Cavitch Familo & Durkin, Co., L.P.A. FindLaw IM Template2026-08-10T16:22:35Zhttps://www.cavitch.com/feed/atom/WordPress/wp-content/uploads/sites/1603528/2022/05/cropped-cavitch-site-icon-32x32.jpgby Bradley Somogyi<![CDATA[Ohio House Bill 446: A Comprehensive New Framework for Trust Protectors – What It Could Mean for Your Estate Plan]]>https://www.cavitch.com/?p=2576102026-08-10T16:22:35Z2026-08-10T16:22:35ZOhio Law Already Recognizes Protector-Like Roles
HB 446 would not introduce the concept of a trust protector to Ohio for the first time. Since 2013, Ohio Revised Code Section 5808.08 has expressly allowed a trust to give a trustee or another person the power to direct the modification or termination of the trust. That statute also provides that, unless the trust says otherwise, a nonbeneficiary holding a power to direct is presumptively a fiduciary who must act in good faith with regard to the trust's purposes and the beneficiaries' interests.
Ohio Revised Code Section 5815.25 likewise already addresses directed-trust arrangements. It generally protects an “excluded fiduciary” from liability for losses resulting from compliance with an authorized direction and relieves that fiduciary from certain investment-review obligations when investment authority has been assigned to someone else.
The important point, therefore, is not that HB 446 would recognize trust protectors for the first time. Rather, it would replace Ohio's current handful of general rules with a comprehensive operating code governing a protector's powers, duties, liability, appointment, removal, compensation, communications, and relationship with the trustee.
What Is a Trust Protector?
Under the proposed Act, a “protector” would be a trust officeholder, other than a trustee, who holds a power of direction under the terms of the trust. The definition applies regardless of whether the trust uses the title “protector,” “advisor,” “director,” or something else.
A protector's role is determined by the trust instrument. HB 446 would not automatically give every protector every power listed in the statute, and it would not add a protector to a trust that does not provide for one. Instead, the Act supplies rules for powers that the trust's creator chooses to grant.
Powers a Trust Could Grant
Depending on the language of the trust, a protector's powers could include the authority to:
Direct trust decisions: issue binding directions concerning investments, administration, or distributions, or approve or veto proposed actions.
Change trust officeholders: appoint or remove trustees, investment advisors, or other trust officeholders, subject to special rules when the drafting attorney serves as protector.
Modify the trust: amend provisions to address tax-law changes, preserve favorable tax treatment, or respond to changed beneficiary circumstances.
Adjust beneficial interests: increase or decrease beneficiary interests, add or remove beneficiaries, or modify powers of appointment if the trust grants that authority.
Address administrative issues: change the trust's situs or governing law, make binding interpretations, add or remove administrative powers, or terminate the trust.
These are potentially significant powers. Careful drafting is essential because the trust instrument—not the title “trust protector”—determines which powers the protector actually holds and the standards governing their exercise.
Fiduciary Status and Liability
HB 446 would continue and refine, rather than create, Ohio's existing fiduciary presumption. Under the proposed Act, a protector would be a fiduciary unless the trust expressly provides otherwise. The trust could also make a protector a fiduciary for some powers but not others, allocate different powers among multiple protectors, and establish different standards of liability for different responsibilities.
When acting as a fiduciary, a protector generally would be subject to the same fiduciary obligations and limitations that would apply to a trustee holding the same power. When acting in an authorized nonfiduciary capacity, the protector generally could act in the protector's sole and absolute discretion. Even then, however, the trust could not eliminate liability for the protector's willful misconduct or self-dealing.
The House-passed bill also contains several safeguards. A protector could not use a power of direction to engage in self-dealing, solely benefit the protector apart from permitted compensation, or exculpate a trust officeholder from liability for that officeholder's willful misconduct. Unless the trust expressly provides otherwise, a protector also could not compel a distribution to or for the protector's own benefit.
Directed Trusts and Trustee Liability
One of HB 446's most consequential features is its detailed allocation of responsibility between a protector and the trustee or other officeholder receiving a direction. After actually receiving a trust directive, the officeholder generally must take reasonable steps to implement it. The officeholder may presume that the directive is valid, rely on information provided by the protector, ask for clarification, and require a verbal directive to be put in writing.
The directed officeholder generally would not be liable for implementing or complying with the directive unless the officeholder's own conduct constitutes willful misconduct. The bill also provides that trustees and protectors generally have no duty to monitor or supervise one another, warn beneficiaries that another officeholder might have acted differently, or second-guess decisions outside their assigned roles. They would, however, have limited duties to share information reasonably related to one another's powers and responsibilities.
Who Could Serve as Protector?
Generally, any person could serve as protector so long as that person is not concurrently serving as trustee of the same trust. If one instrument creates multiple separate trusts, a person could serve as trustee of one trust and protector of another.
HB 446 would impose additional safeguards when the attorney who prepared or supervised execution of the trust—or a person related to that attorney—is appointed as protector. Unless an exception applies, the attorney would have to make specified disclosures concerning alternative appointees, protector compensation, additional legal fees, and removal powers, and the settlor would sign a separate written acknowledgment. A drafting attorney serving as protector also could not remove a trustee without petitioning a court and showing good cause.
Why Might a Trust Include a Protector?
A protector can be valuable when a trust is expected to continue for many years or hold assets requiring specialized oversight. Depending on the plan, a protector may provide:
Tax flexibility: authority to respond to future changes in federal or state tax law without requiring a full court proceeding.
Adaptability: a way to respond to marriages, divorces, births, disabilities, substance-use issues, or other material changes in beneficiary circumstances.
Administrative continuity: a mechanism to replace an unsuitable trustee, resolve ambiguities, or change the trust's situs or governing law.
Specialized decision-making: the ability to assign investment, business, tax, distribution, or family oversight to the person best suited for that responsibility.
A protector is not necessary for every trust. Broad amendment, beneficiary, or removal powers can also create complexity, tax concerns, family conflict, and additional administrative expense. The protector's identity, powers, fiduciary status, succession, and compensation should therefore be tailored to the particular plan.
What HB 446 Could Mean for Existing Estate Plans
As passed by the House, the proposed Act generally would apply to trusts whenever created if they are wholly or partly administered in Ohio or governed by Ohio law, subject to the trust's terms and constitutional limitations. That does not mean the Act would insert a protector into every existing trust or grant new powers that the document does not contain.
Because HB 446 remains pending, most clients do not need to make immediate changes solely because of the bill. If it is enacted, however, individuals creating or reviewing long-term trusts may wish to consider whether a carefully designed protector provision would improve flexibility, clarify responsibility, or reduce the need for future court involvement.
At Cavitch, we will continue monitoring HB 446 as it moves through the General Assembly and evaluating how any final legislation may affect both new and existing estate plans.
If you have questions about HB 446, trust protectors, directed trusts, or whether your estate plan should be reviewed, please contact Bradley Somogyi, Esq. at 216.621.7860 or bsomogyi@cavitch.com.]]>by Katherine Mangan<![CDATA[Planning for Tomorrow: Is a Third-Party Supplemental Needs Trust Right for Your Family?]]>https://www.cavitch.com/?p=2574412026-07-29T16:35:07Z2026-07-29T16:33:39ZUnderstanding The Basics Of A Third-Party Supplemental Needs Trust
A third-party supplemental needs trust differs from other types of special needs trusts because it is funded with assets belonging to someone other than the beneficiary. Parents, grandparents, siblings, or other family members can establish and fund the trust to provide for a loved one with a disability, either during their lifetime or as part of their estate plan.
For many families, a third-party supplemental needs trust is an important long-term planning tool. Rather than leaving an inheritance directly to a loved one with a disability, assets can be directed into the trust upon the death of the person creating the estate plan. The trust assets are then managed by a trustee for the beneficiary's benefit and may be used to pay for supplemental expenses that improve the beneficiary's quality of life, while helping preserve eligibility for government benefits. This approach allows families to provide financial security for a loved one without unintentionally affecting the public benefits on which they may rely.
The Importance Of A Third-Party Supplemental Needs Trust
Planning for the future of a loved one with a disability often means preparing for uncertainties that extend well beyond your own lifetime. Families naturally want to ensure that their loved one will continue to receive the care, financial support, and opportunities they deserve while preserving access to essential public benefits. A third-party supplemental needs trust provides peace of mind by creating a structured plan for managing and distributing assets in a way that complements, rather than replaces, government assistance.
Unlike relying on family members to manage an inheritance informally or hoping government benefits alone will meet a loved one's needs, a third-party supplemental needs trust allows a trusted trustee to manage assets specifically for the beneficiary's supplemental needs. The trust can be used to enhance the beneficiary's quality of life by paying for expenses not covered by public benefits.
A third-party supplemental needs trust also offers significant planning advantages. There are no contribution limits or asset caps on the trust itself, allowing families to transfer substantial assets for the beneficiary's future care. Equally important, because the trust is funded with assets belonging to someone other than the beneficiary, it is not subject to a Medicaid payback requirement upon the beneficiary's death. Instead, any remaining trust assets may be distributed to the family members, charities, or other beneficiaries designated by the person who created the trust, allowing the family's legacy to pass according to their wishes.
If a third-party supplemental needs trust sounds like it may benefit your family, we encourage you to contact the attorneys at [nap_names id="FIRM-NAME-2"]. We would be happy to discuss your circumstances and help you determine whether this planning tool is the right fit for your estate plan and your loved one's future.]]>On Behalf of Cavitch Familo & Durkin Co., L.P.A.<![CDATA[Ten Cavitch Attorneys Recognized on the 2027 Ohio Super Lawyers Lists]]>https://www.cavitch.com/?p=2574402026-07-28T18:07:41Z2026-07-28T18:07:41Z
Six Cavitch attorneys were named to the Ohio Super Lawyers list.
Four Cavitch attorneys were named to the Ohio Rising Stars list.
This achievement underscores our commitment to providing clients with high-caliber legal representation. We commend our recognized attorneys for their dedication and professionalism that led to this distinction.
Ohio Super Lawyers List
The selection process for the Ohio Super Lawyers list is rigorous, with no more than five percent of the state's attorneys receiving this designation each year. Congratulations to the following Cavitch attorneys:
The Ohio Rising Stars list recognizes exceptional attorneys who are either 40 years old or younger or have been in practice for 10 years or less. Only 2.5 percent of eligible attorneys in the state are named to this list annually. Congratulations to:
Super Lawyers is a rating service that selects outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made through a patented multi-phase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The lists are published nationwide and are designed to be a credible, comprehensive resource for identifying exceptional attorneys.]]>by José Valdez<![CDATA[How to Minimize the Risk of Copyright Litigation: A Guide to Fair Use]]>https://www.cavitch.com/?p=2573452026-07-20T15:11:10Z2026-07-20T15:11:10Z17 USC § 106, a copyright owner has the exclusive right to reproduce, prepare derivatives, and distribute copies for sale of copyrighted works. For literary, musical, dramatic, choreographic, motion picture, or other audiovisual works, the copyright owner also has the exclusive right to perform and display the work publicly. Those rights can last a long time. In many cases, copyright protection extends for the life of the author plus 70 years under 17 U.S.C. § 302.
These rights are not without teeth, as US copyright law provides for severe penalties for copyright infringement. These penalties consist of actual damages or statutory damages. Under 17 USC § 504(b), a copyright holder is entitled to their actual and real loss or injury resulting from a violation or infringement. For example, if a musician whose song is uploaded and sold illegally online, the musician is entitled to lost sales or streaming revenue.
On the other hand, a copyright holder may choose to receive statutory damages instead. Under 17 USC § 504(c), the statutory penalties may range from $750 to $30,000 per infringement, and may increase to as much as $150,000 for willful infringement. Willful infringement may also expose an infringer to criminal penalties under 17 U.S.C. § 506 and 18 U.S.C. § 2319.
The Digital Millennium Copyright Act also reshaped copyright enforcement for the internet era by creating notice-and-takedown procedures for online service providers. This is the mechanism through which copyright owners can request a takedown of YouTube videos that use their work.
But U.S. copyright law recognizes the need to promote the progress of science and useful arts. In 1976, Congress codified the long-standing judicial doctrine of fair use into law as 17 USC § 107.
Under 17 U.S.C. § 107, fair use may permit limited use of copyrighted material for purposes such as criticism, comment, news reporting, teaching, scholarship, or research. Courts evaluate fair use by considering several factors, including the purpose and character of the use, whether the use is commercial or nonprofit educational, the nature of the copyrighted work, the amount used, and the effect of the use on the potential market for the original work.
These factors are not applied mechanically, and the list is not exhaustive. The Sixth Circuit has recognized that courts consider the statutory factors in context, including whether the challenged use is commercial. NRA of Am. v. Handgun Control Fed’n of Ohio, 15 F.3d 559, 561 (6th Cir. 1994).
A key question is whether the new use is transformative, rather than merely substituting for the original.. The Supreme Court has described “transformative” as adding something new and important to a copyrighted work. Google LLC v. Oracle Am., Inc., 593 U.S. 1, 29 (2021). For example, the Supreme Court highlighted that the use of an advertising logo is fair use if it is used to make a comment about consumerism. Id. Further, parodies are transformative because they comment and criticize the original even if it mimics the original. Id. at 30.
Because copyright disputes are highly fact-specific, individuals and businesses should carefully evaluate their use of copyrighted material before copying, reposting, adapting, distributing, or monetizing another’s work. Taking proactive steps, such as obtaining permission, securing an appropriate license, or conducting a fair use analysis, can help reduce the risk of infringement claims. Particular attention should be given to whether the use aligns with one or more of the purposes identified in 17 U.S.C. § 107, such as criticism, comment, news reporting, teaching, scholarship, or research, and whether the use is sufficiently transformative to add new meaning, purpose, or character to the original work. A thoughtful assessment of these factors before publication or distribution can be an important safeguard against costly copyright litigation.
Before you publish, share, or monetize content containing third-party works, consider making sure your assets are legally secure. Contact Jose Mendez Valdez and the attorneys at [nap_names id="FIRM-NAME-2"] to schedule a comprehensive fair use analysis and help minimize the risk of costly copyright litigation.]]>On Behalf of Cavitch Familo & Durkin Co., L.P.A.<![CDATA[Cavitch Shareholders Gregory E. O’Brien and Roy A. Krall Recognized in Chambers and Partners Rankings 2026]]>https://www.cavitch.com/?p=2573442026-07-15T15:19:55Z2026-07-15T15:19:55ZGregory E. O’Brien and Roy A. Krall, have been recognized by Chambers and Partners in their latest rankings. This prestigious acknowledgment highlights their exceptional legal skills, unwavering dedication, and outstanding contributions to their respective fields.
Chambers and Partners rankings are the result of an independent and in-depth research process, which includes extensive interviews with clients, peer attorneys, and industry leaders. This rigorous methodology ensures that only the most talented and effective legal professionals are identified and honored.
Gregory E. O’Brien is being recognized for his work in the field of Insurance Law. Greg is a robust advocate on behalf of insurers in complex state and federal tort, coverage, and bad faith disputes. Greg’s Band 1 ranking reflects both his strategic expertise in handling challenging insurance litigation and his standing as a leading advocate in the insurance sector.
Roy A. Krall is being recognized for his exceptional contributions to Private Wealth Law and deep expertise in trusts and estates. Furthering his commitment to guiding clients through sophisticated wealth planning strategies. Roy’s inclusion in these esteemed rankings speaks to his long-standing dedication to helping individuals and families navigate complex matters related to asset protection, estate administration, and intergenerational wealth transfer, providing invaluable and thoughtful counsel.
This recognition by Chambers and Partners underscores [nap_names id="FIRM-NAME-2"]‘s commitment to delivering top-tier legal services and reinforces our reputation as a trusted resource for complex legal challenges across various practice areas.
Cavitch congratulates Greg and Roy on these outstanding achievements.]]>On Behalf of Cavitch Familo & Durkin Co., L.P.A.<![CDATA[Hannah Mahaffey Named To Providence House PHriends Associate Board]]>https://www.cavitch.com/?p=2573092026-07-08T16:24:21Z2026-07-08T16:24:21ZHannah Mahaffey has been named to the Providence House PHriends Associate Board.
Providence House, a historic emergency shelter based in Cleveland, operates to provide shelter for children newborn through twelve years old who are actively living in crisis situations. They also offer critical family support services to help families stay together. The PHriends Associate Board brings together emerging local professionals who act as ambassadors to raise awareness, organize fundraising events, and drive community engagement in support of the organization’s mission.
Hannah joined Cavitch in May 2025 and is a member of the firm’s Litigation and Employment Practice Groups. She focuses her practice on complex commercial litigation, general litigation, and labor and employment matters, representing employers and corporate clients in both state and federal courts. Her appointment to the Associate Board aligns with Cavitch's long-standing tradition of community stewardship and leadership in Northeast Ohio.
A lifelong Cleveland resident, Mahaffey earned her Juris Doctor cum laude from the Cleveland State University College of Law in 2023, where she served as Vice Chair of the Moot Court Team. Her appointment to the Associate Board continues a momentum of recent professional achievements; she was also recently invited to join the Judge John M. Manos Inn of Court and was selected for the competitive Ladder Down Cleveland Class of 2026.
About [nap_names id="FIRM-NAME-1"]
Founded in 1886, [nap_names id="FIRM-NAME-2"] is a full-service law firm located in Cleveland, Ohio. For over 140 years, Cavitch has provided sophisticated legal counsel and creative solutions to individuals, executives, and closely held businesses throughout Northeast Ohio across a wide spectrum of practice areas, including corporate law, litigation, employment, and estate planning.]]>by William Hatt<![CDATA[Stablecoins, Private Lending, and Regulatory Reality in 2026]]>https://www.cavitch.com/?p=2573012026-06-24T17:51:38Z2026-06-29T13:00:51ZSEC Treatment: Stablecoins Are (Mostly) Not Securities
Under current federal guidance, properly structured stablecoins used for payment purposes are not treated as securities. In April 2025, the SEC issued a Staff Statement clarifying that “Covered Stablecoins” – those fully back 1:1 by U.S. dollars, non-interest-bearing, and used solely as a payment mechanism – do not qualify as securities. This position aligns with the anticipated framework of the proposed GENIUS Act, which would formally exempt payment stablecoins like USDC from securities regulation once enacted (expected rollout in 2026-2027).
As a result, an individual may loan stablecoins to another person and receive repayment in U.S. dollars or another digital asset without triggering SEC registration requirements, so long as the transaction is private and not part of a broader lending platform or investment product.
Taxes Are the Real Regulatory Hook
While SEC oversight is limited, the IRS is very involved. The IRS treats stablecoins as property – not currency – meaning nearly every stage of a loan has tax consequences:
Repayment in USD is treated as a disposal of the stablecoin, potentially triggering capital gains or losses.
Repayment in another cryptocurrency (e.g., lending USDC and receiving Bitcoin) is treated as a crypto-to-crypto exchange, with capital gains calculated at the time of receipt.
Interest payments, whether in USD or crypto, are taxed as ordinary income.
Private lenders must self-report interest income and any dispositions of digital assets, typically on Schedule 1 (Form 1040) and Form 8949.
If you use a lending platform, they are now required to send you a Form 1099-DA, with a duplicate going straight to the IRS. While these forms currently focus on your total sales (gross proceeds), starting in 2026, they will also track your "cost basis" (what you originally paid) for each specific wallet. Essentially, the IRS is moving toward automated tracking, and the days of "estimating" your crypto gains are over.
Where the Line is Drawn
Importantly, the regulatory risk increases when lending activity becomes a business model rather than a private transaction. Platforms offering interest-bearing stablecoin products may still be treated by the SEC as issuing investment contracts, requiring registration and compliance with federal securities laws. In fact, the regulatory boundary isn’t just about ‘how much’ you lend, but ‘how’ you lend it. Under the 2026 interpretation of the GENIUS Act, as long as you aren’t acting as an ‘unregistered broker’ – meaning you aren’t facilitating loans for others or promoting a yield product to the public – you remain in the clear. The moment you offer your lending ‘services’ to the public, the SEC’s registration requirements (and the heavy fines associated with them) kick in.
Bottom Line
Private stablecoin lending is currently permissible under federal securities law, but it is not tax-free, nor regulation-free. Structure, scale, and purpose matter – and the shift from personal use to business activity can dramatically change the compliance landscape.
The compliance landscape for digital assets is moving faster than ever. If you are leveraging stable coins for private financing or business transactions, clear boundaries are your best defense against heavy fines and tax surprises.
At [nap_names id="FIRM-NAME-2"], we can help bridge the gap between traditional corporate finance and the realities of the evolving regulatory landscape for digital assets. Contact us for more information.]]>by Jennifer Molnar<![CDATA[Drafting for Durability and Flexibility: Charitable Intent Requires More Than Good Intentions]]>https://www.cavitch.com/?p=2572992026-06-17T15:59:22Z2026-06-17T15:56:32Z
Avoid overly narrow restrictions. Gifts tied to highly specific criteria can create challenges at the time of distribution. The issue is not whether the objective is meaningful, but whether it can be carried out under the legal and institutional framework in place at that time. Framing the gift around a broader purpose can help reduce the risk of delay, refusal, or modification.
Emphasize purpose over precision. A strong charitable provision should clearly express both what the gift supports and why. Defining the underlying purpose provides guidance if the gift must later be interpreted or adjusted and helps preserve alignment with your intent.
Build in flexibility. Charities evolve, and legal requirements change. Including language that allows for reasonable adjustment, such as trustee discretion or compliance provisions, can help ensure your broader goals are preserved.
Plan for contingencies. Including an alternate recipient or charitable purpose helps ensure your assets remain directed to causes you support.
Revisit charitable provisions regularly. Periodically confirming that both the chosen beneficiaries and the associated restrictions remain workable helps ensure your plan continues to reflect your intent and current realities.
Charitable bequests are more than planning tools—they are a reflection of the legacy you want to leave and the impact that matters most to you. Because these gifts are so personal, they deserve more than good intentions; they require thoughtful drafting and careful attention to how they will function over time. When structured with clarity, flexibility, and long-term practicality in mind, a charitable gift is far more likely to carry out not just the donation, but the purpose behind it.
If your estate plan includes a charitable bequest—or if you are considering one—now is the right time to ensure those provisions remain workable and aligned with both current law and your long-term goals. A thoughtful review today can help protect what matters most: your intent, your impact, and the legacy you hope to leave.
At Cavitch, our estate planning team understands the deeply personal nature of charitable giving and is ready to help review your plan or develop a strategy that ensures your charitable intent endures.]]>by Milica Prica<![CDATA[Using an LLC as a Legacy Planning Tool for Family Vacation Homes]]>https://www.cavitch.com/?p=2572972026-06-08T16:10:32Z2026-06-08T16:09:50ZFor many families, a vacation home is far more than just real estate. It is a place where traditions are built, stories are shared, memories are made, and generations connect. However, without thoughtful planning, these cherished properties can become a source of conflict or even be lost altogether.
One increasingly popular and highly effective strategy is placing the vacation home into a trust-owned limited liability company (LLC). The operating agreement is a rulebook for how the vacation home is owned, used, and managed.
The Operations
In an LLC structure, control is centralized through a manager, rather than requiring unanimous agreement among potentially many family members. This allows for efficient handling of repairs, insurance and operations; one point of contact for vendors and legal matters; and defined voting rights for major decisions. The company’s operating agreement also sets out rules for when the property can be used, rented, etc. When a vacation home is owned individually, it can easily be fragmented or forced into sale due to divorce, creditors, or inheritance disputes. An LLC keeps ownership consolidated within a defined group and can restrict transfers to non-family members. Further, future owners must agree to the terms of the operating agreement, limiting their rights to the property if they don’t. The operating agreement further provides a framework for future generations to step in as owners. When a member passes away, their ownership interest can be transferred to their estate plan. Successors can become full members only if they agree to the governing terms.
The Trust
While the operating agreement controls how ownership works, the trust controls how ownership passes. Instead of individuals directly owning the LLC membership interests, the original owner’s revocable trust owns those interest. This is critical because the document determines how those interests are divided upon death. One of the biggest advantages is that trust-owned interests pass outside of probate. That means no court-supervised transfer process, no delays that can tie up ownership for months or longer, and greater privacy and efficiency in administering the estate. For shared vacation homes, this is especially important because it avoids situations where no one has explicit authority to manage or use the property before or during the probate process, bills or maintenance get delayed, and family members are left in limbo. When properly structured, upon the death of the trust creators and original owners, the trust splits the assets into separate shares for beneficiaries. The beneficiary of each trust share can then step into ownership subject to the operating agreement. Further, instead of deeding the original owner’s interest into as many equal shares as they have beneficiaries which creates multiple new fractional title interests in the real estate, the LLC interests simply split instead, while the LLC continues to own the property as a single, unified asset. This means the ownership of the property itself does not change (the LLC remains on title). Only the ownership of the LLC changes behind the scenes.
Why This Works So Well
Independently, each tool is useful. Together, they are powerful. The operating agreement provides governance, structure, and family rules. The trust provides efficient, probate-free transfer of ownership across generations. This results in a system where the family vacation home is efficiently managed, and ownership transitions are smooth and controlled such that the property can remain a lasting family asset rather than becoming a burden. Contact the experienced attorneys at [nap_names id="FIRM-NAME-2"] to set up your family vacation home LLC today. ]]>by Hannah Mahaffey<![CDATA[AI Assisted Hiring: What Employers Need to Know About Discrimination Risks]]>https://www.cavitch.com/?p=2572332026-06-02T17:17:37Z2026-06-02T17:17:37ZEmployers are increasingly using AI-assisted tools to screen resumes, rank applicants, evaluate video interviews, and identify candidates who appear to be the “best fit” for a role. While these technologies may improve efficiency, they also create significant legal risks that many employers may not fully anticipate.
One of the biggest concerns is that AI hiring tools can unintentionally perpetuate discrimination. Many AI systems are trained using historical hiring data, meaning the technology learns patterns from an employer’s past hiring decisions. If those historical decisions reflect unconscious bias or disproportionate exclusion of certain groups, the AI system may replicate those same outcomes. To address these concerns, the Equal Employment Opportunity Commission (“EEOC”) created the Artificial Intelligence and Algorithmic Fairness Initiative, which examines how employers’ use of AI and other automated systems may implicate federal anti-discrimination laws and provides guidance regarding the lawful use of those technologies in the workplace.Information on this initiative can be found here. Importantly, the EEOC has taken the position that employers may still face liability under federal anti-discrimination laws even when hiring decisions rely on AI-assisted tools developed or administered by third-party vendors. The EEOC’s fact sheet on this can be found here. The EEOC has warned that employers may violate Title VII where AI-assisted hiring tools disproportionately screen out applicants based on protected characteristics such as race, sex, or national origin, even absent any express intent to discriminate. Given that these technologies are often used to evaluate large numbers of applicants simultaneously, discriminatory outcomes may occur on a broader scale and may be more difficult for employers to detect if the underlying systems are not properly monitored or audited.The EEOC has also made clear that monitoring AI-assisted hiring is an enforcement priority. In EEOC v. iTutorGroup, Inc., the EEOC alleged that an automated hiring system rejected older applicants based on age by programming its software to automatically reject female applicants age 55 or older and male applicants age 60 or older. The matter ultimately settled for $365,000. Additional details about this case can be found here. More recently, a case in California, Mobley v. Workday, Inc., has drawn national attention. In that case, the plaintiff alleged that Workday’s AI-powered applicant screening tools discriminated against applicants based on race, age, and disability in violation of federal anti-discrimination laws. More about this case and the roadmap of its litigation can be found here. This case is significant because it raises questions about whether software vendors themselves may face liability. The important takeaway: employers cannot simply rely on third-party AI vendors without independently evaluating whether those systems create discriminatory hiring outcomes or disproportionately screen out protected groups.The ADA also presents unique risks in the AI hiring space. According to guidance issued by the U.S. Department of Justice, AI-driven technologies may unlawfully screen out qualified individuals with disabilities if they are not properly designed or monitored. For example, software that evaluates speech patterns, facial expressions, eye contact, or response timing during video interviews may disadvantage applicants with speech impairments, neurological conditions, anxiety disorders, or other disabilities. Likewise, timed assessments or computer-based testing may violate the ADA if employers fail to provide reasonable accommodations. The DOJ further emphasized that employers are still responsible for ensuring their hiring technologies comply with the ADA, regardless of whether the systems are administered internally or through outside vendors. Details of the DOJ’s guidance on this issue can be found here.Although there is potential risk, AI is here to stay, and employers must adapt or be left behind. So, what are some simple things employers do to mitigate against this risk in using AI-assisted technologies in hiring?
Carefully vet AI vendors and examine any contracts with AI vendors regarding indemnification, waivers, insurance provisions, and apportionment of liability.
Ask questions and understand how AI hiring tools are trained and evaluated.
Regularly test for adverse impact on protected groups.
Maintain meaningful human oversight regarding the hiring process.
Ensure that applicants have a way to request accommodations during the hiring process.
The Employment Attorneys at Cavitch, Familo & Durkin are closely monitoring the use of AI in the employment lifecycle and are hosting an AI In The Workplace Panel discussion to further this conversation. This event will bring together legal and business professionals to discuss the practical realities of implementing AI in the workplace, the evolving legal and ethical considerations surrounding its use, and what employers can do now to prepare for the future of work. To attend the event, sign up here.]]>