Joint Title with Right of Survivorship

Two popular forms of joint ownership are Joint Tenancy and Tenancy by the Entirety.  The Tenancy by the Entirety is limited to joint ownership between spouses. 

The Joint Tenancy allows joint ownership between any two or more persons.  One of the distinguishing features of both Joint Tenancy (with Right of Survivorship as oppose to In Common) and Tenancy by the Entirety is the Right of Survivorship.  When one joint owner dies, the deceased owner's interest in the asset goes to the surviving joint owner automatically.  This result is not affected by the deceased owner's will.

You want to make sure your property ownerships are done correctly by seeking expert legal advice.  Contact us at www.ythlaw.com

How does property pass upon death?

There are always questions about the best way to distribute property to your heirs or charitable interest. I remind my clients that property passes four (4) ways upon a person's death. It is passed on by Will (or intestate if there is no Will), Joint Ownership, Beneficiary Designation and Trust (assets have to have been placed into - or retitled into - the name of the Trust).

It is important to determine which way might best serve your needs. An estate planning professional can help with that decision. Contact us at www.ythlaw.com to help with all your estate planning, probate and elder law decisions.

Tenancy By The Entirety

For married individuals, the home is generally owned as Tenancy by the Entirety which means that both, husband and wife, own the whole. When one spoues passes the entire property will belong to the surviving spouse.

The real estate therefore passes via the joint ownership known as Tenancy by the Entirety. It does not pass via provisions provided in ones Will. Only upon the death of the second spouse, if the home is still owned and the deed has not been changed, does the real estate pass under the terms of the Will.

Contact us at www.ythlaw.com should you have any questions on Estate Planning, Elder Law and Probate.

Divorce and Death - What you need to know.

You probably do not even think about all the details of a divorce until you are in the middle of one. That may not be the most appropriate time for you to make rational decisions affecting the rest of your life. But, be that as it may.


What you need to remember, whether you are getting a divorce or not, is that upon death money is distributed 4 ways: by Will, Trust, Joint Ownership or Beneficiary Designation. You need to make whatever changes are necessitated by the divorce in all 4 of these areas.


Contact us at www.ythlaw.com for all your estate planning, probate and elder law needs.

Costly Estate Planning Mistakes

I often attend continuing legal education seminar. Actually, I enjoy them because it keeps me current. I like to learn what others are doing for their clients in the area of estate planning. This evening's event addressed the top estate planning mistakes. Here is the run down of the list so you can see whether you need to see an estate planning attorney, like me, soon:
A. Is your estate in excess of 3.5 million dollars....then you should have federal estate tax planning done, immediately and correctly.
B. Is your estate under 3.5 million dollars and you still have federal estate tax planning done, revisit your plan immediately. You do not want terms and conditions that are no longer relevant to your situation. It will only complicate matters for your estate.
C. How many trusts do you have? Make sure you fund the correct trust. Terminate any trusts that you no longer require.
D. Make sure you review joint ownerships and beneficiary designations to make sure they are consistent with your intent for distribution of your estate.
E. Who will be responsible for the inheritance tax that must be paid? Make sure you cover your preference in your documents.
F. Oh, by the way, do not write on your will after you have executed it. Put it away and keep it clean. AND, do not lose the original....that will be a big problem. So, do you know where your original will is??

These are things to think about that I thought would be helpful to my bloggers. Let me know what you think. Contact us at www.ythlaw.com

How can I avoid Federal Estate Tax?

Question:
My husband died unexpectantly and without a will. The estate is worth in excess of 3.5 million dollars. My husband had children from a prior marriage and we had children together. Can I avoid Federal Estate taxes? How can I best provide for all of his children?

Answer:
Yes, you can avoid federal inheritance tax because of the unlimited marital deduction applied to estate assets that pass from your deceased husband to you. However, since your husband died without a will, there was no planning in place to take advantage of his lifetime exclusion amount or his credit against potential future taxes. Further, there will be taxes on the monies which go directly to the children.

WHY, you might ask? When someone dies without a will, the state determines who inherits what assets. In your case, Pennsylvania provides that ½ of the estate would pass to you and the other ½ would pass equally to all of his children. However, this only applies to probate assets – assets that were titled in your husband’s name only. The intestate (to die without a will) laws do not apply to jointly held property and assets providing for designated beneficiaries.
Assuming that most of the estate was held jointly or provided you as the designated beneficiary, the following estate planning strategies are available to provide for the children while minimizing the Federal estate tax:
Gifting: $13000 can be given annually to each child tax free. Such funds could be placed in a trust for the benefit of the children.
529 College Saving Plans: $6,000 (representing 5 years of annual gifts of $13000) is permitted for each child.
Family Limited Partnership: is another gifting vehicle.
Irrevocable Life Insurance Trust: takes life insurance proceeds out of your estate.

Have your questions answered by entering a comment or submitting an inquiry through http://www.ythlaw.com/.

Do I really need a Will?

Question:
Do I really need a Will? I own everything jointly with my husband. Why should I even have a Will?

Answer:
Everyone should have a Will. A Will allows you, rather than the State, to determine who gets your assets. The State’s plan may not be the best plan for you.

In your particular case, joint property does not go through probate. At your death, jointly held property belongs to the other joint owner, your husband. However, a Will addresses who would get the property in case both you and your husband die simultaneously, in an accident or common disaster. In such a case, you may need to name a guardian, if you have minor children or disabled children.

Also, a Will allows you, instead of the Court, to name an Executor to make sure estate administrative responsibilities are handled. This includes any inheritance tax form filing and last income tax form due.

Finally, even if you believe you hold everything jointly, there may be items overlooked including beneficiaries under an insurance policy or 401K. Is your Estate named? If so, who do you want to take under your Estate? If you die as a result of the negligence of another, the legal suit is considered to be an asset of the Estate. Once again, who would benefit from these assets, you can decide under your Will or the State can impose its Intestate Law, the law applicable for those who die without a Will.

Have your question answered by entering a comment or go to http://www.ythlaw.com/ and email us your questions.

How can I avoid State Inheritance Tax?

QUESTION
My estate is currently under the Federal Estate Tax exclusion but I also want to avoid having my estate pay State Inheritance tax, like that in Pennsylvania. How can Estate Planning help me?

Answer
Transfers to a surviving spouse or a charity are tax free. Certain type of joint ownerships between non-spouses would allow the surviving owner to receive the deceased owners share without an inheritance tax. The concept behind this ownership (Joint Tenants with Rights of Survivorship) is that both individuals owned the whole so upon death there was no “inheritance” by the other owner. This generally occurs when parents name an adult child as co-owner (Joint Tenant with Rights of Survivorship). Though this would allow one to avoid inheritance tax, there are other things to consider before naming another person as a co-owner. Remember, that person’s creditors would have another asset to attach if outstanding debts occur.

Gifting provides another mechanism to avoid or reduce the inheritance tax. The basic rule is that in the year 2009 anyone can give up to $13,000 in money or other property to any number of parties without gift tax. This $13,000 per year, per recipient rule is known as the annual gift tax exclusion and one’s estate is reduced by that amount.

Perhaps the most significant tax disadvantage of gifting is the loss of the so-called "stepped-up" basis. This can be best explained by an example. Let's say you purchased unimproved land for $10,000 but the land is now worth $100,000. If you sell the land, you would realize a $90,000 (100,000 minus 10,000) gain. If you were to make a lifetime gift of this property, the recipient would stand in your shoes and would also realize a $90,000 gain if they were to sell the property. If, however, you were to die owning the property and leave it to your beneficiaries in your Will, those beneficiaries would receive it as if they paid $100,000 for it. As such, they could in turn sell it for $100,000 and realize no taxable gain. Because of the “stepped-up basis” that a decedent's beneficiaries receive, it’s suggested that a donor refrain from gifting appreciated property. You have to do the numbers to see what might work best for your heirs.

Send your questions in by providing a comment or visiting my website at http://www.ythlaw.com/

The TENTH of TEN reasons to have will

TENTH, a will captures the distribution of assets that did not pass by other means. When a person dies, property will pass to another person by different means. These include:
(1) beneficiary designation. This is a form that is required to be filled out when you have life insurance, a 401K, or certain investment products. In the form you state who you would like to get the insurance, 401K or the investment product proceeds. A will does not change that designation.
(2) joint ownership. If someone is named jointly with you on real estate or other property, the will does not change the ownership rights of that person. At your death, that property becomes the other persons if the ownership is joint with rights of survivorship or tenancy by the entireties if husband and wife.
(3) trust. If property is owned by a trust, the terms of the trust will determine who gets the property. A will does not change the terms of the trust.

However, no matter how hard one may try to get property to pass by either of the 3 methods mentioned above, there are situations that can be missed. This includes proceeds that the estate may be awarded if your death was a wrongful death, ie. an automobile accident caused by another person. Who will get those proceeds? If you become incapacitated before your death and acquire property, you may be unable to use other methods to assure such property is distributed in accorance with your preference. A will is the MOST IMPORTANT document that you can have!!!