimed at each state’s own population and needs for affordable health care, transition Medicaid to a “per capita allotment,” increase the contribution maximums for health savings accounts (HSAs), repeal the tax on over the counter drugs, repeal the limitations of contributions to health flexible spending accounts, and assist those in the low to middle-income brackets with monthly tax credits to assist with health care costs.

A summary of the Proposed Legislation impacting employers, as prepared by the Committee on Ways and Means Majority Staff, is as follows:



“This section repeals Obamacare’s small business tax credit beginning in 2020. Between 2018 and 2020, under the proposal, the small business tax credit generally is not available with respect to a qualified health plan that provides coverage relating to elective abortions.”


“Under current law, certain employers are required to provide health insurance or pay a penalty. This section would reduce the penalty to zero for failure to provide minimum essential coverage; effectively Prepared by the Committee on Ways and Means Majority Staff March 6, 2017 repealing the employer mandate. The effective date would apply for months beginning after December 31, 2015, providing retroactive relief to those impacted by the penalty in 2016.


“Obamacare imposed a 40 percent excise tax on high cost employer-sponsored health coverage, also known as Cadillac plans. Under current law, the tax will go into effect in 2020. This section changes the effective date of the tax. It will not apply for any taxable period beginning after December 31, 2019, and before January 1, 2025. Thus, the tax will apply only for taxable periods beginning after December 31, 2024.


“Under current law, taxpayers may use several different types of tax-advantaged health savings accounts to help pay or be reimbursed for qualified medical expenses. Obamacare excluded over-the counter medications from the definition of qualified medical expenses. This section effectively repeals the Obamacare tax on over-the-counter medications. The effective date begins tax year 2018.


“Distributions from an HSA or Archer MSA that are used for qualified medical expenses are excludible from gross income. Distributions that are not used for qualified medical expenses are includible in income and are generally subject to an additional tax. Obamacare increased the percentage of the tax on distributions that are not used for qualified medical expenses to 20 percent. This section lowers the rate to pre-Obamacare percentages. This change is effective for distributions after December 31, 2017.


“Obamacare limits the amount an employer or individual may contribute to a health Flexible Spending Account (FSA) to $2,500, indexed for cost-of-living adjustments. This section repeals the limitation on health FSA contributions for taxable years beginning after December 31, 2017.”


“Prior to Obamacare, as an incentive for employers to offer retiree drug coverage, employers who offered sufficient prescription drug coverage to their employees qualified for the Retiree Drug Subsidy to help cover actual spending for prescription drug costs. Obamacare eliminated the ability for employers to take a tax deduction on the value of this subsidy. This section repeals this Obamacare change and re-instates the business-expense deduction for retiree prescription drug costs without Prepared by the Committee on Ways and Means Majority Staff March 6, 2017 reduction by the amount of any federal subsidy. This section applies to taxable years beginning after December 31, 2017.”

“Obamacare imposed a Medicare Hospital Insurance (HI) surtax based on income at a rate equal to 0.9 percent of an employee’s wages or a self-employed individual’s self-employment income. This section repeals the additional 0.9 percent Medicare tax beginning in 2018.



“The program also calls for simplified reporting of an offer of coverage on the W-2 by employers. Reconciliation rules limit the ability of Congress to repeal the current reporting, but, when the current reporting becomes redundant and replaced by the reporting mechanism called for in the bill, then the Secretary of the Treasury can stop enforcing reporting that is not needed for taxable purposes.


“This section increases the basic limit on aggregate Health Savings Account contributions for a year to equal the maximum on the sum of the annual deductible and out-of-pocket expenses permitted under a high deductible health plan. Thus, the basic limit will be at least $6,550 in the case of self-only coverage and $13,100 in the case of family coverage beginning in 2018.


“This section would effectively allow both spouses to make catch-up contributions to one HSA beginning in 2018.


“This section sets forth certain circumstances under which HSA withdrawals can be used to pay qualified medical expenses incurred before the HSA was established. Starting in 2018, if an HSA is established during the 60-day period beginning on the date that an individual’s coverage under a high deductible health plan begins, then the HSA is treated as having been established on the date coverage under the high deductible health plan begins for purposes of determining if an expense incurred is a qualified medical expense.”



“Obamacare imposed an annual fee on certain health insurers. The proposal repeals the health insurance tax beginning after December 31, 2017.”

For the full summary of the Proposed Legislation, please see: https://waysandmeans.house.gov/wp-content/uploads/2017/03/03.06.17-Section-by-Section.pdf and http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/Section-by-Section%20Summary_Final.pdf

Please note that the American Health Care Act is proposed legislation; the changes which may be made to the PPACA through final legislation are still uncertain.  The Committees for both the House Ways and Means and the House Energy and Commerce have scheduled a markup of this proposed legislation for tomorrow, Wednesday March 8th.  Unless and until any legislation is finalized, employers must stay their current course, including complying with ACA employer reporting requirements and the employer shared responsibility mandate.

We will keep you posted as the legislative process progresses.

This email serves solely as a general summary of complex proposed legislation and government initiatives.  It does not constitute legal guidance.  Please contact us with any questions related to the Proposed Legislation and what impact finalization might have on your employer-sponsored plans.

Questions? Contact us to learn more.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

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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 ecastellani@fraserlawfirm.com 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 pmccord@fraserlawfirm.com.