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Kennett Square Probate & Estate Law Blog

Mirror, mirror, on the wall, who's the best beneficiary of them all? p2

We are fully recovered from Thanksgiving and we are ready to circle back to our Nov. 20 post about naming beneficiaries for retirement accounts. Completing that one form can make the world of difference to your heirs. Making a mistake on the form or altogether forgetting to fill it out could also make the world of difference to your heirs, but not in a good way.

In our Nov. 20 post, we talked about the importance of updating your beneficiary designations after a major life event. Marriage, divorce, adoption, the death of a loved one, a worse-than-normal family fight over the holidays -- these and other events could change what you want to happen to your money after you are gone.

Estate planning for non-traditional family groups

In today's society, there are very few Pennsylvania families that fit the traditional mold. In fact, the very idea of the "traditional" family is being redefined, as people form connections that create an intricate web of loved ones. However, when it comes to estate planning, accommodating an individual's wishes to include family members from different relationships can be a challenge.

For example, consider a scenario in which a husband and wife are both married for the second time. If the husband wants to leave the bulk of his assets to his wife, this is easy to accomplish through the use of a will. However, if he wants to ensure that any assets that remain after her death will pass on to his children from the previous marriage, this will require a more structured approach.

The usefulness of trusts in estate planning

Exemptions for federal estate taxes continue to rise to the point that they are not an issue for most middle-to-upper-income people who plan to leave money to their heirs. Nevertheless, federal estate tax still represents a very big problem for wealthy Pennsylvania residents. The state of Pennsylvania also has what is called an inheritance tax that heirs must pay when they receive money and assets from a deceased benefactor. Traditionally, trusts have been used to help individuals avoid such taxes, and trusts are still very useful today -- not just for avoiding estate and inheritance taxes, either.

Revocable trusts are some of the most common estate-planning tools being used today. A trust can be financed with a wide variety of property, including securities, real estate, life insurance proceeds and cash. A trust document is also very malleable, and it can provide income and bequeath assets to survivors in a way that treats each heir uniquely and individually. For example, a trust might be constructed to provide income to one's spouse until he or she dies, and then it could provide income to one's children after that -- and grandchildren after that. 

What happens to my assets if I don't leave a will?

Thinking about your own death can be a scary thing for most people. Because of its finality, a lot of people try to avoid thinking about it until the very last minute. This can sometimes mean though that people will put off handling many of the end-of-life things that are most important to complete before it's too late. One of these things is making a will.

As we have said many times before on this blog, wills are incredibly important legal documents that help determine who will receive what portion of your assets and who will be executor of your will. Wills can also help outline your end-of-life wishes, which makes things easier on your loved ones after you have passed away.

Mirror, mirror, on the wall, who's the best beneficiary of them all?

We often encourage people to review their beneficiary forms to make sure the right people are named and all of their personal information is as current as possible. Just remember that a life insurance policy is not the only piece of your estate that has a beneficiary: Your IRAs do, too.

It used to be that a person's most valuable asset was his primary residence. Nowadays, we aren't so sure. The Philadelphia metro area's residential real estate market is on the rebound, but after the foreclosure crisis, the wave of underwater mortgages and a surge in loan refinancing, the home may just be one of a few pretty solid assets.

Administering an estate? You don't have to do it alone

If you have been named as executor to the estate of a friend or family member, then you're undoubtedly going through a range of emotions while also dealing with estate administration. This is an understandably difficult time, and it is a good idea to have a lawyer to help you probate the estate. Having legal help is especially important if an executor doesn't live in the county or state where the will is probated.

Estate administration can be a lengthy and complicated process with numerous phases. Assets have to be gathered, accounted for and managed until probate is finished. Heirs and beneficiaries must also be identified and contacted. Sometimes there is dispute over the contents of the will, and the executor becomes involved in probate litigation.

Thinking about common estate planning mistakes

Any number of life events can get individuals thinking about the end of life. Illness, the death of a loved one, marriage, the birth of a child and even the holiday season can be triggers that inspire individuals to begin estate planning. Estate planning is a critical process which allows you to make your wishes known in regards to end-of-life care, how your assets should be distributed in the event of your death, who should assume guardianship if you and your children’s other parent can no longer care for them and a host of other issues.

If you are thinking about digging into the estate planning process, kudos to you. It is not easy to face the possibility of incapacitation and the inevitability of death. However, it is crucial that you do so in order to best protect your loved ones, honor your property-related wishes and ensure that you receive the kind of care you want in the event that you experience a medical emergency which renders you unable to communicate your wishes on your own.

Trusts, estates, tax laws - what are we doing here?

We have covered a lot of territory in the last few months. Powers of attorney, trusts, estate planning mistakes and strategies -- all good information, if we do say so ourselves. All of these subjects are good topics for conversations with an estate planning attorney, too.

Probate and trusts are generally governed by state law. Some of the laws come from centuries-old practices. Some are the result of someone's mistake -- legislatures like to close the barn door after the horses have bolted. There are also uniform laws that states have adopted as their own; the Uniform Law Commission develops them based on best practices that have emerged over the years.

Is your estate plan as good as it'll get?

We were talking about the basics of estate planning in our last post, especially how difficult some of the decisions can be. For instance, with a durable power of attorney, you will have to figure out who should take on the responsibility of looking after your affairs and making decisions about your medical care. That person is not always your spouse or one of your children. Sometimes it is a trusted friend or an attorney, someone who can be a little more objective.

It is not easy to make those decisions. Nor is it easy to decide which estate planning tools to use. Well, maybe deciding is easy, but making the right choice is more involved than people sometimes think.

Overwhelmed by estate planning? Focus on the basics

It can be very difficult and uncomfortable to discuss what you want to happen with your care and assets when you can no longer make these decisions. However, it can prove to one of the most important steps in protecting yourself and your loved ones.

There are many factors that can come into play in estate planning. In fact, there are so many options and tools available that it can become overwhelming and easy to just put off creating an estate plan. But rather than give up, you can instead concentrate on the basics and your goals.

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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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