Thursday, May 14, 2015

Estate Planning For Second Marriages – 5 Things to Consider

Everyone believes in second chances. Second chances can bring a lot of joy, especially in the context of getting remarried. In fact, blended families now outnumber traditional families, according to the U.S. Census Bureau. This is not just because of rising divorce rates – our longer life spans mean that many more people are outliving their spouses and remarrying. However, second marriages bring with them unique challenges, and the need to have comprehensive estate planning becomes increasingly important. It is likely that in your first marriage, you and your spouse generally had the same goals when it came to your estate planning: taking care of the surviving spouse during their lifetime and then leaving whatever assets remain to your children. Now, not only do you have to take into consideration the needs of your new spouse, you also have to consider the needs of your children from your previous marriage and possibly the needs of children from your second marriage.
  1. Wills. In Oregon, when a person becomes married, his or her existing will is automatically revoked. So, even if you updated your estate planning documents after your divorce, a remarriage may require you to take a second look at your existing estate plan.
  2. Beneficiary Designations. Certain assets let you name a beneficiary and are not controlled by a will or trust. These assets include life insurance policies, employer retirement plans, IRAs, annuities, and certain investment and bank accounts. You most likely named your spouse as beneficiary when you were married. Given the fact that you have remarried and may have additional children, updating your beneficiary designations is critical: beneficiary designations will override a will or trust if the documentation isn’t consistent. What does this mean? It means your ex-spouse will receive the assets if he or she is still named as the beneficiary!
  3. Qualified Terminable Interest Property (QTIP) Trust. A QTIP Trust is a type of trust that can provide for your new spouse until his or her death or remarriage, with the remainder of the assets passing to the beneficiaries of the trust – usually your children (though you can name anyone). The surviving spouse is entitled to the income produced by the trust during their lifetime, but the surviving spouse does not have full ownership of the trust assets and cannot sell them or give them away. In addition, these are special IRS-favored trusts that have special estate tax implications. The benefit of a QTIP trust for a second marriage is that it provides for flexibility in treating beneficiaries, can save assets for children of a previous marriage, and can generate tax savings and deferrals of estate tax in taxable estates.
  4. Irrevocable Life Insurance Trust (ILIT) . An ILIT is an irrevocable trust that is both the owner and beneficiary of one or more life insurance contracts. An ILIT could be a way to prevent conflict in your blended family because it would provide for an immediate death benefit to whomever you designate as beneficiaries (most likely your children from your first marriage), instead of forcing children to wait for your spouse to die before having access to assets (as is the case with a QTIP trust). Then, the remainder of your assets would be available to your spouse and perhaps children from your second marriage. As an added bonus, because the insurance proceeds are not part of your estate for estate tax purposes, an ILIT is a useful tool to avoid state and federal estate taxes.
  5. Power of Attorney and Health Care Directive. Now that you are remarried, you want to make sure that you have designated the proper person to make financial and health care decisions for you in the event you become incapacitated. In many cases this will be your new spouse. In Oregon, divorce does not automatically revoke a power of attorney, so failure to update your estate planning documents could cause your ex-spouse to serve as your agent.
Most people think that their situation is “too simple” to necessitate any estate planning. In the case of second marriages, this thinking could not be further from the truth. Estate planning in second marriages presents many challenges and requires the assistance of well-qualified estate planning attorneys to ensure your goals are achieved. Gevurtz Menashe’s estate planning attorneys are well-versed in assisting clients in this area. If you would like to learn more about the necessity of estate planning for second marriages, any one of our estate planning attorneys would be happy to assist you.
Call us at 503-227-1515 or request a consultation online.

Thursday, May 7, 2015

Actress Sofia Vergara Battles Over Frozen Embryos

By William J. Howe III

This week, 42-year-old actress and star of the hit TV sitcom "Modern Family," Sofia Vergara spoke out for the first time after her former fiancĂ©, Nick Loeb, said he should be allowed to use her frozen embryos to have children, even without her consent. According to CNN, Their relationship ended over a year ago, but Loeb has gone public in his law suit over the embryos. Loeb is suing for custody of the embryos, writing in a New York Times op-ed, “in my view, keeping them frozen forever is tantamount to killing them.” Loeb also admits the couple signed a consent form before getting started with IVF, stating nothing could be done with the embryos unless they both agreed. However, the form did not specify what would happen if the two were to separate, a separate consent required by California law.

Dahl vs. Angle

For Gevurtz Menashe, after arguing the Dahl vs. Angle case in 2008, both at the trial and appellate level(s), this story has been an interesting one to follow. This case still remains the only frozen embryos case to appear before the Oregon Court of Appeals—and as far as we know—the only one litigated in Oregon.  However, cases similar to these are certain to follow. With more same sex couples marrying and wishing to rear children, the declining male fertility rate, and the increasing number of women waiting longer to have children, the population of those who are likely to seek fertility assistance is growing.  The law has been slow to adapt to these rapid social changes—and the advancements in medical technology. 
Gevurtz Menashe is a family and estate planning law firm based in Portland, Oregon and Vancouver, Washington.  For more information, call us at 503-227-1515 or request a consultation online.

Embryo Law – Is an Embryo a Living Creature?

With over 600,000 frozen embryos in the country (according to the U.S. Dept. of Health and Human Services), it’s inevitable these IVF issues will continue to grow as a common dispute among couples, in every state. Although this specific case is receiving national attention due to the celebrity involved, it still raises several fundamental legal questions exploring areas such as “when does life begin?” and “what is conception?”—and further, in the eyes of the court, “is an embryo considered a living creature or is it property?”
For what it is worth, I predict that Mr. Loeb has virtually no chance of persuading the court to allow him to bring to life the frozen embryos carrying Ms. Vergara’s genetic material.  The cases from the U.S. and around the world are unanimous in ruling, under the circumstances of this case, that a child will not be brought into this world without both parent’s consent.

For Oregon couples considering any in vitro fertilization procedure, we recommend you seek legal advice from a lawyer experienced in this area. The lawyer will generally advise each party to sign a strong and clear contract provision, or premarital agreement indicating what should happen to any genetic materials should the couple’s relationship end.

About Bill Howe

Bill Howe is our leading authority of relationship agreements and has worked with several cases involving the agreements and litigation of genetic material, including the Dahl vs. Angle case in 2008, on frozen embryos. Bill’s family law practice includes a special emphasis on relationship agreements, premarital agreements, complex property and children’s issues and appeals—and for decades—he has been a leader in crafting the very legislation and procedures that govern family law in Oregon. 

If you would like to learn more about the legal impact of in vitro fertilization, or how you and your partner can better plan for the future, we would be happy to assist you.

Tuesday, April 28, 2015

Top 5 Things to Think About When Hiring Your Family Law Attorney

Hiring a Family Law Attorney

The emotional struggles one faces when dealing with a divorce, custody issue, or any other family-law related legal issue can seem overwhelming.  An attorney can help navigate the system with you and be your advocate when you are faced with important decisions.  While there will be many decisions you make along the way related to your or your children’s interests, who you choose to represent you through this process is one of the most important decisions you make.  Here are the top 5 things to think about when hiring your family law attorney:

What is the attorney’s reputation and experience? 

Do your homework.  Talk to past clients of this attorney (if you know any), talk to other attorneys who practice in the same community, and research online to find out what you can about this person.  What is important to know?  Find out whether this attorney is known for being responsive, attentive, organized, respected by peers, involved in the community, etc.  Is this attorney known as someone who works well with opposing counsel and tries to resolve cases outside of court or is this attorney known for leaving “scorched earth” behind when he/she is done with a case?  A good attorney can advocate your interests without being unreasonable or difficult.  The more “difficult” your attorney is, the higher your bill will likely be.

Can you afford this attorney? 

Ask what the attorney’s hourly rate is.  Ask whether the attorney charges any flat fees.  Ask what the retainer will be.  Read the attorney fee agreement carefully and don’t be afraid to ask questions!  A family law attorney will not be able to tell you exactly how much you will spend on your case because there are too many unknowns – but this doesn’t mean you shouldn’t consider your budget when deciding who to hire.  If the attorney you consult with has a higher rate than you think you can afford, ask if there are any other attorneys in their firm at a lower rate who could work on your case.  Finding the right fit financially is very important.

Does the attorney have support staff? 

An attorney with support staff to help with your case often means you are going to get better service.  Attorneys have several clients at one time and may be unavailable from time to time in trial, depositions, mediations, vacation, etc.  If an attorney has a legal assistant, paralegal, or other attorney helping him/her, this means your case will get the attention it needs even if your attorney is not always available.

Can you be open and honest with this attorney? 

While your attorney doesn’t need to be your new best friend, your attorney should be someone you feel comfortable being honest with.  You will be faced with many difficult decisions in this process and you want to be sure you are able to talk with your attorney openly and candidly.

Is this attorney real with you?

 A good attorney will give you an honest opinion of your case even if that includes an opinion you may not necessarily want to hear.  A good attorney will talk about the pros and cons of your position and help you weigh your risks.  If the attorney you meet with promises you everything you’re asking for – ask yourself whether this attorney is really right for you. 
Gevurtz Menashe has been practicing family law in Oregon, Washington, and Idaho for over years.  We represent clients with tenacity and compassion. To speak to an attorney, call 503-227-1515 or contact us online.
Paige A. De Muniz, Shareholder (Family Law)

Monday, April 13, 2015

How Much Does a Child Custody Case Cost?

Custody Battle Expenses are High

Custody battles are often one of the most expensive areas to litigate in Family Law, from both a financial and emotional aspect. Sometimes when emotions run high in a case, especially at the beginning, parents assume they must “battle it out.” Before deciding what’s best for you and your children, here are some options for you to consider:

Mediation Programs

In most cases, parents feel more satisfied when they can directly manage how custody and parenting time will affect them and their children. These days, the court system highly encourages parents to settle their custody and parenting time disputes in an out-of-court agreement, rather than battling it out in trial. This leaves the question” who will get custody” mostly up to the parents themselves with input from attorneys, counselors and mediators. Before you begin any mediation program, it’s important to know the process and requirements of the county you live in. For example, many counties require a parenting education program for any case involving children. Mediation regarding custody and parenting time is also typically required. Parents can also decide to attend mediation without filing anything with the court under either private mediation or the program hosted by the county. Mediation programs through the county are generally free or nominal cost, while private mediators can be costly, but sensitive to difficult and complex issues.

Custody Evaluations

Sometimes when there is domestic violence, mental health issues, or addiction issues, it’s not always possible to settle custody and parenting time issues in mediation. When this happens, a party or the court can request a custody evaluation of the case. This special evaluation is typically performed by a social worker, psychologist or another expert who has been specifically trained to perform custody evaluations for families. The purpose of the evaluation is to give the court more information about the family’s situation, as well as give the court a recommendation about custody and parenting time specific to the case. These evaluations are quite comprehensive and time consuming—sometimes taking anywhere from 3 to 8 months to complete, depending on the situation.

Attorney fees and litigation costs

It costs money to handle custody disputes in court. There are court fees, attorney fees, and other costs. Because custody cases are unpredictable in terms of complications and length, most family law attorneys charge fees based on hourly rates. A custody and parenting time trial can last anywhere from a few hours to multiple days—in addition to the time it takes for the attorneys to prepare for trial. Beyond the attorney time, you may also need to prepare to pay fees for an expert witness (such as a custody evaluator or a psychologist).
Custody cases are complicated and it is important to try to find an experienced lawyer to help you with your case. During an initial consult, the family law lawyer will present you with some possible solutions and explain the custody laws in your state—along with the various factors a judge will consider when reviewing your case. If you are interested in talking to an attorney about how custody works in Oregon or Washington, give us a call anytime! Portland: 503-227-1515 or Vancouver: 360-823-0410.

Monday, April 6, 2015

How Will Taxes Affect My Estate Plan?

Tax season is here. Most people don’t realize how income taxes and estate taxes affect their estate planning and end up paying more than they should.

Developing a Tax Efficient Estate Plan

You have spent a career building your wealth to be where you are today.  As you craft your estate plan, many things must be considered.  One of the most critical factors in decisions regarding wealth distribution is tax impacts, specifically estate taxes and income taxes. With tax season here, a common question is: “how will taxes affect my estate plan?”  An estate planning attorney can answer this question for you and help you in developing an estate plan that is as tax efficient as possible. Most individuals neglect to realize how income taxes and estate taxes affect their estate planning and wind up paying the government more than they should.

What is Estate Tax?

The estate tax is a type of “death tax”, which is assessed on everything you own or have an interest in at the time of your death. This tax is imposed on both the federal and on the state level in Oregon and Washington and is paid directly out of your estate. The federal estate tax applies to gross estates in excess of $5.43 million. The Oregon estate tax applies to gross estates in excess of $1 million, and Washington’s estate tax applies to estates in excess of $2.012 million. The tax rate at the federal level is 40%! In Oregon the tax rate tops out at 16%, and in Washington the tax rate tops out at 20%. Your estate could potentially owe a substantial amount in taxes without proper planning.

Should you have an estate that is in the range of being subject to the federal or state level estate tax, it is critical that you consult with an estate planning attorney who can assist you in preparing a plan that includes strategies that will minimize estate tax liability.

Estate & Gift Taxes
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Income Tax Planning

In addition to estate tax considerations, proper tax planning also includes efforts to reduce income tax burdens. Some techniques might involve shifting income from a taxpayer in a higher bracket to a taxpayer in a lower bracket, making proper beneficiary designations on your IRAs which will permit the beneficiary of the IRA to stretch out the distributions for the life of the beneficiary, deferring income for a period of time, or taking advantage of depreciation rules. If a taxpayer receives an asset as an inheritance, as opposed to receiving an asset as a gift during their lifetime, the later sale of that asset by the taxpayer will be treated in a much more tax favorable way. In today’s economic climate, it is important to weigh estate tax avoidance against gain that would be due on a taxpayer’s sale of a gifted asset, as opposed to an inherited asset. An estate planning attorney knowledgeable in taxation will be able to help you navigate the twists and turns of the tax code and determine which income tax reduction techniques will be most beneficial to you.

How an Estate Planning Attorney Can Help

Tax planning is not just for the wealthy. All families can benefit from the utilization of estate planning techniques designed to improve tax efficiency (and who doesn’t want to pay less in taxes?!). Gevurtz Menashe’s estate planning attorneys are well-versed in estate and income tax reduction strategies. If you would like to learn more about how taxes can affect your estate plan or how your estate plan can be more tax efficient, any one of our estate planning attorneys can assist you.

Thursday, March 19, 2015

Asset Protection Strategies for Everyone

Basic steps to protect your family from a creditor attack

For many, “asset protection planning” sounds like something to be done only by the wealthy or by people working in professions with high risk for liability, such as doctors and dentists.  However, asset protection strategies are not just for the rich - anyone can get sued or run into trouble with creditors.  Therefore, everyone can take some basic steps to help protect their assets and family from creditor attack.

Obviously the goal of any asset protection attorney is to help clients protect their estates from creditor claims, but how is this done?  Fundamentally, asset protection planning involves converting assets that may be reached by creditors to assets that creditors cannot attack (or that are more difficult to attack).  For example, if you have $5,000 in a personal checking account, any creditor could easily claim access to that cash.  If, however, you contributed that $5,000 to a properly structured irrevocable trust for your children, it may be out of creditor reach. 

Another common asset protection strategy is to use business entities to protect personal assets.  For example, if you own a rental house in your name, any tenant could file a claim against your personal assets.  Transferring the rental home to a well-designed and properly-managed limited liability company (LLC) could shield your personal assets from the tenant’s claims.

Successful Asset Protection Planning starts now

One of the keys to successful asset protection planning is to start now.  If a creditor has already taken action against you, chances are you’re too late to protect your assets against ending up in the hands of a creditor.  To be most effective, asset protection planning should begin before the underlying claim arises.  This can be months or even years before a demand letter is received or lawsuit is filed.   Late-stage planning is not only potentially ineffective, it also can be illegal, as most states have fraudulent transfer laws that specifically prohibit transactions designed solely to avoid creditor liability.

Estate planning and asset protection planning go hand-in-hand.  Many estate tax reduction strategies can also help to protect your assets from creditor exposure.  Making gifts, establishing certain irrevocable family trusts and family partnerships and retitling assets are some of the strategies commonly used by asset protection attorneys.

Gevurtz Menashe’s asset protection attorneys can help your peace of mind

Having a well-designed asset protection plan can give you peace of mind that your assets and family will be protected, even in the event of a creditor attack.  Gevurtz Menashe’s estate planning attorneys can help you review your assets and potential liabilities to create an asset protection plan that works for you.
Are you interested in learning more about asset protection planning? Our Oregon and Washington estate planning team can help! Give us a call anytime! Portland: 503-227-1515 or Vancouver: 360-823-0410.

John Christianson, Of Counsel (Estate Planning)

Tuesday, March 10, 2015

Are You Actually Ready for a Divorce?

How do you know you are ready for a divorce?

While Gevurtz Menashe handles a myriad of family law matters, the largest part of our firm’s practice involves the dissolution of marriages. Our clients come to us at varying steps in the decision-making process. Some clients are just thinking about divorce for the first time and want to find out as much as possible before they even entertain ending their marriage. Other clients have thought about divorce for several months, even years, and are ready to move forward with the legal process. And there are a lot of people somewhere in between – not sure if their marriage is savable but not sure if they want to end their relationship in its entirety either. Many people are simply looking for more information about the process. Wherever you may be in the process, it’s important to us to provide our clients the resources and time necessary to make this very important and intimate decision. 

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Should you get a divorce?

Before we even begin our representation, we want to be sure our clients are actually ready to move forward with the divorce process.  While we are not mental health professionals ourselves, we will often ask our clients the following questions to help them evaluate whether they are ready to proceed with a divorce:
  • Have you tried marriage counseling?  While counseling is not for everyone, sometimes it can really help struggling couples learn how to communicate and work through their problems.  Alternatively, if the marriage is for certain over, couples’ counseling can sometime provide a healthy forum to communicate about divorce issues such as how to tell the children, what co-parenting in different homes looks like, etc.
  • Are there substance abuse issues that need to be addressed first?  We often encounter clients who are seeking a divorce because their spouse struggles with substance issues, and sometimes it’s our clients who have the issues themselves.  There are great in-patient and out-of patient treatment facilities in the area we refer our clients to.  There are also great programs to help spouses of substance abusers, which is equally important.  Sometimes treatment saves the marriage but even when it doesn’t, the divorce process will be much smoother if both parties are healthy and sober.
  • Have you talked about divorce with your support system?  Sometimes there are people who know us better than we know ourselves.  When making an important decision such as divorce, it’s essential to talk about it with at least one other person who you trust and can rely on.  This can be your counselor, clergy, relative, or friend.  Having a support system around you when making the decision and also as you go through the divorce process will be invaluable during each step of the way.
  • Are you and your children safe?  Most importantly, if a client’s or the children’s physical or emotional safety is at risk, we want to be sure there’s a safety plan in place to protect anyone in harm’s way.  If there is physical or emotional abuse by a party, we advise to end the relationship and seek help to protect yourself and your children, which can include legal protections.  
Although the divorce process affects all areas of our client’s life—physical, social, economic, spiritual and emotional, the court system is only able to address a very narrow slice of a very complicated situation. While we do our best to represent our clients in the legal realm, we encourage them to rely on other experts to give them guidance in these other important aspects. It’s important our clients have the emotional support necessary while we work out the legal process.

We help protect what’s most important to you

If you are interested in learning more about the divorce process in Oregon or Washington, give us a call anytime. You can also check out our attorney profiles and read more here. When you’re ready, our legal staff will work with you to schedule a consultation with one of our family law attorneys who will provide information and resources to help with your decision. To reach us in Portland, call 503-227-1515. For our office in Vancouver, WA, call 360-823-0410.

By Paige A. De Muniz, Shareholder