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Do You Need a Trust?

This question is by far the most asked question that we receive in our office. However, there is absolutely no standard or right answer for everyone. Trusts are typically used for either probate avoidance purposes, tax avoidance purposes, or asset protection. Trusts are often used for disability planning but generally, that is not the sole reason for people’s use of trusts.

Currently, the federal estate tax limit provides an $11.7 million exemption per person. This means that an individual currently will not pay federal estate tax unless their estate, per person, goes over $11.7 million or $23.4 million for a husband and wife. This law is set to go back to $5 million in 2025, set for inflation which predictions are that it will end up being around $5.8 million. Even with the reduction in 2025, most people in our local community will not need to do a trust for tax purposes. Certainly, there are rumors each and every day about Congress changing the laws and lowering the exception amounts, but until that happens, I would not make plans for something that may or may not occur. History tells us that all of the rumors that we are hearing, probably none of them will actually look like the actual law if it is ever enacted, and we have always taken the position to plan for the law as it is in effect, and if and when it changes, then we can pivot. With that said, there is not a high percentage of people who will need to do trusts for tax purposes as we sit here today in May of 2021.

Probate avoidance is usually a situation where there are properties in several different states across the country. While every state has different laws as to whether a person needs to open an estate in their specific state, generally speaking, if the property is in a person’s name alone at the time of their death, the state will require them to go through that state’s probate process. We find that many people like to avoid probate in these situations so that they do not have to hire attorneys in each state to finalize for their families. In a situation where a family does not have properties in multiple states, generally, probate avoidance is not something that people are overly concerned about unless they’re in a state that the probate process is very burdensome and overwhelming, which currently, it does not happen to be in the Commonwealth of Pennsylvania.

Asset protection is one reason that people will often do trusts in the Commonwealth of Pennsylvania, to avoid potential creditor issues and long-term care costs. These are a very specific animal of trusts and the rules are very unique to these trusts alone since they are not being set up for tax purposes. It is our recommendation that you speak to a professional well-versed in these types of trusts before completing one. They are very unique and there are very simple rules; however, it is very easy to make mistakes in this area. An elder law attorney well versed in these types of trusts will be able to provide advice as to whether this type of trust makes sense for you. There is no one size fits all answer to the question of “do I need a trust?”. It is important to get very clear on your personal goals and what your goals are for your family. Once you have a very clear picture of that, then a professional will be able to advise you, based upon your current situation, as to whether it makes sense. We would certainly be honored to assist you through this process, and we offer weekly workshops which will give you insight into the thought process in regards to whether trust is right for you. We look forward to seeing you in the future.

If you are looking for advice in regards to estate planning, please call our office at 717-845-5390 or click the link here and we will contact you.

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Moving On – Help for Seniors Relocating to Nursing Homes or Assisted Living Facilities

In my estate and elder law practice, I routinely provide advice to seniors and their families about the next step.  Specifically about what they will do when they need more care in their home or in an assisted living facility or in a nursing home.  Nobody ever wants to have to be relocated as we all wish that we could just reside in our homes until we pass.  However, this is not always the case and having a plan in place, preparing you and your loved ones for what it will look like to have to move will reduce the amount of stress and burden on your family tremendously.  

 I think the most important piece to all of this is for the entire family to be on the same page and to have open and honest conversations with each other.  All too often, families don’t have difficult conversations with the hopes that those decisions or that heartache will simply just go away if they ignore it.  My experience is that that is never the case.  But, ultimately will only provide more heartache and more stress that could easily be avoided if the family has conversations up-front before it is necessary.  

I am always amazed at the assistance and guidance that assisted living facilities, personal care homes and nursing homes provide to their potential residents.  The number of resources and guidance that they can provide are astronomical and should definitely not be underestimated or overlooked.  Take advantage of any and all resources that are made available.  But, if you have not yet made the final decision as to where you may want to move and cannot tap into the resources of a specific facility, there are definitely resources in and around our community that will not only assist you with preparation of your current home for sale and how to receive the highest top dollar but also what to expect when moving and what should you take or leave behind.  

Although these seem like very simple ideas and issues they really aren’t, and thinking about them in advance can save you and your family a lot of headaches.  Tap into your local resources to assist you with the move itself as well as how to get the new place put together and looking and feeling like home.  Spending a little bit of money in order to be able to get your new home feeling like your old home cannot be underestimated.  

If we can be of any assistance or answer any questions while you make decisions about long-term care, please give us a call at 717-845-5390.

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Factors to Consider When Selecting a Guardian for Your Children

When I ask my clients what is driving them to come see me for estate planning, I usually get the same answer; we want to make sure that our family is taken care if something ever goes wrong. It’s a simple enough objective, but all too often clients are only thinking in terms of financial help for their family.  One of the most important things a parent should include in a Will has nothing to do with money, it is deciding who would be their preferred choice of guardian for their minor child(ren) in the event of the parent’s death.  

A guardian is a Court appointed person who can legally care for a child who has lost both of their biological or adopted parents.  A guardian is appointed only by a Judge after judicial proceedings.  During that proceeding the Judge will consider evidence to decide who is the best person to care for that child now that the parents are deceased.  An overwhelming piece of evidence in that decision would be the deceased parent’s choice of guardian, which is commonly listed in their Will.  Here are some factors to consider when trying to decide who would be a good choice of guardian for your child(ren):

  1. Have that discussion.  No matter who you ultimately decide would be a good choice of guardian for your child(ren), be sure to have a talk with that person to make sure this is a responsibility they are prepared to take on.  Serving as a guardian for a child is an awesome responsibility, make sure your guardian is willing to assume this responsibility before making your choice.
  2. Plan for the immediate future, not forever.  Remember, you can always revise your Will in order to change your list of preferred guardians over time.  Therefore, choose guardians who would best serve your child(ren) now, and in the next few years.  The right choice for a toddler may not be the right choice for a teenager.
  3. Have a back-up plan.  Never just list one choice for guardian of your child(ren).  It is important to always list at least one back-up choice.  Your first choice may not be able to serve for many reasons, so always be sure to include a second or third choice.
  4. What if I don’t think anyone in my family is the right fit?  Your preferred choice of guardian for your children does not have to be a family member.  You can choose anyone who you feel would be best suited to serve in that capacity.  When making the decision as to who should serve as a guardian the Court simply makes that decision based upon what is in the best interest of the child.  The Court is not restricted to only consider family members.

Remember, don’t get caught up in just focusing on financial oversight.  Engage in a thoughtful analysis of what the real world implications would look like if your guardian were doing your parenting.  From daily life to finances, and everything between.  By doing so, you will ensure your children are best cared for if the unimaginable would ever occur.

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Meet Dana S. Wieseman from our Probate Team

Click here to watch.

Dana was Born and raised in Central Pennsylvania. A graduate of Mechanicsburg Area high School in 1987 and Central Penn University in 1993 with a Specialized Business Degree in Legal Assistant. She has been a paralegal since 1993 and has specialized in Probate and Estate Administration since 2000 in the Harrisburg area. She furthered her career in 2020 by becoming a Certified Paralegal. Dana loves estate administration work and takes pride in the relationships that she has formed and the people she has meet over the last 18+ years. Dana is looking forward to continuing her career with Bellomo & Associates.

Dana has been married to Dave for 27 years and they have 2 wonderful kids. Megan, 25 is a teacher in Hilton Head South Carolina and Brian, 21 is in his senior year at Pitt’ and is considering law school. Now that Dana and Dave are empty nesters, you can find them on their farm in Bedford. College football is her favorite sport and has been a long time Alabama Fan. Roll Tide!

Please watch Dana’s video by clicking the picture above. If you would like to learn more about avoiding the probate process, please give us a call at 717-845-5390.

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Meet Michelle Wheeler from our Probate Team

I essentially work with the executor/administrator/trustee and help them manage the assets and expenses of the decedent.  It’s like taking over a person’s financial life after they have passed.

If we need to probate, I prepare the court documents and set up the appointment to get the executor/administrator appointed.  Once that’s done there is estate/trust advertising, bank accounts to manage, securities (stocks, bonds, etc.) to sell or transfer, life insurance/annuity/retirement claim forms to file, an inheritance tax return needs to be filed 9 months from date of death (tax estimate paid within 3 months of death to get tax discount), bills to be paid, selling or transferring real estate, etc.  Once an appraisement letter is received from the Pennsylvania Department of Revenue for the inheritance tax (6-9 months or longer from the date the return was filed), we can make final distributions and close out the matter.  It is a lengthy and time-consuming process that can be frustrating.  I do my best to make the process as comfortable as I can.

Myths and Mysteries of the Probate Process:

  1. Even if all assets are in trust, joint name or have specific beneficiaries assigned, it’s the same process except for the estate administration. We still have to get date of death confirmation values on all assets, account for all debts and expenses paid and prepare a Pennsylvania Inheritance Tax return.  Unfortunately, it is not a quick process.
  2. Depending on the company the amount of paperwork needed to transfer, sell or claim assets can be overwhelming. Please be patient.  Once all claim forms are signed and filed, it can take 10 days to a few weeks for the claim to be reviewed once it is in the company’s computer system.  This is not usually a quick process.
  3. I need the following information to start working on a file: bank statements including decedent’s date of death, current deed on all real estate, investment/brokerage statements including decedent’s date of death, life insurance/annuity/retirement paperwork, copy of most recent personal income tax return, copies of bills paid and/or checks drawn.
  4. Stock certificates should be deposited with a broker or investment service. Stock certificates are like holding cash in your hand.  If the certificate is lost, there is a lost certificate fee to get it reissued.  Please keep your investment safe.
  5. If there is only a bank account with $10,000 or less in the decedent’s name alone on a date of death, a spouse, any child, father or mother, or any sister or brother (preference in that order) can close the account with a copy of the death certificate and the invoice showing the funeral is paid in full. No probate is necessary.

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

 

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