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Philadelphia PA Estate Planning Blog

Monday, December 6, 2010

Ethical Wills

Why do we engage in estate planning? Most people would say their priorities in estate planning are protecting their assets and ensuring those assets get passed on properly.

However, we often miss the equally important goal of estate planning: passing on your values, hopes, fears, lessons learned, etc. to the next generation(s).

An ethical will is not a formal legal document, nor is there one right way to put an ethical will together. Your ethical will could be a single sheet of paper, or an hour-long video. It could be something you do once and tuck away, or it could be an ongoing process for you. There is no right or wrong way to go about writing or producing an ethical will.

The purpose of an ethical will is for you to pass on non-material, intangible things, ideas, wishes, etc. that are important to you. What were the lessons you learned in life that you want to pass onto the next generation? What would you want to tell your grandkids if you never knew them? These are just a couple of the countless reasons to write an ethical will.

For a great article on ethical wills, check out last week's Philadelphia Inquirer piece here.

If we can assist you with any questions regarding writing an ethical will, please call our office at (215) 706-0200.


Monday, November 29, 2010

Storing Your Estate Plan Online

 

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

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

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

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

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

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


Monday, November 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 complimentary appointment. Have a wonderful Thanksgiving holiday!


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 complimentary consultation at (215) 706-0200.


Monday, November 8, 2010

Superior Estate Planning

 

What separates a mediocre or good estate plan from a great one? At our firm, we like to think that we go the extra mile for each and every client we see, no matter what the circumstance. Here are a few things that separate us from other estate planning firms:

  1. We understand that estate plans don’t work well in isolation. They must be connected to your financial plan, retirement plan, tax plan and long term care plan. We have put in place a network of professionals that understand how all of the pieces of this puzzle fit together, and can help you craft a well-rounded plan.
     
  2. We take more time than most attorneys do, to both meet with you to design the plan, and to walk you through how it works.
     
  3. We offer a 100% satisfaction guarantee. Therefore, you can rest assured that we will do whatever it takes to get your plan right.
     
  4. We’re members of WealthCounsel, the premier national organization for estate planning attorneys. Collectively, WealthCounsel attorneys are by far the most experienced estate planning attorneys in the country, and together, we all keep up on the latest trends, laws and planning techniques.
     
  5. We never write cookie-cutter plans or offer cookie-cutter solutions. A living trust isn’t for everyone. Some people may need a simple will. Others may need a retirement trust. We walk you through all appropriate options, and educate you so that you can decide what is best for you and your family.
     
  6. Nobody likes to see an attorney. We understand that, and aim to make sure that you and your family are completely comfortable in our office. We have lots of beverages, snacks and a warm environment to relax you.
     
  7. For estate planning cases, we never bill by the hour. We’ll quote you a reasonable flat fee at the end of our first meeting based on the plan we determine is right for you. You’ll never have to worry about calling us if you have a question, because the meter won’t be on.
     
  8. We make sure you keep your plan updated, and that you're organized so when the time comes, your plan is ready to be utilized. Our goal is not just to write your plan, but to make sure it is able to be executed flawlessly.

Can we help you, your family, or friends with estate planning? Please call our firm to set up a complimentary, no obligation consultation today at (215) 706-0200.


Monday, November 1, 2010

Protect and Stretch Your IRA's

You cannot engage in estate planning today without considering your Individual Retirement Account(s) (your IRA's) and other retirement accounts. Ironically, we often find that these are the most significant assets in a person's estate, and yet these assets are given the least attention. 

Even worse, most estate planning attorneys don't help you plan in conjunction with your IRA's. Why? Because they haven't been trained how to help you in this area. Instead, most attorneys will tell you that your IRA passes outside of your will or living trust, and that the IRA asset will go directly to the beneficiary or beneficiaries you've chosen... case closed.

Most estate planning attorneys do not understand that it doesn't have to be that way! Without better planning, your heirs can withdraw the entire IRA principal, which doesn't allow for growth of the funds. Further, if the IRA is significant in value and you distribute it outright, it is exposed to your heirs creditors, spouses, and themselves (think: are your children spendthrifts?).

By having your IRA distributed to a trust, you are ensuring much greater creditor protection, protection from divorce, spendthrift children, etc. You're telling your heirs that you love them and want the best for them. 

Furthermore, a trust encourages (if not mandates) that heirs only take the required minimum distributions of the IRA. If set up correctly, these required distributions are measuring on the life of your heir. For example, want to leave your IRA to a 4 year old grandchild? That grandchild's required distributions will be a lot less than a 40 year old, allowing great "stretch" opportunities.

Few attorneys understand the complex rules and requirements to ensure this is all done correctly. Many will say you can't put the IRA into a trust. That is incorrect. We've been trained by nationally recognized experts on this subject, and we can assist you in making sure all of the pieces of your plan fit together. 

One more thing… why is this area complex? Mostly because the IRS wants to encourage people to spend down their IRA's. Therefore, the tax laws discourage people from passing on an IRA in such a way that allows for the asset to be a wealth transfer tool. It's not that you can't do it. It's just that the IRS makes it tricky for attorneys to do. Proper language must be used on the beneficiary designation form and in the trust.

Need a review of your IRA and your estate plan? Let us assist you.

 

Let our firm assist you: Our firm offers a complimentary 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, October 25, 2010

Special Needs Trusts: The Basics

 

If you wish to provide for a loved one with either a medical or educational disability, a Special Needs Trust is usually the best option to achieve this goal.

It is a detriment to any person that receives public benefits (SSI, Medicaid, etc.) if they are provided money outright. Therefore, a Special Needs Trust is important in these circumstances, and they successfully avoid this dilemma.

By setting up a Special Needs Trust carefully, we select a Trustee who cares for your loved one, and provides for any supplemental needs with the trust fund. 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.

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 Pennsylvania government is not entitled to recover any assets (“estate recovery”) when the person dies. In other words, they cannot dip into whatever is leftover in the Special Needs Trust to cover the cost for any public benefits that were consumed.

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.

 

Let our firm assist you: Our firm offers a complimentary 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, 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 complimentary 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, October 11, 2010

Living Wills and End-Of-Life Instructions

 

A Living Will is not the same thing as a Last Will & Testament, which provides instructions for dividing your estate upon death. Instead, a Living Will describes your end-of-life health care preferences, and what is to happen if you become permanently unconscious and there is no hope of any recovery.

Your preferences for whether life support be withdrawn or not is only used after your health care agent and doctor(s) decide, together, that you have reached the point where there is no hope of any recovery.

Often, this is a difficult decision for many of our clients. Religious beliefs, personal feelings about death, and other considerations can affect a person’s end-of-life wishes.

It is crucial that you have a Living Will, regardless of the choices you make regarding your preferences.

Here are a few reasons why having this document is important:

  • Gives your health care agent/family certainty over your preferences
  • If your preference is to end your life when there is no hope for recovery, a hospital and doctor need to know
  • Avoids unnecessary conflict/uncertainty/bad feelings within your family
  • Gives you peace of mind knowing that you have control over this situation if you were ever to be in it.

Your Living Will should generally be reviewed every 3-5 years, and re-drafted and executed every 5-10 years. Why do you need to re-write it every 5-10 years? If you don’t, a hospital or doctor can question the validity of the document and your preferences, since they are considered outdated.

 

 

Let our firm assist you: Our firm offers a complimentary 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 6, 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 complimentary 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 5, 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 complimentary 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.


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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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