Wealth Preservation, Trusts and Estates

This post was written by:
Douglas L. Kaune, Esquire
dkaune@utbf.com
610-933-8069

IRA’s and other tax deferred retirement plans can now be left to trusts for your beneficiaries instead of directly to the beneficiaries. These IRA Trusts are broadly categorized as either conduit trusts or accumulation trusts. These trusts must be written with care in order to insure that not only are the assets protected from the beneficiaries’ creditors and divorce, but also that the trusts can take only Required Minimum Distributions from the retirement assets. To read more check out this Lawyers USA article on the IRA Trust Planning. Please email or call with questions on the best ways to prepare these IRA Trusts and protect your assets and those of your beneficiaries.

Douglas L. Kaune, Esquire
dkaune@utbf.com
610-933-8069

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This post was written by:
Douglas L. Kaune, Esquire
dkaune@utbf.com
610-933-8069

Many of us are wondering whether or not our Executors, Administrators, beneficiaries or Trustees will have to pay estate taxes at the time of our death. I came accross an excellent article in Smart Money that will help you answer the question, Will My Estate Owe Estate Taxes? This should help you get a better understanding of where you and your estate stand with regard to the possible tax issues at the time of your death.

There are also some excellent strategies to consider in helping to reduce the estate taxes owed by your estate. Some basic considerations mentioned are gifting, bypass trust planning, life insurance and life insurance trusts. If you have any questions in this regard please give me a call at 610 933-8069 or drop me an email at dkaune@utbf.com.

Douglas L. Kaune, Esquire

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If you are 70 1/2 or older there are new rules on required minimum distributions from your IRA. Just click the highlighted line to read more.

David M. Frees III
Pennsylvania Lawyer
Avvo Rated 9.4 Superb.

Visit our convenient offices serving Chester County, Montgomery County, as well as Lancaster County, Berks Delaware and Philadelphia Counties Just click for directions.

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Both the Senate and the US House of Representatives are now working on bills that would reform the federal estate tax (also known as the death tax) before the end of this year. Both bills contain a $3.5 million dollar exemption per person. This would allow an individual Pennsylvania resident to shelter $3.5 million dollars and couples who planned carefully to shelter up to $7 million dollars. It appears, that these bills will probably still require trust planning under a trust or will to do so.

The Senate bill might also reunify the estate and gift tax systems and this would allow the transfer of more assets during a person’s lifetime.

However, the house bill contains a secret or back door tax increase.

It would make minority discounts illegal. This technique has been approved by the tax courts and has allowed families to move farms, and other illiquid assets out to the next generation for many years now. If this change goes through, it would be a loss for moderately affluent families that have illiquid assets.

Stay tuned for more information.

David M. Frees III, Esquire
David’s 9.4 AVVO Rating of Lawyers is SUPERB.

Contact one of David Frees’ convenient offices for an
appointment for estate planning, or for one of our
free guides for executors.
610-933-8069 Ask For Donna or Denise

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I recently completed a great new report entitled “The Top Ten Mistakes Executors Make and How To Avoid Them.” This report is great for people who are or will be serving as executors of Pennsylvania estates for the obvious reason that it will help you to avoid personal liability. And, the report is also good if you are thinking about revising your will or estate plan. Why? Well, clients keep telling me that this report really gets them focused on the job and makes it very clear who should and who should not be your executor.

If you’re a Pennsylvania resident, or you might be the executor of a Pennsylvania estate, and you want your own copy (for free) just visit one of my new sites www.paestateplanners.com. Click on the report and it’s yours. It is that easy.

Enjoy the report and please call if I can be of any further assistance.

David M. Frees III, Esquire David’s attorney rating on AVVO is Superb!
610-933-8069
For more information on David and Unruh, Turner, Burke and Frees please click here.

To get estate planning, trust and estate updates as well as information on protecting your heirs and their inheritance from divorce and lawsuits follow me on Twitter. Just click here.

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In many states, the fees that executors can charge are set by statute. In Pennsylvania, executor fees must be reasonable. They are always subject to court review. In general, many executors charge fees ranging from 1% to 5% of the estates value. The Supreme Court has ruled that a three percent fee is, on the face of it, reasonable, but subject to review.

If you would like more information about what you can charge as an executor, or, what an executor might charge your estate, you can review my article on executor fees by clicking the link to www.paestateplanners.com

David M Frees III, Esquire
For a copy of “The Ten Most Common Mistakes Executors Make and How To Avoid Them” please call one of my assistants and paralegals: Donna,Denise,Whitney, Matt or Tara.
610-933-8069

We have offices located conveniently in Malvern, Phoenixville, and West Chester Pennsylvania and represent clients through out Pennsylvania including such communities as Berwyn, Devon, Chester Springs, Exton, Gladwyn, Philadelphia, Spring City, Royersford, Sanatoga, Reading, Lancaster and many more.

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Post By Douglas L. Kaune, Esquire Email: dkaune@utbf.com Phone: 610-933-8069

One of the most frequently neglected parts of the estate planning process is the proper use of beneficiary designations on life insurance, IRA’s, 401k’s, annuities and other similar assets. Failure to properly prepare and update a beneficiary designation can significantly change the disposition of assets someone intends to be carried out by his or her last will and testament.
I recently represented the Executor of a Chester County PA estate. I have changed the facts, but have maintained the essence of the issues for our discussion. The decedent was survived by a 18 year old son. One month before the decedent died, he signed a will designating a trust for his 18 year old son as the sole beneficiary of his estate believing that this was all of the “estate planning” he needed.
Unfortunately, five years before his death, the decedent submitted a beneficiary designation for his $600,000 life insurance policy naming his then 77 year old mother as a primary beneficiary. I have been told that the expectation was that the decedent’s mother would “watch over” the money for her grandson. The decedent’s mother predeceased him and was not available to collect the insurance proceeds. The contingent beneficiary, the decedent’s brother, is now in line to collect the proceeds from the policy. He has informed the family that he is having financial difficulties and has no intention of sharing the insurance proceeds with the decedent’s son or anyone else for that matter. WOW! This has sent shock waves through the family and significantly diminished the security of the decedent’s son. Although likely contrary to the decedent’s true intention and morally questionable, the decedent’s brother is legally entitled to keep the $600,000 in insurance proceeds and the surviving son does not get one cent.
This case is a flashing neon sign for everyone to check their own beneficiary designation forms and make sure that they are properly integrated into the estate planning process. The decedent should have created a new beneficiary designation form naming the son’s trust under the will as the beneficiary. This would have allowed the trustee to claim the proceeds and then manage the assets for the son until a later date. A will is not always enough!!

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Just a quick reminder that there were many changes in the tax laws for tax year 2008. And, to make sure that take advantage of any beneficial changes you should update the program and download any recent updates before preparing your return. For more, just click here to visit the Wall Street Journals article.
Brought to You By:
David M. Frees III
Unruh, Turner, Burke and Frees
Chairman of The Trust, Estates, and Wealth Preservation Section

P.S. Remember to check your beneficiary designations on life insurance, IRAs and 401(k)s to make sure that they are
coordinated with your will and estate planning documents.

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Many articles, websites, blogs and government talking heads have been out in force to reassure tax payers and particularly the owners of family farms and small businesses, that the reforms proposed by the Obama Administration to the death tax will be highly beneficial and pose no dangers to these groups. But see David Frees’recent comment to one of these articles that points out that due to some quite changes in the law, the $3.5 million dollar exemption will not work to protect many families with closely held businesses and real estate.

click the link below and be sure to read the article and Dave frees’ comment to the blog.

http://www.allbusiness.com/legal/tax-law-tax-reform/11802168-1.html?doconfirm=1

David M Frees III, Esquire

For more information on the Death Tax Disinformation campaign being waged against the American tax payer, visit this article.

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There is currently a bill before the House Ways and Means Committee that would radically increase the federal estate (also known as the “Death Tax”).

Are you trying to pass on assets, investments, family land or farms, or a family business? If you are, then things might be about to get a lot rougher. Many middle class and affluent families have real estate and businesses that have a high value but are very illiquid.

Many of these families consider themselves to be blessed, they don’t consider themselves to be rich and in fact, live very simple lifestyles.

These families often pay a high amount of taxes during their lives but hope to pass on assets without a higher estate tax. However, the increase from $2 million dollars to $3.5 million dollars might not be enough to help these families because of a few provisions in bills like this that take away long standing tax payer rights and techniques (such as minority and marketability discounts for family limited partnerships) and impose potentially much higher taxes on many families.

For more, click here to read my commentary and the news release on this new pending bill.

I will continue to keep you posted on changes in the tax law that might have an effect on your planning.

David M. Frees III, Esquire
610-933-8069
dfrees@utbf.com

David Frees’ AVVO rating is SUPERB!
For more updates follow David M. Frees on Twitter or on Facebook.

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