The Surfside, Florida, building collapse which killed at least 97 people to date, has raised a lot of questions about where the responsibility lies. And while structural engineers are only starting to put their investigation into high gear after the search teams have completed their mission, the disaster is already raising many questions among condo residents and Association Boards alike – especially the key question: “Can what happened in Surfside happen to our building, too?”.

Here are 10 common sense steps Condo, Coop and Home Owners Association Boards should take to protect their residents and property:

1. Review your Association’s governing documents regularly to make sure what Common Elements and Limited Common Elements the Association is responsible for overseeing, repairing and maintaining and determine what maintenance and repairs the Associations is responsible to pay for. It is always good to consult with a qualified association attorney to review the governing documents and determine whether they need to be strengthened or revised.

2. Visually inspect your buildings and structures regularly, and, if you see something concerning, be sure to engage a professional, either a structural engineer or architect, to review any issues of concern. Trust your reasonable impressions; if it looks like a problem, it is worth looking into.

3. Be sure to comply with all local building department requirements in your jurisdiction to have your building inspected or certified.

4. It is good practice to, at least every 10 years (if not sooner), engage an engineer to review your building’s roof, facade, vault spaces, areas around or below pools, balconies, patios and other areas susceptible to water infiltration and have a report prepared concerning the professionals’ findings together with an action plan.

5. If your Association’s professionals determine that capital improvements are necessary to ensure the structural stability of your buildings or improvements, take heed of those findings and then take decisive, timely steps to address them.

6. If necessary, to protect the building and more importantly, the safety of unit owners and other occupants, fiscally plan for capital improvements by having a healthy reserve fund for the Association. Do a reserve study to make sure your Association is prepared for unexpected expenditures. An Association’s reserve study, which should be based on an on-site review of the Association’s property every five years, should itself be updated annually to account for unexpected costs and new capital improvements.. On average, most Boards should be setting aside approximately 20-40 percent of their annual assessments toward reserves to ensure the future financial health of the Association.

7. When necessary, special assess the unit owners to pay for emergent repairs. While it is often difficult to convince unit owners to incur increased costs, when your professionals tell you of an emergent condition with your building, you must grant the weight to those statements they deserve. Honesty is usually the best policy. When an emergent building issue presents itself, after consulting with counsel, it is usually a good idea to explain the condition to the unit owners and advise why a special assessment is needed.

8. Review your Association’s General Liability and Directors and Officers (D&O) insurance policies with your insurance broker to see how a “collapse” is defined and whether there are any exclusions to the policy that would preclude future recovery. Also, make sure that you have a D&O policy that properly protects all directors and officers against personal liability for decisions they make as Board Members.

9. Always be guided by “reasonableness” and sound business judgment. Act for the benefit of all unit owners and do your best to keep your buildings and other structures in good and updated condition.

10. Take note of unit owner concerns. If unit owners are complaining of ongoing conditions, strange noises, leaking walls and floors, windows that no longer open, doors and walls that are no long plumb, unexpected cracking in structural components, etc., make sure to inspect these conditions in a timely manner and hire competent professionals to follow up when it makes sense to do so.

Typically, when a Board acts reasonably and with the safety of all residents in mind, it is hard to fault its logic. Almost all building issues can be addressed before they become major problems by the Board Members being attentive, listening to unit owners and consulting with qualified professionals. A well-reasoned approach based on sound business judgment is the key to ensuring that small problems don’t become larger ones and that the Association does not incur unnecessary liability later on.

Estate planning is the process of deciding how, and in what manner, your assets will pass to your loved ones.  For many, a large component of the design of an estate plan focuses on minimizing taxation that occurs upon the transfer of wealth.  While estate and gift taxation are the primary focus of many individuals, another transfer tax, the generation-skipping transfer tax (of GSTT), is often overlooked.  When transferring assets, it is important to consider when and how the GSTT may apply.

This federal tax is triggered when an individual transfers assets to a skip-person (i.e., someone who is more than one generation below than the transferor).  Such a transfer can be direct (e.g., when a grandparent makes a gift directly to a grandchild) or it can happen indirectly (e.g., when a transfer is made to a skip-person through a trust).  The ability to transfer wealth to multiple generations without taxation, which is particularly relevant is states where dynasty planning is available (like New Jersey), is an extremely powerful estate planning option.

Generation-Skipping Tax Defined

The Internal Revenue Code imposes gift and estate taxes on transfers of wealth above certain limits.  For 2021, an individual can exclude gifts of up to $15,000 from the gift tax, with that limit doubling for married couples who agree to split the gift.  The lifetime exemption from federal estate tax in 2021 is $11,700,000 per person.  Thus, for 2021, an individual can pass wealth having a value of as much as $11,700,000 free of federal estate tax.  Note that the lifetime exemption can also be applied against lifetime gifts made in excess of the annual exclusion amount.

The gift and estate tax rate is 40% on the value of assets over the lifetime exemption amount.  In addition to the gift and estate taxes, the IRS imposes the generation-skipping transfer tax on the passage of any wealth that skips one or more generations.  Assets subject to the generation-skipping transfer tax are also taxed at a 40% rate, in addition to the federal estate tax.  However, like the estate tax, there is a lifetime exemption from the GSTT, which in 2021 is $11,700,000.

How to Apply the GSTT

Generation-skipping transfer tax covers the transfer of assets (directly or indirectly) to skip-persons.  Typically, the GSTT is applied on the transfer of wealth from a grandparent to a grandchild when the grandchild’s parent (who is also the child of the transferor grandparents) is still alive.  If a transfer is made to a grandchild whose parent has predeceased the transferer, then the GSTT would not apply.

As noted above, the GSTT is a separate tax from the federal estate tax and it applies alongside it.  Similar to estate tax, this tax kicks in when an estate’s value exceeds the lifetime exemption limit.

This is how the IRS covers its bases in collecting taxes on wealth as it moves through multiple generations.  If an individual were to pass his/her wealth to a child, who then passes it to their child, then no GSTT would apply; however, the federal estate tax would be triggered upon the passing of each generation.  If wealth is to be passed directly to a grandchild, that removes a link from the taxation chain. The GSTT essentially allows the IRS to replace that link, but, as noted above, there is a lifetime exemption that can be applied against generation-skipping transfers which renders such assets to which the exemption is applied exempt from taxation regardless of how many generations to which it subsequently passes.

The Power of Avoiding The Generation-Skipping Transfer Tax

Transferring assets to a trust that has the ability to remain in effect for multiple generations (such trusts are commonly referred to as “dynasty trusts”) and allocating lifetime exemptions against estate tax and GSTT is a tremendously powerful estate planning tool.  The compounding effect avoiding transfer taxes over multiple generations can lead to some amazing results.  The following illustrates the differences in result for a $1,000,000 contribution into a dynasty trust that will last for 120 years.  The savings potential is often greater than illustrated since the example ignores the fact that property received outright will probably be reduced further due to (1) divorce settlements, (2) creditor problems, and (3) the fact that assets are less likely to be dissipated in a trust than if held outright even if the invasion rights in a trust are extremely broad and generous.

Annual After-Tax Growth	Value After 120 years
3.00%	34,710,987
4.00%	110,662,561
5.00%	348,911,561
6.00%	1,088,187,748
7.00%	3,357,788,383
8.00%	10,252,992,943
9.00%	30,987,015,749
10.00%	92,709,068,818

 

Conclusion

For those seeking to maximize wealth preservation, avoiding the generation-skipping transfer tax is an essential component to an estate plan.  In addition to the divorce and creditor protection that dynasty trusts offer, the ability to transfer assets to multiple generations of beneficiaries and avoid transfer taxation, and in particular the GSTT, is a feature that anyone looking to protect assets and maximize wealth should utilize.

 

Overview

The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (passed on December 27, 2020) is intended to help offset the huge financial crisis caused by the Coronavirus (COVID-19) pandemic.  As part of this act, a second round of COVID-19 stimulus checks were approved for most Americans, including those who are elderly and on fixed income. On December 29, 2020, the issuance of these payments began by the Internal Revenue Service (IRS) and the U.S. Treasury Department. Even as the second stimulus payments go out, there is a push for a third stimulus check.

Many Medicaid beneficiaries who live at home, assisted living, adult foster care, or nursing homes are concerned the money will put them over the Medicaid income or asset limit, and therefore, disqualify them from Medicaid benefits. Medicaid applicants express the same concern that the additional money will cause them to have income or assets over Medicaid’s limits, and as a result, prevent them from becoming eligible for Medicaid.

Stimulus checks do not count as income, and therefore do not impact Medicaid beneficiaries or applicants. However, should the stimulus money not be spent within 12 months, it will be counted as an asset, and therefore could impact eligibility in the year ahead.

Stimulus Check Impact for Medicaid Beneficiaries

Nursing Home Residents

The receipt of stimulus checks by Medicaid beneficiaries who reside in nursing homes do not impact these individuals’ Medicaid benefits. In other words, stimulus checks do not disqualify them from Medicaid benefits. This is because Medicaid does not count the money as income, which means it cannot push one over Medicaid’s income limit, and hence, result in the loss of Medicaid benefits.  Furthermore, stimulus checks do not count as assets, provided that the money is spent within 12-months of receiving it. Therefore, a nursing home Medicaid recipient can retain possession of the stimulus money and it will not impact that beneficiary’s Medicaid eligibility. However, it is essential that the stimulus money be completely spent within one year of receipt. If it is not spent down, the remaining amount will count towards Medicaid’s asset limit and could potentially push the beneficiary over the resource limit, resulting in Medicaid disqualification.

Neither Medicaid, nor a nursing home in which a Medicaid beneficiary resides, can take stimulus check money to help cover the cost of their care.

Spouses of Nursing Home Residents

Non-applicant spouses of Medicaid-funded nursing home residents (called Community Spouses) can receive stimulus checks without impacting their spouses’ Medicaid eligibility in any manner. First, and foremost, the money from stimulus checks is not considered income by Medicaid, and even if it were, the income of a non-applicant spouse is not considered in the continuing Medicaid eligibility of the institutionalized spouse.

For Medicaid beneficiaries, the entire check needs to be spent within 12-months of receiving it or the remaining funds will count as assets towards Medicaid’s eligibility. However, the same rule does not hold true for community spouses.  There is no time limit in which a community spouse must spend his/her stimulus checks.  The funds from a non-applicant spouse’s stimulus check will never count as resource towards the institutionalized spouse’s eligibility.

Medicaid Waiver Beneficiaries

Home and Community Based Services (HCBS) Medicaid Waiver recipients can receive stimulus checks and it will not impact their Medicaid eligibility if spent within 12-months of receipt.  This is because the money from the checks is never considered as income, but it will be counted towards Medicaid’s resource limit if not spent within the specified 12-month period.

Aged, Blind and Disabled Beneficiaries

Persons who are on Aged, Blind and Disabled (ABD) Medicaid are no exception from other Medicaid recipients and will be issued a second stimulus check.  The receipt of this money will in no way impact an ABD beneficiary’s Medicaid benefits, meaning the receipt of this check will not cause one to lose his/her Medicaid benefits.  The money is also not considered as income for Medicaid purposes, nor will it be treated as a resource for the first 12-months.  However, if the money is not spent down in its entirety during that timeframe, any remaining funds will be counted as a resource by Medicaid and could cause one to lose his/her Medicaid eligibility.

Stimulus Check Impact for Medicaid Applicants

When it comes to applying for Medicaid, stimulus checks are not considered towards Medicaid’s income or asset limit (if spent within 12 months of receiving it) in any of the 50 states and Washington DC. This means that the receipt of these cash payments will not cause an applicant to be over the income and/or resource limit(s), and hence, be denied Medicaid benefits.  This is true regardless of what Medicaid program (ABD Medicaid, nursing home Medicaid, HCBS Medicaid Waiver) an applicant is applying for and regardless of marital status.

Medicaid has a 60-month look back period (Medi-Cal in California is 30-months) in which Medicaid considers all past asset transfers immediately preceding one’s Medicaid application. During this timeframe, the Medicaid agency scrutinizes all past asset transfers to ensure no assets were given away or sold under fair market value. If one violates this rule, it is assumed it was done to meet Medicaid’s asset limit and a penalty period of Medicaid ineligibility is established. However, it is thought that the stimulus money is exempt from this rule, given the money is gifted within 12-months of receiving it. Therefore, a Medicaid applicant, or someone considering applying for Medicaid, could give away the stimulus check money to family members, educational funds, to charity, etc. during the 12-month period. However, after 12-months, the funds would count as assets for Medicaid eligibility purposes and giving the money away would violate Medicaid’s look back rule.

 

 

Effective November 5, 2020, Executive Order No. 192 is in effect, requiring New Jersey employers to implement certain workplace safety protocols.  This is the State’s latest effort to increase workplace safety for employees. Specifically, Executive Order No. 192 requires the following protocols:

• Individuals “at the worksite maintain at least six feet of distance from one another to the maximum extent possible;”
• “Employees, customers, visitors, and other individuals entering the worksite to wear cloth or disposable face masks while on the premises, in accordance with [CDC] recommendations” (although employees may “remove face masks when the employees are situated at their workstations and are more than six feet from other individuals at the workplace, or when an individual is alone in a walled office”);
• Employers must “provide sanitization materials, such as hand sanitizer that contains at least 60% alcohol and sanitizing wipes;”
• Ensure that employees “practice regular hand hygiene;”
• “Routinely clean and disinfect all high-touch areas in accordance with DOH [Department of Health] and CDC guidelines;”
• “Conduct daily health checks of employees, such as temperature screenings, visual symptom checking, self-assessment checklists, and/or health questionnaires, consistent with CDC guidance;”
• “Immediately separate and send home employees who appear to have symptoms, as defined by the CDC, consistent with COVID-19 illness upon arrival at work or who become sick during the day;”
• “Promptly notify all employees of any known exposure to COVID-19 at the worksite” consistent with confidentiality requirements under the Americans with Disabilities Act and Equal Employment Opportunity Commission guidance;
• “Clean and disinfect the worksite in accordance with CDC guidelines when an employee at the site has been diagnosed with COVID-19 illness;” and
• “Continue to follow guidelines and directives issued by the New Jersey DOH, the CDC and the Occupational Safety and Health Administration.”

Note that the Order authorizes the New Jersey Department of Labor and Workforce Development (“DOLWD”) to enforce the requirements set forth therein.  Specifically, the DOL is required to “establish an intake mechanism to receive complaints” from employees, create “a process for consideration of such complaints” and coordinate with the “Commissioner of the DOH and any other applicable State entity to establish a process to address such complaints.”  Note the Order further authorizes the DOLWD to “provide compliance and safety training for employers and employees.”

Moreover, note that the Order states that “penalties may be imposed” against employers for failure to comply with the Order and that failure to comply may result in “closure by the Commissioner of the DOH.”   Lastly, while no private right of action exists under the Order, employers may be susceptible to claims under the New Jersey Conscientious Employee Protection Act (“CEPA”) for taking adverse employment action against employees who avail themselves to the protections under the Order.

*  Frank A. Custode is a Partner at Curcio Mirzaian Sirot LLC and the Chair of the Firm’s Employment practice.

The two age groups most prone to be in a car crash, whether in New Jersey or elsewhere in the U.S., are teen drivers and drivers age 65 or older. According to a study from the Center for Injury Research and Prevention, a group at the Children’s Hospital of Philadelphia, these two age groups are raising their risk even more because they tend to drive older vehicles, which are less safe.

ESC and side airbags are crucial

Using the NJ-SHO Data Warehouse, researchers analyzed the data on crashes that occurred in New Jersey between 2010 and 2017. They then obtained the VIN on every vehicle involved and determined the model year, vehicle type and so on. Researchers focused especially on whether the vehicles came with electronic stability control and front, side and curtain airbags.

Electronic stability control is known to reduce the risk for a crash fatality just as much as seat belts can. It helps keep a vehicle under control when driving on sharp curves and wet, slippery roads.

Older vehicles and lower income

Researchers found that teens and older drivers were less likely to drive a vehicle with electronic stability control or side airbags. Drivers from lower-income neighborhoods tended to drive older vehicles, too, regardless of age. However, researchers point out that many safer vehicles are priced under $7,000 and should therefore be feasible.

For those seeking compensatory damages

Of course, driving an older car is not negligent, but it may have contributed to more serious injuries in the accident you were in. Fortunately, you may be able to pursue a personal injury case in your effort to be compensated for your losses, including your medical expenses, lost income, vehicle repair or replacement costs and pain and suffering. Not everyone can file a third-party insurance claim in this state, so consulting a lawyer may be wise.

Modern cars in New Jersey and across the country are equipped with features meant to keep drivers and passengers safe should an accident occur. These features include airbag systems, automatic emergency brake systems and electronic stability controls. Though the Insurance Institute for Highway Safety has found that these safety features decrease accident deaths, more can be done to keep people safe. One simple solution is changing the color of the turn signal in vehicles.

Several studies done over the past decade have shown that cars with amber-colored turn signals are less likely to be involved in a motor vehicle accident than those with red turn signals. A study done in 2008 by the National Highway Traffic Safety Administration found that vehicles with red turn signals are more likely to be rear-ended than those with amber lights. Another study by the same institute found that vehicles that switched their lights from red to orange decreased accident risk by 5.3%. Because 50% of all accidents that occur involve rear-hit vehicles, changing lights could significantly decrease the number of personal injuries each year.

Though no mandates regarding turn signal lights have been set, measures are being taken to encourage vehicle manufacturers to install amber lights. The agency is considering adding amber lights on vehicles as part of the criteria for a five-star safety rating. Experts estimate that the switch would cost less than $10 per vehicle and that the safety benefits would be well worth the money.

Being rear-ended in a car accident might result in severe injuries and lost wages due to time spent off work during recovery. Those involved in a motor vehicle accident may be able to file a civil suit to help recover monetary damages. A personal injury lawyer might be able to help. For example, a lawyer may be able to show that a driver wasn’t paying attention and failed to slow down for a turning vehicle. If negligence can be proven, the injured party might receive damages.

When unlawful behavior manifests itself in the workplace and can lead to harm inflicted on others, including the general public in New Jersey and elsewhere, a whistleblower can correct the situation. That is why state and federal employment law provides whistleblower protections against workplace retaliation.

What whistleblower protection laws do

A whistleblower is someone who reports a violation of internal employer workplace policies or external local, state or federal laws. A whistleblower might be a:

• Company worker, manager or executive
• State or federal agency employee
• Anyone witnessing wrongdoing

Whistleblowers could report company policy violations or those who break local, state or federal laws or regulations. Such violations could become especially harmful if they affect the environment or national security. They also cause harm when corruption and fraud occur to bypass laws and regulations that are in place to protect others against harm.

Former New York City Police Officer Frank Serpico’s famous whistleblower story became a popular Hollywood film starring Dustin Hoffman after corrupt officers tried to kill him for whistleblowing on the illegal activities inside the police department.

Retaliation comes in many forms

Fortunately, murder is not a common way to retaliate against whistleblowers as was attempted in Serpico’s case. More often, the retaliation is expressed by firing individuals, reduced work hours, changes in scheduling and intimidation. Those who engage in retaliation often utilize questionable tactics to make the punishment seem legitimate, but the ultimate aim is to get rid of and punish the whistleblower.

New Jersey employment law protects whistleblowers

New Jersey and federal employment laws forbid whistleblower retaliation. OSHA accepts and investigates whistleblower retaliation complaints by interviewing the whistleblower. As the complaint respondent, the employer also gets interviewed and apprised of the complaint and any state or federal laws potentially violated. Once the complaint is investigated, OSHA determines the appropriate response.

While state and federal laws protect whistleblowers, that protection is useless if you cannot use it effectively. An experienced New Jersey employment law attorney can help ensure whistleblower protection and punish violators.

New Jersey residents who are looking forward to an age of self-driving cars may want to temper their hopes for now. A study from the Insurance Institute for Highway Safety (IIHS) says that self-driving cars are far from being able to prevent all or even most crashes involving driver error. It should be noted that driver error is behind some 90% of crashes.

 

The IIHS looked at over 5,000 crashes from NHTSA’s National Motor Vehicle Crash Causation Survey, and after identifying all the driver errors that contributed to these crashes, it created five categories of errors. Of these, only two could be eliminated by self-driving vehicles: sensing and perceiving errors, such as distraction-related errors, and errors from incapacitation, including drug and alcohol impairment.

The first type contributed to 23% of the analyzed crashes and the second to 10%. Therefore, self-driving cars can currently address about one third of error-related crashes. Errors in prediction, such as misjudgments of vehicle speeds; planning/deciding errors, including tailgating and speeding on wet roads; and execution/performance errors, such as overcompensation, are left untouched.

Moreover, researchers emphasize that some accidents are due to blown tires, broken axles and other examples of vehicle failure, which are not always preventable. Automakers will need to prioritize safety over speed and rider preference if they intend to eliminate all error.

Victims of an auto accident may pursue a personal injury case even if the other car was an autonomous vehicle. After all, a claim may be filed against the manufacturers of a defective vehicle or defective part. To see whether they can do this and how much they might be eligible for, victims could consider seeing a lawyer for an assessment. The lawyer may even take on every step for them, including the negotiations for a settlement.