UAW Legal Services Plan

The UAW Legal Services Plan is the largest pre-paid legal services program in the country.

Plan staff attorneys are represented by AFSCME and support staff are represented by OPEIU.

The Plan provides “personal legal services” to our 725,000 eligible workers, surviving spouses, and retirees. Legal Services are provided to our members primarily through one of our 69 Plan offices throughout the nation. If a member lives outside a Plan staff office area, then the member receives a referral to a “Cooperating Attorney” by our Cooperating Attorney Department, which is located at the National office in Detroit.

Plan wins key bankruptcy case in U. S. Supreme Court

In one of the most significant cases since its inception, the UAW Legal Services Plan has won a favorable ruling from the United States Supreme Court on a bankruptcy issue that had been hotly contested around the country. The decision, handed down in May, 2004, is saving Plan Participants and other consumer bankruptcy debtors millions of dollars in payments to creditors in chapter 13 cases. A nationally prominent bankruptcy judge has called the Court's decision "the biggest win ever [for debtors] in the chapter 13 world."

Successful appeal helps used car buyers

In one recent appeal case, our client innocently bought a used car in Ohio and later tried to register title in Michigan. It turned out that it had been stolen. The Michigan Bureau of Motor Vehicles refused to register title; and it was confiscated and returned to the true owner. The Plan sued the Ohio dealer. The dealer defended by stating that it had disclaimed any warranty of title in the contract language. The trial court (wrongly) ruled in the dealership's favor and the Plan appealed. The Plan argued that the the disclaimer language was not a clear statement that was likely to be understood by the ordinary buyer. The Court of Appeals agreed with the Plan and reversed the trial court. Through this successful appeal, the Plan was able to ensure fairness for all buyers of used cars in Ohio.

Tax law changes protect non-spouse beneficiaries of retirement accounts

After recent tax law changes, the beneficiary of your 401(k) or Individual Retirement Account (IRA) will soon be able to roll over the account without a tax penalty, even if he or she is not your spouse. Currently, if you own a 401(k) or IRA, only your spouse after your death can defer taxes on the inherited account by rolling it over to his or her 401(k) or IRA. If your beneficiary is not your spouse, the normally required immediate payout of the funds from the account, typically in a lump sum, could result in a significant tax bite. The Pension Protection Act of 2006, which became law on August 17, 2006, has eliminated this tax consequence. Read more below

Planning for Medicaid nursing home benefits made harder

Concerned that the cost of nursing home care will deplete their assets, some senior citizens try to plan their estates so as to qualify financially for Medicaid nursing home benefits. A strategy some have used is to gift or transfer property to beneficiaries before entering the nursing home, so that the property will not be counted as an asset in the Medicaid application process. Such a transfer normally triggers a "Medicaid disqualification period." Also called a "transfer penalty period," this is a length of time in which the applicant is disqualified from benefits and is calculated to approximate the number of months of nursing home care the gifted property could have paid for. Read More Below

Why are Plan Benefits Taxed?

Have you ever wondered why every so often you have an entry on your paycheck for the UAW-GM, Ford or Daimler-Chrysler Legal Services Plan? Have you ever wondered why at the end of the year, your W-2 or 1099 tells you that you have to report approximently $75 of income for these same legal services plans? The answer is that the United State Congress took away favorable tax treatment for group legal services plans, effective June 30, 1992. Prior to that time the money that it takes to run the plans, the employer’s payments to the legal services plan, was tax exempt to you. While it was income, just like wages and other benefits such as health, dental and vision coverage, there was a special section of the tax code, which kept you from being taxed on it. That provision, called Section 120 of the Internal Revenue Code, expired on June 30, 1992 and has never been reenacted. (See attached document for full article)

In the News:
Supreme Court bankruptcy decision

Highlighted Case:
Tax Law Change Continued

Plan Attorney of the Month:
Medicaid continued

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