Estate Planning Isn’t Just For The Wealthy!

Everyone over the age of eighteen should have an estate plan, regardless of your net worth. An estate plan consists of documents that control decisions over your person or your affairs if you cannot make those decisions for yourself, or if you pass away. It includes not only the documents that everyone thinks about such as a Will or Trust, but it also includes important documents such as a Health Care Proxy, Power of Attorney, and beneficiary designations.

The wealthy may have a more complex estate plan, but everyone should have the basic documents; Health Care Proxies, Powers of Attorney, and a Will. A Health Care Proxy gives someone trusted the power to make health decisions on your behalf if you are incapacitated. While a Health Care Proxy controls health decisions, a Power of Attorney controls business decisions. A Power of Attorney appoints someone you trust to make financial decisions on your behalf. A Will directs how your assets will be distributed after you pass away.

Everyone, no matter your level of wealth, should consider the following as part of their estate plan:

1. Healthcare Proxy and Power of Attorney: Health Care Proxies and Powers of Attorney will save your loved ones time and money in a time of crisis. No one wants to become incapacitated; everyone wants to have control over their own affairs, unfortunately life doesn’t always work this way. Without a Health Care Proxy or Power of Attorney, if you become incapacitated, your family would need to petition the Probate Court in order to make medical and financial decisions on your behalf. Imagine the frustration of going to court multiple times in order to obtain this permission on top of the stress and sadness that your family is already going through due to whatever the circumstances are that led to your incapacitation.
2. Last Will and Testament: A Will can nominate someone to be the Guardian of your children if you pass away. This is the reason many people have Wills drafted. Without this designation in your Will, the Probate Court will decide who becomes the Guardian of your children. This Probate Court action can lead to fighting among family members who are already grieving. Additionally, a Will allows you to control who will inherit your assets. This is especially important if you are in a long-term relationship, but have not officially married. Pursuant to Massachusetts law, if you pass away and are legally single, your estate would first go to your children, parents, or siblings, in that order. As an unmarried couple, your significant other has no rights to your estate, making drafting a Will to include them vitally important.

If you have any questions about basic estate planning documents, please contact the estate planning attorneys at Baker, Braverman & Barbadoro, P. C. We can sit down with you and draft an estate plan that fits your needs and goals. – Elizabeth A. Caruso.

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Massachusetts Appeals Court Decides Burden of Proof for Evergreen Clauses

The Massachusetts Appeals Court recently analyzed the burden of proof applicable to automatic renewal clauses, otherwise known as evergreen clauses, and concluded that the party seeking to prove performance of the acts required to stop the automatic renewal had the burden to prove compliance with the terms of the contract.  Although the underlying dispute involved a commercial lease, the holding is applicable to any contact containing an evergreen clause.

The landlord and tenant in Patriot Power, LLC v. New Rounder, LLC, Mass. App. Ct. No. 16-P-420 (March 13, 2017), had disagreed as to whether the term of their commercial lease had automatically renewed. The landlord had filed a complaint seeking a declaratory judgment that the tenant had not effectively terminated the lease. The disagreement was purely factual, and the resolution depended on whether the jury believed the tenant’s assertion that it had included a termination letter in an envelope containing other correspondence or whether the jury believed the landlord’s assertion that there was no termination letter in the envelope received from the tenant.

The landlord raised the issue of burden of proof early in the dispute, and a judge concluded that the landlord had the burden of proof because it was the moving party. Executive assistants for each party testified in direct contradiction. The jury was instructed that the landlord had the burden of proof, and the jury returned a verdict in favor of the tenant. The landlord appealed. The Appeals Court reversed the jury verdict and remanded after concluding that the tenant had the burden of proof on this essential issue.

The Appeals Court recognized that the burden of proof in a declaratory judgment action depends on the nature of the underlying dispute, not on the party that initiated the action. Citing a case every Massachusetts law school graduate remembers, Gray v. Gardner, 17 Mass. 188 (1821) (burden of proof for delivery of sperm whale oil), the court concluded that the tenant had the burden to prove performance of the condition that would avoid the automatic renewal. In other words, the tenant was required to prove that the termination letter required by the lease was contained in the envelope that it sent to the landlord during the applicable notice period.

This decision reinforces the principle that parties should understand the requirements for compliance with their contract conditions, ensure full compliance with any conditions, and extensively document any notifications sent to the opposing party.

If you have any questions about evergreen clauses, please contact the business attorneys at Baker, Braverman & Barbadoro, P.C. – Kim Kroha.

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What’s the difference between PIP and Med Pay coverage on your automobile insurance policy?

In the Commonwealth of Massachusetts, Personal Injury Protection (PIP) coverage is mandatory. PIP pays reasonable expenses for necessary medical services, lost wages, and replacement services to you, your household members, and your vehicle occupants if injured or killed in an auto accident regardless of fault.

PIP pays the first $2,000.00 in automobile accident related medical bills and will usually cover up to a total of $8,000.00 if the injured party either does not have private health insurance coverage, has a private ERISA-covered health insurance plan, has MassHeath or Medicare, or has had his or her claim denied for non-covered services by the health insurance company. Once the initial $2,000.00 in coverage is exhausted, any remaining outstanding and future medical bills are deferred to your private health insurance company. The remaining $6,000.00 in PIP coverage is reserved for lost wage reimbursement (75% of gross earnings) and/or any medical expenses not covered by your private health insurance carrier, such as cosmetic and dental services, co-payments and deductibles.

It is important to understand the difference between PIP and Medical Payments (Med Pay) coverage when you are selecting your auto insurance coverage and optional coverage packages. Since Med Pay coverage is optional, it is in excess of your PIP coverage and cannot be carried without PIP coverage. The limit of liability you purchase for the Med Pay policy applies to each person who sustains bodily injury in one accident. Your Med Pay coverage moves with you, whether walking, riding in another vehicle, or on public transportation, or in or out of the Commonweath of Massachusetts, as well as with your insured vehicles, regardless of who’s driving and it carries no deductible or co-pay.

The benefit of Med Pay is that is covers myriad of other out-of-pocket costs that your typical health insurance policy will not cover, including chiropractic, dental, prosthetics and, in a worst-case scenario, funeral expenses. Additionally, after you have exhausted your PIP coverage you can tap into the Med Pay policy without ever needing to use your private health insurance.

In Metropolitan Property and Casualty Ins. Co. v. Blue Cross and Blue Shield of Massachusetts, Inc., 451 Mass. 389 (2008), the Massachusetts Supreme Judicial Court held that when the health insurance policy specifically defers payment to Med Pay coverage, then, after the initial $2,000.00 in PIP is exhausted, instead of your medical bills being submitted to your health insurance provider, your bills will be submitted for payment under your Med Pay policy.

Since your health insurance provider is entitled to reimbursement for all benefits paid on your behalf resulting from the accident and will attach a lien to your personal injury case for the repayment of same, having a Med Pay policy can avoid such a lien up to the amount of coverage you have purchased.

When searching for ways to lower your car insurance premium, you may be tempted to drop the Med Pay coverage from your policy because it is not a mandatory policy requirement.  Keep in mind that a basic premium for a Med Pay policy is minimal.  A $5,000.00 policy is likely going to cost between $20.00 and $25.00 per year.  Med Pay coverage can be purchased in increments of as little as $5,000.00 or upwards of $25,000.00 or higher, the benefits of which far outweigh the premium.

If you have been in an accident and you are unsure of your coverage selection and benefits, contact Baker, Braverman & Barbadoro, PC and we will review your benefits and assist you in filing a claim to ensure you receive immediate use of your PIP and other benefits under your insurance policy.

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