Special Needs

Tuesday, January 6, 2015

Dangers of Writing Your Will Online

 The saying goes, "there's an app for that" and sure enough, there are plenty of applications, websites and software packages today that allow you to "create an estate plan" by yourself. I put the previous phrase in quotes because I believe it is akin to false advertising.  An estate plan is much more than just a document—an effective plan requires knowledge, application of proven strategies, and an attorney with experience. Experience matters, because an estate plan that initially appears to be simple may have dangers lurking in the background, and only an experienced estate planning attorney can preemptively address and correct those issues.

Before you consider do-it-yourself planning, consider these five true stories of DIY planning gone wrong:

  1. The Suze Orman Trust: Suze Orman has a great reputation for no-nonsense talk on financial matters. A couple of years ago, a couple visited me and showed me the trust they wrote with Suze Orman’s Living Trust kit. The couple lived in Pennsylvania, but they had a California trust. California and Pennsylvania laws are significantly different, including property ownership laws, probate laws and more. Therefore, the trust they had was not appropriate for Pennsylvania and would have done more harm than good. Suze Orman talks a lot about avoiding probate, which is a valid concern in California, but generally not in Pennsylvania. Here, we had a case of over-planning and improper planning. Not everyone needs a living trust, including this couple.

  2. Honey, I Deleted You From My Trust: A gentleman made an appointment with me last year, and he wrote his living trust online. He was married with three children. He wrote the trust so that if he passed away, everything went directly to his three children. When I showed him and his wife the error, she was not happy… at all. Thankfully, we fixed this plan—and as it happened, this couple did not need a living trust either, so we were able to simplify their plan and get it right.

  3. Powerless Power of Attorney: I met with a couple who drafted their powers of attorney online. They were very proud that they had powers of attorney for virtually no cost. The problem? They left out key provisions, such as the ability to make gifts strategically if long-term care was needed. They had no backup power of attorney. Finally, they failed to execute the documents properly, meaning the plan would have been useless in a time of need. By the way, they also had no will, which they claimed wasn’t important because all of their assets were jointly held. A will is still vital in this case, because you still need to appoint an Executor.

  4. Special Problem: Recently, a couple retained me after they drafted their wills online. They have one child, and figured their plan must be simple. The problem is that their child is special needs, and their will left everything outright to their child. If this plan were executed, the child would be disqualified from receiving any public benefits. We drafted a special needs trust for this family so that their child's inheritance would be protected and he would still qualify for public benefits.

  5. Where There’s a Will, It Won’t Help Your IRA: A widowed woman’s computer-savvy nephew drafted her estate plan online after her husband passed. She has two children, rents an apartment, and has most of her money in IRA’s and annuities. When I sat down with her about estate plan, we uncovered the fact that only about 10% of her assets would pass through her will. Also, after reviewing her beneficiary designation forms for her IRA’s and annuities, we realized her only beneficiary was her deceased husband. There were no contingent beneficiaries listed! Her will was a good start, but not what she needed. We setup a Retirement Asset Protection Trust for her IRA’s, so that they would stay in the bloodlines and her children would get the stretch-out benefits of the inherited IRA.


These stories and situations are common, and illustrate the dangers of do-it-yourself estate planning. Consider hiring an estate planning attorney as you make your own estate plan. A qualified attorney understands the right questions to ask, all of the strategies available, and the dangers lurking beneath the surface.

Monday, October 27, 2014

Social Security Benefits Increase 1.7 Percent in 2015

The nation's elderly and disabled Social Security recipients will receive a 1.7% increase in payments in 2015. This is expected to raise the average monthly payment for the typical retired worker by $22.  The increase is slightly higher than last year’s 1.5% cost-of-living adjustment (COLA). The same COLA will apply to pensions for federal government retirees and to most veterans.

As was the case last year, the small rise in benefits will not be whittled down by a Medicare premium increase because the standard Medicare Part B monthly premium will remain $104.90 in 2015, the same as it was in 2014.  Most Medicare recipients have their premiums deducted from their Social Security payments.  (In a recent column, Reuters columnist Mark Miller argues that the COLA doesn't measure retiree inflation accurately and that it's time to "adjust the adjustment.")

The COLA by the Numbers

Starting in January 2015, the average monthly Social Security retirement payment will rise from $1,306 to $1,328 a month for individuals and from $2,140 to $2,176 for couples. The 1.7 percent increase will apply to both elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits.  The maximum Social Security benefit for a worker retiring at full retirement age, which is age 66 for those born between 1943 and 1954, will be $2,663 a month.

The Social Security COLA also raises the maximum amount of earnings subject to Social Security taxation to $118,500 from $117,000.  This means that those earning incomes above $118,500 will pay no tax on any income above that threshold.

The COLA increases the amount early retirees can earn without seeing a cut in their Social Security checks.  Although there is no limit on outside earnings beginning the month an individual attains full retirement age, those who choose to begin receiving Social Security benefits before their full retirement age may have their benefits reduced, depending on how much other income they earn.

Early beneficiaries who will reach their full retirement age after 2015 may now earn $15,720 a year before Social Security payments are reduced by $1 for every $2 earned above the limit. Those early beneficiaries who will attain their full retirement age in 2015 will have their benefits reduced $1 for every $3 earned if their income exceeds $41,880 in the months prior to the month they reach their full retirement age.

For 2015, the monthly federal Supplemental Security Income (SSI) payment standard will be $733 for an individual and $1,100 for a couple.

For a complete list of the 2015 Social Security changes, go to:

Tuesday, September 2, 2014

An Explanation of Special Needs Trusts

Are you planning on leaving part of all of your estate to a person with special needs? Particularly, the concern is that an individual with special needs that is receiving Medicaid or SSI benefits may become ineligible for those benefits upon receiving an inheritance. How can you avoid that from happening while still providing for him or her?

A Special Needs Trust is required to keep your loved one on his or her public benefits while still providing supplemental needs for them.

In Pennsylvania, it is a detriment to any person that receives public benefits (SSI, Medicaid, Medical Assistance / MA). Even if the person is not currently receiving benefits but you’re concerned they may receive public benefits in the future, you want to consider a special needs trust.

By carefully establishing a Special Needs Trust, you can select a Trustee who cares for your loved one, and provides for any supplemental needs through the trust funds. The Trustee makes sure that your loved one never actually touches the funds. This ensures that eligibility for public benefits will never be in jeopardy. The trust can 

There are several different types of Special Needs Trusts:

  • Third Party Special Needs Trust: If you establish a Special Needs Trust for the benefit of another person, this is called a Third Party Special Needs Trust. With these types of trusts, the Commonwealth of Pennsylvania nor the Federal Government are not entitled to recover any assets (“estate recovery”) when the individual with special needs passes.

  • First Party Special Needs Trust: Also referred to as a self-settled trust, an individual with special needs may put their own assets into this type of trust, protect their estate while living, and still qualify for public benefits. Often used for personal injury settlements, this trust must name the government as the primary beneficiary. This trust must be reviewed by the government before it may be activated. Individuals doing estate planning for their own estate on behalf of a loved one with special needs should utilize a Third Party Special Needs Trust.

 A Special Needs Trust is a specialized tool and provides many benefits. If you have a loved one on public benefits that you wish to provide for, we can assist you. The Law Offices of Jeremy A. Wechsler offers a complimentary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

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

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