Friday, May 28, 2010

For All Those Who Serve and Have Served

Memorial Day, May 31, 2010,
commemorates the men and women who died while serving in the American military.

Last week my daughter, Angelina, and I toured Washington DC. The Korean War and Vietnam War Memorials were among the sites visited. My father, her Pop-Pop, served in the Korean War.

In 2006, he released a book about his Korean War experience. For me, Memorial Day is a day to pause and give thanks to all the people who made a difference in the quality of life we live as American citizens.

For my Dad and all those who serve or have served, THANKS!!!

Thursday, May 20, 2010

Charitable Remainder Trust

With anything there are pitfalls. The Charitable Remainder Trust is a great way to give appreciated property to your favorite charity while getting tax deductions for yourself. We often refer to this type of trust as the gift that gives back.

However, you must understand how this type of trust works and make sure it is right for you. It is an irrevocable trust which therefore can not be changed or terminated once it is set up. Of course there are ways available to make changes or terminate BUT at a cost of time and money. If the person setting it up and the charity receiving the benefit should agree to a proposed change or termination then court approval should be sought. Also, the Attorney General's office should be notified since the Attorney General's office handles charitable organizations.

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Wednesday, May 19, 2010

Income vs. Wealth

I would encourage everyone to read The Millionaire Next Door. It has been out for awhile and the information it provides is invaluable for those who want to accumulate wealth. Most of us have the wrong profile of what it takes to be a millionaire. We even think some folks are wealthy when in fact they are NOT. Even more interesting, we think some folks are not wealthy when in fact they ARE. Having a great salary or income does not necessarily lead to wealth. It all depends upon your spending and saving habits.

So many more of us could accumulate the wealth we desire if we took note of our buying behavior and its impact upon our success in this area. For example, how much is the "pride" of having a current model car worth? If you could get the make and model of the car you want but not new, maybe 3 or 4 years old and the same car new for an additional, say $5,000, $10,000, $20,000, would you? Even if you could, why? This is one example of the many buying habits we could reevaluate on our way to being wealthy. The book has many more worth your perusal.

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Monday, May 17, 2010

When someone dies, who pays the Debts?

I just got off the phone with a friend of mine who recently loss her husband. She does not live in Pennsylvania but knows I handle estate administration and I have been available to answer the numerous questions that inevitable arise. She has made good use of my book Stop! What are you waiting for? Your step-by-step guide to estate planning which was a gift to her before any of us realized just how sick her husband was.

She asked about the bills, medical bills specifically, which are beginning to pile up. Is she responsible for paying these bills? The answer is the estate is responsible. Did her husband have any assets in his name alone? Such funds must be used to first pay the debts of the estate before any distribution is made to beneficiaries. However, assets jointly with his wife and accounts/investments/retirement accounts with beneficiary designation are NOT part of the estate. Therefore, if all of the assets fell into those categories, the estate is bankrupt and can not pay its debts.

Remember though if the estate should come into any money, ie. win a law suit for wrongful death, then the estate has money and those piled up bills have to be paid first. Leave your comments here or contact me at

Wednesday, May 12, 2010

Law and Order Discusses the Federal Estate Tax?

Yes, that is correct. Even Law and Order wants to get in on estate planning drama. The drama that unfolded in this recent episode pertained to coincidental deaths of several millionaires at a cancer clinic which engaged in "experimental" cancer treatment. When all else had failed, this was apparently the place to go, especially if you had money. The only problem was that it was a one way visit. You checked in but never checked out, at least not alive.

So, here is the estate planning twist. The federal estate tax which would be a 45% tax on estates in excess of 3.5 million, sunset in 2010. In 2010, there is NO federal estate tax on these high level estates. We do not know what will happen in 2011 but if Congress does nothing, the federal estate tax will return.

On Law and Order, the millionaires had cancer which could no longer be treated traditionally. They were given say another year or two to live. BUT, this "experimental" treatment "might" provide them with a longer life span option or even a "cure". Needless to say, it did not prolong the life of those expected to live "maybe" another year or two. They died in 2010. The millionaire that was given only a month to live in 2009 did live longer into 2010 before dying but the quality of life was highly questionable.

All of the families of these millionaires inherited these estates FREE of federal inheritance tax. Was this a crime? Sorry, I fell asleep before the end of the show, but what do you think? Leave your comments here or contact me at

Tuesday, May 11, 2010

A Legend's Death

The legendary Lena Horne will be remembered for her outstanding musical, acting and humanitarian work. There is so much to be passed on from her legacy and I am hopeful that her estate preserves what can be shared for generations. She was able to surmount many barriers to enter the workings of Hollywood and, while there, share her musical and acting talents to the world.

We will miss this Icon but her legacy will live on.
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Monday, May 10, 2010

Probate - The Issues and The Resolutions

I have been involved in a number of probate matters recently that raise complex questions for families having to deal with the loss of a loved one. Three concerns come to mind. Discussing them here may help others avoid the pitfalls.

One, if the will is not notarized then the witnesses have to appear before the Register of Wills. This can be a troubling task for many since witnesses can be scattered here and there. So, if the person failed to get the will notarized (remember to get your will notarized) then you can get 2 other people familiar with the signature of your loved one to attest to the signature before the Register of Wills. You can serve as one of the individuals.

Two, make sure you do not delay presenting the will before the Register of Wills. Other family members could try to open probate alleging there was not will. They have a heavier burden but if no one comes forth with the will, it makes it easier for others to create a fraud. Trust me, it happens in the best families.

Three, notification to beneficiaries and an inventory of the estate are required. Many Executors or Administrators are delinquent in this task. This is a violation of fuduciary responsibility and could lead to fines and penalties. So, if you serve in these roles make sure you know what you are required to do and do it.

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Friday, May 7, 2010

What is an Endowment?

I did a presentation and book signing at Freedom Theatre sponsored by African Tropic Decor Gallery, Inc. It was a wonderful evening. The art on display was uniquely fantastic.

Well, we had lots of questions which I enjoy the most when I do these presentations. I share one with you here. What is an Endowment? First, an endowment is not a bequest which is a gift left in a will. Note, a bequest could go towards an endowment. An endowment is not a trust which serves a specific purpose and generally can hold a variety of assets.

An endowment is a fund established generally with money, but can include real estate and other assets, to benefit an institution or person. It has a specific purpose and the money in the fund is to be applied for that purpose. In an endowment fund, the principal is invested, and only a portion of the investment earnings, income, is spent. The rest of the earnings are directed back into the fund, so that the endowment grows over time. In this manner, the endowment becomes a perpetual source of funding for whatever the person making the donation wishes to achieve.

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Thursday, May 6, 2010

Have you Updated Your Will

I often quote the statistics that 70% of the people do not have a Will. But, the 30% that do have a will, need to update their will. What category are you in?

How many times have I heard that a will did not express the wishes of a loved one. Circumstances had changed and the "intent" was to make a change. However, it was never done so we have a legally binding document that can't be changed because the only one that could change it has died. Sometimes these statements appear to be self-serving and other times not so.

I ask you now to take a close look at your will while you can and make sure it does express your wishes. Engage in such a review whenever your circumstances change. Leave your comments here or contact us at

Wednesday, May 5, 2010

Mother's Day - A time to talk

You know I often say that estate planning is a family conversation. Mother's Day is this weekend and generally all the family is together. As our parents age, who will be there for them? If a parent is alone due to divorce or death, then answering this question is even more important for the family.

A friend asked me to write a guide for families. A step-by-step approach to How to Care for Mom. When families are faced with this reality, it can be overwhelming. Families are no longer living in close proxmity. They have multiple commitments and obligations. They struggle themselves financially. BUT, in all this chaos, there is an approach to make the burden easier. The approach not only includes necessary documents like General Power of Attorney and Healthcare Power of Attorney; but, resources like continuing care communities and elder care wellness centers. Having this information available in a handy check-off format, makes an otherwise daunting task doable. So coming soon, your guide to caring for Mom.

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Tuesday, May 4, 2010

Revocable Trust

I had yet another client who came to my office to update their current estate planning documents. The client needed to modify their Revocable Trust. The first question I always ask is "What have you placed in your trust?". When I get a blank steer, I know the client has not followed through on the most important part of having a Revocable Trust. You MUST retitle assets into the name of the Revocable Trust.

A Revocable Trust is a legal document. As a visual, I ask clients to think of it as a shopping cart. Once you have the shopping cart, you have to place items in it. Without these items, it is empty. The same applies to a Revocable Trust. If you do not retitle your assets into the name of the Revocable Trust, the Trust has not served its purpose. For example, if you want the Deed to your home or your brokerage account to be in the Revocable Trust, you would retitle those assets by changing from your name to "Your Name, Trustee for the Your Name Revocable Trust dated Execution Date."

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Monday, May 3, 2010

Car Bombing in Times Square

I was taking my daughter to her Tennis practice on Sunday when she asked, out of the blue it seemed, whether there was war. She is just turning 9 so her world perspective is limited to family news discussions and of course current events at school. But, whether there is war or even whether we are at war and with whom is quite a complex topic to have with a 9 year old as we are rushing in to make it on time for tennis. And, she is actually waiting for my response. So I quickly say what any loving mother would, "Ask your dad".

She dashes on to the court and I flee back to the car to see how many errands I can possibly accomplish in less than an hour. Then I hear about the car bombing in Times Square. Did my daughter hear this story before I did? Does she have a sixth sense? Whether those responsible for this bombing are part of a larger network that goes beyond our borders or not, this act of violence clearly gives reasons to pause and ask "Are we at war and with whom"?

What is our collective legacy to the next generation? Will it be of war or will it be of peace? Leave your comments here or contact us at