Portland Legal Services - Joanne Reisman, Attorney at Law
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Estate Planning isn't just about writing a Will

Estate planning doesn't just mean doing a will. It means learning how property transfers with or without a will and making sure you have set up your financial affairs so that your property goes to the people or charities that are important to you.
There can also be some tax planning involved. Most people don't have to worry about Federal Estate Tax anymore since you don't pay taxes unless you have an estate over 5 million dollars. However Oregon still begins to charge estate taxes on estates of 1 million dollars or more. While that might sound like a lot for most of us, it can be reached when you add in any life insurance payable on your life to the equation when you die.

That's right, if you buy life insurance on your life the full amount is includable in your estate for estate tax assessment purposes. So if two spouses both have large life insurance policies, a home with a lot of equity, retirement and investment accounts, it is possible to pass the 1 million mark on paper and incur taxes when the second spouse dies. (There is no tax for property passed from one spouse to another).

There are some easy fixes particularly for married couples that can avoid a lot of estate taxes.   I like to add a disclaimer trust into my Wills for married couples where the possibility of estate tax is uncertain.  It is inexpensive to add this provision and the provision allows people to make an elections after the first spouse dies if they see the need to do some post-mortem planning to avoid estate taxes. The election puts some of the first spouses property into a trust where it can still be used to support the second spouse with some limitations, but the passage into the trust allows the first spouses exemptions from estate tax to apply to that property which would have been lost if the property went directly to the second spouse before passing to the children.  Clients with this clause to need some instruction on how to maintain the title of their properties so that it is possible to make the election but it isn't too difficult once you understand some basic concepts.

For more information on Wills and Estate Planning please be sure to check my Articles and Links page.

Bankruptcy and Tax Refunds

As 2011 draws to a close some of you are still stunned by the lack of recovery of our economy.  Maybe you finally found a new job but it's for lower pay or less hours.  You remain buried in debt.  This might be a good time to consider getting rid of the debt that piled up during a long period of unemployment or during an extended illness or other calamity that put you behind. 

There are limits to the amount of income you can earn and still completely discharge your debt in a chapter 7 bankruptcy so filing when your income is still relatively low may be your best chance to wipe out debt for a fresh start.   If you wait until your income improves and still can't pay your debt you might be limited to a chapter 13 bankruptcy plan which will require you to make payments towards your debt for up to 5 years.  By using a chapter 7 bankruptcy now to get rid of all your debt, you will be debt free and able to move on in your life rebuilding your credit to again plan for your future retirement and other future needs.

First you are going to want to collect any 2011 tax refunds due to you since unlike wages owed to you where 75% of the back wages are exempt, tax refunds don't get that same favorable treatment in bankruptcy and up to 100% of the tax refund due to you can be collected by a bankruptcy trustee and used to pay your creditors.  With some simple advanced planning you can file for your refund as soon as you get your W-2s from your employers and your tax refund will be on it's way.  Once you receive the refund you can use the funds to pay for your bankruptcy and spend any additional money on necessities for you and your family.  

You can consult with an attorney now about whether bankruptcy is a good option for you.  I offer a free preliminary phone consultation and more intensive office screening at a low cost.  It is important to talk to an attorney before you spend your tax refund just to certain you don't inadvertently spend it in a way that the bankruptcy trustee will object to or that you buy some other asset that is not exempt and can be taken from you.  

As a general rule you can spend your refund on reasonable expenses for food, clothing, shelter and medical expenses as well as attorney fees related to your bankruptcy.  It is still a good idea to get legal advice first.   Talking to a lawyer about bankruptcy does not commit you to filing a bankruptcy.  It is only a preliminary step to explore solutions to your debt situation.  In the course of talking to you I might be able to suggest other non-bankruptcy solutions.

For more free information on Bankruptcy please use the tool bar and click on "Articles and Links"

Joanne Reisman
Attorney at Law

Portland Legal Services here to help!

Wishing everyone a problem free holiday season, but if there are legal problems in your life, don't let the worry ruin precious time with friends and family.  Please contact me for a free e-mail or phone evaluation. 

The best way to reach me is by e-mail at JoanneReisman@PortlandLegalServices.com.  If you prefer to call, please call 503-222-7401 and leave a voice mail message with your phone number and name so I can call you back.  Please understand that I do not often answer this phone number directly, but frequently check for voice mail messages and try to return calls on the same day, if you call during the week.

I can very often offer free helpful suggestions or point out misconceptions in the law that will reduce your worry and stress significantly.   I am of course here to help you further with legal services if the problem merits my intervention.

Again, my wished for a safe and happy holiday season to all!

Joanne Reisman
Attorney at Law
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