Wealth Preservation, Trusts and Estates

IRA and 401(k) Distribution Rules For 2010 or How Do I Restart The Withdraws?

By:  Attorney David Frees with offices in Malvern, West Chester and Phoenixville, Pennsylvania

If you stopped taking mandatory IRA or 401(k) distributions last year you might be wondering if you can do the same this year.  The quick answer?  No.

Well then, the next question is: “If they only allowed me to skip distributions last year how do I start taking them again and are their any remaining effects from last years’s law change on how I calculate distributions?”

Again, for almost all tax payers, there is no change.  Your calculation method will be the same as before the 2009 one year change.  However, sinceyou skipped a year of withdraws, your calculation will be based on a larger number.  That’s it.  Fairly simple for a change.

However, there are two technical matters where you might need to pay special attention.

For more on how to calculate mandatory IRA distributions for 2010 see this brief article.

To update your estate planning for greater flexibility during these uncertain times, or for more information about the many options you have in using your IRA or 401(k) assets in your estate planning, call 610-933-8069 for an estate planning guide, or for an appointment.  Mention this code: 2010DavidFrees for a special discount and a frees cd of estate planning ideas to protect your heirs by David Frees.

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By David Frees Esq. “Top Lawyer” by Main Line Today Magazine.

Married couples often believe that signing a joint signature card at the bank makes those assets impervious to creditor claims in the event you are sued. And, while Pennsylvania law does offer some protection on joint accounts, you need to be careful and consider not only careful planning, but what you do after the account is opened.

For example, if a husband and wife own a joint account, and one of them gets sued, it is generally true that the creditors’ cannot get the joint asset. However, see this recent bankruptcy case that seems to say it is not just the signature card that matters but also what you do after the account is opened.

It is also important to remember, that if one spouse dies and the joint account becomes the property of a spouse who has been sued, then the creditors can again reach the account.

If you are concerned about your will, estate planning and/or asset protection please visit www.PaEstatePlanners.com for more free reports or call 610-933-8069. If you are a Pennsylvania resident, you can get a free initial consultation by mentioning this code: DavidFrees2010.

David Frees has attained the highest AVVO rating of 10.0 and has been selected as a Top Lawyer by Main Line Today Magazine.

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Remember to Review The Tax Allocation Clause In Your Will or Trust. by Douglas L. Kaune, Esquire. Most people do not realize that they can choose which beneficiaries will be responsible for paying the PA inheritance tax and federal estate tax on their taxable estate. Many wills are written automatically and sometimes incorrectly to say that the taxes are to be paid from the residue of the probate estate. Therefore, you could unexpectedly lay the entire tax burden on the shoulders of the people who are beneficiares under the will where there are beneficiaries of specific assets in the will, joint accounts or beneficiaries named on an IRA or 401K or stock account outside of the probate estate. The PA inheritance and federal estate taxes could be tens or hundreds of thousands of dollars so you should be careful to structure the tax clause, if desired, to make the beneficiaries of specific gifts or nonprobate assets responsible for paying the tax on what they receive. Review this article for a closer look at the tax clause issue and specific examples of where it might be important to adjust the clause to insure a fair allocation of the taxes in your estate.
Please feel free to contact us at any time at 610-933-8069 or dkaune@utbf.com to discuss your particular case to determine the appropriate tax clause in your estate planning documents.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Malvern, Phoenixville, West Chester Offices Chester County Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Law Practice Locations.

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As fewer and fewer young Americans choose to enter into marriage, the issues of estate planning become more complicated. Since married couples in Pennsylvania benefit from a zero tax rate on inheritances, and on protections for the surviving spouse under the state intestate law, that do not exist for unmarried couples, making sure that you have done your planning is more important than ever.

For more information on estate planning for unmarried couple click here.

David M. Frees III
David Frees is a local lawyer practicing in the areas of trust, estate, estate planning and asset protection law. He has law offices in Malvern, Phoenixville, and West Chester. His firm is Unruh, Turner, Burke and Frees.

To update your estate plan, will, trust or living will please call 610-933-8069 for a consultation by phone or in person with David Frees. Pennsylvania residents can qualify for a free consultation and a reduced fee by mentioning this code: UTBF2010.

Communities Served: Malvern, Phoenixville, Downingtown, Exton, Collegeville, Devon, Berwyn, Ardmore, Wayne, Chester Springs, Edgemont, Willistown Township, Paoli, and many surrounding areas.

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By: David Frees
Wills, Trusts, Estate and Asset Protection Planning

Generally, the rule is that when you create a trust, and keep the right to receive assets from that trust, the trust can be reached in a lawsuit against you and will be taxed in your estate.

In recent years, several states, including Delaware, Nevada and Alaska have passed statutes purporting to allow you do get both tax and creditor protection without having to move assets off shore.

And, while these trusts have a number of restrictions, and downsides, the IRS has now issues a PLR – private letter ruling on these important issues related to an Alaska trust.

For more information on the IRS and asset protection trusts, prepared by David Frees click here.

For an appointment ranging from a simple will review and update to the more complex issues of trusts and estate planning, call David Frees’ office at 610-933-8069.

Mention this code (DavidFrees2010) if you are a Pennsylvania resident and receive a free initial consultation by phone or in person. Call 610-933-8069.

David Frees and Unruh, Turner, Burke and Frees maintain law offices in Phoenixville, Malvern and West Chester.

These offices service West Chester, Chester Springs, Exton, Phoenixville, Spring City, Collegeville, Downingtown, Malvern, Devon, Berwyn, and many surrounding communities.

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Roth IRA Conversion Might Equal Estate Tax and PA Inheritance Tax Savings. Many individuals are considering whether or not to take advantage the new Roth IRA conversion rules. Read this Smart Money article for some of the issues to consider for Roth conversions. This decision will require an in depth analysis of each individual’s circumstances and goals. That being said, the Roth IRA conversion is likely to create a PA Inheritance and Federal Estate Tax savings in estates where thoses taxes apply. Generally speaking, paying the income tax associated with your IRA now will serve to reduce the overall size/value of your estate. This will theotically reduce the assets subject to estate and inheritance tax at death and help avoid the possible “double or tripple taxation” of your IRA at death. The possible estate and inheritance tax savings are not the sole determining factors, but can likely be placed in the positive column when making the overall assessment to conert your traditional IRA or not.
Please feel free to contact us any time at 610-933-8069 or dkaune@utbf.com to discuss your particular estate/probate case to determine the appropriate fee structure for an attorney or executor.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Malvern, Phoenixville, West Chester Offices Chester County Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Law Practice Locations

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Executor and Attorney Fees and commisions For Estate Administrations and Probate in Pennsylvania (PA).  This is often a mysterious topic for many who find themselves involved in an estate administration as executor or beneficiary in PA.   There is not a perfect answer as to what the executor , attorney and probate fees will be in each case, but click here to see the statutory references to Pennsylvania estate administration fees, PA executor commisions, attorney fees and Johnson Estate Fee Guidelines.   Also check this guide by David M. Frees, III Esquire for some helpful information relating to the estate administration fee issues.   The fee structure might vary generally depending on the estate value and complexity.  It is a good practice to establish a flat fee or flat fee range based loosely on the PA estate fee guidelines, but modified by the other contributing factors in the particular estate administration case.  Please feel free to contact us any time at 610-933-8069 or dkaune@utbf.com to discuss your particular estate/probate case to determine the appropriate fee structure for an attorney or executor.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Malvern, Phoenixville, West Chester Offices Chester County Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Law Practice Locations.

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Annuities have long had a role in Medicaid and nursing home asset protection planning in PA and in other states. There are planning opportunities that allow a husband and wife to shelter a portion of the family assets so that the community spouse (non-nursing home spouse) can remain at home and have greater financial freedom. The case referenced below is a favorable opinion for the Medicaid applicant and should increase the likelihood that certain annuities will be successful Medicaid nursing home planning tools for married couples.
In Weatherbee v. Richman, 595 F. Supp. 2d 607 (W.D. Pa. 2009), the U.S. District Court for the Western District of Pennsylvania reversed the denial of Medicaid benefits to a nursing home resident (“institutionalized spouse”), holding that the income from an irrevocable, non-transferable, non-assignable, single premium, immediate annuity payable to the spouse of the nursing home resident (“community spouse”) was protected under federal law, specifically the Medicare Catastrophic Coverage Act of 1988 (“MCCA”). MCCA provides that the community spouse’s income is completely protected and does not affect the Medicaid eligibility of the institutionalized spouse.
Please call Douglas L. Kaune, PA Lawyer 610-933-8069 for additional information about this case and to discuss Medicaid and nursing home planning opportunities it presents for you.
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 PA

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By: Trust, Estate, and Probate Lawyer: David Frees *

Now that we are a few days into 2010 it has become clear that the rules about the federal estate tax and the gift tax are anything but clear.

And with so much confusion, especially about the gift tax, I thought that a few basics might help to avoid costly mistakes.

Myth #1. The gift tax was eliminated on January 1, 2010 just like the estate tax.
Fact: Only the federal estate tax was eliminated. The gift tax remains intact and any gifts made this year are subject to the gift tax rules.

Myth #2. The amount that you can gift each year without tax (the annual gift tax exclusion) goes up every year.
Fact: Last year the exclusion amount was $13,000.00. This year, because inflation was so low, the amount will remain the same.

Myth #3. If you exceed that annual amount, then you owe gift tax to the government.
Fact: True and false. In addition to the annual gift tax exclusion, each person has an additional $1 million dollar lifetime exemption. This doesn’t get renewed each year but can be taken in years when you exceed the $13,000.00 dollars per person. There are also exceptions for college education and some health care expenses. So, provided that you file a gift tax return, you will not actually have to pay gift taxes until you both use up your $1 million dollar lifetime exemption and you exceed the $13,000.00 per persona annual limit (which may, from time to time, adjust for inflation).

Myth #4 Gifts are taxable to the recipient.
Fact: The giver cannot deduct the gift for income tax purposes and the gift is not income taxable to the recipient. Any gift tax due is the obligation of the person making the gift.

In short, the gift tax remains alive and well in 2010 and beyond. Make sure that you get good advice about gifting this year as part of your overall estate planning strategies.

David Frees
Wills * Trusts * Estate Planning * Asset Protection Planning
Law Offices in Phoenixville, West Chester, and Malvern Pennsylvania

For an appointment with David Frees to update your estate plan drafted more than 2 years ago, or to correct a plan drafted even more recently and containing federal estate tax planning call 610-933-8069

Note: In Pennsylvania, there are no recognized specialties, or practice areas.
When an attorney is referred to as a trust and estate or will and probate lawyer, this merely indicates that he or she confines or limits his or her practice areas.

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Are you wondering:

Should I update my estate plan, will or trust?

Do I need a new power of attorney?

I have over 3.5 million dollars how does the affect me?

I have under 1.0 million dollars. What now?

To Roth or not to Roth?

What is happening to the estate tax?

What if I leave the old formula will in place is my spouse disinherited?

If you need more information on any or all of these click here to read this great review of the current situation by CBS.

Here is the WSJ Smart Money Article. Click here to read more.

David M. Frees III
Attorney David Frees is available at 610-933-8069

For an appointment to update your estate planning, or for consultation regarding
duties as an executor or trustee, please call Donna, Denise, or Beth at 610-933-8069.

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