Friday, September 28, 2012

What is Income for Child Support? Recent N.H. decision uses broad definition

                We are often asked as attorneys what figure the Court uses as income for the purposes of calculating child support. RSA 458-C:3 defines “Gross Income” as “All income, from any source, whether earned or unearned…” and then goes on to include specific sources of income like wages, salary lottery or gambling winnings, etc. This is an easy concept for most people to understand. You work, you receive salary or wages, and those are calculated for child support purposes. However, what if you received hundreds of thousands of dollars from a life insurance policy? Well, the New Hampshire Supreme Court recently answered that question with a “yes”.
                The case, In the Matter of Larocque and Larocque, looked at whether life insurance proceeds the father received from the death of his second wife should be calculated as income for child support purposes. The father argued as a matter of law life insurance proceeds are not included as income, as there is no specific reference including those proceeds in the statute referenced above. The Supreme Court disagreed.
                First, the Court stated that while no specific reference including life insurance proceeds is in the statute, it is also worthy to note that there is no specific exclusion of life insurance proceeds. Second, the Court focused on how income for child support purposes can be “earned” or “unearned”. Third, they focused on how the life insurance payout was solely in the form of money, and how it was similar to the receipt of trust or annuity income which was specifically included in the child support statute. The Court reasoned that the definition of income for child support is broad, and found that the life insurance proceeds by law are to be included in child support calculations. In this case, the life insurance proceeds totaled $500,000.00 and were paid directly to the father. A child support award of around $100,000.00 was ordered to be paid to the mother.
                How can potential litigants avoid having this issue arrive in the common case of second marriages? Well, in the first instance, the title of the beneficiary of the life insurance is very important. It is common for parties to have life insurance policies that name the mother or father of the child as a “beneficiary in trust for the minor child or children”, which means the parents will receive the money on behalf of their children and that the funds can be used for that purpose. That option may not be palatable to some, and there are other options in order to properly title the potential insurance proceeds so the other party does not receive a windfall in child support.
                Here at Parnell & McKay, we have experience both in planning for the future and in family law. If you find yourself with concerns about how to handle your family case or potential estate, contact us today. 

Wednesday, September 12, 2012

Massachusetts vs. New Hampshire: Differences in Personal Injury Claims

                Massachusetts is a mandatory insurance state, and as a result, all residents of Massachusetts are required by law to carry automobile insurance. New Hampshire, on the other hand, does not require everyone to carry automobile insurance. Many people ask us what this means for them, and their potential injury claim.
                First, Massachusetts policies have what is called “personal injury protection” (a/k/a “PIP”) coverage. This is a type of insurance that pays for medical bills incurred as a result of an auto accident. So, if you are injured and have a Massachusetts policy, then the personal injury protection will be the first to pay out for medical bills. Under Massachusetts rules, the first $2,000.00 of all related medical bills to the accident are paid by the auto insurance coverage through PIP. Once the $2,000.00 is reached, there is an important event that happens, and that is the case reaches the “tort threshold”. Essentially, if you have incurred over $2,000 in medical bills, or have suffered scarring or permanent disability, then you are then allowed to proceed with a personal injury action. If you do not meet this tort threshold, you are not allowed to proceed under Massachusetts law, and are confined to be reimbursed by the PIP coverage. Once the $2,000 in PIP coverage is reached, then it gets really confusing. At that time, the primary payer on related medical bills to the accident switches to the health insurance company. They will pay the first payment, and then PIP coverage will pay for any co-pays or uncovered expenses that health insurance does not pay for. This will cover the next $6,000 of the total of $8,000 covered by PIP. However, PIP does not just cover medical bills, it also covers lost wages. So, it is very common for PIP to pay wages the injured person missed as a result of their inability to physically work. Thus, PIP coverage provides almost immediate remuneration to injured persons without having to reach a global settlement on your case.
                In New Hampshire, the insurance policies are markedly different. First, you will not typically find any PIP coverage that you would in Massachusetts. Instead, most New Hampshire policies have medical payment coverage that can be as little as $1,000, and as much as $10,000. This is commonly referred to as “med-pay”. It is very important that your attorney of choice understands med-pay coverage and how that affects your claim. Medical payment coverage is non-subrogable, which is a complex way of saying that any bill paid by the med-pay policy will not be required to be reimbursed through any settlement. This is different from your health insurance. If your health insurance carrier pays for medical bills from an accident, and then you settle your claim from the accident, then the health insurance carrier has a right to subrogate (i.e. be reimbursed in part) a portion of the payments they have made to those medical bills. Thus, it is very important that any attorney understands that med-pay coverage must be exhausted first in order to save clients a potentially substantial sum of money. Unfortunately, in New Hampshire, this is all the payments you will receive other than reimbursement for property damage. Insurance companies will generally not pay lost wages or non-med-pay covered medical bills without reaching a global settlement on the file. Thus, as you can see, there are pros and cons to both systems. The Massachusetts system is complex and involves multiple insurance companies and departments, while the New Hampshire system is broader and involves fewer insurance issues. Both have their benefits, and both have their drawbacks.
                Here at Parnell & McKay, we pride ourselves on our knowledge of insurance law, and how to utilize that knowledge to maximize the benefits to our clients in any injury case. If you are injured, please contact us today to schedule an appointment. Consultations are free.

                        This blog is not legal advice, and is just a general summary of law. You are not to rely on any statements in this blog in relation to your pending case or cases. This blog does not establish an attorney-client relationship, and shall not be construed to do so. If you have specific legal questions, please contact us as your individual case requires individual analysis and review.