2018: LI Leaders Offer Direction to What Lies Ahead
2018 will present unique challenges for the long-term health care facility and senior health care marketplace. With the presumptive passage of the tax bill, we will likely see cuts to federal programs, such as Medicare, Social Security and Medicaid, to off-set the resultant deficit increase. This at a time when our nation as a whole, and Long Island in particular, is seeing a growing senior population whose long term health care resources are already stretched thin.
Skilled nursing facilities struggle to deliver quality care to our older adults and vulnerable seniors while managing their bottom line. The challenges of managed care, slow reimbursement, and a shrinking hiring pool of health care workers have led to buy-outs, mergers and management consolidation. These industry strains on an already stressed marketplace require a nimble management team in lock-step with legal counsel. Long-term health care facilities that identify problem matters early, and quickly refer such cases to legal counsel, dramatically increase their reimbursement dollars and rate of success.
During 2017, our firm experienced a substantial increase in health care facility representation business and we expect the same in 2018. We are currently hiring more attorneys and support staff to adequately service our health care facility clients.
As a business lawyer, my practice is directly impacted by the health of the economy. I believe that we risk a downturn in 2018, as companies and individuals assess the impact on them of tax law changes, and increasingly grow wary of the inevitable general economic downturn. It is easy to lose sight of the fact that we have been experiencing one of the longest economic upswings in history. The last recession was more than 10 years ago. On a positive note, I expect that the Long Island economy, including legal work, will increasingly be fueled by the innovation in which the Island has been investing, especially life sciences and health. Some of the biotechnology, life sciences and other innovation-based companies that received seed funding and incubation on Long Island in the last five years, including at some of our renowned research institutions, will further develop into engines of economic growth on Long Island. Finally, I see increasing economic collaboration between Long Island and New York City. Long Island continues to present a talented and lower-cost, yet proximate alternative to New York City companies facing pressure to maintain or increase their profits.
The stories that dominated 2017 – sexual harassment in the work environment, cyber threats, and corporate mergers and acquisitions – will continue to drive the legal landscape in the coming year.
While allegations of harassment and inappropriate behavior by those in the entertainment, media or political arenas garner the headlines, companies in virtually every industry and of every size will need to closely examine their policies on workplace behavior. There will be increased focus this year on expanding in-house training, updating procedures for handling complaints of inappropriate behavior and providing counsel in the event of litigation.
Cybersecurity will remain on the forefront not just for 2018 but for years ahead. With new threats almost daily, all businesses need to regularly assess their preventative systems and policies and evaluate their contingency plans in the event a data breach occurs to maximize their legal protection. Companies in specific industries such as financial services and health care need to navigate additional complex regulations and notification requirements, and any business can face reputational ruin from a single data breach.
In corporate law, increased confidence in the economy, as reflected in the healthy stock market, and a plethora of capital held by private equity funds, should continue to fuel substantial merger and acquisition activity in 2018. Companies in all industries will need to assess the complexities in the anticipated benefits of corporate tax cuts from Washington.
Our firm experienced fiscal and physical growth in 2017. We added attorneys and staff to our estate and trust department and our elderlaw/Medicaid planning areas. Despite proposed changes to the tax law, which would significantly increase the estate tax exemption amount, we are seeing an increase in client estate planning needs. The baby boom generation is now overseeing the needs of their parents; eldercare and Medicaid planning also are of paramount importance. Due to the aging population, our firm also has experienced an uptick in guardianship proceedings. Our other practice areas have remained steadfast. One of our accomplishments is the ability to foresee the needs of our clients in various practice areas and make sure the crossover is seamless. For instance, our estate planning team often works with our business exit planning team to make sure that our clients’ personal and business needs are met. We work together to develop goals with our clients and make sure all of their needs are addressed. Clients are sensitive to legal fees and making sure they receive value, so in addition to our normal case management, we are involved in mediation and collaborative law endeavors in our litigation and family law departments.
2018 will be a good year. We are looking forward to adding to our office space at our Lake Success location and possibly expand into Suffolk County. We will then have coverage in Manhattan, Queens, Nassau and Suffolk Counties, as well as New Jersey. We are looking to expand our firm and combine resources in a well thought-out manner. In that regard, we have been speaking to smaller firms that are well-regarded in their practice areas. In addition to internal growth, we see the benefits of expansion through lateral mergers.
As we step into 2018, Long Islanders, as well as the rest of the country are waiting impatiently on how the tax changes are going to affect their future financial situation. It is anticipated that there may be some unfavorable scenarios surrounding the new tax law changes for people who have debt issues.
Here on Long Island, incomes have flat-lined over the last few years and expenses are climbing. Paying off or resolving debt and dealing with creditors is already challenging for consumers that are trying get a handle on their finances. There’s no predicting what creditors will do with debt owed to them. We could see more lawsuits or less, or see the debts sold to third parties or creditors retaining the debts to work it internally.
With upcoming new rules and laws, there will be more hoops to jump through in debt resolution. There’s still some confusion surrounding who will be affected by the new tax laws and the effect that will have on how the creditors manage outstanding debt. The results for individuals from the new tax laws is that people could receive less in tax refund money if certain things are less deductible, like property taxes. Not taking as many deductions could show more income and put people into a higher tax responsibility which will add more strain on Long Islanders trying to make ends meet and stay out of debt in 2018.
As we enter the New Year, there will be a significant change in the area of commercial litigation. As of Jan. 1, 2018, two recent amendments to the Commercial Division Rules will be in effect. These rules, amendments to Rules 10 and 11, are designed to encourage alternative dispute resolution of commercial cases.
The new rules foster communication between attorneys and clients about alternatives to the usual discovery and trial practice, and require attorneys to certify to the court that such discussion has been had in each case. This is in stark contrast to past practices, where alternatives to litigation, such as mediation, were either never mentioned or not discussed until very late in the game.
It certainly seems that 2018 may usher in a much broader use of alternative dispute resolution. This could ultimately save litigants significant time, money, and aggravation, and may help alleviate some of the caseload in our already overburdened court system. It is predicted that mediation and arbitration may become the “new” norm for resolving lawsuits in 2018 and beyond. It is my hope as a mediator that these substitutes for litigation will be considered for all types of disputes.
The tax bill, released Dec. 15, is certainly an early holiday gift for those practicing in the field of trusts and estates. It is probable that effective Jan. 1, 2018, individuals will reap an increase in the federal gift and estate tax exemption, as adjusted for inflation, from $5.49 million to $11.2 million. The provisions of the proposed tax bill provide for this increased exemption, at least until 2026 when the exemptions will revert back to the scheduled 2018 amount of $5.6 million, as adjusted for inflation. What will 2018 offer to individuals in need of estate planning?
Wealthy individuals will take the time to review the structure of estate plans to make sure the amount passing to a trust for the benefit of a spouse is not overstated, especially in blended families. There will be a marked increase in the contributions to existing trusts, likely those created in 2012, to use the increased exemption. Types of trusts expected to be augmented include spousal access trusts, benefiting a spouse and descendants but keeping the income flowing into the family, or lifetime trusts for children to protect them from creditors, including a divorcing spouse, or trusts that can avoid estate taxation in the child’s estate, yet permit the child to act as a co-trustee and direct disposition of the trust fund at the child’s death to a limited group of individuals.
The tax bill will certainly keep trusts and estates professionals active in 2018 and beyond.
It has been said (by Peter Drucker) that “trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.” Hop in and let’s go for a ride.
Here are some predictions about the practice of law in 2018:
2 Sexual harassment and other employment discrimination allegations will multiply exponentially in 2018. There will be a marked increase in training and education throughout the corporate world.
Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.
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