WATCH OUT FOR THE LATEST IN LIABILITY EXPOSURE

One of President Obama's first acts after he assumed office was to sign into law the "Lilly Ledbetter" bill. This law will "make it easier for workers to win lawsuits claiming pay discrimination based on sex, race, religion, national origin, age or disability . . .This bill would relax the statute of limitations, making clear that each new paycheck is a violation of the law if it results 'in whole or in part' from a discriminatory pay decision made in the past." Critics claim that employers will now be exposed to "decades-old discrimination claims that they have no ability to defend", and, that the "individual responsible for the alleged discrimination is no longer with the company, or perhaps not even living." (The New York Times, Jan. 28, 2009).
Earlier, Thomas J.. Donohue, president and CEO of the Chamber of Commerce, declared that if such a law was passed it would "lead to a flood of new litigation that will hurt businesses." Donohue "charged that labor unions and trial lawyers are 'expecting quick and frequent payback for their efforts and their investments' in Democratic election campaigns." (LawyersUSA, Nov. 11, 2008)
Subsequently, Lenora Vhu, CNNMoney.com contributing editor, wrote that under this law "small companies may be at a disadvantage - few have access to the attorneys and human-resource professionals that will help larger businesses comply with the newly expanded law." Elizabeth Milito, senior executive counsel of the National Federation of Independent Business stated that: "There's also the potential for one lawsuit that goes south to put a small business out of business." (CNNMoney.com, Feb. 2, 2009)
Coupled with this new law is last year's expansion of the Americans With Diabilities Act whereby the definition of the term "disability" was greatly expanded. In support of this expansion, the 9th U.S. Circuit Court of Appeals just ruled that a "Type-2 diabetes patient was entitled to the protections of the Americans With Diabilities Act." (Los Angles Times, Feb. 13, 2009)

IRS PENALTY FOR LATE FILING OF FORM 5471

While the penalty for failure to timely file IRS forms has been around for many years, effective 2009 the IRS will asses an automatic penalty on any corporation that does not file a Form 5471 on a timely basis. All U.S. citizens who have equity in, or a controlling interest in a Controlled Foreign Corporation ("CFC") must file a Form 5471, a somewhat common situation for U.S. cleints of certain offshore asset protection promoters. The IRS will now asses an automatic penalty of $10,000 for each missed CFC filing, and, separate penalties will apply to each entity for each year that has not been filed. (See, Offshore Press, Inc., Jan. 5, 2009 www.offshorepress.com)

PITFALLS OF MEDICAID PLANNING

Elderly individuals, and their children, often seek to protect their assets by transferring such assets to their children in an attempt to subsequently qualify for Medicaid benefits. With rare exception, such transfers do not work and can be very costly for the Medicaid applicant. For example:

A woman who transferred her house to her son before entering a nursing home, thereby incurring a Medicaid penalty period (i.e., disqaulification), violated the state's fraudulent conveyance statute and is financially liable to the nursing home. (ElderLaw Answers, Jan. 5, 2009).

A woman who signed a nursing home admissions agreement as a designated representative (in.e., attorney-in-fact) is not responsible for paying the resident's nursing home bills. However, the personal representative may still become responsible for the payment of the nursing home resident's bills because she used the power of attorney to dispose of the resident's property and failed to pay all of the sales proceeds to the nursing home. (ElderLaw Answers, Jan. 5, 2009).