Piercing the Corporate Veil
August 24, 2008 by RickBryan
One of the reasons that people setup corporations and limited liability companies is to protect their personal assets from creditors of the corporation in case things go awry with the business. As long as all the i’s are dotted and t’s are crossed, this strategy is pretty successful, for the most part, because corporations are separate and distinct legal entities from their owners. The phrase ‘piercing the corporate veil’ refers to disregarding the corporate structure so as to make the owner’s assets available to satisfy creditors of the corporation. This happens most often when the owner does not respect the legal, tax and accounting aspects of operating the business as separate and apart from himself.
The factors which determine whether courts will pierce the corporate veil include:
(1) the absence of corporate formalities (corporate books and records);
(2) inadequate capitalization or the corporation or limited liability company;
(3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes, and properly accounting for any transfer of funds;
(4) overlapping ownership, officers, directors, and employees;
(5) common office space, address, phones;
(6) the amount of business discretion by the allegedly dominated corporation;
(7) whether the corporation and its owner(s) dealt with each other at arm’s length;
(8) whether the corporations are treated as independent profit centers;
(9) payment or guarantee of debts of the dominated corporation; and
(10) whether the corporation in question had property that was used by the owner of the corporations as if it were its own.
As a general matter, many small business corporations would probably fail the piercing tests. This is usually of little consequence, since the vast majority of corporations and their owners will never run into a situation where the legitimacy of their corporate form is questioned. Unfortunately, like all exceptions, if you’re the one for whom the ‘general rule’ fails, the consequences could be severe indeed.
New York’s Medicaid Website
August 8, 2008 by RickBryan
The New York Department of Health runs an excellent website which not only looks terrific, but is an incredible collection of resources for New York citizens and professionals advising their clients on issues relating to Medicare and Medicaid. On the left side of the DoH website there’s a link to the pages discussing Medicaid in particular, and then from that page there’s a link to the “Reference Guides.” From there, click on the Medicaid Reference Guide to get right to the PDF files used by the local social services offices while they’re reviewing applications.
The most important point to note is the enormous size and complexity of the rules and regulations. It’s difficult to imagine a New York senior, or children in distress over mom or dad’s impending entrance into a nursing home, going through the rules to figure out how to qualify for Medicaid. Advisors knowledgable on these rules and procedures are in a great position to bring important services to their clients. Of course the more you work in this area the easier it becomes to track down answers; if you rarely work in the field, it’s probably better to team up with someone who really focuses their practice on elder law issues.
AXA Clean-up Hitter Brian Appel forms Producer Group at 1633 Broadway
August 6, 2008 by RickBryan
I met the other day with one of AXA’s heavy hitters in annuity sales, Brian Appel, who runs his producer group “The Appel Financial Group” out of the 1633 Broadway office. AXA is one of the largest annuity sellers in the world anyway, so I’m not sure how The Appel Financial Group stacks up against AXA’s other big producers, but this guy is definitely knocking the cover off the ball. Brian Appel spent ten years at Putnum, and then a short stint at The Guardian before joining AXA in 2005. He’s an MDRT producer who made Chairman’s at AXA in 2006. I’m not sure what AXA’s “Top Gun” award is all about, which Brian Appel was awarded in 2007, but the dude definitely has some Tom Cruise star qualities, so perhaps he’ll be flying F-15′s in the new Top Gun sequel.
Anyway, one of Brian Appel’s marketing strategies is to hold Private Client Briefings: informal (but well rehearsed) dinner conversations where four couples (clients or potential clients) are treated to dinner with Brian and two or three other financial advisers to discuss various topics of the day. It’s unclear how Brian Appel (who runs The Appel Financial Group with his brother and a couple of associates) brings the usually skeptical, high net worth clients to the table, but apparently he’s got his fighter plane running with afterburners full blast. His website is at www.theappelfinancialgroup.com, and Brian Appel can be reached at Brian@TheAppelFinancialGroup.com.
Good luck, and thanks to Kirk Welcome, a District Manager at AXA’s 1633 Broadway office, for putting Brian and I together.
Beyond Structured Settlements Blog Enormously Useful
August 4, 2008 by RickBryan
I stumbled across (perhaps even for the second time!) a blog titled Beyond Structured Settlements, which describes itself as
Collaborative thinking and commentary about how the Internet impacts four overlapping markets – structured settlements, personal injury settlement planning, special needs planning and the secondary insurance and annuity markets.
Truly remarkable work; an incredible collection of posts and links to all sorts of fascinating articles relating to estate planning and elder law issues and annuities and important legislation, etc. etc., all tied together in Web 2.0 format using a Typepad blog. Tremendous technical achievement combined with extraordinarily well written commentary. Bravo!
What’s amazing too is that it’s very difficult to tell who the dude is that’s running the show. His picture is on all the pages (I guess that’s him), but generally very hard to find out who’s behind this important internet resource. And maybe that’s the point of Web 2.0.
Supplemental Security Income (SSI)
August 2, 2008 by RickBryan
SSI is a federal program administered differently by each state which makes monthly payments to people with low income and limited resources who are 65 or older, or blind or disabled.
Medicaid and Medicare
August 2, 2008 by RickBryan
Medicaid is a health care program for people with low incomes and limited resources. In most states, children who get SSI payments qualify for Medicaid. In many states, Medicaid comes automatically with SSI eligibility. In other states, you must sign up for it. And some children can get Medicaid coverage even if they do not qualify for SSI. Check with your local Social Security office, your state Medicaid agency, or your state or county social services office for more information.
Medicare is a federal health insurance program for people age 65 or older and for people who have been getting Social Security disability benefits for at least two years.
There are two exceptions to this rule. Your child can get Medicare if he or
- Has a chronic renal disease and needs a kidney transplant or maintenance dialysis; or
- Has Lou Gehrig’s disease (amyotrophic lateral sclerosis).
Medicaid Payback Trusts
August 2, 2008 by RickBryan
A Medicaid Payback Trust is established to prevent the funds received from an estate or personal injury settlement from disqualifying the disabled person from public benefits such as Social Security Income and Medicaid. The trust money is for “special needs” outside of food, shelter and clothing. Trust money may be used to pay for some or all of the following items:
• Dental Care
• Plastic, cosmetic surgery or non-necessary medical procedures
• Psychological support services
• Recreation and transportation
• Differentials in cost between housing and shelter
• Supplemental nursing care and similar care which public assistance programs may not otherwise provide, including payments to those providing services in the home
• Telephone and television services
• Electric wheelchair and other mobility aids
• Mechanical bed
• Periodic outings and vacations, including costs incurred by caretaker companions
• Hair and nail care
• Stamps and writing supplies
• More sophisticated medical, dental or diagnostic treatment, including experimental treatment, for which there are not funds otherwise available
• Private rehabilitative training
• Payments to bring in family and friends for visitation if the trustee deems that appropriate and reasonable
• Private case management to assist the primary beneficiary, or to aid the trustee in the trustee’s duties
• Medication or drugs prescribed by a physician
• Drug and/or alcohol treatment
• Prepay funeral and burial expenses
• Companions for reading, driving and cultural experiences
To protect the money, the disabled person cannot touch it directly. The trustee is not permitted to write the disabled person a check or give cash. For example, to purchase a new television, the disabled person could pick out the model, get a bill from the store and present it to the trustee. The trustee would then write the check directly to the store.
The trustee has the sole discretion to decide if purchases are appropriate. Because these funds are there for a lifetime, they should be for special luxuries that enhance the beneficiary’s life. Because all types of trusts are complex, consult your attorney if you feel a Medicaid Payback Trust would be advantageous to you or someone you love.