Why Living Trusts Do Not Make Sense for Most People

As we’ve often discussed here on the blog, having a well-designed estate plan – no matter the value of your property and assets – is a gift to your family and/or friends who will handle your affairs once you’re no longer living. And there are a lot of things to consider when working through the planning process.

From creating your will to ensuring that someone you trust is designated to make decisions for you via power of attorney should you become seriously ill or incapacitated, there is much to know and understand – especially if minimizing complications for your loved ones is your priority.

One component of estate planning that may fall under creating more complications for executors and heirs is the living trust. While these asset-protective arrangements have great value in some specific circumstances, unfortunately, living trusts are often sold to people who do not actually need them, and the truth is that they don’t tend to make sense for the average individual or estate plan.

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Understanding Death Taxes

Benjamin Franklin once wrote in a 1789 letter, “…in this world nothing can be said to be certain, except death and taxes.” This bit of wry humor is true, of course. And in our modern time, we’ve figured out how to combine those certainties with what are commonly known as “death taxes.”

As with most things today, the term “death taxes” is politically charged – the name was devised (likely in the 1990s) to describe estate and inheritance taxes by opponents looking to have those repealed. Unfortunately, their efforts were unsuccessful, but the morbid name stuck.

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What to Expect During Probate in PA

In an earlier post here on the blog, we discussed the steps you should take to begin probating an estate in Pennsylvania. Today we’re picking up where we left off to let you know what you can expect once the probate process is underway.

It’s true that probate can be a time-consuming and expensive process, and it’s important to approach the responsibility in an organized manner. Once you’ve worked through all of the preparatory steps and paid the filing fee, it’s time to get down to the business of probate.

Don’t forget to stay organized, and remember that you can consult an attorney at any time for help if you get stuck. Just because you have not worked with an attorney from the beginning does not mean that you can’t call for a rescue if you run into trouble with creditors, family members, or anything else about the probate process.

Here’s what will happen next now that probate is open. Continue reading “What to Expect During Probate in PA”

Powers of Attorney: Beware of Forced Arbitration Clauses

Recently, the Superior Court of Pennsylvania upheld a Philadelphia County Court of Common Pleas judge’s decision not to enforce an arbitration agreement in a nursing home contract that was signed by a resident’s wife without his knowledge.  Despite that decision, numerous courts in Pennsylvania and around the country have enforced compulsory arbitration clauses, which are often unknowingly signed by consumers, the elderly and others, which force people to give up their right to a jury trial.

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A Step-by-Step Guide to Opening Probate in PA

Most people are overwhelmed by the idea of probating an estate in Pennsylvania, if they even understand the process at all. For good reason, no two estates are alike and not all will even require the formal probate process. For those that do, probate can become time-consuming and expensive, depending on the total value of the estate and other factors related to debt and assets. So it’s easy to feel overwhelmed if you’re facing the probate process.

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Avoid the Pitfalls that can Derail Your Estate Plan

Because there are so many ways that your wealth and assets can be passed on to your surviving family members and other heirs, it is easy to ruin even carefully thought-out estate plans. Your last will and testament may not be the final word on how assets are distributed to others, although many people mistakenly believe this is the case. Beneficiary designations on financial products, for instance, can override your will, and many common estate planning pitfalls may cause heartache and infighting among family members. Protect yourself by getting to know the major “land mines” that can potentially blow up your estate plan. Continue reading “Avoid the Pitfalls that can Derail Your Estate Plan”

7 Common Mistakes Executors Make During Probate

Few people feel fully prepared when they are named a Personal Representative (an Executor, or Executrix) in a loved one’s will. They are often worried about knowing how to probate an estate, what to do, and when to do it. And about making mistakes.

These worries are common, and completely understandable. Legal processes are daunting to most people to begin with, and figuring out how to probate an estate while grieving the loss of a loved one is even more so. On top of that, Personal Representatives can be held personally financially responsible when they make a mistake that results in a loss for the estate, making it sometimes an even more stressful experience.

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Estate Planning: What You Need to Know

Many people don’t want to think about their end-of-life affairs, but if they don’t plan carefully, they may leave their families out in the cold—or with a dilemma on how to handle their estate. Hiring the right estate planning attorney can help you decide how to transfer your assets while minimizing complications and simplifying or eliminating the payment of death taxes for your loved ones and surviving family members.  A well designed estate plan benefits everyone, not just “the wealthy.” Meeting with an attorney and establishing an estate plan makes the process easier, especially if you anticipate health issues or you have a lot of valuable possessions and assets.

To successfully map out your estate plan, you should find an experienced estate planning attorney who can educate you on all the options, while also helping you avoid legal pitfalls. We’ll briefly outline some different estate planning options below so you can familiarize yourself with avenues you may want to consider. Continue reading “Estate Planning: What You Need to Know”

Incorrect Beneficiary Designations Will Frustrate Your Estate Plan

Nightmare #1: You’re happily remarried and have established a fine life with your new spouse, then die unexpectedly and your life insurance policy pays out—to your ex-wife.

Nightmare #2: Your grandchild develops a debilitating illness and now has to rely on disability payments and Medicaid to supply his needs.  Upon your death, one of your life insurance policies is paid to him—and he loses all government assistance.

Nightmare #3: Most of your assets are in a sizeable IRA, which you are counting on to support your spouse should you pass away.  Upon your death, the IRA is paid out to your estate and is not only divided up among all the residuary beneficiaries in your will, but must also be paid out—and taxed—within five years of your death instead of providing for your spouse for the rest of her life.

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Challenge to “In Loco Parentis Standing” – Use it or Lose It!

Sued for custody of your child by someone other than the your child’s other parent?  Beware!  Under Pennsylvania Law a person other than a parent has standing to sue for custody in very limited circumstances.  Standing is a legal concept.  Standing refers to the right of a particular person to file a case in court.  If you don’t challenge standing in time you forfeit the right to challenge standing forever! Continue reading “Challenge to “In Loco Parentis Standing” – Use it or Lose It!”