In a historic 2014 ruling, the U.S. District Court in Whitewood v. Wolf made same-sex marriage legal in Pennsylvania. This ruling, while finally allowing a sizable segment of the population the same legal freedoms heterosexual couples have always enjoyed created problems for some same-sex couples that had done their best to take care of one another in a pre-Whitewood world.

Prior to the legalization of same-sex marriage, it was not uncommon for same-sex couples to go through an adult adoption. This was the only method available to them to create a legal family unit. By one partner adopting the other, couples were able to enjoy some of the protections and benefits only available to families. One of those benefits was a reduction of inheritance taxes. Prior to the Whitewood ruling, when one partner of a same-sex couple died, the other partner would have to pay 15% inheritance tax because the surviving partner was simply viewed as “other heir” under the tax code. Imagine paying 15% tax on assets you helped acquire during your relationship, while married heterosexual couples were taxed at 0% on the same inheritance. By adopting one’s partner, same-sex couples created a legally recognized family unit and reduced inheritance to the 4.5% of lineal heirs. While a vast improvement, the solution was far from perfect.
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During the holidays, we all become nostalgic about the things in our lives that have touched us, have changed us in some way or has simply been a blessing.  When I think of those things at this time of year, I immediately go to the blessings of my family and dear friends.  For so many of us family is the most important part of our lives, and I have been so lucky to have had the pleasure of being part of adding to many of my clients’ families over the last 20 years. 
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The other night I found myself sitting with my children watching America’s Got Talent. While America’s Got Talent is clearly a popular show, it is not one which I have seen before. That being said, my children and I became engrossed in the wonder of this all-American talent show where some acts were silly, others

In previous blog posts, I wrote about the adoption tax credit, which provides qualifying taxpayers who have adopted children with relief from the expenses related to the adoption. While those expenses must be substantiated with documentation, if the child has received a determination from the state that he or she has special needs, then the full credit can be claimed without substantiation. Additionally, because of the substantiation requirements, taxpayers cannot use the Internal Revenue Service’s per diem rate tables.

When I had previously written about the credit with regards to the adoption of children with special needs, the Internal Revenue Service had not provided any guidance with regard to substantiating a determination of special needs from the state. Since then, the IRS has issued some guidance on their website. According to the IRS, a state’s determination of special needs may be substantiated with the following items:

  1. A signed adoption assistance or subsidy agreement issued by the state;
  2. Certification from the state or a county welfare agency verifying that the child is approved to receive adoption assistance; or
  3. Certification from the state or a county welfare agency verifying that the child has special needs.

Please note that this list is not exclusive.

For the 2011 tax year, taxpayers can claim up to $13,360 for each child they have adopted. The credit limit has gone up from $13,170 for the 2010 tax year and $12,150 for 2009. While the credit can be taken in multiple years, the credit limit is cumulative and includes any adoption tax credit claimed in prior years. That means for each adopted child, once the credit limit is reached, no future credit will be available unless the credit limit is raised. Further, since 2010, the credit is "refundable," meaning that qualifying taxpayers will receive the credit even if they do not owe any tax for that year.


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I have come across many clients who have a child that qualifies for certain government benefits because the child has special needs. Unfortunately, a well-intentioned gift to a child can, in some cases, inadvertently disqualify the child from the government benefits. In other instances, a child might have become entitled to sizeable funds, such as through a settlement or award in a personal injury lawsuit, which could also disqualify the child from benefits. This is where special needs trusts come into play.

The role of special needs trusts is to provide economic security for a person with special needs without disqualifying them from government benefits. There are three types of special needs trusts, depending on the circumstances: common law discretionary trusts, OBRA-93 payback trusts and pooled trusts. 

Common Law Discretionary Trusts:

This type of trust is referred to as “common law” because it arises from a series of court decisions and not from a particular statute. Typically, common law trusts should be used when the source of the funds is coming from a third party, such as money in the form of a gift to the person with the special needs. 

There are four primary requirements for establishing a common law discretionary trust. 

  1. The trust must explicitly state that proceeds of the trust are meant to supplement and not supplant public benefits. 
  2. The trust must also require that public benefits be considered by the trustee prior to distribution of any income or principal. 
  3. The trust must be irrevocable, which generally means that once funds from third parties are in the trust, they cannot be removed later by the third party. 
  4. The trustee must have total, absolute and unfettered discretion to pay, or refuse to pay, the income or principal from the trust to the disabled beneficiary. As a result, required periodic payments are not permissible. It is also helpful if there are other beneficiaries of the trust, such as other children of the parents creating the trust. 


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Making a will is something that occasionally crosses your mind, it’s one of those things you think maybe you need but don’t have the time or desire to make it a top priority. In addition, there are many things that can deter you from making a will such as lack of money or property, the unlikelihood that something catastrophic will happen to you or just simply procrastination. However, if you are a parent, one of the most important reasons you should have a will is to appoint a person to care for your child upon your death and the death of the other parent. The care of your child upon an unfortunate event such as death can happen to anyone regardless of the size of your estate. As a parent myself, I believe that one of the most important parts of a will is the section that appoints a guardian for anyone with minor children.


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On April 27, 2011, Holly Filius received a Letter of Commendation from the Lancaster County Commissioners in recognition of the Central Penn Business Journal’s Women of Influence Lifetime Achievement Award. She will formally receive her award on May 16 at the Women of Influence Luncheon. Holly was presented with the Letter of Commendation during the

Holly S. Filius, Managing Partner, of Russell, Krafft & Gruber, LLP in Lancaster, PA has recently been named the recipient of the Lifetime Achievement Award in the Central Penn Business Journal’s Women of Influence Awards program.

Filius received her B.A. in Political Science from Villanova University and her J.D. from Widener University School of Law. She concentrates her law practice in Family Law, Adoption and Estate Planning. Filius joined the firm as an associate in 1998 and attributes her early success to hard work, a commitment to client service and integrity, which has earned her a solid reputation among her clients and the legal community. This success led to a partnership offer after only five years in private practice. Six years later in 2009, she was elected Managing Partner of the firm. Filius’ commitment to excellence and her leadership skills made her an ideal candidate for the position.

Filius has earned a reputation as one of the best Family Law attorneys in Lancaster. Over the years she has acted as a mentor to all of the young lawyers at Russell, Krafft & Gruber, LLP. In addition to mentoring lawyers in her own firm Filius often makes time for law clerks and even lawyers in other firms who recognize her expertise and appreciate her professional and approachable demeanor.

Currently, Filius serves as President of the Board of Directors of the S. June Smith Center Foundation. She is active in numerous community and professional groups, has served on the Board of Directors of The Pennsylvania State Foster Parent Association and as a member of the Women in Business Committee of the Lancaster County Chamber of Commerce and Industry.

Filius’ career achievements are ones that stand out among both the men and women in her field. Under her leadership the firm has been able to successfully balance growth and caution in the midst of a struggling economy and position the firm for the future. As a long time resident of Lancaster County, she feels a commitment to her community and strives to make Lancaster county a better place to live and work.

The Women of Influence awards were created in 2010 to recognize midstate women leaders who are influential in their companies, industries and communities. In total, 28 local women business leaders will receive awards recognizing their outstanding leadership, integrity and accomplishments in the midstate’s business community at the Central Penn Business Journal’sWomen of Influence event on Monday, May 16, 2011 at the Hilton Harrisburg. The award recipients will also be profiled in a special supplement to the May 20, 2011, issue of the Central Penn Business Journal. This list will also appear in the Business Journal’s 2012 Book of Lists publication.


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