General

Monday, May 14, 2012

Reverse Mortgage News

Reverse mortgage borrowers are getting younger, and that may not be a good thing.

The age of reverse mortgage borrowers is dropping, according to a new study by MetLife. Unfortunately, reverse mortgages come with risks, so younger borrowers need to be careful.

Reverse mortgages allow homeowners who are at least 62 years of age to borrow money on their house. The homeowner receives a sum of money from the lender, based largely on the value of the house, age of the borrower, and current interest rates. The loan does not need to be paid back until the last surviving homeowner dies, sells the house, or permanently moves out.

The MetLife study found that younger borrowers are taking out reverse mortgages. Today baby boomers aged 62 to 64 make up 21 percent of reverse mortgage applicants. In 1999, only 6 percent of applicants were in this age bracket.  Of homeowners who are considering a reverse mortgage, 46 percent are under age 70.

This new trend toward younger borrowers could spell trouble. While reverse mortgages seem like a great idea, there are major downsides. The closing costs for the loans are much higher than for conventional mortgages, and younger borrowers receive less money because their life expectancy is longer. In addition, the borrower is still responsible for property taxes, homeowner's insurance, and maintenance. If the borrower runs out of money and can't pay the property taxes or homeowner's insurance, the loan will default, and the borrower could lose his or her house.

MetLife's study also found that most reverse mortgage applicants (67 percent) wanted to use the reverse mortgage to lower household debt compared to 27 percent who wanted to enhance their lifestyle and 23 percent who wanted to plan for the future. Instead of using a reverse mortgage to pay for health care that would allow borrowers to remain in their homes during their final years, borrowers are using reverse mortgages to cover short-term financial shortfalls. The MetLife study finds that strong reverse mortgage counseling is needed, and it cautions that homeowners need to consider whether to use their home equity to shore up their retirement financing or preserve this asset for major unexpected expenses in the future, such as health-related expenses that inevitably increase as people age.  (Funds for reverse mortage counseling were eliminated in last year's budget deal between Democrats and Republicans but have since been restored.) 

To read the MetLife study, click here.

For more information on reverse mortgages, click here.

Monday, May 14, 2012

Provision in Will to Kill The Cat Found Invalid

A case of estate planning for pets is decided in a Chicago court.

A Chicago judge has reversed a death sentence that has been hanging over Boots the cat for months.  The feline's owner, Georgia Lee Dvorak, died last Christmas Eve at age 76.  Dvorak left no survivors, and her will, written in 1988, included a provision directing that any cat or cats she owned at the time of her death be euthanized "in a painless, peaceful manner." 

But trust officers at Fifth Third Bank, which was appointed to manage Dvorak's $1.4 million estate, were reluctant to follow through on the will's terms when it came to Boots, age 11. 

The bank asked a Cook County (Chicago) probate court to set aside that provision of Dvorak's will.  In its arguments to the judge, the bank noted that Dvorak had left the the bulk of her estate to twelve animal-related charitable organizations.  They also cited legal precedents in which courts had spared other animals in similar legal predicaments, including two Irish setters in Pennsylvania who had been ordered destroyed in their owner's will, and horses in Vermont and Canada that had been similarly condemned.

The judge allowed the bank to search for a suitable home for Boots to live out the remainder of her life, and one was found.  Cats-are-Purrsons-Too agreed to care for Boots provided it could receive a $2,000 endowment.  On April 3, 2012, the judge ruled that $1,000 of Dvorak's estate could go toward the endowment, and the bank agreed to forego fees of $1,000, according to an article in the Chicago Tribune.   

In its fact sheet "Providing for Your Pet's Future Without You," the Humane Society of the United States warns that when a pet owner puts a request in a will that an animal be put to death, "that provision is often ruled invalid by the legal system when the animal is young or in good health and when other humane alternatives are available."

Monday, May 14, 2012

More Information on Reverse Mortgages

Under our "system" of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there's little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.

If you own a home and are at least 62 years old, you may be able to quickly get money to pay for long-term care (or anything else) by taking out a reverse mortgage. Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan repayments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out.

In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. For example, a 70-year-old borrower with a $200,000 house in Westchester County, New York, would be able to receive a maximum loan of $110,723 (based on 2009 figures). The lower the interest rate and the older the borrower, the more that can be borrowed. To find out how much you can get for your house, use the AARP's reverse mortgage loan calculator.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower's option, or in a series of regular payments, called a "reverse annuity mortgage." The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan.

Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions--the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs, or to retrofit a home to make it handicapped-accessible.

Borrowers who take out a reverse mortgage still own their home. What is owed to the lender -- and usually paid by the borrower's estate -- is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower's home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.

Reverse mortgages are somewhat underutilized now, but financial institutions, sensing an opportunity as the population ages and people live longer lives, are expanding their reverse mortgage programs.

The most widely available reverse mortgage product -- and the source of the largest cash advances -- is the Home Equity Conversion Mortgage (HECM), the only reverse mortgage program insured by the Federal Housing Administration (FHA). However, the FHA sets a ceiling on the amount that can be borrowed against a single-family house, which is determined on a county-by-county basis. High-end borrowers must look to the proprietary reverse mortgage market, which imposes no loan limits. On October 1, 2008, a new housing law took effect that increases the borrowing level on reverse mortgages. The national limit on the amount a homeowner can borrow is now $417,000. The limit can be increased to $625,000 in areas with high housing costs.

Is a Reverse Mortgage Right for You?

While reverse mortgages look like no-lose propositions on the surface, they also have some significant downsides. First, the closing costs for these loans are about double those for conventional mortgages. Closing costs on a reverse mortgage for the $200,000 home described above would be more than $10,000. These costs can be financed by the loan itself, but that reduces the money available to you.

Reverse mortgage payments also may affect your eligibility for government benefits, including Medicaid. Generally, these payments will not be counted as income as long as they are spent within the same month that they are received. If the funds are not spent, however, they could accumulate and push your resources over the allowable limits for Medicaid or SSI eligibility. In addition, payments from reverse annuity mortgages may be counted as income for purposes of Medicaid and SSI whether or not they are spent within the month they are received. This shouldn't be treated as income, since it simply involves withdrawing equity from one's home, but the state may view it differently since the funds come in a regular monthly check. In any case, you should consult with an elder lawyer in your state if you have any concern about how a reverse mortgage will affect your eligibility for federal benefits.

Also, bear in mind that if your major objective is to safeguard an inheritance for your children, a reverse mortgage may not be a good idea. As soon as the elderly person (or the survivor of an elderly couple) dies, it will be necessary to sell the home and much -- if not all -- of the sales proceeds will have to be paid to the lender. But if you have a pressing need for additional income and have no close heirs, or if you do not intend to benefit your children or your children don't particularly want to inherit the house, a reverse mortgage can be a way to supplement income, perhaps without jeopardizing Medicaid eligibility.

Reverse mortgages are complex products and borrowers are advised to acquaint themselves with the different options available and then carefully compare competing loan offerings. Following are two outstanding Web sites to get you started in that process:

• You can learn the basics about reverse mortgages from the AARP's excellent reverse mortgage Web site. The site includes a calculator for estimating the loan for which a borrower would be eligible. Go to: www.aarp.org/revmort
• For more details, background information, and supplementary materials, visit the National Center for Home Equity Conversion site at www.reverse.org

In addition, the names of FHA-insured lenders are available from the Federal National Mortgage Association (Fannie Mae), (800) 7-FANNIE.

Monday, March 05, 2012

Are you getting all of your benefits?

Check out this web site we came across, www.benefitscheckup.org. It's a wonderful site that allows adults ages 55 and over to check and see if there are any federal, state or local benefits that they may be qualified for but not receiving. 

According to the web site, "Many adults over 55 need help paying for prescription drugs, health care, utilities, and other basic needs. There are over 2,000 federal, state and private benefits programs available to help. But many people don’t know these programs exist or how they can apply." Take 15-20 minutes on this web site and let it find unused benefits for you.

We hope this helps!

Sunday, January 22, 2012

Caution: Do-It-Yourself Wills

Is it a good idea to write your own will? I can’t answer that question without being somewhat biased, because as an attorney, I know that there are complex and unique issues that each family and individual faces. Therefore, it does concern me when I hear of someone writing his or her own will without an attorney’s help.

My mission as an attorney is to build a long-term relationship with each client and provide superior service to him or her. The stack of paper in a binder or folder that I eventually hand to my clients is not what they find valuable. They just find it heavy! So the question is, where is the value in working with an attorney on my estate plan? My clients tell me that they find value knowing that they have a trusted legal advisor that has taken the time to learn about their needs, their goals, and the unique aspects of their lives. Unique lives translate into unique estate plans.

When I hear about do-it-yourself estate planning, I can’t help but get nervous for the folks that use those products. Here’s what concerns me about folks writing their own will:

1. Failure to protect your assets: As an attorney, I always talk to my clients about their kids and grandkids, and I make sure that an asset protection plan is put in place. I want to make sure the client’s kids or grandkids are protected from themselves and others, including their creditors, spouses (or ex-spouses), business partners, legal judgments, etc. I can assure you that you cannot design a one-size fits all form for an asset protection plan, which is more important than ever today.
    
2. Failure to create an asset preservation plan: A will and power of attorney is important but only the start for many estate plans. A major concern for retirees and people close to retiring is making sure an asset preservation plan is crafted, so that if you go into a nursing home, the house will be safe and some assets will also be safe from Medicaid spend down.
    
3. False sense of protection: Doing it yourself and convincing yourself you only need the “simple will” may give you a false sense of protection, when in fact your situation is more complex. By complex, I mean things like second marriages, kids with financial issues, real estate under water, uncertain financial future, family conflicts, etc. I can assure you that these types of issues won’t go away when you pass on—in fact, our experience shows they only magnify if they’re not dealt with while you’re still here.
    
4. Legal issues and problems with the documents: Let’s be honest, you don’t know what you don’t know when it comes to estate planning. Work with a trusted advisor that knows what you need. Would you pull your own tooth? Do surgery on yourself? Estate planning and asset preservation is best done with the help of a professional.

Are you going to spend more money on an estate plan with an attorney? Yes. But do you really want the “cheapest” plan? Worse, are you making matters more complex by doing it yourself and saving a few bucks?

I make my living by being passionate about helping families deal with their estate planning goals, fears and hopes to ensure they leave a legacy they can be proud of, no matter what happens and when it happens. Think about estate planning as saving your family time, money, aggravation, conflict, and from your estate being unnecessarily spent down on long-term care. Then, the real value of working with a professional will be realized.  

Monday, January 16, 2012

Social Security For Spouses

Social Security benefits can be complex, and our article this week shows you why. If you need assistance with planning for Social Security, please contact our office.

Social Security doesn't just pay retirement benefits to retired workers; in some circumstances, it also provides benefits to a worker's spouse or ex-spouse and to a deceased worker's surviving spouse. Here are the ins and outs of spouse and survivor benefits.

SPOUSAL BENEFITS
Spouses are entitled to benefits if the marriage lasted at least 10 years. A spouse is entitled to an amount equal to one-half of the worker's full retirement benefit. To receive this benefit, you must be at your full retirement age or caring for a child who is under 16 years old. In addition, your spouse must have filed for Social Security retirement benefits even if he or she isn't receiving them.

If you could receive more from Social Security based on your own earnings record than through the spousal benefit, the Social Security Administration will automatically provide you with the larger benefit. If you have reached your full retirement age, you may also elect to receive spousal benefits and delay taking your benefits, allowing your own delayed retirement credits to accrue, and switch to your own benefit at a later date. However, you cannot elect to receive spousal benefits below your retirement age and later switch to your own benefits.

If you begin collecting your spousal benefit before your full retirement age, your spousal benefit will be permanently reduced.  But if your spouse retires early, but you wait until your full retirement age, you will still receive benefits based on one-half of his or her full retirement benefit.

DIVORCED SPOUSES
An ex-spouse is also entitled to receive one half of the worker's full retirement benefit as long as the marriage lasted at least 10 years. Unlike a current spouse, a divorced spouse can begin receiving benefits even before the worker has applied for benefits. The worker must be at least 62 years old and the divorce must have been final for at least two years.

SURVIVOR BENEFITS
If you are a surviving spouse at full retirement age, you are entitled to the worker's full retirement benefits. If the worker delayed retirement, the survivor's benefit will be higher. Survivors are entitled to benefits even if they are divorced as long as they had been married for at least 10 years. If you file for benefits before you are over age 60, but below full retirement age, you will receive a reduced percentage of the worker's benefits. Surviving spouses who are younger than 60 receive benefits only in limited circumstances, such as cases of disability or caring for a disabled child.

Monday, January 09, 2012

Your Digital Assets

What will happen to your digital assets if you pass away?

Monday, December 12, 2011

Estate Tax Update / 4 Common Estate Planning Questions

Monday, November 14, 2011

Estate Planning Misconceptions

This week, we have selected five common estate planning misconceptions that we often hear from our clients. 

1. Gifting the house for $1 to my kids is always good idea

Gifting your house to your kids may save some inheritance tax dollars, but there will be no “step up in basis” if the kids try to sell the house after you pass on. To put it simply, there may be more taxes due than if you just left the house in your name. Additionally, once the kids own the house, you’re on the hook if they get into any sort of creditor or marriage trouble.

2. I only need a simple will, or no will at all

Every provision in your will is important. You want your will to be perfect, otherwise it could spell trouble for your family later on. You need to speak with an attorney about what type of estate planning tool you need.

3. I don’t need a will because all of my assets have beneficiaries on them

It always makes sense to have a will, regardless if anything will pass through the will. Inevitably, we find the will always disposes of some assets.

4. A power of attorney is just a form and is the same for everyone

Powers of attorney are subject to the most lawsuits because of this assumption. Your power of attorney needs to be carefully tailored so there aren’t too many powers.

5. I can’t gift more than $13,000 per year

As it stands now, you have a $5 Million lifetime gifting exemption through 2013. You can make the $13k gifts each year without paying taxes or filing gift tax returns. Anything over $13k is not taxed, but must be accounted for. Anything above $5 Million is taxed at 35%. For years, the lifetime exemption was $1 Million, so the $5 Million jump presents a great opportunity for wealthy individuals and families to make transfers.

Estate planning should be undertaken with a qualified estate planning attorney. Everyone needs to engage in estate planning to ensure they leave a legacy that's free of conflict and confusion. For a complementary estate planning consultation, please call our office at (215) 706-0200.

Was this week’s blog entry helpful to you? If so, we encourage you to forward it on to friends and family members who you think may find it informative as well.

Have a great week!

Monday, October 10, 2011

7 Estate Planning Questions

Top 7 Estate Planning Questions That Clients Ask

1. What if I don’t have a Power of Attorney, what happens?

You need to make sure you have a Power of Attorney, no matter what age you are. If something happens to you and you can’t make decisions for yourself, you need to make sure someone is appointed to handle your affairs. If you don’t, a guardian may need to be appointed for you. That means going through the courts, something that no one wants to be bothered with.

2. Is probate a big deal in Pennsylvania? Do I need a living trust?

Probate is not the scary process that it used to be, at least in Pennsylvania. Most people in Pennsylvania opt to have a will over a living trust because probate is rather straightforward. Sometimes, an attorney may need to be retained to help with probate affairs, but many times, a family can do it themselves.

3. Why do I need a will if most of my assets are joint or have beneficiaries?

Regardless of if your assets are jointly titled and have beneficiary designations, it still makes a lot of sense to have a will.

First, you may acquire new assets or move assets around during the course of your life. You may forget to re-title beneficiaries, or you may not title the asset jointly.

Second, there are bound to be assets that WILL pass through the will! It always happens. Plus, even if that doesn’t happen, a will is important for other reasons, such as making sure you have an Executor appointed.

Finally, if you are married, a will may not be as important upon the first-to-die, but upon the second-to-die, a will becomes essential because it’s likely that many of those joint assets are no longer jointly held, and will pass through the will.

4. Where do I store my documents, and should an attorney keep a copy?

We generally recommend you purchase a fire-proof records safe for your home and store your original estate planning documents there. They will be safe, but more accessible than a bank safe deposit box. As your estate planning law firm, we keep a copy of your documents on our secure LegalVault service, which also provides you and your health care providers access to your documents.

5. Can I write my plan myself or with a LegalZoom type of service?

Of course you can, but it’s probably not a good idea. Would you skip the doctor’s office and diagnose yourself if you’re feeling sick? Estate planning is best done with an attorney who understands how all of the pieces of the puzzle fit together. Estate planning includes wills, powers of attorneys, and trusts, but it also includes strategies while you’re alive, and strategies for the next generation. Even a “simple” plan is best done with an attorney, because as of our experiences show, even the simple plans require customizations.

6. How often should I update my plan?

Check your documents at least every three years to make sure they still seem current. We recommend that you update the plan when you see a need for a change, and update your powers of attorney every five years.

7. What are the taxes at death and how do I avoid them?

There are both federal estate and state inheritance taxes. Most people today don’t worry about federal estate taxes today, because only folks with more than $5 Million of assets are affected. 

Pennsylvania has a state inheritance tax, and any asset transferred upon death in Pennsylvania is possibly subject to inheritance tax, with very few exceptions. The tax rates are relatively small (4.5% to kids and grandkids), so most of the time, planning to avoid PA inheritance taxes is not worth it. However, every case is different and we can discuss estate and inheritance tax planning strategies with you that may make sense.

Monday, September 26, 2011

Estate Planning Tips

This week, I reached into my grab bag for a few best practices in estate planning. Everyone must have an estate plan because without one, you risk leaving your affairs a mess for others. Here are a few tips and ideas:

1. KEEP IT CURRENT:
   Keep your Powers of Attorney up-to-date. In the event of a disability, you want to ensure financial institutions and medical providers will accept these documents without reservation. Update them every 3-5 years.
    
2. DON’T LET PROBATE SCARE YOU:
   In Pennsylvania, don’t let the probate process scare you into writing big expensive estate plans to avoid probate. Probate is a relatively easy process in Pennsylvania compared to other states.
    
3. FOLLOW THE THREE C’S:
   In your estate plan, be CLEAR, be CONSISTENT, and be CAREFUL. Make sure you’re working with an attorney who only practices estate planning so you can rest assured knowing your plan meets this criteria. Make sure the language is clear, that nothing in the plan conflicts, and that you think through what you want your plan to say.
    
4. HOPE FOR THE BEST, PLAN FOR THE WORST:
   Estate planning is about as exciting as going to a dentist for many people. No one wants to do it, but it must be done. While you’re planning, make sure you plan for the worst-case scenario. For example, leaving your son a large inheritance and the chance that he could have creditor problems or he gets divorced and his ex-wife wants half of the estate. Yes, there are strategies we can put in place to protect an inheritance from these types of situations.
    
5. GIFT PROPERLY:
   Want to downsize, help your kids while you’re still living, or take care of the grandkids? Writing a check may make them smile, but there are other ways to make gifts, such as setting up life insurance policies inside trusts (great for asset protection) and creating a pension for life for your kids. If you want to gift, make sure you explore your options with qualified professionals. Doing so may provide multiple benefits to you and your heirs.

Monday, September 19, 2011

Five Myths About "Living Trusts"

Is the Revocable Living Trust, sometimes just called a Living Trust, the ultimate estate planning tool? It depends who you ask, and what state you’re in.

In Pennsylvania, Living Trusts aren’t used commonly as an estate planning tool. Instead, practitioners in Pennsylvania, as well as clients, tend to favor Wills as the fundamental estate planning tool.

Here are five myths about Living Trusts in Pennsylvania:

Myth #1: Living Trusts save, reduce or avoid taxes:
A Living Trust is NOT a tax reduction or avoidance strategy. You simply cannot avoid estate or inheritance taxes by using a living trust. It used to be that more people were effected by the federal estate tax, and that married couples could reduce their estate tax by using credit shelter trusts. But you could do the same thing in a Will!

Myth #2: They prevent estate challenges:
A Will is easier to challenge than a Living Trust, because a Will is probated and is public. However, just because a Living Trust isn’t probated, doesn’t mean it can’t be challenged in court. It just takes a little more time, effort and money to do so.

Myth #3: They avoid probate because probate should be avoided:
Pennsylvania probate is pretty simple, and a run-of-the-mill estate can be probated by the Executor him or herself without the help of an attorney. So probate shouldn't necessarily be avoided at all costs and you shouldn't be scared of probate in PA. Yes, living trusts avoid probate, but your living trust must be 100% funded with ALL of your stuff to do that! Even missing ONE small bank account means your loved ones will have to go through probate. Anyway, probate is not a big deal in Pennsylvania, unlike in other states such as California (yes, living trusts are popular there because probate is a COURT supervised process!).

Myth #4: A Living Trust will make things easier at the end of my life:
Not really… It is probably takes just as much work to probate the will, settle the estate, etc., as it does to manage an ongoing trust. Trusts need to comply with many rules, tax returns must be filed annually for trusts, and more. A living trust will usually require the help and services of a professional.

Myth #5: I need a living trust to shelter assets from nursing home costs:
A living trust would NOT be a good tool to use if you want to shelter some of your assets from being spent down by nursing homes. You need to use a Medicaid Asset Protection Trust, which is IRREVOCABLE, and establish and fund this trust when you’re still healthy. A living trust used in a situation like this would be a disservice to you and your family.

LIVING TRUSTS MAKE SENSE IN SOME SITUATIONS, BUT NOT ALL SITUATIONS.  Estate planning is an individual process that's unique for everyone. A qualified attorney can help guide you to what estate planning tools you need.

Want more information on what estate planning tools make sense for you? Call us today at (215) 706-0200 to schedule your complimentary visit.

Wednesday, September 07, 2011

Fall 2011 Estate Planning Essentials

Our blog entry this week focuses on five topics that have been hot button issues for clients over the last few months. Estate planning continues to evolve and therefore, we must continue to “think different."

Estate Planning in General: Estate planning today isn’t what it was 5 or 10 years ago. For most families that I see today, saving estate tax dollars is not an objective, because there are simply no taxes to begin with! But just because the tax problem went away (at least for the time being) doesn’t mean you shouldn’t plan. Our clients come to us to make sure their kids and grandkids will be taken care of properly, and that their estate is setup and optimized properly to achieve those goals. In other words, there are many more reasons to engage in estate planning than simply to save taxes.

Powers of Attorney: To put it bluntly, we are living longer. A Will by itself won’t suffice anymore. A Will is a death document, and only kicks in upon your passing. As we live longer, we have more time where we may be incapacitated or incompetent to make decisions. Therefore, powers of attorney, appointing someone to take over your affairs, continue to become more essential.

Long-Term Care: Long-term care costs are rising. See last week's blog entry on the latest average costs in Pennsylvania for long-term care. It is essential that middle class families plan for long-term care costs. There are strategies that can be employed to save at least part of your estate from costs that could ravage your estate.

Non-Probate Assets: More and more, people are acquiring assets that don’t pass their Will, such as IRA’s, 401(k)’s, life insurance, and annuities. In general, any asset with a beneficiary designation form avoids the Will and avoids probate. But it doesn’t mean you shouldn’t plan or protect those assets with trusts or other devices, and it doesn’t mean you should ignore them when planning your Will and estate.

Gifting: 2011 and 2012 present great opportunities to make large gifts without incurring gift taxes. You can optimize your estate plan and take care of your kids or grandkids with life insurance, pensions for life, and other great tools. Gifting may be more limited come 2013, so now is the time to act.

Fall is typically our busiest time for estate planning. Make your appointment now and reserve some time with me today if you want to optimize your estate plan. Call my office today at (215) 706-0200 or schedule an appointment online on our web site.

Monday, August 22, 2011

Powers of Attorney 101

You must have a financial power of attorney and health care power of attorney in Pennsylvania, and you must make sure these documents are updated every five years or so. It's important to update them because the older the documents are, the less likely an institution or individual will accept the documents as valid.

Why are these documents important? They allow someone to act for you if you become disabled or incompetent, temporarily or permanently.

If you don't have these documents, you are not guaranteed that a loved one or someone else can make decisions for you unless that person goes to court to get guardianship. That is time consuming, expensive, and burdensome. It is, in other words, unnecessary.

There are two types of Financial Powers of Attorney, IMMEDIATE and SPRINGING.

* Immediate Powers of Attorney: This type allow the person you appoint to act without doctors certifying incapacity.

* Springing Powers of Attorney: Here, (usually) two doctors must certify incapacity or incompetency in writing.

The problem with a Springing Power of attorney is that sometimes, people forget they have this type. When it comes time for the appointed person to use the Power of Attorney, they cannot unless they have the doctors certification. In other words, this can hold up important affairs, decisions and transactions. We're not saying that Springing POA's have no place, but often times, Immediate POA's make more sense.

Some people will ask to have a Springing POA because they don't trust the person they appoint to act properly if they have the ability to use the power of attorney right away. A Springing POA won't solve the trust issue though. Therefore, you need to start from scratch and decide who you trust completely to handle your affairs. Once you find someone you trust, then the type of POA will probably matter much less.

Tuesday, August 16, 2011

Ethics and Estate Planning

Is your attorney thinking about your case or his/her bottom line? How do you know for sure? When it comes to estate planning, and drafting your will, trust, powers of attorney, etc., you want to make sure you’re getting a plan that is based on your best interests.

Here are a few points to consider, red flags, and questions to ask to make sure your hiring an ethical attorney.

1. Are you meeting with the actual attorney who will be drafting your documents? If not, that is a red flag, and the firm/company could be breaking the law.
   
   
2. Ask if the attorney actually drafts the documents or not. Sometimes it is ok for a paralegal to draft part of the document, but some attorneys do not draft at all, which is a problem.
   
   
3. Ask if you’ll get to review the documents or not before you sign them. Also, will the attorney take the time to answer questions you have about the documents?
   
   
4. Has the attorney actually provided reasoning behind why he or she is putting in place a particular plan? If the attorney recommends a trust, why? If a will, why? You should know exactly why you are getting certain documents and plans.
   
   
5. The attorney should learn about your family, the dynamics, unique circumstances, and more. If they don’t inquire about your family and try to learn about you, that’s a red flag.
   
   
6. Don’t be afraid to ask questions. If the attorney doesn’t want to spend the time with you to answer your questions, you should probably see someone else.

Monday, August 08, 2011

Ten Reasons To Write A Will

Without a Will (or a trust for that matter), your estate will be dealt with according to the state law in place. In Pennsylvania, the estate becomes an “Intestate Estate” and is divided based on who your closest living family members are that survive you. Without a will, you are severely limited with who handles your estate, how it is divided, and more.

The 10 items below are not available to someone without a will.

1. You can name someone to care for your kids or dependents upon your death
    
2. Distributes your assets as you wish, and can establish trusts if you don’t want a beneficiary getting an inheritance all at once
    
3. Puts someone in charge of any pets you have, and provides compensation
    
4. Allows you to name who your Executor will be (very important in avoiding conflicts!)
    
5. Can disinherit someone if you wish
    
6. List who gets what for assets both big and small. Consider large assets like real estate, and smaller assets like jewelry, valuables, etc.
    
7. Expresses your wish for your final arrangements (burial, cremation, etc.)
    
8. Minimize challenges to your estate with proper language and considerations
    
9. Take advantage of any estate or inheritance tax planning possible with current laws
    
10. NOT split your assets evenly among your kids (maybe one is much better off than the other two)

Need a will or know someone who does? Contact our office today at (215) 706-0200. 

Monday, July 18, 2011

Five Estate Planning Red Flags

Monday, July 11, 2011

New Radio Show

We're back on the air, broadcasting every Wednesday at 11:00 AM on AM 1180 WFYL. 

We hope you'll tune in for great information about retirement and estate planning. Just like our former show, this one is sure to be informative but also entertaining.

Your hosts, Jeremy A. Wechsler, Your Estate Planning Attorney and Peter R. Wechsler, Your Retirement Quarterback, bring you pertinent news and discussion about the thorniest issues in estate and retirement planning. We'll be discussing topics such as the latest economic news, how to protect your nest egg, various estate planning techniques and issues, and more. 

Join us for the hour every Wednesday at 11 AM. Tune to 1180 on your AM dial or listen online at http://www.1180wfyl.com.

Monday, June 06, 2011

Three BIG Estate Planning Mistakes

Tuesday, May 31, 2011

Free Summer Estate Planning Classes

Tuesday, May 17, 2011

50/50

As an estate planning attorney, I hear about some of the craziest, outrageous estate planning matters gone awry. But those types of cases are outliers, and although they’re interesting, they’re uncommon. It’s the typical case gone wrong that really causes problems for more families.

For instance, in one relatively straightforward estate planning matter, I have a colleague who is currently representing a sister who is being sued by her sibling (brother) over some real estate their parents left them. When their parents died, they left their two children the house as equal owners – 50/50. The parents insisted that the children never had conflicts, and that the family was close. They couldn’t imagine how this simple matter could be anything but straightforward.

However, the client’s brother unfortunately got laid off in the recession, after having a secure job at a pharmaceutical company for many years. As a result, he could no longer afford his share of the expenses of the house. and needs to sell the real estate. The client doesn't want to sell as she feels they would take a big loss, as the housing market still has not turned around in many parts of the country. She would rather wait until the real estate market has recovered. Oh, and by the way, the parents named the two children as Co-Executors, something we always caution clients against doing.

Since they cannot come to an agreement, the brother sued the client to compel the property to be sold. The parents are probably rolling over in their graves, as the two siblings duke it out in court. Guess who wins? Attorneys, who spend plenty of time on cases like these and rack up many billable hours. It may take years for this family to recover from hard feelings and the conflict. Sadly, none of it needed to happen.

If you are leaving any property to your family after you are gone, talk to your estate planning attorney about establishing provisions in your will or trust to ensure that this never happens. Some ideas including setting money aside to handle the expenses (for many people, life insurance is an excellent option in a case like this). As I always say, none of us have a crystal ball, and you simply don’t know what will happen after you’re gone. Your estate plan needs to be crafted in such a way that takes into account multiple scenarios, and most importantly, the worst case scenario so that such a scenario can be avoided.

50/50 doesn’t seem so great after all. If your plan needs a fresh look, or if you know of someone who can use some assistance with estate planning, please call our office today at (215) 706-0200.

Monday, May 09, 2011

Inheritance Protection

Make sure your inheritance isn’t squandered!

Before we can help you write your will, trust, and power of attorney, we must understand your concerns and goals for estate planning. Many people have an overarching goal—that is, they want to be assured that the inheritance they are leaving to someone isn’t squandered.

Protecting an inheritance is a crucial goal, and one that we specialize in helping people deal with every day. But protected from whom and what, exactly? Here are a few answers, and they depend on who the person is:

• If the beneficiary is a minor, obviously we want to ensure the inheritance is used for their benefit and their benefit only.
• If the beneficiary has a spending problem, substance abuse problem, etc., our goal would be to limit how the inheritance can be spent.
• Is the beneficiary in a relationship with a daughter-in-law or son-in-law that you don’t care for or have a concern about? Worried that the inheritance would go to your beneficiary’s spouse upon divorce? We devise solutions to deal with these problems on a regular basis.
• What about beneficiaries in high risk professions, such as lawyers or doctors, where lawsuits are prevalent and where the inheritance could be attached to a lawsuit?
• Special needs beneficiaries, of which 15-20% of people are, must have their inheritance put into a special needs trust if you don’t want the inheritance to be squandered to cover costs that public benefits, such as SSI or Medicaid, would otherwise cover.

These are a few of many reasons why people are coming to us every day to make sure the inheritance they leave to someone else isn’t squandered. Remember, sometimes we know of these types of issues now or ahead of time. But more often, we cannot predict what will happen in the future. Do you want to risk your inheritance being used the wrong way? We can help craft a flexible plan that ensures your inheritance will go where you want it to go.

Let us know if we can help you protect your legacy. Call today for a complementary appointment, (215) 706-0200.

Tuesday, April 26, 2011

Disinheriting a Relative; Will Contests

We hope you are enjoying this wonderful weather! A couple of miscellaneous, but nonetheless important topics on this week’s blog: A quick discussion about disinheriting a relative, and a quick discussion about will contests.

DISINHERITING A RELATIVE

The question we always hear is, “Do I need to write in my will that I am disinheriting someone?” The answer depends on who it is. First, you can never completely disinherit your spouse, even if you write such a clause into your will. Your spouse, if you are still legally married at the time of death, is entitled to an elective share or 1/3 of your estate in Pennsylvania.

Second, you can disinherit a child, but you must be careful in this case. You should always write in your will that you are disinheriting the child. Usually, it is good practice to give the reason why you are disinheriting. Some people feel better giving a nominal inheritance of $1, but it is not necessary to do so if your disinheriting clause is clearly written.

Third, other relatives or people in your life generally don’t need to be mentioned. However, if you have written previous wills in which certain people have received inheritances, and you’re not sure if there are old copies of your will floating around, it may be advisable to insert disinheriting language into your new will.

You should always speak with an attorney when considering who to disinherit, and how to do so.

WILL CONTESTS

There are typically two reasons that someone can use to contest or challenge your will: Competency/capacity and Undue Influence. In Pennsylvania, undue influence is usually the best way to challenge a will.

Undue influence occurs when someone with whom you have a relationship with receives a substantial benefit as a result of your weakened intellect.

A typical case of undue influence is when one child brings mom or dad in to write a will, and that child convinces mom or dad to disinherit her other children. Mom or dad in this case would have some sort of condition, such as Alzheimers or general incompetency that would prevent them from making a rational decision.

In our office, we are careful to practice defensive lawyering, in that specific disinheriting language is used, and steps are taken to help prevent will contests. If we can be of assistance, please contact our office at anytime at (215) 706-0200.

Monday, March 28, 2011

10 Things That Could Go Wrong Without A Plan

Without an estate plan, many things could go wrong. As always, what could go wrong depends on your situation. Here are ten quick issues that could arise if you do not have an estate plan:

1. If you have kids but have not appointed a guardian, and something happens to you (and your spouse), someone will have to petition a court for guardianship, a burdensome process.
    
2. You have no control over how your assets are divided if you don't have a will.
    
3. If you become sick/incompetent, and an end-of-life health care decision needs to be made for you, your family may end up in court if there is disagreement and discord.
    
4. The state will determine who your Executor will be. What if more than one person wants the role? What if no one wants the role? Either way, this could lead to major conflicts in the family.
    
5. Particularly for a second marriage, if you don't have an updated and carefully drafted durable financial power of attorney, your spouse could cut out your children from the first marriage, particularly when it comes to retirement accounts.
    
6. Your family could inadvertently pay more inheritance taxes.
    
7. For those that are not married, but are either engaged or in a long term relationship and want that significant other to be in control of any decisions for incapacity, etc., you MUST have an estate plan with powers of attorney and wills.
    
8. For any family, there is the possibility of a family conflict over your personal belongings if they aren't assigned to someone in your plan, or while you're still living.
    
9. Without a plan, a trust is not established for minors, dependents, and special needs beneficiaries. Only a custodial account can be created under the UTMA, and the functionality and use of this account is severely limited.
    
10. Lastly, a plan that is not updated might be just as bad, if not worse, if a lot has changed between now and the time you put the plan together.

If you need assistance with your estate plan, please contact our office today at (215) 706-0200.

Monday, February 21, 2011

Is Probate a Concern in Pennsylvania?

Should you worry about whether your estate will need to go through probate or not in Pennsylvania? For the majority of Pennsylvania residents, probate is not a concern for them or a burden on their family. However, there are times when probate should be avoided. A good estate planning attorney will analyze your situation and determine the appropriate planning strategies.

In general, probate is the process of your executor formally registering your will, hence the office that they go to is named the “Register of Wills.”

Pennsylvania is ahead of the curve in having streamlined the probate process years ago. Other states, notably California and Florida, still require court supervision, thus ratcheting up the costs of probate in those states. In Pennsylvania, the probate fees are reasonable. Yes, an attorney should still be retained by the Executor to ensure the process is handled absolutely correctly. But the cost of probate generally speaking is still far less than it would be in several other states.

Therefore, Pennsylvania is not a “living trust” state where the majority of residents have a revocable living trust rather than a will. Instead, many PA residents use will-based estate plans. That doesn’t mean a living trust never makes sense for PA residents. Sometimes, people who believe they need a “simple will” actually need much more strategic and careful planning. The best advice is to arrange for a consultation with a qualified estate planning attorney.

At our firm, we offer a complementary 60-minute consultation for estate planning matters. If you wish to have your plan reviewed, or need a plan crafted for your family, we invite you to call our office at (215) 706-0200.

Tuesday, January 04, 2011

Legal Vault

The Value of LegalVault Online Storage

Our firm has recently seen a surge in the enrollment and use of LegalVault, the online document storage and information service.

People always ask us, where should I store my documents? What happens if I lose my will, or lose my power of attorney? What happens if my executor or power of attorney cannot find my estate planning documents? One of the biggest concerns is making sure a hospital and doctors have a copy of your living will and health care power of attorney if needed.

LegalVault solves many of those problems. LegalVault offers a secure web site to store your estate planning documents and any other vital information. Only you and your attorney can access all of your documents, and only your health care provider/hospital can access your medical power of attorney and living will.

One of the biggest advantages of using LegalVault is that you’re given a laminated emergency ID card to carry with you. This card provides hospitals and doctors direct access to your medical power of attorney and living will only. This solves a significant problem of you or your loved ones not having the physical documents available when admitted to a hospital, which is when the hospital usually asks to see such documents.

If you are interested in learning more about LegalVault and how to enroll, please call our office today at (215) 706-0200.

Monday, December 27, 2010

When To Plan

When is the right time to start planning your estate? It really depends on your concern, but we help a range of people plan, from those in their 20's through the 90's.

It is especially important to plan if you have young children, or are newly married. You need to ensure a guardian is appointed for your children in case something happens to you and/or your spouse. Also, you want to ensure you have adequate life insurance for your children, and a trust set up in case something happens to you while they are still underage.

If you have grandchildren, you should encourage your children to engage in estate planning if they haven’t already.

Everyone, whether you’re 20 years old or 90 years old, needs a basic estate plan, which includes a will, financial power of attorney, and health care power of attorney (with a living will).

As you build up your 401(k) or IRA, you should see an estate planning attorney to ensure that your beneficiary designation forms are properly completed, and that these accounts are coordinated with your overall estate plan.

When you get into your 60’s, you should consider seeking the advice of an elder law attorney. Medicaid laws make it very difficult to shelter assets in case a spouse goes into a nursing home today. The earlier you plan, the better.

Everyone should update their estate plan every few years, to ensure the documents are still an accurate reflection of your wishes.

As you grow older, your needs will change. You may need more advanced estate planning. Some reasons for needing more advanced planning include:

• Family member with special needs
• Family member with health issues
• Estate value grows
• Property in multiple states
• Family conflicts
• New family members
• Charitable intentions
• Asset protection issues

If we can assist you with any estate planning matters, please do not hesitate to reach out to our office for a complementary consultation by calling (215) 706-0200.

Monday, November 29, 2010

Storing Your Estate Plan Online

Our firm is pleased to offer a secure online service called LegalVault, which allows our clients to store all of their estate planning documents.

There are two levels of access to LegalVault, one level for health care providers only, and the other level for you and your attorney.

The most important level of access is for your health care records. When you enroll in LegalVault, we’ll give you a custom ID card so that if you become sick, disabled or incapacitated, a hospital can immediately access your health care power of attorney and living will. Hospitals will only have access to these documents, and no others. When someone is ill, the ability to access these documents immediately reduces error, and reduces burdens on family.

The other level of access is for you and for your attorney. You can store copies wills, trusts, financial power of attorney and any other documents that you wish. You can also provide instructions for your Executor directing him or her to where your original documents are located. The benefits of storing the documents online include ensuring authenticity, providing peace of mind, reducing clutter, and staying organized. At the appropriate time, when your executor needs access to your LegalVault account, your attorney will provide him or her that information.

Security is key, and LegalVault is proud to use sophisticated security systems on par with major banks security systems.

For more information about LegalVault or to enroll, simply call our office today at (215) 706-0200.

Monday, November 15, 2010

Leaving Your Stuff To The Kids & Grandkids

Leaving your estate to your kids and/or grandkids is often a prime objective of many clients we meet with.

Every family situation is different, but in many cases, it often does not make sense that a child or grandchild receives a check from your estate, to do whatever they want with.

Why not? Quite simply, once they receive that check, they have full control over it. That means their their spouse, any creditors that come after them also have potential control over it. What if your child is involved in a lawsuit? What if he or she is in a high risk profession? Bankruptcy proceeding? All of these issues present a critical threat to preserving the inheritance you have left your child or grandchild.

When I help people with their estate plan, I will often hear things like, “my children would never get into trouble.” But the fact is, we just don’t know. One of the most valuable aspects of planning is taking into account a range of possibilities, and then planning for all of them.

At our firm, we can create an asset protection trust for you within your Will that allows your child or grandchild the flexibility to take from the trust when they need it, for things like education, and maintaining their general lifestyle. This mechanism ensures the trust is used for valid purposes only, and isn’t raided by creditors, ex-spouses, the IRS, and litigation.

Most important to you is we can make this planning tool affordable for you, and easy to understand. Let us know if we can assist you or someone you know in this type of planning. Call us today for a complementary consultation at (215) 706-0200.

Monday, October 18, 2010

Top 10 Signs It's Time To Review Your Plan

Your estate plan should be reviewed on a regular basis. Here are ten signs that it is time to review it. If you are not sure whether your plan needs to be altered, get in touch with our office at anytime.

1. Your plan was crafted over five years ago.
    
2. You moved to a different state.
    
3. You got re-married, or got divorced.
    
4. You’ve been blessed with grandchildren.
    
5. You no longer talk to one of your kids, or you have reconnected with your child.
    
6. You are now widowed.
    
7. You have acquired significant assets, or lost substantial assets.
    
8. You don’t feel that your plan really meets the test for a good estate plan: “Give what you want, to whom you want, when you want and how you want.”
    
9. You have over $1 million in assets, or you and your spouse together have over $2 million in assets, which means there may be pending estate tax implications for you.
    
10. You’re worried about your kids, either because they spend too much, they are in a high risk profession, they may get divorced, etc.

In general, any time that an event occurs that changes your life or your family should prompt you to review your plan. We are pleased to provide a complementary consultation to you if you wish for our office to review your plan.

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

Pass the word on: If you know someone who can benefit by reading this blog, please forward it on to them, or subscribe your friend or family member through this link.

Wednesday, October 06, 2010

The Will of Teddy Pendergrass

The famed Teddy Pendergrass, who died in early 2010, is back in the news. It seems that his second wife and son are both locked into a will challenge. 

Will challenges are never fun, and as you'll see from the article, become nasty and time consuming battles.

How do you avoid what happens to Mr. Pendergrass' estate? 

• Never keep your old wills, or copies of old wills. Whenever you re-write your will, destroy the old ones immediately.
   
• Never write anything on your will, nor add or remove pages to it.
   
• Keep your will in a safe place, usually a fire proof records safe at home. 
   
• However, depending on your age and circumstances, you can leave the will with your executor (in this case, if Teddy really wanted his son not to be cut out, perhaps he should have followed my instructions, particularly this one).

Here is the article link. Enjoy: Philly.com Article

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

Pass the word on: If you know someone who can benefit by reading this blog, please forward it on to them, or subscribe your friend or family member through this link.

Tuesday, October 05, 2010

Where Should I Store My Will?

Should you keep your Will in a safety deposit box at the bank? Probably not. But conventional wisdom, at least in the past, has been to favor storing Wills and Powers of Attorney in safety deposit boxes. 

It doesn't make much sense to keep your estate planning documents there for a couple of reasons:

• Banks are not open 24/7. You don't want to delay the ability for your Executor to be able to get possession of your Will or Power of Attorney.
   
• Depending on who your Executor is, he or she may face hurdles in opening the safety deposit box, particularly if they are not a joint owner of the box.
   
• How often do you check your safety deposit box? We always recommend that people review their documents every couple of years. Having them stored in a bank does not make this easy, nor does it encourage review of the documents.

We typically recommend that clients store their original documents in a fire-proof records safe at home. Walmart, Target, Staples, etc. all sell these boxes for approximately $40. This protects the documents against any wind, rain and fire damage, but allows you to access them at your convenience.

If there is concern that a family member may try to tamper with your Will, then there are alternatives to storing your documents, including our online Legal Vault service. 

Additionally, if there is great concern that a family member would tamper with your Will, or that a potential Will challenge is possible, there are other estate planning tools that can help to prevent this. 

If you have any questions about storing your Wills or Will challenges, please do not hesitate to reach out to our office.

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

Pass the word on: If you know someone who can benefit by reading this blog, please forward it on to them, or subscribe your friend or family member through this link.

Monday, September 20, 2010

Living Trust?

Do you really need a living trust? Living trusts, also known as Revocable Living Trusts (RLT's) have been an on and off fad in Pennsylvania for at least the last fifteen years.

There appears to be a resurgence in the discussion about living trusts. Think Suze Orman, or the mailers you probably get emphasizing the absolute necessity of a living trust.

A living trust is not a silver bullet, and they are not for everyone, particularly in Pennsylvania. Certain states, like California or Florida, have a probate process that is much more burdensome than the one in Pennsylvania. Pennsylvania's probate process is much simpler, and is not court supervised.

In other words, if you are only interested in having a living trust to avoid probate, and you live in Pennsylvania, you may be spending a lot of money on something you really do not need.

Another misconception is that a living trust will allow a person to avoid taxes. This is categorically untrue. Any tax saving or tax reduction strategies can be carried out and executed with a will just as easily as with a living trust.

Because probate is simpler in Pennsylvania and living trusts are not tax avoidance tools, many people in Pennsylvania have wills as their fundamental estate planning tool.

A living trust does have benefits for certain cases. You should seek an estate planning attorney to help educate you about what tools you need for your estate plan. Estate planning is a very individualized field of law, and the tools you need depends on your family, your circumstances and your goals.

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

Pass the word on: If you know someone who can benefit by reading this blog, please forward it on to them, or subscribe your friend or family member through this link.

Tuesday, September 07, 2010

Estate Planning To-Do List

Make sure you have your estate plan up to date. Here is a quick to-do list. There is no better time than now to get serious about creating or updating your plan.

1. Make sure you have an updated Last Will & Testament: This describes your wishes for your estate upon your death. You may need a more advanced Will or even a trust, depending on your needs.
    
2. Make sure you have updated powers of attorney: You need powers of attorney for both for your general/financial affairs and for your health care. These ensure that if you become disabled, someone will have the power to step into your shoes.
    
3. Check your beneficiary designation forms for life insurance policies, IRA's, 401(k)'s, etc: Many people forget to update these forms for various accounts. Any account with this type of form does not pass through your Will or trust!
    
4. Make sure you know where your original Will and powers of attorney are: They should be in a fire-proof records safe in your home, not a safe deposit box at a bank.
    
5. Communicate: Ensure that your agents (executor, trustee, powers of attorney, etc.) know their respective roles, and know where your original estate planning documents are.
    
6. Keep Up To Date: Continue to review this blog for updates on the federal estate tax. It could potentially come back in 2011 and effect many more people than it used to. If that occurs, you will need to have your estate plan reviewed.

If you need your estate plan created or reviewed, contact our office today at (215) 706-0200 for your complementary consultation.

Tuesday, August 17, 2010

Check out our events

We keep our Workshops list updated, and we have some great events coming up in the next couple of months. 

Please register today for a class on managing your wealth/retirement planning, or one of our more informal Lunch 'n Learn events held in our comfortable offices.

Seating is limited for all events, so register today. Here is the link for our events: Workshops.

We discuss retirement planning, estate planning, tax planning and our comprehensive approach to retirement, among other regularly discussed topics.

Monday, August 02, 2010

Estate planning in the uncertain economy

Proper estate planning during the challenging economic times we face is essential. Sure, proper estate planning does come at a cost. However, the cost of not planning is potentially much greater for your family.

Estate planning is for everyone, regarding of income and asset levels. The belief by some that estate planning is only for millionaires is simply not reality.

What are the benefits of estate planning during uncertain times?

• Make sure that if you become disabled or incapacitated (over 50% of us do at some point in our lives), we have a plan ready so that no guardianship proceedings are needed
• Understand exactly what your estate is worth -- many families find this extremely valuable
• We can assist you in coordinating your last wishes with a retirement plan that will ensure you do not run out of money as long as you live
• Although the times are uncertain, you will feel better knowing that you have a plan that is certain to work for your family when it needs to be executed.

We do not believe estate planning has to be expensive, but we do believe each plan must be effective. Contact us today at (215) 706-0200 to set up your complementary consultation today.

Friday, July 30, 2010

Ten Common Estate Planning Mistakes

As heard on our radio show on July 31, 2010.

1. Discounting the importance of your plan. Many people think they only need a “simple will”, Period. Every family requires an attorney who will carefully analyze their situation.
    
2. Not hiring a “specialist” – letting a general practice attorney handle your estate plan.
    
3. Thinking that you can break the rules and get away with it – for example, not probating a will or not paying inheritance taxes.
    
4. Not planning at all.
    
5. Avoiding dealing with conflict within family that could effect the plan later on.
    
6. Joint ownership to avoid probate.
    
7. Using a revocable living trust to avoid taxes. Living trusts do NOT help you avoid taxes.
    
8. Waiting until you are in poor health to complete your estate plan.
    
9. Not reviewing your estate plan at least every few years.
    
10. Assuming “things will work out” or your kids will “do the right thing.”

If you need estate planning assistance, please do not hesitate to give our firm a call at (215) 706-0200 or email us.

Friday, June 11, 2010

Kids Inheritance: Freedom vs. Control

When we are concerned about the well-being of our children, estate planning quickly becomes complex.

Why?

Because if we have concerns about our children but love them unconditionally, we want to make sure they spend their inheritance wisely. Yet, we often hesitate about limiting their ability to control their inheritance.

Clearly, we must find a compromise – we can’t discount our concerns and fears, and we also can’t discount the fact that we feel we should completely trust our children.

When we create a trust for our children, we’re setting rules. Rules are found everywhere, from home, to the work place, and our society at large. Why shouldn't we have rules for a trust? When we give our children money to spend, sometimes we give it to them unconditionally as a gift. But more often, we give them money for specific things—a new down payment on a home, a new car, education, money towards a marriage, etc. If we gave our children money towards a masters degree, and they ended up going to the casino and spending it all, would we be very happy?

Having an independent co-trustee coupled with rules on trust distributions protects your children from themselves and others. It says to your children, I love you very much, and I want the best for you for the rest of your life and even perhaps your own children’s lives. Of course, others will look at the same plan and shrug their heads, saying they can’t fathom telling their kids how to spend their money.

You have to decide which camp you fit into – the freedom camp or the control camp. There is a compromise. But you cannot have absolutely freedom and absolute control.

Thursday, May 20, 2010

Estate Planning in Uncertain Times

When I assist people in estate planning, we look at many scenarios.  We plan for the “god forbids” and hope they never happen, but if they do, that they happen far down the road. Who wants to plan 20, 30 or 40 years out when their true concern is how bad or good their portfolio will look tomorrow?

I understand. In these uncertain times (and yes, we see a recovery happening, but who knows how much or how fast?), many people are afraid to engage in estate planning. Forget uncertain times… even in good times, 60% or more of adults in this country don’t plan! It’s no wonder I get calls daily to help clean up messes on estates where the deceased person left no will.

For those that don’t plan during uncertain times, they likely believe that whatever they put on paper today, will change tomorrow. Very true. However, I approach estate planning as a lifelong process, one that doesn’t stop after the first time you create a plan. Just as our lives change on a regular basis, so to should our estate plan. If we thought about estate planning as a one-time process, we would all be in a stalemate.

Remember, what you put on paper today is not written in stone. You can always change it tomorrow. In fact, I encourage my clients to continue to update their plan (with the assistance of an attorney) whenever something significant in their lives change, and to at least review their plan every few years.

For our readers that do have plans, have you thought about your plan, and has it been reviewed and updated in the last few years? For those that don’t have plans, is it because it just hasn’t been the “right time” yet? Even in the most uncertain of times, having a plan will only benefit your heirs and loved ones. Now is the right time to update your plan, and to create one if you don’t yet have one.

Wednesday, April 07, 2010

Vital Estate Planning Documents

Only 35% of Americans have their estate plan completed, either with a will or trust. Therefore, over 6 out of every 10 people reading this have not done any planning! Instead, they have decided to let the government do their planning. Not a good idea.

For those putting off planning, you've likely been talking about planning for a while now and keep pushing it off. Being in this profession, I see way too many unfortunate circumstances where planning was not done before time was up. It is vital to put at least a basic plan in place today. Here is what you need to at least get started:

1. Last Will & Testament: The will is the document that lists your wishes after you pass. You will names your executor, the person who handles your estate, lists who the beneficiaries are (a beneficiary is the person who receives property from you), and lists any immediate family members that you have disinherited. It can also name a guardian for minor children, and list your wishes on whether you want cremation or not. Wills can be more advanced, and can include provisions such as setting up testamentary trusts so that all assets are not immediately distributed. You must have a will. If you don't, the government has what's called an intestate/intestacy statute that lists in detail who in your family will take property. You will have no control, and neither will your heirs!
    
2. Financial Power of Attorney: This document controls all of your non-medical affairs when you become disabled or incapacitated. Sometimes it is more important than having a will. These must be updated every few years or so because some institutions, such as banks, investment houses, etc, will say they are "stale" if more than 5-10 years old. This is a powerful document, giving your agent (the person who acts on behalf of you) the power to manage your assets, property, businesses, accounts, etc. It also may give your agent the ability to handle your retirement accounts (be careful with this) and to make gifts (also another one to be careful about). You can also use this document to appoint a guardian for yourself or for your children during your incapacity.
    
3. Medical Power of Attorney / Living Will: In Pennsylvania, the medical/health care power of attorney and living will can be combined into one document. The power of attorney controls while you are alive but disabled. The living will controls at the end of life phase when there is no realistic hope of recovery. This document gives the person acting on behalf of you to speak with your doctors, hire and fire your doctors, tell the doctors what to do based on your wishes, etc.

These documents are only a start to a solid estate plan. Estate planning requires a lot of thought and analysis, and takes into consideration you, your family, the legacy you want to leave and the assets that you currently own. More advanced estate planning can often be necessary to save taxes, probate fees and provide asset protection.

Finally, if you already have a basic estate plan, make sure to update it at least every five years, if not sooner.

Please contact our firm today if we may be of assistance. We can provide an economical basic estate plan that will be the foundation of a sound estate plan. Inquire about our outstanding services today.

Sunday, March 14, 2010

When To Update Your Estate Plan

Sunday, February 28, 2010

Values, Service and Experience.

We want you to choose an estate planning attorney that is right for you.
Consumers often find it difficult to select the right estate planning attorney. We cannot tell you how to choose the perfect attorney to handle your estate planning needs. Each attorney and law firm has different values, levels of service and expertise. Below, learn about our firm's values, level of service, and wide-ranging experience that we provide. If you are an existing client, this is a great item to forward to your friends and family. For prospective clients, we hope that this will help you in selecting an estate planning attorney in the Philadelphia area that meets your needs.

Our values

* Estate planning is a highly personal matter, and every family is unique.

* Estate planning is done out of love for your family to provide for you and your loved ones for generations to come.

* We value a client-centered approach to the lawyer-client relationship. We value the knowledge, experience, wishes and hopes of each and every client that we meet with and make sure that we actively listen to what the client wants.

Service

* Our clients tell us they love the fact that we return calls and emails on the same day.  We do not allow any client to get lost in the shuffle.

* We do not cap our initial complementary consultation at 60 minutes. Our consultations usually last over 2 hours, so that we can get to know your family, you can get to know us, and we can see if we're a good fit.

* The documents that we craft for you are organized, easy to read and professional. We provide you an original and a reference copy in a planning binder that allows you to have a central resource for your estate, financial and memorial plans.

* We offer maintenance programs that permit doctors to instantly access your health care documents on a secure web site, and allow your designated family members to access your estate planning documents when appropriate.

Our Expertise

* As a member of the national organization WealthCounsel, we have access to the latest, most innovative estate planning techniques and technology.

* We offer a holistic approach to retirement planning, and our firm is part of an umbrella of highly respected professionals that can assist you, if needed, on your retirement financial plan, long term care insurance, life insurance, and tax planning.

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We know that it is not easy to choose the right attorney and that not every attorney is right for every client. That is why we offer a complementary consultation. We hope you'll take us up on the offer to meet with you to determine if we can assist you in crafting your estate plan.

Thursday, February 25, 2010

Jeremy Attends Estate & Elder Law Symposium

Yesterday, your estate planning attorney Jeremy A. Wechsler attended the Pennsylvania Bar Institute's annual Estate & Elder Law Symposium. Jeremy believes that continuing to learn the latest estate planning techniques and case law is crucial to maintaining top standards in practice.

For instance, several key cases came through the Pennsylvania courts this year regarding estate planning. A big case, Slomski, has huge ramifications for powers of attorney, and whether certain language in your power of attorney gives the agent the ability to change beneficiaries on your retirement accounts. Was your power of attorney drafted a while ago? Better have it reviewed by us to make sure the language is proper. In fact, there have been dozens of cases throughout Pennsylvania this year that could have estate and elder law ramifications. Bottom line is, your documents from 10 or 20 years ago may not work today.

Other topics discussed yesterday were new and current asset protection strategies that actually work in Pennsylvania. Asset protection simply means planning ahead of time to keep your assets as safe as possible, using legal strategies. There are many strategies to protect your assets -- it's really about knowing the law. What assets can creditors get to? What is restricted? What strategies can you use to get money out of your estate and into your son or daughter's hands? What about strategies to protect your son or daughter with that estate? These are all questions we can help you with.

Also of interest was the latest elder law issues, such as Medicaid planning and the Medicaid application process, social security issues, and family caregiver agreements.

If you need a review of your estate plan, or need an estate plan crafted, make sure you visit with an attorney who keeps up with the latest law and most innovative techniques that actually work.

Tuesday, February 16, 2010

New and Improved Radio Show

Catch Jeremy and his dad, the "retirement quarterback" Peter Wechsler, every Saturday from 8:30 AM to 9:30 AM on your AM dial, 1340 WHAT. You can also listen online at www.am1340what.com.

Each week on our show, we discuss current estate planning and retirement planning issues. This week, we're going to be rolling out a couple of new segments, including Take Five, where we feature listeners questions that we get via email (you can email us your questions at info@jawatlaw.com).

It's a sure bet that you'll not only learn a lot on our show each week, but have some fun too. Peter and Jeremy, father and son, are known to banter on for quite a bit. So grab that cup of coffee, turn on your radio, and tune in every Saturday at 8:30 AM.

Thursday, January 28, 2010

Radio Show Moving To Saturday's at 8:30 AM Starting 2/7

We are excited to announce that our radio show will move to 8:30 AM to 9:30 AM every Saturday. Our show will now be an hour long, giving us double the time to talk about estate planning and retirement planning issues. Look for more special guests and in-depth discussions.

You can tune into our radio show by turning your radio dial to AM 1340, or listen online live at www.Am1340WHAT.com.

Friday, January 22, 2010

February Workshops

Join us on February 23, 2010 at the Solaris Grille in Center Square or February 25, 2010 at The William Penn Inn for our workshop that will help you to Keep From Losing Your Stuff.

Clients love our holistic approach to retirement planning. An estate plan on its own is simply not as valuable without working in concert with a retirement planner, financial advisor, CPA and long term care specialist. At this workshop, we will bring you a new, comprehensive approach to wealth management and preservation. We'll teach you how a coordinated approach can add value to you and your family's finances and legacy. Learn about asset protection strategies, how to craft the perfect living trust, and why every estate plan must be unique for your family.

The classes are free, and seating is limited. In addition, a complementary delicious dinner will be served! Just click on CLASSES on the menu bar above to register for one of the two workshops. We hope to see you there!

Saturday, January 02, 2010

Estate Planning 2010

Welcome to 2010 and a happy and healthy new year to everyone. We can all use a fresh start from time to time, and the new year is ripe for new, innovative ideas and resolutions to grow and improve. Furthermore, as we enter the next decade, we are reminded (most of us anyway) how quickly time passes, and that we need to make the most of every day with our loved ones...family, friends and others.

With that said, 2010 is going to be an important year for estate planning for many people. We are in a state of flux right now. Here are some updates and some ideas to consider in 2010:

- The federal estate tax is currently on hiatus, but with that, step up in basis was also repealed for the year. This could put a squeeze on many people.

- Your retirement assets are probably one of the largest assets you own, yet they are often not protected. We can help you build an IRA Inheritance Trust or retirement trust to protect this asset and also allow them to grow, especially if you wish to see these assets passed on to your heirs and grandkids.

- So many people have not updated their estate plans for a long time. I hear people all the time saying things like, they do not know where their will is... they don't know who their executor is... they had a will amendment (codicil) written but they never signed it... they haven't updated their will since 1985. I recommend in any of these situations to schedule an appointment with us as soon as possible to make sure your estate plan is up to date.

- Related to that, in modern estate planning, regardless of tax planning, a will is often not adequate to protect your assets especially if you have minor children (or even grown children!). Think about coming in to sit down with us and evaluate whether your estate plan needs some new tools from our toolbox.

Have a great 2010 and be sure to keep reading our blog for the latest in estate planning news and techniques.

Tuesday, December 29, 2009

January Classes Posted

Join us on January 19, 2010 or January 21, 2010 at The Buck Hotel for our new class, Keep From Losing Your Stuff.

We're teaming up with a premier retirement planner and long term care specialist to bring you a new comprehensive approach to wealth management and preservation. We'll teach you how a coordinated approach can add value to you and your family's finances and legacy.

The classes are free, and seating is limited. Just click on CLASSES on the menu bar above to register for one of our four classes (three on Tuesday 1/19, and one on Thursday 1/21). We hope to see you there!

Friday, December 25, 2009

Happy Holidays

Thursday, December 17, 2009

On The Radio Show This Sunday

This Sunday on AM 1340 WHAT (Philadelphia), Jeremy and Peter Wechsler are going to be discussing one family's estate and financial plan. The family, based on real clients but many factors changed to protect the identities of the clients, is an interesting case, and most people will be able to relate to at least bits and pieces of the situation. We're going to take you through the family, both good and bad, look at their current estate and financial plan, and then discuss our possible recommendations. Sure to be a great radio show, so check it out. Every Sunday at 9:30, AM Dial...1340 WHAT. You can listen online as well at www.Am1340What.com.

Sunday, December 13, 2009

Ethical Wills

We just posted new information about ethical wills. Check it out under the Resources tab.

Sunday, December 06, 2009

Continuing Education

Saturday, December 05, 2009

Estate Planning Statistic

Thursday, December 03, 2009

Catch Us On Facebook

Tuesday, December 01, 2009

Welcome to our new blog

Welcome to our blog, where you will find essential and timely information on estate planning.

Within estate planning, our blog will cover a variety of topics. We welcome you to subscribe to our blog by email or check back at our web site regularly for updates.

When you visit our blog, you'll find information on estate planning, living wills, advanced health care direcives, powers of attorney, revocable living trusts, wills, the federal estate tax, the Pennsylvania Inheritance Tax, same-sex and LGBT planning, non-traditional planning, special needs trusts, pet trusts and more.

We look forward to seeing you often!