Selling a business is much more involved than just collecting documents and answering questions. It is a negotiated allocation of value and risk. The seller may begin with an attractive headline price, but the amount ultimately retained can depend on dozens of provisions that require context, judgment, and a clear understanding of the seller's priorities. These are all things AI cannot understand.

When used thoughtfully, AI can be helpful early in the transaction process. It may assist in generating a diligence checklist, classifying documents for a virtual data room, reviewing contracts for recurring provisions, and preparing summaries for the deal team. For a seller looking at years of agreements, corporate records, employment materials, and financial information, that organizational support can be invaluable, saving time and helping identify areas that deserve closer attention.

But a well-organized data room is not the same as a well-positioned business. The critical question is not merely, “What information do we have?” It is, “How do we present this company in a way that supports its value while addressing risk before the buyer uses it as leverage?” Experienced deal counsel can strategically determine which issues should be resolved before going to market, how diligence should be sequenced, and how disclosures should be framed accurately without creating unnecessary exposure.

The headline price is only the beginning

Every seller wants the highest possible purchase price. But the stated price in a letter of intent or purchase agreement does not always equal what the seller receives at closing or what will remain after the deal is complete. Diligence findings can trigger price reductions, working capital adjustments can move significant dollars after closing, earnouts can make a portion of the sale dependent on future performance and buyer-controlled decisions, and escrows and holdbacks can delay access to proceeds.

While AI may be able to flag these provisions or compare them with language found in other agreements, it is critical to have an understanding as to how the provisions interact and how they affect this seller's actual economics. A working capital definition that appears ordinary may exclude an item that is central to the business. An earnout metric may sound objective but become difficult to achieve after the buyer integrates the company. A seemingly modest indemnity can become costly if it is paired with broad representations, a long survival period, and an inadequate liability cap.

Experienced counsel is trained to look beyond whether a term is simply present. They evaluate how it operates, where it shifts leverage, and whether it is consistent with the commercial bargain the seller believes it made.

AI cannot negotiate post-closing liability

For many sellers, the provisions governing post-closing exposure are among the most consequential parts of the transaction. The sale price loses some of its meaning if too much remains subject to claims, repayment obligations, or disputes long after closing. Controlling that exposure requires negotiation, not just identifying standard clauses.

Deal counsel works to narrow representations and warranties, limit indemnification obligations, reduce escrow or holdback amounts, establish appropriate liability caps and baskets, define exclusions carefully, and shorten survival periods where the circumstances support it. Counsel also considers how those protections fit together. Winning a lower cap may offer little comfort if a broad exception effectively swallows it. A shorter survival period may not solve the problem if the most significant representations remain outside that limit.

This is where experience directly impacts the economics of a deal. A lawyer who has seen claims arise under similar language can anticipate how a provision may be used when the parties no longer share the optimism of signing day. AI analyzes text. It does not advocate for the seller, read the negotiating dynamics, or make the tradeoffs required to bring the parties to agreement.

A technically correct answer may still be the wrong deal decision

M&A negotiations are filled with decisions that do not have a single correct answer. Should the seller resist a buyer's request or conserve leverage for a more important issue? Should a potential concern be disclosed now, investigated further, or addressed through a specific contractual solution? Is a provision worth extending the negotiation, or is accepting it the better choice given the buyer, the timing, and the seller's objectives?

Coming to the right answer requires understanding context. It may turn on the strength of the buyer's alternatives, the seller's tolerance for delay, the likelihood that the issue will create real exposure, and the relative value of other concessions under discussion. It also requires an understanding of the personalities at the table and how aggressively a point can be pressed without jeopardizing the deal. That judgment is built through experience and cannot be generated from contract language alone.

Overreliance on AI can create new risks

The efficiency of AI can create a false sense of completeness. A seller may assume that an AI-generated contract summary captured every material obligation or that an automated diligence review identified every inconsistency. But incomplete context, ambiguous drafting, poor source documents, or a seemingly minor error can lead to inaccurate disclosures, missed consent requirements, incomplete diligence responses, and post-closing disputes. Confidentiality, data security and the handling of privileged information also require careful attention when AI tools are used in a transaction.

The responsibility for the deal lies with the parties and their advisors, not the technology. They remain accountable for the accuracy of disclosures, the completeness of responses, and the meaning of the documents they sign. AI output should therefore be treated as a work product to validate, never something to accept without review.

Use AI to support the deal team, not substitute for it

Sellers should take advantage of AI tools that make transactions more efficient and allow for better organization, faster review, and earlier identification of potential issues. But the strongest approach is to use those tools under the direction of experienced advisors who understand what matters, can test the output, and know how to convert information into strategy.

A revocable trust is much the same.

Many people believe that once they sign their trust documents, their estate plan is complete. In reality, creating the trust is just the first step. To function as intended, a trust requires ongoing attention and maintenance. Think of it as practicing good “trust hygiene.”

Trust hygiene helps ensure that your trust remains properly funded, reflects your current wishes, and stands ready to accomplish its goals when needed. Without regular maintenance, even a carefully drafted trust may fail to deliver the benefits it was designed to provide.

Feed the Trust: Proper Funding Is Essential

A dog cannot thrive without food, and a trust cannot function effectively without assets.

One of the most common estate-planning mistakes is failing to fund a revocable trust after it has been created. Funding simply means transferring assets into the trust or coordinating beneficiary designations so the assets ultimately flow into the trust.

Depending on the asset, funding may involve different tasks:

• Transferring real estate into the trust through a new deed
• Retitling bank or brokerage accounts in the name of the trust
• Assigning ownership interests in closely held businesses
• Naming the trust as a beneficiary of certain assets when appropriate
• Moving your furniture, artwork, jewelry, and other personal property to the trust through an “assignment”

Many people are surprised to learn that signing a trust agreement does not automatically transfer ownership of their assets. If assets remain titled in an individual’s name, they may still be subject to probate despite the existence of a trust.

A trust that has not been properly funded is like a dog that has not been fed — it cannot thrive and perform the functions for which it was intended.

Schedule Regular Checkups

Good trust hygiene includes periodic reviews.

Families’ financial lives rarely remain static. People buy homes, sell investment properties, open new accounts, start businesses, inherit assets, and make other significant financial changes throughout their lives.

Each of these events creates an opportunity for assets to fall outside the trust.

For example, a couple may have properly funded their trust when it was established but later purchased a vacation home and never transferred it into the trust. Years later, that single oversight could create an expensive and unnecessary probate proceeding.

Periodic trust reviews help identify these issues before they become problems. As a general rule, it is wise to review your estate plan every few years and after major life or financial events.

Keep Trustee Appointments Current

Another important aspect of trust hygiene is reviewing the individuals named to serve as trustee and successor trustee.

When a trust is first established, the successor trustee you have named may be the obvious choice. But circumstances can change significantly over time.

A successor trustee may relocate, develop health issues, become unwilling to serve, or simply no longer be the best fit for the role. Family dynamics can also evolve in unexpected ways.

Regular reviews provide an opportunity to confirm that the people named in the trust remain capable and appropriate choices. Updating trustee appointments when necessary can help avoid administrative difficulties later on.

Review Beneficiaries and Distribution Plans

Just as families change, estate plans should evolve as well.

Children grow up. Grandchildren are born. Marriages begin and end. Beneficiaries develop different financial needs and levels of maturity. What seemed like the perfect distribution plan 10 years ago may no longer reflect your current objectives.

A trust review provides an opportunity to revisit beneficiary provisions and determine whether they still accomplish your goals.

In some cases, adjustments may be appropriate to account for changing family circumstances, special-needs concerns, creditor-protection issues, or evolving tax considerations.

Good trust hygiene means ensuring that your trust continues to reflect your family’s present reality rather than a snapshot of life from many years ago.

Don’t Forget New Assets

One of the easiest trust hygiene mistakes is forgetting to update ownership when acquiring new assets.

People often focus on funding the assets they own when the trust is created but overlook assets acquired later. A new home, investment account, business interest, or valuable piece of property may never be coordinated with the trust.

Over time, these omissions can undermine the effectiveness of an otherwise well-designed estate plan.

Whenever you acquire a significant new asset, it is worth asking a simple question: “How does this fit into my trust plan?” That one question can help prevent many common estate administration problems.

Healthy Trusts Require Ongoing Attention

A revocable trust is not a “set it and forget it” estate-planning tool.

Like any important part of your financial life, it benefits from regular maintenance. Proper funding, periodic reviews, updated trustee appointments, current beneficiary provisions, and attention to newly acquired assets all contribute to good trust hygiene.

The goal is simple: When the trust is needed, it should work exactly as intended.

Schedule a Trust Hygiene Review

If it has been several years since your trust was reviewed, or if you have purchased property, opened new accounts, experienced a major life event, or are simply not sure whether your trust is fully funded, now may be the perfect time for a trust hygiene review.

That makes sense. Tax controversies often begin with an examination, a notice, a proposed adjustment, a penalty, or a denial of a refund claim. At that stage, the dispute may feel primarily technical. What does the Internal Revenue Code say? How did the IRS calculate the adjustment? What documents support the taxpayer’s position?

But when a dispute becomes serious enough that litigation is a realistic possibility, the questions become more about what you can prove.

First, who has the burden of proof? And then, who are the witnesses, both good and bad, and will they still be available if this case goes to trial, even if it’s years from now? What documents exist? What story do they tell? And who will ultimately be deciding whether that story is credible?

That shift in mindset is critical. Federal tax litigation requires more than knowing the tax law. It requires building a case that can withstand scrutiny in a courtroom. And that process often begins long before anyone files a petition or complaint.

What Happens Before Litigation Does Not Stay There

One of the biggest mistakes taxpayers and advisors can make is treating the administrative process as though it exists in a vacuum. It does not.

Yes, when litigation starts it is a de novo proceeding (Latin for starting “anew”) but, what happened during the administrative process does not simply disappear when the case reaches court.

Positions taken during an audit, appeals conference, protest, refund claim, penalty response, or other administrative proceeding can follow the taxpayer into litigation. That does not mean every statement made during an IRS examination becomes binding. But explanations, documents, factual representations, and valuation positions advanced early in the dispute can later become part of the case.

If the taxpayer tells the IRS one story during the examination and a materially different story appears at trial, someone is going to ask why.

If a business tells the Service that a transaction had one purpose in response to an Information Document Request and later relies on a different purpose in litigation, that inconsistency may affect credibility.

And if documents are not preserved because everyone assumes the dispute will be resolved administratively, litigation counsel cannot recreate them years later. At that point, you may find yourself hoping the IRS kept the document in its administrative file and produces it when needed. Hope is not a preferred legal strategy.

The administrative process is therefore not merely something to “get through” before litigation. It is often the beginning of the litigation record, even if nobody wants or expects the matter to end up in court.

That does not mean every response to the IRS should be drafted as though it will someday be projected onto a courtroom screen. But when the amount at stake is significant, the allegations are serious, or the dispute is unlikely to resolve quickly, it is worth asking how today’s position may affect tomorrow’s case.

Where the Case Is Tried Can Change the Case

Taxpayers may have different paths to judicial review depending on the type of dispute.

The U.S. Tax Court is generally a prepayment forum. In a traditional deficiency case, that means a taxpayer can challenge the IRS’s determination without first paying the disputed tax. For many taxpayers, that is an enormous advantage.

Tax Court cases, however, are decided by judges, not juries.

The U.S. Court of Federal Claims is another federal forum for certain tax cases, but it likewise conducts bench trials rather than jury trials.

Federal district court litigation is different. Generally, the taxpayer must first pay the tax at issue, satisfy the applicable refund claim requirements, and then sue for a refund. In appropriate tax refund cases, either party may request a jury.

The government lawyers across the table are different too. In Tax Court, the government is generally represented by the IRS Office of Chief Counsel. In federal district court and the Court of Federal Claims, the United States is represented by the Department of Justice.

These differences are not cosmetic. Where the case is tried, who the opposing lawyers are, and whether the ultimate decision-maker is a tax judge or a jury can materially affect the presentation of the case, the facts that receive the most attention, the experts needed, the level of technical detail that is useful, timing, cost, and the practical leverage available to each side.

Forum is not simply a question of where a complaint gets filed. Sometimes it changes the case itself.

A Good Tax Position Still Has to Be Proved

Tax cases frequently turn on facts that are far less tidy than the tax return. And by the time litigation begins, significant time has often passed. Everyone suddenly wishes the record is better and the evidence to be stronger.

It is great when a client remembers an important conversation. It is much better when the client remembers the conversation and we have the contemporaneous email confirming it.

Testimony is evidence. Testimony supported by contemporaneous documentation is better evidence.

And life happens. An employee who understood the transaction left the company three years ago. The CPA changed firms. The person responsible for maintaining the records retired. The business reason for a decision was obvious to everyone at the time, so nobody thought there was any reason to write it down.

Until there was.

That’s where trial experience changes the way a dispute is evaluated. A litigator has to consider not only about whether a fact is true, but also whether it can be proved – and, when there are several ways to prove it, which one is likely the most effective. There is no such thing as an automatic win simply because the taxpayer has a strong legal argument. A technically strong tax position with a poor factual record can become a very difficult case.

Judges and Juries Hear the Same Case Differently

One of the most significant strategic differences in federal tax litigation is whether the ultimate factfinder will be a judge or a jury.

A judge works with complicated legal disputes every day. Tax Court also lives and breathes federal tax law. That changes the presentation. Tolerance for courtroom drama tends to diminish. A Tax Court trial can involve highly technical testimony, extensive expert reports, complicated statutory frameworks, and extensive post-trial briefing. The judge has the benefit of being able to work through that factual and legal record over time.

A jury trial is fundamentally different.

Jurors generally do not arrive at the courthouse with a working knowledge of the Internal Revenue Code. They are people being asked to understand a complicated dispute, determine what actually happened, decide who they believe, and then apply the law the judge gives them. The facts matter. The story matters. Presentation matters.

And the client matters.

A technically sophisticated position can be badly damaged if the taxpayer appears evasive, inconsistent, or unable to explain why certain actions were (or were not) taken. Conversely, a complicated case can become understandable when the witnesses are credible, the documents support their explanation, and the evidence fits together in a coherent story.

Consider a promoter penalty case. The underlying tax structure and statutory requirements may be complicated. But once the dispute reaches a jury, the most important questions become remarkably direct:

• What was the arrangement?
• What did the person actually say?
• What did they know at the time?
• What did they rely on?
• What evidence supports the government’s allegations?

A jury has to understand the answers. That does not mean oversimplifying the case or pretending complicated tax law is simple. It means separating what is technically interesting from what is actually important and explaining the latter in a way that someone who has never read the Internal Revenue Code can follow.

The burden of proof matters too. In many tax disputes, the taxpayer carries it. In others, including certain penalty cases, the government bears the burden on critical issues. Where a jury is legally available, deciding to give up that jury can mean giving up a meaningful strategic advantage. That decision should be made deliberately, not simply because bench trials are more familiar to most tax practitioners.

Time Can Be Part of the Litigation Strategy

There is another important difference between judge-tried tax litigation and jury litigation that is easy to overlook: when do you get an answer?

In a jury trial, once the evidence is complete and the case is submitted, the jury deliberates and returns a verdict. The parties generally know the answer before they leave the courthouse.

A Tax Court case works differently.

After trial, many cases require extensive post-trial briefing. That process alone can take months. The judge then reviews the testimony, exhibits, proposed findings of fact, and legal arguments before issuing an opinion. There is no fixed deadline for when that opinion must issue. In a complicated case, the wait can be substantial. Sometimes it is measured in years.

And time can have a real economic cost.

In many Tax Court deficiency cases, a taxpayer does not have to pay the disputed tax while the case is pending. That is one of the great benefits of the Tax Court as a prepayment forum. But if tax ultimately remains due, interest generally continues to accrue on the unpaid liability until the taxpayer takes time to stop it.

That creates a counterintuitive reality: the least expensive forum to enter is not necessarily the least expensive forum when everything is over.

Federal district court refund litigation generally requires payment first. That can make the federal district court route more expensive upfront — and, for some taxpayers, financially impossible.

A jury case may also require concentrated discovery, experts, significant trial preparation, and greater expense over a shorter period.

But in the right case, there is value in getting an answer. A verdict can provide economic certainty while a Tax Court case may still be awaiting an opinion. That matters when interest is running. It matters when a disputed liability affects financing, financial statements, transactions, or business planning. And it matters when management has already spent years living with a tax controversy.

None of this means district court is always preferable to Tax Court. It is not. The ability to challenge an asserted deficiency without first paying it is indispensable for many taxpayers, and there are options for addressing the running of interest that should be discussed with counsel.

The point is simpler: forum selection has economic consequences as well as legal ones. The analysis should include both the cost of getting to trial and the cost of waiting for the dispute to end.

Trial Strategy Should Begin Before Trial

The best time to start thinking about trial is not the week before trial. It is when the dispute first begins showing signs that it may not resolve easily.

That awareness can change relatively simple decisions. Save the IRS notice. Save the envelope it came in. Keep the mailing receipt and tracking information when something important goes to the IRS. Document when notices were actually received. Preserve the business records underlying the position. Identify the employees, accountants, consultants, and advisors who actually know what happened. Preserve the contemporaneous business reason for a decision instead of assuming someone will remember it four years later.

And when the stakes warrant it, consider bringing litigation counsel into the process before the administrative proceeding is finished.

That does not mean every audit needs a trial lawyer. Many do not. But significant cases are easier to litigate when someone was thinking about the evidence before the evidence disappeared.

Mailing records are a surprisingly good example. The date on an IRS notice, the date it was mailed, when the taxpayer actually received it, whether it went to the correct address, and when the taxpayer responded can become critical procedural facts.

The same is true when the taxpayer sends something to the IRS. Years later, “I know we mailed it” is nowhere near as useful as the certified-mail receipt or tracking record showing that you did.

Recent ERC disputes have brought that lesson into particularly sharp focus, with taxpayers sometimes needing to establish exactly when a claim or response was mailed.

This is why one of the least glamorous pieces of litigation advice is also one of the most useful:

Save the envelope. And save the receipt.

Better yet, apply the same mindset to the entire dispute.

The Bottom Line

John Adams famously told a jury during the Boston Massacre trials that “facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.” More than 250 years later, trial lawyers are still learning the same lesson.

By the time a tax dispute reaches a courtroom, most of the facts that will decide the case have already happened. The witnesses have had the conversations. The business made the decisions. The documents were created or they were not. The IRS took its position, and the taxpayer responded.

Good tax law matters. But once tax becomes trial, being right is only part of the job. You still have to prove it.

The best litigation strategy is therefore not the one invented on the eve of trial. It is the one that began while the evidence was still available, the witnesses still remembered what happened, and the taxpayer still had choices about how – and where – to fight.

While similar, each jurisdiction's statutory and decisional authorities have, as one might expect, evolved differently. Virginia has recently supplemented its common-law framework through legislation creating enhanced presumptions of undue influence in certain will and trust contests, while Maryland and the District of Columbia continue to rely principally upon traditional judicial formulations.¹

Virginia's bellwether is Parson v. Miller,² where the Supreme Court reversed a jury verdict that had set aside a will on grounds of lack of testamentary capacity and undue influence. The Court held that the contestant's evidence, largely circumstantial and rooted in family dynamics, was legally insufficient to sustain a finding of undue influence. The opinion remains Virginia's leading judicial analysis of the circumstances giving rise to a presumption of undue influence and the evidentiary consequences that follow.

The common-law framework articulated in Parson v. Miller has since been codified and supplemented by the General Assembly. In 2022, the Virginia General Assembly enacted Section 64.2-454.1, providing that in defined situations where a presumption of undue influence arises in a will contest, the finder of fact shall presume undue influence unless persuaded that the decedent intended the challenged instrument to operate as his will. The provision materially strengthens the position of contestants once the predicate facts giving rise to the presumption have been established and reflects a legislative shift toward greater scrutiny of suspicious testamentary transfers.³

Maryland's appellate courts have likewise adhered to traditional capacity principles. In Lynn v. Magness,⁴ the Court of Appeals articulated the familiar rule that a testator must understand the nature of the testamentary act, the property being disposed of, and the natural objects of his bounty. More recently, in Castruccio v. Estate of Castruccio,⁵ the Court reaffirmed Maryland's adherence to longstanding testamentary principles while resolving an execution-formalities dispute under Md. Code Ann., Estates & Trusts § 4-102. And in Upman v. Clarke,⁶ the Court held that a revocable trust functioning as a will substitute must be evaluated under the testamentary undue-influence standard rather than the inter vivos gift standard. Maryland's recent enactment of the Maryland SAFE Act, codified principally at Md. Code Ann., Estates & Trusts §§ 13-601 et seq., has expanded remedies for elder financial exploitation but has not altered traditional burdens of proof or presumptions governing will contests. As a result, Maryland appears, at least, to remain substantially committed to common-law analysis of testamentary capacity and undue influence, even as litigants increasingly pair those claims with statutory exploitation remedies.

The District of Columbia, by contrast, has fewer published appellate decisions squarely addressing undue influence in the will contest context. But the statutory baseline is clear: a testator must be "of sound and disposing mind" at execution. In practice, the D.C. Superior Court Probate Division generally analyzes testamentary-capacity disputes through principles similar to those employed in neighboring jurisdictions, focusing on whether the testator understood the nature of the testamentary act, the property involved, and the natural objects of his bounty. See In re Estate of Wilson, 416 A.2d 228 (D.C. 1980); D.C. Code § 18-102.⁷

¹ Execution‑formalities disputes and forensic challenges to testamentary documents are beyond the scope of this analysis. For more on challenging the bona fides of a will document, itself, see my March 26, 2026 publication, “Will Challenge Litigation: Forensic Expert Cross-Examination.” For more on execution-formalities disputes, see my posts regarding “’de facto” Wills and the Harmless Error Rule,” Part One, April 27, 2023; and Part 2, May 22, 2023 (Offit Kurman Blog); and “’De Facto Wills’: Estate Planning’s Dirty Little Secret?” Virginia State Bar Trusts and Estates Section Newsletter, Vol. 22 No. 13.

² Parson v. Miller, 296 Va. 509, 822 S.E.2d 169 (2018).

³ See also Va. Code § 64.2-724.1 (effective July 1, 2026), extending a comparable presumption-of-undue-influence framework to certain trust contests.

⁴ Lynn v. Magness, 191 Md. 674, 62 A.2d 604 (1948).

⁵ Castruccio v. Estate of Castruccio, 456 Md. 1 (2017).

⁶ Upman v. Clarke, 359 Md. 32 (2000).

⁷ See In re Estate of Wilson, 416 A.2d 228 (D.C. 1980) (discussing testamentary capacity); D.C. Code § 18-102.

An NOV generally puts a company on notice of an alleged violation and provides an opportunity to achieve compliance.

An AONOCAPA is a formal enforcement action that can order corrective action, impose a civil administrative penalty, and provide the recipient with a limited period to request an administrative hearing. If a hearing is not requested, the recipient generally waives objections to the alleged violation and penalty determination.

Understanding which document NJDEP has issued is therefore important to determining the appropriate response.

What Is an NJDEP Notice of Violation?

NJDEP describes an NOV as an enforcement action that advises a regulated party that a violation has occurred. An NOV typically identifies the violation, the date it was discovered, and a compliance deadline.

NOVs do not themselves carry civil administrative penalties. NJDEP also states that an NOV cannot be appealed through its administrative hearing process. In many instances, if the violation is corrected, no further enforcement action follows.

That does not mean an NOV should be ignored. An NOV may become the basis for additional enforcement if NJDEP concludes that compliance was not achieved or determines that further action is appropriate.

For this reason, companies should use the NOV stage to evaluate the factual and technical basis for NJDEP’s allegations and determine what corrective action may be required.

What Is an AONOCAPA?

An AONOCAPA is more significant.

According to NJDEP, an AONOCAPA may be issued after a company fails to comply with an NOV or where NJDEP determines that a violation is not minor. Unlike an NOV, an AONOCAPA carries a civil administrative penalty and may also order specific corrective action.

An AONOCAPA must be contested through the administrative hearing process within the applicable time frames.  If not, the recipient is generally deemed to have waived all objections to the alleged violation, the required corrective actions, and any penalty assessments.

The deadline for requesting a hearing is not uniform across all NJDEP programs. Hearing deadlines may vary depending on the program and document, generally ranging from approximately 10 to 35 days. The specific enforcement document and applicable regulations should therefore be reviewed immediately.

Contesting an AONOCAPA through a hearing request should be done in all instances and does not generally require extensive litigation but is essential to preserve objections and provide a basis for negotiating a resolution of the alleged violations.

Why the Difference Matters

The distinction affects both timing and strategy.

With an NOV, the immediate focus may be on investigating the violation, addressing compliance, and determining whether NJDEP’s allegations are accurate.

With an AONOCAPA, the company must also consider whether to preserve its right to an administrative hearing, whether the penalty is appropriate, and whether NJDEP’s factual and legal conclusions should be challenged.

Companies receiving correspondence from NJDEP should therefore begin by identifying exactly what NJDEP has issued.

An NOV and an AONOCAPA may arise out of similar facts, but they do not necessarily create the same obligations, deadlines, or rights.

The underlying securities litigation arose from one of the most publicized corporate collapses of the last decade. Nikola was founded with an ambitious vision of developing hydrogen-powered and electric commercial vehicles. For a time, it became one of the market's most celebrated emerging clean-energy companies, achieving a multibillion-dollar valuation despite having only limited commercial operations.

The company's fortunes changed dramatically after a series of public allegations that many of its statements concerning vehicle capabilities, technological achievements, development milestones, and commercial prospects were materially misleading. Investors alleged that they purchased Nikola stock at artificially inflated prices based on those representations. When contrary information became public through a series of corrective disclosures, Nikola's stock price declined sharply, generating substantial losses for shareholders.

A securities class action followed in the United States District Court for the District of Arizona. The class plaintiffs alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. As is typical in securities fraud litigation, the claimed damages were tied directly to the decline in Nikola's stock price following the corrective disclosures. The theory was straightforward: investors allegedly paid more for Nikola shares than they otherwise would have paid had the market known the truth.

Prior to its bankruptcy filing, Nikola and the class plaintiffs participated in mediation and reached a settlement memorialized in a January 2025 term sheet. Under the proposed settlement, Nikola agreed to pay the class $13 million in cash together with other consideration. The settlement appeared to transform a disputed securities fraud claim into a fixed contractual payment obligation. Indeed, the settlement term sheet contemplated that if Nikola later filed bankruptcy, it would seek court approval of the settlement under Bankruptcy Rule 9019.

Less than a month later, however, Nikola commenced its Chapter 11 cases. The class plaintiffs filed a proof of claim asserting entitlement to at least the $13 million. At first glance, the claim appeared stronger than a typical unliquidated securities claim. The parties had already negotiated a resolution, agreed on a payment amount, and documented the settlement terms. Yet bankruptcy law focuses not merely on the form of a claim but on its origin.

That distinction became outcome-determinative.

Section 510(b) requires mandatory subordination of claims "for damages arising from the purchase or sale" of a debtor's securities. Congress enacted the provision to preserve the traditional risk allocation between creditors and shareholders. Creditors bargain for repayment. Equity investors bargain for potential upside while assuming the risk that the enterprise may fail. When an investor's losses stem from ownership or purchase of stock, section 510(b) generally prevents that investor from elevating those losses to parity with ordinary unsecured creditors.

Nikola argued that the class claim, even after settlement, still arose from the purchase and sale of Nikola stock. The settlement had changed the amount of the claim, but not its essential character. The economic injury remained the same: losses allegedly suffered because investors purchased Nikola shares at inflated prices and later experienced a decline in value when the truth emerged. The bankruptcy court agreed, characterizing the claim as a textbook section 510(b) claim seeking damages measured by the diminution in value of the debtor's equity securities.

As a result, Nikola's plan placed the securities settlement claim into a separate subordinated class reserved for claims subject to section 510(b). Because senior creditor classes were not being paid in full, the subordinated class was projected to receive no recovery. A claim that had been negotiated down to a $13 million settlement and appeared destined for payment outside bankruptcy was relegated to the bottom of the distribution waterfall and effectively eliminated.

The class plaintiffs did not seriously dispute that section 510(b) applied. Instead, they focused on procedure, arguing that Nikola could not subordinate their claim through plan confirmation alone. According to the plaintiffs, the debtor was required to file a formal claim objection or commence an adversary proceeding before subordinating the claim. Both the bankruptcy court and the district court rejected that argument, concluding that section 510(b) subordination concerns priority and treatment rather than claim allowance and that Bankruptcy Rule 7001(h) expressly permits subordination to be implemented through a chapter 11 plan.

The lesson from Nikola is that a settlement agreement may create a contractual right to payment. Still, it does not necessarily erase the nature of the underlying injury that gave rise to the obligation. Where the economic reality remains shareholder loss arising from the purchase or sale of the debtor's stock, section 510(b) may continue to apply. In Nikola, that principle transformed a seemingly fixed $13 million settlement obligation into a subordinated claim that ultimately recovered nothing.

Understanding Title IX Coverage

That coverage question is especially important for private K-12 schools because not all are subject to Title IX. In general, Title IX applies only when a school receives federal financial assistance. For example, in general, religious institutions do not receive federal funding and, as a result, are exempt from Title IX. Because funding arrangements and exemptions can vary, families should ask whether the school is covered by Title IX, whether it has designated a Title IX coordinator, and what formal process it uses to address sex-based discrimination complaints.

The legal landscape also continues to evolve. Following a federal court decision issued on January 9, 2025, schools covered by Title IX currently operate under the 2020 Title IX regulations rather than the 2024 Final Rule.

What Happens if a Private School Is Not Covered by Title IX?

If a private school is not covered by Title IX, that does not necessarily mean the concern will be ignored or that no process exists. Instead, the matter is often handled under the school's handbook, code of conduct, student safety policies, employment policies, or other complaint procedures. In some situations, other federal, state, or local laws may also apply, depending on the facts and the type of school involved. In New York, the state legislature has opted to separately address campus sexual assault pursuant to New York Education Law Article 129-B. NY Article 129-B, otherwise known as the "Enough is Enough" law, requires all colleges and universities in the state to adopt comprehensive rules regarding sexual assault, dating violence, domestic violence, and stalking. Families should ask who will investigate the complaint, what policy will be used, what interim or supportive measures are available, whether there is an appeal process, and when the school expects to reach a decision.

When Title IX does not apply, the school's response may look more like an internal investigatory process than a formal Title IX grievance procedure. That means the procedural steps, timelines, and available remedies may be defined by school policy rather than federal regulation. In serious situations, families may also wish to consider whether reporting to law enforcement or seeking civil legal remedies is appropriate. In all cases, it’s important for families to seek legal advice as soon as they become aware of the campus issue to determine the best way to route their concerns.

Reporting Concerns and Seeking Support

If a student experiences sexual harassment or other sex-based discrimination, families should promptly report the concern to the appropriate school official. At a covered school, that will often be the Title IX coordinator, who can explain the school's procedures, discuss available supportive measures, and answer questions about the complaint process.

If a family believes a covered school has not adequately addressed a complaint, it may file a complaint with the U.S. Department of Education's Office for Civil Rights or seek legal remedies through the court system.

What to Expect During the Process

Every school's procedures differ, but Title IX investigations generally involve gathering information from the parties and witnesses, reviewing relevant documents, and evaluating the parties’ credibility. Schools typically notify the parties of the complaint, explain the process, and provide information about available supportive measures.

Investigation timelines vary, but many schools aim to complete investigations within approximately 60 days. Unlike many college and university procedures, K-12 schools are not required to hold live hearings.

Religious Schools and Title IX

Some private schools are affiliated with religious organizations. Even when a religious school receives federal financial assistance, it may qualify for a religious exemption if compliance with certain Title IX requirements would conflict with its religious tenets.

Because the scope of these exemptions has been the subject of ongoing litigation and regulatory debate, families should not assume that Title IX applies identically at every religious school. Parents may wish to ask whether the school claims any Title IX religious exemptions and how those exemptions affect its policies and procedures.

Practical Tips for Families

Families can play an important role in protecting a student's rights by:

• Determining whether the school receives federal financial assistance
• Reporting concerns promptly and identifying the appropriate school contact
• Preserving all documentary and electronic evidence
• Keeping records of emails, meetings, notices, and other communications
• Requesting information about the school's process, timeline, and available supportive measures
• Following up on important conversations with the school in writing
• Asking for an explanation of how the issue affects the student's educational experience, including attendance, participation, safety, or academic performance

Effective Advocacy

For families at private K-12 schools, effective advocacy begins with understanding whether the school is covered by Title IX. If it is, the school should be following the mandated grievance procedure outline under the Title IX Regulations. If it is not, the case will often be handled under the school's own policies and procedures instead. In either situation, families should ask who is responsible for the response, what rules apply, what supportive measures are available, and what timeline the school expects to follow.

Whether the matter proceeds through Title IX or through school-specific procedures, clear communication, careful documentation, and timely reporting can help families seek support and protect a student's access to educational opportunities.

While the rules look straightforward on their face, squaring them with D.C.’s existing laws on rent control, utility fees, and security deposits is not.

Why October 1?

The Pets in Housing Amendment Act of 2024 became effective in March 2025, but a fiscal provision requiring pet-friendly homeless-shelter funding held up its implementation. The fiscal year 2027 budget legislation limits the funding condition to the still-unfunded pet-friendly shelter requirement, allowing the provisions regulating rental housing providers to apply as of October 1, 2026.

In other words, while the law was enacted in 2025, it couldn’t be implemented because it bundled an (unfunded) pet-friendly shelter requirement. Now, as of October 1, the landlord provisions (which did not drive the law’s identified fiscal cost) are no longer held back by the still-unfunded shelter requirement.

Pet Deposits and Pet Rent

A housing provider can charge a refundable Pet Deposit of up to 15% of monthly rent, in addition to the ordinary security deposit for the unit. Providers can use that Pet Deposit only for damage directly caused by the pet that exceeds ordinary wear and tear.

Providers may also charge monthly Pet Rent, capped at:

• 1% of the first full month’s rent for each dog
• 1% of the first full month’s rent for all non-dog common household pets combined

Other than the Pet Deposit and monthly Pet Rent, pet-related charges should be treated as presumptively prohibited. That includes pet screening, registration, administrative, DNA, inspection, and similar fees unrelated to actual damage caused by the pet (even if payments are routed through a third-party vendor).

An End to Breed Restrictions

Housing providers can no longer impose restrictions or special charges based on a pet’s breed, size, or weight. They can still maintain reasonable rules addressing safety, sanitation, maintenance, and the number of pets allowed in a unit.

The law also does not require every property to permit pets. Landlords can continue to operate pet-free properties or require written approval before allowing a pet.

Assistance Animals Are Not Pets

The new D.C. law regulates common household pets, but service and assistance animals are separate.

A request for a reasonable accommodation involving an animal is not a request for permission to keep a pet, and leasing and property-management staff should be trained accordingly. An animal required as a reasonable accommodation is not subject to ordinary pet-approval rules, Pet Deposits, or Pet Rent. Pet forms and fee documents should also not be presented to applicants requesting an accommodation.

Federal guidance in this area continues to develop, though. The U.S. Department of Housing and Urban Development changed its enforcement position concerning emotional support animals in May 2026. That guidance does not supply a single answer for every property or request, and the inquiry remains highly individualized. Accommodation requests should remain separate from ordinary pet policies and must be evaluated under applicable law.

Questions the Law Does Not Answer

The Pet Deposit cap refers to “monthly rent,” while the Pet Rent cap refers to the “first full month’s rent charged” to the tenant. The law does not define either term for this purpose.

That matters because D.C. law defines rent broadly enough to include more than the amount labeled “base rent” in a lease. Landlord-collected utility charges and other mandatory payments could affect the calculation.

The answer could also differ when a lease begins with a prorated or discounted month, a pet is approved, removed, replaced, or added mid-lease, or the lease renews at a higher rent.

The statute also calls the monthly pet charge additional rent. For rent-controlled units, that creates another issue. The 1% limit may establish the maximum Pet Rent permitted under the new law without independently authorizing an increase outside D.C.’s ordinary rent-control process.

The law provides little transition guidance, either. It does not explain how owners should handle Pet Deposits already above the new cap or pet-related charges that continue under older leases. Those questions depend on the property, the lease, and the timing and nature of the charge.

Unauthorized Pets and Reasonable Rules

The new law does not automatically or retroactively authorize all pets. Keeping a pet in violation of a no-pets or prior-approval policy can still constitute a breach of the lease and grounds for a possession action. Landlords can continue to enforce their leases and recover documented damage caused by an animal.

Landlords are also still able to respond to an individual animal’s conduct. Documented aggression, repeated nuisance behavior, sanitation problems, and property damage can support an individualized decision to limit or prohibit a particular problem pet.

What owners should not do is replace a prohibited breed restriction with another rule that produces the same result. An onerous insurance requirement imposed only on particular breeds, for example, may be an indirect breed restriction rather than a neutral safety policy.

Answers Lie in Your Leases and Ledgers

Housing providers should review more than their leases and addenda for compliance. The law can affect fee schedules, billing systems, deposit procedures, relationships with third-party platforms, staff training, and property-level policies.

October 1 resolves when the landlord provisions become operative. It does not resolve every question about how they apply. Those questions require attention across your D.C. rental portfolio.

Just as thoughtful wedding planning reduces stress and surprises, so does thoughtful planning for your shared finances and legal affairs. Many newly married couples assume that trust and estate planning is only relevant to older or wealthier individuals. In reality, it is one of the more important steps a couple can take early in a marriage, and it requires far less time and expense than the wedding itself did.

Step One: Update Your Beneficiaries

One of the first practical steps after marriage is reviewing your beneficiary designations. If these have not been updated since before your marriage, a parent or sibling may still be listed, and beneficiary designations generally supersede a last will and testament, regardless of what your estate plan says. Accounts without a named beneficiary become subject to probate.

Review and update:

• Checking and savings accounts
• Life insurance policies
• Investment accounts (stocks, bonds, mutual funds)
• Retirement accounts (401(k), IRA, Roth IRA, 403(b))
• Pension and military benefits

Step Two: Decide How You’re Combining Finances and Property

Some couples consolidate their finances immediately; others keep certain assets separate for years. There is no single correct approach, but the decision should be a deliberate one, made together rather than by default. Open a joint account for shared expenses, apply for a joint credit card to start building credit together, update health insurance, and re-title the house, car, or other joint property so ownership actually matches reality.

A certified financial planner and an estate planning attorney, working together, can align your financial goals with a long-term strategy and ensure you use the right tools to protect and grow your wealth as a couple.

Step Three: Establish Advance Directives

A common misconception is that marriage automatically grants a spouse legal authority to act on the other’s behalf. It does not. Without the proper documents in place, a spouse may be unable to manage finances or make medical decisions in the event of illness or incapacity when that authority is needed most.

A Power of Attorney allows you to appoint your spouse, or another trusted individual, as your agent to handle matters such as paying bills, managing investments, or selling property on your behalf. In New York, a valid POA must conform to the statutory format set out in General Obligations Law § 5-1501 et seq., and must be signed, notarized, and witnessed by two disinterested adults. Without a properly executed POA, disputes among family members can arise during emergencies.

A Health Care Proxy serves a similar function for medical decision-making, allowing your spouse to act on your behalf and carry out your wishes, including regarding life-sustaining treatment and end-of-life care, if you are unable to communicate them yourself. Without one, disagreements among family members can arise at critical moments.

Step Four: Establish a Will and Revocable Trust

This step is often delayed, on the assumption that estate planning is unnecessary until later in life or until greater wealth has been accumulated. In fact, the value of a will and revocable trust lies not in the size of an estate, but in ensuring that assets are distributed according to your wishes rather than by default rules of law. Planning early allows a couple to:

• Avoid probate to make the administration of your estate more efficient, private, and less burdensome for your spouse and family
• Name guardians for minor children, so if something happens to both parents, the decision is guided by your wishes rather than left to uncertainty or court involvement
• Provide structure for how and when children or other beneficiaries receive assets, rather than having funds pass outright before they are ready to manage them
• Protect your spouse by making clear what should happen to individually owned assets, jointly acquired property, and family or inherited assets
• Put a basic plan in place now, while life is relatively straightforward, and update it over time as your family, finances, tax considerations, and priorities change
• Reduce the likelihood of conflict among family members by documenting your intentions clearly before there is an emergency or a difficult decision to make

The Bottom Line

The same diligence that goes into planning a wedding is worth applying to the legal and financial foundation of a marriage. A brief conversation with an estate planning attorney early on can prevent significant confusion, expense, and conflict for your family down the road.

What is a Bond?  It’s a promise.

In a court context, a bond is simply a promise. It is made by someone who is, in some way, interacting with our court system. When a loved one dies, or declines in mental capacity, a probate or guardianship/conservatorship can be established to formalize your role in managing the estate or the incapacitated person’s affairs. Because the law has formally passed the baton of leadership of another man’s earthly estate to you, it will also ask forward-looking accountability from you. These types of circumstances can be lumped together as “fiduciary matters,” and that term is tied directly to the oath you take and the bond you “post.”  Whether it is a promise-bond (no surety) or a policy-insured-promise (a bond with surety) will depend on the tasks ahead of you and the circumstances of the case.

Many people are surprised to learn about bonding requirements when they begin probating a loved one’s estate; many people think bondsmen are reserved for criminal cases. True, in the criminal context, courts may impose “personal recognizance bonds” which are promises that a defendant (who the judge determines is not any real threat to the community, or any real ‘flight risk’) will come back to court, at a later date, to have the case adjudicated fully; a “bond hearing” tests those two legitimate concerns. In the appeals-context (and depending on your particular state) an “appeal bond” may be nominal, or it may require the full payment of the money-judgment, and a ‘suspending bond’ (sometimes called a supersedeas bond) can work to protect the judgment amount secured in the lower court, while also insulating the appellant as he pursues his right to corrective action from the higher court. These are all, regardless of species, “promises,” so the pithy definition of a bond as a promise, holds.

Your Word Alone: Bonds without Surety

If you are appointed as guardian of an incapacitated person, your state may blend-in authority over assets, as well as decision-making power over the medical care of the precious person. In Virginia, the law distinguishes guardianship of the person (decisions about the ward’s corporeal care) and conservatorship of the estate (the assets/finances). In some cases, if a guardianship is only over “the person” and no assets are in play, a “promise only” bond may do the job, and no insurance policy is required to back up that promise. In those cases, you must nonetheless take an oath to faithfully perform all your duties to the ward as part of the court’s “qualification” process, however you won’t need to apply with a bonding company to purchase the insurance.

Surety Bonds: Ensuring Performance by The Chosen One, for The Loved One

If your role, as with executors or conservators, involves overseeing assets (e.g., things of value like bank accounts, real property, cars, stocks, jewelry, etc.) some states will require an insurance policy to vouch for your promise. This puts the “sure” in assuring you do your work properly. Surety, insurance, assurance, all echo what the state seeks here — it seeks a little more confidence from you than just your word. This rigor can be required based on 1) your relationship to the decedent, 2) your status as an out-of-state resident, or 3) the terms of the will itself, or the court’s order appointing you.

Many people are confounded by the bonding requirement when they are named as executor. Understandable confusion. Why would you need a bond if you are helping close out the affairs of a loved one?  Sometimes, if the will does not explicitly direct that the testator/decedent “waives the bond,” the executor may have to apply for this special insurance policy, issued by a bonding company, to back up your promise to properly report to the court and distribute the estate to the decedent’s chosen beneficiaries (grandkids, charities, long-time friends, or great loves).

You may also be called upon to secure a bond if you discover that you are tasked by a court to serve as the conservator of a loved one who has diminished to the point of complete inability to care for themselves or their finances. The bond amount is approximated to the best-guess value of the ward’s estate. Importantly, at your initial qualification in this role, that estimate may be a good-faith “guess;” but as time passes and you begin to receive information from the ward’s banks, the court, with your help and input, will reassess the estate’s value, and increase the bond, if the dollars escalate well-above the initial estimates. Don’t worry about being wrong at the outset with your ‘best guess;’ the system will right-size protection for the ward/estate as better information is discovered. As an inventory is reviewed and confirmed, revising the initial estimate is common and easy, precisely because the law knows many families are serving their deceased kinsman, with very little visibility into his assets. Very often, you will only become aware of best information after you are formally qualified by the court, and you have authority to be given sensitive financial data.

We Swear, Because We Care: Oath as Accountability

The need for a surety bond could seem a little penal to the “Chosen One,” stepping up to do the thankless work of overseeing an elderly ward, administering an estate, or taking over the books of an elderly family member. But no. Think of it as a “further assurance” for a person who has necessarily lost the capacity to watch out for their own life’s bounty.

When you’re appointed guardian/conservator for a precious person, the Commonwealth has a stake in ensuring you faithfully serve your loved one. Similarly, when you are named as an executor, you will be asked a few questions prior to taking your oath. Have you ever been convicted of a big crime? Have you ever filed for bankruptcy? Ever been a lawyer?  This litany of questions aims to protect the ward/estate from a reckless, hapless, or witless custodian of funds belonging to another man. Qualification will require you to swear that these answers are true and that you will faithfully perform your duties. Because society asks that a promise-made, be a promise-kept.

It is an honor to have been selected to serve an estate; it is an honor to be chosen by the court to protect a person in need of a proxy. Done right, taking an oath should weigh heavily on us. The task is as weighty as the honor. Honorable people can remain so, with external guardrails like surety bonds to help them perform all their duties. Your loved one thanks you. Society thanks you. Because when you raise your right hand… there’s something heroic in it.