Protecting Your Business with Entity Redemption Buy-Sell Agreements

Businesses with only a few owners (or even just one) can often struggle to stay open when an owner becomes disabled or even dies. One way to prevent this is to set up a buy-sell agreement so the interest of the disabled or deceased owner can be purchased with little disruption. One type of buy-sell agreement is an entity redemption where the company itself agrees to buy, and each owner agrees to sell (or have his estate sell) the owner’s interest in the company. To guarantee the company will have the cash available to complete the agreement, the company can purchase life or disability insurance on the business owners.

Having the company agree to purchase the business interest (as opposed to having each owner agree to purchase the other owners’ interests) can simplify the number of, and relationship between, the insurance policies needed. It can also ensure the premium costs for the various insurance policies on all of the owners are shared equally, so that no one owner has to pay a disproportionate amount for the same coverage.

If you have any questions about buy-sell agreements, or other ways you can help protect your small business, contact me at or 413-570-3170.

Some Resources for Parents

For forty years, the non-profit Federation for Children with Special Needs has provided information, assistance, and support to parents of children with disabilities, and has helped thousands of families in Massachusetts in addressing the issues that arise in special education programs.

The Federation’s Parent Training and Information Center connects parents like you with special education advocates and compiles and summarizes key topics and relevant legislation for easier comprehension of the rules and regulations you and your child have to work within. It also holds regularly scheduled workshops around the state covering every stage of the special education process from ‘Basic Rights in Special Education’ to ‘Transition 101 – High School to Adulthood,’ and can be a valuable resource for this initial information.

If you have questions about the Federation for Children with Special Needs, or any other issues related to special education advocacy, contact me at or 413-570-3170.

Draft a Will, So There’s a Way

If you die in Massachusetts without a last will and testament, you’re leaving a lot of things up to chance – state law will control how your property will be distributed, and a probate and family court judge will have to determine who might be the best person to handle your estate, or the best person to take care of your children.

In contrast, having a last will and testament in place allows you to provide instructions that will control or influence these decisions, and will almost always be enforced by a judge. In the document, you can distribute your property to different people or charities, and these gifts can be compelled by the beneficiary. Within your will, you can also name a person to serve as your personal representative (formerly known as the executor) and that choice will be respected unless the court finds the person you chose cannot faithfully fulfill their duties. Finally, your will can also name the person or people you would like to be responsible for any of your children, when necessary. If the court finds the named guardian is willing and able to serve, your choice will then have priority over other qualified people.

Drafting a will is a simple process that requires a short conversation with your estate planning attorney and a review of the document to make sure it reflects your wishes. You should also consider amending your will if you’ve been married or divorced, if you’ve had more children or would like to add, remove, or change your beneficiaries, or if you’ve moved from another state.

If you need to discuss drafting your will, or have questions about any other estate planning issues, contact me at or 413-570-3170.

New Rules for Flexible Spending Accounts Mean More Choices

Employers who provide Flexible Spending Accounts (FSA) under Section 125 Cafeteria Plans can now choose to modify their FSA plan to allow employees the ability to roll-over up to $500 in unused funds from year-to-year, thanks to new rules enacted by the U.S. Treasury Department.

To take advantage of this change, employers must amend their plans in writing, but an amendment may be made retroactively for the 2013 plan year. Some FSA plans include provisions for a grace period, where an employee can use prior year account balances to cover any expenses incurred in the first seventy-five days after the end of the year. If an employer chooses to amend their FSA plan to allow for the roll-over of funds, however, the plan must also be amended to remove any grace period.

Employees who choose to roll-over $500 in unused funds may still defer the full $2,500 allowed in the next plan year, but the employer may choose to apply the newly deferred funds from the current year before applying the rolled-over funds from the previous year.

To help employers and employees transition to health care plans newly available under the Affordable Care Act, the enacted rules also include provisions which allow employees who are part of non-calendar cafeteria plans to make retroactive decisions regarding their FSA plans.

If you have any questions about your FSA plans, or want to discuss any business issues, contact me at or 413-570-3170.

Ensuring (and Insuring) Proper Title to Your Real Property

When you purchase real estate, you have an expectation that you can occupy and use the property as you wish, that the property will not be subject to debts or liens you haven’t agreed to, and that you’ll be able to mortgage or sell the property in the future. To ensure this is the case, you (and your lender) will want to make sure no third party has any claims against the property. This is done by having an attorney examine a number of things, including public records held by the local registry of deeds and the local probate and family court, the payment of taxes and utility services at the municipal and state level, and information from the seller about the prior use of the property. The attorney’s investigation should identify whether a third party has any potential claims of ownership, or has any potential liens for work done on the property.

Once this investigation is complete, and all potential issues have been identified and cleared up, your attorney will contact a title insurance company to issue a title insurance policy. The title insurance company will review the attorney’s investigation of the property, confirm all issues have been cleared up, and authorize the issuance of the title insurance policy. This policy insures your ownership of the property, and sets out the title insurance company’s agreement to defend your ownership if a claim arises and to pay out the value of the policy if any claim is successful.

There are two types of title insurance policies issued by a title insurance company: a lender’s policy and an owner’s policy. A lender’s policy is given to the lender and only insures the value of the loan issued. In contrast, an owner’s policy is given to you as the owner and insures the full value of the property, including any equity you may have. When you first purchase property, the additional cost of an owner’s policy is usually minimal, and is almost always worth the investment.

If you have questions about purchasing property, the process of obtaining title insurance, or any real estate matter, contact me at or 413-570-3170.

Protecting Your Special Needs Student from Bullying

With students returning to school following the holiday weekend, it’s important to remember the disproportionate impact bullying can have on students with disabilities. Not only are students with learning disabilities, attention deficit disorder, autism, and other special needs more likely to be bullied than their peers, but they are also less likely to recognize an action as bullying, less likely to understand the harm the behavior is causing, and less likely to report the behavior to an adult. As a result, it’s even more necessary these issues are spotted and addressed as early as possible.

In light of this need, the U.S. Department of Education recently issued a statement reminding school officials of their obligations to identify and prevent the bullying of students with special needs. (See the letter here.) In the letter, the Office of Special Education and Rehabilitative Services makes clear that the bullying of a student who is receiving special education services can result in the student not receiving a Free and Appropriate Public Education if the behavior prevents the student from receiving meaningful educational benefits.

Whenever a school becomes aware that a disabled student has been bullied, it should call a meeting of the student’s IEP team to determine if the student’s needs have changed and if the IEP needs to be changed. The school, however, should try to avoid a change in placement because the disabled student is still entitled to receive FAPE in the least restrictive environment, and this requirement cannot be avoided simply because of bullying behavior. Instead, whenever possible, the school should address the situation in a way that allows the student to continue their education in a meaningful and appropriate fashion.

If you have questions about your child’s education, contact me at or 413-570-3170.

Health Care Proxies and Medical Directives: Guiding Your Health Care

In the last post, we discussed how a durable power of attorney allows another person to act on your behalf, especially at a time when you may be incapacitated.  A health care proxy document plays the same role for medical care – if you’re unable to make informed medical decisions, your health care proxy grants that authority to someone else.  As a result, a health care proxy is one of the most important estate planning documents everyone should have.

A health care proxy only becomes effective when the attending physician has determined you are unable to make informed decisions about your medical care.  At that time, your proxy will become authorized to make decisions on your behalf.  You can, however, limit your proxy’s authority by specifying that certain care should, or should not, be administered in specific situations.  You can amend or withdraw the health care proxy at any time, unless a court has determined that you are incompetent to do so.

If you become incapacitated, and do not have a health care proxy in place, the hospital or your family may be forced to ask the Probate Court to impose a guardianship, which can be a time-consuming and expensive process.  A simple and easily completed health care proxy can help avoid this situation.

In addition to a health care proxy, you should also consider completing a medical directive, which will outline specific medical situations and provide guidance to your proxy regarding what your wishes are for each situation.

If you have questions about health care proxies, durable powers of attorney, or any other estate planning issues, contact me at or 413-570-3170.

Solicitation Runs Both Ways (Update!)

Last month, we discussed a U.S. District Court case that found a non-solicitation provision signed by a former employee was enforceable even when contact between the former employee and the third party client was first initiated by the client. This finding (and the preliminary injunction issued against the former employee) was recently upheld by the First Circuit Court of Appeals, which has solidified the protections employers bargain for when they enter non-solicitation agreements.

The former employee asked the Appeals Court to adopt a per se rule that working with the clients of a former employer would be allowed if the clients were the first to contact the former employee. The Court declined to do so and, instead, found the facts of each situation would have to be analyzed to determine whether “solicitation” had taken place: “where the sales process is complex and the products are customized, initial contact is usually at a considerable remove from a closed sale. In such a situation, initial contact is likely to weigh far less heavily.” The Appeals Court held that “the amorphous nature of the term [initial contact] counsels persuasively against a per se rule.”

Ultimately, this decision will make it easier for employers to protect their goodwill and client relationships, even when a former employee is attempting to entice them away.

If you have any questions about this case, non-solicitation agreements in general, or want to discuss other business issues that commonly arise, contact me at or 413-570-3170.

Protecting Your Home: The Massachusetts Homestead Act

Your home is not only one of your single largest financial investments, it’s also the place where your family lives and makes memories. The Massachusetts Homestead Act, revised in 2011, helps protect your home from business creditors, lienhodlers, and personal debts.

Under the revised Homestead Act, your principal residence automatically receives a homestead protection of one-hundred and twenty-five thousand dollars ($125,000). However, by recording a Declaration of Homestead in the Registry of Deeds, you can protect up to five-hundred thousand dollars ($500,000) of equity in your home. If you are older than sixty-two or are disabled, you are eligible for even more protection.

If you decide to file a Declaration of Homestead, you should make sure all the owners sign the declaration. Owners eligible to file a declaration include anyone with a legal interest in the property who also uses the property as their primary residence (non-owner spouses and family members are automatically protected as long as they are using the home as their primary residence). Even if you have granted the property to children but hold a life estate in the home, or even if the property has been transferred to a trust but you are one of the beneficiaries of the trust, then a homestead can still be filed. (If the property is in trust, the trustee would file the declaration and name the trust beneficiaries in the declaration.)

Your homestead protects your primary residence from attachment, execution, or seizure for the payment of many types of debt. A homestead does not protect you from all obligations, and some exceptions include claims arising in connection with your mortgages, government taxes and assessments, or court orders regarding payment of alimony or child support. The protections afforded by the Homestead Act are not effective against liens or claims recorded before your Declaration of Homestead is recorded, so consider preparing and recording a homestead now.

If you have any questions about the Homestead Act, or other ways to protect your property, contact me at or 413-570-3170.

The Importance of the IEP to a Free and Appropriate Public Education

Earlier, we discussed a student’s Individualized Education Plan (IEP), including how it should be drafted, who should be involved, how goals, objectives, and benchmarks should be set, and which direct services and related services could be identified as necessary. We also discussed different examples of related services which might be available. The ultimate goal of the IEP, and the provision of all special education services, is your student’s free and appropriate public education (also known as “FAPE”).

Under federal law, each state is required to provide a free and appropriate public education to every student with disabilities between the ages of three and twenty-one. FAPE is defined as “special education and related services” that (i) are provided at public expense; (ii) meet the state’s education standards; (iii) include an appropriate preschool, elementary, or secondary school education; and (iv) are provided in conformance with an IEP.

Courts have determined the requirement to provide FAPE does not mean the school has to provide the “best” program available, nor does it mean the school has to provide a program that will “maximize” a student’s potential. Instead, it means only that the program must provide a “basic floor of opportunity” which allows a “child to benefit educationally from instruction.”1 This minimal standard allows many school districts to argue a proposed program meets the requirements for a free and appropriate public education merely because a student will receive some benefit from the program, even if the student would receive greater benefit from a different placement.

The requirement that FAPE integrates the IEP, however, opens a door to making sure a student is placed in a program that provides more than just minimal benefits. As we know, an IEP must be individually tailored to a student’s unique needs, and must be calculated to provide the student with services that help achieve specific goals, objectives and benchmarks. Because of this, what is a free and appropriate public education for one student may be different than what it is for another. As a result, by making sure your student’s IEP contains a very detailed listing of the special education services to be provided, you can ensure your student is receiving a free and appropriate public education that is both unique to them and provides benefits greater than the minimum standard required by the courts.

If you have questions about whether your student is receiving a free and appropriate public education, or whether a school district is complying with an individualized education plan, contact me at or 413-570-3170.

1 Board of Education v. Rowley, 458 U.S. 176 (1982).