Miller, Miller & Canby's Diane Feuerherd Joins Appellate Seminar Panel


Join our own Diane Feuerherd and other speakers on September 14 at 5:30 pm for the Prince George's County Bar Association and Maryland State Bar Association Appellate Seminar 2020. This program will include a discussion of new appellate rules, final judgements for appeals, issue recognition and drafting questions presented.

Date: September 14, 2020
Time: 5:30pm

Moderator: Michael Wein, Esq.

Speakers:
Hon. Douglas R. M. Nazarian
Court of Special Appeals & Member of Maryland Rules Committee

Hon. Joseph F. Murphy, Jr. (Ret.)
Chief Judge, Court of Special Appeals

Hon. Erek L. Barron
Partner - Whiteford Taylor  & Preston

Timothy Maloney, Esq.
Shareholder - Joseph, Greenwald & Laake, PA

Diane Feuerherd, Esq.
Miller, Miller & Canby

For more information and to register click here.





Best Lawyers in America® Announces 2021 Best Lawyers Awards; Recognizes Five MM&C Attorneys


Miller, Miller & Canby is pleased to announce five firm attorneys have been recognized as Best Lawyers in America.® for 2021. James (Jim) Thompson, Joel (Jody) Kline, Donna McBride and Joseph (Joe) Suntum have been recognized in their respective areas of practice as “Best Lawyers” and Diane Feuerherd has been recognized as a Best Lawyers “One to Watch”, an honor for attorneys who are earlier in their careers, typically in practice nine years or less. 

Mr. Thompson
concentrates his practice in eminent domain and real estate valuation litigation, in addition to civil litigation involving complex real estate and business/commercial disputes. He has led Miller, Miller & Canby’s Litigation practice group for close to 30 years. He has been named to the Best Lawyers list every year since first being recognized in 2007.

Mr. Kline
joined Miller, Miller & Canby in 1974, has been a principal of the firm since 1981 and has served as head of the firm’s Land Use & Zoning practice since that time. His practice concentrates on land use, zoning and subdivision law, representing private clients, nonprofit entities, and municipal corporations and agencies. He has also been named to the Best Lawyers list every year since first being recognized in 2007.

Ms. McBride
is a partner in Miller, Miller & Canby’s Litigation practice, where she focuses in complex business matters for corporate clients, as well as insurance-related litigation and trust litigation. In 2019 she was admitted to the American College of Trial Lawyers as a Fellow, an honor reserved for experienced trial lawyers who have mastered the art of advocacy and whose professional careers have been marked by the highest standards.

Mr. Suntum
is a principal in the firm and the leader of the Eminent Domain and Condemnation group. His decades of trial experience and his in-depth knowledge of real property valuation and the law of eminent domain allow him to protect his clients' property rights and maximize their compensation when their properties are targeted for condemnation. He is the Owners’ Counsel of America member  attorney for the state of Maryland, a selective membership restricted to only one attorney per state. The firm’s Eminent Domain practice has been honored as a Best Law Firms Metropolitan “Tier 1” practice.

Ms. Feuerherd
is an attorney in Miller, Miller & Canby's Litigation practice with a focus in appellate, business and real estate litigation. She has successfully represented individuals, property owners, and businesses in a wide variety of matters, ranging from administrative hearings before the Board of Appeals, to jury and bench trials in state and federal courts, and to appeals before the Court of Special Appeals and Court of Appeals. In addition to her work she is active in state and local bar associations.

Best Lawyers in America is the oldest and one of the most respected attorney ranking services in the country. Recognition is based entirely on peer review. For more than 30 years, the organization has assisted those in need of legal services to identify the attorneys best qualified to represent them across hundreds of areas of practice.

Best Lawyers publishes a stand-alone publication which announces recognized attorneys. Best Lawyers lists are also published in local, regional, and national print and digital versions of leading publications, including The Wall Street Journal, The New York Times, and the Washington Post.

ABOUT MILLER, MILLER & CANBY
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Use & Zoning, Real Estate, Litigation, Eminent Domain, Business & Tax and Trust and Estates Law. The firm's moderate size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946. For more information, visit www.millermillercanby.com.
 





Estate Planning Tip: Be Aware of a Recent Tax Court Ruling that “Loan” Is Actually a Gift


In a recent tax court case, Estate of Bolles v. Commissioner, T.C. Memo. 2020-71, 119 T.C.M. (CCH) 1502 (June 1, 2020), the court recognized that where a family loan is involved, an actual expectation of repayment and an intent to enforce the debt are crucial for a transaction to be considered a loan. Many people use trusts and gifts as estate planning tools. Be aware of the requirements of “loans” v. “gifts” when using lending as an estate planning tool.

Background
Mary Bolles made numerous transfers of money to each of her children from the Bolles Trust, keeping a personal record of her advances and repayments from each child, treating the advances as loans, but forgiving up to the annual gift tax exclusion each year. Mary made numerous advances amounting to $1.06 million to her son Peter, an architect, between 1985 and 2007. Peter’s architecture career initially seemed promising, and during his early career, it seemed that Peter would be able to repay the amounts advanced to him by Mary. However, his architecture firm, which had begun to have financial difficulties by the early 1980s, eventually closed. Although Peter continued to be gainfully employed, he did not repay Mary after 1988. By 1989, it was clear that Peter would not be able to repay the advancements.

Although Mary was aware of Peter’s financial troubles, she continued to advance him money, recording the sums as loans and keeping track of the interest. However, she did not require Peter to repay the money and continued to provide financial help to him despite her awareness of his difficulties. Although Mary created a revocable trust in 1989 excluding Peter from any distribution of her estate upon her death, she later amended the trust, including a formula to account for the loans made to him rather than excluding him. Peter signed an acknowledgment in 1995 that he was unable to repay any of the amounts Mary had previously loaned to him. He further agreed that the loans and the interest thereon would be taken into account when distributions were made from the trust.

Upon Mary’s death in 2010, the IRS assessed the estate with a deficiency of $1.15 million on the basis that Mary’s advances to Peter were gifts. Mary’s estate asserted that the advances were loans. Both parties relied upon Miller v. Commissioner, T.C. Memo 1996-3, aff’d, 113 F.3d 1241 (9th Cir. 1997).

Requirement for Advances to be Considered a Loan
The case of Miller v. Commissioner, T.C. Memo 1996-3, aff’d, 113 F.3d 1241 (9th Cir. 1997) spells out the traditional factors that should be considered in determining whether an advance of money is a loan or gift. To establish that an advance is a loan, the court should consider whether:
(1) there was a promissory note or other evidence of indebtedness,
(2) interest was charged,
(3) there was security or collateral,
(4) there was a fixed maturity date,
(5) a demand for repayment was made,
(6) actual repayment was made,
(7) the transferee had the ability to repay,
(8) records maintained by the transferor and/or the transferee reflect the transaction as a loan, and
(9) the manner in which the transaction was reported for Federal tax purposes is consistent with a loan.

Court Ruling
In the Estate of Bolles case, the tax court recognized that where a family loan is involved, an actual expectation of repayment and an intent to enforce the debt are crucial for a transaction to be considered a loan.

The court found that the evidence showed that although Mary recorded the advances to Peter as loans and kept records of the interest, there were no loan agreements, no attempts to force repayment, and no security. Because it was clear that Mary realized by 1989 that Peter would not be able to repay the advances, the court held that although the advances to Peter could be characterized as loans through 1989, beginning in 1990, the advances must be considered gifts. In addition, the court found that Mary did not forgive any of the loans in 1989, but merely accepted that they could not be repaid. Thus, whether an advance is a loan or a gift depends not only upon the documentation maintained by the parties, but also upon their intent or expectations.

Lending as an Estate Planning Tool
As the Estate of Bolles case demonstrates, intra-family loans can be a smart estate planning tool for many families IF properly structured and well-documented. Lenders (usually grandparents or parents) can essentially give access to an inheritance without any immediate gift or estate tax problems, generate a better return on their cash than they could with bank deposits, and borrowers (usually children or grandchildren) can take out loans at interest rates lower than commercial rates and with better terms. In fact, the Internal Revenue Service allows borrowers who are related to one another to pay very low rates on intra-family loans. Furthermore, the total interest paid on these types of transactions over the life of the loan stays within the family. These loans may effectively transfer money within the family, for the purchase of a home, the financing of a business, or any other purpose.

There are several points to keep in mind regarding these types of loans: the loan must be well-documented, lenders should usually ask for collateral, the lender should make sure the borrower can repay the loan, and the income and estate tax implications should be examined thoroughly.

Express Intent in Estate Documents
While you were kind enough to help a member of your family by lending him or her money, do not let this become a legal dilemma in the event of your incapacity or after your death. Instead, use your estate plan to specifically express what you want to have happen regarding these assets. Before lending money, it is important to carefully consider how the loan should be structured, documented, and repaid.

We are Here to Help
If you or someone you know has lent money and has questions about how this affects your estate plan, contact MM&C estate planning attorney Dave Lucas today to discuss the options.

David Lucas
is an attorney in the Estates & Trusts and Business & Tax practice groups at Miller, Miller & Canby. He focuses his practice in Estate Planning and Trust and Estate Administration. He provides extensive estate and legacy planning, asset protection planning, and retirement planning.

Contact David at 301.762.5212 or via email. To learn more about Miller, Miller & Canby's Estates & Trusts practice click here.  

 





The Daily Record Announces Annual VIP List Winners; Names MM&C Attorney Diane Feuerherd to List


Miller, Miller & Canby is pleased to announce attorney Diane Feuerherd has been named to the Daily Record VIP list for 2020. The VIP list recognizes leaders in the State of Maryland based on their professional accomplishments, community service and a commitment to inspiring change. Honorees are 40 years old or younger. They are selected by an outside panel of judges, which includes previous winners and business leaders.

“We are extremely proud to announce this well-deserved honor for Diane, who has been an instrumental part of our firm since she joined us in 2013,” said Managing Principal Robert Gough.

Added senior Principal Donna McBride, “Diane makes a tremendous positive impact here for our clients, and also in the broader legal community through her many volunteer and leadership roles.  She has accomplished a great deal in a short period of time, and we look forward to continuing to celebrate her achievements as she advances in her career.”

Diane Feuerherd
is an attorney in Miller, Miller & Canby's Litigation practice with focuses in appellate, business and real estate litigation. She joined the firm after serving for two years as an appellate law clerk to the Honorable Lynne A. Battaglia of the Court of Appeals of Maryland, the State's highest court. She has successfully represented individuals, property owners, and businesses in a wide variety of matters, ranging from administrative hearings before the Board of Appeals, to jury and bench trials in state and federal courts, and to appeals before the Court of Special Appeals and Court of Appeals.

In addition to her work, she is active in state and local bar associations. She serves as co-chair of the Maryland State Bar Association’s Judicial Appointments Committee, Blog Manager of the Maryland Appellate Blog, Board Member of the Maryland Bar Foundation and a past Fellow of the MSBA’s prestigious Leadership Academy.

"This year's VIP List honorees are an impressive group of young professionals with a strong work ethic and a drive to succeed," said Suzanne Fischer-Huettner, group publisher of The Daily Record. "They are making significant contributions to their professions and to improving their communities. The Daily Record is pleased to honor them."

Click here for more information about the Daily Record VIP list for 2020 and celebratory event on September 17, 2020. Click the Download Attachment link below to view the entire list of VIPs.

Take a peek at the write-up about Diane on the Daily Record website by clicking here.

ABOUT MILLER, MILLER & CANBY
In 2021, Miller, Miller & Canby will celebrate 75 years of serving the legal needs of metropolitan Washington, DC. As the oldest law firm in Montgomery County, MD, the firm recognizes that this milestone reflects the relationships built and maintained with our clients, friends and the business community, many spanning multiple generations. The firm maintains its focus on its core areas of practice: Land Use and Zoning, Real Estate, Litigation, Eminent Domain, Business and Tax, and Trusts and Estates Law. The firm's size allows its attorneys to maintain close contact with clients and have the opportunity to develop and foster trusted, lasting relationships. In all of our practice areas, an overarching concern for quality of product and efficiency of accomplishment assures clients that we strive for true value in legal representation. Miller, Miller & Canby is proud to have maintained this standard of service since the firm’s founding in 1946.





Widening Washington D.C.’s Beltway & I-270 for Toll Lanes in Maryland: June 2020 Project Update


If you live in Montgomery or Prince George’s Counties, or you regularly commute into Washington D.C. or Northern Virginia, you are likely already aware of plans to widen the I-495 Beltway and I-270 to make way for new toll lanes.  Miller, Miller & Canby’s eminent domain and condemnation attorneys are closely monitoring this major infrastructure project.

The Landscape
This project is a priority of Governor Hogan, which is emerging out of the I-495 & I-270 Managed Lanes Study launched in March 2018 by Maryland Department of Transportation’s State Highway Administration (MDOT SHA).  A Public-Private Partnership (P3) has been established to manage and indeed fund the project’s development, design and construction.  The P3 releases periodic newsletters and maintains this project website.

On January 8, 2020, Maryland’s Board of Public Works (BPW), comprised of the Governor, Treasurer and Comptroller, voted 2-1 to approve Phase-1 of the project.  On February 7th the P3 posted an announcement on its website (click here to view) clarifying that the BPW’s vote “only allows the solicitation process to move forward for a Phase Developer to assist the MDOT SHA with preliminary development and design activities, which is allowable under federal regulations.”   Once the project’s new toll lanes are constructed, the P3’s development contractor will retain some level of ownership interest in those lanes while operating and maintaining them for a given time period – purportedly 50 years.

Prior to January’s BPW vote, the National Environmental Policy Act (NEPA) process was already well underway for the I-495 & I-270 Managed Lanes Study.  In fact, the Draft Environmental Impact Statement (DEIS) was scheduled to be released earlier this year for public review and comment until the COVID-19 situation introduced delay.  The P3 is working to release the DEIS in the mid-July timeframe, and it will be followed by an announcement scheduling public hearings, which will most likely be held virtually, but in-person hearings have not yet been ruled out.  P3 also announced that the minimum-required 45-day review period will be extended.


The Plan for Phase 1
The P3’s February 7th website post included a map of Phase-1 as planned, a copy of which is provided below.  Phase-1 will widen I-495 and I-270 for toll lanes, beginning by replacing and widening the American Legion Bridge that crosses the Potomac River from Virginia, and extending northward to I-70 in Frederick County.  Current plans are to divide Phase-1’s delivery, first widening I-270 up to its intersection with I-370 in Montgomery County.  However, since the project’s details remain undefined, the extent of privately owned real estate that will be required to support the widening remains unresolved.  At present, there is an interactive map posted online by MDOT SHA for preliminary planning purposes, which remains subject to change.


Failure of Legislation Proposed to Stop the Project
This project remains highly controversial.  In fact, Bills S.B. 229 & H.B. 292, cross-filed in both chambers of the General Assembly in the 2020 regular session, proposed to prohibit the State from constructing toll roads or bridges without the consent of the majority of the affected Counties.  The Bills proposed to rewrite an existing law (Maryland Transportation Code Section 4-407), which already requires majority County consent for toll projects, but only amongst nine named Counties all located east of the Chesapeake Bay Bridge.  If successfully enacted, the new law would have extended that majority consent requirement to ALL Maryland Counties and Baltimore City.  

However, on March 16, 2020, the House Environment and Transportation Committee voted 16-5 against HB292 and issued an unfavorable report.  The Senate’s version of the Bill, S.B. 229 technically died in the Finance Committee by March 18th, when the regular session prematurely adjourned due to the COVID-19 situation.

While the General Assembly’s debate over the 495/270 widening project may carry on due to its passionate opponents, they find themselves in the minority – so it seems highly unlikely the General Assembly will enact legislation that even potentially threatens to curb the project.


About Miller, Miller & Canby
Miller, Miller & Canby has extensive experience in protecting property owners’ rights throughout the eminent domain process. Jamie Roth is an Associate in the firm’s Litigation Practice Group, concentrating his practice in real estate litigation with a focus in eminent domain. Prior to becoming an attorney, Jamie enjoyed a distinguished career spanning over twenty years in the private and public sector with experience in project management, strategic planning, asset management and risk mitigation, including eleven years as a successful real estate consultant in federal eminent domain matters.

If you have any eminent domain-related questions or questions about the project or its potential impact to your property, please contact Jamie at 301.762.5212 or via email.

Visit our firm’s website for general information on the eminent domain process and our firm’s services by clicking here.

 





MM&C Condemnation Attorney Joseph Suntum Elected Chair of the Owners’ Counsel of America Board


Miller, Miller & Canby Condemnation Attorney, Joseph (Joe) Suntum, has been elected Board Chair of the Owners’ Counsel of America (OCA) Board of Directors.

The OCA is a network of highly-skilled eminent domain attorneys dedicated to defending the rights of private property owners across the country. OCA condemnation attorneys represent landowners in cases against local and state governments, the federal government, transportation departments, utilities, energy companies, redevelopment authorities, and other agencies.

The eminent domain attorneys affiliated with OCA have experience representing landowners – including owners of homes, commercial buildings, undeveloped land and industrial real estate -- in eminent domain, inverse condemnation, regulatory takings claims, property rights litigation, and complex real estate valuation matters.

“I am honored by the Board’s trust and look forward to working with the Board…to continue moving OCA forward and building upon the foundation of our predecessors. With everyone’s support we will continue OCA’s growth and stature as a strong voice for private property rights and an invaluable supporting organization for all our members,” said Mr. Suntum.

OCA member attorneys are advocates for property owners across the country. Membership is selectively restricted to one member attorney from each state. Mr. Suntum is the member attorney for the state of Maryland.

To learn more about the Owners’ Counsel of America, click here.

Joe Suntum
is Miller, Miller & Canby’s Eminent Domain/Condemnation practice group leader. He brings more than 30 years of trial experience and in-depth knowledge of real property valuation and eminent domain law to effectively protect the rights of his clients. In 2020, Miller, Miller & Canby’s Eminent Domain practice was awarded a U.S. News – Best Lawyers ® First Tier ranking in the Washington, DC region for the fourth year.

To learn more about eminent domain and Miller, Miller & Canby, contact Joe Suntum at 301-762-5212, or via email.
 





Widening Washington D.C.’s Beltway & I-270 for Toll Lanes in Maryland: Project Update


If you live in Montgomery or Prince George’s Counties, or you regularly commute into Washington D.C. or Northern Virginia, you are likely already aware of plans to widen the I-495 Beltway and I-270 to make way for new toll lanes.  Miller, Miller & Canby’s eminent domain and condemnation attorneys are closely tracking this major infrastructure project.

The Landscape
This project is a priority of Governor Hogan, which is emerging out of the I-495 & I-270 Managed Lanes Study launched in March 2018 by Maryland Department of Transportation’s State Highway Administration (MDOT SHA).  A Public-Private Partnership (P3) has been established to manage and indeed fund the project’s development, design and construction.  The P3 releases periodic newsletters and info on their website.

On January 8, 2020, Maryland’s Board of Public Works (BPW), comprised of the Governor, Treasurer and Comptroller, voted 2-1 to approve Phase-1 of the project.  On February 7th the P3 posted an announcement on its website clarifying that the BPW’s vote “only allows the solicitation process to move forward for a Phase Developer to assist the MDOT SHA with preliminary development and design activities, which is allowable under federal regulations.” (Click here for full anouncement)  Once the project’s new toll lanes are constructed, the P3’s development contractor will retain some level of ownership interest in those lanes while operating and maintaining them for a given time period – purportedly 50 years.

Prior to January’s BPW vote, the National Environmental Policy Act (NEPA) process was already well underway for the I-495 & I-270 Managed Lanes Study.  In fact, the P3’s most recent September 2019 Newsletter noted that the Draft Environmental Impact Statement (DEIS) was scheduled to be released later this Winter 2020 for public review and comment, followed by public hearings in the Spring.  However, the P3’s February 7th website post announced that the DEIS would not be published until Spring 2020.

The Plan for Phase 1
The P3’s February 7th website post included a map of Phase-1 as planned, a copy of which is provided below.  Phase-1 will widen I-495 and I-270 for toll lanes, beginning by replacing and widening the American Legion Bridge that crosses the Potomac River from Virginia, and extending northward to I-70 in Frederick County.  Current plans are to divide Phase-1’s delivery, first widening I-270 up to its intersection with I-370 in Montgomery County.  However, since the project’s details remain undefined, the extent of privately owned real estate that will be required to support the widening remains unresolved.  At present, there is an interactive map posted online by MDOT SHA for preliminary planning purposes, which remains subject to change.



Legislation Proposed to Stop the Project
This project remains highly controversial.  In fact, Bills SB0229 & HB0292, cross-filed in both chambers of the General Assembly this session, propose to prohibit the State from constructing toll roads or bridges without the consent of the majority of the affected Counties.  The Bills propose to rewrite an existing law (Maryland Transportation Code Section 4-407), which already requires majority County consent for toll projects, but only amongst nine named Counties all located east of the Chesapeake Bay Bridge.  If successfully enacted, the new law would extend that majority consent requirement to ALL Maryland Counties and Baltimore City. 

The House Environment and Transportation Committee held a hearing on February 13th in which HB0292 was under consideration.  Those testifying in favor of HB0292 (i.e. in opposition to the 495/270 project), led by Prince George’s County representative Mary Lehman, raised arguments and allegations including:

  • The existing law stands as precedent, and to continue limiting the consent requirement to nine Counties is inequitable/unfair.

  • The State needs to fully engage affected Counties, yet there has been virtually no consultation, coordination and collaboration with affected Counties for this 495/270 project. 

  • The contract procurement process has been far from transparent, as solicitation was recently amended to essentially sole-source to an Australian company called Transurban who was Virginia’s P3 contractor that still owns and operates its I-495, I-395 and I-95 Express Lanes.

  • Preliminary MDOT SHA estimates indicate that the entire 495/270 project will range between $8 and $9 Billion, but witnesses asserted that budget estimate details have not been released and independent estimates are as high as $25 Billion.

  • Testimony challenged the assertion that the project will be financed wholly by private investment, thus enabling other planned MDOT SHA projects to remain funded and on-track.  Rather, it was suggested that taxpayers will likely absorb change-orders and cost overruns, which have proven to be significant in other P3 projects elsewhere.  Transurban’s current West Gate Tunnel project in Australia was presented as an example.

  • This Bill will not become a blanket veto of all toll projects, because County politicians are accountable to voters, and if the project makes sense, they will support it or face being replaced.

Those testifying in opposition to the Bill (i.e. in favor of the I-495/I-270 project) raised arguments and allegations including:

  • This is a Not In My Back Yard (NIMBY) Bill, in that its proponents living closer to D.C. are disregarding the decades-long notorious traffic issues faced particularly by Maryland commuters living in upper Montgomery County, Frederick County and further. (4+ hours daily commute for many) 

  • The State, not Counties, must ultimately consider how this 495/270 project will benefit its citizens at large and the larger State economy as it pertains to the livability and attractiveness to new persons and businesses considering moving here. 

  • Individual Counties cannot be given a first right of refusal that will impact the entire State and pit counties against each other – which in all likelihood will occur.  They referenced the recent I-95 toll road project north of Baltimore extending into Harford County, which Baltimore County could have opposed if this Bill were law, to the detriment of Harford County residents. 

  • It is a fallacy that adding toll lanes will increase greenhouse gas emission.

  • The 495/270 widening would generate jobs and income, which would be lost if this Bill were passed. 

Finally, there was discussion regarding the potential constitutional Commerce Clause challenges that could be raised should HB0292 become law.  It was also noted that while toll projects tend to be State projects, they usually receive federal funds, making federal law applicable, which would potentially preempt a State law such as the one proposed.  HB0292’s opponents posited that it is more susceptible to being repealed or preempted than the existing law requiring nine eastern Counties’ consent.  They pointed out that the I-495 project involves interstate transit into Virginia falling under federal purview, while asserting that the existing law only impacts intrastate roadways in nine counties.  HB0292’s proponents reiterated that it changes nothing about existing law other than the number of Counties whose consent is required. 

As the General Assembly continues to deliberate these Bills, the 495/270 widening project will undoubtedly press ahead.

About Miller, Miller & Canby
Miller, Miller & Canby has extensive experience in protecting property owners’ rights throughout the eminent domain process. Jamie Roth is an Associate in the firm’s Litigation Practice Group, concentrating his practice in real estate litigation with a focus in eminent domain. Prior to becoming an attorney, Jamie enjoyed a distinguished career spanning over twenty years in the private and public sector with experience in project management, strategic planning, asset management and risk mitigation, including eleven years as a successful real estate consultant in federal eminent domain matters.

If you have any eminent domain-related questions or questions about the project or its potential impact to your property, please contact Jamie at 301.762.5212 or via email.

Visit our firm’s website for general information on the eminent domain process and our firm’s services by clicking here.





Three Liability Planning Tips for Business Owners


The risk of liability is a very real concern for today’s business owners.  There are employment-related issues including wrongful termination, sexual harassment, and discrimination; careless business partners and employees; and contractual obligations that may include personal guarantees, leases, business agreements, etc.  There are also personal liabilities like divorce, vehicle accidents, and rental real estate.

Unfortunately, our litigious society necessitates that a broad range of people, including business owners, board members, real estate investors, private practitioners and retirees, should protect their hard-earned assets from a variety of liabilities. We have outlined some strategies for business owners and practitioners that may help provide protection from risk.

Key Take-aways to Protect Yourself from Risk:

●    Types of liability insurance you need to have in place;
●    State exemptions that will protect certain assets from the claims of creditors; and
●    The role of business entities in liability planning.

Tip #1 – Insurance is the First Line of Defense Against Liability

Liability insurance is the first line of defense against any claim.  Liability insurance provides a source of funds to pay legal fees as well as settlements or judgments.

The types of insurance you should consider include:

●    Homeowner’s insurance
●    Property and casualty insurance
●    Excess liability insurance (also known as “umbrella” insurance)
●    Automobile and other vehicle (motorcycle, boat, airplane) insurance
●    General business insurance
●    Professional liability insurance
●    Director and officer insurance

Planning Tip:  Never rely on insurance as your sole means of liability protection since the cost of a comprehensive policy may be prohibitive, and each type of policy has numerous exceptions to coverage.  Instead, you should use insurance as one of a multiple layer of strategies designed to place a barrier between your business and personal assets and the claims of a plaintiff.  Moreover, it is important to work with an insurance professional who can explain the purpose of each type of coverage, make recommendations for liability limits and deductibles, and help you consider the most cost-effective coverage on an annual basis.

Tip #2 – State Law Exemptions Protect a Variety of Personal Assets from Lawsuits

Each state has a set of laws or constitutional provisions that partially or completely exempt certain types of assets from the claims of creditors.  While these laws vary widely from one state to the next, in general, the following types of assets may be protected from a creditor seeking to enforce a judgment against you:

●    Primary residence (referred to as “homestead” protection in some states)
●    Qualified retirement plans (401(k)s, profit sharing plans, money purchase plans, IRAs)
●    Life insurance (cash value)
●    Annuities
●    Property co-owned with a spouse as “tenants by the entirety” (only available to married couples; and may only apply to real estate, not personal property, in some states)
●    Wages
●    Prepaid college plans
●    Section 529 plans (“college savings plan”)
●    Disability insurance payments
●    Social Security benefits

Planning Tip:  If you reside in Maryland or the District of Columbia, Miller, Miller & Canby’s attorneys can help you determine which exemptions are available to you and how much protection they provide.  Our business and estate planning attorneys can also help you understand the pros and cons of each type of exemption.  For example, while tenants by the entirety co-ownership of real property between you and your spouse is simple and may make sense in the short term; in the long run, if you divorce or one spouse dies, the protection provided by tenants by the entirety co-ownership ends, thus making it completely useless.  As with liability insurance, exemption planning is best used as one layer of an overall asset protection strategy.

Tip #3 – Business Entities Protect Business and Personal Assets from Lawsuits

The various types of business entities include partnerships, limited liability companies, and corporations.  Business owners need to mitigate the risks and liabilities associated with owning a business. Business entities can also help real estate investors mitigate the risks and liabilities associated with owning real estate.  The right structure for your enterprise should take into consideration asset protection, income taxes, estate planning, retirement funding, and business succession goals.

Business entities can also be an effective tool for protecting your personal assets from lawsuits.  In many states, in addition to the protections offered by incorporating, assets held within a limited partnership or a limited liability company are protected from the personal creditors of an owner.  Depending on the type of business entity and the state of formation, the personal creditors of an owner may be prevented from taking control of the business.  Instead, the creditor is limited to a “charging order” which only gives the creditor the rights of an assignee.  This is beneficial to the owners, because an assignee generally only receives distributions from an entity if, and when, the distributions are made.
 
Planning Tip:  Creating a business entity that protects your assets from lawsuits involves much more than just filling out some forms with the state and paying an annual fee.  Business formalities must be observed and documented, otherwise a creditor can attack the entity through “veil piercing” or “alter ego” arguments, which could result in personal liability for your business’s actions or debts.  Additionally, state laws governing business entities vary widely and are constantly changing due to legislative action and court decisions.  As a result, it is critical to properly chronicle business activities and modify the business’s governing documents as applicable laws change. 

Miller, Miller & Canby’s business law attorneys can help you remain in compliance to thwart any potential challenges to your entity.  And remember, as with liability insurance and state law exemptions, the use of business entities is just another layer of an overall asset protection strategy that should coordinate with other asset protection strategies.

Protecting Your Assets

We highly recommend that liability insurance, state law exemption planning, and business entities be used together to create a multi-layered asset protection plan.  The business & estate planning attorneys at Miller, Miller & Canby are experienced with helping business owners, real estate investors, board members, retirees, physicians, practitioners, and others create and maintain effective liability protection plans.

David A. Lucas
is an attorney in the MM&C's Estates & Trusts and Business & Tax practice groups, focusing his practice in Estate Planning, and Trust and Estate Administration. He provides extensive estate and legacy planning, asset protection planning, and retirement planning. To learn more about Miller, Miller & Canby's Estates & Trusts practice click here

Chris Young
is an associate in the Business & Tax practice at Miller, Miller & Canby. He focuses his practice on corporate legal agreements, business formation, tax controversy work and helping clients deal with new tax regulations. View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.
 





Commercial Property Owners Have Until February 10th to Appeal New Maryland Property Tax Assessments


At the end of December, the Maryland Department of Assessments and Taxation (SDAT) issued new Assessment Notices to owners of one-third of all commercial and residential properties in Maryland. For instance, in Montgomery County, commercial properties in Bethesda, Potomac and Germantown were reassessed.  In Anne Arundel County, commercial properties in Annapolis, Glen Burnie and Linthicum were reassessed. In Frederick County, commercial properties in and around downtown Frederick were reassessed. In Prince George’s County, commercial properties in Beltsville, Laurel, Clinton and Upper Marlboro were reassessed.

Property owners have 45 days from the date of the Assessment Notice to challenge these new assessments.  Based on the notices we have seen this cycle, the appeal deadline is February 10, 2020, although this could vary depending upon the notice date. The “first-level” appeal takes place at the local Assessment Office. If the assessor refuses to reduce the assessment, the owner may file a further appeal to the county’s Property Tax Assessment Appeals Board (PTAAB).  This Board will consider the evidence and issue a written decision, usually within two weeks. If the property owner is still dissatisfied, another appeal may be filed to the Maryland Tax Court.

Miller, Miller & Canby has been challenging the assessments of various types of properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients. Our litigation attorneys regularly represent clients before the local Assessment Office, PTAAB and the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, industrial sites, casinos, apartment buildings and cemeteries.  Let us help you reduce your Maryland property assessments in 2020.

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby.  In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals. Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.





The 3 Types of Real Estate Co-ownership in Maryland: What Every Owner Should Know


Do you co-own, or are you planning to co-own, real estate in Maryland?  Perhaps you are married or planning to marry, you are acquiring property with others, or you have inherited a property along with others.  There are many decisions to make when considering real estate co-ownership, one of which is the type of co-ownership you should enter into, referred to legally as your estate in the property.  In fact, as circumstances change, you may benefit by changing your type of co-ownership.  However valid your reason for sharing ownership in a given property may be, you should clearly understand the type of co-ownership you have, because it matters a great deal more than you may realize. 

Consider these three important questions:

  • Can you convey your share of the property by gift or sale, or devise it in a will, without consent of your co-owners?
     
  • Is your property vulnerable to a creditor who may be actively seeking to collect on a personal debt you owe, or on the debt of a co-owner?
     
  • What happens to your property interest in the event of a divorce or death?

There are three types of real estate co-ownership in Maryland:  Joint Tenancy, Tenancy by the Entirety (a.k.a. Tenancy by the Entireties) for married couples and Tenancy in Common.

  1. JOINT TENANCY is when two or more co-owners simultaneously have an interest in the whole property, as well as a separate, undivided individual interest.  Each Joint Tenant enjoys a shared right of possession to the whole property, while holding title to a portion of it.  Joint Tenancy requires that the Joint Tenants acquire their interests at the same time, by the same instrument (e.g. deed or will) and in equal interests.  The hallmark of Joint Tenancy is a right of survivorship.  When one Joint Tenant dies, by operation of law the decedent’s interest is automatically transferred proportionally amongst the surviving Joint Tenants.  The intent to form a Joint Tenancy must be clearly expressed in the instrument.  If the instrument does not contain the words “Joint Tenants” or “Joint Tenancy,” it must otherwise clearly intend a right of survivorship.

    Pros & Cons of Joint Tenancy:  In one sense a right of survivorship is an advantage, because there is no need to record a deed verifying that the survivor(s) now owns the decedent’s interest.  However, this also means that a Joint Tenant cannot devise her property interest to her heirs.  Joint Tenants are only responsible for their respective share of cost of maintaining the property, such as property taxes, mortgage and insurance.  Moreover, Joint Tenants are entitled to share proportionally in any income the property earns.  Also, if a Joint Tenant incurs a debt unrelated to the property, any resulting judgment lien is only against her apportioned interest in the property.  However, if a judgment creditor successfully levies the property within the debtor Joint Tenant’s lifetime, the other Joint Tenants may suffer the consequences of either a forced sale or partitioning (physical division) of the property.  A Joint Tenant retains the right to sell or gift his/her interest in the property without permission of the other Joint Tenants, but in doing so, the Joint Tenancy is severed, creating a Tenancy in Common with the remaining Joint Tenants.  In Maryland, a Joint Tenant’s mortgage of his/her property interest also converts his/her co-ownership into a Tenancy in Common.  Finally, an individual Joint Tenant may file a lawsuit to potentially force a partition of the property, or a sale in lieu of partition, in which case the proceeds are distributed amongst the Joint Tenants.
     
  2. TENANCY BY THE ENTIRETY is a form of Joint Tenancy recognized under common law for married couples.  In Maryland, couples who are married when executing the deed to a property are presumed to take title as Tenants by the Entirety unless otherwise provided in the instrument.  However, if two persons marry while already owning property together as Joint Tenants, their ownership is not automatically converted into a Tenancy by the Entirety. They must update their deed. Conversely, when the Court grants an absolute divorce, the Tenancy by the Entirety is severed by operation of law and their co-ownership is converted into a Tenancy in Common, thus extinguishing the right of survivorship.

    Pros & Cons of Tenancy by the Entirety:  Under a Tenancy by the Entirety there is only one shared interest between the married co-owners, consequently one spouse cannot sell or otherwise convey the property without the consent of the other.  Also, if only one spouse owes a debt to a creditor, that creditor cannot force a sale to satisfy the debt; the property is shielded from the debts of one spouse.
     
  3. TENANCY IN COMMON differs from Joint Tenancy in that each co-owner has a divisible interest in the property, and there is no right of survivorship.  When a Tenancy in Common is formed, the property interests will be apportioned equally between the Tenants in Common, unless allocation is otherwise specified.  Any property granted to two or more unmarried persons is a Tenancy in Common unless there is a clear intention in the instrument to form a Joint Tenancy.

    Pros & Cons of Tenancy in Common:  A Tenant in Common may convey, encumber and devise his/her property interest as he/she wishes without the consent of the other co-owners.  However, a Tenant in Common’s interest in the property is susceptible to liens and judgments.


As a co-owner in any arrangement, you should understand the ramifications of your type of co-ownership.  This is particularly true when facing litigation. It is important to consult a professional to review your deed, and discuss how your property interest may be impacted if you are facing litigation or other situation.

James (Jamie) Roth is an Associate in the Litigation Practice Group at Miller, Miller & Canby. He concentrates his practice in real estate litigation with a focus in eminent domain, as well as business and commercial litigation. He has enjoyed a long-standing and distinguished career as a successful real estate consultant, including more than twenty years of private and public sector experience in project management, strategic planning, asset management and risk mitigation.  

Contact Jamie at 301.762.5251 or via email.

For more information on Miller, Miller & Canby’s Real Estate Litigation Practice, click here.

DISCLAIMER - This article is offered as an overview for educational purposes, it is not a comprehensive coverage of the law, and it is not a substitute for an attorney’s consultation.

 





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