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Philadelphia PA Estate Planning Blog
Wednesday, April 7, 2010
Only 35% of Americans have their estate plan completed, either with a will or trust. Therefore, over 6 out of every 10 people reading this have not done any planning! Instead, they have decided to let the government do their planning. Not a good idea.
For those putting off planning, you've likely been talking about planning for a while now and keep pushing it off. Being in this profession, I see way too many unfortunate circumstances where planning was not done before time was up. It is vital to put at least a basic plan in place today. Here is what you need to at least get started:
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Last Will & Testament: The will is the document that lists your wishes after you pass. You will names your executor, the person who handles your estate, lists who the beneficiaries are (a beneficiary is the person who receives property from you), and lists any immediate family members that you have disinherited. It can also name a guardian for minor children, and list your wishes on whether you want cremation or not. Wills can be more advanced, and can include provisions such as setting up testamentary trusts so that all assets are not immediately distributed. You must have a will. If you don't, the government has what's called an intestate/intestacy statute that lists in detail who in your family will take property. You will have no control, and neither will your heirs!
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Financial Power of Attorney: This document controls all of your non-medical affairs when you become disabled or incapacitated. Sometimes it is more important than having a will. These must be updated every few years or so because some institutions, such as banks, investment houses, etc, will say they are "stale" if more than 5-10 years old. This is a powerful document, giving your agent (the person who acts on behalf of you) the power to manage your assets, property, businesses, accounts, etc. It also may give your agent the ability to handle your retirement accounts (be careful with this) and to make gifts (also another one to be careful about). You can also use this document to appoint a guardian for yourself or for your children during your incapacity.
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Medical Power of Attorney / Living Will: In Pennsylvania, the medical/health care power of attorney and living will can be combined into one document. The power of attorney controls while you are alive but disabled. The living will controls at the end of life phase when there is no realistic hope of recovery. This document gives the person acting on behalf of you to speak with your doctors, hire and fire your doctors, tell the doctors what to do based on your wishes, etc.
These documents are only a start to a solid estate plan. Estate planning requires a lot of thought and analysis, and takes into consideration you, your family, the legacy you want to leave and the assets that you currently own. More advanced estate planning can often be necessary to save taxes, probate fees and provide asset protection.
Finally, if you already have a basic estate plan, make sure to update it at least every five years, if not sooner.
Please contact our firm today if we may be of assistance. We can provide an economical basic estate plan that will be the foundation of a sound estate plan. Inquire about our outstanding services today.
Thursday, March 25, 2010
Special Needs Trusts are designed to permit financial resources to remain available to assist a disabled individual who receives or may receive in the future, Medicaid/Medical Assistance and SSI benefits. The trust, when set up properly, protects the resources from im
Special Needs Trusts are designed to permit financial resources to remain available to assist a disabled individual who receives or may receive in the future, Medicaid/Medical Assistance and SSI benefits. The trust, when set up properly, protects the resources from immediate invasion by Pennsylvania Department of Public Welfare (DPW).
When setting up the trust, one must clearly state that the trustmaker is SUPPLEMENTING public benefits, not supplanting them. The trust must be irrevocable, and must allow the trustee (person making the distributions) to have complete and unfettered control over those distributions. Distributions should never be made directly to disabled person. Instead, distributions should be used to pay vendors for medical equipment, entertainment, etc. for the benefit of the disabled person.
Types of trusts:
Self-settled trust: A self-settled trust is funded with the disabled person’s own money. In Pennsylvania, the commonwealth must be listed as initial beneficiary upon passing of disabled person to recover costs of Medical assistance, etc.
Third party trust: A third party trust is created by one person for the benefit of another (i.e., mother creates trust for disabled daughter). Unlike a self-settled trust, the Commonwealth of Pennsylvania has no right to seek reimbursement for Medicaid, unless they are added as a beneficiary, in which case, they WILL likely attempt to recover appropriate expenses
Pooled trust: This kind of trust involves a non-profit fiduciary with a “mutual fund” type of program where the funds are invested in a common fund but with individual accounts
Questions to think about:
-- Who is the trustee? Corporate trustee or someone in the family?
-- How much money should be in the trust?
-- Does your attorney have experience writing SNT’s?
The rules for SNT’s are tricky and complex. Make sure you have an attorney who is experienced in special needs matters draft the trust, and advise you on all matters relating to the trust.
Sunday, March 14, 2010
Time to review your Will, Trust and Powers of Attorney?
It's so important to keep your estate plan updated. We hear so often of folks writing their wills and powers of attorney 10 or even 20 years ago... and they don't remember where the originals are, or even the contents of these crucial documents. You should review your plan at least every five years. Here are some additional reasons that you may want to update your plan sooner than the next five years:
Your named executors, beneficiaries, guardians are no longer in your life. You might have named someone as a beneficiary, executor, guardian, trustee or power of attorney who has passed away, or is no longer in your life (i.e., divorce or separation). If that's the case, you definitely want to update your documents to reflect a new executor or beneficiary.
You have a new family member. You might want to include a child, grandchild, niece or nephew who has been born after your last will was signed. If you have named individuals specifically and not as a class, you will have to make sure after-born individuals are included.
The law has changed. You might not know of all the changes in the law, but the law is changing on a regular basis. New cases are decided, new statutes are instituted. Therefore, it is a good idea to have your attorney review your estate plan every few years to make sure the plan complies with the current law.
Substantial increase or decrease in the value of your estate. There might be federal estate tax or state inheritance tax issues that will depend on the estate value at the date of death. In 2010, there is no federal estate tax, but the estate tax rates are uncertain at this point for 2011. These tax considerations could result in significant cost or savings for your estate. You must be continuously aware of the tax thresholds and the planning needed to protect your assets.
Hitting the jackpot. If you've acquired a large asset, this might impact your overall estate plan or might necessitate specific mention of the asset in order to allow for the best transfer mechanism. This will only happen if the documents are updated as required.
IRA and 401K Beneficiaries. You should see an attorney about the best way to designate beneficiaries. You should also have your wills and trusts drafted in a way to allow a trust for minors or for a spouse to be named as beneficiary and still have the retirement "stretched" for income tax purposes
Disabled Beneficiary. If a beneficiary becomes disabled, you must update your will to insert a Special Needs Trust (SNT). The SNT will allow the assets to be protected for the disabled beneficiary and will prevent them from being disqualified from government benefits.
Spouse has Entered a Nursing Home. You must update your wills to insure that some portion of your assets are protected from your spouse's nursing home spending if you die before him or her. This is frequently missed and cost the family tens or hundreds of thousands of dollars.
Monday, March 8, 2010
Your will does many things, but any asset that has a beneficiary designation form, such as a life insurance policy, annuity, IRA, etc., does not pass through your will.
Instead, those assets with a beneficiary form pass directly to the specified benefiary, and the will does not control in those situations.
What are the implications of this for your estate plan? All too often, families have not given serious thought to fairness and equality in distributing assets and personal property. For example, in your will, you leave 50% to Child A and 50% to Child B. But you have a large life insurance policy that you purchased before Child B was born, and Child A is the sole beneficiary. As a result, the distribution of your estate is unequal.
The example above is a simple one, but many plans have more assets, family members and gray areas. You should speak with a qualified estate planning attorney who can analyze your entire estate, including the assets that pass outside of your will, and implement a superior solution that will benefit your family.
As always, we recommend that you review and possibly update your estate plan in Pennsylvania no less than every five years. Your will, trust, powers of attorney and beneficiary forms may need changes, and it's a good idea to meet with your attorney to review your documents. If you have not reviewed your estate plan for over five years, please call our office at 215-706-0200 to schedule a complementary consultation.
Sunday, February 28, 2010
We want you to choose an estate planning attorney that is right for you.
Consumers often find it difficult to select the right estate planning attorney. We cannot tell you how to choose the perfect attorney to handle your estate planning needs. Each attorney and law firm has different values, levels of service and expertise. Below, learn about our firm's values, level of service, and wide-ranging experience that we provide. If you are an existing client, this is a great item to forward to your friends and family. For prospective clients, we hope that this will help you in selecting an estate planning attorney in the Philadelphia area that meets your needs.
Our values
* Estate planning is a highly personal matter, and every family is unique.
* Estate planning is done out of love for your family to provide for you and your loved ones for generations to come.
* We value a client-centered approach to the lawyer-client relationship. We value the knowledge, experience, wishes and hopes of each and every client that we meet with and make sure that we actively listen to what the client wants.
Service
* Our clients tell us they love the fact that we return calls and emails on the same day. We do not allow any client to get lost in the shuffle.
* We do not cap our initial complementary consultation at 60 minutes. Our consultations usually last over 2 hours, so that we can get to know your family, you can get to know us, and we can see if we're a good fit.
* The documents that we craft for you are organized, easy to read and professional. We provide you an original and a reference copy in a planning binder that allows you to have a central resource for your estate, financial and memorial plans.
* We offer maintenance programs that permit doctors to instantly access your health care documents on a secure web site, and allow your designated family members to access your estate planning documents when appropriate.
Our Expertise
* As a member of the national organization WealthCounsel, we have access to the latest, most innovative estate planning techniques and technology.
* We offer a holistic approach to retirement planning, and our firm is part of an umbrella of highly respected professionals that can assist you, if needed, on your retirement financial plan, long term care insurance, life insurance, and tax planning.
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We know that it is not easy to choose the right attorney and that not every attorney is right for every client. That is why we offer a complementary consultation. We hope you'll take us up on the offer to meet with you to determine if we can assist you in crafting your estate plan.
Thursday, February 25, 2010
Yesterday, your estate planning attorney Jeremy A. Wechsler attended the Pennsylvania Bar Institute's annual Estate & Elder Law Symposium. Jeremy believes that continuing to learn the latest estate planning techniques and case law is crucial to maintaining top standards in practice.
For instance, several key cases came through the Pennsylvania courts this year regarding estate planning. A big case, Slomski, has huge ramifications for powers of attorney, and whether certain language in your power of attorney gives the agent the ability to change beneficiaries on your retirement accounts. Was your power of attorney drafted a while ago? Better have it reviewed by us to make sure the language is proper. In fact, there have been dozens of cases throughout Pennsylvania this year that could have estate and elder law ramifications. Bottom line is, your documents from 10 or 20 years ago may not work today.
Other topics discussed yesterday were new and current asset protection strategies that actually work in Pennsylvania. Asset protection simply means planning ahead of time to keep your assets as safe as possible, using legal strategies. There are many strategies to protect your assets -- it's really about knowing the law. What assets can creditors get to? What is restricted? What strategies can you use to get money out of your estate and into your son or daughter's hands? What about strategies to protect your son or daughter with that estate? These are all questions we can help you with.
Also of interest was the latest elder law issues, such as Medicaid planning and the Medicaid application process, social security issues, and family caregiver agreements.
If you need a review of your estate plan, or need an estate plan crafted, make sure you visit with an attorney who keeps up with the latest law and most innovative techniques that actually work.
Tuesday, February 16, 2010
Catch Jeremy and his dad, the "retirement quarterback" Peter Wechsler, every Saturday from 8:30 AM to 9:30 AM on your AM dial, 1340 WHAT. You can also listen online at www.am1340what.com.
Each week on our show, we discuss current estate planning and retirement planning issues. This week, we're going to be rolling out a couple of new segments, including Take Five, where we feature listeners questions that we get via email (you can email us your questions at info@jawatlaw.com).
It's a sure bet that you'll not only learn a lot on our show each week, but have some fun too. Peter and Jeremy, father and son, are known to banter on for quite a bit. So grab that cup of coffee, turn on your radio, and tune in every Saturday at 8:30 AM.
Thursday, February 11, 2010
Sometimes, a power of attorney is more important than your Will. A power of attorney essentially lets someone step into your shoes, to take care of your financial and health matters if you become disabled or incapacitated.
Many people have power of attorney documents, and a good portion of these documents were probably executed over ten years ago. It is important to have an updated power of attorney. Why? Your family or family circumstances may have changed. The agent listed may no longer be the agent you want. Most importantly, Pennsylvania laws and regulations have changed within ten years, adding and modifying requirements for powers of attorney.
Even if you are married, it is still essential to execute both the health care power of attorney and financial power of attorney.
Make sure your attorney carefully crafts your document and only gives the powers you want to grant. Pay particular attention to retirement plans and the power to change beneficiaries, the power to deal with life insurance policies, and gifting powers.
For a free review of your power of attorney, your estate plan or to craft an estate plan, please call our office at 215-706-0200 to schedule an appointment.
Thursday, February 4, 2010
A great resource to learn more about IRA's, Roth conversions and more is Natalie Choate's podcast page. Natalie is one of the foremost expert on IRA's.
Should you convert your IRA to a Roth IRA? What effect does remarriage have on your retirement? What things should you avoid with your inherited IRA? Natalie's podcast page is chock full of resources. Check them out today:
https://advisor.morningstar.com/products/podcasts/choate.xml
Tuesday, February 2, 2010
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.
Thursday, January 28, 2010
People always ask us how often they should review their estate plan, whether it be a Will or Revocable Living Trust. Just as your family changes, your estate plan should reflect those changes. Good estate planning attorneys try to plan ahead for as many contingencies as possible in each estate plan. However, even the best estate planning attorney cannot plan for every change down the road.
Therefore, we recommend that you have your estate plan reviewed every 3-5 years, or sooner if there is a major change in your family, or you change your mind about something in your plan.
An estate plan is not a static document, and must be updated throughout the course of your life.
Our firm offers different maintenence programs, and we even offer a secure online service to store and access your important documents. If you are interested in having our firm review your estate plan--whether it be your will, trust, powers of attorney, or living wills, please do not hesitate to contact us by email (info@jawatlaw.com) or telephone (215-706-0200).
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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