Blog Archive

Tuesday, August 23, 2016

The Benefits and Ethics of Social Media

By Kimberly A. Bielan

The use of social media is gaining traction in the legal profession, with attorneys frequently posting blogs, writing articles, and sharing articles of interest.  As Co-Chair of REBA’s Strategic Communications Committee, the evolving use of social media presents great opportunity, presenting the ability to connect REBA members with access to blog posts, event updates, access to seminars, and the chance to more actively participate in the Association.  Put simply, social media presents a mechanism by which you can not only market yourself to prospective clients, but also engage with your colleagues in the legal profession.
At the 2016 REBA Spring Conference, I had the opportunity to speak on a panel entitled “Joining the Social Media Revolution … One Step at a Time” with Julie Barry, Co-Chair of REBA’s Strategic Communications Committee, and Justin Tucker.  The panel was an opportunity to introduce REBA members to the variety of social media platforms, answer questions, and discuss ethical issues that may arise when using social media.  As part of the Strategic Communications Committee’s effort to encourage active social media engagement between REBA and its members, this article is the first in a series on the topic, which seeks to encourage you to dip your toe into the proverbial social media pool.
Part of attorneys’ hesitancy to use social media is often a question of the ethics surrounding the new medium.  To be sure, social media may present traps for the unwary, but all one need keep in mind is that the applicability of the Massachusetts Rules of Professional Conduct (S.J.C. Rule 3:07) to online conduct is no different than it would be to actions undertaken off-line.  Stated succinctly, if you would not undertake certain conduct in person, then do not undertake that conduct on social media.  Keeping this simple statement in mind should guide your online interactions and (hopefully) take some of the intimidation out of engaging on a new form of medium. 
Here is a list of other things to remember when interacting on social media:

1. Social Media Profiles and Posts May Constitute Legal Advertising

2. Avoid Making False or Misleading Statements

3. Avoid Making Prohibited Solicitations

4. Do Not Disclose Privileged or Confidential Information

5. Do Not Assume You Can “Friend” Judges (In fact, according to Massachusetts Committee on Judicial Ethics Opinion No. 2011-6, judges are prohibited from “friending” any attorney who may appear before them!)

6. Avoid Communications with Represented Parties

7. Be Cautious When Communicating with Unrepresented Parties

8. Beware of Inadvertently Creating Attorney-Client Relationships

9. Beware of Potential Unauthorized Practice Violations

10. Read Cautiously with Testimonials, Endorsements, and Ratings
For more on each of these topics, including specific examples and recommendations on how to deal with each situation, please consult your 2016 REBA Spring Conference materials.
The Strategic Communications Committee looks forward to interacting with all of REBA’s members and encourages all members to access its blog at, which is updated often with new content, to engage with REBA on Facebook, and to follow REBA on LinkedIn, where links to articles and events are frequently posted.
Kimberly Bielan co-chairs REBA’s strategic communications committee and is a leader in the association’ strategic long-term planning, particularly with the new lawyers committee.  She practices in the litigation department of Marcus Errico Emmer & Brooks, P.C.  Kimberly can be contacted by email at


Monday, August 15, 2016


Saul J. Feldman, Esq.

During summer, we think of vacations. Often this means a resort or a second home condominium. There are many concerns in buying a vacation condominium. The usual concerns involve pools, parking, and pets. Noise is also an issue, given the sometimes close proximity of the units. 

There are other issues as well, such as the right to lease your unit. Many of the units in a vacation condominium are often owned by absentee landlords and rented out on a weekly, monthly, or seasonal basis. The rules and regulations for the condominium must be drafted to take this into account. Tensions often exist between renters and owners, and between couples with children and couples without children.

Some vacation condominiums contain mixed uses. There can be tensions, for example, between homeowners and an on site restaurant involving odors, noise, and allocation of expenses. There can also be tensions in a golfing condominium, between the owner of the golf course and the residential owners, where the ownership of the golf course is separate from the ownership of the residences. These tensions include noise during golf tournaments and allocation of expenses between the owner of the golf course and all of the owners of residential units.

Where a vacation condominium is both commercial and residential, in an attempt to reduce the tensions between commercial and residential owners, often a rules committee is created by the owners. One of the functions of the rules committee can be to make rules and regulations regarding signage. This is necessary to prevent the owner of the restaurant unit from installing signs that are bothersome to the owners in the adjacent cottages.

Given the popularity of golf in the 1980s and 1990s, many condominiums were created consisting of residential units and a golf course as a unit and the main amenity.

Another common vacation condominium would be in a beach community. In a beach community, I should note that vacation condominiums were a subject of a case involving a “cottage colony” in the Town of Dennis on Cape Cod. The case is Goldman v. Dennis, 375 Mass. 197 (1978). The Goldman case upheld a town by-law that regulated the conversion of certain types of buildings to the condominium form of ownership.

I have never liked the Goldman case. A condominium is a form of ownership. It is not a form of land use.

The court in the Goldman case decided that there are some situations where a municipality may regulate a condominium conversion if the conversion will intensify the use of the property.

The issue of a vacation condominium is complicated by a condominium statute (Chapter 183A) that provides no guidance to the owners of vacation or seasonal condominiums.

I should mention that there are boat dock condominiums, often in vacation areas such as Cape Cod. Also, there are hotel condominiums which consist of one unit being a hotel and the remaining units being residential vacation units. The condominium form of ownership has been used to create some interesting vacation condominium projects.

Massachusetts does have a separate statute covering timeshares, but this statute does not apply to a vacation condominium unless a portion of it has been made into a timeshare pursuant to the timeshare statute (Chapter 183B).

One difference between a vacation condominium and other condominiums is that the board of trustees meets less often, and, when they do meet, they often meet by a telephone conference call. The condominium documents for a vacation condominium must allow for meeting by a telephone conference call, as the Trustees may spend most of the year far away from their vacation condominiums.

Finally, it is essential that the condominium be managed by a management company that has experience with vacation condominiums. There are rental agreements with residents, move in and move out issues, and many other matters that require a management company with expertise in managing vacation condominiums.

A management company may also have to deal with workouts involving a troubled or failed vacation condominium development, run-away expenses, bank loans to the vacation condominium association, and litigation against unit owners who are often out of state.

In any event, your resort or second home condominium will in all likelihood have its share of legal issues.

Saul Feldman is a member of the Condominium Law and Practice Committee. He can be contacted by email at

Thursday, August 11, 2016

The Many Advantages of an LLC for Real Estate Holding

By Leo J. Cushing


Limited liability companies clearly are the entity of choice, particularly in cases where holding real estate is involved.  By way of background, Massachusetts first introduced limited liability companies in 1996.  As a result of a 2003 amendment, single member LLCs became permissible.

Single member and multi-member LLCs are clearly superior to other entity choices, including S corporations, Massachusetts Business Trusts and nominee or “realty” trusts.  For example, contributions of appreciated property to limited liability companies are income tax free.   More importantly, distributions of appreciated property from an LLC to its owners are generally income tax free. This is a particularly significant benefit, inasmuch as a distribution of appreciated property from an S corporation will be a taxable event.

Liability and Income Tax Advantages

By statute, each member of an LLC has limited liability.   A single member LLC does not file a separate income tax return.  Rather, all items of income, expenses, deductions, and credit are reported to the owner on the individual income tax return for both federal and state purposes. 

Multiple Properties

In cases in which there are multiple properties, it is common to form a parent LLC and have each of the separate properties owned by a separate LLC.  Each separate title-holding LLC will be owned by the parent LLC.  The separate, single purpose LLCs, which own separate properties, are single member LLCs that do not have a separate income tax filing obligation.  Of course, each LLC must pay the $500 annual filing fee.    

Tax Filing Obligations

All income will be reported on the parent LLC and, in such a case, if the parent LLC is a single member LLC, all items of income, expense, deduction, and credit will be reported on the individual’s owns personal income tax return.  Multi-member LLCs are treated as partnerships.  No income taxes are paid at the entity level.  All items of income, expense, deduction and credit will pass through to the members and will be taxed in accordance with the partnership rules of Subchapter K of the Internal Revenue Code.

Gifting of LLC Membership Interests

LLCs are used extensively for estate planning.  In a typical case, a senior family member will form an LLC and contribute substantial real estate holdings to it.  Thereafter, the senior family member will transfer by gift LLC membership interests.  These may be voting or nonvoting and could represent a small or significant portion of the LLC-using non-voting shares. To the extent that the membership interest transferred is either a minority interest or non-voting shares, the gift tax value of the interest will be discounted.  This is because the interest is nonvoting and nontransferable.

In the case of Pierre v. Commissioner, 133 T.C. 2 (2009), the IRS argued unsuccessfully that the LLC should be disregarded and that the transfer of a membership interest was essentially a distribution of the underlying asset to the transferor, a gift by the transfer or to the transferee with a recontribution of that asset by the transferee, and, as a result, no discount would be allowed.  This was rejected by the Tax Court.

Changing Domicile

Limited liability companies are also useful to minimize Massachusetts estate taxes in connection with a change in domicile.  Massachusetts residents are subject to an estate tax that can be as high as 16%.  For this reason, many Massachusetts residents consider changing their domicile to Florida, New Hampshire or some other state that does not have a state death tax.

Aside from the need to comply with the various regulations in terms of changing voting registration, driver’s license, physicians, and the like, it is also important to deal with Massachusetts real estate that the taxpayer may own.  The reason for this is that nonresidents are subject to the Massachusetts estate tax based on a formula. 

The computation involves first computing the amount of the state death tax that otherwise would be due if the Florida resident was a Massachusetts resident, and then multiplying that amount by a fraction, the numerator of which is Massachusetts real estate and other tangible personal property located in Massachusetts with the denominator being the decedent’s adjusted gross estate.  G.L. c. 65C, § 4(g).
If we assume that a single taxpayer dies with an estate of $5,000,000, which would be nontaxable to a Florida resident, and we assume that 50% of the property is Massachusetts real estate, then the Commonwealth of Massachusetts would be entitled to $195,800, computed as follows:

Total tax due assuming decedent was                                                $2,500,000

a Massachusetts resident:                                $391,600  x     $5,000,000   =   $195,800

If the Massachusetts property was transferred to an LLC in connection with a change in domicile, even if the LLC is owned by the Florida resident, the numerator would be zero since the LLC is an intangible and not real estate.  See Estate of Nielson v. Commissioner, Docket No. F232365; (Appellate Tax Bd. Feb. 15, 2001) (stating that partnership interest not taxable, but interest in realty trust taxable for Massachusetts estate tax purposes).

This planning opportunity has been addressed by a number of states, most recently New York.  In an advisory opinion, the New York State Department of Taxation and Finance concluded that real estate owned by a single member LLC will not be considered an intangible unless it elects to be taxed as a corporation.

It is likely that other states will follow suit but not likely in Massachusetts because the LLC statute provides that an LLC interest is personal property and a member has no interest in specific LLC property. Also, this issue was addressed in a DOR regulation, 830 Code Mass. Regs § 65C.2.1, which was repealed in its entirety as being obsolete in 2014.
Avoiding Excise Stamp Taxes

General Laws c. 64D, § 1, imposes as stamp/excise tax on the sale of real estate; the amount is $4.56 per $1,000 of sale price and is payable by the seller.  Massachusetts has not taken the position that a single member LLC is a property interest, at least for purposes of imposing the $4.56 per $1,000 stamp tax.  In theory, then, this would permit a taxpayer to transfer their property to a single member LLC and then sell the membership interest to avoid paying the $4.56 per $1,000.  See DOR Directive 95-5 (a sale of benefits interest in a Massachusetts nominee trust is subject to the stamp tax).

Single Member LLC and Asset Protection

One important asset protection benefit to an LLC is the statutorily-limited remedy of a creditor to a so-called charging order.  See G.L. c. 156C, § 40.  Generally, this means that unlike an interest in another type of entity, the interest cannot be taken to satisfy a judgment creditor.  A word of caution:  this benefit does not exist in the case of a single member LLC.


This article only scratches the surface of the complex and vexing issue, not yet settled in all jurisdictions, on whether a single member LLC is an intangible or an interest in real estate.  However, it is widely recognized that for holding title to real estate, the limited liability company has supplanted all other entities.
The founding partner in the Waltham-based firm of Cushing & Dolan P.C., Leo Cushing has written and lectured extensively on all aspects of taxation and estate planning.  He also co-chairs REBA’s estate planning, trusts and estate administration committee.  Leo can be contacted by email at