What Is a Beneficiary in Estate Planning?

Learn what a beneficiary is, how they’re named, and why it’s critical to keep beneficiary designations up to date. Get estate planning guidance from an experienced attorney.

What Is a Beneficiary?

If you’re setting up an estate plan — or listed in someone else’s — you’ve probably come across the term beneficiary. But what does it really mean?

Put simply, a beneficiary is the person (or entity) who will receive money, property, or other assets from a will, trust, or financial account after someone passes away.

Common Types of Beneficiaries

Beneficiaries can be:

• Individuals – such as spouses, children, grandchildren, siblings, or friends.
• Organizations – including charities, religious institutions, or nonprofits.
• Trusts – you can name a trust itself as a beneficiary, especially for minor children or individuals with special needs.

You can name one or multiple beneficiaries, and even specify the percentage or type of asset each one should receive.

Where Are Beneficiaries Named?

Beneficiaries are typically named in:

• Wills – specifying who should receive assets after probate.
• Trusts – which allow assets to pass outside of probate.
• Life insurance policies
• Retirement accounts (401(k), IRA)
• Bank accounts or brokerage accounts with payable-on-death (POD) or transfer-on-death (TOD) designations

Important: Assets with named beneficiaries (like life insurance or IRAs) generally pass outside of your will and do not go through probate.

Primary vs. Contingent Beneficiaries

You can name:

• Primary beneficiaries – the first in line to receive the asset.
• Contingent (or secondary) beneficiaries – who inherit only if the primary beneficiary has died or is otherwise ineligible.

Example: You name your spouse as the primary beneficiary of your life insurance and your children as contingent beneficiaries.

Why Beneficiary Designations Matter

Keeping beneficiary designations current is just as important as having a will or trust. Here’s why:

• They override your will. If your will says one thing but your retirement account lists a different person, the account designation wins.
• They can cause conflict. Outdated or missing beneficiary info can delay distribution or lead to legal disputes.
• They ensure faster transfer of assets. Assets with named beneficiaries go directly to the person named.

Tips for Managing Beneficiaries

• Review your beneficiary designations every few years or after major life changes (marriage, divorce, birth, death).
• Use full legal names and relationships when listing beneficiaries.
• Consider setting up a trust as beneficiary if your heirs are minors or need oversight.

Conclusion

A beneficiary is more than just a name on a form — it’s a key part of your estate plan that affects how and to whom your assets will be distributed. Keeping your beneficiary designations up to date ensures your wishes are honored and your loved ones are protected.

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What Is a Trustee? | Role, Duties & Responsibilities

Learn what a trustee is, what they do, and why the role is so important in estate planning. Understand trustee responsibilities from a trusted estate planning attorney.

What Is a Trustee?

If you’re creating a trust or have been named in one, you may be wondering: what exactly is a trustee?

In estate planning, the trustee plays a central role — and it comes with serious legal responsibilities.

Here’s what you need to know.

Trustee Defined

A trustee is the person or institution responsible for managing the assets in a trust according to the instructions laid out in the trust document. The trustee acts on behalf of the beneficiaries — the people (or organizations) who are meant to benefit from the trust.

In simple terms, a trustee is the one in charge of the trust funds and assets — making sure everything inside is protected, invested wisely, and distributed properly.

Who Can Be a Trustee?

• An individual: Often a trusted family member, friend, or professional advisor.
• A professional: Such as an attorney, accountant, or corporate trustee (like a bank or trust company).

The most important thing is that the trustee is trustworthy, organized, and capable of following the law and the terms of the trust.

Trustee Responsibilities

Trustees have what’s called a fiduciary duty, which is the highest standard of legal responsibility. This means they must act in the best interest of the beneficiaries — not themselves.

Typical duties include:

• Managing trust assets responsibly (e.g., real estate, investments, bank accounts)
• Following the terms of the trust
• Keeping accurate records
• Communicating with beneficiaries
• Paying any taxes or expenses of the trust
• Distributing assets according to the trust instructions

Failure to perform these duties correctly can lead to legal liability — so it’s not a role to accept lightly, and a trustee can choose not to serve.

Trustee vs. Executor: What’s the Difference?

People often confuse trustees with executors, but they serve different roles:

• A trustee manages a trust, which can last for years — even decades.
• An executor administers a will and oversees the probate process, typically a one-time role after someone dies.

Sometimes, the same person can serve in both roles, but the responsibilities are distinct.

Should I Choose a Family Member or a Professional Trustee?

That depends on the complexity of the trust and the dynamics of your family.

• A family member may understand the beneficiaries’ needs and save on fees, but could face emotional pressure or conflict.
• A professional trustee is neutral, experienced, and better equipped to handle complex trusts or family tension.

The trustee plays a vital role in making sure your trust works the way you intended. Choosing the right trustee — or understanding your responsibilities if you’ve been named as one — is crucial to protecting the trust and its beneficiaries.

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What Is a Trust in Estate Planning? | Trust Attorney Explains

Learn what a trust is, how it works, and whether it’s the right tool for your estate plan. Discover the benefits of trusts from an experienced estate planning attorney.

What Is a Trust?

When it comes to estate planning, trusts are one of the most powerful and flexible tools available. But what exactly is a trust — and do you need one?

Let’s break it down in simple terms.

Definition: What Is a Trust?

A trust is a legal arrangement in which one person (the trustee) holds and manages property for the benefit of another person (the beneficiary). The person who creates the trust is called the grantor or settlor.

Think of it like a secure box for your assets — one where you decide:

• What goes inside
• Who manages it
• Who gets it, and when

There are many different types of trusts, each designed to accomplish different goals.

Types of Trusts

1. Revocable Living Trust
   • Can be changed or revoked at any time by the grantor.
   • Often used to avoid probate and maintain privacy.
   • Assets in the trust pass directly to beneficiaries upon death, without court involvement.
2. Irrevocable Trust
   • Cannot be changed once created (with limited exceptions).
   • Often used to reduce estate taxes, protect assets from creditors, or qualify for Medicaid.
3. Testamentary Trust
   • Created through your will and takes effect after death.
   • Useful for managing assets for minor children or beneficiaries who need oversight.
4. Special Needs Trust
   • Protects a disabled person’s eligibility for government benefits while providing supplemental support.
5. Charitable Trust
   • Allows you to support a charitable cause while also gaining potential tax advantages.

Why Use a Trust?

Here are a few reasons people include trusts in their estate plans:

• Simplify Probate: Assets in a trust pass directly to beneficiaries without needing probate court approval.
• Maintain Privacy: Wills become public after death — trusts do not.
• Provide Control: You can set specific rules for how and when assets are distributed (e.g., over time, at certain ages, or for specific purposes).
• Protect Beneficiaries: Trusts can shield assets from creditors, lawsuits, or even a beneficiary’s own poor spending habits.
• Reduce Taxes: Certain trusts can minimize or eliminate estate taxes for large estates.

Do You Need a Trust?

Not everyone needs a trust — but many people benefit from having one. You might consider a trust if:

• You want to avoid probate
• You have minor children or dependents
• You own property in multiple states
• You have concerns about incapacity
• You want to protect or control how assets are used

A trust is a versatile legal tool that offers privacy, control, and protection — and it can be customized to fit your specific goals. Whether you’re looking to simplify inheritance, care for a loved one, or shield your estate from taxes and probate, a trust might be the right fit.

Wondering whether a trust makes sense for your situation? Our estate planning attorneys can walk you through your options and help you create a plan that meets your goals. Contact us today for a personalized consultation – Call 203-885-0500.

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Also Increases Conveyance Tax On Expensive Homes

First-term Governor of Connecticut, Ned Lamont, is introducing a new bill – to implement his proposed budget – that would expand the sales tax on services in Connecticut to legal and real estate related services. The bill also increases the conveyance tax on homes over $800,000.00.

You can see the full version of the proposed bill here: https://www.cga.ct.gov/2019/TOB/s/pdf/2019SB-00877-R00-SB.PDF. The good news is that many of the changes in the bill, if it becomes law, will not go into effect until 2023.

What types of “legal services” would now have to charge sales tax?

The proposed bill uses NAICS industry codes to outline the types of legal services that would have to charge sales tax to clients and pay over that sales tax to the State on a monthly basis.

The legal service providers covered under the new expanded sales tax law are:

1. Lawyers;
2. Notaries;
3. Process servers;
4. Paralegals;
5. Settlement Agents; and
6. Title companies.

What types of “real estate services” would now have to charge sales tax?

Under Lamont’s proposal, the real estate service providers that would have to charge and remit sales tax in Connecticut are:

1. Real Estate Brokers;
2. Real Estate Agents;
3. Property Managers;
4. Appraisers;
5. Inspectors;
6. Escrow Agencies or Escrow Companies; and
7. Real Estate Consultants.

[NOTE: Some of the services listed above may already be subject to sales tax collection and reporting earlier, but if the Governor Lamont’s Proposed Bill is passed (without changes to these provisions), there will be no question that the above service providers will be subject to sales tax.]

Top CT Real Estate Conveyance Tax Would Be Increased to 1.5%

Right now, every time residential real estate is sold in Connecticut, the Seller pays 1% in conveyance tax which is divided in the following way:

For houses sold for under $800,000: 0.75% is paid to Connecticut and .25% is paid to the local government.

Currently, for homes over $800,000, the seller pays an higher conveyance tax – at the increased rate of 1.25% – to Connecticut for sales proceeds over the $800,000.00 threshold (not a rare occurrence in most populated areas of CT!)

The proposed bill would actually increase the State’s portion of the Conveyance Tax to 1.50% on any amount over $800,000.00 in the conveyance of commercial real estate.

This change would take effect this year on July 1st!

The Impact On Real Estate Clients

These new laws will directly impact the cost of buying, selling and maintaining real estate in Connecticut, whether for residential, business or investment purposes.

Buyers of real estate would pay sales tax on realtor admin fees, title search and title insurance fees, attorneys fees, paralegal or document preparation fees, appraisal fees, inspection fees, and any consultation costs.

Sellers of real estate will have to pay sales tax on attorneys fees, realtor fees, real estate broker property advertising charges, paralegal or document prep fees, release tracking, and an increase in a portion of the conveyance tax over $800,000.00 in purchase price.

The Impact on Legal and Real Estate Service Providers

The impact on the legal service and real estate service providers will be severe in the beginning. The learning curve for how to properly charge, collect, track and remit sales tax will take some time. The increased time to handle this compliance may take away from time spent doing the actual work or servicing the client. Over time, Service providers will probably outsource these tasks to third parties, meaning that consumers of these services would pay more for those services.

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Causes of Partnership Disputes

What Causes Business Partners to Battle it OUT and Pack it UP?

A business partnership is a complex relationship. No matter how solid the relationship may seem, partnership disputes still occur in almost every partnership. Partnership disputes are the most common type of business disputes. A business partner dispute is very disruptive to the day-to-day activities of the business and can cause an otherwise successful business to fail. Even where the business is grossly successful, partnership disputes are inevitable, there’s no question about it. The Question is, will your business survive the partnership dispute?

Financial obligations and a weak or completely missing partnership agreement are the main causes for partnership disputes. This usually happens when the business is in flux; either experiencing financial problems or growing quicker than anticipated. The following are the most common causes of partnership disputes:

1. Misappropriation of business assets or property

Misusing assets for personal use can cause a clash between business partners. But perhaps there is a disagreement as to what is acceptable? Maybe one partner thinks it is perfectly fine to use the company car to do grocery shopping, but the other does not. Or perhaps one partner thinks it is perfectly fine to “borrow” $2,000 from the business to cover his mortgage for the month, after all, “it’s their money, too”.

2. Responsibility and authority are not delineated

If there is no set chain of command, authority or responsibility for each partner, you will quickly run into two issues; some things will not be getting done by anybody, and other things won’t be getting done because multiple partners will be sticking their nose in it. Without set responsibility, authority and a chain of command, who can really be held accountable for anything?

3. General disputes about how to utilize partnership resources

Disagreements on how to use partnership income to promote the business and what expenses should be incurred by the business are common. Perhaps one partner wants to advertise on a billboard while the other thinks radio is better. One partner thinks they need nicer offices, while the other would rather slum and make more money. Should we lease vehicles under the business? Pay for cell phones? Offer health insurance? Disagreements on the small things quickly turn into big problems.

4. Misappropriating “business opportunities” that belong to the partnership

Misusing business opportunities that belong to the partnership can aggravate business partners. This happens often when partners do “work on the side” but within the same industry. Common with mechanics and contractors, one partner trying to turn a partnership lead into a “side job” can quickly cause conflicts of interest and angry business partners.

5. Workload imbalance

The amount of work one person can handle in limited. Strength comes from numbers. After all, that’s the entire point of a partnership! But when one partner is bearing a larger portion of the workload burden at any given moment, the underlying relationship can be strained. Sometimes this is due to the actual abilities of each partner, where more work of one type comes in than another. Other times it is due to the evolution of the market, where only that type of work currently exists. If there is no mechanism in place to spread the burden, issues can arise.

6. Disagreements on company objectives

One business partner has one objective while the other business partner has another direction in mind and they can’t seem to agree on one direction for the company. As much as the small things matter, the big picture is often more important. If partners cannot agree on a direction to head in, the business could get split in two.

How Do You Avoid Partnership Disputes?

Proper planning is the way to avoid partnership disputes. By having a partnership agreement and being advised on common issues that can talked through and decided, problems are stopped before they even occur.

If you are dealing with a partnership dispute, we encourage you to discuss your case with our business attorney. Whether you want to work to resolve the partnership dispute or you want to terminate your partnership, our attorney will work on your behalf to prepare the proper documentation and make sure your best interests are protected.

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Successor Liability: You May Be Liable for Unpaid Business Taxes When Buying a Business

If you rush into buying a business you may receive a nice little gift from the State of Connecticut. Except it’s not a gift, it’s a bill, for the unpaid state tax liabilities of the previous business owner. That is because Connecticut has Successor Tax Liability for unpaid state business taxes, but the liability is avoidable.

What is Successor Liability?

Successor Liability is a statutorily created obligation for the Buyer (“successor”) of a business to hold, from the purchase funds, any amounts of business tax that are owed and unpaid by the Seller at the time of the sale, and use it to pay off the Seller’s tax debts to the State. If the Buyer fails to do so, they are liable for those unpaid business taxes.

What taxes can a Successor be liable for?

The Buyer of a business can be hit with successor liability for Sale and Use Tax, Admissions and Dues Tax, and Income Tax Withholdings.

This would theoretically apply to both amounts that were collected and not remitted to the State and amounts that should have been collected but were not. The successor liability also extends to penalties and interest on the unpaid tax amount.

What kind of business succession transactions give rise to successor liability?

Successor Liability will be created when:

1. one or more persons buy the business or stock of goods of a seller
2. a co-owner quits or transfers ownership for little or no consideration
3. a change in the form of ownership occurs

Successor Liability does not arise when:

1. transfer of a business or stock of goods is part of a foreclosure, repossession, bankruptcy or receivership
2. the purchase is of a controlling interest in a business entity

Is there a limit to the amount of successor liability?

The Buyer is liable for the unpaid business taxes of the Seller ONLY to the extent of the purchase price, valued in money.

The “purchase price” could involve cash, property, assumption of liabilities, cancellation of debt, and the taking of property subject to liability.

So, if the Buyer is receiving a business, in exchange for $10,000 cash, a Derek Jeter rookie card valued at $1,000, the assumption of liability for two outstanding small claims cases (max payout $5,000 each), the forgiveness of $500 in debt owed by Seller to Buyer for a lost bet on the Super Bowl, and the assumption of a $200,000 mortgage on the business property, the Buyer would potentially be liable for up to $221,500 of unpaid business taxes of the Seller.

How can Successor Liability be avoided?

This is the million dollar question. How does a Buyer protect themselves from being liable for the Seller’s unpaid business taxes?

The short answer is that the Buyer needs to meet their obligations under Connecticut law and withhold any tax amounts owed by the Seller. But how does that Buyer know if the Seller owes the State of Connecticut any taxes and the amount owed?

It is the Buyers responsibility, or the responsibility of their appointed agent, to request Tax Clearance Certificates for each type of business tax they want to be protected against owing. The State will review the file of the Seller, and either issue a Tax Clearance Certificate stating that no taxes are due, or an Escrow Letter, telling the Buyer how much money needs to be withheld from the purchase price to pay off the Seller’s state business tax liabilities.

Of course, if an Escrow Letter is issued, the Buyer still needs to follow through with holding onto the funds and actually paying off those tax liabilities or they are still on the hook.

At Glouzgal Law PLLC, our business attorneys represent Buyers in the purchase of businesses and business assets. Part of our job is doing the due diligence necessary to protect the interests of our clients and minimize their exposure to liability. For all our business purchase clients, we take on the responsibility of getting Tax Clearance Certificates for the business tax liabilities our clients may be exposed to. If an Escrow Letter is issued instead, we make all parties aware of the unpaid tax debt, make arrangements to hold the necessary amounts in escrow, and follow through with paying off those business tax liabilities.

Successor Liability is just one of the considerations when buying a business or business assets. If you are in the process of buying a business or business assets, schedule a free 20 minute phone call with one of our business attorneys to discuss your goals and needs.

SCHEDULE A CALL WITH A BUSINESS ATTORNEY

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Which Medical Professionals Can Form a Limited Liability Company In Connecticut?

Forming a CT LLC for the Purposes of Rendering Medical Services

In Connecticut, the Limited Liability Company Act governs the way in which an LLC is formed and for which purposes an LLC may be formed. In most ways, forming an LLC for the purposes of rendering professional services, or services for which a State issued license is needed, is identical to forming an LLC for any other business purpose.

However, an LLC may be formed to render professional services ONLY IF each member (co-owner) of the LLC is licensed or authorized as a member of that profession, the LLC will only render those specific kinds of professional services and those services ancillary to that purpose, and only licensed professionals shall render those professional services.

There Are Exceptions

The Limited Liability Company Act allows for certain medical professionals to form LLC’s together even though they hold different licenses.

• Psychologists, martial and family therapists, social workers, nurses and psychiatrists can form LLC’s together;
• Physicians and Surgeons, occupational therapists, social workers and alcohol and drug counselors can form LLC’s together;
• Physicians and Surgeons, and Chiropractors can form LLC’s together;

Medical Professionals can also form LLC’s together regardless of their licensing status if the LLC is not providing medical services.

What are the Consequences of Forming an “Illegal LLC”

Forming an “illegal llc”, or one that is not in compliance with the laws of the State of Connecticut, can lead to many issues, starting with forced dissolution and/or treatment as a general partnership for tax or liability purposes. This means that if you form an illegal LLC you will not be afforded the liability limiting protections had you properly formed the LLC to begin with.

If you are just forming your medical practice in Connecticut and are considering using a Limited Liability Company for your organizational structure, you should hire a Connecticut business attorney to assist in the drafting of your documents and filing of your LLC. Doing things correctly from the beginning can save business owners a lot of time, money and stress and will add to the overall health and success of the business. If you have already formed your LLC but are not sure if you are compliant with the laws of the state of Connecticut, you should contact a Connecticut business lawyer immediately to review your documents and resolve any flaws before they become problems.

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Attorneys for Young Professionals

Let us be your lawyers for life!

At Glouzgal Law PLLC, we are a firm comprised of attorneys in their thirties. As young professionals ourselves, we are able to cater to other young professionals such as doctors, nurses, financial advisers, accountants, insurance agents, real estate agents, teachers and professors, life and success coaches, etc. Our young professional clients appreciate our ability to communicate on their level, use technology to improve the flow of information and their overall attorney experience, and in general understand the hardships and demands of the modern landscape for young professionals.

Below are some of the practice areas we serve and some examples of how we help our young professional clients meet their needs within those areas of law.

Business Formation, Planning & Licensing

Whether you just graduated school or have been working for somebody else gaining experience, you may be looking to open your own business or practice. One of the things they don’t teach you in grad school, and that your previous employers are not likely to share with you, is how to start, plan and run a business. Many of our first encounters with our young professional clients are when they are trying to go out on their own but don’t know how to handle much of the business paperwork that was previous done on their behalf. Should they form a partnership, an LLC or a corporation? How should they handle partners or investors? Are they allowed to have partners or investors under State laws? What licensing will they need? What types of insurance will they need? What contracts do they need to sign with their clients and customers? How about a business plan to seek funding? Should they be charging sales tax?

We can assist our clients by identifying all of the needs of their business, the barriers it will have to get over, and how we will attack those barriers. We have the knowledge, experience and software to meet all the business law needs of our young professional clients.

Real Estate – Purchases, Sales & Refinance

Many young professionals are beginning to reap the fruits of their labor; they are finally starting to make decent money after years of education and training. One of the first things many think about, and perhaps the most important purchase of their life, is buying a home. Whether buying a condominium or a house, there are many specific considerations that go into the legal process of buying a home. As first time homeowners, young professionals need a little extra help when buying their first home. Our real estate attorneys are ready to guide our clients from contract signing to closing.

Perhaps the young professional bought a home before they were making good money, and now their income and credit score have improved. It might be a good idea to consider a refinance, lowering your interest rate and perhaps the length of the mortgage, saving you lots of money over the life of the loan. Or maybe they want to sell their condo and buy a house – we can manage a sale and purchase for the same day!

Wills, Estate Planning and Probate

Until they begin working in their profession and building up wealth, many young professionals do not feel like they own anything worth putting into a will, so many do not consider an estate plan. First, you should always have an estate plan, even if that plan is to not draft documents and allow the laws of intestacy (dying without a will) control the distribution of your assets. Second, once the money starts rolling in and the young professional owns a car, has a home, marries and has kids, the issue of what will happen to their money and will it provide for those they care about becomes very important. Young professionals also need special considerations in the modern age: child protection plans, social media property distribution, and an increased need for privacy are just some of those considerations.

As we age so do our loved ones, such as our parents and grandparents. Issues such as the need for special needs trusts or probate estate administration after the death of a loved one begin to arise. Our firm can handle the estate planning and administration needs of multiple generations; and we hope to serve the next generation too (the children of our current young professional clients).

Young Professionals Need Proper Representation

At Glouzgal Law PLLC, we know the modern landscape and how treacherous it can seem. Young professionals are the future of the the middle class and upper middle class, and will be the backbone of the United States in the decades to come. Without proper planning and guidance, the years of education, training and labor in your industry could be jeopardized.

As a young professional, you need to protect your property, your money, and your family; but most importantly yourself. As attorneys for young professionals, we help our clients review their life situation, not just their one individual need at that moment. We want to help you make the right legal decisions, place the right planning into action before it is too late, and get out of hot water if the need arises.

No matter what your needs as a young professional are, we are here to help; even if it does not fall into our area of expertise, we will help find you the right attorney to handle your needs. If you need our help, contact us today by calling 203-885-0500.

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Contractual Considerations for Physicians When Entering Into Electronic Medical Records Service Agreements

What issues should a doctor look for in an electronic medical records service contract?

If you are a physician in private practice, or a small medical group, you may finally be considering incurring the cost of getting electronic medical records (“EMR”) for your practice. With the Medicare penalty going up next year, even those physicians who had avoided electronic medical records like the plague are now warming up to the idea.

Doctors seeking EMR software will come across multiple providers. All will require that the physician or group sign a service agreement of some kind. The agreements will be long, dense, and not very exciting. However, this agreement can have a profound impact on the future of your medical practice and how it operates. The first thing you should do is ask whether the agreement is negotiable or take-it-or-leave-it. The second thing you should is review the agreement for the following terms.

Purchasing Software or Licensing Software

One difference between EMR providers and how they will serve you, is whether you will be purchasing or licensing the software. If you are buying the software, you will probably be paying a large one time fee for the software and the initial setup. However, the software is now yours. Nobody can come and remove it from your computer or cut off your access to the software. If you are licensing, you are simply paying for the right to use the software, you own nothing. Since this is usually done on a monthly payment basis, once you stop paying your license fees, the electronic medical records provider can cut off your access to the software.

It should be noted that based on the agreements we have reviewed, those that purchase software will not receive updates or technical support unless they pay an additional fee, while those that license usually have the updates and tech support included in their monthly fee arrangement.

Information Security

Another big consideration is the security of the confidential client information and especially HIPAA compliance.

Who is responsible for the security of data stored off site in the cloud? Who has access to this data? Is this data backed up regularly? Who has access to the backups? Is the cloud HIPAA Compliant?

What data is stored on the office computer, and who is responsible for the security of that data? Who is responsible for the security of the wi-fi network? Does the EMR provider run a security compliance review with the medical office?

What are your remedies if the security of the data is compromised?

All of these questions need to be addressed in the agreement.

Ownership of Intellectual Property

As may be expected, in all of the agreements we have seen, the EMR provider reserves all rights as to the any trademarks, copyrights or patents in connection with their software. However, who should own the client information that the doctor’s office will be inputting into the software database? It should definitely be the physician, so be very wary of any provider that seeks to own or control this data. Also, there should be some terms for the physician to get this information out in a reasonable format in case the doctor decised to switch EMR systems, and that the data is available for some time after the switch.

HIPAA compliance requires that the EMR not sell confidential client information to any third parties, and most providers will not sell confidential information. However, some will sell data that they “mine”, or deduce, from the confidential information, such as “how many married males over 40 have erectile dysfunction” or “how many teens under 18 take anti-depressants”. If it bothers you to have the EMR providers make further profit off of your patients data, make sure they promise not to do so in the service agreement.

Guarantees and Warranties

In a way, picking an EMR system is like buying a car. You are making an investment and want to be sure that you are not wasting your money and time. With cars, it is common to get a guarantee that warranties your car for a certain number of miles or years.

Is the EMR provider willing to guarantee that the software is suitable for use by your practice and for your specific specialty?

Is the EMR provider willing to guarantee the accuracy of supplemental information in their system? What are your remedies if information you relied on to make a professional medical opinion was inaccurate?

Is the EMR provider willing to guarantee their software against crashes and interruption? If not, what are you actually paying for? If the system goes down and you are unable to work, who will reimburse you for the lost income?

Early Termination

Finally, there is always the issue of early termination. How much will the physician or office have to pay if they decide to terminate their service agreement early? Sometimes there will be multiple provisions for early termination based on the reason. If the doctors simply decide to stop using EMR, there will most likely be a fee. What if the reason for the termination is for-cause, such as dissatisfaction with the system? What if a doctor retires or becomes disabled, temporarily or permanently?

Attorney Contract Review

The issues discussed above are only a small fraction of what goes into an EMR service contract and there is no way to know what other terms might be thrown in there without reviewing the document. Further, there are some contractual terms that, even though they are very clearly expressed and known to both parties, are simply not enforceable in court. Relying on the protection of such unenforceable terms, or complying with such terms hen you don’t actually have to, can be detrimental. The bottom line here is that just as attorneys should not try to set broken bones, physicians should look to trained legal professionals to review and advise on contracts before they sign anything.

If you are a physician in need of contract review or other business services contact our firm today by calling 203-885-0500 or using the contact form on this site. We have successfully represented multiple medical professionals across multiple specialties in everything from business formation, organization and licensing to health insurance company approved medical provider list appeals. We are here to help you too.

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A Properly Drafted Business Agreement Can Add Health to Your Company

Agreements Between Business Founders

When beginning a new business venture, most entrepreneurs have a handle of the importance of properly forming a business in terms of selecting a business structure such as a partnership, a limited liability company or a corporation, and filing with the State to gain legal existence.

A much smaller group understand the importance of having a partnership agreement, operating agreement or shareholder agreement between company founders. I have seen a few situations where the lack of such an agreement has caused struggle between business founders, even leading to failure of that business.

Business founders need to budget some cost for a basic agreement to document terms such as ownership structure and rights, voting and decision-making rights, management responsibilities, and buy/sell provisions or rights of first refusal when one founder decides to make an exist, among many others. Having a well drafted agreement that brings up major points the business founders have not even consider is very important and can save a lot of time and money in the long run.

An agreement is no guarantee of business success or that issues between founders will not arise. However, having an agreement in place that is specific and decisive can squash many smaller issues before they grow into bigger problems.

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