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Testamentary Trusts

Monday, May 20, 2013

Michael Jackson's Estate

Last night's CBS 60 Minutes program featured a piece on Michael Jackson's estate. If you missed the tv program, check out the story by clicking the link below. Michael Jackson set up a trust for his mother to care for her during her lifetime, but the bulk of the estate will go to his three surviving children. Michael Jackson, now deceased, has made more money in the last few years than any living celebrity. Wow!

https://www.cbsnews.com/8301-18560_162-57585140/michael-jacksons-lucrative-legacy/


Tuesday, June 05, 2012

Jeremy Wechsler Releases New Book on Estate Planning

Looking for a great resource on estate and retirement planning? Jeremy Wechsler, your Estate & Elder Law Attorney, recently co-authored a new book with Peter R. Wechsler, his father and Your Retirement Quarterback. The book is an easy read but full of valuable information on estate and retirement planning.

Learn more about the book here: https://solvingtheretirementpuzzle.com


Monday, May 14, 2012

Five Ways To "Upgrade" Your Estate Plan

 

Everyone must plan their estate. Otherwise, you run the risk of your affairs being a mess at your death and things not happening the way you intended. Make sure you speak with a qualified estate planning attorney to build your customized estate plan. Just like every person and family is unique, so is your estate plan. 

Here are five ideas for your plan: 

  1. Testamentary Trusts Consider adding testamentary trusts to your will, either for your kids or grandkids. A customized testamentary trust has several benefits, including ensuring asset preservation, protection for minors, and more. A well-written testamentary trust is economical and can provide you peace of mind.
     
  2. The Year of the Gift: Consider a sophisticated gift strategy. 2012 might be considered the "Year of the Gift" because of the large exemption amount of $5 Million that may disappear at the end of the year. Smart gifting can provide many benefits to you and your heirs, but you must ensure gifting is done properly and in a way that makes sense for you. Be careful about doing-it-yourself.
     
  3. Write an ethical will: Most times, a Will or a Trust cannot capture the values, ideals, morals, judgments that you wish to pass on to the next generation. An ethical will can put those thoughts into words for you. Although it's not a legal document, an ethical will can be a great addition to any estate plan. 
     
  4. Trust Strategy: Consider the use of trusts for certain needs. For beneficiaries on public benefits, a special needs trust should be established. If you wish to preserve assets against Medicaid spend down, a nursing home protection trust should be used. There are other trusts and strategies as well, and depending on your situation, they may make sense for your estate plan.
     
  5. Communicate: Talk to your family! Communication is key for any estate plan to work. You don't need to tell your kids how much you have in your estate, but you should communicate your general intentions as to who the Executor will be, whether there are even or uneven distributions and why, etc. Surprises are never good and unpleasant or unexpected surprises can lead to lasting conflict. 

Please continue to update your plan regularly, and if you don't already have an estate plan, now is the time to put one into place!


Monday, June 06, 2011

Three BIG Estate Planning Mistakes

 

Sure, there are more than three common estate planning mistakes. But we thought we'd highlight three of them in this week's blog.
 
1. Your plan does not match your needs: Why do we see clients with relatively simple needs come to us with large revocable living trusts? Or clients with a $10 Million estate come to us without even an updated will? Your plan needs to be aligned with your current needs, as well as your hopes, desires and fears for the present and future. Only a consultation with a qualified estate planning attorney can help you determine what the correct tools are for your estate plan.
 
2. Failing to protect your IRA and large assets that fall outside of a will: So, you’ve set up a carefully drafted will that has testamentary trusts for assets passing to your children. But you also have a large IRA that doesn’t pass through your will. Instead, you filled out a beneficiary designation form for that IRA, and it will pass directly to your heirs. This exposes a large asset to divorce settlements, bankruptcy, spendthrift children, lawsuits, etc. In addition to your will, you should consider an IRA inheritance trust to protect against these common issues.
 
3. Failing to review and update your plan regularly: A plan written today is based on the facts and circumstances today. Over time, those facts change—new family members come into our lives, and others depart. Our relationships change with our family. We may see new conflicts develop. We may have significantly more or less assets as time goes on. All of these changes in circumstances require you to regularly review and possibly update your plan. Our standard for review is at least every three years, and upon any major changes or developments in your family.
 
Does your plan need a fresh look? Please call us for a complementary consultation today at (215) 706-0200.


Monday, May 09, 2011

Inheritance Protection

 

Make sure your inheritance isn’t squandered!

Before we can help you write your will, trust, and power of attorney, we must understand your concerns and goals for estate planning. Many people have an overarching goal—that is, they want to be assured that the inheritance they are leaving to someone isn’t squandered.

Protecting an inheritance is a crucial goal, and one that we specialize in helping people deal with every day. But protected from whom and what, exactly? Here are a few answers, and they depend on who the person is:

  • If the beneficiary is a minor, obviously we want to ensure the inheritance is used for their benefit and their benefit only.
  • If the beneficiary has a spending problem, substance abuse problem, etc., our goal would be to limit how the inheritance can be spent.
  • Is the beneficiary in a relationship with a daughter-in-law or son-in-law that you don’t care for or have a concern about? Worried that the inheritance would go to your beneficiary’s spouse upon divorce? We devise solutions to deal with these problems on a regular basis.
  • What about beneficiaries in high risk professions, such as lawyers or doctors, where lawsuits are prevalent and where the inheritance could be attached to a lawsuit?
  • Special needs beneficiaries, of which 15-20% of people are, must have their inheritance put into a special needs trust if you don’t want the inheritance to be squandered to cover costs that public benefits, such as SSI or Medicaid, would otherwise cover.

These are a few of many reasons why people are coming to us every day to make sure the inheritance they leave to someone else isn’t squandered. Remember, sometimes we know of these types of issues now or ahead of time. But more often, we cannot predict what will happen in the future. Do you want to risk your inheritance being used the wrong way? We can help craft a flexible plan that ensures your inheritance will go where you want it to go.

Let us know if we can help you protect your legacy. Call today for a complementary appointment, (215) 706-0200.


Monday, April 18, 2011

What is a Testamentary Trust?

 

In Pennsylvania, many clients opt to use a Will rather than a Revocable Living Trust for their estate plan. Living Trusts can be beneficial in certain situations. Your attorney can speak to you about when a living trust may be appropriate. In Pennsylvania, living trusts are not appropriate simply to avoid probate, since the Pennsylvania probate process is not burdensome.

Although a living trust may not be advisable for your family, many people still want to control the inheritance they leave to their children or grandchildren, ensuring it gets to the right person and is used for the right purposes. In other words, give what you want, to whom you want, when you want.

Unfortunately, we livein a litigious society – assets held in certain trusts can be better protected for your heirs. Also, beneficiaries that are spendthrifts, in high risk professions, too young, have spouses that you can’t trust, etc. all are good reasons to think about trusts. 

For clients with these concerns, we can use testamentary trusts, or trusts within a will. The trust is not actually established until death, when your will is executed. The instructions for the trust are written into your will, and once your will is probated, the specified assets and amounts will be used to fund a new 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. At our firm, we can help you customize your trust based on your needs and concerns.

You may already have a testamentary trust in your will, but it may not do what you really want it to do. Let us know if we can help you review your current estate plan.

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.


Monday, March 28, 2011

10 Things That Could Go Wrong Without A Plan

 

Without an estate plan, many things could go wrong. As always, what could go wrong depends on your situation. Here are ten quick issues that could arise if you do not have an estate plan:

  1. If you have kids but have not appointed a guardian, and something happens to you (and your spouse), someone will have to petition a court for guardianship, a burdensome process.
     
  2. You have no control over how your assets are divided if you don't have a will.
     
  3. If you become sick/incompetent, and an end-of-life health care decision needs to be made for you, your family may end up in court if there is disagreement and discord.
     
  4. The state will determine who your Executor will be. What if more than one person wants the role? What if no one wants the role? Either way, this could lead to major conflicts in the family.
     
  5. Particularly for a second marriage, if you don't have an updated and carefully drafted durable financial power of attorney, your spouse could cut out your children from the first marriage, particularly when it comes to retirement accounts.
     
  6. Your family could inadvertently pay more inheritance taxes.
     
  7. For those that are not married, but are either engaged or in a long term relationship and want that significant other to be in control of any decisions for incapacity, etc., you MUST have an estate plan with powers of attorney and wills.
     
  8. For any family, there is the possibility of a family conflict over your personal belongings if they aren't assigned to someone in your plan, or while you're still living.
     
  9. Without a plan, a trust is not established for minors, dependents, and special needs beneficiaries. Only a custodial account can be created under the UTMA, and the functionality and use of this account is severely limited.
     
  10. Lastly, a plan that is not updated might be just as bad, if not worse, if a lot has changed between now and the time you put the plan together.

If you need assistance with your estate plan, please contact our office today at (215) 706-0200.


Monday, February 28, 2011

No Plan? Big Problems.

 

Don't have an estate plan? No one can force you to engage in estate planning, but without a proper estate plan, you are putting yourself and loved ones at more risk than necessary. Here are some complications that can arise when you don’t have a plan. For our readers that have not engaged in estate planning or haven’t reviewed their plan for over 3 years, now is the time to get your affairs in order.

  1. Intestate Laws: Pennsylvania has an intestate law that dictates how your property and assets are divided upon death if you do not have a will or other estate planning tool such as a living trust. Dying without a will can be costly, both in potential higher taxes and family grief/conflict due to a lack of knowledge about your wishes.
     
  2. Dependents: If you have minors or care for dependents or pets, you want to ensure you appoint someone in writing to be in charge of your dependents, kids or pets. You also want to make sure you leave assets, preferably in trust, to care for your dependents. If you have kids and no estate plan and they inherit assets, a custodian account will be established. Once a child turns 18, however, they are free to do what they want with those assets. Typically, an 18 year old does not have the maturity to handle their own assets.
     
  3. Spendthrifts and Special Needs: If you have a spendthrift child, or a spouse or child with special needs, there are steps you must take to ensure assets don’t end up in the wrong hands (creditors, government, bankruptcy court, etc.).
     
  4. Family Battles: Don’t assume your family will just sort out your affairs without any conflicts or commotion. From our law firm’s vantage point, we often hear of cases that go to court that pit family member against family member. We also know that conflicts can largely be avoided by putting together a proper estate plan. It’s just not worth the risk, or your legacy.
     
  5. Incapacity or Disability: You must ensure you have a power of attorney for your finances and health care. That way, if something happens to you and you cannot make decisions for yourself, someone you trust can immediately carry on your important affairs. Without a power of attorney, sometimes a guardian will have to be appointed in court, and the guardian must continue to be supervised by the Orphan's Court. This means legal bills can pile up quickly and unnecessarily.

If you, a friend, a neighbor or relative need estate planning assistance, we welcome you to contact our firm at your convenience. You can use our convenient online contact form or call us at anytime at (215) 706-0200. We are pleased to offer a complementary initial consultation.


Monday, February 21, 2011

Is Probate a Concern in Pennsylvania?

 

Should you worry about whether your estate will need to go through probate or not in Pennsylvania? For the majority of Pennsylvania residents, probate is not a concern for them or a burden on their family. However, there are times when probate should be avoided. A good estate planning attorney will analyze your situation and determine the appropriate planning strategies.

In general, probate is the process of your executor formally registering your will, hence the office that they go to is named the “Register of Wills.”

Pennsylvania is ahead of the curve in having streamlined the probate process years ago. Other states, notably California and Florida, still require court supervision, thus ratcheting up the costs of probate in those states. In Pennsylvania, the probate fees are reasonable. Yes, an attorney should still be retained by the Executor to ensure the process is handled absolutely correctly. But the cost of probate generally speaking is still far less than it would be in several other states.

Therefore, Pennsylvania is not a “living trust” state where the majority of residents have a revocable living trust rather than a will. Instead, many PA residents use will-based estate plans. That doesn’t mean a living trust never makes sense for PA residents. Sometimes, people who believe they need a “simple will” actually need much more strategic and careful planning. The best advice is to arrange for a consultation with a qualified estate planning attorney.

At our firm, we offer a complementary 60-minute consultation for estate planning matters. If you wish to have your plan reviewed, or need a plan crafted for your family, we invite you to call our office at (215) 706-0200.



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 complementary consultation at (215) 706-0200.


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The Law Offices of Jeremy A. Wechsler assist clients with Estate Planning, Wills, Trusts, Asset Protection, Special Needs Planning, Powers of Attorney, Will Challenges and Probate/Estate Administration 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 and Furlong in Philadelphia County, Bucks County and Montgomery County.



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