What do you mean I can't find out about my husband's accident injuries? Why can't we move my mother to the nice nursing-home down the street? The Health Insurance Portability and Accountability Act or HIPAA caused two of my clients to live through these very situations.

A husband and wife were involved in a terrible automobile accident. The husband was seriously injured. His wife wanted to make certain that the needed medical attention was given to her husband. The wife could not get any medical information from her doctor. Even though she was the wife, the new HIPAA law and regulations prevents her from receiving medical information without specific written authorization!

In another case, an elderly widow lady became incapacitated. Her two children wanted to place her in a nursing home so that she would receive adequate care. Even though they had a living will and health-care power of attorney for their mother, they were required to go to court and be appointed her guardians so that they could place their mother in the health care facility.

What is the HIPAA Law all about?

The HIPAA Law in a Nutshell

HIPAA took effect on April 14, 2003.

This legislation applies to virtually every physician, nurse, pharmacist, dentist, and health care provider in the nation. It impacts everyone's access to health care information.

What does this privacy act mean? The regulations stress that health care providers must limit health information to those who are intended to receive it. This means health care information cannot be released to any unauthorized person. This may mean you may not be able to receive medical records for your spouse or parent.

HIPAA Violation Penalties

The penalties for health care providers are staggering. For each disclosure violation, there is a $100 fine. If the violation is knowing, there are criminal penalties of a $50,000 fine and up to one year in prison. If information is provided or obtained under false pretenses, there is $100,000 fine and up to five years in prison. If the wrongful sale, transfer or use of the information was for commercial advantage, there is a $250,000 fine and up to 10 years in prison.

How does this affect you? To ensure an easy transition, you must have the appropriate medical release language to comply with HIPAA in three of your estate planning documents.

Documents to Update

The documents which need to be updated are:

• Your Living Will and Health Care Power of Attorney
• Your Living Trust
• Your Durable Power of Attorney

What if I do nothing?

You may be forced to sign the doctor's or hospitals forms in a stressful emergency situation. These documents may not reflect your choices and may contain confusing legal and/or medical terminology. Or you may be unable to sign anything and may repeat one of the above scenarios.

If your documents were created before 2003 and have not been amended since, have your attorney review them for HIPAA compliant language. Are you missing some or all of these documents? Make an appointment today!

Every business must retain certain records on their current and past employees, but which ones and for how long?

On the federal level, there are two agencies that regulate record keeping. First is the IRS, which is responsible for enforcing the Internal Revenue Code. The second is the U.S. Department of Labor (DOL). The Wage and Hour Division of the DOL is responsible for enforcement of the Federal Fair Labor Standards Act (FLSA), the Family and Medical leave Act (FMLA), the Immigration Reform and Control Act (IRCA), and the laws governing wages paid by federal government contractors.

Both of these agencies have separate rules regarding the type of records that must be kept and the length of time you must keep the records. To further complicate your requirements there are numerous state, local and other regulatory agencies that may require additional record keeping. State agencies enforce State Unemployment Insurance Tax Acts, state wage and hour laws, child support and creditor garnishment laws and unclaimed or abandoned wage requirements.

Keeping these records accurate and up-to- date is extremely important to the health of your business. Without the proper records you will be unable to meet regulatory requirements should you be audited by any of various federal state and local agencies. Failing to meet these requirements can mean large penalties and the potential for large settlement awards should you be unable to provide the required information when requested.

Internal Revenue Service

The following records must be kept for four years after the tax due date or the actual date paid.

• Name, address, occupation, and social security number of each employee

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  Total compensation and date paid including tips and non-cash payments

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  Compensation subject to withholding for federal income, social security and Medicare tax

• Pay period for each compensation period

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  Explanation of difference in total compensation and taxable compensation

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  Employees' W-4 Form

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  Dates of employment (beginning and ending)

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  Employee tip reports

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  Wage continuation made to an absent employee by employer or third party

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  Details of fringe benefits provided to employee

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  Copy of employee's request to use the cumulative method of wage withholding

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  Adjustments or settlement of taxes

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  Amounts and dates of tax deposits

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  Total compensation paid to employee during calendar year

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  Compensation subject to FUTA

•  

  State unemployment contributions made

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  All information shown on 940

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  Copies of returns filed (941, 643, W-3, Copy A of Form W-2 and returned W-2 forms)

Department of Labor

The following records must be kept for three years after date of last entry.

• Employee's name as it appears on social security card
• Complete home address and date of birth if under age 19

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  Sex and occupation

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  The beginning of the employee's work week Regular rate of pay for overtime weeks

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  Hours worked each workday and workweek

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  Straight-time earnings including the straight –time portion of overtime earnings

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  Overtime premium earnings

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  Total wages paid for each pay period including additions and deductions

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  Date of payment and pay period covered

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  Records showing total sales volume and goods purchased

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  Following records must be kept for two years after the last date of entry

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  Employment and earnings records, employee hours of work, basis for determining wages and wages paid

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  Order, shipping and billing records showing customers orders and delivery records

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  Wage rate tables and piece rate schedules

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  Work time schedules that establish hours and days of employment

Department of Labor

In addition to the general requirements of both the IRS and the DOL mandated by several federal acts. They are:

Family and Medical Leave Act

What are meeting minutes?

Minutes provide a summary of what was discussed at a meeting, what actions were agreed, who will action any issues and by when. They also contain a list of those present at the meeting and apologies for absence.

Why do you need meeting minutes?

Minutes act as an aid memoir for those who attended the meeting and are also a useful for summary for anyone who was unable to attend. Everyone attending should ‘sign off on’ the minutes to confirm what is recorded is reliable, and this prevents any later arguments regarding what actions were agreed.

For regular meetings e.g. project meetings for an ongoing project, it is good practice to check through the previous minutes at the beginning of a meeting and note whether the actions mentioned have been taken. This is often the first thing on the agenda.

What does the minute taker do?

The person taking minutes will make notes of what transpires in the meeting, write them up (sometimes in a specific format agreed in advance), distribute them to all who attended for sign off, then distribute a final copy to all who attended and anyone who sent apologies. This person will probably also be responsible for keeping copies of minutes on a file for future reference.

Sometimes a full recording of who said what is required. On other occasions minutes may consist only of a brief note of what was discussed and what actions were agreed.

Importantly minutes should be issued as soon after the meeting takes place as possible, although for detailed minutes the writing up might take as long as the meeting, or longer. (This won’t be the case if the minutes are discussion and action points only.)

Who should the minute taker be?

The person taking minutes will ideally have some knowledge of the subject of the meeting but should not be the chair of the meeting. It is just not possible to satisfactorily chair a meeting and take minutes.

Ideally the minute taker will not be a participant in the meeting at all; their role will be simply to take minutes.

Advantages of an outsourced minute taker

An outsourced minute taker could be a virtual assistant or a secretarial service. While a virtual assistant may work closely with a company s/he will not be a part of it but an entirely separate entity. A secretarial service is similar but is unlikely to have even a close relationship with the company. This can be an advantage if the content of the meeting is likely to be contentious or if the chair is concerned about bias.

In a small company an outsourced minute taker also allows all the meeting attendees to concentrate on participating in the meeting, discussing and putting forward suggestions. If a team member is taking minutes they will be fully occupied with this task and unable to give their full input.

Using an outsourced minute taker

• Before the meeting

   

  Many virtual assistance and secretarial services will include a confidentiality clause within the contract they will ask you to sign to work with them. If they do not you might want to consider asking the minute taker to sign a confidentiality agreement.

  The minute taker should ideally be issued with an attendance list in advance. If the members of the meeting are going to be reporting on various projects or tasks then ideally the minuter should be issued with a list of topics that each will be reporting on. This may be included in the agenda but alternatively an agenda might simply say. ‘5. Each team member to report on their projects’. If this is the case then additional information should be given.

  An outsourced meeting minuter will probably charge you for the time spent at the meeting and the time spent writing up the minutes .You can reduce the time spent to write up by briefing the minute taker properly in advance. Make sure they have a basic knowledge of the purpose of the meeting, a copy of the agenda, and if there are any jargon or key words that are likely to come up, provide a list of these in advance.

  If the minute taker does not know the participants then each should have a large-format card placed on the table in front of them.

  Ensure that you both know what you will do after the meeting: will you be meeting up to discuss the minutes; who will distribute the minutes; who will keep records of the minutes?

   

• During the meeting

   

  It will save a lot of time if the meeting is effectively chaired. This requires the chair to ensure that the participants keep to the agenda points, and that they don’t all speak at once. This makes note taking easier and the notes are in agenda order, thus saving writing up time.

  At the end of the meeting the chair should ask the minute taker if there are any points that require clarification before the meeting is closed. This gives the minuet taker the opportunity to ask specific members of the meeting to clarify certain points on the spot.

   

• After the meeting

Prior to issuing the minutes the chair should carefully check through them to ensure accuracy and completeness. If at all possible the chair and the minute taker should go through the written up minutes together for this purpose.

Confirm whether you want the minute taker to distribute the minutes to participants or whether that will be done by an internal person.

A corporate resolution is a formal process adopted by the Board of Directors of a company that authorizes the officers or management of the corporation to undertake actions on behalf of the company. This corporate resolution has the intent of amending the corporations existing terms of reference, by-laws or regulations or to provide exact advice to the corporation’s management on specific matters regarding the operation of the business.

A corporate resolution can cover a wide range of topics and issues and can be used to hire or appoint the officers of the corporation, hire or dismiss employees, or refer a matter to a subcommittee of the Board of Directors for further study and review. It can also be used to approve a major transaction or merger involving the corporation to buy new equipment, property, land or facilities that are required by the company. A corporate resolution might also be required in order to approve the sale of company assets, to issue new stock in the company, or to alter the ownership structure of the corporation.

Corporate resolutions can be placed before the Board of Directors by shareholders, the managers or management of the business, or by the Board of Directors or the officers of the corporation. All corporate resolutions must be passed by a majority of the Board of Directors meeting in session and any corporate resolutions which receive this approval have to be recorded in the minutes of that Board of Directors meeting.

These corporate resolutions have to be filed with the appropriate regulatory body in which the corporation has been registered and all shareholders must receive notice that the corporate resolution has been passed by the Board of Directors. All corporate resolutions which have been approved during the business year must be also presented to the Annual General Meeting of the corporation and the officers of the Board of Directors need to be available to answer questions to the shareholders at this meeting to answer any questions they may have about the corporate resolutions.

Sometimes the impact of a corporate resolution is so great that the company may choose to present the corporate resolution at the Annual General Meeting of the corporation for input by the shareholders before taking a final decision on the resolution of the corporate resolution. This allows the company to answer questions and build support for the corporate resolution before making a final decision.

A corporate resolution is not normally required for the general operation of the business since that has been delegated to the officers and senior management in the original articles of incorporation. It is usually reserved for those major decisions that either have an impact on the ownership structure of the corporation or to appoint new officers to positions within the corporation.

I recently wrote about the absolute need for a Medical Directive granting the “exclusive power” to your Agent for the purpose of communicating your healthcare wishes and to instruct those in charge of your medical care and to respond to the actual facts and variables known when an actual healthcare decision needs to be made. Your Medical Directive becomes effective, when:

1. You cannot communicate your own wishes for your medical care:

A. Orally, B. In writing, or C. Through gestures, and

2. You are diagnosed to be close to death from a terminal condition, or to be permanently comatose, and

3. The medical personnel attending to your care are notified of your written directions.

WHAT IS A FINANCIAL DIRECTIVE?

To summarize, a “Medical” Directive is a legal Instrument addressing the issue(s) of your healthcare and a “Financial” Directive is legal financial Instrument that empowers your Agent over all your financial matters and to exercise or perform any act under a recognized “Principal / Agent” relationship, with power, duty or right of any obligation whatsoever over everything that you now presently have or may thereafter acquire in the future, relating to any person, matter, transaction or property, real or personal, tangible or intangible, now owned by you or thereafter acquired by you, including, without limitation, general powers and specifically enumerated powers as to each possible event or circumstances.

In order for your Financial Directive to be legally binding on all third parties, the third parties so notified of your Principal/Agent relationship, your instrument must be in writing, properly witnessed or notarized with power to indemnify all those who accepted it in good faith.

Your Financial Directive should grant your Agent full power and authority to do everything necessary in exercising any of the powers as fully as you might or you could do if you were personally present, with full power of substitution or revocation, ratifying and confirming all that your Agent may lawfully do or cause to be done by virtue of your Financial Directive.

ESSENTIAL ESTATE TAX PLANNING: THE FINANCIAL DIRECTIVE

A Financial Directive should be part of your estate tax planning.

Your Financial Directive Instrument should address the following general powers and specifically enumerate those powers as to each possible event or circumstance:

1. Demand, receive, and obtain by litigation or otherwise, money or other thing of value to which the Principal is, may become, or claims to be entitled, and conserve, invest, disburse, or use anything so received for the purposes intended.

2. Contract in any manner with any person, on terms agreeable to the Agent, to accomplish a purpose of a transaction, and perform, rescind, reform, release, or modify the contract or another contract made by or on behalf of the Principal.

3. Execute, acknowledge, seal, and deliver a deed, revocation, mortgage, lease, notice, check, release, or other instrument the Agent considers desirable to accomplish a purpose of a transaction.

4. Prosecute, defend, submit to arbitration, settle, and propose or accept a compromise with respect to a claim existing in favor of or against the Principal or intervene in litigation relating to the claim.

5. Seek on the Principal's behalf the assistance of a court to carry out an act authorized by your Financial Directive Instrument.

6. Engage, compensate, and discharge an attorney, accountant, expert witness, or other assistant as it becomes necessary or relevant to principal objective(s).

7. Keep appropriate records of each transaction, including an accounting of receipts and disbursements.

8. Prepare, execute, and file a record, report, or other document the Agent considers desirable to safeguard or promote the Principal' s interest under a government statute or governmental regulation.

9. Reimburse the Agent for expenditures properly made by the Agent in exercising the powers granted by this Instrument.

10. In general, do any other lawful act with respect to the subject at hand.

WHEN DOES YOUR FINANCIAL DIRECTIVE BECOME EFFECTIVE?

Your Financial Directive becomes effective when you are considered disabled or incapacitated.

For purposes of your Financial Directive Instrument, "disabled or incapacitated" means when a physician certifies in writing at a date later than the date of your Instrument was executed that, based on your physician's medical examination of you, your doctor declares you mentally incapable of managing your financial affairs.

Your Financial Directive should have a paragraph to “legally authorize your/the physician” who examines you to disclose your physical or mental condition to another person for validation. You may even authorize a second physician for a second opinion. Subsequent to this verification and disclosure of your incapacitated condition, a third party that accepts your Financial Directive is fully protected from any action taken.

FINANCIAL DIRECTIVE COMPARED TO GENERAL POWER OF ATTORNEY

I am reminded of cases where the spouse is precluded to sit in important business meetings of which her temporarily incapacitated husband was a member, and decisions were being made affecting her husband’s interest in the business. While a general power of attorney may have been sufficient, but more likely would have required further court action. The Financial Directive is a significantly stronger Instrument then a general power of attorney, and would have specifically addressed issues concerning the spouse’s ability to sit and vote with the Agent, in decisions affecting the business, and more specifically her ownership interest in the business, with ability to bring in professional assistance to consult with her on such important matters.

CAUTIONARY PROVISIONS WITHIN YOUR FINANCIAL DIRECTIVE YOU WOULD NOT WANT YOUR AGENT TO HAVE

While we have enumerated the specifics of the powers to your Agent, there are some powers you would not want your Agent to have:

1. Your Agent cannot execute a will or codicil on your behalf.

2. Your Agent cannot execute any trust on your behalf; however, your Agent can enter into a custodial agreement with another “independent” individual or bank with trust powers.

3. Your Agent cannot divert your assets to himself [or herself], his [or her] creditors or his [or her] estate.

4. Your Agent shall not exercise, and shall not be vested with any incidents of ownership as to insurance policies insuring your life and shall have no power and no authority over life insurance policies you may own on your Agent's life.

5. Your Agent is your FIDUCIARY, possessing no general or limited power of appointment.

6. Your Agent shall not exercise any powers which you received from your Agent in a fiduciary capacity, and your Agent shall have no authority to exercise any powers, the exercise of which would cause any of your assets to be considered as taxable in your Agent's estate for the purposes of the federal estate tax or the inheritance tax.

Your Agent shall have NO Power to void or modify any portion of your Financial Directive in any way whatsoever. Only the Principal may revoke or amend by written notice to all parties and only by certified mail with return receipt.

There are a variety of ways to structure the formation of a business. Partnerships and limited liability partnerships are two of the choices.

If you are currently running a business, you might be in for a surprise. If the business has two or more owners and no specific business entity has been formed, you are in a partnership! Why? Under long standing law, any business with two or more owners is automatically considered a partnership unless affirmative steps are taken to form the business as something else.

A partnership is a form of business that has great benefits and horrendous negatives. Personally, I believe it should be used sparingly as a form of business. Why? Well, a partnership provides no protection to its owners. If the partnership gets sued, all the partners are liable for the debt. This liability is total. If you only own 10 percent of the partnership, you can still be required to pay 100 percent of the debt if you are the one with money. For this sole reason, I believe partnerships should be avoided like the plague as a business entity choice.

So, why would anyone form a business as a partnership? In a word – taxes. Partnership entities do not pay taxes. Instead, the finances of the partnership pass down to the partners in accordance with their ownership percentages. It makes life easy from a tax perspective and avoids a lot of the complexities of business taxation.

So, is there any way to take advantage of the tax benefits of a partnership while avoiding the potential liability problems? Many people think a limited liability partnership is the answer.

A limited liability partnership is just like a general partnership with one big exception. The limited partners are shielded from personal liability. The “LLP” takes the following form. There is one general partner that actually runs the business on a day to day basis. There are then multiple limited partners that make capital contributions to the partnership in the form of cash, products and so on. If the LLP is sued, the general partner has no protection. The limited partners, however, can only lose their investment in the business.

So, why doesn’t everyone just form a limited liability partnership? Well, the limited partnership position is really restricted. As a limited partner, you can not be involved in the running of the business. You are essentially limited to contributing capital to get the business up and running. If you don’t like the way things are being done, there isn’t a lot you can do. If a limited partner becomes active in the running of the business, he or she loses all protection from liability.

All and all, partnerships should be used sparingly. They can be excellent choices for very particular business situations. If you are considering this form of business, make sure to speak with an experienced business attorney so you know exactly what you are getting into.