Wealth Preservation, Trusts and Estates

If I named my child as a POD (pay on death) or FBO (for benefit of) beneficiary of a bank or stock account and that child is now in financial trouble, can I lose the accounts?

The short answer is “No.”

POD designations on an account do not make that account the property of your child now and his or her bankruptcy or a lawsuit will not subject your accounts to claims by his or her creditors.

However, there are three more things that you need to know about POD (pay on death) and FBO (for benefit of) designations and accounts to be sure that your accounts are safe and that your child will also be protected.

Click here for more essential information on POD and FBO accounts for your children and how to protect your accounts for yourself and for your heirs.

David M. Frees III, Esquire

Have questions about your estate planning and how your POD or beneficiary designations work with your estate planning documents?

Need to update your will, power of attorney, medical powers, or living wills and to coordinate them with your bank and stock accounts.

Mention this blog post to receive a free consultation with David Frees or one of the trust and estate attorneys. Call Donna or Denise for more information at 610-933-8069 or email dfrees@utbf.com

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by Douglas L. Kaune, Esquire Pennsylvania Attorney
Wills * Trusts * Probate * Elder Law * Estates * Estate Planning * Asset Protection Planning
Malvern, Phoenixville, and West Chester Law Offices Chester, Montgomery, Delaware, Philadelphia, Berks and Bucks County
Roth IRA’s can have significant income tax benefits for you and for generations to come. However, many wealthy individuals have been unable to take advantage of the Roth IRA because of low income ceilings set by the Internal Revenue Service (IRS). However, in January 2010, the IRS income ceiling for Roth conversions will be removed. This will present many wealthier individuals an option to convert an existing IRA to a Roth IRA which had not previously been available. The painful part of the decision will be the income tax that will be due as a result of the conversion. The initial inclination is to defer the tax as long as possible, but the Roth conversion comes with the benefits of tax-free withdrawals and elimination of required minimum distributions. This can provide a tremendous tax benefit to individuals in their retirement years and to their beneficiaries who will also be able to take withdraws income tax free. Read this great article setting out the pros and cons of making a Roth IRA conversion. This is an important opportunity that should be discussed with your Estate Planning Attorney, Financial Advisor and Accountant to determine the best decision for you and for your family. I will follow this with posts regarding the estate planning and estate tax benefits of making the Roth conversion.
Please contact Douglas L. Kaune, Esq. at 610-933-8069 or dkaune@utbf.com to comment or discuss this and other topics.

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David M. Frees III
Trust, Estate and Wealth Preservation Section
Law Offices in Phoenixville, Malvern and West Chester

** Attorneys Practicing in Probate, Trusts, Estate Planning Asset Protection Planning and Elder Law

More Important News On The Federal Estate Tax

There has been a flurry of activity in the House on recent Federal Estate Tax bills as the end of the year draws near and as the lapse of the existing Federal Estate Tax looks more and more like a real possibility. However, Representative Pomeroy has introduced a Federal Estate Tax bill HB 4154 that may be the subject of a vote as early as Tuesday, December 2, 2009.

In summary, this bill will make the exemption of 3.5 million dollars permanent and would not allow for carry over of the spouses exemption. This means that careful planning will still be be necessary for married couples for the foreseeable future and it will mean tax for many families (at a forty-five percent rate (45%).

This bill appears to be less favorable than the bill we discussed last week HB 3905. As you may recall from our blog post, HB 3905 would raise the exemption amount, reduce the tax rate, and increase the exemption through time to five million and then index it for inflation.

In any case, we are actively watching both bills and will keep you posted as they may have an effect on your estate planning.

David M. Frees III, Esquire

Call Donna or Denise at 610-933-8069 for a telephone or in person
consultation for estate planning, asset protection planning, trusts,
wills, or estate matters. Elder law consults are also available if you
or a loved one is facing nursing home issues within the next five years.

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By: David M. Frees III, Esquire Unruh, Turner, Burke and Frees with Law Offices For Your Convenience in Phoenixville, Malvern and West Chester

It is an honor to have been named as an executor of an estate, or as a trustee of a trust. The person who created the will or trust obviously had a great deal of faith and confidence in you as a person, and in your ability to get things done, quickly, efficiently, cost effectively, and to keep the peace among often competing interests at a difficult time in their lives.

But most trustees and executors are surprised to discover that those jobs are difficult, time consuming, and carry a great deal of exposure to personal liability. Now I do not mean, that be agreeing to be an executor or trustee, that you automatically become liable for the debts of the deceased. You do not.

However, there are many ways in which executors and trustees are exposed to liability for their actions and you simply must understand them before agreeing to undertake the job. Once you get started, it might be too late.

Please view this short video before being sworn in as an executor, or before agreeing to act as a trustee.

Click here for our report for Pennsylvania executors: The Ten Most Common Mistakes That Executors Make and How To Avoid Them.

For a private consultation with David Frees, in any of our conveniently located law offices, please call
610-933-8069.

For access to our free executor and trustee information and a courtesy discount on any fee arrangement, be sure to mention that you read this blog post when you call.

David M. Frees III, Esquire has a 9.8 AVVO rating of superb. Click here to read more about David M. Frees III on AVVO.

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If you are a local client of the firm you are probably not at a loss for holiday activities. The Phoenixville, Spring City, Malvern, West Chester, Exton, Main Line and greater Philadelphia area is rich in holiday fare and holiday, Christmas, and Hanukkah activities.

But if you’re like me, you can never find just the right holiday event at just the right time. So when I ran across this web site with a great collection of local holiday movies, tree farms, holiday shopping events, Philadelphia traditions and both Christmas and Hanukkah activities, I wanted to pass it on.

This site has everything from events at the Colonial Theater in Phoenixville, to holiday musical events, to events in the Reading Terminal Market in Philadelphia. And, you probably know a few holiday events, or local holiday activities that are not listed so feel free to post your event or alert the readers to other area holiday events by posting a comment below.

Click here for a great list of local holiday activities ranging from the Holiday Movies, to performances of the Nutcracker, and tree farms, traditions, and more.

There is more on the holidays to follow, but we wish you the very best for all of the holidays and may you spend this time being healthy and happy and with the people that you love.

David M Frees III, Douglas L. Kaune as well as the entire team in the Unruh, Turner, Burke and Frees Trust, Estate, and Wealth Preservation Section of the law firm.

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By: David M. Frees III, Esquire Will, Trust and Estate Planning for the End of The Year.

Want to make sure that you avoid the most common estate planning mistakes at the end of the year and that you are reviewing and doing what you need to complete to make sure that your new year starts off just right?

Want to know how much you can gift without filing a gift tax return?

Need to know when those gift checks have to be cashed before you’ve got a problem?

Then click here for a short video and a checklist that you can print out and follow.

It could save you and your heirs thousands to tens of thousands of dollars.

END OF YEAR GIFTING, Estate Planning and Asset Protection CHECKLIST, and VIDEO by David Frees

David M. Frees III
Asset Protection and Estate Planning

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Interested in more information about Social Security and Medicare benefits? The maze of social security benefits, survivor benefits, Social Security Disability benefits, and prescription drug benefits has become ever more complicated in recent years. So, at the request of many of our clients we will be bringing you a multi part series on government benefits with links and resources on:

Qualifying for Social Security Benefits
Information on Drug Benefits
Estimating Social Security Disability Benefits
Estimating Retirement Benefits
Estimating Survivor’s Social Security Benefits
Requesting a Social Security Statement
Applying for Retirement, surviving Spouse and Disability Benefits and more

In this first installment we help to answer the question: What Social Security
Benefits Can I Qualify for?

For more information click: What Social Security Benefits Do I qualify For?
This information is provided through BEST (Benefit Eligibility Screening Tool)

Getting information on the government’s various prescription drug plans can be daunting. Here is a place to get started.

Can I get Help with Medicare Prescription Drug Costs?

For more information on surviving spouse’ and survivor Social Security benefits, Social Security benefits estimators, disability benefits and more please register for the RSS feed (to the right) to get notice when articles are published here, or book mark the site and check in regularly.

David M. Frees III
Unruh, Turner, Burke and Frees
Law Offices in Malvern, Phoenixville, and West Chester
David Frees is highly rated by Lawyers and clients on AVVO

Call 610-933-8069 for wills, trusts, estate planning, asset protection planning, and elder law
assistance from David Frees or one of the lawyers in his department.

Mention this article to receive a free consultation, and free reports on topics of your choice.

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Do It Yourself Wills Trusts and Estate Plans are in the news and are the subject of debate. Is there a right answer. Yes and No. Isn’t that just like a lawyer.

Can you really do a will on line that is valid in Pennsylvania?

Are will forms valid? Do they work to save taxes?

What if a do it yourself will is challenged?

How much do DIY wills cost?

Is a lawyer worth the extra dollars?

How about Legal Zoom? (the cost by the way was almost the same for a simple will as our lawyers from the Trust, Estate, and Wealth Preservation Section of the firm)

These and other questions are answered in my recent article on do it yourself wills and the battle raging over a Wall Street Journal reporter who used several systems. If you have ever thought about doing your own estate planning, you owe it to yourself to peruse these articles.

Do It Yourself Wills And The Lawyer Attacks on The Wall Street Journal

Enjoy! And, let me know your comments and questions below.

Thank you
David M. Frees III
610-933-8069 for an appointment or telephone conference

Unruh, Turner, Burke and Frees has law offices for their
will, trust, estate, and estate planning and asset protection
lawyers in Phoenixville, Malvern, and West Chester Pennsylvania.

These law offices serve Exton, Spring City, Gladwyn, Devon,
Chester Springs, Berwyn, Ardmore, and many surrounding
communities.

For directions to the law offices click here.

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By Douglas L. Kaune, Esquire Pennsylvania Attorney
Wills * Trusts * Estates * Estate Planning * Asset Protection Planning
Malvern, Phoenixville, and West Chester Law Offices Chester, Montgomery, Delaware, Philadelphia, Berks and Bucks County

Hmm, if I did not already have a will and trust, I would have run out to meet with an estate lawyer to commission a last will after I read the title words to this blog posting. Thanks to my profession, I happen to recognize the need for a cohesive estate plan to minimize tax implications, avoid family disputes, protect beneficiaries from improper spending, creditors, lawsuits and divorce. So many people either have an out dated will or no will at all and are “too busy” in their lives to update their planning.
As this recent Wall Street Journal Article reminded me, Benjamin Franklin was a walking billboard for Estate Planning Attorneys everywhere when he said, “but in this world nothing can be said to be certain, except death and taxes.” As I read his words, I imagined Ben flying his kite in the thunderstorm waiting for lightning to strike and I was not thinking about the discovery of electricity. Instead, the probate attorney in me wondered if Mr. Franklin had heeded his own words about death and taxes by having a properly drafted Last Will and Testament. After all, the lightning could have struck more than just the dangling key. After a little research I was able to locate Benjamin Franklin’s last will and testament online so click here to see how Ben protected his family, children, lands, assets and wealth from creditors, taxes and government interference.
Ben was right, not just about death and taxes, but also that he needed that last will and testament.
by Douglas L. Kaune, Esquire
Estate Planning & Administration, Wills, Trusts, Asset Protection, Elder Law
Unruh, Turner, Burke & Frees, P.C.
Phoenixville, Malvern, West Chester PA
dkaune@utbf.com PH: 610-933-8069

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Are you a Pennsylvania resident?
Do you have, or are you interested in a domestic asset protection trust?
Are you unsure whether or not these self created trusts will be included in your estate for tax purposes?
If so, then you’ll be interested in the IRS’s new Private Letter Ruling.

The general rule, in most states,(including Pennsylvania’s trust law) is that you cannot create a trust (a self-created trust) and then claim that your creditors cannot reach it.

And, the IRS generally takes the position, that when you create a trust, it remains in your estate for estate tax purposes if you retain the right to continue to use the trust assets, your creditors’ can reach them under state law, or you retain the right to benefit from or to control the assets.

And, for that reason, the residents of Pennsylvania tha are interested in creditor protection have started creating trusts under the laws of Delaware and/or Alaska, Nevada or other states that permit these asset protection trusts.

However, there has always been some question about whether these new trusts (now permitted in 12 states including Delaware, Alaska, Utah and Nevada) are effective for asset protection and whether or not the Service would claim that they were to be taxed at death since they do often allow for the grantor or settlor (the creator of the trust) to get distributions from the trust under certain circumstances.

However, in a recent PLR (Private Letter Ruling 200944002) the IRS confirmed that an Alaska self created trust will not be included in the creator’s estate for estate tax purposes. However, the ruling is limited on it’s face to an Alaska resident using an Alaska trust. And, the PLR seems to also turn on the fact that under the particulars of that state law, the creditors could not reach the assets. However, in some states that have asset protection trusts, there are provisions that allow creditors to reach assets under certain circumstances that might still cause their inclusion in your estate.

So, if you have or intent to create a trust under one of the 12 states laws that now permit such asset protection trusts, you now, for the first time, have something from the IRS to help you to evaluate the effectiveness, the pros and cons of these trusts.

Now under IRC (Internal Revenue Code) section 6110(k)(3) Private Letter Rulings cannot be cited or used as precedent. And, these rulings are specific to the facts, the type of trust, the trustees, and many other factors. However, this one does expressly hold that the trust is not includable in the estate.

In summary, and according to Douglas Blatmacher this ruling provides planners and their clients “who have been hesitant to make large gifts (for fear of future needs)” – “with a strategy that not only provides asset protection, but significant potential estate tax savings while at the same time the comfort of knowing that if the settlor requires some portion of the funds transferred a trustee can provide for them.”

More specifics on this to follow as we analyze this important development.

David M. Frees III Asset Protection Attorney and Will Trust and Estate Lawyer
Asset Protection and Self-Settled Trusts
Trusts, Estates, Asset Protection and Wealth Preservation
Law Offices in Phoenixville, Malvern and West Chester

Our Will, Trusts, and Estates Planning Lawyers
serve clients in Chester County, Montgomery County
Philadelphia County and Delaware, Lancaster, and Berks and Bucks Counties

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