Texting Your Will

In the U.S., laws about what constitutes a valid legal will have not changed very much since the Declaration of Independence. Most states still follow the old English law that a valid will must be signed by the testator in front of two witnesses, who must also sign the document.

If this procedure is not followed precisely, then a document is not a valid will that can be considered by a court.

Office-620822_640However, the United Kingdom's official government legal advisors, The Law Commission, are now suggesting changes to that old way of doing things, as The Telegraph reports in "Could a text become your will? The plans to revolutionise 'outdated' legacy system."

If the changes become effective, judges in the U.K. could look at other evidence to determine what a deceased person intended to do with his or her estate. For example, if the deceased left behind a voice mail or text message concerning the estate, then the judge could take that into consideration and use it in making a judgment.

The purpose of the old rules was mainly fraud prevention.

Judges who did not know the deceased, could rely on the testimony of witnesses to establish whether the will was legitimate.

What was the thinking behind the recommended changes? With digital technology, judges can more adequately make a determination of legitimacy without the need for witnesses.

If you want to discover all you need to know about estate planning, we have a FREE workshop.  You can RSVP and grab a seat by clicking here today.

Jeff Bellomo


Reference: The Telegraph (July 13, 2017) "Could a text become your will? The plans to revolutionise 'outdated' legacy system."


Looking Past Simple Answers On The Estate Tax / York, PA

MP900442387What is the $5 million federal estate-tax exclusion, and how does it work?

You deal with taxes every year (technically at every time you open your wallet with a sales tax in play). Some taxes, however, only come to your attention when you really sit down to do some planning. For instance, the first time you really think about the estate tax may be when you sit down to plan for your estate. So what is this tax? What is the exclusion? What does it all mean?

A reader recently put these questions to the Q&A in The Wall Street Journal, which found its way to publication in “The Federal Estate-Tax Exclusion.” If you find yourself asking, “What is the $5 million federal estate-tax exclusion, and how does it work?” you’re not alone and here’s a start.

Essentially, the federal government has an estate tax that only kicks in above a certain amount that you (or the executor of your estate) can exclude. The exclusion amount determines what you can pass on without taxation and just how much of your net worth will get fed through the taxman’s ringer instead of going straight to heirs. The actual exclusion amount also changes when Congress changes the laws, which savvy readers will know is a fairly often occurrence these days. Currently, an individual can exclude a tidy sum of $5.34 million from his or her estate prior to paying a cent in estate taxes, which is slightly more than the $5.25 million in 2013. That’s a serious boon to your estate plan and means many can duck under the tax entirely!

As much as we like this simple answer, it’s important for many to learn much more about the estate tax and well beyond the answer given in the original article. The problem with Q&A’s, after all, is that finding simple questions matched by simple answers is not the same as learning the subject. There is much to learn here.

Did you know that the gift tax and the estate tax are linked? Did you know there are special tax rules that go into effect when giving directly to grandchildren? Did you know that how you pass along the house, the car or the collection can dramatically affect your heirs and their own taxes? The estate tax gets the media attention and it’s easy to give simple answers, but your estate isn’t necessarily so simple. If you want to ensure the best for your heirs, then there are many things to think about, both within and beyond the world of taxation.

For more information about estate tax, please visit my estate planning website.

Reference: The Wall Street Journal (May 25, 2014) “The Federal Estate-Tax Exclusion


Caring For All Of The Family Members: Pet Trusts / York, PA

MP900316845Owners cannot leave money to their pets, nor can pets own property. But owners who consider their companions to be integral members of the family can make sure they their pet is properly cared in the event of the owner’s death by creating a pet trust.

Pets tend to have a firm and well-established role within the family. Sometimes, they have full membership. In the eyes of the law, however, pets enjoy a far lesser standing. This can make planning for the care of your pet difficult after you’re gone. While you can’t leave an “inheritance” to a pet, when including a “pet trust” as part of your estate plan you can provide for their care when you’re not there to provide it yourself.

“Pet trusts” have a decidedly less serious ring about them than a “Grantor Retained Annuity Trust.” Legal jargon aside, pet trusts can be plenty useful little devices for a common problem, especially amongst elderly pet lovers. In fact, a recent article in the Millionaire Corner considers a pet trust an estate planning basic. The article, titled  “Estate Planning Basics: Creating a Pet Trust,” offers some practical pointers to consider.

Pets are family members to some, but to the law they are just another form of property. Nonetheless, this living, breathing “property” sometimes outlives its master and this fact of life is worthy of proper legal attention. What happens when there isn’t a family member or friend to step up and take the animal? What if there is a potential caretaker, but that person simply cannot afford to care for your pet? By establishing a pet trust as part of your estate plan, you can set aside funds exclusively for the care of your pet, the caretaker and your own peace of mind.

Setting up a trust doesn’t need to be too difficult, but it does take some preparation and foresight to keep it running efficiently when needed. You’ll want an experience estate planning attorney to create a pet trust as part of your estate plan.

For more information about pet trust, please visit my estate planning website.

Reference: Millionaire Corner (April 28, 2014) “Estate Planning Basics: Creating a Pet Trust


To Protect Your Heirs From Themselves: Inherited IRAs And Trustee Guidance / York, PA

MP900385209IRA holders have two ways to “stall” adult children or other heirs from doing an immediate cash-out of the IRA when the surviving spouse dies.

Sometimes all you want to do is just give away an asset to your heirs, let them do with it as they wish, and let life teach them the folly of shortsightedness if they are not good stewards. Then again, simply letting them fail in the "school for hard knocks" can be such an awful waste and not all heirs learn best by failure. This is especially true in the case of an inherited IRA.

You may have many assets to leave behind for your heirs. However, an IRA is unique enough to be easily squandered in taxes, as MarketWatch noted in a recent article appropriately titled “Protect your heirs from an IRA tax trap.

IRAs are some of the most common high-value assets. That noted, because they are such unique accounts, there are some equally unique rules regarding inherited IRAs that are either amenable to diligent financial planning or a short-term high of a cash-out.

When an IRA is inherited, the inheritor can elect to take regular distributions (much like the retiree who earned the funds in the first place) that will stretch over the life of the IRA. This can maximize the long-term value of the IRA and minimize the taxation. Alternatively, the inheritor can elect to immediately cash out the IRA and foot the tax bill on the whole sum. This will limit the value of the IRA now and maximize the taxation, limiting growth and the true benefit to the IRA in the first place. Either way, how do you make sure the inheritor will make the right decision?

The original article has some options for you to consider. This is important if your IRA is going to be a large part of the inheritance you leave. Basically, to avoid a disaster that cannot be undone, make sure there is someone there to speak up when needed and to exercise authority over the decision.

You can either name a trust as the beneficiary of the IRA, giving a trustee discretion, or you can actually structure the IRA to be a Trusteed IRA. Each option requires sound legal and financial planning advice, as the rules are some of the most complex in the entire tax code.

How does IRA distribution planning fit into your overall estate plan? Is the IRA the only asset you worry about or is there more to protect? With careful legal structuring, an entire estate plan can work to protect your heirs from themselves.

For more information about inherited IRA’s and trustee guidance, please visit my estate planning website.

Reference: MarketWatch (April 28, 2013) “Protect your heirs from an IRA tax trap


To Marry Or Not To Marry, But To Plan Accordingly Either Way / York, PA

Happy-old-coupleLawyers urge unmarried clients to draw up agreements specifying which partner is responsible for expenses and who will inherit assets. Many couples ignore the advice and share expenses informally. But the loose arrangements can result in messy legal problems if the couple splits or one partner dies suddenly.

It has been said that marriage is a young persons’ game, but love isn’t. These days, more and more Americans are meeting new loves or (finally) their true loves later in life. These later-in-life marriages can be tricky. On the other hand, even if you leave marriage to the young and idealistic, there is some planning that really has to be in place.

The sociology of later-in-life marriage is fascinating, both in thinking about the recent jump in numbers and the more recent decrease. Either with or without tying the knot it is also a practical issue with legal ramifications, and for those later-in-life loves not destined for marriage there is some practical advice to be gleaned in a recent article on the subject in The New York Times titled “Welcoming Love at an Older Age, but Not Necessarily Marriage.

The article has the voice of several experts and more than a few horror stories to share. You see, marriage is an emotional union, but it is also an economic and legal one. This may come far more naturally to 20-somethings than boomers. It seems the older you get the more you have and the more you have to think about.

If you are to marry, then the separate pasts, lives, and families have to account for it all and mesh together, which is a tricky enterprise when everything from college financial aid for children/grandchildren to Medicare or Medicaid benefits may instantly be affected.

To not marry doesn’t necessarily make all of those issues go away, but it might add new ones. For example, how will you legally care for one another and how will you own assets like the home. And of course, there is always the possibility of a split – even this late in life – and the question then of how protected your assets comes to the forefront.

Do take a look at the original article, especially if marriage is not the end-goal, and be sure to structure this new stage in life so that it might also be a happy one.

For more information about planning accordingly, please visit my estate planning website.

Reference: The New York Times (April 25, 2014) “Welcoming Love at an Older Age, but Not Necessarily Marriage

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