Probate and Estate Administration

Monday, January 30, 2012

Gifting the House For $1: Good Idea or Not?

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, 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, 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.

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. 

Tuesday, May 17, 2011

50/50

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

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

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

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

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

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

Monday, 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, March 21, 2011

What's The Cost Of Probate In Pennsylvania?

Probate is the process of your Executor of your will formally proving that such a will exists, and becoming legally named Executor by the appropriate county Register of Wills office.

Probate is generally considered easier in Pennsylvania, but there are still costs associated with the process. The main two factors for the cost is the size of your estate, and the complexity of the matter. Also, each county in Pennsylvania sets its own probate fees.

Your Executor is entitled to receive reasonable compensation for his or her work. The attorney that your Executor hires is also compensated. In Pennsylvania, there is a ceiling set by the PA Attorney General for compensation. The link for these rates are here (Scroll down).

To give you an idea of the range of costs for the County fees, here are links to the local County fees for probating a will. Generally, probating a will costs between $200 - $1,000 depending on the size of the estate.

Philadelphia Register of Wills fees

Bucks County Register of Wills fees

Montgomery County Register of Wills fees

Delaware County Register of Wills fees

Chester County Register of Wills fees

If we can help you with any probate or estate administration matters, please give our office a call at anytime. (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 24, 2011

Types of Ownership

Joint ownership? Tenants in common? Right of survivorship? For many people, it is easy to get confused about how property is owned.  This week, we put together a quick guide for different ways to own property.

Our office regularly helps clients record property deeds for real estate and real property. We find it is important to educate our clients on the various ways that one can own property. There are tax advantages or disadvantages for every situation, which we will not be exploring today.

Joint Ownership With The Right Of Survivorship: (JTWROS) A common way to own real estate, two or more individuals own one piece of property together. All joint owners own the whole property (in other words, not easily partitioned). When one joint owner dies, the other owner automatically inherits the decedent’s share (survivorship). The decedent’s Will won't control how his or her share is distributed in this case, thus avoiding probate.

Tenants In Common: Two or more individuals own a share of the property. The property is easily partitioned. For example, you own 50% (the east side) and I own 50% (the west side). Upon death, the tenant in common’s share is passed through his or her Will. The advantage is that this type of property is easier to divide/partition, but doesn't avoid probate.

Tenancy By The Entirety: This is similar to Joint Ownership with Right of Survivorship above, but it reserved for legally married couples. This type of ownership offers additional creditor protection for the married couple. This method of ownership avoids probate.

Payable On Death (POD)/Transfer On Death (TOD) Accounts: These types of designations are typically found on a bank account or other financial account. An individual owns the property while he or she is living and has full control over it. The POD or TOD beneficiary only has access to the account upon the owner’s death. The advantage is that it passes directly to a person, and not through the Will, thus avoiding probate.

Life Estate: Used for real property, allows an individual to have a right to live in a property while he or she is living, but another person retains ownership interest. Can be advantageous for seniors, and for several situations, but you must be careful in setting up a life estate.

It’s important to know how your property and assets are titled, and who owns what. Whether it’s jointly held or not makes a big difference, for inheritance, planning and tax purposes. A good estate planning attorney always asks the client about how property is owned, and if the client doesn’t know, the attorney helps the client find out.

To schedule a consultation to review your estate plan, call us today 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, November 22, 2010

Pennsylvania Inheritance Tax 101

When you die in Pennsylvania, any property or assets that you leave to other people is subject to an “Inheritance Tax.” This is in addition to possible federal estate taxes (more on this in the coming weeks).

Typically, but not always, the Executor of the estate pays the inheritance tax on behalf of all beneficiaries of the estate before any of the property is distributed to beneficiaries.

Pennsylvania mandates that inheritance tax be paid 9 months after the decedent dies. You can get a discount if you pay within 3 months.

The PA Inheritance Tax rates for 2010, 2011 and beyond (at least as of now) are:

• 0% --  Legally married spouses
• 4.5% -- Children, Grandchildren
• 12% -- Siblings
• 15% -- All others

Most property is subject to inheritance tax. Jointly owned property is taxed at the share the person owned (i.e., if a person owned 50% of a property, that 50% share would be taxable).

One way to avoid inheritance tax in PA is to establish an irrevocable trust, or simply gift assets (unconditional giving, no strings attached) to someone. You must outlive them at least one year in order for the gift or trust to be complete so that no inheritance tax is due on that property.

Be careful what you gift to someone. If you gift someone a house, and you still want to live in it while he or she owns it, you could be making a risky move, especially if that person gets in trouble.

We would advise you not to do any inheritance tax planning without the assistance of a qualified estate planning attorney.  Please call our office today at 215-706-0200 to schedule a complementary appointment. Have a wonderful Thanksgiving holiday!

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.

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, 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 11, 2010

Paying PA Inheritance Tax is Not Optional

No one likes taxes, especially “death taxes” – many people fundamentally disagree with a system that taxes a dead person’s belongings that pass on to their loved ones. However, if you are a resident of Pennsylvania, and due to your death you pass property onto others, your estate and/or your heirs are responsible for paying Pennsylvania Inheritance Tax.

The vast majority of property passed on is subject to PA Inheritance Tax. Most property owned by the decedent is taxable at rates that have been pretty steady. The Pennsylvania inheritance tax rates in 2010 are:

• 0% for spouses,
• 4.5% to kids, grandkids and parents,
• 12% to siblings and
• 15% to all others. 

There is no common law marriage in PA or domestic partnership laws. Therefore, property passing from one person to another in a type of relationship listed right above is subject to the 15% rate.

Inheritance taxes are due 9 months after the person dies. Paying within 3 months rewards the taxpayer with a 5% discount off the total tax bill.

Quite a few estates, on paper, are plush with assets. However, many estates have a high majority of assets that aren’t liquid – think about retirement accounts, real property, etc. That makes paying inheritance taxes difficult at times. I recommend that you plan in advance with a qualified estate planning attorney. Our firm can assist you in making sure your estate is setup properly to ensure your loved ones can pay the inheritance tax without dipping into their own assets.

Inheritance taxes must be paid. You cannot simply avoid paying the tax bill if you are an executor, personal representative, or someone receiving an inheritance. The state may very well eventually catch up with you if you fail to pay the taxes. If you are caught, you will be faced with severe penalties and interest.

No one likes to pay taxes, but paying Pennsylvania inheritance taxes are not optional. We recommend that an executor or personal representative of an estate hire a qualified estate planning/estate administration attorney to assist in all matters relating to the estate, including the filing of the PA inheritance tax. An executor does not need to hire an attorney, but it is highly recommended, even for estates that seem fairly basic.

If you have any questions about estate administration or inheritance tax issues, please contact our firm today at (215) 706-0200. We offer complementary initial consultations.

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.

Friday, July 30, 2010

Ten Common Estate Planning Mistakes

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

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

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

Tuesday, July 27, 2010

Should I Transfer My Home To My Kids Now?

Have you heard advice that you should sell your house to your kids now for $1? We advise you to schedule an appointment with us before you re-title property in your children's names.

Here are the reasons why you should reconsider this option and consider alternatives:

* Inheritance Taxes: Many people are under the impression that Pennsylvania Inheritance Taxes are more than they really are. Upon your death, property that is transferred to your lineal heirs (children) is taxed at a minimal 4.5% rate, that has remained steady for years and is not expected to change. 

* Step Up In Basis: By gifting your property to your children for $1, you could potentially be giving them more of a tax burden if they end up selling the property later. Be careful.

* Your Children Will Own The Property: Let me repeat that. Once you gift your home to your children, your children will own the property. Even if you are a joint owner with your children, they will still own a share. The question becomes.... What if your child gets in trouble... What if your child gets divorced... What if your child goes through bankruptcy... If you don't think it could happen to your family, you are playing the odds.

There are other reasons why you should re-consider jointly titling property.

If you are seeking to avoid probate, you may want to set up a revocable living trust, which is a way to avoid probate. Keep in mind that probate is relatively simple in Pennsylvania and not as costly for the most part. If you are not concerned about probate (and you probably shouldn't be), then using a will to convey your house is a good option.

If you have multiple homes (i.e., home in Pennsylvania, vacation home in New Jersey or Florida), you should strongly consider setting up a living trust. This will avoid ancillary probate (probate in other states), which could be a real hassle.

Remember: Your estate plan is important, and there is no "simple" estate plan. Make sure you consult with our firm before you deed your property to your kids. Let us help you explore your options. To schedule your complementary consultation, call our office at (215) 706-0200 or email us at info@jawatlaw.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.

Thursday, May 27, 2010

NEW: Probate Resource Center

Please check out our new Probate Resource Center for Pennsylvania. In the new resource center, you'll find information about how probate works, the steps to probating an estate, links to important resources, questions and answers, and more.

Our firm works with our clients during the most difficult times in their lives to make sure the probate process is not burdensome. We know our clients and prospective clients want to get educated about how probate works, so we've put together some great resources to help achieve that goal.

Keep in mind that Pennsylvania probate is different than other states, such as California.

If you have any probate and/or estate administration matters that need attention, our firm is pleased to be able to offer our assistance.

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.

Tuesday, February 02, 2010

Pennsylvania Inheritance Tax

Residents of Pennsylvania need to be aware of the PA Inheritance Tax, which is structured differently than the Federal Estate Tax. In 2010, there is no Federal Estate Tax.

In Pennsylvania, there is no exemption amount. That is, the tax calculator starts running from $1 and up.

Here is a quick and important list of the Pennsylvania Inheritance Tax Rates:

-- Passing property to spouse: 0% (Yes, no more PA Widows Tax...for now.)

-- Passing property to children: 4.5%

-- Passing property to siblings and other family: 12%

-- Passing property to all others: 15%

Tax Discount: The Inheritance Tax is due within 9 months of passing, and then penalties are applied thereafter. However, you can receive a 5% discount by paying the tax within 90 days of passing. You can pre-pay the tax and estimate the tax due.

Tax Exemptions: There are several ways to reduce the tax, including:

- Subtracting attorneys fees, probate fees and professional fees from the net estate.

- Subtracting funeral costs from the net estate.

- Various exemptions, including the Family Exemption.

Preparing The Return: As part of the estate administration work an attorney does, the Inheritance Tax Return should be included in the fee. Our office always prepares the PA Inheritance Tax return as part of any probate/estate administration matter. Every case is different and some returns are trickier than others.

For more questions about the PA Inheritance Tax, contact our office today at info@jawatlaw.com or by calling 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.