WILLS, TRUSTS, ESTATES

ESTATES, TRUSTS & TAX

A LAST WILL & TESTAMENT – DO YOU NEED ONE?

If you live in Pennsylvania, a Last Will & Testament is an essential estate planning tool, even if you have a trust or other advanced plan. A well-crafted will expresses your last wishes, including your instructions for your estate should be distributed and divided, and who will be in charge (Executor). A will provides certainty about your wishes, hopes, fears and values. Without one, your family could be headed for conflict and confusion. A valid, well-crafted will ensures clarity and assists in conflict avoidance.

A Last Will & Testament is essential! If you do not have a will or need your will reviewed, contact us now.

LAST WILL & TESTAMENT VS. REVOCABLE LIVING TRUST

A revocable living trust is a substitute for a will. A living trust may be more advantageous or less advantageous than a will. It depends on your circumstances and needs. During our initial consultation, we will discuss which tool makes more sense for you and your family.

Unlike a will, which is effective only at death, a living trust is set up while you are living. Typically, an individual who creates a living trust will re-title his or her assets (home, accounts, etc) into the name of the living trust. You have complete control of those assets while you are living. In your trust, you write instructions as to how your assets are distributed when you die. The advantage of a trust is that its existence is continual, and can provide a more orderly distribution of an inheritance (for instance, a small portion on an annual basis).

A living trust should be used to avoid probate if a conflict exists, if you own property in multiple states, have a blended family, and for other reasons. Your attorney should discuss whether a will or a living trust makes more sense for you during your initial consultation.

Do you need a will or living trust? Contact us now for your consultation.

WHAT ARE THE REQUIREMENTS TO EXECUTE A WILL OR A LIVING TRUST IN THE COMMONWEALTH OF PENNSYLVANIA?

A will or living trust can be drafted and executed at any time in Pennsylvania as long as you meet a few basic requirements. These include:

Being over the age of 18,
Being of sound mind and body, and
Without undue influence by another.

WHAT SHOULD I INCLUDE IN MY LAST WILL & TESTAMENT OR LIVING TRUST?

We recommend that you have a qualified estate planning attorney draft your will or living trust. An estate planning attorney will make the determination, based on a careful analysis of your situation, as to what provisions should be in your will or trust, or if you need more advanced planning (i.e., trusts).

When an estate planning attorney drafts a will or trust for you, here are some of the concepts that Will be considered:

Your Goals:

Are you leaving gifts for just your children, or your grandchildren as well? Determining your goals for your family (i.e., leaving your grandkids a gift for life, or effectively giving an inheritance to a spendthrift child, etc.) is crucial to proper planning.

Minors:

Leaving gifts to minors requires setting up proper trust instruments to ensure that those gifts do not fall into the wrong hands. In addition, instructions are provided in the trust that describe when, how much and for what circumstances the minor will receive the gift.

Blended family:

Is there a blended family situation? Second marriages with kids from first marriages can mean more advanced planning is required beyond a will. Blended families and second marriages (and third!) are more common than ever today. In this case, a living trust may be appropriate.

Executor:

The executor of your will is the person who carries out your instructions for distributing your estate upon your death. The executor gathers your estate (accounts, real property, etc.), pays required taxes, files proper probate documents, and distributes your estate to your beneficiaries. You should always choose someone you trust as executor. In addition, if that person cannot serve, you should always have two successor backup executors.

Tax Planning:

There is a state inheritance tax in Pennsylvania, as well as a federal estate tax (except in 2010). Pennsylvania inheritance tax is a modest tax (0% to spouses, 4.5% to kids, 12% to siblings, and 15% to all others). The federal estate tax is in flux right now, and as of 2012, the federal estate tax is exemption is over $5 Million per person (therefore, most people are exempt and don’t have to worry about federal estate taxes). Married couples can reduce and prolong federal estate taxes using an A-B trust (also called a credit shelter trust, bypass trust, and marital deduction trust) within the will. Other strategies for reducing federal estate tax burden include smart charitable planning, using irrevocable life insurance trusts, gifting and intentionally defective grantors trusts.

Testamentary Trust:

Often times, individuals find it valuable to have a “testamentary trust” within their will. This is a trust that is established upon your death that provides a more orderly inheritance structure. Instead of distributing an inheritance outright (all at once) to a beneficiary, your trust can provide that a trustee distribute only a portion of the inheritance every year (you set the terms of how, when, for what, etc).

Charities:

Are you leaving gifts to charities? Charitable giving is a great way to reduce potential estate and inheritance tax burdens, while also providing for an organization or cause that is important to you.

Family Conflict:

Every family is imperfect, and conflicts range from minor to major. However, during an estate planning consultations, the attorney needs to know what issues exist within the family, so that proper planning can be accomplished. For instance, if two siblings are not on speaking terms, then perhaps the parents should not appoint either as executor.

Is your will or trust complete? If you’re not sure, contact us now for your appointment.

ONGOING PLANNING AND ESTATE PLANNING MAINTENANCE IS KEY

People always ask, “How often should I update my will?” Your will or living trust should be reviewed no less than every three years to ensure it reflects your wishes, values and goals. A will only controls your affairs after you die. When your will is drafted, powers of attorney should also be drafted both for your financial and health care affairs in case you become disabled or incapacitated. You should also have a living will to make your end-of-life health care decisions known.

STORING AND SAFEGUARDING YOUR LAST WILL & TESTAMENT

At our firm, we provide you with your original signed will, as well as a reference copy in a professional binder. You should always store your original in a fire-proof records safe, not in a safe-deposit box in a bank. The reason to avoid storage in a safe-deposit box is that it is not accessible, particularly to individuals besides yourself.

Our firm also offers a low-cost, secure service called LegalVault that allows us to store your original documents online. Ask us about this service during your initial consultation.

SCHEDULE YOUR ESTATE PLANNING CONSULTATION TODAY

Whether you have an existing Will that needs reviewing or do not have a will, please contact us today to set up your appointment. You can reach us at 1.800.773.0680 or by emailing us.

Practicing Attorneys

Kyong Ha Growney

Craig F. Turet

Timothy J. Szuhaj