With premiums increasing drastically, should I keep my long-term care insurance?

This is a question that I receive on a regular basis in my estate planning and elder law practice. By way of full disclosure, I am not a licensed insurance agent and I am not licensed to be able to sell long-term care insurance or any other insurance product. I am an attorney with approximately 20 years of experience in estate planning and elder law and I happen to be a Certified Elder Law Attorney under the authorization of the Pennsylvania Supreme Court. While I am not the person who will sell the products, I am certainly an individual who has been advising numerous clients over the years and definitely believe in the benefits of a long-term care policy and what they can provide. We have done numerous other logs about long-term care insurance and the benefits of said policies.

When long-term care insurance first gained popularity, many companies completely missed out on the actuarial tables and in predicting what people were going to need. Because of this drastic miscalculation, most of the companies who originally were in the markets for long-term care insurance are no longer there. The few standing companies that are left are trying to figure out ways to make up for the mistakes of the past. Because of that, they are often forced to increase premiums and decrease benefits. Although these companies do have to get permission from the insurance board, it is not a very difficult proposition and in most cases, they will almost always be able to receive permission. The most difficult part is that individuals have been paying into a plan for a number of years and now are learning that they’re going to have to decrease their benefits and even then they may have to increase the premiums that they are paying. It is heart-wrenching to have to provide guidance in these situations and ultimately I always encourage them to bring in their financial professionals to try to make the decisions.  This is as much about the numbers and common sense as it is about the emotion involved. This becomes very easy for us to get disgusted and upset about what is occurring, but it is a cold, harsh reality of the miscalculations that were made in the past.  In some instances increasing premiums and decreasing benefits is the only way some of these companies will survive. 

My best advice to any and all people who are faced with this dilemma is to write out the pros and cons and to try to make the evaluation and determination about numbers and as little as possible about the emotion of the situation. It is too easy to get hung up on the principle of the manner, but the truth is principals are expensive and cause wars. Make the best decision for you and your family based upon the information that you have in front of you. Long-term care is not going away and dropping the policy out of spite is not going to help anyone. 


My Spouse Died, Am I Liable for his/her Debts?

As estate planning and elder law attorneys we receive this question all of the time. As a general rule of thumb, the answer is no, you are not liable for the debts of another individual. However, there are some exceptions to that general rule, which is why it is essential to seek professional advice when a loved one passes, especially a spouse who had debt in his or her name alone.

For example, there are a few situations where a spouse would be liable for the debt of a spouse, and they are a few of the following:

  1. If a spouse co-signs on a loan for a spouse, then they also own the debt.
  2. If a spouse is a joint account holder of a credit card with their spouse, then they are also liable for the credit card as a joint owner.
  3. If a spouse has jointly owned property, and that property has liability, then the joint owner would as well.

These exceptions are obviously pretty clear, which all point to the situation where the spouse is either an owner or co-signed for the debt one way or another. 

However, in the State of Pennsylvania, there is a doctrine called “The Doctrine of Necessities.” Essentially, it provides that a spouse is liable to provide for the necessities of their spouse. While this is certainly not a doctrine that is used all the time, it is possible that a spouse could be held liable for their spouse’s debt that was incurred prior to death if it is deemed to be a necessity and is deemed that the spouse has a duty to support the other spouse.

Although this is rare, it is definitely something not to overlook and, again, is why we recommended that you seek legal counsel when a spouse passes away to make sure that everything is taken care of properly and that you don’t assume any personal liability for any inadvertent omissions. 

Please, if you have any questions or concerns about your financial future should your spouse die, contact us at (717) 845-5390 or fill in our contact us form and we’ll get back to you.


How Technology is Changing the Estate Planning Landscape

It is so easy these days from the comfort of our homes to be able to learn all about our ancestry and to be able to take DNA tests to learn about our family history.  Technology sure has come a long way and is providing us with information from the comfort of our own homes that we never had seen before.  It is essential, now more than ever, to make sure that our estate planning documents are up to date and also are done appropriately and properly.  

Nowadays, it is easier to track down a parent that you never knew existed and just learned about, whether were adopted or simply just lost contact or were estranged from that person. Or there could be a situation where someone does not know that they had a child and years later it may come to light that they are a father because of the technology and ability to learn this information from the comfort of your home.  This will certainly change outcomes in the future of who is entitled to certain assets and who may have standing and different circumstances.  

It will be interesting to see how this fleshes out over the next 20 or 30 years, but one thing is for certain – it is more important now than ever to make sure that your estate planning is up to date.  It will be important to have them done correctly and make sure that all of your i’s are dotted and t’s are crossed to ensure that someone can’t come in later who is unknown or unexpected and have rights. And especially important to have your documents prepared and not rely on the intestate laws of Pennsylvania to determine your beneficiaries.   

Technology certainly has and will change estate planning in the future, and we look forward to seeing how it does, but in the meantime, we will certainly plan accordingly and make sure that our documents are up to date and properly drafted for any unexpected mishaps.

 If you would like to learn more about this, please give us a call at 717-845-5390.


I Am a Beneficiary of an Estate. How Long Will it Take For Me to Get My Money?

This is a question that we receive at least once a month if not more in our office.  Individuals who were named in a Last Will and Testament as a beneficiary, once they realize that they are a beneficiary, want to know how long it will take for them to receive their inheritance. 

The probate process in the Commonwealth of Pennsylvania is actually a very straight-forward process.  Many states in the country have a very complicated process that individuals have to go through, but Pennsylvania is not one of them.  However, that does not mean that an individual who is named as a beneficiary will receive their money overnight because there are a lot of things that have to occur before a beneficiary can get the money that they are entitled to under the Will.  

In the Commonwealth of Pennsylvania, there are requirements of an executor that he or she must comply with in order to ensure that he or she will not be personally responsible or liable for the taxes or to the beneficiaries.  For example, an executor must provide notices to heirs as well as advertise the estate in the local newspaper and local legal journal to provide notice to creditors to start the statute of limitations for creditors to come forward with a claim.  The executor must also get date of death valuation letters from every institution who holds an account or had an asset of the decedent at the time of their death.  

Once the executor and the attorney for the estate receive all the date of death letters, they are then in a position to begin to prepare the Pennsylvania inheritance tax return.  Once the Pennsylvania inheritance tax return is prepared and filed it can take the Department of Revenue up to one year to review and approve the return.  It typically takes 6 to 9 months for the approval process but can take up to 1 year.  Typically the attorney will prepare receipt and releases for each and every beneficiary if the estate is going to make a partial distribution to the beneficiaries prior to receiving the approval from the Department of Revenue.  

It is always my recommendation to the executor not to distribute all monies to the beneficiaries at this point because the Department of Revenue still has to sign off on the appraisement and the tax return agreeing that they are not looking for any additional tax in the estate.

It is also worth noting that there is a significant time delay currently with the Department of Revenue and receiving notice back of the inheritance tax and that the appraisements are okay. As of September 2020, we had filed appraisements October of 2019 that we still had not gotten final approval back on. This is significant, because although the normal lag time is five to six months, we are currently seeing about a 10 to 12 month delay in receiving the appraisements back from the Department with final approval currently.

I always recommend to my executors that they not make final distributions and have the beneficiary sign off on the receipts and releases/family settlement agreement until we have the final paperwork back.

It is obvious that in the current times, In light of COVID and the state having to close for a period of time and not getting to any tax returns, the time frame from a beneficiary to receive their money under current times is fairly significant. However, this is not normal, and under normal circumstances the final appraisement certainly would be quicker.

 It also is a case by case basis as to how much we can distribute before receiving the final word from the government. In some situations, when there’s a close family, they will distribute more with the partial distribution than in other situations. In a case where it is contentious and there are beneficiaries who are not family or who have caused nothing but issues, we will often recommend that we not distribute anything until we get the final word from the Department. In these cases, under the current situation, it could take a year or more before we are in a position to be able to do that. 

It is important to know that in a situation where somebody does a living trust or a Grantor trust in the Commonwealth of Pennsylvania and retains control, an inheritance tax return is still required to be filed. That means that even under a trust administration, if we are waiting on the Department to approve the inheritance tax return, the time frames would remain the same. I say this because many people think that probate is the problem, or that it is the fault of the local Register of Wills or Orphans’ Court, but in reality, that is not it at all, we are at the mercy of the Department of Revenue for final approval of the inheritance tax return. 

For any questions or assistance through this process, please contact us at (717) 845-5390. We would love to help you.


How Can I Avoid Probate? 

Can I avoid probate?

Can I avoid probate?

A week probably does not go by in my estate planning and elder law practice that I do not hear this question.  We spend a lot of time in our weekly workshops in our office answering this question and also much of our time during our free consultations also discussing this in detail.  I believe that the major reason why people make this their primary question is because of a lot of information that is out in the mainstream, the media, from national companies or national spokespeople who often urge people to avoid probate at all costs.  

I was very fortunate several years ago that I was able to travel the country training and teaching lawyers all over the country.  It was an extremely enjoyable experience and I learned and grew tremendously from it.  One of the main things that hit me during my time educating and teaching is that each and every state in the country has very different rules. 

Most attorneys are only licensed in one state and typically do not get licensed in multiple states because of the exams and costs that are associated with it.  It became very clear to me over the years that each state is very different in regards to its probate rules as well as how difficult probate is. 

Many of the national trust companies and national spokespeople live and come out of states where the probate process is very burdensome, overwhelming, arduous, confusing, expensive, and time prohibitive.  In those states, it makes a lot of sense to take steps in order to be able to avoid probate so that their clients do not have to go through those processes and spend the time and cost involved with it. 

Several very good business individuals understood what a valuable opportunity it could be for them to be a spokesperson or to advertise living trusts and other opportunities to avoid probate.  Rather than take the time to research each state’s rules, they make blanket statements and characterizations that seem to apply to every state but in reality do not.   

Yes.  There are certainly ways to avoid probate, and if the situation is correct, we will often make recommendations to do things such as creating a trust or having access jointly owned with another individual or using beneficiary designations on accounts.  In our workshops, we spend a lot of time talking about these and many other opportunities to avoid probate and how to take advantage of them.  

My concern is that without proper advice and guidance, oftentimes these tricks and solutions often aren’t necessary and can be overkill.   

If you are interested or believe that you are interested in avoiding probate for the sake of avoiding probate, please come to one of our upcoming workshops to learn not only about probate but also about the options that we would use to avoid probate and pros and cons with those. 

It is imperative that people be provided good advice in regards to this and any implications and complications that could come from decisions that are made.  Remember, in Pennsylvania avoiding probate does not equate to avoiding inheritance tax. 

If you would like to learn more, please give our office a call at 717-845-5390.   


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