Philadelphia PA Estate Planning Blog

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.

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 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.

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 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.

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

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

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

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

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

Let our firm assist you: Our firm offers a 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.

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

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

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

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

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

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

Let our firm assist you: Our firm offers a 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.

Make sure you have your estate plan up to date. Here is a quick to-do list. There is no better time than now to get serious about creating or updating your plan.

1. Make sure you have an updated Last Will & Testament: This describes your wishes for your estate upon your death. You may need a more advanced Will or even a trust, depending on your needs.
    
2. Make sure you have updated powers of attorney: You need powers of attorney for both for your general/financial affairs and for your health care. These ensure that if you become disabled, someone will have the power to step into your shoes.
    
3. Check your beneficiary designation forms for life insurance policies, IRA's, 401(k)'s, etc: Many people forget to update these forms for various accounts. Any account with this type of form does not pass through your Will or trust!
    
4. Make sure you know where your original Will and powers of attorney are: They should be in a fire-proof records safe in your home, not a safe deposit box at a bank.
    
5. Communicate: Ensure that your agents (executor, trustee, powers of attorney, etc.) know their respective roles, and know where your original estate planning documents are.
    
6. Keep Up To Date: Continue to review this blog for updates on the federal estate tax. It could potentially come back in 2011 and effect many more people than it used to. If that occurs, you will need to have your estate plan reviewed.

If you need your estate plan created or reviewed, contact our office today at (215) 706-0200 for your complementary consultation.

There was an interesting article in yesterday's Wall Street Journal by Robert Rubin, the former treasury secretary. Rubin advocates bringing back the estate tax in 2011 at a $3.5 million exemption (the 2009 levels). Many people agree with Rubin on this. Where many will part ways with him is his push to retroactively apply an estate tax in 2010, and bring it back for the remainder of this year. It's unlikely to happen, but we'll keep an eye on it. Check out the article with this link.

It is never too soon to write a will, and have powers of attorney drafted, particularly if you are married and have children. Young families in Pennsylvania need to have a fundamental estate plan in place. Once the fundamentals are in place, as your family grows, you can build on your estate plan as needed.

The fundamentals of a young family's estate plan includes:

• A Last Will & Testament: If you and your spouse go at the same time, you need to ensure that your assets are protected for your children. You also need to make sure a guardian is appointed, so that no guardianship proceedings are necessary.
• Financial Powers of Attorney: This ensures that if you become disabled or incapacitated, someone else can make decisions for you. If both you and your spouse both are disabled at the same time, this document also ensures that you have put a temporary guardian in place for your children.
• Medical Powers of Attorney: Your health care decisions and end of life preferences are extremely important, and you must appoint someone to have authority over such decisions if something were to happen to you.
• Adequate Life Insurance: For young children, parents need to ensure that there is at least a term life insurance policy to provide the resouces to care for a child, pay for college, etc. if the spouse who generates the income dies.
• 529 Plan/College Savings Plan: A college savings plan should be in place for your child or children.

These are the basics of any estate plan for a young family. As your family matures, or if there are unique circumstances in your family, different estate planning tools may be needed. Our firm is equipped to assist young families with all of their estate planning needs in the Philadelphia area. For a complementary consultation, please call us today at (215) 706-0200 or email info@jawatlaw.com.

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

Are your powers of attorney documents up to date?

Powers of attorney that are over ten years old in Pennsylvania are likely to be considered invalid, because there were major changes in the law around 2000.

Regardless of changes in the law, it is important that your powers of attorney documents don't go "stale." You want to make sure that institutions, hospitals, etc. will view your power of attorney as valid. Banks, governement agencies, etc will be hesitant to accept powers of attorney over 10 years old.

Experience tells us that powers of attorney documents, which allow someone to manage your affairs if you can't make decisions for yourself (due to disability or incapacity) are more important than a will or living trust (your death wishes). Over half of us will, at some point, experience extensive disability and we will need someone to guard over our affairs.

If you do not have a power of attorney and you become disabled, you run the risk of needing a guardian appointed by a court. Guardianship proceedings, even if uncontested, are burdensome and expensive. Guardians are then under regular court supervision. A well drafted and updated power of attorney avoids all of this. Compared with guardianship proceedings, drafting powers of attorney is simple and economical.

Everyone in Pennsylvania should have a financial power of attorney and medical power of attorney, with end of life instructions.

The law in Pennsylvania is going to change again soon, and powers of attorney language regarding gifting and retirement accounts will become more stringent, to the benefit of most Pennsylvanians. Keep a watch on this blog for any updates.

Meanwhile, please contact us to have your powers of attorney either drafted or updated today. We can be reached at (215) 706-0200 or info@jawatlaw.com.

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

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

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

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

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

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