Thursday, October 30, 2014

Gevurtz Menashe Welcomes Estate Planning Attorney – Stefan Wolf



      
We welcome attorney Stefan Wolf to Gevurtz Menashe this month.  Stefan has practiced law for the last four years and has successfully administered numerous wills, trusts, gift tax returns, estate tax returns, and probate cases. He received his B.A. from Whitman College and his J. D. from Lewis & Clark Law School, where he graduated Cum Laude. He will continue to handle estate planning matters such as asset protection planning, beneficiary representation, estate and gift taxes, probate, wills and revocable trusts. Stefan’s passions are traveling, skiing and spending time with his family. If it weren’t for his loyalty to the city of Portland, Stefan would prefer to be living in Kauai – but really, who wouldn’t?


Read more about Stefan HERE.

Tuesday, October 28, 2014

Kathryn Smith Root Receives Oregon Women Lawyers’ 2014 Katherine H. O’Neil Volunteer Service Award




      
We are proud to announce that our friend and colleague, Kathryn Smith Root, received the 2014 Oregon Women Lawyers’ Katherine H. O’Neil Volunteer Service Award. Kathy is a true and dedicated leader who has devoted her professional career to assisting others. Her 30 years of managing various charitable and professional pursuits, pro bono counseling, and work as a family law attorney made her the perfect candidate. This award recognizes sustained contributions of service in an identified position with OWLS or an OWLS chapter, the Oregon Women Lawyers Foundation, the National Conference of Women’s Bar Associations, the National Association of Women Lawyers, or the ABA Commission on Women in the Profession.

Kathryn is also a proud founder of OWLS. Her ongoing commitment  to promote women and minorities in the Oregon legal profession is profound. Kathryn is a sought-after mentor, and currently serves as Chair of the OWLS Foundation Advisory Board. Congratulations, Kathryn on this well-deserved honor!


Read more about Kathryn HERE.

Thursday, October 23, 2014

Financial Aid Considerations for Children of Divorced or Never-Married Parents


Whether a divorce was amicable, angry, or somewhere in between, divorced parents can face extra challenges when trying to help their college-bound children apply for financial aid. This article offers some suggestions for divorced and never-married parents to try to help reduce the anxiety and stress that can accompany what can be a complicated and confusing process.

This fall some 21 million students are expected to attend American colleges and universities. This is an increase of about 5.7 million since fall 2000. 1 For the 2012–13 academic year, the average annual price for undergraduate tuition, fees, room, and board was $15,022 at public institutions and $39,173 at private nonprofit institutions.2 These costs don’t include school supplies, clothing, transportation, food, equipment, etc.  The average 2013-2014 tuition increase was 3.8 percent at private colleges, and 2.9 percent at public universities.3     These figures are substantially higher than the general inflation rate and higher than the average increase in personal income.
 
Unfortunately, as college costs increase, aid available to students has failed to keep pace. 4      This makes it even more important to apply for federal aid early and correctly.  To be eligible for federal student aid, the student must, among other things, demonstrate “financial need.”  Financial need means the difference between the cost of attendance at a school and the Expected Family Contribution (EFC). 5    Aid is based on the concept that it is primarily the student’s and his or her family’s responsibility to pay for the education.  An independent student (over 24 years old; married; has dependents of their own; parents deceased; working towards masters or doctorate degree; emancipated; active duty or veteran of U.S. armed forces) will only need to report his or her own information. (If married, they will also need to report a spouse’s information).  A dependent student is assumed to have the financial support of parents and thus, that parents’ financial information is required. 6       A “parent” is defined as a biological or adoptive parent.  It doesn’t matter if the student doesn’t live with his or her parents, the student must still report information about them.  For dependent students’ with divorced or separated parents, it can be confusing to know which parent’s financial information to use.
 
Here is what you need to know if you are divorcing, divorced, separated or never married and have a child applying for federal aid   [Note: Consistent with the Supreme Court decision holding Section 3 of the Defense of Marriage Act (DOMA) unconstitutional, same-sex couples must report their marital status as married if they were legally married in a state or other jurisdiction, without regard to where they live or where the student will be going to school]:

•    If you were never married or are widowed, only your financial information is considered.

•    If you are divorced or separated and don’t live together, the financial information considered is from the parent with whom the child has lived more during the past 12 months.  If the child spends the same amount of time with each divorced or separated parent, the financial information of the parent who provided more financial support during the past 12 months (i.e. child support) is considered.

•    If you are a stepparent who is married to the legal parent whose financial information is considered, your financial information will also be considered. See Federal Student Aid, https://studentaid.ed.gov/fafsa/filling-out/parent-info

•    If you still live together, both parent’s financial information is considered.

Applying for federal aid can be complicated.  For more information visit https://studentaid.ed.gov/.  

In addition to helping your student apply for federal student aid, you can also contribute to your child’s college expenses through the following:

•    A Section 529 Plan is a special type of education savings account that offers certain tax benefits.  Funds within a 529 Plan account grow tax free, much like a 401(k) or IRA.  Withdrawals from the account may also be made on a tax-free basis, so long as the withdrawals are used for qualified educational expenses (tuition, fees, books, room and board, etc.).  Contributions to a 529 Plan are not deductible from federal income taxes, but many states (including Oregon) offer a state income tax deduction.

•    Contributions to 529 Plans constitute gifts under federal gift tax law.  If the contributions, together with all other gifts you have made to the child in that calendar year, total less than $14,000, the 529 contribution will qualify for the annual gift tax exclusion and does not need to be reported on a gift tax return.

•    One benefit unique to 529 Plans is that contributors may elect to use up to five years of annual gift tax exclusions for one contribution.  For example, you could contribute up to $70,000 to a 529 Plan today for your child without making any taxable gifts.  To make this election, the gift must be reported on a timely filed gift tax return (which is due April 15th in the calendar year after the gift is made). 

•    In addition to the tax benefits of 529 Plans, the Internal Revenue Code provides that amounts paid directly to an educational institution for tuition expenses escape gift tax completely.  That means that payment of your child’s tuition bill does not count toward the $14,000 annual limit.  There are two important rules to consider when making tuition payments. First, to qualify for the exclusion, the payment has to be made directly to the educational institution; you cannot give the money to your child.  Second, the exclusion only applies to amounts for tuition expenses, so to the extent that payments for books, room and board exceed $14,000 per child per year, they will constitute taxable gifts.

Written by Paige De Muniz, Shareholder (Family Law), and John Christianson, Of Counsel (Estate Planning)

1 U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), January, 2014.
2U.S. Department of Education, National Center for Education Statistics, Higher Education General Information Survey (HEGIS), March 2014.  
3The College Board, http://www.collegeboard.org
4The College Board, http://www.collegeboard.org.
5Federal Student Aid, https://studentaid.ed.gov/glossary#Financial_Need.
6Federal Student Aid, https://studentaid.ed.gov/glossary#Financial_Need.

Wednesday, September 24, 2014

Shawn N. Menashe Receives Avvo.com ‘Clients Choice’ Award

Each year, Avvo.com presents a few lawyers with its ‘Clients' Choice’ Award, based on both the quantity and quality of client online reviews that the attorney receives. This year, we are proud to promote family law attorney and Gevurtz Menashe’s Managing Shareholder, Shawn N. Menashe as a 2014 recipient of the Avvo.com ‘Client’s Choice’ Award. This award is given to attorneys who have reached a 10-out-of-10 “excellent” rating on Avvo.com’s website and who have received a large number of overwhelmingly positive reviews written by recent clients. Well done, Shawn!

Shawn N. Menashe has been practicing law for more than 10 years and is considered to be one of the top family law attorneys in the Portland legal community. He received his Juris Doctorate from the University of Oregon School of Law in 2003. Upon admittance to the Oregon State Bar, he joined Gevurtz Menashe, the family law firm founded by his father in 1982. Today he is Managing Shareholder of the firm, where he proudly leads a team of 25 attorneys with exclusive practice in family law and estate planning. Shawn has served as chair of the ABA young lawyer’s family law section as well as a variety of local bar sections and community non-profit boards. His practice focuses on a broad range of family law issues including high asset and complex divorce, alternate dispute, child support, custody/parenting time, paternity issues, and relationship agreements. For Shawn, practicing family law is rewarding because it allows the opportunity to make a positive difference in people's lives—during a time they likely need it most. Check out Shawn’s recent Avvo.com reviews or read more about him HERE.

Shawn Menashe avvo.com clients' choice award 2014

Thursday, September 18, 2014

Who Gets the House?

If you are going through a divorce and own a home, chances are you are trying to decide what to do with the house.  Should you keep it, sell it, or let your spouse have it?  There are several things to think about when making this decision which can have immediate, as well as long-term, effects.

In Oregon, the allocation of property between spouses in a divorce must be “just and proper.”  ORS 107.105(1)(f).  In general, this means that an asset acquired during the marriage should be divided equally between the spouses.  Assuming your home was purchased during the marriage, this means both you and your spouse will receive one-half of the equity value in the home (the current market value minus and outstanding mortgage or other indebtedness secured by the house).  If you keep the home, you will owe your spouse his or her one-half share of the equity through a cash pay-out (sometimes obtained through a refinance) or through an award of other assets.  If your spouse keeps the home, he or she will owe you 50% of the equity, either in cash or through other assets.  And if neither of you keep the home, the home will be sold, with the net proceeds typically being divided equally between spouses, depending on the allocation of other assets and debts.

In determining what to do with the home, you should explore the following:
  1. Do you know what your house is worth in the current market?  You should get a comparative market analysis or appraisal done of your home to determine its likely current market value.  If you owe more than the house is worth, can you afford to pay the shortfall or will you need to explore a foreclosure or short sale?  Meet with a real estate agent to learn how long houses like yours are taking to sell in your area so you can think about how the mortgage, utilities, insurance, etc. will get paid while the sale is pending.  The real estate agent should also be able to give you an idea of how much you should you budget for necessary repairs to make the home marketable.
 
  1. What type of living situation do you really need?  If you have children and need multiple bedrooms or bathrooms, explore the cost and availability of rentals in your area.  It might make more sense to rent versus being financially tied to a non-liquid asset while you figure out what your needs will be after the divorce.  Renting may make sense given the needs of your post-divorce life-style.  For example, if you are now going to be a single parent, do you want to be responsible for household repairs and maintenance or would you prefer being able to contact the property manager to have those tasks done?
 
  1. Can you really afford the home?  In addition to discussing this with your divorce lawyer, meet with a financial advisor who can help you review your monthly budget.  Explore not only the cost of the monthly mortgage, but also the cost of maintenance, utilities, property taxes, etc. in determining whether you can afford to keep the home.  You also may need to determine whether you can qualify to refinance the mortgage into your own name. Typically the other spouse will not agree to remain on the loan indefinitely and the court can order the sale of the home if you are unable to refinance as a way of removing your former spouses name from the loan obligation.
 
  1. What assets are you giving up in order to keep the house?  The goal is to make sure the liquidity of the assets you are get from the divorce match your needs.  Again, meet with a financial advisor and/or CPA to determine the various tax consequences that could result from selling or trading assets and liabilities during divorce.  For example, if you decide to keep the house now and intend to sell it later on your own, you may have to pay significant capital gains tax and real estate fees while selling during a divorce essentially splits these costs with your spouse.  If you’re giving up a pension or other retirement asset to keep the house, you should understand the long-term consequences (i.e. pre-tax contributions and tax liabilities) before doing so.
 
  1. Is there a benefit to getting rid of the home and moving on?  If you shared this home with your soon-to-be ex-spouse, there might be emotional and financial benefits to selling the home.  It might be a financial benefit not to be tied to a non-liquid asset and to receive cash and/or retirement assets instead.  It might be an emotional benefit not to be reminded of your past every time you sit down in your kitchen or living room.  There is typically an emotional cost you should try to account for when making these types of decisions in your divorce.

Regardless of what you do, try to have as much information as possible before making any final decision.  Given the long-term ramifications of these types of decisions you want to make sure you have the right experts involved.  Ideally, you will want to explore your options with your divorce attorney, financial advisor, and/or accountant in order to make well-informed and educated choices regarding your property division.

Written by Paige A. De Muniz, Shareholder.

Tuesday, September 2, 2014

"Ten Questions to Consider before Marrying", Mark Johnson Roberts and John Christianson in PQ Monthly

Mark Johnson Roberts, Family Law, Of Counsel and John Christianson, Estate Planning, Of Counsel, author, "Ten Questions to Consider before Marrying" in the August 2014 edition of PQ Monthly.  You can read the article online, HERE.

Monday, August 25, 2014

Albert Menashe featured on KGW News, commenting on high conflict divorce and therapy

Albert Menashe was featured on KGW News, Channel 8, adding expert input on the tragic Jessica Smith case.  Albert specifically commented on high conflict divorce and therapy.