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Asset Protection

Wednesday, June 21, 2017

Long-Term Care: Should You Count On Uncle Sam's Help?


There’s no doubt about it:  long-term care planning is stressful and costly, causing many people to simply ignore it and hope for the best. But it’s to their detriment. Some private nursing homes can cost over $12,000 per month these days, and the cost of nursing care rises faster than inflation. When I speak to prospective clients and clients, I get a lot of anxious questions about long-term care and nursing homes, but my answers provide little desire to plan for this possibility. Why? Long-term care insurance is expensive, and many of my clients do not have ideal assets to establish a “Medicaid Trust”.
Read more . . .


Tuesday, May 16, 2017

Five Things To Know About Legacy Planning


We did a lunch & learn last week on IRA Trusts, something you newsletter readers have read about, courtesy of me, all too often. IRAs are potentially great assets to pass on, but only if structured properly. Unfortunately, there are many pitfalls with IRAs and inheritances.

One issue that comes up a lot, at these events and in meetings with my clients, is the desire to pass things along to heirs and beneficiaries, but the worry that comes along with that that the recipient will squander that gift.  Not too many people trust an heir, especially a young one, with a significant sum of money.


Read more . . .


Wednesday, February 22, 2017

Making Sense Of Long-Term Care


Why don’t more people plan for long-term care? It’s probably one of the more difficult items to plan for due to the cost, the complexity and anxiety that comes with the thought of aging. Most people I talk to figure they’ll age gracefully, never leave their home and get in-home health care. While that is possible in more cases than ever today, nursing homes are at 92% occupancy in Pennsylvania and new ones continue to be built.

I’ve never talked to anyone who tells me they’re looking forward to going into a nursing home or that even wants to contemplate it. But for some folks, it’s a reality that they will face at some point.

Read more . . .


Tuesday, November 1, 2016

Top 10 Estate Planning Mistakes


We’ve all heard at least one estate planning horror story.  Or we’ve seen one on TV.  The surprise mistress that is given a large cut, the one child that has been written out of a will or feuding family factions each producing a different copy of the will.  It all makes for great TV and great drama, but chances are, you aren’t leaving your estate to a secret lover and you don’t want your estate plan to create a lot of undue stress.  But despite your best intentions, there are mistakes you could be making – unknowingly – that could produce a lot of drama after you’re gone.


Read more . . .


Tuesday, September 13, 2016

Lost? Check Your MAPT!


Are you concerned  about affording long-term care in the future should you or your spouse need it?  Or worse, the possibility that your estate may be depleted as a result of the costs?  Nursing homes today in Pennsylvania cost over $12,000 per month.  If you stayed in a nursing home for five years, that’s $720,000!!  It’s impossible to say when, if and how long you’ll need long-term care.  But the fact is, for everyone, it’s a risk worth insuring against.

If you’re not keen on long-term care insurance or life insurance with a long-term care rider, or you can’t get underwritten, another idea to consider is the Medicaid Asset Protection Trust (MAPT).

The MAPT is a sophisticated way to shelter assets in advance of needing a nursing home.
Read more . . .


Tuesday, May 17, 2016

Keep Your Estate Conflict-Free!


Prince is just the latest in a long line of celebrities who have failed to properly plan their estate. But it's not just celebrities who mess up or brush aside estate planning. Statistics show that at least half of adults in the United States don't have an estate plan.

Lawyers across the country continue to report an increase in estate litigation. There's no perfect solution to solving this problem, but a great place to start is with an estate planning attorney that you trust.
Read more . . .


Thursday, July 9, 2015

Procrastinating & Estate Planning

Many people feel guilty about procrastinating about their estate plan. But procrastination is normal. Frankly, not many people want to consider their own demise. But you can't wait until it's too late to start your estate planning. Remember that it's not just about you, but it's about your family and legacy. The younger you are, the more options we have to protect your estate and the easier it is to plan.

Make sure you have valid Powers of Attorney, a will and/or a trust, and any other estate planning tools that your attorney deems necessary.

Estate planning is not just about tax planning. Today, it's about a few more things:

  1. Your legacy -- in this complex world, a poorly written estate plan can tear a family apart forever.

  2. Your long-term care plan -- we are living longer, and long-term care is expensive. How will you protect your family while paying for your long-term care?

  3. Asset protection for your loved ones -- no one wants their hard earned savings to be part of their heir's divorce settlement, lawsuit judgment or creditor claim.

Now is the best time to plan or review your existing plan. Call our office today at (215) 706-0200 to schedule your complimentary telephone consultation at a time convenient for you.


Sunday, February 15, 2015

Do You Need a WILL or ESTATE PLAN?

It's not uncommon to hear people confuse a will and an estate plan. A will can be part of an estate plan, but is not a complete estate plan.

The question is, what is a "complete" family estate plan? Here's my definition broken down into bullet points:

  1. Provides a legacy that your loved ones will be proud of for years to come;
  2. Ensures your property passes to whom you wish it to pass;
  3. Protects the inheritance from outside forces, such as creditors, divorces and lawsuits;
  4. Addresses incapacity and long-term illness planning; and
  5. Saves your heirs every tax dollar possible, and saves them from making mistakes when inheriting your estate.
 
A Last Will & Testament only helps with one of the five items, item #2.  Item 2 is important, but aren't the other four equally important? 

I could make a case that each one of the five are the most important items on the list, but the truth is, they're all important. One remarkable but little-known truth of estate planning is that in the modern estate, typically only half of the estate passes through the will. The other half passes by beneficiary form. Think about your IRA's, life insurance policies and annuities: They all have beneficiary designation forms. IRA's in particular offer great rewards, but great dangers to your heirs if they inherit them without knowing what to do. 

The best advice (perhaps biased advice) that I can give you is to design your entire estate plan with an estate planning attorney. He or she can walk you through all of the steps, and discuss all of the points above. Every plan is different. The plan really depends on your goals, the types of assets you own, your family and more. 

Don't get a false sense of security if you have a simple will. If you haven't visited with an estate planning attorney, take the initiative to do so. If nothing else, you'll learn a lot!

Tuesday, November 18, 2014

"Simple Will"

Is a simple will really so simple? Jeremy Wechsler shares with you his thoughts about what a simple will really means, and why it is a disservice for you and your family. Read more in this blog post.


Read more . . .


Tuesday, September 16, 2014

Five Ideas To Improve Your Estate Plan Now

  1. Use Trusts Instead of Outright Distributions: An outright distribution offers no protection to your loved ones and you have no control to ensure the inheritance stays in your bloodlines. Asset protection is crucial if you want your estate plan to work through the years and perhaps generations to come. Asset protection is important to prevent risks including divorce, lawsuits and creditors from eating up an inheritance. Also, asset protection can protect beneficiaries from themselves, if they have issues that would prevent them from managing an inheritance properly.

  2. Create a Long-Term Care Plan: Previously, tax planning was what motivated clients to plan their estates. Because estate taxes are no longer an issue for most people, the new estate planning is long-term care planning. The question to ask yourself is, what will happen if I need to go into a nursing home or need long-term care? Long-term care costs can significantly diminish an estate leaving nothing for your spouse and loved ones. Insurance is an option but not the only option. The use of Medicaid Asset Protection Trusts are also a possibility. Build a long-term care plan today to ensure you preserve at least part of your estate for your heirs.

  3. Regularly Update Your Estate Plan: Updating your estate plan on a regular basis will bring you peace of mind and ensure that the plan will work the way it should work. Normally, it’s best to update your plan at least every 3-5 years, or sooner if a major family event occurs, or circumstances change. As your life changes, your plan must change with it.

  4. Ensure Your IRA Becomes a Stretch IRA: Your will does not control your IRA. If you create asset protection trusts in your will for your heirs, those trusts will not protect the IRA. IRA’s pass by beneficiary form, and you run the risk of your heirs cashing out the IRA’s as lump sum distributions, taking the “Stretch IRA” off the table. It’s called a Stretch IRA because a younger beneficiary can keep the account as an IRA and stretch it out over his or her lifetime. You can use a special retirement account trust to ensure the beneficiary takes the Stretch IRA, the IRA has asset protection, and the money stays in the bloodlines.

  5. Consider Life Insurance: Life insurance is tax free cash for your loved ones, that can help pay for final expenses, debts, taxes and administration costs. In other words, life insurance can be a great way to leverage your estate. Life insurance may also have benefits for you while you’re living—it can be used as an investment tool, or you can choose a policy that has a long-term care rider, allowing you to use the death benefit towards your long-term care costs.

 

These are just a few ideas to improve your estate plan now. Always consult with a professional when planning your estate.

For a complimentary estate planning consultation, contact our office today at (215) 706-0200.


Tuesday, August 26, 2014

Joint Accounts with Children = Poor Estate Plan

Three Reasons Joint Accounts May Be a Poor Estate Plan

By Jeremy A. Wechsler, Esq.
Your Estate Planning & Asset Protection Attorney

Many people see joint ownership of investments, bank accounts and real estate as an inexpensive way to avoid probate since joint property passes automatically to the joint owner upon death. Joint ownership can also be an easy way to plan for incapacity since the joint owner of accounts can pay bills and manage investments if the primary owner falls ill or suffers from dementia. These are all legitimate benefits of joint ownership, but three potential drawbacks exist as well described below. Please note that I am discussing joint ownership with your children or other loved ones, excluding your spouse. Jointly owning property with a spouse is normal and makes complete sense. 

Drawbacks to Joint Accounts:

  1. Risk: Joint owners of accounts have complete, unconditional access and the ability to use the funds for their own purposes. I have seen children who are caring for their parents take money without first making sure the amount is accepted by all the children. In addition, joint assets are available in the case of divorce, creditor claims, bankruptcy, lawsuits and more. Joint assets could be considered as belonging to all joint owners if applying for public benefits or financial aid.

  2. Inequity. If you have one or more children on certain accounts, but not all children, at your death some children may end up inheriting more than the others. While you may expect that all of the children will share equally (“they will do the right thing”), it is far from a guarantee. If you have several children, you can maintain accounts with each, but you will have to constantly work to make sure the accounts are all at the same level, and there is little guarantee that this plan will actually work. This type of planning will only create discord and conflict in the family later on.

  3. The Unexpected. A plan based on joint accounts can truly fail if a child passes away before the parent. Then it may be necessary to seek guardianship to manage the funds or they may ultimately pass to the surviving siblings with nothing or only a small portion going to the deceased child's family. For example, a mother put her house in joint ownership with her son to avoid probate and Medicaid’s estate recovery claim. When the son died unexpectedly, the daughter-in-law was left high and dry despite having devoted the prior six years to caring for her husband's mother.

If you are concerned about incapacity, instead of joint accounts, consider using a power of attorney. It is much safer and does not give the appointed agent personal rights over your funds (unlike as a joint owner). The agent has a fiduciary responsibility to you and your beneficiaries.

Regarding probate and ease of administration, joint accounts are convenient but as described above, it presents risks. In Pennsylvania, probate is not a difficult or burdensome process. Also, property passing to children is taxed at a 4.5% inheritance tax rate, which is a relatively low rate compared to historical federal estate tax rates. With a well written will and trust, you can have peace of mind knowing your plan will work just the way you intend it to work, free of conflict and problems. Joint accounts may seem like an easy answer, but often create more headaches. Please review your estate plan to ensure that it will work as you intend for it to work. 

 


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The Law Offices of Jeremy A. Wechsler assist clients with Estate Planning matters in Willow Grove, PA as well as Abington, Hatboro, Dresher, Horsham, Bryn Athyn, Huntingdon Valley, Fort Washington, Jenkintown, Glenside, Oreland, Warminister, Wyncote, Ambler, Elkins Park, Flourtown, Philadelphia, Warrington, Cheltenham, Gwynedd Valley, Jamison, Feasterville Trevose, Richboro, North Wales, Blue Bell, Lafayette Hill, King of Prussia, Collegeville, Oaks, Phoenixville, Oxford Valley, Langhorne, Penndel, Bristol, Fairless Hills, Bensalem, Plymouth Meeting, Furlong, Philadelphia County, Bucks County and Montgomery County.

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