Last Will & Testament

Monday, May 14, 2012

Five Ways To "Upgrade" Your Estate Plan

Everyone must plan their estate. Otherwise, you run the risk of your affairs being a mess at your death and things not happening the way you intended. Make sure you speak with a qualified estate planning attorney to build your customized estate plan. Just like every person and family is unique, so is your estate plan. 

Here are five ideas for your plan: 

1. Testamentary Trusts Consider adding testamentary trusts to your will, either for your kids or grandkids. A customized testamentary trust has several benefits, including ensuring asset preservation, protection for minors, and more. A well-written testamentary trust is economical and can provide you peace of mind.
    
2. The Year of the Gift: Consider a sophisticated gift strategy. 2012 might be considered the "Year of the Gift" because of the large exemption amount of $5 Million that may disappear at the end of the year. Smart gifting can provide many benefits to you and your heirs, but you must ensure gifting is done properly and in a way that makes sense for you. Be careful about doing-it-yourself.
    
3. Write an ethical will: Most times, a Will or a Trust cannot capture the values, ideals, morals, judgments that you wish to pass on to the next generation. An ethical will can put those thoughts into words for you. Although it's not a legal document, an ethical will can be a great addition to any estate plan. 
    
4. Trust Strategy: Consider the use of trusts for certain needs. For beneficiaries on public benefits, a special needs trust should be established. If you wish to preserve assets against Medicaid spend down, a nursing home protection trust should be used. There are other trusts and strategies as well, and depending on your situation, they may make sense for your estate plan.
    
5. Communicate: Talk to your family! Communication is key for any estate plan to work. You don't need to tell your kids how much you have in your estate, but you should communicate your general intentions as to who the Executor will be, whether there are even or uneven distributions and why, etc. Surprises are never good and unpleasant or unexpected surprises can lead to lasting conflict. 

Please continue to update your plan regularly, and if you don't already have an estate plan, now is the time to put one into place!

Monday, May 14, 2012

Estate Planning & Online Accounts

Who gets access to your online accounts after you die?

You may have a plan for what to do with your physical belongings after you die, but what about your online accounts? In today's social media-dominated world, a person's digital presence lives on online even after he or she is gone. But who has the right to access those accounts? States have begun addressing this issue with new digital access laws.

Under current Facebook policy, if an account member dies, Facebook will remove the account at the request of family or put it into "memorial status," but it is very difficult for family members to get access to the account itself.  Family members may want access to a deceased loved one's account to read messages left by friends or to have the ability to contact the deceased's friends. 

Under Facebook's policy, the estate can have access to a download of account data as long as it has prior consent from the deceased or if it is mandated by law.

Such mandates are beginning to appear.  In 2010, Oklahoma became the first state to pass a law giving estate executors the power to access, administer, or terminate the online social media accounts of the deceased. Two other states -- Nebraska and Oregon -- are now considering similar laws. Under Oklahoma's law, the executor automatically has the power to act on behalf of a deceased individual and access a Facebook, Twitter, or e-mail account. The executor does not have to go to court to get access to such accounts.

While states grapple with this issue, it may be a good idea to provide some instruction in your will on how to deal with your online accounts once you die. Contact your attorney to determine if this is something you should add to your will. In addition, online services have also popped up that help people pass on the digital keys to their online lives.

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."

Tuesday, February 21, 2012

Update Your Estate Plan!

The Only Good Estate Plan is an Updated Estate Plan.

Lately, many of my newest clients have come to me with very old wills and powers of attorney. The plan is nicely done, folded and tucked in a nice envelope. The older the will, the harder it is for me to unfold. Once I dust it off, the will done on the typewriter is readable. 

In any case, it's a relief to me when these clients visit with me and actually become clients. My thought is, at least I can help this family update their plan, because most of the time, the plan no longer reflects their wishes, values, or the realities of their family situation. 

Many times, the kids were young when you first sat down to make your will. The needs were different. The choice of executor or power of attorney may be a sibling that you no longer feel comfortable with having serve in these roles. The estate size and value have changed, as well as the types of accounts and assets you own. Maybe there has been a second, or third marriage. You get the point! 

That's why the only good estate plan is an updated one. An old estate plan may have provisions in it that go against your current wishes today. 

If you have an old estate plan, I applaud you for doing some planning in the first place. Too many people fail to plan. But now, take the next step and make sure to keep that plan updated. I recommend checking your plan every 3 years, and updating it every 5-10 years. Those are rough guidelines. If there are any major changes in your family or circumstances, update the plan immediately.

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, December 12, 2011

Estate Tax Update / 4 Common Estate Planning Questions

Monday, November 28, 2011

Evaluate Your Estate Plan

Monday, November 21, 2011

Executors; Estate & Gift Tax Update

THE ROLE OF THE EXECUTOR... The Executor is the CEO of an estate. The individual or institution filling that role is, in essence, the owner of your estate when you pass on, and has a “fiduciary duty” to do what is in the best interests of your beneficiaries, the people you leave your stuff to.

Executors and trustees (if you have a living trust instead of a Will) need to be careful and diligent about their work, and consider hiring outside assistance (attorney, CPA, etc.) as needed to ensure accountings are filed correctly, and inheritance tax and estate tax returns are prepared properly.

Transparency is key when you are an Executor. For instance, sharing a full accounting and a copy of the Will with the beneficiaries goes a long way.

Also, if an estate has creditors, you must be diligent in ensuring they receive proper notice. If an Executor fails to give proper notice to creditors and the Executor distributes the estate, there is a possibility that the creditor could later appear, make a demand, and hold the Executor personally liable.

Being Executor is not impossible to handle without a lot of outside help, especially for simple estates. But where there are complexities, beneficiaries with some conflict, creditors, etc., it makes good sense for your estate for the Executor to consider outside assistance. Remember, the Executor has a legal obligation and a fiduciary obligation.

FEDERAL TRANSFER TAX UPDATE... The so-called “super-committee” had apparently floated the ideas of changing the gift tax and federal estate tax before the year is out. Fun rumor, but not going to happen, as we have heard over the weekend that Congress is... surprise, surprise… deadlocked!

The gift tax exclusion stays basically the same in 2012. You can make $13,000 annual gifts to as many people as you want, no tax due and no filing needed. Over $13k, you have a $5.12 million lifetime gifting exemption. Anything above $13k, you need to file a Gift Tax Return (IRS Form 709). Any gift over $5.12 Million in 2012 is taxable at a 35% rate. This will potentially change again in 2013. Now is the time to make large gifts.

The federal estate tax remains at a $5.12 Million exemption in 2012, affecting very few people. Anything above $5.12 Million, or $10.24 Million for a married couple, is taxed at 35%. Again, 2013 could see major changes in this scheme.

The Pennsylvania Inheritance Tax rates will remain the same in 2012.

Of course, we’ll keep you updated on any changes.

Have a Happy Thanksgiving! Best wishes to you and your family.

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 24, 2011

Did Steve Jobs Have An Estate Plan?

Even several weeks after his death, people are still talking about Steve Jobs and his contributions to the technological advances we've made in the last 30 years. Just last week, there was a memorial for Apple employees, shutting down every Apple store for a couple of hours, to celebrate the life of Steve Jobs. I remember using the Mac Classic, a black and white Apple computer from the 1980’s, and being fascinated by what was then advanced technology (no WiFi, no Facebook, no internet but still great!). People are going to be talking about Steve Jobs for a long time.

As your estate planning attorney, I was intensely curious about what type of estate plan Jobs created. We have plenty of wealthy individuals who have not engaged in estate planning, and their affairs are simply a mess.  People like Elvis Presley, Sammy Davis Jr. and others lost a huge amount of their estate to unnecessary taxes because they didn’t plan properly. We can learn a lot from their mistakes. But we can also learn from those who actually did take the time to plan, like Steve Jobs. To be honest, the less we can learn about their estate plan, the better their estate plan probably was!

To read more about what Steve Jobs did and didn’t do, check out the Forbes article on his estate plan here.

Every estate plan is different. Most people don’t have the wealth that Steve Jobs had. Nonetheless, everyone needs a plan that works for them and avoids disputes, excessive taxes, and unhappy heirs. If Steve Jobs didn’t put the proper plan in place, we will surely find out sooner or later.

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, October 03, 2011

Is it time for a WILL review?

Is it time to update your LAST WILL & TESTAMENT? You don't know until you review it! We've put together a few tips this week for when it's a good time for you to pull the will out of storage and give it a review. 

1. THE WILL IS FIVE OR MORE YEARS OLD: You should review your estate plan at least every five years, even if you feel nothing has changed. It's a good habit to get into, so that you can be sure your plan works for you.

2. YOU DO NOT UNDERSTAND THE WILL: If you see parts of the will you simply do not understand, you may want to get it reviewed. Chances are, some of the sections or the language may simply be out of date.

3. YOU GET RE-MARRIED, DIVORCED, OR ARE NOW WIDOWED: The change in your marital status should prompt a will review and mostly likely require significant changes to your WILL.

4. YOUR KIDS WERE YOUNG WHEN YOU WROTE YOUR WILL: Now that the children are older, maybe out of college or even married with children, you probably have quite a few revisions to make in your will. 

5. NEW GRANDKIDS: You may wish to leave grandkids a direct inheritance, or not. But either way, you should make sure your will is reviewed when you have new grandkids. If they come into the inheritance early for some reason, you want to ensure that proper plans are made.

6. YOUR WEALTH HAS CHANGED FOR THE BETTER OR WORSE: Significant changes in your wealth should prompt a review of your will. There may be new strategies, depending on what types of assets you have and what your goals are.

Do you need a review of your Last Will & Testament? Call us to schedule a no-obligation Will review at (215) 706-0200. We'll take 30 minutes of your time and tell you whether you may need an update or not.

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 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, 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, April 18, 2011

What is a Testamentary Trust?

In Pennsylvania, many clients opt to use a Will rather than a Revocable Living Trust for their estate plan. Living Trusts can be beneficial in certain situations. Your attorney can speak to you about when a living trust may be appropriate. In Pennsylvania, living trusts are not appropriate simply to avoid probate, since the Pennsylvania probate process is not burdensome.

Although a living trust may not be advisable for your family, many people still want to control the inheritance they leave to their children or grandchildren, ensuring it gets to the right person and is used for the right purposes. In other words, give what you want, to whom you want, when you want.

Unfortunately, we livein a litigious society – assets held in certain trusts can be better protected for your heirs. Also, beneficiaries that are spendthrifts, in high risk professions, too young, have spouses that you can’t trust, etc. all are good reasons to think about trusts. 

For clients with these concerns, we can use testamentary trusts, or trusts within a will. The trust is not actually established until death, when your will is executed. The instructions for the trust are written into your will, and once your will is probated, the specified assets and amounts will be used to fund a new trust. At that point, your options are unlimited – perhaps you want to give a yearly percentage of assets to a child, or maybe provide only for their education and health. At our firm, we can help you customize your trust based on your needs and concerns.

You may already have a testamentary trust in your will, but it may not do what you really want it to do. Let us know if we can help you review your current estate plan.

To determine what type of trust is right for you, give us a call now at (215) 706-0200 or email info@jawatlaw.com. We can schedule your complementary consultation right now.

Monday, April 11, 2011

Co-Executors... Good Idea?

Naming Co-Executors appears to be a convenient way to make everyone happy in the immediate future when it comes to estate planning. But choosing more than one person to serve as Executor can have disastrous consequences on your estate.

Those with two or more children are most likely to consider naming Co-Executors. The thinking behind naming all children as Co-Executors is to not offend or show favoritism to any child. However, being named Executor or not is unrelated to the inheritance that someone receives. For instance, choosing Child A as Executor, does not mean you cannot split your estate three ways, between Child A, Child B, and Child C. It simply means that Child A will be the sole person to manage and oversee this process.

By choosing Co-Executors, here are some huge potential problems:

1. Co-Executors cannot agree on fair market value of real property, causing a severe delay in closing the estate.
2. Co-Executors may not communicate well, and with each taking action, there could be overlap, conflict, confusion, etc.
3. Co-Executors may develop a short-term or long-term conflict with one another as a result of working together. If Co-Executors are both family members, this could have a lasting impact on family relations.
4. As a result of conflict or disharmony, Co-Executors may end up in court to end the dispute, and no one wants to end up in court.

Instead, our firm often finds that it works much better to name a primary Executor, and then two successor backup Executors. This ensures that the role will always be filled, and allow decisive action on your estate.

Your Will should be written clearly so that nothing is left open to interpretation. This way, there will be no question regarding your wishes that your Executor is charged with carrying out.

Lastly, naming someone as Executor should not be a secret you keep to yourself. You should inform people that you have chosen to fill roles for your plan. This way, no one will be surprised when the time comes that they need to fill the role.

Do you have a plan that you are comfortable with? For a complementary estate planning consultation, please call our office today at (215) 706-0200.

Monday, April 04, 2011

A Solid Estate Plan is Like Insurance for Your Affairs during Incapacity and Death

I cannot count how many times I have heard people say, “I don’t care what happens when I’m gone… They can do what they want with my stuff, I won’t be here!”

I could likely convince over 90% of the people who say that to me, that they actually do care, but they’re frustrated over how to plan in a practical, sensible way that ensures their estate is left in good hands.

At our firm, we view estate planning as an insurance policy for your affairs. You need to ensure that your affairs are going to be handled smoothly in the event that you become sick, incapacitated or disabled. We don’t know when or if that will happen. Our hope is that it will not. But what if it does? Do you know who will care for you and manage your affairs? Who will make health care decisions for you? Some people will respond that their spouse will do these things. What if both of you are incapacitated at the same time? Then what?

Unfortunately, those that are most vulnerable (elderly, those that are incapacitated, etc.) are often taken advantage of the most. We see it all the time in the estate planning field. Our goal is to prevent this from happening to you.

You also need to ensure that your estate is handled properly upon your death. There are many things that could go wrong if you do not have a carefully written and thought out Will or Living Trust. Like any good or service, you get what you pay for. Sure, you can pick up a Will form in your local office supply store. Unfortunately, those forms are most often a disservice to people. It’s not about how “good” the form is, or the form at all… Can a two page form really make sense of every aspect of your family? Rather, it’s about knowing the right questions to ask, and taking lots of factors into account. Every family is unique and has issues that must be sorted out. It cannot all be put neatly onto a simple two page form.

Have you given your estate plan adequate thought? Need a review of your current plan? Contact our office today for a complementary consultation at (215) 706-0200 or www.JawAtLaw.com. We are located in Willow Grove, PA in the Executive Mews Office Complex.

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 28, 2011

No Plan? Big Problems.

Don't have an estate plan? No one can force you to engage in estate planning, but without a proper estate plan, you are putting yourself and loved ones at more risk than necessary. Here are some complications that can arise when you don’t have a plan. For our readers that have not engaged in estate planning or haven’t reviewed their plan for over 3 years, now is the time to get your affairs in order.

1. Intestate Laws: Pennsylvania has an intestate law that dictates how your property and assets are divided upon death if you do not have a will or other estate planning tool such as a living trust. Dying without a will can be costly, both in potential higher taxes and family grief/conflict due to a lack of knowledge about your wishes.
    
2. Dependents: If you have minors or care for dependents or pets, you want to ensure you appoint someone in writing to be in charge of your dependents, kids or pets. You also want to make sure you leave assets, preferably in trust, to care for your dependents. If you have kids and no estate plan and they inherit assets, a custodian account will be established. Once a child turns 18, however, they are free to do what they want with those assets. Typically, an 18 year old does not have the maturity to handle their own assets.
    
3. Spendthrifts and Special Needs: If you have a spendthrift child, or a spouse or child with special needs, there are steps you must take to ensure assets don’t end up in the wrong hands (creditors, government, bankruptcy court, etc.).
    
4. Family Battles: Don’t assume your family will just sort out your affairs without any conflicts or commotion. From our law firm’s vantage point, we often hear of cases that go to court that pit family member against family member. We also know that conflicts can largely be avoided by putting together a proper estate plan. It’s just not worth the risk, or your legacy.
    
5. Incapacity or Disability: You must ensure you have a power of attorney for your finances and health care. That way, if something happens to you and you cannot make decisions for yourself, someone you trust can immediately carry on your important affairs. Without a power of attorney, sometimes a guardian will have to be appointed in court, and the guardian must continue to be supervised by the Orphan's Court. This means legal bills can pile up quickly and unnecessarily.

If you, a friend, a neighbor or relative need estate planning assistance, we welcome you to contact our firm at your convenience. You can use our convenient online contact form or call us at anytime at (215) 706-0200. We are pleased to offer a complementary initial consultation.

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.

Monday, January 17, 2011

Does a Living Trust Make Sense in 2011?

Does a living trust make sense?

The term ‘living trust’ is tossed around a lot in the estate planning world and means different things to different people.

Clients and prospective clients sometimes believe that a living trust is necessary to ‘avoid probate’ and to ‘avoid estate taxes’.

Some attorneys believe everyone needs a living trust, no matter what the circumstance.

Both of these assertions are incorrect.

Living trusts ARE a will substitute that allows you, a trustee, to place your assets in a trust, and remain in control of those assets while you are living. The living trust allows you to provide detailed instructions upon how the assets will be distributed upon your death. The living trust can last for years and allows you to give what you want, to whom you want, when you want. For instance, once you pass away, you could instruct the person who takes over as trustee for you to pay your daughter a small sum annually and provide for your daughter for her health care or education needs at anytime.

Living trusts do NOT help a family avoid estate taxes or inheritance taxes. Actually, living trusts can help reduce federal estate taxes if you are affected by the tax (which most people aren’t today), but a Will can do the exact same thing. Therefore, if using a living trust only to save taxes, this is simply an incorrect reason to use a trust. Living trusts today provide a great mechanism for planning through generations… tax saving is not a consideration for most clients.

Regarding probate… Any asset placed within a living trust avoids the probate process. But to completely avoid probate, you must re-title all of your assets into the name of the living trust, and must do so anytime you acquire new assets.

Does it make sense to avoid the probate process? If you own property only in Pennsylvania, you might be better off allowing your estate to be probated. Probate in Pennsylvania is relatively straightforward, although there are several considerations and reasons that you may wish to avoid probate even in Pennsylvania. Sometimes, administration of your estate can occur more smoothly if you have a fully funded living trust. Some people like the idea that they will never need to publicize their will, or deny the government even a small fee. Call it the American spirit!

Another consideration in avoiding probate is that for many clients, at least half of their assets have already avoided probate because the asset, perhaps an IRA or an annuity or a life insurance policy have beneficiary designations. That means those assets go directly to those beneficiaries without probate. Same goes for any jointly held asset (joint with the right of survivorship).

Does a living trust make sense for you? Make sure when you are doing your estate plan that a living trust is at least discussed. It may or may not make sense for you depending on the circumstances.

Call for your complementary consultation today at (215) 706-0200 to find out if a living trust makes sense for you.

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, December 13, 2010

Do I Need A Revocable Living Trust?

Revocable Living Trusts are a substitute to a Last Will & Testament, but for many Pennsylvanian’s, living trusts aren’t necessary for an effective estate plan.

Historically, many people have planned with a living trust to (a) avoid probate and (b) save on federal estate taxes.

Pennsylvania is one of a number of states that has simplified their probate process over the years. Probate in Pennsylvania is mostly handled by your executor and attorney outside of court, unless someone challenges your will or the distribution of your assets. Other states, like Florida and California, still have more burdensome probate processes that require court supervision.

Federal estate taxes fluctuate, but the rates that Congress is discussing for 2011 and 2012 mean that far less than 1% of people will ever be affected by such a tax. The White House and Congress are proposing an estate tax exemption of $5 Million. That means you will not be affected by the tax until you have over $5 Million in assets. Regardless of whether you are affected or not, a living trust does no better than a will with a testamentary trust in saving on tax dollars.

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. However, 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.

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.

Tuesday, September 28, 2010

What is Probate and How Does it Work in Pennsylvania?

Are you confused about what probate is, or what it entails?

Probate is a process that occurs upon your passing, but it is different in every state.

The person in charge of your estate, your executor, is responsible for formally proving your will is valid before a court or administrative office. In Pennsylvania, this is relatively easy. Usually, a court is not involved. Instead, your executor goes to the “Register of Wills” office in your respective county of residence, hands the administrator the original will, and the executor, after an oath and proof of identity, is named formally as executor.

The executor then is responsible for:

• Communicating with beneficiaries, creditors, debtors, etc. of the estate.
• Caring for estate property, and consolidating appropriate assets, selling appropriate property, etc.
• Filing inheritance tax returns and a final income tax return.
• Paying creditors from the estate assets, as well as distributing the inheritance to appropriate beneficiaries.

Probate cases vary, and there may be additional tasks for the executor depending on the situation. An executor is usually assisted by an estate planning attorney in these tasks as needed.

Although probate sounds burdensome for your executor, Pennsylvania makes probate relatively simple when compared to other states. In Pennsylvania, your executor typically never enters a courtroom. Once he or she is named executor, there is little or no supervision from that point forward (unless, of course, there are conflicts between the executor and beneficiaries). Other states require a court supervised process, which is more time consuming, costly and burdensome.

Many of our clients have notions that they must avoid probate at all costs. There are strategies to avoid probate, but usually, if you only own property in Pennsylvania, it is not advantageous to avoid probate. In Pennsylvania, the costs and administrative duties of probate is on par with the administrative duties of being a trustee.

When crafting your estate plan (your will, trust, etc.), a qualified estate planning attorney will discuss all of your options with you based on the facts and circumstances.

If you want to know if your plan works for you, whether you should avoid probate, etc., please schedule a complementary consultation with us.

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.

Sunday, September 12, 2010

Beware of Will Making Software

The New York Times has an informative article this weekend on various software programs that can be used for you to write your own will. The general consensus seems to be that, yes, a will making program will probably produce a valid will. However, whether the will actually does what you intend it to do is another story.

Without a trained lawyer helping you, you are putting your estate plans at risk.

Here are some other reasons that writing your own will may not be a good idea:

• May need additional estate planning tools, including certain types of trusts for various issues
• Everyone needs powers of attorney in addition to wills
• You don't know what you don't know - every word, sentence, phrase and clause in your will has significant meaning.
• The law is always changing - your software program may not be up to date

Do you have a do-it-yourself will? We can review it for you during a complementary consultation.

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.

Friday, September 10, 2010

Will Challenges

Upon your passing, your will becomes a public document once it is probated. Probate is a formal legal process of your executor proving your will, being formally named executor, and accounting/distributing assets.

Because a Will is a public document upon probate, it is important to consider the possibility that someone may challenge your Will. The most legitimate challenges to your Will typically come from spouses or children.

In PA, you cannot disinherit your spouse completely unless he or she formally agrees. A spouse is always entitled to an "elective share" or 1/3 of the estate, even if he or she is disinherited in your will.

A child can be disinherited, but you must affirmatively disinherit him or her in your will.

Another factor that can make a Will challenge more successful is if you wrote the Will while you were incompetent, or while you were being unduly influenced by someone else.

A substitute for a Will is a living trust, which does not go through the probate process. However, a living trust, just like any person or entity, is still subject to challenge in court. However, by virtue of not being automatically public, a living trust discourages frivolous challenges.

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.

Sunday, August 29, 2010

Who should be my Executor?

The question is simple, and we hear it every day in our firm. Who should manage my affairs when I die? 

• 150% Trustworthy
• Peacemaker
• Competent
• Ability to accept role and carry out all parts of role
• Location (closer, the better)
• Relationship with other family members
• How ethical the person is

Wednesday, August 25, 2010

Testamentary Trusts

Since probate avoidance is typically not a concern if you are a Pennsylvania resident and only have Pennsylvania property, a living trust is usually not recommended. Revocable living trusts are more expensive than a will, and are usually more complicated.

Revocable living trusts are useful in some situations, but they are not recommended simply to avoid probate, which is not burdensome in Pennsylvania.

Trusts can provide a controlled inheritance – give what you want, to whom you want, when you want – and protect your beneficiaries from themselves and others (think creditors, divorce, bankruptcy, high risk professions, spendthrift kids, etc.).

If our clients are interested in controlled inheritances, we can often write a trust in the will. This is called a testamentary trust. The trust is not actually established until you die. The instructions for the trust are written into your will, and once your will is probated, the assets that you direct go into the trust. At that point, your options are unlimited – perhaps you want to give a yearly percentage of assets to a child, or maybe provide only for their education and health.

Testamentary trusts are more economical than a living trust, and they often make sense for many clients.

To determine what type of trust is right for you, give us a call now at (215) 706-0200 or email info@jawatlaw.com. We can schedule your complementary consultation right now.

Tuesday, August 24, 2010

Can I Write My Will By Myself?

On first blush, writing a will seems easy enough... leave my stuff to my loved ones, and simply write that on paper.

Based on that misconception, we often get calls asking if we would advise someone to write their will themselves. We cannot advise someone whether to do this or not, but we definitely don't recommend it.

Services like LegalZoom are more prevalent than ever today, and services like these make estate planning seem easy, to the point where you can fill in a few blanks and have a perfect plan. I've seen Suze Orman's living trust sample forms used by some potential clients. They lived in Pennsylvania, but their trust was written for California law.

The problems with writing a will by yourself are numerous. Here are some reasons why writing your own will can be a problem:

• An estate plan usually includes more than a will -- think powers of attorney, living wills, etc. which are often times more important than a will.
• A will may be inappropriate in a few cases, and a living trust may make more sense.
• No independent third party (the lawyer) to review and ensure your wishes on paper reflect both your actual wishes and reality of your family circumstances.
• Over 50% of the time, clients we see that need a "simple estate plan" actually need quite a bit of customization, and a few will need more advanced planning based on their goals.
• If you create a trust within a will (a testamentary trust), your will becomes more complicated. Fill-in-the-blank services cannot do an effective job building trusts for you.
• Our firm builds relationships with each and every client. We make sure your estate plan stays updated at least every few years, which is crucial.
• Today, many of your biggest assets probably won't be distributed through your will. IRA's, 401(k)'s, life insurance, etc. is all distributed through a beneficiary designation form. An attorney can help you plan your inheritance taking into account the entire estate.
• A lawyer knows the law, and the minefield that exists with will challenges, capacity in writing a will, conflicts, etc... all the legal stuff that you probably don't want to worry about. A lawyer can ensure that when you write a will, it will be upheld if need be in any court.

These are just a few reasons why writing a will by yourself is not a good idea.

One more thing... if your estate plan is indeed a simple one, our firm's rates aren't much more expensive than LegalZoom, and the value you receive by seeing an attorney is so much greater.

To speak with our firm today, please give us a call at (215) 706-0200. We can conduct a complementary review your do-it-yourself will and estate plan. 

Monday, August 23, 2010

Comprehensive Estate and Retirement Planning

An estate plan completed by a law firm, by itself, is simply the legal documents that are drawn up to make sure your wishes are valid when you become incapacitated and when you die. 

However, an effective estate plan should be part of your overall retirement plan and wealth management plan. 

When our clients want to make sure their estate plan is seamless with their retirement plan, income plan and tax plan, we work with Franklin Retirement Solutions, a firm that specializes in retirement planning. Together, we can make sure all of the pieces of your plan fit together.

Here's just one of many examples of how a "piece meal" plan can go wrong: Client X has a financial advisor, who doesn't know the estate planning attorney. Client X has a special needs child. Client X asks attorney to protect assets for the special needs child, and attorney drafts both a will and sets up a special needs trust. Client X dies, and estate realizes that assets were not allocated properly (as a special needs child, putting assets directly into this child's name is a really bad idea). Client X's financial advisor was not aware of rules for special needs persons that are on public benefits. As a result, Client X's son almost lost his public benefits. 

By combining your financial planning and estate planning, your plan becomes a lot more effective. Most of our clients love having access to a financial planner, tax planner, Medicare supplement/Long-term care insurance specialist, and more.

To summarize, here are a few advantages of planning with this approach:

• All parts of your plan work together
• Ensures your plan will be reviewed and, if needed, updated more often
• Provides a more seamless transition to your heirs, since your affairs are in order.

We find that this type of planning is extremely beneficial to middle class clients. To learn more about our comprehensive approach to estate and retirement planning, please give our office a call today at (215) 706-0200.

Thursday, August 05, 2010

What's up with the Federal Estate Tax?

2010 has been quite a year already... The U.S. Congress has failed miserably at giving us direction on what the tax landscape will look like come 2011. Folks, we're only five months away from 2011, believe it or not. And in 2011, the federal estate tax comes back with a roar. If Congress does nothing, many more people will potentially be effected by the tax. For married couples, you will be able to pass on about $2 Million to your heirs, estate tax free. If your estate is worth more than $2 Million, every dollar past the $2 Million mark will be taxed at a 55% rate. $2.5 million estate? Count on your heirs paying Uncle Sam $275,000.

Congress has not stepped up to the plate at this point, and there have been no meaningful committee votes or full member votes on any estate tax fix. A couple of senators and house members have spoken up, but that's not enough when you have 535 such members. Therefore, I am not optimstic right now that there will be a fix come 2011. If you think your estate is worth around $1 million or more if you're single, or $2 million or more if you're married, you need to start thinking about planning now. There are things we can do to minimize the estate tax if you were effected by it.

Here are a couple of great articles I've found this morning on the federal estate tax.

• What's next for the federal estate tax? Pittsburgh Post-Gazette. This article is great for Pennsylvanian's to read.

• Ways to shelter your money should the estate tax return. NJ Star Ledger. Provides a couple of ideas for reducing the estate tax if you're effected.

The best time to plan is now. Please do not hesitate to reach out to my firm to get started on planning. Call us at (215) 706-0200.

Monday, July 26, 2010

Having a Will is Essential

If you don't have a Last Will & Testament (or a Living Trust), you are leaving your estate in the hands of the government to determine who will manage it, and who will receive it. Sometimes, this works out okay. But more often, this opens up unresolved family conflicts, battles and arguments.

Why is that the case? Here's an example. You die and leave a $500,000 estate (house, IRA, bank accounts, etc.) without a will (dying without a will is called "intestate"). You have three children. One child has been helping you with your medical care more than others and he thinks he is entitled to more of your estate. He helps himself to more than his fair share of your estate after you die. Your two other children are furious, and they challenge this--in court. If it sounds messy, it is messy.

Creating a will and mapping out your estate plan is the perfect antidote to dilemmas like the one above. By making your wishes clear, and putting one person in charge of your affairs, you have hampered most possible will challenges. Further, by discussing your plan openly with your family (letting them know who the executor will be, why you chose to divide your estate the way you did, etc) will greatly help quash any possible future conflict.

Please call our office today to schedule a complementary estate planning consultation at (215) 706-0200. Don't forget to listen to us on the radio every Saturday at 8:30 AM on AM 1340 WHAT (and listen online at www.am1340what.com).

Wednesday, June 23, 2010

Do I Need a Living Trust?

What are living trusts?

A living trust is a valid will substitute in the Commonwealth of Pennsylvania. During your lifetime, you have the ability to place your assets in a trust, designate a trustee (usually yourself while you’re living), a successor trustee (someone to take the job after you pass away), and beneficiaries. A living trust can be superior to a will, depending on the needs, goals and size/complexity of the estate of a particular client. However, living trusts are not for everyone, particularly in Pennsylvania.

Why do people create living trusts?

1. Avoid Probate: Many people create living trusts to avoid probate, the process of proving your will. However, Pennsylvania’s probate process is much simpler compared to other states. Pennsylvania probate is not a court-supervised process, and only takes a relatively short amount of time to become appointed executor. Yes, there are probate fees for the County (probably in the range of $300-$1,000, depending on the size of the estate) but they are relatively modest. Therefore, avoiding probate (assuming you only own property in Pennsylvania) is not a good reason, by itself, to create a living trust.
    
2. Asset Protection: You can’t protect yourself from creditors, spouses, etc. by creating a living trust. But you can potentially protect your children, heirs and other beneficiaries from themselves and from others. A living trust can never guarantee asset protection, but can help fend off predators and creditors, depending on the situation. In addition, the living trust must be set up in a particular way, with limitations on your beneficiaries, in order to effectively protect the assets.
    
3. Seamless Transition: A living trust, if funded during your lifetime, can provide a smoother transition from one generation to the next. With a living trust, you have the potential to carefully lay out a distribution scheme in which the assets can flow to beneficiaries quicker.
    
4. Privacy/Avoid Potential Estate Challenges: A living trust set up properly and funded with all of your probate assets can avoid probate completely, and therefore, is subject to privacy from the public. A potential beneficiary or anyone for that matter can challenge the validity of a trust, but it is much more difficult to do so since they don’t have easy access to the document.
    
5. Control From The Grave: A living trust allows a grantor to control an inheritance long after they pass away. For instance, you can spread out an inheritance over 20 years, or only for certain needs, such as education or health. However, we can do the same thing in a will with a testamentary trust.
    
6. Reduce/Avoid Taxes: Actually, this is a myth. A living trust does not do a better job than a will or any other testamentary device in avoiding death taxes, estate taxes or inheritance taxes. You can take advantage of the marital deduction and unified credit through a will with a testamentary trust and it will have the same effect. Don’t get sold on creating a living trust solely for tax benefits.

Do you recommend a living trust?

Living trusts are expensive to create, and we do not recommend creating one unless you have legitimate concerns about:

• Privacy
• Estate challenges
• Asset protection
• Assets in more than one state

Those concerns, coupled with the desire to avoid probate are good reasons to create a living trust.

If you want to know more about what tools make sense for your estate, whether it is large or small, contact our office today at (215)706-0200 or info@jawatlaw.com. We offer complementary initial consultations to determine if we’re a good fit.

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.

Wednesday, May 26, 2010

Talking To Your Agents About Their Role

One of the more challenging aspects of estate planning can sometimes be choosing our agents—who will manage our affairs when we become sick (power of attorney), and who will manage them when we die (executor of a will or trustee of a trust). Not only do we need to choose agents, but we always need to choose at least two backup agents just in case the initial agent can’t or won’t take on the role.

For some of our clients, it is easy to choose agents – maybe a husband or wife, an only child, and another close relative. For others, they just aren’t sure who to choose!

While contemplating who to select as your agent, you should really consider talking to them about the roles they will fill and also make sure they are willing to accept the role.

For your initial agent, let them know that they will be the first person to be in charge if something were to happen to you. Let them know where you have kept your original estate planning documents, and let them know if you have any copies of the documents and where they are as well. Also, let them know where they can find a list of your assets, including bank accounts, securities, investments, IRA’s, etc. They will need this information!

You should tell your agents that by agreeing to the role, they will be accepting a major responsibility, one that must be taken seriously. You must let them know that they must act in your best interests, and that you’ve put safeguards into place to make sure that occurs.

You should explain your health care preferences and end of life preferences to your agent. Even though you’ve written down your preferences on your living will and health care power of attorney, it’s still important to verbally communicate your wishes so that your agent is clear about your instructions. You should let your agent know that if you were at an end-of-life situation and you asked for “the plug to be pulled”, your agent would still have to confirm those instructions with the doctor in charge, which could be a painful decision for the agent to make.

In summary, your agent should know as much as possible now about your plan. There should be no surprises as to who the agents are, what you expect from them, and what your medical preferences are. Your agents should always be people you trust without a doubt.

Remember, make sure you review your plan every few years to make sure that the agents you selected then are the agents you would like to have listed now.

Our firm has the expertise necessary to help you choose agents, and make sure you have a well-crafted legacy plan. Please contact us today at info@jawatlaw.com or by calling (215) 706-0200 for your complementary consultation.

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.

Thursday, April 22, 2010

Appointing Agents -- An Important Estate Planning Component

One of the most difficult tasks in any estate plan is choosing who will manage your affairs while you’re alive and after you pass away. In addition, if you have children under eighteen, you also must consider who will step in as guardians if need be. An agent is a broad term, and emcompasses several roles, depending on what components of an estate plan you put into place. Agents include powers of attorney, personal representatives of the estate, trustees and fiduciaries.

Below are some ideas to start with on how you might go about filling these important roles. After reading this article and gathering some ideas, you should seek the assistance of a qualified estate planning attorney to help you make these decisions.

• Who do you trust? Trust is key in appointing anyone to serve in these important roles. When I think of trust, I think of a gut feeling that I have about a person. I ask, will that person have my best interests at heart when they are acting on my behalf? Finding someone you can place your trust in for these roles is easier said than done. Whatever you do, don’t simple choose someone because of convenience.
   
• Who is capable? Assuming most people are good-natured, the next question becomes, who can actually manage your affairs, your estate and your children? Sometimes, managing the affairs of someone else can be extremely complex, depending on the assets that the person has. Consider whether that person will have to hire an attorney to help him/her manage your affairs. That can get costly.
   
• Who would agree to the role? Just because you have decided to appoint someone does not mean they will agree to serve. In fact, a person filling a role can resign at anytime. Make sure the person you appoint is on board to serve.
   
• Who will the backups be? In the event that your first choice cannot serve in the role, you must make sure you have at least one, if not two trusted backups. You must make sure the backups are trustworthy, capable and willing to serve as well.
   
• When does it make sense to appoint two or more people to fill one role? Typically, I do not recommend setting up your appointments like this. Consider this: You really want to have whoever is dealing with your affairs to speak with one voice. There is much potential for disagreement and discord if two or more people are filling one role. Remember, your goal is to create a smooth transition, not hamper it even more.

In general, you should review your choices for these roles at least every five years, if not sooner. You don’t want to have outdated documents with people filling roles you no longer want them to fill, or roles they can no longer fill.

We offer complementary 90 minute consultations for estate planning issues. Call our office today (215) 706-0200 or email us at info@jawatlaw.com to set up your appointment today. Our team would be pleased to assist you in all of your estate planning needs.

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

Thursday, January 28, 2010

How Often To Update Your Estate Plan

People always ask us how often they should review their estate plan, whether it be a Will or Revocable Living Trust. Just as your family changes, your estate plan should reflect those changes. Good estate planning attorneys try to plan ahead for as many contingencies as possible in each estate plan. However, even the best estate planning attorney cannot plan for every change down the road.

Therefore, we recommend that you have your estate plan reviewed every 3-5 years, or sooner if there is a major change in your family, or you change your mind about something in your plan.

An estate plan is not a static document, and must be updated throughout the course of your life.

Our firm offers different maintenence programs, and we even offer a secure online service to store and access your important documents. If you are interested in having our firm review your estate plan--whether it be your will, trust, powers of attorney, or living wills, please do not hesitate to contact us by email (info@jawatlaw.com) or telephone (215-706-0200).

Saturday, January 16, 2010

Wills vs. Trusts

People always ask, what is the difference between these two documents? Will or trust, I'm still leaving my assets to the people I care most about, right? Sure, that is true, but there are several key differences between the two.

Trusts are usually pieces of a larger puzzle. For instance, you may have sizeable assets that you want to protect. Revocable living trusts (this is your standard trust), along with other asset protection tools, can offer greater protection when you pass assets onto your kids, grandkids and spouse. For instance, you have a son who is married. You are weary of your daughter-in-law, and worried that if they ever got divorced, she would make out like a bandit with all of your assets. Set up correctly, trusts can minimize this concern. With a will, you are passing on your assets outright, meaning that upon your passing, your assets simply become part of your son's estate, therefore greatly increasing the chances that your daughter-in-law could take the assets.

Wills are not private. When you write a will, you have to realize that upon your passing, the will is probated and becomes public. Why does this matter? First, if someone wants to challenge your will, the fact that it is a public document makes it much easier for anyone to browse your will and find ways to challenge it. Trusts that are funded do not go through the probate process, and therefore they are not public.

The Tax Issue. Neither a will nor a trust can avoid Pennsylvania inheritance tax or federal estate taxes (that is, when there is in fact a federal estate tax). However, trusts, set up correctly between spouses, can minimize and delay federal estate taxes. Remember that in Pennsylvania, property transferred between spouses is taxed at a 0% rate.

Trusts Offer Greater Control. If you are worried about your 25 year old son inheriting $200,000 and spending it down in two months, you're not alone. A will, leaving that money outright to your son, will attach no conditions to how or when he can spend the money. With a trust, the options are limitless as to what conditions you want to attach to those assets and when your son receives it. For instance, you might want to distribute certain assets for education, a wedding, health and maintenence, when a child is born, etc. Again, it is up to the imagination. The great thing about trusts is that they survive after you pass, allowing you to have potentially eternal control.

Prices. Wills are cheaper than trusts. However, with a will, your heirs will pay later in probate and administration fees. For instance, a $1,000,000 estate going through probate could cost as much as $20,000-$30,000 in attorney fees and state/county fees, and that doesn't even include taxes. Trusts do cost at least several thousand dollars to build, but if built properly, avoids those huge fees at the end of your life.

If you want to review your estate plan, and you're not sure if you need a will or trust, please contact our firm today and set up a complimentary consultation.

Monday, December 21, 2009

How to Probate a Will in Pennsylvania

Most people who know anything about probate want to avoid it. Even in Pennsylvania, where probate is relatively streamlined compared to other states, probate avoidance is still highly desirable for most people. If you must go through probate, how does it work in Pennsylvania? 

First, the original will and any amendments or codicils must be presented.

In Montgomery County, our principal county of practice, a petition form must be filed as well as an 'Estate Information Sheet', another form. The form goes to the Register of Wills, an office of the Orphan's Court that handles probating wills.

In addition, a valid death certificate must be presented.

Montgomery county has an extensive list of filing fees -- this is where it can get tricky, even though probate is streamlined in Pennsylvania, there are of course costs associated with probate. Fees include attorneys fees, the fees for the county and state, and perhaps the cost of more emotional pain at a time when you do not need it.

How can you avoid probate? By using a living trust based estate plan rather than a Will, and funding your living trust, you can avoid probate because your assets are no longer tied directly to you, but they are put in a trust. The beauty of this is that you still control your trust (hence the term, 'Revocable' living trust). Only after you pass, does your trust become irrevocable and gets its own Tax ID number.

If you want to learn more about probate avoidance, please call our office at 215-706-0200 or email at info@jawatlaw.com.

Saturday, December 19, 2009

What happens if you don't have a will or living trust?

Monday, December 14, 2009

Wills Are Public Documents

A lot of people ask our office what the difference is between Wills and Trusts. There are several key advantages to trusts, depending on your estate planning needs. One advantage to our readers who value privacy is that a well-crafted Revocable Living Trust, if properly written AND funded, can avoid the probate process. By avoiding the probate process, your written instructions, hopes, wishes and legacy have a better chance at being kept private. In contrast, a Will always enters the probate process, and thus, becomes a public document. All you have to do is google "Jackie Kennedy Will" to see what I mean. Anyone can access the former First Lady's Will! Sure, the chances of your Will leaking all over the internet are slim, but the point remains--your Will is available to all those that want to see it, whether or not you want them to see it. Living Trusts can never guarantee complete privacy. However, qualified attorneys can craft Living Trusts to better protect against intrusions. Remember that if you currently have a Will as the foundation of your estate plan, you CAN "upgrade" to a Trust.