Should my Will be notarized?

This is a question many people ask because they do not understand the importance of having a Will notarized when it is not a legal requirement. In Pennsylvania, you only have to sign your Will at the end of the document. Witnesses are not required and the Will does not have to be notarized. BUT, both, having your Will witnessed and notarized, are important.

It is important to have witnesses because they help to establish whose Will it is. They can state whether the person was under duress or of sound mind at the time of signing

Notarizing the document makes the Will self-proving. This means that if there is ever a question regarding the Will, the witnesses do not have to be located. The fact that it was notarized validates that the Will was appropriately witnessed.

So, do not take short cuts when embarking upon such an important task. Share your comments or contact our office at http://www.ythlaw.com/
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What are the terms of the Trust for Children?

Many people want to place their assets, upon their death, in a Trust for their children. The question that is often asked is what are the standard terms of a Trust for children. As with any of the estate planning documents, a lot of the terms and conditions are based upon each person's situation, circumstances and intent. However, there are some general guidelines that many follow when they have no specifics of their own.

The age for distribution of the principal of the Trust are generally 25, 30 and 35. However, the income is distributed after the child turns 18, monthly, quarterly or annually, at the discretion of your named Trustee and based upon the needs of the child. The needs generally addressed are education, health, maintenance and general support. The lump sum distribution of principal at 25 is generally thought to be used to start ones career after undergraduate and graduate work. The lump sum distribution at 30 is generally thought to be used for the down payment on a home. While the final distribution at 35 is generally thought to help with the needs of the grandchildren or to address any other major life event.

Everyone's situation is different but it is always helpful to have some idea of how these Trusts are set up. It is best to seek the advice and guidance of an estate planning professional because the options are so varied. Send us your comments or contact us at

When do I begin to plan my estate?

I alway use my birthday as a time to review and reflect on important health, financial and personal matters. Making sure my estate plan is up to date is a part of this annual reflection. Well, today is my BIRTHDAY!!! I will of course celebrate the gift of another year of wisdom and experience while I take the time to encourage you to get something done that is important to you and your loved ones. I encourage you to get your Will done NOW but NO LATER THAN YOUR BIRTHDAY!!!

One question that I often get from audiences is when do I begin to plan my estate. The simple answer is now. If you are 18 or older and of sound mind then you can and should have at a minimum, a Will. Many people use certain triggering events to start their estate plan. this would include events like buying a house, getting married, having a baby or developing a particular passion. Why not use your BIRTHDAY as your triggering event. This is your day to take care of your health, financial and personal matters. Let one of those matters be getting you Will done.

Leave your comment here or contact us at http://www.ythlaw.com/

Legacy - Your Life's Worth

We had a traditional Memorial Day, taking my daughter to the parade and having friends and family over for a cookout. One of the things I also enjoy with an extended weekend is an opportunity to read a good book. It seems no matter what I read I always find an Estate Planning moment. This time it was in Loving Frank - a fictional Frank Lloyd Wright love story.

One of the characters in the story owned a home sanctuary on a beautiful lake in Sweden. The home represented a culmination of her life's work and worth on women's empowerment in the early 1900s. It was her intent to make this sanctuary a kind of legacy upon her death. So she was having a will drafted up to accomplish that goal.

A legacy is a powerful testimony to one's life and one's work. However, it can not be done without proper planning. An estate planning attorney goes beyond merely your tangible assets but combines that with the intangible desires that you might have, your hopes and dreams for the future.

That is what we do best at my firm!! Send a comment or contact us at http://www.ythlaw.com/

Retirement benefits and estate planning

Whenever I learn something new, I just can not wait to share it with my readers. I attended a seminar this week and we discussed how one might leave their retirement plan to a loved one. The tax favored approach would be to to:
1. Leave it in Trust to a young individual. The life expectancy of that individual will be used to determine the payout period.
2. Leave your retirement benefits outright to your spouse. There are all kinds of benefits to the surviving spouse, one of which is the rollover into their own retirement account. This benefit is not available to other beneficiaries.
3. Leave it in Trust to a Charity

The least tax favored arrangement for retirement benefits would be
1. Leaving it to an older individual
2. Leaving in Trust for the spouse
3. Leaving it to your Estate

So you want to think about this very important asset when having your estate planning done.

Contact my office for a free consultation about this and other estate planning matters.

What does Power of Attorney mean?

Question:
I keep hearing that it is important to have a power of attorney but I really do not know what it all means.

Answer:
The power of attorney provides the name of the person or persons who will handle your financial matters should you become incapacitated. There are many decisions that are time sensitive and, if delayed, could result in significant financial loss to you. The Power of Attorney allows you to designate a person, of your choice, to act on your behalf and ensure financial decisions are not unnecessarily delayed.

It is your “personal decision insurance”. Make sure you are covered.

A Power of Attorney is a document that gives another person or institution the right to take certain actions on your behalf. The scope of actions authorized is written within the Power of Attorney. A Power of Attorney can be effective immediately or it can give the agent the authority to act only after you become incapacitated. The latter is known as a springing Power of Attorney and requires proof of the your incapacity. Making the Power of Attorney effective immediately avoids this issue. However, unless directed to do so by you, the agent should not use the Power of Attorney if you are capable of making decisions.

There are several forms that Power of Attorney can take, including limited, general and health care. Depending upon your personal circumstances, there may be a need for all three to ensure continuity in business transactions.

The Limited Power of Attorney does not provide broad powers. It is generally used in the purchase and sale of real estate when you are unavailable on important signing dates or for the negotiation of securities transactions within an investment account.

A General Power of Attorney can grant "all-encompassing" authority for virtually any type of decision relating to all types of property.

The Health Care Power of Attorney is used to appoint a person who may make important medical decisions regarding a person’s care during incapacity.
Critical Note:
1. Regardless of the form of the Power of Attorney, it is imperative that your agent be carefully selected. Given the authority granted under any Power of Attorney, trustworthiness is the essential key.
2. The Power of Attorney terminates upon your death.

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

When should I have a Revocable Trust?

Question:
I live comfortably on my investments and retirement income. My sons are grown and only one of my grandchildren is under the age of 18. While my permanent residence is in Pennsylvania, I own real estate is several other states. How can I best set up my estate for ease of administration for my sons and grandchildren?

Answer:
This is where a funded Revocable Living Trust is ideal. There are many reasons to consider a Revocable Living Trust, one of which is when there is ancillary real estate, ie. real estate in more than one state. The use of a Will when you own real estate located in more than one state requires the filing of additional probate documents with each of the local probate courts. Local counsel usually must be retained in each of those additional jurisdictions. If the additional real estate is held in a Revocable Living Trust, however, the costs associated with these ancillary estate administrations may be reduced or avoided altogether. It would also be wise in your situation to provide for a trust for your younger grandchild and let your son, the child’s father, serve as the Trustee. These instructions can be provided in your Revocable Living Trusts.

If you want to know more about Revocable Living Trusts: The Pros and The Cons - The Reasons for Revocable Living Trusts and Whether They Address the Needs of You and Your Family CALL (215) 321-4033.

Should I plan NOW for possible future incapacity?

Question:
I have been the owner of a small restaurant for 25 years. Since my wife and children are not interested in the business when I die, I have provided for the sale of the business in my will. However, I have not addressed what will happen to the restaurant if I am unable to run it for a period of time due to an extended illness. I am 62 and enjoy taking care of the details of my business. Should I also plan now for possible future incapacity? What are my options?

Answer:
Yes, you should plan now for possible future incapacity

If you do not have a Power of Attorney, it is wise to have one. This will authorize someone to act on your behalf. Depending on the details of your business and number of employees, this may adequately cover you during recuperation.

Another alternative might be a revocable trusts. Among other uses, it can provide for the management of trust assets in case of incapacity. Your restaurant business could be placed in the trust and you can be both the trustee and beneficiary. You make the decisions about trust assets and you would be responsible for the income tax on any earnings of trust assets. Life goes on, pretty much, as before with only the title of the assets being in the trust. You would name a successor trustee for special cases as defined by the trust, ie. incapacity. This would be a person of your choice who would be under a legal duty to protect your assets. It avoids potential conflict among family members and any possible court involvement.

It is best for you to plan now and not leave to others, not as familiar with your business, to plan for you.

Have your questions answered by entering a comment or sending an email through http://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/.

How should I plan for my special needs son?

Question:
How should I plan for my 22 year old son who has been disabled since birth?

Answer:
A “special needs trust” may be the best alternative.
The special needs trust is intended to supplement, rather than supplant, public assistance benefits that the disabled child may be entitled to receive under various programs such as Supplemental Security Income (“SSI”) and Medical Assistance. The purpose of the special needs trust, therefore, is to make sure that monies available to a disabled child does not result in the loss of public benefits if that is an important issue for you and your son. A special needs trust may be set up by a third party such as a parent, grandparent or guardian or it may be set up with the funds of the disabled child. The latter situation generally involves a personal injury settlement where the accident was the cause of the disability and a settlement is made for the benefit of the child.

Critical Note:
Even though most trustees named under a special needs trust are corporate trustees, such as a financial institutions, if the trust is a modest size, typically less than $75,000 or only holds a home, a non-corporate trustee can be named. This includes a family member who may then seek the advice of a financial planner if they do not currently have that expertise.

Have your question answered by entering a comment or contact us at

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.

What happens if the Federal Estate Tax law is repealed?

Question
Is Estate Planning necessary if the Federal Estate Tax law is repealed?

Answer:
Estate planning has many purposes besides reducing or eliminating the federal estate tax. It is used to protect assets, preserve and distribute wealth. For example, you can provide for family members with disabilities or other challenges in financial management. You can control when your heirs receive any distribution. You can designate executors, trustees, guardians and those to inherit your assets.

In short, yes, estate planning will still be necessary if the Federal Estate Tax law is repealed.

Ask your question by commenting or submitting a question to http://www.ythlaw.com/

How do I plan in uncertain times?

Question:
Can you effectively plan your estate in the midst of uncertainty with Federal Estate Tax law? I am aware that Congress is considering bills that would change the Federal Estate tax. How can you effectively plan your estate when the tax laws are constantly changing?

Answer:
Flexibility is the key when planning ones estate during change and uncertainty. We do not have a crystal ball to see the future. Therefore, we need the next best thing.In my opinion, that would be control over the timing of implementation of designated estate planning tools. For example, funding the Credit Shelter Trust (used to preserve the exclusion amount of the first spouse to die) may create a burden for the surviving spouse if the estate is not large enough to justify the use of the Credit Shelter Trust. However, if the instrument is not drafted to provide some flexibility then funding of the Credit Shelter Trust may be mandatory. An alternative would be the use of a Disclaimer Trust. When the first spouse dies, an assessment can be made at that time whether to disclaim all or part of the inheritance. Only that amount, if any, would be placed in the Disclaimer Trust. The terms of the trust would provide for the surviving spouse during their lifetime. Afterwards, the funds would be distributed to the children or the remainder beneficiaries.

Ask your question by commenting or submitting a question to http://www.ythlaw.com/

What rights will the Prenuptial Agreement affect?

Question:
What rights will the Prenuptial Agreement affect?

Answer:
The scope of a Prenuptial Agreement can be as broad or as limited as the situation dictates or you and your fiancé desire. It can deal with just one asset or it can fix all of the rights arising out of the marital relationship.

For example, upon divorce in Pennsylvania either spouse may request that their marital property be divided between them. Rather than leave such a decision to the court or even to a negotiation process between the divorcing couple's attorneys, the parties themselves could agree prior to marriage on how their assets will be divided in the event of a divorce. Similarly, an agreement can fix their respective rights to alimony or support in the event of a divorce or separation. In both cases, the agreement avoids a protracted battle in the event the marriage ends in divorce.

Let's say your interest is to have your children inherit your property. Without a Prenuptial Agreement, your new husband would have certain rights to at least a portion of your property. With an agreement, however, you can ensure that your children will receive their inheritance.

As relates to your rights the following is important:
1. You and your fiancé should make full and complete disclosure of your financial worth. You should never waive your rights without full knowledge of what you are giving up.
2. You and your fiancé should each have an attorney. Your attorney can review the terms for reasonableness.

Have your question answered by commenting or submitting your question to http://www.ythlaw.com/

Should I have a Prenuptial Agreement?

Question:
I am getting married this summer. It is a second marriage for both of us and we both have children from our prior marriages. My fiancé had his attorney draft a Prenuptial Agreement for us to execute. I am in favor of the agreement to protect my children’s inheritance. However, I want to make sure I understand the future ramifications. Should I also hire an attorney? What rights will the agreement affect?
Should I also hire an attorney prior to executing a Prenuptial Agreement?

Answer:
Yes!!!!!!!
The purpose of the agreement is to alter the rights that you would otherwise have upon divorce or death of your spouse. Your attorney will focus on the rights that you give up, will make sure you understand the terms of the agreement and, if necessary, will amend the proposed agreement (or draft a new one) to address your concerns.

It used to be that only those with vast fortunes to protect considered a Prenuptial Agreement as part of their wedding plans. Even though such steps may not be necessary for every couple, in light of the ever-increasing divorce rate and more common second and third marriages, many couples, like yourself, readily welcome the suggestion of a Prenuptial Agreement, especially to protect the interests of their children from a prior marriage.

More on Prenuptial Agreements tomorrow.

Have your questions answered here by commenting or submit your question at http://www.ythlaw.com/

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/

Should my children inherit my Retirement Plan?

Question:
I would like my children to inherit my qualified retirement plan. However, I want to control the distribution of those assets after I die. How can I accomplish this goal?

Answer:
You should have a trust name as the “designated beneficiary”of a qualified retirement account.

You, like many other people, may have significant assets in a retirement account and you want to be assured that after your death such assets benefit the ones they love. For example, if your surviving spouse were to remarry, the new spouse could get the money if you fail to plan ahead. If, as another example, you were in a second marriage, protecting your children from a prior marriage may be your concern. Another possibility is that you want to leave all the retirement assets to minors or individuals whom you do not trust to make good financial decisions. The terms of a designated beneficiary trust could address all of these situations.

In order for a trust beneficiary to qualify as a designated beneficiary, the trust:
must be valid under state law,
must be irrevocable or, by its terms, become irrevocable at the death of the grantor and
must have identifiable individuals as beneficiaries.
A copy of the trust must be provided to the retirement plan administrator
As long as these requirements are met, the life expectancy of the trust's oldest beneficiary will be used to determine the applicable distribution period.

Critical Note:
By selecting a trust as beneficiary, a surviving spouse would lose the opportunity to roll the retirement account over into a new qualified retirement account. This rollover is a big advantage for a spouse because the spouse can select new beneficiaries and a new distribution pattern. Your situation would have to be assessed to make sure giving up this spouse-only privilege is in your best interest.

Contact our office with your questions today.

How can I provide for my grandchildren?

Here is another question raised by a reader.

"How can I best provide for my grandchildren? My son has been divorced twice. His 2 children (5 and 9) do not have the same mother. I have a wonderful relationship with my grandchildren but not with their mothers. My son has full custody of his 9 year old son and joint custody of his 5 year old daughter. However, he is not financially responsible. What is the best way for me to provide for my grandchildren during my lifetime as well as when I die? Giving or leaving money to either parent for the care of the children is not an option."

In Response to your question:
During your lifetime, you may want to consider a gifting program. This would allow you to annually gift up to $13,000 (as of 2009, amount changes periodically) in a separate trust for each child. The terms of the trust will dictate how the money will be spent. You should not serve as the trustee but designate a person or institution that you trust. Other options for gifting would include custodian accounts (distribution required at 18 or 21) and 529 Plans (limited to college education expense). You should also be aware of any tax implications. Prior to any final decision, consult with your tax advisor.

If you set up an irrevocable trust during your lifetime, it could continue under the same terms and conditions when you die. If you did not set up anything during your lifetime, you could establish a testamentary trust with terms and conditions that you desire for the care of your grandchildren. However, whenever assets skip a generation (ie. to grandchildren instead of children), a generation-skipping transfer has occurred and a tax is imposed unless the amount is within the exemption. There is no tax if you do not exceed your 1.5 million dollar lifetime exemption.

Made your comments here or email a question via my website http://www.ythlaw.com/ .

How can I best set up my estate?

Over the next few days, I will be answering questions posed by readers.

The first question I received was:

"How can I best set up my estate for ease of administration for my sons and grandchildren? I live comfortably on my investments and retirement income. My sons are grown and only one of my grandchildren is under the age of 18. While my permanent residence is in Pennsylvania, I own real estate New Jersey and North Carolina. How can I best set up my estate for ease of administration for my sons and grandchildren?"

In response to the question:
There are several ways to set up an estate for ease of administration. In your case a funded Revocable Living Trust would be very beneficial. There are many reasons to consider a Revocable Living Trust, one of which is when there is ancillary real estate.

The use of a Will when you own real estate located in more than one state requires the filing of additional probate documents with each of the local probate courts. In your case, this would be both New Jersey and North Carolina. Local counsel usually must be retained in each of those additional jurisdictions. If the additional real estate is held in a Revocable Living Trust, however, the costs associated with these ancillary estate administrations may be reduced or avoided altogether.

It would also be wise in your situation to provide for a trust for your younger grandchild and let your son, the child’s father, serve as the Trustee. You are not required to appoint a corporate trustee. You should name someone that you trust to follow through with the specific instructions provided in your Revocable Living Trust.

Provide your comments or send a question through my website: http://www.ythlaw.com/

Who will handle your financial/business affairs when you can not?

Everyone should have a plan to cover incapacity, especially business owners who do not have family members involved or interested in the business. What happens when you can not handle your financial affairs or run your business for a period of time due to an extended illness? Whether you are young or old, planning now for possible future incapacity is important because YOUR assets are at risk.

What are your options?
If you do not have a Power of Attorney, it is wise to have one. This Durable Power of Attorney, as it is often called, authorizes someone to act on your behalf. For someone without a business or with a simple estate, this document may adequately cover you for any period of incapacity. For those with businesses or complex estates, there are other alternatives to consider.

One such alternative might be a revocable trust. Among other uses, it can provide for the management of trust assets in case of incapacity. Your business could be placed in the trust and you can be both the trustee and beneficiary. You make the decisions about trust assets and you would be responsible for the income tax on any earnings of trust assets. Life goes on, pretty much, as before with only the title of the assets being in the trust. You would name a successor trustee for special cases as defined by the trust, ie. incapacity. This would be a person of your choice who would be under a legal duty to protect your assets. It avoids potential conflict among family members and any possible court involvement.

It is best for you to plan now and not leave to others, unfamiliar with your business, to plan for you.

Call (215) 321-4033 with questions and to learn more.

Day Five - Time To Plan

As with all good things, the end has to come. So my pre-release excursion to St. Thomas has come to an end. But, it is just the beginning of the marketing of Stop! What are you waiting for? Your Step-By-Step Guide to Estate Planning.

A rainbow appears as I begin my travels back to Pennsylvania. I think of the plans for the future and what lies beyond that rainbow. I know that I want to use this book to encourage everyone to take the time to plan. We are all so busy making life happen that we fail to live life to the fullest and part of living life is making sure we pass on our life's work and worth. Too many people are not effectively planning. In writing a book directed to those who have not taken the time to plan or to update their plan, I make a call to action. With the knowledge outlined in the book, your action is the next step. I want everyone to have a will (or a trust as it may apply), the cornerstone of any estate plan. I envision a time when everyone over 18 will have this essential document and, like a driver's license, passport or credit card, will be easily accessible when needed.

What is the tipping point to move the masses in this direction? It is, I believe, my book Stop! What are you waiting for? Your Step-By-Step Guide to Estate Planning.

Day Four - Horizon Dock

Each morning I was up watching the sunrise from the hilltops and in the evening I watched the sunset on the horizon. This evening I sat on the dock awaiting the ferry to town as the sun made it descent towards the blue horizon. There has been much to celebrate with the pre-release of my first book. The bookstores are as anxious as I am for the arrival of my books in June. We have many planned events throughout the summer. I will keep you posted.

In the meantime, I answer the questions from a bookstore patron regarding long term care planning. I devoted an entire section of my book to Elder law which has become increasingly important. There are many planning steps that everyone should do to make sure their golden years are golden and not replete with regret from not planning.

Let me guide you through the answers to many of your long term care concerns.

Day Three - St. John

I thought it could not get any better than St. Thomas then I went to St. John. Miles of white sand beaches, crystal clear blue water, unique colorful shops and million dollar homes neatly tucked in the cliffs rising high above the ocean, all welcomed the ferry I traveled on to reach St. John. Our first stop was the bookstore at the National Park Headquarters.

It was a small section of the Welcome Center devoted to books. This bookstore, like Dockside in St. Thomas, will stock my book. And the pre-release continues.

The land in St. John is now very expensive If you ownn land on the Island, I was told by a long time resident, the value has greatly appreciated. The questions from residents of this jewel of the Virgin Island did center on real estate. The concern by some was how to keep real estate within the family for generations. This is where a trust or even a LLC (especially for rental properties) may serve as the best course of action. Stay tuned - one more day left for pre-release activities.

Day Two - Cliff Crab at Sunrise

Pristine is the word for the scenery this morning. I am on the veranda overlooking the cliffs to the ocean. Since there is no sand, the crab I see scampering across the rocks below I call cliff crab.

Yesterday, I continued to talk about my book to the locals arriving for Carnival and those from all over the mainland arriving by cruise ship. I find people very interested in knowing how estate planning can help their circumstances. From the native of St. Thomas living in Long Island, New York who would love to purchase a piece of the island of St. Thomas to the young Chicago couple interest for their 14 month old son, they all pause to ask me questions. I'm excited to know that my book can really help resolve issues for so many people's circumstances.

Later today I travel to the island of St. John for an event at another bookstore. Stay tuned.

Day One - Book Launch St. Thomas Virgin Island

I arrived 2 pm yesterday in beautiful, sunny St. Thomas. The weather could not have been any better. I am staying at the Marriott Resort. I only had a few moments to check in before I was off to Dockside Bookstore, the first of 3 stores that I will visit during this trip. The store is well stocked with books from all over the world on all topics. My publishing company, Second Wind Press, was in touch with the manager who greeted me upon my arrival. After a tour of the bookstore, we took pictures and greeted customers, sharing the flyers regarding the June, 2009 release of the book.

Well, it was an interesting experience. I talked with the manager about the marketing and promotion of the book when it arrives. She was very helpful. The more locals that know about the book, the better sales will be. I will spend the next few days working on that recommendation. She also thought that a spot on Oprah would not hurt either. Well, I will work on that as well. Any recommendations out there from any of my readers?

After a cable car ride to the top of the cliffs and a magnificient view of the Island, I concluded the day at Agave Terrance restaurant, a must try whenever you visit this wonderful Island.

If today was indicative of the rest of the week, we are in for quite a marvelous time. The people are lovely and inviting. There could not be a better place to launch a book on the importance of estate planning. And, yes this too is a Beach read!!

So order your copy of Stop! What are Waiting For? Your Step-By-Step Guide to Estate Planning today.

Estate Planning Is a Time to Celebrate Your Life

Today, I will travel to St. Thomas, Virgin Islands for a pre-release event for my book. I want people to realize that estate planning can be a celebratory event. It is not just a time of somber contemplation about your immortality. It is a time to reflect and project - reflect on just how awesome your life journey is and has been and project how your life's work and worth can impact another generation and beyond. That is why I choose Carnival time in St. Thomas to launch a book on Estate Planning.

So travel with me over the next 5 days for an experience that I hope might encourage you to take the estate planning ride. Become a participant observer through my daily blogs on the festivities, one of which will be my pre-release party. Let's have some fun!!!

The Stimulus Package and Estate Planning

Have you thought about how the Economic Stimulus Package might affect you? I have given it some thought as it relates to my clients and perspective clients. I encourage my current clients to take this as an opportunity to revisit their estate plan. Your estate plan should be updated as your personal and financial circumstances change. Another time to revisit your estate plan is when there are significant law changes impacting you and your family's future. We are in such a period now.

For perspective clients, I encourage you to look at this economically challenging time for our country as your wake up call to plan for the future of your children. An estate planning professional can help you sort through those aspects of the stimulus package that might be of importance to your circumstances. Call our office for a free consultation.

Stop! What are you waiting for?

My new book is coming soon!!! It is an exciting time. The publisher has scheduled a pre-release event this month in St. Thomas, V.I. I will also be in all of the major markets once the book is released. You can order your book NOW, in ADVANCE!!!

This is the book that my clients encouraged me to write so that I could share my message to more and more people. The message is that estate planning is ESSENTIAL for everyone and it DOES create lasting WEALTH!!

The book is a comprehensive guide to preserving your wealth. It will provide information on the benefits of estate planning. It will address how estate planning
(1) Protects your assets;
(2) Saves you money;
(3) Creates your legacy;
(4) Distributes your wealth;
(5) Addresses your special circumstances;
(6) Insures you peace of mind; and,
(7) Discerns needs as you age.

More importantly, this book will challenge you to reflect on your life. You can engage the estate planning process as a process of self-discovery to help you understand the life that you are living. It may be the first time that you plant an idea of your purpose that can begin to germinate into your legacy.

Order your advance copy of the book today!!!

Uniform Transfer to Minors Act - Children's Trusts

As part of your estate plan, you want to consider the ways to give money to your children. During your lifetime, you or other members of your family can gift money to your minor children. Sometimes that money is placed in a bank account in the child's name and at age 18 the child can withdraw any and all of the money. For larger amounts of money, the Uniform Transfer to Minor custodian accounts are set up. Once funds are placed into a custodian account, the account can not be terminated. The child is entitled to all of the funds at age 21.

For significant transfers of funds to minors and to provide for a longer term, you want to consider a Trust for your children. The Trust provides flexibilty and longivity that most parents are looking for when they want money to serve for the support, maintenance and education of their children.

Consult with our office on all your estate planning needs.

Federal Estate Tax - Update

What will happen in 2010 with the Federal Estate tax remains to be seen. It is one of the hot topics in estate planning that I continue to blog on. Under the current law, there will be no Federal Estate tax in 2010. It was anticipated that Congress would have addressed this issue before now. With less than a year to go people, lots of people, have been talking about the status of the Federal Estate Tax.

One of my financial advisor associates shared an article with me from Investment News, a leading news source for investment advisors. They, like others, are following Congress closely and the most recent congressional bill would have the current exemption amount of 3.5 million to remain permanently.

See the article below for more information and to continue to follow developments in this area. Share your thoughts here. We encourage your comments.

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090421/REG/904219982/1094/INDaily01

Transfer Your Deed

Let's say you have a home and you want to leave it to your children. What would be the best way to leave your home to them? This third option (Life Estate and Irrevocable Trust were options discussed the last 2 days) would have you transfer all your interest to your children now while you continue to reside in the home.

Pros of Deed Transfer
(1) If you should need medical assistance in the future, the home would not be subject to recovery by the state since ownership was transferred out of your name to your children. If your deed was transferred to the children (without fair market consideration, ie it was gifted to them) within 5 years of you having to go into a nursing your eligibility for medicaid will be affected.
(2) Upon your death, your children would not have to pay an inheritance tax since they are already owners of the property.
(3) If your home was your only asset then there would be no need to probate your estate.

Cons of Deed Transfer
(1) Since you no longer own the property, you would have to have an agreement from your children that you may live in the house for as long as you like.
(2) If your children have issues with creditors, divorce or bankruptcy, the home is exposed to those issues. You could find yourself evicted by new owners.
(3) Your children would not have the advantage of a "step-up" basis of the property which one receives when they inherit property. Their basis would be the same as yours which is the value of the home at the time of your purchase. This could result in significant capital gain tax upon the sale by your children.

A deed transfer is ideal when: (1) you are well into retirement, late 70s into your 80s and beyond (2) your property is not income producing (3) you want to avoid the inheritance tax and (4) your children do not have issues that might put your home at risk; and (5) there would be no issues with a long term lease from your children.

Consult with our office if you would like to learn more about this estate planning technique.

Life Estate

Let's say you have a home and you want to leave it to your children. What would be the best way to leave your home to them? Today, I want to address the life estate with the remainder interest to the children. Over the next few days, we will continue to look at the options and you can decide which alternative might work best for you.

Pros of the Life Estate
(1) The Life Estate allows you to continue to have an ownership interest in the property. You can continue to take advantage of any benefits available to a homeowner, ie real estate tax rebates, etc.
(2) If you should need medical assistance in the future, the home would not be subject to recovery by the state since ownership passes to your children upon your death. If your deed was changed to add the children within 5 years of you having to go into a nursing home, your eligibility for medicaid will be affected.
(3) Upon your death, your children would not have to pay an inheritance tax since they are already owners of the property.
(4) The value of your life estate diminishes as you age so any value to creditors is lessen since upon your death, the home becomes the chidren and is not subject to your debts.

Cons of the Life Estate:
(1) Your interest in your home is diminished and your children's interest is greater
(2) If your children have issues with creditors, divorce or bankruptcy, your home is exposed to those issues

The life estate is ideal when: (1) you are well into retirement, late 70s into your 80s and beyond(2) your property is not income producing (3) you want to avoid the inheritance tax and (4) your children do not have issues that might put your home at risk.

Consult with our office if you would like to more about this estate planning technique.

Irrevocable Trusts

Let's say you have a home and you want to leave it to your children. What would be the best way to leave your home to them? Today, I want to address the Irrevocable Trust for that purpose. Over the next few days, we will look at other options and you can decide which alternative might work best for you.

Pros of the Irrevocable Trust:
(1) The Irrevocable Trust allows you to take property out of your estate. Therefore, for purposes of Federal Estate Tax, your home would not be an estate asset at your death and would reduce the value of your taxable estate.
(2) If you should need medical assistance in the future, the home would not be subject to recovery by the state if the trust held your home for at least 5 years.
(3) Upon your death, your children would not have to pay an inheritance tax when the home is transferred to them from the Irrevocable Trust.
(4) Unless your home is rental property, there would not be any income for income tax purposes. Therefore, though the Irrevocable Trust would have its own EIN for tax purposes, when income tax filings are done, there would be no income tax due.

Cons of the Irrevocable Trust:
(1) When the property is transferred into an Irrevocable Trust, there would be a transfer tax due. In Pennsylvania, that would be 6% of the fair market value.
(2) An Irrevocable Trust can not be changed and you can not serve as the Trustee.
(3) If your home is rental property, income taxes would have to be paid at the trust rate which is a higher rate than for individuals.

An Irrevocable Trust is ideal when:
(1) you are well into retirement, late 70s into your 80s and beyond
(2) your property is not income producing
(3) the transfer tax is not a problem for you to pay
(4) you want to avoid the inheritance tax

Consult with our office if you would like to more about this estate planning technique.

Updating your Estate Plan

Timing is everything. Many people procrastinate getting their estate planning done. Even more people procrastinate in updating their estate plan. It is just as important to update your plan as it is to have one in the first place. The reason is that our circumstances change and our plan should reflect those changed circumstances.

There are many reasons that you might need to revisit your plan. These reasons include the birth of a child; the death, illness or incapacity of a loved one; moving to another state; receiving an inheritance or another significant financial change; divorce; marriage; and, change in the laws. I always tell my clients that generational wealth is not about luck. It is about planning and implementation.

Make a difference in the future of your children and grandchildren by reviewing your estate plan. If you need to make a change, call our office for an appointment.

Generational Wealth

I was listening to an entertainer recently commenting about his neighborhood. He said there are a few other wealthy entertainers living in his area. However, this neighborhood of multi-million dollar homes included many people who do not have multi-million dollar salaries.

This is where generational wealth is an advantage. It is not about what the individual makes. It is about access to wealth and to other sources of assets. Generational wealth is about trust funds, inheritance, gifting and other estate planning techniques. In order for one generation to help another generation, there has to be planning done. It can not be done in a choatic way or at the last minute if your intent is to make a positive financial difference for the next generation.

Whether expensive homes, exotic travels, charitable endeavors or other opportunities are of interest to your heirs, you can make it all possible in a way that is most productive and beneficial to those you love. Let's talk about what your plans might be soon. Call for a free consultation.

Assets - Leaving a Legacy of Encouragement

I just listened to this wonderful singer from Britain's Got Talent, 2009, Susan Boyle. As she said she would, she "rocked" the house with a standing ovation. BUT, do you know how this all started!! It was because she had a dream and her recently deceased mother encouraged her to audition, to follow her dream. In honor of her mother, she did audition and you see/hear the result.

A Will does not only address tangible assets, ie money and real estate but also it can address non-tangible assets. You can encourage or provide incentive for someone to pursue a career, make a beneficial lifestyle change, stop smoking, drinking, gamblings or engaging in other potentially harmful activity. Through estate planning you have the opportunity to change the life of the one your love, in many ways, and in turn you give the world a gift, as Susan's mother did for us.

Help your loved ones reach their full potential through estate planning today. Let us help you be as creative as you desire.

Probate - Who should serve as Executor?

Join me this evening for an Estate Planning presentation. See the information in the left column. Come and bring a friend. Learn more about probate and other matters.

There are many important decisions to make when you are doing your Will. One of those decisions is who will you name as your executor. When making the decision, trust is your number one consideration. After that, you can pretty much pick anyone you would like. It could be a family member, a friend, a professional advisor, a beneficiary under the will, your neighbor, in other words anybody that you trust. They do not need to have expertise in this area or live in your state. Yes, it could help if the person has some expertise in this area or live in your state or close to you. However, all of that is not necessary and you should be guided by the one you feel you trust to do what would be in your best interest. You can then share with them the duties of the executor as provided in the previous blog posting.

We can help you as your make important decisions regarding your estate. Contact our office for a free consultation or post a blog which we will answer for you.

Probate - Inheritance Tax Return

It is tax time. Hopefully, you have already done your taxes and are now awaiting a nice, big refund. OK, that may be wishful thinking.

One the major tasks in settling an estate is filing the Inheritance Tax Return (in those states with inheritance tax). The deadline for filing inheritance tax return is not the same as the April 15th, income tax deadline. Inheritance tax returns for states like Pennsylvania are due within 9 months of the death. After determining the taxable assets less all debts of the decedent, the net amount will be subject to the applicable state tax rate. Generally, the will provides who will be responsible for the payment of the tax. However, for ease of administration, it is best if the tax is paid by the estate. Otherwise, if the beneficiaries fail to make the tax payment, the executor might be held responsible.

The executor will want to seek professional advise when preparing the inheritance tax return. Contact our office for that advice and guidance.

Probate - Duties of Administrator/Executor

Many times the person appointed as an administrator or named as the executor under the will knows very little about the duties of that position. I advise my clients to tell the person they appoint as executor. It should not come as a surprise to anyone. I then let them know what that person's responsibilities would be so that such information can be shared with their executor.

The main duties of an administrator (one who is appointed during probate if there is no will) or executor (person named under the will) are to:
(a) ascertain the assets subject to probate (not all assets are subject to probate, such as assets owned jointly, assets in a trust, assets transfered by beneficiary designation;
(b) gather and provide an inventory of the assets;
(c) open up an estate account (checking account) to place assets and receive other assets due the estate, including interest, dividends, and other income;
(d) determine the beneficiaries - who is going to get what and how much under the Will (if there is no Will, the state’s "interstate succession laws" apply);
(e) determine or obtain appraisal of the estate’s assets;
(f) give legal notice to potential creditors (generally done via legal advertisement - determine state or local requirements for notifying creditors);
(g) investigate the validity of claims against the estate;
(h) pay funeral bills, outstanding debts, and valid claims;
(i) pay the expenses of administrating the estate;
(k) handle various paperwork, such as discontinuing utilities, memberships and charge cards, and notifying Social Security and others of the death;
(l) file and pay inheritance tax;
(m) distribute the remaining property in accordance with the instructions provided in the Will or under intestate law; and
(n) close probate.

In some states, you may be required to hire an attorney to handle probate. In other states, you proceed without counsel. Call our office if you have a probate issue and we can help you meet the requirements.

Probate - How much does it cost?

Not only are people interested in how long probate will take (as discussed in the prior posting) but also how much will it cost. The cost of probate depends upon many factors as well. Does the jurisdiction (state) have a specific cost based upon the size of the estate? There are bills that have to be paid, professional service fees for legal and tax matters, cost of posting a bond, if required, legal notice/advertisement costs, cost associated with the sale of assets such as real estate, reimbursement for administrator/executor expenses or payment of a fee, among many other things that may arise. Many of these costs apply whether there is a will that must be probated or a trust that has been set up, depending upon its terms and conditions.

It is important that you address the cost as well as the time associated with probate during the estate planning process. You can save more money for your heirs with proper advance planning. We are available to answer your questions. Call for a free consultation.

Probate - Time it Takes to Do

Often, I have heard, as a complaint about probate, that it takes a long time before heirs can get their money. As a result, many people seek to avoid probate for that reason. How long probate actually takes depends on a number of factors. Those factors include, the size of the estate, the complexities of the estate, the disagreements among potential heirs, the jurisdiction (which state) where probate occurs, the lack of clarity in the will, the skill of an executor/administrator, the notification period to creditors and potential heirs, the source of payment of inheritance taxes and the efficiency of the Register of Wills, among other factors.

When you are getting your will prepared, you can make sure some of these factors will not result in delaying the administration of your estate. Be clear and concise with the specifics provided in your will. Pick a person who can handle managing the distribution of your estate. Address inheritance tax payments. Know the probate laws of your state and if they provide very burdensome requirements, then consider the use of a trust instead of a will.

Contact our office for a free consultation on this and other estate planning issues.

Probate - Bond Requirement

I have a number of inquiries regarding the probate process. These inquiries are as simple as what does probate mean to the process to challenge probate. Well, probate means to prove a will. Does the will presented to the Register of Wills meet all of the state legal requirements? Of course, many people die without a will. One of my passions is to get people to do a will. Where there is a will there is a way! Got will? Like it or not you need a will. Here is one issue that is faced more often than not by loved ones having to probate an estate; the bond requirement. You can provide in your will that your executor does NOT have to take out a bond to handle your estate. You have picked the person to act as your executor and this person is someone you trust. In many cases, it is a family member who will inherit part if not all of your estate. Paying for a bond would be an unnecessary expense. HOWEVER, if you do not have a will or do not specify no bond requirement in your will then the Register of Wills can impose such a requirement. Generally, the Register of Wills will impose a bond requirement when the Executor (one named under the will) or the Administrator (when there is no will) is out of state. You can avoid this expense for your executor or administrator by taking the simple step of having a will done by a professional who can make sure the right terms and conditions are covered.

Have you had a probate experience that you want to share? Do you have questions about probate? Give us your comments today and we will get right back to you.

Three (3) options to consider when transferring your home to your children

I grew up in Salisbury, Maryland and my parents still live in the home that we moved to when I was 12 years old. My parents were my first estate planning clients. They often revisit their plan with me to keep it up to date with changing times. They had a question about one thing recently which is often a question posed by many of my clients. As we get older, how should we hold the deed to our property? For many people, their home is their most valuable asset especially in an economy that is kinder then the one we currently face. The answer to this question depends upon your specific circumstances. The 3 primary options that could be considered are as follows:
Option 1. Add your children's name to your deed.
Issue - You expose your home to any issues that your children may have with creditors, banruptcy, divorce, etc.
Option 2. Maintain a life estate with the remainder interest to your children.
Issue - Children take your basis (for tax purposes) in the property and not the step-up in basis received when the property is inherited. This also is an issue in Option 1. and Option 2.
Option 3. Transfer the deed to your children, removing your names as owners.
Issues - All of the issues noted in option 1 and 2. Further, if you are transferring property to avoid nursing home costs, such transfer has to occur 5 years prior to the need to go in the nursing home.

There are other options that you could also consider from not doing anything to transferring the deed into the name of a trust, revocable or irrevocable both of which have their own issues to consider in your particular circumstances. Feel free to ask me a question through the comment section or call my office for a free consultation making reference to this blog entry.

Leaving It All Behind or Going out in Style

You know it can be difficult picking a title of a book. Some say the title needs to tell the potential reader what the book is about. Some say the title should be catchy whether it explains the content or not. Well, in my case, I did choose a title that I thought would be catchy with a sub-title that explained exactly what the book was about. Stop! What are you waiting for? Your step-by-step guide to estate planning. Coming to a bookstore near you this year!!

There were some really good runners up. Leaving it all behind or Going out in Style What do you think about these title? When one dies, you obviously can not take your assets with you. But others can take it from you if you do not plan. Since you do have to leave it all behind, why would you not have a plan for it, your plan and not the state's plan. Then you can truly go out in style. Your will is your last word and testament. Let it be your signature, your mark, in your style. So the runners up have real credibility and maybe, just maybe, they will be the title of my next 2 books. Never say never, at least that's what I have learned.

Mediation

Last week I took a mediation training course. It was very interesting to look at ways to resolve disputes between parties without litigation. This can be especially helpful in Probate Court when addressing will contests, guardianship (though incapacity can not be determined in mediation), inventory and accounting disputes and fiduciary issues. Another growing area for this practice is in Elder law.

Mediation allows me, as a neutral third party, to work with the disputing parties. My role as a trained mediator is to help parties listen to and talk with each other. I help them gain clarity on their options and the possibilities for moving forward. Often in this process, the parties gain a better understanding of each other's point of view. It is not my role to make the decisions for them or even tell them what to do. Nor, do I act as an advocate for either of the parties. In this transformative mediation process, parties if allowed the necessary space can begin to resolve their own conflict and in turn can save themselves and, if an estate is involved, the estate the growing expense of litigation.

I particularly like mediation because it empowers the individual in the decision making process. As the process progresses, in many cases, you can see the shift that all parties make towards reaching an amicable resolution. It is one that they take ownership of because it was not imposed upon them by legal system. If you happen to be in a dispute, consider mediation. I can help you with that choice. Contact my office today.

Charitable Deduction

Charitabel estate planning can benefit you during your lifetime. Charitable deductions are not only available to your estate when you die but you can engage in charitable estate planning while you are living and take advantage of charitable deductions. The amount of the charitable deduction that you may be entitled to take in any one year is limited to a percentage of your adjusted gross income. The percentage is based upon the type of asset contributed and the type of charitable organizations to which your donation is made. Deduction for contributions of cash to public charities is limited to 50% of your adjusted gross income. Deduction for contributions of appreciated capital gain property (i.e. real estate and stock) to public charities is limited to 30% of your adjusted gross income. If your charity is a private foundation, deduction for contributions of cash is 30% and for appreciated capital gain property, the deduction is 20% of your adjusted gross income.

Your tax advisor can also work to help make sure you get the most out of your charitable estate planning. Start with a call to an estate planning attorney today!!

What is a Private Foundation?

Private foundations are often founded by an individual or corporation and do not receive support from the public. They are essentially a private tax exempt organization with the purpose of benefitting public charities, including educational institutions, research organizations, or other nonprofit organizations serving the public interest. A private foundation does not provide charitable services but makes grants to provide funding to other qualified charities. Private foundations are established by those who want a greater degree of control over administration, making grants and investment of the assets donated to the private foundation, than is possible with public charities.

More importantly, the private foundation of an individual or family can serve to transfer assets to the next generation. This is accomplished by involving the younger generation in the foundation’s administration, management, and grant making. Children can learn about and engage in philanthropy at an early age. When a private foundation is established by a family, all of the family members’ charitable giving can be channeled into one vehicle, resulting in larger gifts and greater impact on their chosen charities.

Depending upon your level of giving, the private foundation may serve you and your family's charitable giving in a unique and beneficiary way. Want to learn more? Provide your comment here or contact my office for further information.

What is a Qualified Charity?

As I continue to talk about charitable estate planning, it is important to define a qualified charity so that you can make the appropriate choices for your charitable estate planning. A charity which qualifies for charitable gifts is one that is a charitable organization as described in the Internal Revenue Code 501 (c) (3). All nonprofit organizations are defined by the IRS as either "public charities" or "private foundation." Public charities include churches, schools, museum, hospitals, and medical research organizations. All public charities rely on public support. Contributions to a public charity are tax deductible.

Public charities also include community foundations. Community foundations are organized as a permanent collection of endowed funds and charitable donations for the advantage of a defined geographic area. The governing body of a community foundation is made up of representatives of the general community which operate the foundation as a grant-making organizations. The community foundation accept gifts of cash and other tangible and intangible assets. Giving to a community foundation allows you to leverage your contribution with others to help make a greater impact on the recipient of the grant given by the foundation.

Tomorrow's blog will explore the private foundation and how they can be a part of your charitable estate planning. Ask your questions regarding charitable estate planning and I will provide a response for all to benefit.