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Kennett Square Probate & Estate Law Blog

Trusts offer a variety of protections for accumulated wealth

When thinking about how to best pass on a lifetime of accumulated assets, many Pennsylvania residents consider taking shortcuts to make things easier for their children or grandchildren to inherit property or wealth. In many cases, however, these shortcuts can result in financial devastation. When it comes to protecting assets and passing down wealth, trusts are a solid choice.

Consider, for example, a parent who wants her two adult children to inherit her home, which is fully paid off. She places the kids on the deed to the property and discusses the matter with them in depth. However, when her son later goes through a divorce, his wife is entitled to a share of his interest in the home. That can leave the son in serious financial straits. In the worst case scenario, such an event could force the sale of the home, leaving the mother with no place of residence and both children with a depleted inheritance.

Estate planning for Pennsylvania equestrians

Horse lovers throughout the state of Pennsylvania know how important it is to ensure that their animals are properly cared for. That task is a major commitment and can go on for many years. Few equestrians, however, think about what would happen to their horses in the event that the owner passes away. Including these issues into one's estate planning is important and can make a world of difference in the lives of horses that survive their owners.

Horses are more than just assets; they are loved animals that deserve compassionate care. When a horse owner's family members are not involved in the care of the animals, an issue can arise in the event the owner suddenly dies. While surviving family members may have the best of intentions, the decisions that they make might not be in line with the needs of the animals. This can result in a highly trained and accomplished show horse being put out to pasture in the belief that such a choice offers the animal a comfortable sort of retirement from the show circuit. In reality, a horse that has grown accustomed to the grooming, training and care required for showing would likely find such a transition jarring.

The role of residency in estate planning efforts

When a Philadelphia resident is making provisions for his or her estate plan, residency is not often part of the conversation. In reality, however, where a person establishes residency can have a great deal of impact on how his or her estate planning efforts will play out. There are cases in which one state's laws can be more beneficial to a family than another, which is why residency should be discussed during the planning phase.

One way that estate planning can differ from one state to another is in terms of varying state taxation. Some states impose a higher estate tax than others, which can take a bigger bite out of the assets that are handed down to loved ones. Another issue involves end-of-life planning. Certain states have laws that allow individuals to maintain a high degree of control over how their medical care is handled during the last stages of their life.

Can estate administration be simplified by online storage?

In today's increasingly wired world, there seems to be a app or software program for everything. In terms of estate planning, there are multiple companies that offer to store documents online, which can assist loved ones when the time comes to handle estate administration. That said, the online realm is also subject to attack from cyber thieves. Many in Philadelphia are concerned about the security of these documents, and the risk that they or their loved ones could be the victim of theft if their estate plan is accessed by the wrong parties.

One answer lies in creating a comprehensive estate plan that will be stored in both online and offline versions, and limiting the sensitive information that is contained in the online format. The reason that many people seek online document storage is to protect against the loss of estate planning paperwork and to make sure that the right people can access the plan when the time comes. However, there is no need to include many of the details that attract cyber thieves, such as Social Security Numbers, credit card and bank account numbers.

Life insurance trusts can be critical for special needs children

Families with special needs children are aware of the extra care and consideration that their children require. When the time comes to consider estate planning, families need to focus on structuring a plan that will ensure that the special needs child will be cared for throughout his or her life. Life insurance trusts are among the best options for Philadelphia families who are concerned about continuing care needs.

Families can purchase life insurance with a value that will ensure that a special needs child is properly cared for after the loss of both parents. The trust is then structured so that the trust itself owns the life insurance policy. That effectively removes the life insurance from the parent's taxable estate. Once the person named on the policy dies, the trust is also the beneficiary of the life insurance proceeds.

Pennsylvania estate planning terminology can be confusing

Some Pennsylvanians may procrastinate concerning their estate plans because of a lack of understanding of the documentation and the applicable terminology. There may be misconceptions that are holding people back. Consulting with an attorney may provide answers and eliminate confusion about estate planning.

Many are confused about the difference between a living will and a last will and testament. The last will is a legal document that declares how assets should be divided, also when and to whom. If a person should die without a will, state law will determine the distribution of the deceased person's assets. A living will declares the person's wishes in relation to health care in the event of incapacitation or terminal illness, and it can also indicate whether a person wants to be kept alive by extraordinary measures.

Inheritance dispute over billionaire's estate

Most people in the Philadelphia area want to leave some sort of legacy behind them when they pass away. In some cases, their legacy could be in the form of an inheritance left to loved ones. Unfortunately, if proper documents are not in place, an inheritance dispute could follow the loss of a loved one. Such a dispute has arisen over the estate of a deceased billionaire who lived out of state.

According to reports, the man passed away at the age of 98 without a will. His estate, valued at $1.8 billion, must be divided among his two children, three grandchildren and widow. Three people have requested that a court award them a larger portion of the estate. One is his daughter, who is set to receive $30 million. Although distribution of this amount was approved by the court, she claims that it is improper to distribute the funds while there is a challenge to the estate and questions a $7 million payment to its executor.

Wills are the best way to protect a surviving spouse

One of the most common choices that married couples make in regard to planning their estate is for each spouse to leave all assets to the other. Many couples feel that they have spent a lifetime working to build a base of assets and create financial stability, and they want that stability to pass directly to whichever partner survives the other. While this is an understandable approach, it is important the the proper steps are taken to ensure that this is the eventual outcome. Unfortunately, many Philadelphia families fail to create wills that would put their intention into writing.

In order to protect each other's financial security, married spouses must create clear and comprehensive wills that outline their final wishes. Otherwise, the rules of the state will dictate how assets are divided. This can mean that distant or even estranged relatives can end up with a significant portion of one's estate.

A shared goal within estate planning and prenuptial agreements

When a Philadelphia resident has amassed a considerable amount of wealth, handing those assets down to children and grandchildren is a source of pride. No one wants to envision a scenario in which an heir loses access to a chunk of his or her inheritance, but that is a risk that must be mitigated with proper planning. Fortunately, there is an estate planning approach that can help make sure that wealth passes down to the intended recipient.

One of the biggest financial risks that anyone takes is getting married. Statistics show that many marriages will eventually end in divorce. When that outcome occurs, marital wealth is divided between the parties. For those who have received an inheritance, it is possible to lose a significant portion of that wealth during the property division process.

Baby Boomers and durable powers of attorney

As the Baby Boomer generation enters retirement, these Americans will have a unique set of needs when it comes to estate planning. Many Boomers in Philadelphia have already set up their estate planning packages, but they may not be reviewing and revising those documents as their circumstances change. This is especially true in regard to durable powers of attorney.

Most married couples simply name each other as their designated proxy for health and financial matters. They assume that if one party becomes injured or ill, then the other will be the best equipped to know how to handle matters. This presumption is correct in most cases, but there are circumstances that can render both parties incapable of fulfilling that role.

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Larmore Scarlett LLP

Larmore Scarlett, LLP
123 E. Linden Street,
P.O. Box 384

Kennett Square, PA 19348

Phone: 610-444-3737
Fax: 610-444-9532
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