Wealth Preservation, Trusts and Estates

Capital Gains Taxes For Trusts, Estates, and Beneficiaries of Estates in 2010 Are The Subject of IRS Attention. By: Attorney David M. Frees III

If you inherited assets from a trust or an estate where the decedent died during 2010 you probably thought that you were spared the worries and expenses of the federal estate tax. And strictly speaking, it appears that you’d be right. But, you may not have completely dodged the tax bullet and even the IRS hasn’t weighed in yet on exactly what you need to do.

Congress unexpectedly allowed the federal estate tax to lapse at the end of 2009 and despite regular threats to impose a retroactive estate tax, it appears that there will be no federal estate tax for this year.

However, since most lawyers, accountants and financial advisers expected Congress to address the situation and even the IRS held off, there are now many unanswered questions about the tax returns for these estates and their beneficiaries.

In particular, there are numerous unanswered questions about the new carry over basis rules and what they really mean for estates and beneficiaries who inherit assets and later sell them.

For more information on the IRS and the tax issues facing trusts, estates, and their beneficiaries from the Wall Street Journal click this highlighted link.

David Frees and Unruh, Turner, Burke and Frees’ Trust, Estate, and Wealth Preservation Section assist families and individuals with their trust, will and estate planning needs ranging from the simple to the highly complex.

David can be reached for consultation at 610-933-8069 or by e-mail at dfees@utbf.com.

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The Will, Trust, Estate and Probate Section of Unruh, Turner, Burke & Frees Invites You To Our Upcoming Client Appreciation and Educational Events

Doug, Jennifer, and I enjoyed hosting and getting together with you to say thank you for being our clients, and in 2011 we will also be hosting a series of social and educational but fun events for clients and friends of the firm.

If you’re interested in attending one or more of the events that are being considered please let us know by sending me an email at dfrees@utbf.com or by calling Donna, Beth, or Denise at 610-933-8069.

Also, if you have an idea or suggestion for another event or an educational event please let us know by email or by leaving a comment below.

The Napa Wine Tasting Event

Just recently, we hosted a very nice wine tasting event at the Frees house where we shared some wines that Robin and I discovered during our anniversary in Napa and then served a light supper (fillet, salad, and home made deserts by Robin).

The weather was perfect and everyone had a great time. If you are interested in any future wine tasting events, please let us know that you wish to be added to the list. E-mail dfrees@utbf.com, dkaune@utbf.com, or call 610-933-8069 and mention that you want to be added to the wine events list.

So what else do we have in store for our friends and clients?

Winter/Spring Auction Event & Cocktail Party

Many clients have expressed interest in attending one of the famous
Freeman’s Auction House Auctions in Philadelphia.

This local and family run business has been in operation since colonial times, is America’s oldest auction house,  and they have invited us to host a cocktail reception for our clients before an auction.

So if you’re interested in bidding at an auction, selling at an auction, or just learning more about the world of art, jewelry, and antique auctions, let us know that you would like to join us when this event is scheduled.

To sign up for this event, just email dfrees@utbf.com or call us at 610-933-8069.

Fall/Winter Educational Events

Why January 1st Matters and What To Do About Your Estate Planning To Be Ready for The New Law

October 3, 2010 Dave Frees will be appearing as part of a panel including an accountant and financial adviser to help you to deal with the radical changes coming in the areas of federal estate tax and estate planning in 2011. This event is being hosted by Phoenixville Federal Bank and Trust. To register call 610-933-8069 and we will add you to the list.

Nursing Home Protection and Obamacare Update

Want to know how to lock your assets up to keep them safe from a nursing home?

Worried about Obamacare changes to medicare, taxes and insurance law and how it affects you?

Date To Be Determined: At this event, Douglas Kaune and David Frees will help you to understand what Obamacare changes in insurance, medicare, and taxation mean to you.  This program will also review how you can lock your home and assets up in a Family Wealth Protection Trust(TM) for your heirs, rather than seeing them dissipated for nursing home care.

Spring/Summer Picnic Event

In 2011 we have a picnic planned for the late spring or early summer. The date and location are yet to be determined, but we are already working on the menu, the music, and all of the things that make a great picnic.

If you enjoy a great cook out, then let us know that you’d like to be on the invitation list for this event.  To let us know, email dfrees@utbf.com or dkaune@utbf.com or call Donna, Denise, or Beth at 610-933-8069 and tell them that you’d like to be on the client picnic list.

For more information on any event or to suggest a new event or educational topic, just email us: Attorney David Frees dfrees@utbf.com or Doug Kaune dkaune@utbf.com or call 610-933-8069.

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Wills and Estate Planning Sound Hard But The Process Can Be Easy -
Well Maybe Easy Isn’t Quite Accurate But It’s Easier Than You Think
And You Feel Better When It’s Done Than You Can Imagine

Many young couples with families, older couples who’s children are grown, and even seniors with grandchildren, avoid doing a will, trust, or estate planning because it just sounds hard and complicated.  But the truth is, that the best time to do an estate plan, will, a trust, or a power of attorney or living will is now, before it’s an emergency.

After all, if we wait too long, and we have an accident or illness, the estate planning becomes harder, not easier.  And, many of us have a spouse or loved one who is fearful that we haven’t finished that will or estate planning and that they will be left without a plan, without guidance, and without knowing what they should do.

So how do you make the estate planning process fast and simple?

First, become an educated consumer.  For example, many people use the expression estate planning interchangeably with financial planning.  And, while both are important, estate planning usually refers to the process of getting your finances in order, making sure that you know what assets you have, what they are worth, and what you want to happen to them when you die and then executing the documents, such as wills and trusts, that will carry out that plan.  Financial planning is developing a plan to achieve your financial goals such as retirement, or putting children through school, or purchasing a vacation home.  and, when doing a financial plan, it is often suggested by effective financial planners that you also do an estate plan, and vice versa.  Why, because putting your financial life and your estate plan in order help you and your heirs to both feel better and to save time, money, and expenses.  The two concepts are, often benefited by one another.

In addition, truly effective estate planning requires you to review your IRA, insurance, and and other retirement beneficiary designations to make sure that the work properly with your estate planning documents. So, if that does sound hard and complicated you’re not alone.  But our clients consistently tell us that the process was faster and more enjoyable than they thought it would be.  And, many clients discover that their spouse, children or loved ones are so happy that it is finally in place, that the weight of the world has been lifted.

So what is this secret process that we use that makes people actually happy about something that seems complicated and unpleasant?  What is the Enhanced Estate Planning Process(TM) that we use?

In an way, it’s quite simple – like many effective things.  First, we schedule an initial appointment so that you can tell us what you want, find out if you like our lawyers, staff, client relations manager, and the team of people who will help you.  Before that, we also give you a simple tool to use to figure out what you want and some of the other things that we will need to do the best possible job of advising you.

Often, there are many ways to make you plans work, so we help you to narrow it down to the top one or two, tell you what they cost, and then help you to pick what is best for you and for your family.  If this sounds expensive, think again.  Sometimes, basic estate planning such as a will, power of attorney, a living will, HIPPA authorization and a medical power of attorney can be achieved for little more than the cost of doing them on a service like Legal Zoom (Legal Zoom is a trademark of a company formed by lawyers but “which doesn’t provide legal advice” – and even I am not sure what that means).  And, while many plans can be much more expensive than a basic estate plan, you’ll know the price in advance, how much can be saved in taxes and other fees, and whether or not such plans are valuable to you and your family.

At the end of that first meeting, we will work with you to set a convenient time and office for you to review the estate planning documents with a lawyer or paralegal and for you to have a signing ceremony where the documents are finalized.  For many clients, the process only takes a few weeks from the time you schedule your first appointment to the time you sign the plan.

Following your meeting, your draft estate planning documents are sent to you for your review.  They are reviewed completly at the signing meeting, clause by clause before you sign.

Following your signing meeting, the final documents are sent to you in an attractive folder or binder along with instructions of follow up matters and where and how to store the documents.

You’ll also receive a report filled with important information about your estate plan, and other important documents.  Our firm also sends out reminders, to clients who want them, about changes in the law that might mean that you need and update as well as other reminders over the years.

We know from clients that they like the books, the process, the way that we help with estate planning, and getting it done, quickly and easily.

Have more complicated affairs that require transferring family businesses, protecting family assets, nursing home issues or more?

The process is adapted to break these issues into sensible chucks so that you can get the most urgent and important things done first and then follow up with the less time sensitive matters.  In any case, there is a team of lawyers, paralegals, client relations managers, and others to help and that simply makes the process easier and more pleasant.

For more information on these and related issues you can request our booklet – Enhanced Estate Planning or visit another of our content rich web sites www.PaEstatePlanners.com

David M Frees III focuses his practice in the areas of estate planning, wills trusts and probate.  He has assembled a team of talented attorneys, paralegals, and support staff such as a client relations manager to help the estate planning or probate process to be as simple and cost effective for you and your family.

For a complimentary consultation with David Frees or one of his team, mention this article.  David can be reached at dfrees@utbf.com or by phone at 610-933-8069.

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Avoiding The Federal Estate Tax – In 2010 and Beyond
What You Need To Know and Do In Your Estate Plan To Be Ready For 2011

The federal estate tax is currently not in effect.  However, it will return at rates and in amounts
that have not been seen for some time.  As of January 1, 2011 the IRS will be taxing all estates
of over 1 million dollars at rates of 42% to 55% depending on the size of the estate.

However, five billionaires have died since the federal estate tax was eliminated at 12:01 on January 1st 2010.
and as a result, their families will likely owe no tax as opposed to more than half of the estate value.
Since the federal estate tax ranges (when it is in effect) from a rate of 42% to 55% the federal government
has failed to collect billions in tax that it might otherwise have charged the billionaires’ estates.

The the deceased billionaires include, among others,  Mr Bell, the founder of Taco Bell, George Steinbrener, who
needs no introduction, and philanthropist and media billionaire Mr John Kluge.

Kluge, who was well known in media circles, was the oldest member of the Forbes 400 Richest List
and had a net worth estimated to be in excess of $7 million dollars.

For more information on the federal estate tax click here.  For more information on Mr. Kluge, see the
The New York Times which carried an article on Mr. Kluge as well as USA Today, The New York Daily News, and
CBS news.

So short of dying in 2010 what do you need to know and to do before the tax is imposed on your family?

First, stay informed.  When you register for any one of our reports, you’ll be added to a list of smart consumers and you’ll
receive updates through our articles on what Congress is doing about the federal estate taxes. You can also peruse our articles, blogs, videos and checklists
that we provide at www.utbf.com/trust-estate and www.PaEstatePlanners.com.

Next, understand that even if your wills are designed to save on Federal estate taxes, they may no longer work properly and you might need to do more planning
to be prepared for 2011.  Just get advice that applies to your situation.

Finally, be an informed consumer about the options and planning techniques often used by those with larger estates but which might also work for
families with more modest affluence who will be taxed after January 1, 2011. Click here for a selection of our reports for executors, trustees, and those doing estate planning.

David M. Frees III has been awarded the AVVO lawyer rating services highest rating of 10.0 – Superb.

dfrees@utbf.com

610-933-8069

Law Offices In Malvern, Phoenixville and West Chester

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Can You Get An Extension To File A Federal Estate Tax Return (Form 706)?

In 2010 there is no federal estate tax and the IRS is not currently accepting the form 706.

In case you’re wondering why anyone would file an estate tax return when there is no estate
tax, that’s another story for another time.  But, in just a few more weeks the federal estate tax will come
back with a vengeance.

On January 1, 2011, the IRS will again begin accepting estate tax returns for descendants dying after
that date.  And, they will be taxing your estate (including life insurance) for every dollar over $1 million.
Additionally, the tax rate will return to a top marginal rate of 55%.

Many clients find, that because of the complexities of the estate, or the lack of ability to get accurate
appraisals, or because of a lack of clear record keeping by an aging relative, that hey are not in a position to file the return
within the nine months permitted by law.  The good news is, that there is also a provision for an automatic extension of up to six months.

Note, that this extension is merely to file a return and is not an automatic extension of time to pay the tax.  In addition, a federal court recently
held that the IRS failed to grant an additional extension (when the extension was requested after the due date for the return).  However,
there are a number of important limitations cited in this case.  But, this ruling  in favor of the tax payer might give you a basis for
requesting an extension other than the automatic extension of six months.

In any case, file requests for extension in a timely manner to avoid the litigation costs experienced by the estate in this case.

To review the case and the federal courts ruling on extensions to file a federal estate tax return, click here.

David M Frees focuses his practice in the areas of trusts and estates, and probate.  He also works with many closely held

family businesses in the areas of succession planning and asset protection planning. 610-933-8069

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Getting The Most Out of The Remaining Days of Great Weather
Great Summer and Fall Actives For Our Friends and Clients

By: David Frees

We want our clients and friends to get the most out of life and out of the remaining days of summer and those first warm days of fall.

We do have some suggestions, but we’d love you to share your own ways for getting more fun out of the changing seasons. So, we hope that you’ll share one or more by commenting below.

Now we know that your time is valuable, but we have a great gift for the reader who leaves the best suggestion – as selected by a vote of the whole staff of Unruh, Turner, Burke and Frees Trust and Estate Section.

But enough about the gifts we have for you.  What are the suggestions we have for the end of the summer?

1) Get to the shore for one or more of the many fall festivals designed to keep the day trippers coming to the beach later in the season. In the alternative, there are many festivals around here.

2) Visit one of the farmer’s markets (Phoenixville and West Chester are two) before the winter and bake an apple pie, or an even easier fruit cobbler, or crumble (a pie without a crust but with great crumb toppings).  Be sure to whip some heavy cream with powdered sugar and vanilla. Pie and crumble recipes.

3) Take a class at a cool outdoor location like Terrain at Styers located on Route one near Brinton Lakes or get to a Phillies game. You can still get tickets at Stub Hub.

4) Eat brunch outside at Parc Bistro on Rittenhouse square.

5) Make great coffee or tea and read the paper outside on Sunday morning.

Dave Frees’ own hot weather coffee recipe: If it’s hot outside (it can be in September and October), make a pot of strong coffee and let it cool.  Pour it over ice, add some Hershey’s Special Dark Chocolate sauce and stir.  If you’re really being decadent, add sugar and top with real whipped cream.

6) Find a new restaurant with outdoor dining and eat there – soon. There are many in Chester, Bucks and Montgomery county.

7) Have a picnic in a park, or in your back yard.

Set up a hammock or use the one you already have.

Ok!  Enough of ours.  How about a few of yours……  Leave a comment below and be entered to win a great end of summer prize.

Don’t want to use technology?  Call us with a suggestion and give us permission to publish it and you’re also entered to win. 610-933-8069.

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Are Your Pets – horses, cats or dogs included in your estate plan? If you have horses, cats, dogs or other pets with long life spans, it might be time to include those pets in your estate planning.  Pets in estate plans are often thought of as an estate planning activity of the rich and famous, but many Americans now purchase pet health insurance, pet vacations, pet day care and many other luxuries for their beloved animals.

So, it’s only rational to make provisions for your pets in the event of your death.

Estate planning for pets can range from the very simple to the very complex and from very inexpensive to more costly arrangements.

From simple to more complicated here are a few points to consider:

1) The Informal Memo Option -At the very least, consider putting together a memorandum to your executor and/or family members suggesting the disposition of your pets.  In this case, where no financial provision is being made for the pets and their care, it is often advisable to discuss the plans with the friends or relatives involved to ensure that they will, in fact, take on the responsibility. In any case, a memorandum that sets out instructions is still always a good idea.

What something more complicated but more certain?

2) The Outright Gift Option – Consider a bequest to heirs or others who agree to care for one or more pets.  Remember, selection of such care takers is important where there is a flat and outright bequest sine there is no way of knowing how long the responsibility will last.  For that reason, and given the high cost of equestrian care, many horse and other pet owners prefer a gift to a trust where the trustee can ensure that care givers get what they need to Providence continuing care at the right level anticipated by your trust and in your memorandum of instructions.

3) The Trust Option – First, be aware that not all states permit a trust for pets and animals. Pennsylvania and thirty one other states have, however, adopted such a law.  Next, review the issues such as: identifying your pets (the ASPCA site even suggests DNA identification), identifying a caretaker and trustee.  A memorandum to the trustee and care takers with specifics about your pets needs, and your desires for care can be vital. Finally, determine how much will be needed and who gets the balance at the death of your pet or pets.

For more on these issues and equestrian issues watch for more articles.

By:  David Frees – Attorney

For more information on estate planning and trusts for horses, and pets, call at  no obligation for a consultation with David M Frees III.  David’s practice focuses on trusts, estates, and related pet and equine issues in estate planning. dfrees@utbf.com

610-933-8069

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If you’re interested in using a charitable trust and want to know what happens as the money grows, or what happens when the charitable purpose of your trust no longer exists, the read this quick article about Charitable trusts.

And, for more information about trusts, living trusts, charitable trusts, insurance trusts, and family trusts, call the law offices of Unruh, Turner, Burke and Frees for attorney David M Frees III or email David Frees at 610-933-8069 or dfrees@utbf.com.

The firm has law offices in Malvern, Phoenixville, and West Chester and serves many communities on the Main Line.

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The Inherited IRA can provide powerful tax deferral benefits for named beneficiaries. In order to optimize the tax deferral options, the

original owner must properly structure beneficiary designations in accordance with I.R.S. rules and regulations. The I.R.S. has laid a mine field of beneficiary designation traps that can either serve to reduce or eliminate the income tax deferral for the beneficiary. If you are writing a beneficiary designation form, you must take great care when integrating it with the other estate planning documents such as wills and trusts. I encourage you to seek legal or tax counsel when activating these designations.
Beneficiaries themselves must also take care in how they initiate and follow the beneficiary claim process. Read this article for withdraw options. Great care must be taken when reviewing the claim forms and options. Again, a single stroke of the pen might result in years of lost deferral. Additionally, trustees claiming a trusts interest in an IRA must take even greater care in making a claim on behalf of the trust beneficiary. Tremendous fiduciary liability risks are lurking and can be avoided with proper guidance. Read this Forbes article on the Inherited IRA issues for some additional guidance.

Douglas L, Kaune is a Partner with Unruh, Turner, Burke & Frees, P.C. which is a full service law firm with offices located in Malvern, Phoenixville and West Chester, PA. Doug can be reached at 610 933 8069 or at dkaune@utbf.com. The Law Practice serves towns such as Royersford, Collegeville, Limerick, Devon, Frazier, Berwyn and others in Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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It’s that time of year when our college aged children go back to college and we may not see them again until Thanksgiving.  But, they might need our help inn between, and without a power of attorney that might mean trouble.  We tend to think that powers of attorney are for the elderly.  And, it’s true that a well drafted and customized power of attorney can help us to manage a parent or grandparent’s affairs, and to make health care decisions, to get medical records and to generally get done what needs to get done.

But, when a college student needs help we are often powerless to help – even as parents.  Once your child turns 18, you need a HIPPA authorization to talk with their doctor or to get copies of their medical records.  Want to see their grades?  Well, you’d better be on good terms with that college aged student because without their permission, or  a power of attorney you’re not getting a copy from the school. And no, just because you pay the tuition doesn’t override the school’s privacy policy.

Have a student that needs you to do banking while they are away at school?  Again, you might need a power of attorney.

So, if you need a HIPPA authorization or a power of attorney to cover your ability to help or to be directly involved if there is a medical or other emergency what is a parent to do?

First, your son or daughter is now an adult.  Talk to them like one.  Explain that in the event they have a medical emergency or need you to help with finances, then you’ll need a HIPPA authorization and a medical power of attorney and possible a financial power of attorney.  They should also know, that such documents can be revoked at any time, so they remain in charge of their own affairs. You should also agree in advance how and why such documents would be used.

Will this be expensive?  Probably not. Most banks and brokerage firms offer their own limited powers of attorney for individual accounts and these are free.  Many law firms offer a free consultation for family members of their clients or for new clients and many also offer discounted fees for college students or family members of their clients.  Make sure that the discounted fees will include a durable or limited power of attorney, a medical power of attorney, and a living will (if desired) and a HIPPA authorization.  With these documents, you’ll have the ability to get grades, deal with financial emergencies or ordinary transactions, and with medical issues including emergencies.

Without them, you might be shut out of certain information and decision making pending an expensive guardianship proceeding in court just to get certain powers and information that would be automatic with the above estate planning.

Finally, it’s not too early for a young adult to start thinking about a basic will.  This summer I had a number of young clients come to see me after their parents’ appointments to do wills before they went back to school.  Mention it for your college aged student to consider. By: Attorney David M Frees III

For information our Family Consultation Plans(TM) and Family Estate Planning Clinics(TM) call David M. Frees III at 610-933-8069 or email David at dfrees@utbf.com or his assistant Donna at dbrownback@utbf.com

Getting One From Your Kids Might Not Be A Bad idea Either

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