The Sentinel-News published an article on highway danger on August 31, 2016 which reviewed DUIs, fatalities and injury accidents for the year 2015. The most dangerous highways were I-64 with 156 accidents; Mt. Eden Road with 107 accidents; Taylorsville Road with 100 accidents; and Waddy Road with 51 accidents.

The article concluded that more DUI arrests have occurred. There were nine fatal injuries on the highway, an increase of three from 2014. The majority of highway injuries and deaths are caused by inattention, distractions including phone use, eating, controlling the radio or other screen applications, truck driving abuses, and driver error.

Several years ago, we took the lead and made several presentations to the public regarding distracted driving, and encouraged awareness and changed behavior of persons driving and using their phone or other distractions. Statistically, it is proven that distracted driving causes highway danger and injuries. As the Sentinel-News reported, the National Highway Traffic Safety Administration reports that 10% of fatal crashes, 18% of injury crashes, and 16% of all police-reported motor vehicle crashes in the U.S. in 2014 were reported as distraction-affected crashes. This trend is continuing.

We encourage everyone to avoid distracted driving. You can save lives.



There is a never-ending assault on your individual rights that plays itself out each and every day in Congress, state legislatures, news media, advertising, and judicial rulings.

The crux of these assaults is that the civil justice system negatively impacts job creation, reduces the number of physicians, reduces corporate investments, creates a windfall to those injured, costs all of us more because of lawsuits, and that reform is a must.

The problem is that this assault has no basis in fact and the fictions created by those who have reform as their primary agenda are doing the insurance companies bidding while they stay in the background pumping tons of money to propagandize the issue with claims of disaster for the ordinary person. The truth is far from the organized effort of these assaulters who distort, lie, and intentionally spend millions to win the minds of the general public.

The fact is that there are fewer lawsuits now than at any time in recent history. This is established by the National Center for State Courts and the Bureau of Justice Statistics. Companies are not running away from Kentucky. According to the Kentucky Economic Development Cabinet, more than 14,000 jobs were created in 2013, and over $3.3 billion in new investment was made, the fourth straight year for growth. Lexington and Louisville rank 31st and 41st respectively on Forbe’s list for “Top 100 Best Places for Business and Careers.”

The American Medical Association states that the number of physicians is at an all time high of 317 per 100,000 population and the number is 21% higher in states without medical caps on damages (349 vs. 288). Kentucky has more doctors per capita than Californina, Indiana, and Texas, all of which have “reform” measures such as medical panels.

There is no crisis in litigation. That is a lie perpetrated by the assaulters who only want to pad their pocketbooks even further, without regard to the citizens who deserve fair treatment regardless of their wealth, status, or social standing. The assault continues and we must continue to speak the truth.


On New Year’s Day in 2013, Congress finally provided some stability (at least for now) to the federal estate, gift and generation-skipping transfer (“GST”) tax laws. Since 2001 when President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), estate planning professionals have been advising clients in an unpredictable estate, gift and GST tax environment. At its basic level, the unpredictability was the result of the continuous bickering between politicians over federal tax revenue.

Prior to 2001, the estate tax exemption (also known as the “applicable exclusion amount”) was $675,000. After the enactment of EGTRRA, the applicable exclusion amount gradually increased up to $3,500,000 in 2009. In 2010, the estate tax was repealed for one year. In other words, the exemption was unlimited if a person died in 2010. If Congress did nothing, which it almost did, the federal estate tax would have been reinstated in 2011 and the applicable exclusion amount would have been $1,000,000. Yes, that is correct . . . as EGTRRA was written, if a single person died on December 31, 2010 with $2,000,000 of assets and had not properly planned his estate, the estate tax would be $0. All things being equal, if that same single person had died in January 1, 2011, his estate tax would be close to $1,000,000. Approximately two weeks before this scenario became a real possibility, Congress enacted the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the “2010 Tax Act”). The 2010 Tax Act reinstated the estate, gift and GST taxes, but also increased the applicable exclusion amount to $5,000,000. It also introduced a new and important planning tool — “portability” of unused estate and gift tax exemption amounts between spouses. In other words, if the executor of the deceased spouse’s estate made the proper filings, the unused portion of the deceased spouse’s exemption could be combined with the surviving spouse’s exemption. Prior to the portability idea, any unused portion was lost. The 2010 Tax Act also made certain other changes, such as reunifying the estate and gift tax exemption amounts and reducing the maximum estate, gift and GST tax rates. Despite this seemingly reasonable compromise between politicians, the 2010 Tax Act, much like EGTRRA, was scheduled to “sunset” on December 31, 2012.

Congress did take action, as only it can, on January 1, 2013 (after the “sunset”), and effectively made permanent the provisions of the 2010 Tax Act by enacting the American Taxpayer Relief Act of 2012 (“ATRA 2012”). As it stands now, the exemption equivalent amount is $5,000,000 and increases each year for cost of living adjustments. In 2014, the exemption equivalent amount is $5,340,000. In addition, the estate and gift tax exemptions remain unified and the portability of a spouse’s unused exemption amount is permitted. It is worth noting that this portability election only applies to a person’s most recent spouse, which means that a surviving spouse will lose the deceased spouse’s unused exemption amount upon remarriage. Possibly the most important part of ATRA 2012 is what is does not include — a sunset provision. Unless Congress affirmatively acts to change the estate, gift and GST tax laws, those laws will continue and that allows for more predictable planning.

Neal & Davis, PLLC can help you plan your estate so that your taxes are minimized and your loved ones are protected. Call us at 502-633-6002 and schedule your appointment.

1031 Exchange

Business or individuals owning appreciated real or personal assets go up in value face the prospect of significant capital gains tax liability upon the sale of these assets. This liability can be deferred by structuring the transaction as a “like kind” exchange under Section 1031 of the Internal Revenue Code.

The Code defines property as “like kind” if it is (a) held for investment, or (b) used in a trade or business. While business taxpayers may utilize exchanging in the sale of equipment and other tangible personal property, the most frequent contact individual taxpayers have with the exchange process is through the sale of investment real estate. Proper planning and structure of these sales can add significant value to the transaction.

There are essentially two types of exchanges in solving investment real estate. They are the simultaneous or straight exchange and the deferred exchange. In the straight exchange, the taxpayer sells “like kind” property (the “relinquished” property) to the buyer who simultaneously transfers similar property (the “replacement” property) to the taxpayer. If the value of the replacement property is greater than the value of the relinquished property, the taxpayer pays additional cash “boot” to the seller. If the value of the replacement property is less, the taxpayer receives taxable cash “boot” to equalize the transaction. Only the cash received is subject to tax with the tax attributable to the exchanged real estate deferred.

The two-party straight exchange is relatively rare since in the typical IRC 1031 transaction, the seller of the replacement property is not the buyer of the taxpayer’s property. In many instances, the taxpayer may have sold the relinquished property before finding suitable replacement property. In these situations a deferred exchange, utilizing a Qualified Intermediary, can be structured to achieve the same result.

A Qualified Intermediary is a third party, often a bank or exchange service company, which maintains an account holding the net proceeds of sale of the relinquished property until the taxpayer has identified and closed on the purchase of the replacement property. On execution of the Exchange Agreement, the contract to sell the relinquished property is assigned to the Intermediary and funds otherwise due seller at closing are instead paid directly to the Intermediary. Thereafter, the taxpayer must identify the replacement property within 45 days and close with Intermediary funds within 180 days. If done properly all taxable gain on the sale of the taxpayer’s property will be deferred.

The key to a successful 1031 exchange is full and correct documentation together with strict observance of all time limitations. The IRS is unforgiving in its application of the rules relating to exchanges. Neal & Davis, PLLC has represented clients who have done of these transactions and is available to bring added value to your next sale of investment real estate.

***In a future article we will discuss two more complex exchange transactions, the reverse exchange and the constructed property exchange.




Whether you are building a new home, remodeling, or making repairs, making sure the work is done properly is not an easy proposition. Here are some the mistakes in building that we have seen while representing clients against their builders:


1. The foundation was not below the freeze level.

2. The foundation was poured incorrectly and the quality of concrete was poor.

3. Decks were built with improper support.

4. Roof trusses were improperly tied together.

5. Brick work was poor and water leaked through the joints.

6. Poor material was substituted.

7. The builder took money from one job and put it on another job.

8. The builder walked off the job.

9.  The builder filed a bogus mechanics lien against the owners’ property.

10. The builder did not finish on time.

11. The builder kept asking for more money claiming it was for things not included in the contract.


How do you protect yourself from these problems and make sure the job is done well?

The first thing you have to do is find a reputable and honest builder. Then you need to have a detailed contract setting out the exact work to be done, the cost of the work, the time limit for the work, the methods of payments including what percentage is paid and when, a list of all subcontractors so you can check their reputations, and a provision for lien waivers when the subs are paid.


This is just the beginning and inspections throughout the building process should be scheduled to make sure the construction meets code and is of a high quality. Do your due diligence and make sure you get legal help in regard to the contract so that you can protect your investment. Building a home is stressful but you can alleviate some of the emotional turmoil by making sure your legal position is solid from the beginning.




Appellate Mediation

Appellate Mediation – Coming to Kentucky?




When I first became aware of appellate mediation I was skeptical about its basic premise that you could resolve anything after an appeal was filed. While CR 76. has the provision for prehearing conferences, it is nothing like an appellate mediation. Most court of appeals cases are not referred to a prehearing conference and most attorneys indicate that it would not be helpful in resolving the appeal.

So why would you consider an appellate mediation, what is it, how does it differ from a regular mediation, when is the appropriate time for an appellate mediation, and how does it work. These are issues I will address in this article.


So you have won your case and as the saying goes “justice was done and now the appeal”. Why mediate on appeal if you have won and if it is a money judgment, interest is mounting. Kentucky’s Court of Appeals consist of three judge panels who consider your case. More and more, oral argument is being dispensed with and you have no opportunity to verbally persuade the panel. If you are on the losing side of judgment, you definitely have an incentive to try and resolve the case. A review of your previous appellate cases should be done. Look at your wins, look at your losses. Is there any consistency upon which you can rely? Have you been shocked by the appellate result you have received in a case? What is the percentage of reversal on appeal. What are the pitfalls that can kill your appeal, such as listing issues in the prehearing statement, not enough citations to the record, not pointing out sufficiently your preservation of error, and what panel is reviewing your case.


I must confess that I have received a couple of appellate decisions that have absolutely dumbfounded me. One case was argued in the Supreme Court several years ago. In that case there was a 4 to 3 decision against my client. I petitioned for a rehearing which was granted. After the oral argument, clerks came up to me and told me that I had won the day. The decision came out again with the same 4 to 3 against my client.In the Court of Appeals, I have a decision or two that has left me scratching my head. I do not claim to be omniscient as to law but I do know when I see something wrong in the law applied to my client. All of the above are good reasons to mediate your case on appeal.


When is the best time to mediate on appeal. Some think that the mediation should take place before the briefs are filed so that time and money can be saved. Some think that mediation should take place after the Appellant files her brief so that the Appellee can see the meritorious issues raised on appeal and therefore is in a more compromising position. Some think that mediation should take place after all briefs are filed. Some consider that the mediation should be held after the prehearing statements are filed. The problem with waiting is that expenses mount, attorneys fees go up, and there is further delay in getting a case resolved.


An appeal is a search for errors of law. An appellate mediation is a search for doubt. Various errors can be asserted on appeal. For example, granting summary judgment, granting a motion to dismiss, granting or not granting a motion for directed verdict, granting or denying a particular jury instruction, entering a judgment against the weight of the evidence, granting or denying a motion for a new trial. There also may be an abuse of discretion in granting or denying specific performance, maintenance, granting or denying a new trial, granting or denying an injunction, admission or exclusion of evidence, failure to object, inadmissible evidence, questions of law, contract interpretations, parol evidence, Daubert issues, failure to make findings, and substantial evidence requirements.


Another area for appellate mediation is appeals to circuit court. These cases are usually contentious and mediation can work well here.


Kentucky has no formal appellate mediation rules. Nonetheless, it seems that the appellate courts would bless this process, grant extensions of time for the mediation process, and appreciate the parties’ efforts in trying to resolve their case. It is imperative, in my view, that an appellate mediator be well-versed in the appellate rules, the procedural rules, and the law applicable to the appeal for a successful appellate mediation. An appellate mediation is more hands on for the mediator as he needs to be involved in the legal arguments, understand the underlying case, and consider the doubts that can be raised on appeal.


An appellate mediator should know how the lawsuit began, understand why the parties have agreed to mediate, discuss best outcome scenarios, focus on the parties’ interests, not their perceived legal standing, and understand that the parties’ interpretation is only one assessment.


A party may say we won already, what do we have to talk about. So the mediator must take a critical review of all parties’ positions. What is the nature of the error asserted on the appeal? Is it harmless error? Is it a de novo question? Is it discretionary and an abuse of that discretion? Are there any doubts within these rulings?


Another reason for appellate mediation is to cut costs and save time. The likelihood of complete reversal on appeal is not great. Statistics show that may happen in 20 to 30 percent of the cases. Partial reversal and remand may occur in 30 to 40 percent of cases, and the remaining are affirmed in full. Consequently, there is a margin of error to consider which makes appellate mediation worthwhile. The parties must consider the likelihood of success on appeal, probable outcome if successful or not,

costs, including interest if a money judgment, premium for the supercedeas bond, the risk or benefit of creating precedent, and collectability from the adverse party.


It is my recommendation that the Supreme Court adopt appellate mediation rules which formalize the process allowing the court by motion or sua sponte to refer a case to appellate mediation. These rules would have built in tolling of times to perfect an appeal and for brief filing until the mediation is completed. Timelines would be set for the mediation to occur and report to the appellate court of its results.


Appellate mediation has proven to be successful in 11th Circuit Court of Appeals, in the Florida appellate courts, and can be successful in Kentucky. Referrals to mediation can be made by the court or by motion by a party.


The time for an appeal in Kentucky can be a long process. By the time the notice of appeal is filed, the record is certified, the prehearing conference time expires, the briefs are submitted, and a decision is made more than a year can pass, and in some cases 18 months to two years can pass. Can mediation be better?


Decisions made on findings of fact are reviewed by the competent substantial evidence test. The appellant knows that that if there any competent and substantial evidence the decision of the trial court will be affirmed. The appellee knows that without a complete review, it is uncertain whether the appellate court will find such evidence to support the decision.


Discretionary decisions by the trial court are not reversed unless there is an abuse of discretion by the trial judge. The appellant knows that it is difficult to show an abuse of discretion and the appellate court will not disturb the decision even if it would have decided differently. The appellee knows that unless the relevant legal issues are reviewed the appellate court does not have the opportunity to check for abuses. Also, the harmless error rule applies and if the error is not prejudicial the decision will be affirmed.


In recent years the number of cases mediated in the 5th DCA Florida has increased along with the success rate averaging around 40%. The 11th Circuit Court of Appeals has also had success with mediation.


An appellate mediation can educate the parties on both sides of the law and its application. The risk of public opinion can be avoided. The risk of establishing bad precedent can be eliminated and time and money can be saved. Once appellate mediation is adopted in the Kentucky Civil Rules, a reasonable method of resolving disputes can be implemented and if 40% of the cases mediated can be resolved the dockets of the Court of Appeals can be reduced thereby reducing the time for a decision in other appeals.


This article by Gregg Y. Neal was published in the Advocate by the Kentucky Justice Association.


No Fault and Your Auto Insurance Policy


Kentucky is a No Fault insurance state. What does that mean? It means that your auto insurance pays you for certain losses regardless of who is at fault when an accident happens. This method of payment is called BRB (basic reparations benefits) or PIP (personal injury protection). The minimum offered by insurance companies is $10,000 which is what most people have. So if you are injured in a wreck there is $10,000 available to you for the payment of medical bills and lost wages. And you can elect where the money is to go, that is, to a medical bill or your lost wages.


The key thing you need to decide when you purchase auto insurance is how much PIP do you want, and how much underinsured and underinsured coverage you want. Underinsurance covers you if the person who is at fault does not have enough insurance to cover your losses. You can then claim on your own policy for underinsurance money. Uninsured coverage on your policy covers you if the person at fault has no insurance. One final thing to consider is how much liability coverage you need in the event you are at fault and cause damages to another person.


The important thing about liability coverage is that if you are at fault you are defended by the insurance company and it pays the damages up to your limits of liability. The minimum liability required in Kentucky is $25,000 per person and $50,000 per accident. However, you should buy more protection and you can make your underinsurance and uninsured coverage the same amount as your liability coverage. This protects you at a higher level.


If this sounds a little complicated, it is, but it is important to understand. In summary, here is a list to consider:


  1. PIP – minimum is $10,000; consider buying $50,000
  2. Liability coverage – minimum is $25,000; consider buying at least $100,000
  3. Underinsured and Uninsured coverage – buy the same amount as your liability coverage.
  4. Read your policy so you know what is covered. Unfortunately, you take what the insurance company gives you and you have no ability to negotiate the terms of the policy.


If you need help with understanding your auto insurance call us at 502.633.6002.



How do kids lose their inheritance?



A recent newsflash showed how this happened. The deceased had an IRA account that went to his estate but said how it was distributed in his will and not in the beneficiary document of the IRA. The court held that the $400,000 went into the estate and the deceased’s wife, whom he married two months before his death, became very rich. WARNING! THE IRA DOCUMENTS CONTROL AND YOU MUST NAME YOUR BENEFICIARIES IN THE DOCUMENT, NOT YOUR WILL.


5 Mistakes People Make After a Car Accident

5 Mistakes People Make After a Car Accident

There are a lot of mistakes people make after a car accident but these are the top 5 mistakes that can destroy your case.

1. Social media posts on Facebook, Twitter, etc. are fair game if you claim injury and post pictures of you rock climbing, or making some inappropriate comments relating to your injury, you are hurting your case. You have to be very careful as to what you put on the internet for all to see, including words and pictures.

2. You talk to the at fault driver’s insurance company and give a statement which is recorded. That adjuster is not on your side.

3. You don’t seek medical attention right away and you don’t follow your doctor’s medical instructions.

4. You don’t take pictures of the accident scene (if you can) and you talk to the police officer when you are not thinking clearly.

5. You exaggerate your injuries.

Call us for immediate help. 502.633.6002




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