Wealth Preservation, Trusts and Estates

MALLOY v. DEPARTMENT OF PUBLIC WELFARE (No. 1575 C.D. 2009): A Memorandum Opinion was issued by a three-Judge panel of the Commonwealth Court reported unofficially. Read the facts of the case and unofficial reporting here. This case shows the Pennsylvania Department of Revenue’s (DPW) expanded attempts to recapture overpayment of Medicaid benefits. The DPW relied on the guardians intimate knowledge of the financial transactions, his signature on the Medicaid Application and the Medicaid application verbage that states among other things, “any person enriched as a result of a transfer of assets or income, which would have affected [the recipient's] eligibility, will be liable for repayment of those benefits issued incorrectly.” It further highlights just how imortant it is to have proper legal counsel through all phases of the Elder Law Planning and Medicaid application process.

Please feel free to contact Douglas L.
Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss your particular Medicaid Asset Protection, Nursing Home or Elder law case to determine the appropriate planning for you and your family.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Malvern, Phoenixville, West Chester Offices serving Collegeville, Royersford, Media, Exton, Norristown, Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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Owning S Corporation Shares in a Trust can be tricky business. There are three types of trusts that can qualifiy with the IRS to own shares of an S Corporation: 1. The Qualified Subchapter S Trust (QSST) 2. Electing Small Business Trust (ESBT) 3. Grantor Trust. There are different benefits and pitfalls for using each of these S Corporation Trust options. Read here for an overview of the compared characteristics of the QSST, ESBT and Grantor Trust. After selecting the correct Trust to own your S Corporation shares you must also make a timely IRS election to further qualify the trust.

Without proper trust planning and proper IRS election, your S Corporation could be recharacterized as a C Corporation. This is likely to have significant negative income tax consequences that can and should be avoided with advanced planning.

Please feel free to contact Douglas L. Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss your particular Estate and Trust case to determine the appropriate planning for you and your family.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Malvern, Phoenixville, West Chester Offices serving Media, Exton, Downingtown, Norristown, Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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Wills * Trusts * Elder Law * Probate * Asset Protection * Estate Planning
In a Tax Court case, Price v. Commissioner, T.C. Memo. 2010-2 January 4,2010)
gifts of limited partnership interests by parents to their three children did not constitute present interest gifts that qualify for the gift tax annual exclusion. The court stated that the present interest requirement is satisfied if the donee has immediate enjoyment of either the donated property or the income from the property. In this case, the donees had no ability to withdraw their capital accounts and the partners could not sell their interests without the written consent of all other partners.

PLANNING TIP: For clients that intend to make annual exclusion gifts to an FLP, we will draft a Partnership document and operating agreement in a way that allows the transfers of limited partnership interests to be considered present gifts. It is very imortant that you have an experienced estate planning attorney who can draft the FLP in a way to best suit your needs and take advantage of the maximum tax and asset protection benefits.

Please feel free to contact Douglas L. Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss your particular Estate Planning goals, including creating a Family Limited Partnership (FLP) to determine the appropriate structure for you and your family.

Unruh, Turner, Burke & Frees, P.C. is a full service lawfirm with offices in Malvern, Phoenixville and West Chester serving surrouonding communities including King of Prussia, Berwyn, Wayne, Newtown Square, Media and Paoli and the following counties: Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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Why gifts might really be savvy and how to make gifts to children and grand children in 2010.

It looks like there may not be meaningful estate or gift tax changes in 2010. And, the crash landing of the nasty old federal estate tax on January 1, 2011 means that we will soon return to a tax regime that is highly unfavorable to the tax payer. And, while the situation is so fluid, the advantages of making gifts during this tax year are significant.

So, if you are an individual with assets of more than one million dollars, or a couple with assets in excess of two million dollars, and you can make gifts without harming your retirement lifestyle, and/or you have significant retirement income, then gifting in this year looks like a very good strategy.

So how and why make gifts (taxable or not) in 2010?

Non Taxable Gifts:

Annual Gift Tax Exclusion Gifts:
Every year, each taxpayer gets an annual gift tax exclusion of $13,000.00 per person without incurring gift taxes. This allows you to give cash, stocks, bonds or other assets worth that amount to each person such as children and grandchildren. When these transfers are made, you avoid the tax on those assets AND the growth of the assets after the gift is made.

Gifts of Medical and Educational Expenses:
In addition to the annual gift tax exclusion you can also make additional gifts of tuition, and medical expenses over and above the $13,000.00. However, these gifts are restricted as to the recipient, and they must be paid directly to the school, or the health care provider. This can be a great technique, but if you do it wrong, taxes could result. Make sure to consult your tax adviser or estate planning lawyer.

Life Time Exclusion of $1 million Dollars:
In addition to the renewable annual gift tax exclusion, each tax payer gets a 1 million dollar exemption from tax that they can make during his or her lifetime. This means that couples can transfer assets valued at up to $2 million dollars during their lifetimes, without triggering a gift tax. So, if you want to create a trust, or move assets with larger value out to the heirs, then you (and a spouse) can each allocate amounts of up to $1 million dollars to such transfers to avoid paying gift tax. This again helps to move not just the asset, but also the appreciation of the asset out of your estate.

GRATS and CLATS:
Grantor Retained Annuity Trusts and Charitable Lead Annuity Trusts are especially useful in a low interest rate environment, and when asset values are low. We are in a historically low value and interest rate environment so be sure to ask your adviser about these techniques.

Taxable Gifts: If you have already used your exemption and you want to give assets worth more than the annual gift tax exclusion, you might consider a taxable gift. Even thoug, there are n estate taxes for 2010 (so far), there is still a gift tax. However, the tax rate of thirty-fuve percent looks very favorable to the top rate of fifty-five percent next year. Consult your adviser about the pros and cons of taxable gifts.

Why consider these gifting techniques when the laws might change?

We are in a period of historically low estate and gift tax rates and many assets have reduced values during this difficult economy. This means that we may be able to move more value to our heirs at very low tax rates or without taxes.

Furthermore, many techniques such as GRATs and CLATs work extremely well in low interest rate environments. And, while it is impossible to predict what will happen later this year or next year with any certainty, economic pressures on Congress make it unlikely that the tax will be eliminated or the rates significantly lowered.

Planning now for strategic gifting may allow you to pass on significant wealth without endangering your own lifestyle.

David M. Frees III, Esquire
610-933-8069
For a consultation on gifting, updating your estate planning, or the use of trusts, call 610-933-8069 or contact David at 610-933-8069

David M. Frees III on What To Do About The Federal Estate Tax Problem

The law firm of Unruh,Turner, Burke and Frees has offices in Malvern, Phoenisville, and West Chester Pennsylvania serving the Eastern and Western Main Line of Philadelphia, Chester County, Montgomery County, Delaware, Bucks and Berks Counties.

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PA Case Tells Us To Review Tax Clause To Insure that the Correct Party Pays the Inheritance Tax on the assets In Your Estate.  In Re Estate Of Thomas P. Allen, 2008 PA Super 260 Atlantic: 960 A.2d 470 the decedent had a will and the will contained a Tax

Clause intended to determine whether the estate or each individual beneficiary would pay related estate or inheritance taxes.   However, the Tax Clause was poorly drafted and deemed “ambiguous.”  Therefore, the Court chose to rely on PA statutory law 72 P.S. § 9144(f) which requires each beneficiary of both probate and non probate assets to individually pay the tax on what they inherit.  This statutory provision is frequently contrary to the testator’s intent and should not be relied on.  This case further demonstrates the importance of every clause in your will and, in particular, the need to review and revise documents with experienced legal counsel.  Experienced counsel will help insure that your wishes are carried out.

Please feel free to contact Douglas L. Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss your particular Estate Planning or Probate matter to determine the appropriate planning for you and your family.
Unruh, Turner, Burke & Frees is a full service law firm with offices located in Malvern, Phoenixville, West Chester, PA.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning

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Has it been a while since you last completed or updated your will or trust?

Are you a Pennsylvania resident and would you like to get a complimentary review of your existing will, trust, living will, power of attorney and medical power of attorney?

There is no cost for this service and you have no obligation to hire the firm to make any changes or updates.

At Unruh, Turner, Burke and Frees we are providing a Free Will And Trust Review for existing clients and for non clients who are area residents near our offices in Malvern, Phoenixville and West Chester.

If you are one of our clients simply call 610-933-8069 before March 30th 2010 to be scheduled for this complimentary service and mention this code: FREEWILLREVIEW. That is just something that we do for our clients.

If you are not a current client, call today and if you are one of the first twenty-five to call, you can get one of the remaining twenty-five appointments scheduled for our two Will and Trust Review days in April and May. Just mention this code : NONCLIENTWILLREVIEW to get your free appointment.

Why would a law firm provide this service for free?

Well, that’s a fair question. In the Trust, Estate, and Wealth Preservation Section of Unruh, Turner, Burke and Frees, all we do is estate and trust planning, elder law, and we help executors and trustees who have had a loved one die.

And, we have local offices in Phoenixville, Malvern, and West Chester that serve many local communities. David Frees, Chairman of the Trust and Estate Section has been serving local communities for over 25 years and his partner Doulas L. Kaune,  and our team of paralegals have been collectivly serving our local clients and families for over thirty years.
Our reputation is built on doing a great job and being well know for doing this work.

Many clients are in fact surprised that they can get estate planning work done by a firm that focuses on that work for less than some trust mills or general practice firms.

And, frankly, we think that many of our clients and others will need updates due to so many changes in the law and in their personal circumstances. So, when we do a will or trust review for free, many existing clients and new clients hire us or pass the word to friends and family memebers.

If you don’t need any changes we’ll tell you and you can rest easy, knowing that your plan is still good.

But, if you need changes, we are available to help and we always quote a fixed flat fee, in advance of any work you tell us to do for you or a family member.

If you don’t like the fee, there is no obligation. But, we think that you will.

Still not sure if you need this complimentary review?

Here are the five questions that you need to think about:

1) Is your will or trust older than five years old?

2) Have your circumstances changed since you last updated your will or trust ?
Do you have new children or grandchildren?
Your heirs are now old enough that they don’t need their inheritance in trust?
Are your assets worth much more or much less than they were when you did your planning?

3) Do you need to change your guardians for children, executors, or trustees?

4) Do you still need federal estate tax planning or can your documents be simplified? In the alternative, since the estate tax is set to drop back to a one million dollar exemption do you now need federal estate tax planning or a flexible disclaimer will or trust that works either way?

5) Was your will or trust prepared by a non lawyer or by a trust mill that has since been investigated by the attorney general for using lawyers that never saw the clients? These wills and trusts often look great and cost a great deal ($1,500 – $5,000) but are often too complex and not customized to your situation. These trusts can actually cost your heirs money but can often be reviked and/or repaired easily and can be replaced with amended trusts that actually do what you want and need without the extra costs and complexity of the older trusts.

After you review these questions if you feel that you want to take advantage of our complimentary will and trust review, call 610-933-8069 to get your spot before there are all booked.
If you’re a client, mention Code: FreeWillReview and if you’re not yet a client mention code: NonClientwillreview

Donna Brownback, Denise Fox and Beth McNulty are all available at 610-933-8069 to help get you one of the spots.

We look forward to seeing you and to reviewing your plan.

P.S. What will you get? When you call for an appointment, if you get one, you will also be sent an Estate Planning Questionnaire. In addition, clients will also receive a free report that helps them to choose executors and trustees. It is important to complete the questionnaire (as much as you can) and to bring it with you to your appointment. This will help the lawyers to make sure that your documents are coordinated with your assets (a common flaw in many plans) and that you have the right type of trusts or other techniques given your level of exposure to estate and inheritance taxes.

P.P.S. Want to get a child or grandchild to do their own will, trust, or estate planning? Learn more about our GOLD Client Plan.

If you do ever hire the firm, or if you’re an existing client, you can upgrade at anytime to our gold plan for a small fee. Being a Gold client allows you to get an additional ten percent discount on your own planning, and you will receive two $250.00 gift certificates that you can give to friends or family members for their own planning. These can be used separately by two people or can be combined and used by one family member or friend even if that discounts their planning to zero. Please note, that Pennsylvania lawyers are ethically restricted when one client is paying for another client’s legal fees. There must be full disclosure both on the gift certificate and at the time of the appointment, and that must be agreeable to the party.

P.P.P.S. What kind of lawyer will I get for free? Again, the free part is the will or trust review. And, you’ll get the help of very experienced lawyers. If you need any work and hire the firm you’ll get the same experienced lawyers. And, because we believe that our gift to the communities and people in the towns where we work, and our commitment to our clients is good for you and for us, (some of you might need revised or updated or new planning and might hire us) you’ll get our most experienced lawyers who practice in the areas of trusts, estates, elder law, and asset protection. Your appointment will be with David M. Frees III, Esquire, (David Frees has AVVO’s highest rating, he is a Superlawyer and has been the Top Trust and Estate Lawyer in Main Line Today Magazine), Douglas L. Kaune Esquire, (Douglas has focuses his practice on trust and estate planning and he is Chairman of the Elderlaw Section of Unruh, Turner, Burke and Frees).

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If two PA Cases continue to hold, Your Joint Accounts Might Not Pass To Surviving Joint Owner. We have long believed in the sanctity of the contractual obligation created by a joint account designation. We believed that the joint account would pass automatically to the surviving joint owner regardless of what the decedent’s last will directed. This belief has now been drawn into question by two pennsylvania cases IN RE: ESTATE OF AMELIA J. PIET 2008 PA Super 72 and In re Novosielski, 937 A.2d 449 (Pa. Super. 2007).
Both of these cases have different sets of fact, but two separate Courts have come to the conclusion that where joint ownership was established after the signing of a will, the joint accounts would pass according to the decent’s last will and testament and not to the surviving joint owner. The Courts further stated that the initial presumption of the Multiple Party Accounts Act, pa 20 Pa.C.S. § 6301 that survivorship rights are established is rebutted by the existance of contrary provisions of a previously signed will.
PLANNING TIPS:1. We suggest that if you make a will and later transfer an account to joint names, you should make a contemporaneous writing that states your intention to make an account joint contrary to the will provisions. 2. You should also consider updating your wills to add a provision that states accounts made joint by you at a later date should not be distributed according to your will unless the joint account is the result of cohersion or fraud. 3. Executors should be careful to consider their obligation to pursue joint accounts being distributed contrary to a decedent’s will.

Please feel free to contact Douglas L. Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss your particular Estate Planning, Probate, Trust Planning and Elder law case to determine the appropriate planning for you and your family. Unruh, Turner, Burke & Frees is a full service firm with offices in Phoenixville, West Chester and Malvern representing clients in surrounding communities such as King of Prussia, Collegeville, Royersford, Paoli and Frazer.
Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning

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