IN THE MEDIA: SmolenPlevy Principals On Air to Discuss Sharing Your Child’s Expenses After Divorce

It’s back-to-school season, and for divorced or separated parents, the question is: Who is paying for the expensive TI-84 calculator their child needs for class? Alan Plevy is featured on WTOP and Mandy Walker’s popular Since My Divorce blog to weigh in on what is covered with child support and how parents can decide who will pay for out-of-pocket expenses. Kyung (Kathryn) Dickerson shares her own insights on these complex family law issues on WUSA 9’s Great Day Washington.

Child support doesn’t cover the costly tab of #2 pencils, paper, clothes and computers, which runs on average about $600 per child, adding more stress to what can already be a tense situation between parents. Plevy says cooperation goes a long way to helping exes–and their children handle back-to-school season.

Plevy says there are typically two ways parents can decide to handle back-to-school expenses: Split the expenses down the middle, or use the same income ratios often used for reimbursement for medical expenses. “For instance, one parent may have 66 percent of the income, so one parent pays 66 percent of the cost, and the other pays 33 percent of the cost.”

For divorced or separated parents struggling to provide normalcy for their children, “This actually forces the parents to come together and try to talk about these expenses,” Plevy said. “Sometimes they’re able to do it, sometimes they’re not, but if they’re not it’s really the children who suffer.”

Listen to Alan Plevy on WTOP Radio and on the popular podcast Since My Divorce:

Watch Kathryn Dickerson on WUSA 9’s Great Day Washington: 

 

The Huffington Post: The Pros and Cons of a Co-Parenting Coordinator

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As seen on The Huffington Post by Alan Plevy and Kyung (Kathryn) Dickerson. 

Tensions can run high when former spouses have to work together and oftentimes, divorced couples feel like they are no longer allies. Yet, when they have children, there are numerous decisions that the divorced couple needs to make together. Enter professional decision makers, also known as co-parenting coordinators. A co-parenting coordinator is a neutral third party who serves a divorced or separated couple as a decision maker and a facilitator of communication.

Your ideal co-parenting coordinator is someone who will work themselves out of the job. It is important for parents to learn to work effectively with their ex-spouse and their children, and a good co-parenting coordinator will help the parents not only resolve the immediate issues but also establish a method by which the two parents can resolve future issues by themselves.

Several years ago, there was a notable increase in the number of co-parenting coordinators/counselors and a related spike in the number of problems associated with their use. However, since then, the trend in using co-parenting coordinators has leveled off to a certain extent and parties have become more discerning about what they want from a co-parenting coordinator, including how long they want to pay the fees to employ one.

Co-parenting coordinators are professionals, often psychologists or other mental health counselors, whose role is to help reduce, mediate and settle conflicts between divorced parents on matters regarding their children. Sometimes the coordinator can even be the decision maker if the parents are at an impasse. The role and the limits of what a co-parenting coordinator can do are set forth either in a contract signed by both parents or in the court Order appointing them. During regularly scheduled meetings (or emergency meetings if the contract or Order permits these meetings), co-parenting coordinators serve as an impartial third party to listen to and resolve issues like:

  • Schooling;
  • Visitation and custodial arrangements;
  • Holidays;
  • Camps;
  • Non-emergency medical care; and
  • After-school activities.

Ideally, the co-parenting coordinator listens to both parents and helps the parents come to a decision. The process is intended to avoid the escalation that may result when small issues become larger arguments, and to reduce the delay and legal expenses associated with litigating parental disputes. The role of the co-parenting coordinator is to help parents during that difficult period following a divorce when parents are learning how to co-parent while living in different homes.

During the period when the use of co-parenting coordinators was growing dramatically, they were often treated as a panacea. But unfortunately, co-parenting coordinators do not magically cure the communication issues between the spouses which often led to the divorce. Nor do co-parenting coordinators eliminate the different perspectives and opinions parents have when it comes to various challenges of raising children, like whether the child should go to an overnight camp or when a child should get a smart phone.

Parents have learned that their inability to come to a resolution on issues, like whether the child can bring their pet from one parent’s home to the other’s, or whether the child would participate in a specific activity, was costly in the time and money that was spent in co-parenting sessions. If co-parenting coordinators are used as a permanent decision-making mechanism by parents, parents can spend significant funds during the period between their divorce and when their child becomes an adult.

Previously, there was no time limit set for the use of a co-parenting coordinator, and parents who had been divorced for years were still required to use the co-parenting coordinator to resolve any disputes. Another problem with the lack of a termination date is that parents are not forced to figure out how to work with each other. Instead, they expect the coordinator to continue solving their problems; this does not encourage parents to move beyond the often dysfunctional relationship they were in at the time of their divorce. Additionally, if the parents and the co-parenting coordinator are unable to reach a resolution, either parent can take the matter to court and litigate the issue, however small, in front of a judge.

Further, the expense of a co-parenting coordinator, who is usually paid for by both parents in equal share to maintain their neutrality, can work to the disadvantage of the parent who has a less disposable income. There are some parents who “win-at-all-costs”, who try to bully the coordinator and their ex-spouse. In some cases, one parent will repeatedly call and email the coordinator, trying to dominate the process and to wear down the coordinator in order to “win” whatever issue is raised in the co-parenting session. There have been parents who have demanded meeting after meeting with the coordinator and presented the coordinator with multiple binders of documents just to run up the costs of co-parenting, hurt their former spouse and to ensure that no resolution is reached.

If you want to incorporate the use of a co-parenting coordinator, consider the following:

  • Before you hire the coordinator, thoroughly interview the coordinator. Find out what experience, education and training they have, what their approach is to the communication challenges of your situation, what their experience and approach is to the needs of your children, particularly if your children have special needs, and what processes they have found to be most effective in resolving differences between parents.
  • Ensure that your former or estranged spouse also wants to use a co-parenting coordinator and that the two of you have similar expectations from the process. This is not marriage or family counseling, nor should it be a place to rehash the issues from the marriage.
  • Set an end date for the use of a co-parenting coordinator – ideally this date is within 3-6 months of their appointment.

Remember that a co-parenting coordinator is a neutral third party whose ultimate goal is to reduce the conflict between the parties and set up a process through which the parents can resolve issues without the co-parenting coordinator’s intervention. Used judiciously, a co-parenting coordinator can be an effective and cost-efficient tool for divorced parents. 

On Air: Dan Ruttenberg Shares Estate Planning Tips for the Elderly

Preparing in advance is vital if you want to protect your assets and have a say in how they are passed on. SmolenPlevy Principal Dan Ruttenberg, JD, CPA, LLM shares estate planning tips on local TV show, Senior Living in Alexandria.

“Legal documents are tools to address issues,” Ruttenberg tells Senior Living in Alexandria host Jim Roberts. It is important to have documents that keep you covered in case of death or disability. Particularly in the event of a disability, you want to have confidence in who is making decisions on your behalf.

What happens if you don’t have an estate plan in place? That will depend on the circumstances at the time — Ruttenberg explains important estate planning tips, including how to avoid probate in the complete segment above.

On Air: Daniel Ruttenberg Shares Why You Should Have a Will in Order on ABC 7

A court confirmed that music superstar Prince died without a will, which leaves complicated questions about who inherits his vast fortune. There are at least six siblings, including half siblings, who may inherit, and the confusion is just starting. In an interview on ABC 7, SmolenPlevy Principal Daniel Ruttenberg explained the problems that may occur when you die without a will, and why it’s vital to make sure that doesn’t happen to you.

Ruttenberg explained that without a will, Prince could not direct where his assets should go. “I think that’s a travesty,” said Ruttenberg. Often, people avoid estate planning because they don’t think they have enough assets. But Ruttenberg said you don’t need to own much to learn from Prince’s mistake — plan now and prevent the heartache and need for the court’s intervention after you’re gone.

A will can dictate to whom your money goes, protect your children’s interests in their inheritance and help avoid taxation. News reports predict Prince’s siblings will split the multi-million dollar estate, but Ruttenberg indicates that someone who claims to be Prince’s child could trump all of that.

Ruttenberg told ABC 7’s Kimberly Suiter that whoever does inherit Prince’s estate isn’t necessarily going to be better for it. Sudden wealth has its own set of problems, and many people who inherit a fortune overnight end up blowing it all quickly. They can end up broke, homeless, and in a worse position than they were before getting the money.

Jason Smolen Shares Ways to Keep Inheritances from Unnecessary Taxation on MainStreet.com

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When estate planning, consider whether taxes will turn an inheritance into a burden for your beneficiaries. In a just-published article on MainStreet.comSmolenPlevy Co-founding Principal Jason Smolen discusses various tools used to transfer wealth while limiting the impact of estate taxes.

The federal estate tax exempts $5.43 million for individuals and $10.86 million for couples. However, 16 states and the District of Columbia impose state estate taxes of up to 20% on estates valued at more than a specified amount. For example, in Maryland, heirs may face an additional tax of 10% to 26% upon receiving their inheritance.

While Roth IRAs (which are exempt from income taxes) and trusts are ways to safeguard inheritance from taxes, Smolen suggests three other tools to consider:

  1. Gifting: Gifts to heirs before death reduce the size of an estate and can help it avoid additional estate or inheritance taxes. A person can gift up to $14,000 to an individual (or $28,000 with a spouse) each year without incurring a gift tax.
  2. Real Estate Transfers: Because real estate often represents a significant portion of the estate, a limited partnership to transfer property may be effective. Beneficiaries can be given shares in the limited partnership directly or in a trust.
  3. Life Insurance in a trust: If a policy is held by a trust that is set up outside of an estate, insurance proceeds are generally tax free.

Read the full article on MainStreet here.

Jason Smolen Discusses the Step Up Provision with MainStreet

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Traditionally, heirs have avoided taxes on increases in the value of a decedent’s portfolio assets. However, President Obama proposed ending of this provision, commonly referred to as the Step Up provision in the capital gains tax, during his State of the Union address in January. SmolenPlevy co-founding Principal Jason Smolen explains the implications of the proposal in a just published article on Mainstreet.com.

Under the proposal, the capital gains tax on inherited assets would only exempt the first $200,000 for a married couple and $100,000 for singles. The elimination of the “step up” provision could become an accounting challenge for heirs. “You would have to know what the deceased paid to acquire an asset to determine the original cost basis for all inherited assets,” Smolen tells MainStreet.

Although the end of “step up” is still just a proposal, there may be an increase in using life insurance policies as an estate planning tool. Smolen says insurance can be an add-on benefit that can reduce the frictional costs of taxes.

Read the full MainStreet article here.

In The Media: SmolenPlevy’s Kyung Dickerson on the Surge in January Divorces

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There’s a chill during January. Not just outside, but in many a marriage. As just reported on WNEW radio, SmolenPlevy Principal and family law attorney Kyung (Kathryn) Dickerson says January is a busy time for divorce.

“There’s something symbolic about the new year,” according to Dickerson, who states that the number of people who want to take action towards separation and divorce increases after the holidays. Many people wait until January for the sake of their children and family. They don’t want to create memories that associate the holidays with the breaking up of a family.

While the desire to separate is there, some couples fail to prepare financially. Dickerson says people need to consider whether there will be additional expenses, such as a second household and the expenses associated with it. Dickerson suggests couples get a full picture of their finances–assets, debts, etc.

Listen to Dickerson on WNEW Radio below:

 

In the Media: SmolenPlevy Attorneys Note Effect of Recovering Economy on Rise in Divorces in Virginia Lawyers Weekly

SmolenPlevy attorneys Alan Plevy and Kyung (Kathryn) Dickerson provide insight into the increase in divorces in a healthy economy in the September 2, 2013 issue of Virginia Lawyers Weekly.

Plevy and Dickerson were among the first attorneys to notice the trend of couples holding off on filing for divorce when the economy began to struggle in 2009.  Couples stayed under the same roof during the recession because 401(k) plans, stocks and home prices were so low they could not afford to split.

Roughly four years later, things have improved for couples wanting a divorce.

“People couldn’t even think about divorce before – they were just focused on survival,” says Plevy. “Now the economy has changed with people being able to refinance and a lower unemployment rate.”

Dickerson noted a silver lining from the recession: the economic downturn forced couples to be more civil and practical. “If both people are worried about how to pay the utility bill, then they were more respectful of each other in the process.”

To read “Till Death do Us Part…Or the Housing Market Rebounds,” click here.