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Philadelphia PA Estate Planning Blog
Monday, December 21, 2009
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.
Saturday, December 19, 2009
This is a question that I get asked often. If you do not have a will or living trust, the Commonwealth of Pennsylvania has developed a scheme of how your assets will be distributed upon your passing. This is called dying "intestate" and the law is the Pennsylvania Intestacy statute. For instance, if you die and have a surviving spouse, you had kids together and you have a surviving parent, your spouse will collect $30,000 plus one half of the remaining balance of your estate. The rest of the estate goes to your children in equal shares. The scheme continues, and takes into account the possibility of having no spouse, no kids, or parents.
Of course, it is always better to have a plan of where you want your stuff to go upon your passing. Every family is different, and each family presents unique circumstances and dynamics that must be addressed in an estate plan. For instance, if you have minor children, you would probably not want your assets distributed outright upon your passing. Rather, you would likely want to hold those assets in trust until the child reaches a certain age.
The intestate statute is a backup, and should never substitute for an estate plan.
Thursday, December 17, 2009
This Sunday on AM 1340 WHAT (Philadelphia), Jeremy and Peter Wechsler are going to be discussing one family's estate and financial plan. The family, based on real clients but many factors changed to protect the identities of the clients, is an interesting case, and most people will be able to relate to at least bits and pieces of the situation. We're going to take you through the family, both good and bad, look at their current estate and financial plan, and then discuss our possible recommendations. Sure to be a great radio show, so check it out. Every Sunday at 9:30, AM Dial...1340 WHAT. You can listen online as well at www.Am1340What.com.
Wednesday, December 16, 2009
The IRS recently announced that the annual gift tax exclusion will stay the same in 2010 at $13,000.??If you're married, each spouse gets an exclusion so a married couple can gift $26000 to each individual without creating a tax liability or necessity for reporting.
With proper gift planning, a family could transfer a significant amount of money to their children and grandchildren while saving money on federal estate taxes. With the estate tax potentially going back to only a $1 Million exemption in 2011, gifting may make sense to more clients. Reducing your estate tax is complicated, and you should consult a qualified attorney to determine whether you are liable for the estate tax, and how to reduce your liability if necessary.
Also note that gifting is not for everyone. For instance, the chance that senior citizens need Medicaid is typically increased and gifting in this instance can disqualify you from certain government benefits.
Monday, December 14, 2009
A lot of people ask our office what the difference is between Wills and Trusts. There are several key advantages to trusts, depending on your estate planning needs. One advantage to our readers who value privacy is that a well-crafted Revocable Living Trust, if properly written AND funded, can avoid the probate process. By avoiding the probate process, your written instructions, hopes, wishes and legacy have a better chance at being kept private. In contrast, a Will always enters the probate process, and thus, becomes a public document. All you have to do is google "Jackie Kennedy Will" to see what I mean. Anyone can access the former First Lady's Will! Sure, the chances of your Will leaking all over the internet are slim, but the point remains--your Will is available to all those that want to see it, whether or not you want them to see it. Living Trusts can never guarantee complete privacy. However, qualified attorneys can craft Living Trusts to better protect against intrusions. Remember that if you currently have a Will as the foundation of your estate plan, you CAN "upgrade" to a Trust.
Sunday, December 13, 2009
We just posted new information about ethical wills. Check it out under the Resources tab.
Saturday, December 12, 2009
WealthCounsel is the premier estate planning organization in the United States. Quite simply, no other organization even comes close to the level of experience that WealthCounsel offers its over 1,000 estate planning attorneys. Asking whether or not your estate planning attorney is affiliated with WealthCounsel is crucial, because only WealthCounsel members have all of the latest techniques and tools for proper estate planning. As a member of WealthCounsel, our firm can design a living trust for you that is sound under the law, yet customizable to you and your family's needs.
Thursday, December 10, 2009
Here is some food for thought: If Congress doesn't pass a permanent federal estate tax fix soon, we are looking at perhaps 2010 staying at the $3.5 Million exemption, as it is more likely that they'll pass a one year fix. That's already passed the House and I think the Senate will probably pass it too. But I get the feeling we're going to be back to a $1 Million exemption in 2011, because quite simply, the federal government needs revenue. They cannot sustain a $12 Trillion and growing deficit by lowering or eliminating taxes.
What does this mean for you? If you are worth at least $.5 Million or more, you must seriously consider trust-based planning. Proper planning with trusts, particularly for married couples, can reduce and (sometimes permanently) delay estate taxes, depending on how the trust is designed.
The key takeaway is that trust-based planning is something you ought to be considering now, even if you don't consider your estate to be valuable. Depending on your estate, your $.5 Million could easily grow during your lifetime and pass the taxable threshold. You should know that living trusts are not away to avoid income taxes or estate taxes. But, with proper planning, it is possible that we can make sure you don't pay more estate taxes than you have to, and we can use sophisticated tools to delay the payment of those taxes. The bottom line is, these are times of uncertainty. A will-based plan for any estate cannot account for the uncertainty as well as a proper trust-based plan can.
Tuesday, December 8, 2009
Came across this article on USNews that concisely talks about how to avoid some common estate planning mistakes. Some ways to avoid the mistakes include finding the right estate planning attorney, picking the right executor and trustees, and make sure your title to your assets is clear. Check out the rest of the article
here
.
Monday, December 7, 2009
We talk extensively about the Federal Estate Tax. Indeed, it only applies to less than 10,000 families right now across the entire United States. Why? Because the exemption from being taxed is high for married couples -- You must have more than $7 Million in assets as a married couple for the federal estate tax to kick in. But what about the Pennsylvania Inheritance Tax? There is no minimum for that tax, unlike the Federal Estate Tax.
If you are passing assets to your husband or wife in Pennsylvania, there is no Pennsylvania Inheritance Tax.
The inheritance tax rate for passing property onto descendants, children and grandchildren is 4.5%
The inheritance tax rate for passing property onto siblings is 12%.
All others are taxed at 15%.
If you want to learn more about the Pennsylvania Inheritance Tax or Federal Estate Tax, schedule some time with me at our office.
Monday, December 7, 2009
Thinking about making that charitable gift sometime soon? Now is the time to do it, before December 31. This is one of several tax-saving strategies that you can apply during the month of December, so that come April 15, you can rest a bit easier at night. Check out the article from Forbes magazine, detailing the federal tax saving strategies
here
.
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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