Lancaster Law Blog : Lancaster PA Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Pennsylvania : Lancaster's Legal Link

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Most divorce cases require the use of outside experts to assist with the valuation of marital assets, including real estate, retirement accounts or a family business. The collaborative process is not any different in that those values still need to be obtained in order to negotiate an appropriate settlement that takes into account the needs and goals of both parties. However, a collaborative divorce will likely include just one financial expert to provide a neutral valuation of an asset, rather than a "battle of the experts". In the litigation model, it is not unusual for both parties to obtain their own property appraisals from their own paid expert, requiring both parties to dedicate much-needed resources to obtain a valuation. 

In the collaborative model, one expert can be retained, who will provide a neutral valuation. The use of a collaboratively-trained financial specialist in a collaborative case can also be helpful. Such a financial specialist can provide a financial analysis of the marital estate, evaluate the tax consequences of certain dispositions, develop current and future cash flow analysis, and illustrate long-term financial projections for both parties. Ideally, the financial specialist will model alternatives for dividing assets to ensure financial security for both parties. The financial specialist may also be able to assist with providing clients creative solutions to enhance the total value of their assets available to both. 

This "team approach" to the divorce process helps each party to make fully-informed and carefully considered settlement decisions.  It also allows the parties to have greater control over what their futures will look like after their divorce is final.

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The 65% COBRA Federal Premium Assistance has been extended once again. The last extension covered involuntary terminations through March 31, 2010. On April 15 the President signed H.R. 4851 extending several government programs including unemployment benefits. The COBRA subsidy will now cover qualified individuals who are involuntarily terminated on or before May 31, 2010.

The U.S. Department of Labor has updated its Fact Sheet on the COBRA Premium Reduction. There is also additional information regarding eligibility of terminations from March 2, 2010 through May 31, 2010 which followed a reduction in hours: 

•   March 2, 2010 through May 31, 2010 if:

o        the involuntary termination follows a qualifying event that was a reduction of hours; and

o        the reduction of hours occurred at any time from September 1, 2008 through May 31, 2010 (a reduction of hours is a qualifying event when the employee and his/her family lose coverage because the employee, though still employed, is no longer working enough hours to satisfy the group health plan’s eligibility requirements).  

COBRA premium assistance continues to be limited to 15 months as provided in the first extension and ends upon eligibility for other coverage. For additional information you may want to check out another page on the DOL’s website that includes video messages and other FAQs.

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A few weeks ago I wrote about protecting the tax-exempt status of your nonprofit organization. As promised therein, this post covers intermediate sanctions; however, before I broach that topic, I wanted to pass along a quick tax note.

Earlier this month, President Obama signed the Hiring to Restore Employment Act (or the HIRE Act). One key provision allows most nonprofit and some for-profit organizations to keep their share of the 6.2% payroll tax on certain new hires of certain individuals for the rest of 2010. The new hire must NOT: (1) have worked more than 40 hours in the previous 60 days; (2) replace an existing employee (unless the former employee left voluntarily or for cause); and (3) be related to owners or managers of the hiring organization. Additionally, if the employer is a nonprofit, the new employee must perform work that furthers the employer's tax-exempt purpose. The Act also includes other provisions such as a new hire retention credit.  Please check the IRS website for additional details if you think your organization or business could benefit from the HIRE Act. 

Now, back to the subject at hand. The sanctions are called "intermediate" because they generally don't threaten the tax-exempt status of a nonprofit. They were developed because the IRS wanted a system more flexible than the all-or-nothing decision to revoke or not revoke tax-exempt status of questionable organizations. 

Essentially, intermediate sanctions penalize "disqualified persons" from entering into "excess benefit transactions" with tax-exempt organizations. The Internal Revenue Code defines a "disqualified person" as someone who was in a position to exercise substantial influence over the dealings of the organization at any time during the five year period ending on the date of the transaction in question. These are generally the directors, officers, key employees, founders, substantial contributors and employees with compensation based on revenue. Family members of "disqualified persons" also tend to be deemed "disqualified".