Legal Corner – by Samuel C. Totaro

The Adoption Tax Credit Survives

Andrea and I were fortunate to be invited as guests by then President Bill Clinton to the White House to witness the first signing of the Adoption Tax Credit bill in August, 1997. Since then, it has had its ups and downs, and was set to go out of existence at the end of 2012. However, as Congress debated whether to let the economy go over the fiscal cliff, cooler heads prevailed and the adoption tax credit was made permanent, effective January2, 2013, as part of the Affordable Care Act.

The adoption tax credit is available to adoptive parents in the year that the adoption becomes final, and is reimbursement for qualified adoption expenses. These include reasonable and necessary adoption fees, court costs, attorney fees, agency fees, traveling expenses (including amounts spent for food and lodging while away from home), and for any expenses directly related to the principal purpose of the legal adoption of the eligible child. An eligible child is a child under the age of 18 years old, or be physically or mentally incapable of himself or herself. If you adopt a special needs child, you are able to claim the entire credit, even if your expenses do not meet or exceed the threshold. Further, you will not need to document actual expenses for a special needs child. Continue reading

Post Adoption Contact Agreement (PACA)

Several years ago, the Pennsylvania legislature enacted several amendments to the Pennsylvania Adoption Code, one of which now allows for an option for adoptive parents and birth parents, and certain of their relatives, to enter into voluntary agreements for ongoing communication or contact between themselves and the adopted child. These agreements must be subject to approval by the court prior to or at the finalization of the adoption.

In order for the Post Adoption Contact Agreement (commonly referred to as a “PACA”) to be legally enforceable it must be in writing. Additionally, if the child is 12 years of age or older, the child must also consent to the agreement.

Prior to the enactment of this legislation, similar agreements, whether oral or written, were legally unenforceable in the event that the adoptive parents refused to abide by the terms of the agreement. The court approved PACA now allows for either party to enforce the agreement by court action, but the court is only able to order that the parties carry out the terms of the agreement. No monetary damages are allowed. Further, before a court will enforce a PACA it must determine that the party seeking enforcement is substantially in compliance with the agreement and that the agreement continues to serve the best interest of the child.

Once approved, only the adoptive parents, or the child if over the age of 12 years, may petition the court to modify the agreement. Further, the agreement can only be modified with less contact than in the original PACA. Any of the parties can petition to discontinue the PACA, and by law, unless agreed to otherwise, any PACA will cease at 18 years of age.

A PACA can benefit all parties in an adoption, by allowing birth families to stay in contact with the adoptive family. Contact can be as little as pictures and letters over the years, or as much as visits with the child. PACA’s are tailored to each individual situation, and there is no boilerplate agreement for anyone. There can be as little or as much contact as the parties wish.

Where there is a possibility of an adoption, PACA’s can be an extremely beneficial tool for both birth parents and adoptive parents involved. However, you should proceed with caution in creating such an agreement, and at all times, an attorney should be consulted.

Samuel C. Totaro, Jr., Esquire, Curtin and Heefner, LLP