Wealth Preservation, Trusts and Estates

The Answer May Not Always Be What You Expect

Simply “Probate” means at death an estate (the deceased person’s property) is administered and supervised by the court, often called probate court. The court will make sure the Last Will is administered correctly and if there is no will state law is followed by a court appointed administrator.

Does Your Will Dictate What Happens To All Your Assets?

Many people ask us how they can “avoid probate” before they understand what it means and how long it will actually take. For example in Pennsylvania it is a fairly straightforward process, many cooperative families can “opt out” of much of the process, and it takes as few as several months and can be helpful in making sure the executor, the person who distributes the property, does what the Last Will says to do and that he or she is protected from subsequent claims and law suits.

Many people also do not know that most property transferred at death passes outside of probate through a non-probate mode of transfer. Here are some examples of things that do not go through the probate process and may not even be distributed according to the will.

1. Joint tenancy property both real and personal

The decedent’s (the person who has just died) interest ends at death. The survivor has the whole property.  Bank accounts, brokerage and mutual fund accounts, and real estate are often held in joint tenancy, particularly between married couples. At the death of the first, this property generally transfers directly to the surviving joint account holder or joint tenant on the deed no matter what the will says. These assets are still taxable for both State Inheritance Tax purposes and possibly for Federal Estate Tax purposes. And, who pays that tax is often a function of the tax clause in the will. Be sure to get good legal advise on this issue.

2. Life Insurance

Life insurance proceeds on the decedent’s life are paid by the insurance company to the beneficiary named in the insurance contract. However, while such policies are not taxed by Pennsylvania, they are taxed for Federal Estate Tax purposes.

3. Bonds & Contracts with payable on death (POD) provisions

Federal E and H Bonds, and pension plans often have survivor benefits as do tax-deferred investment plans such as IRA’s 401(k)’s, and brokerage accounts if there is a death beneficiary. While the beneficiary of such accounts receive the money directly, the proceeds may or may not be taxable for Income Tax and or Inheritance and Estate Tax Purposes.

4. Interests in Trust

Do You Have A Trust?

When property is put in trust, the trustee holds the property for the named beneficiaries. The trustee in accordance with the terms of the trust instrument invests, holds and or distributes the trust property to the beneficiaries.

To read our trust guide How To Find The Right Trust For You click here.

Property in a testamentary trust does pass through the probate process but an inter vivos trust during the decedents’ life does not.  To read more about inter vivos gifts read Should I Make Gifts Now As Part Of My Estate Planning.Such trusts if revocable during your life are Taxable but irrevocable trusts may avoid taxation for Death Tax purposes.

Distribution of non-probate property does not involve a court proceeding.  The controlling contract, trust, or deed terms control the distribution of the property.

Distribution of probate property under a will or an intestate estate (someone who dies without a will) may require a court proceeding involving probate of a will or finding of intestacy followed by appointment of a personal representative to settle the probate estate.

Find out the best way to utilize both the probate and non-probate process in planning your comprehensive will and trust.

A successful comprehensive estate plan takes all of these factors into account when organizing your will or trust.

Whitney O’Reilly

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Lawyers, like doctors and other professionals, habitually use language that is practically impossible for many of us to understand. They use language familiar to them but sometimes forget that it may be unfamiliar to you if you do not work in their field of trust and estate law.

So how are you supposed to get what you want from a trust lawyer if you can’t understand what they are talking about or, worse yet, what if they aren’t really understanding exactly what you want in your will or trust?

All to help you, we have written a handy guide to some trust language you may hear from your lawyer or written in documents you have or have been given. With this guide you should be able to ensure you get what you want at the best possible cost.

A trust can be a valuable resource in your estate planning and asset protection. Unfortunately, a trust can also be complicated by state and federal regulations, codes, and statutes.

Un-complicate trusts.

Understand trusts.

And, get a head start on understanding your trust lawyer so you can make sure you get what you want.

Click here to read A Guide to Lawyer Language: Understanding Trusts

If you already know exactly what you want your trust to do, call 610-933-8069 for an appointment. You’ll also receive a free CD of important estate planning information and other resources before your appointment by mentioning the offer: Trust Guide if you call or email.

You can also email David Frees at dfrees@utbf.com for an appointment.

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A special needs trust is a way to provide your disabled loved one

without the assets affecting their government eligibility into

programs like Medicaid and Social Security Disability.

Find out if a Special Needs Trust is right for you.

Read the entire Report on Pennsylvania Special Needs Trusts/ Supplemental Needs Trust here.

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Many professions have their own technical language.  For an example, think about the last time you or a family member was hospitalized. Did anyone use expressions, drug names, or therapies that simply had no meaning to you? Were you ever confused?

Do you remember the words the doctor or nurses used that left your brow furrowed? What does it mean when the doctor says that you have a fracture of the metatarsal or what does abductor spasmodic dysphonia mean?

Doctors, nurses, and therapists don’t mean to confuse or intimidate us. They are just immersed in the world of medical jargon that they forget what we know and what we don’t know.

This is also true of the language of lawyers and trusts.

And, just like in the hospital, where you want to understand what the doctor is saying so you can make the best decisions about your treatment or care, the same is true about the language associated with trusts. You want to understand the lawyer and to make sure that the lawyer understands your specific instructions.

Mutual understanding is critical to an effective and efficient trust or estate plan. It is essential to getting what you want and not some form or template document. Effective communication between the lawyer and client can also help to reduce legal fees.

For more guidance in this important area read A Guide to Lawyer Language: Understanding Trusts to find out what many commonly used trust words really mean and how you can take advantage of that knowledge.

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Yes.

If you are disabled and receive benefits and a personal injury award

and or inheritance and you do not want to be disqualified from

government benefits a “self-settled” trust can help. A  “self –settled” trust

is frequently created by individuals who have become disabled as a result

of an accident or medical malpractice and later receive a personal injury

award or settlement. This type of trust has specific requirements in order

to keep your government benefits such as  Medicaid, Social Security, and

Section 8 Housing.

Please click here to read the entire Report on Pennsylvania Special Needs Trusts.

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Special Needs Trusts Require The Right Trustee For A Tough Job

The trustee of any trust is an
important position.

In special needs trusts the trustee has

sole discretion to decide what the

beneficiary, your disabled loved one,

needs and what can be distributed

under state laws or federal regulations

without disqualifying the beneficiary.

They may spend quite a bit of time at the job in order to do it well.

They also often have the authority to liquidate the trust.

In short, trustee selection is vitally important,

If you are going to be the trustee

make sure you have a back-up trustee so if something

happens to you the right person is in place to take

on this important responsibility.

Also keep in mind if the trust is not administered correctly

your loved one could lose the benefit of government programs.

To read the entire Report on Special Needs Trusts/ Supplemental Needs Trusts click here.

To Find Out More About Special Needs Trusts and Who To Select as Trustee

Call David M Frees III Chairman Trust, Estates, and Wealth Preservation
610-933-8069 or dfrees@utbf.com

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Special Needs and Supplemental Needs Trusts Are The Vital
Tool To Protect Our Loved Ones When We No Longer Can

A special needs trust or supplemental needs trust is a way to provide

for your disabled child or disabled loved ones quality of life.

The great thing about this type of trust is your child or loved one

will not be disqualified from government programs because

the assets are not considered theirs. In order to have the assets

in this type of trust unavailable to the government see the complete

Report on Pennsylvania Special Needs Trusts.

If you already know that you need to do estate planning,
or to update an old will or trust, for a special needs child or heir,
then please call 610-933-8069 and mention this article by David
Frees for a discounted estate plan only available to
David’s blog readers and existing clients and their families.

Do own a business, LLC, or corporation? Or, are you a
“C Level” Executive?

Ask about our enhanced and elite First Class
and Business class upgrades to your estate planning.

Our estate planning fees include wills, trusts (when needed),
a power of attorney for each of you, a medical power of attorney
and living will, a HIPPA authorization and more.

And, our superior two step process get you through the
planning and to signed documents faster and with more
precision than many other lawyers or firms.

Get this off your TO Do list. Call 610-933-8069 or
email dfrees@utbf.com for a call to schedule your planning
appointment.

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David M. Frees III on a Asset Protection

It is that time of year when the IRS publishes warnings about tax fraud to try to keep the tax payers honest. And, it is also that time of year, when faced with increasing tax liabilities, many tax payers update their estate and asset protection planning and look for opportunities for tax savings as well as the opportunity to shelter assets from frivolous lawsuits.

However, as many of the articles below will confirm, there are unscrupulous “salesmen” who tempt tax payers with tax devices and “asset protective” investments that are just too good to be true.

So, how do you know of that proposed tax advantaged investment is a scam, borderline or flat out illegal?

Here are a series of articles that give you some of the warning signs of a dangerous sales pitch. The danger signs include, but are not limited to: tax investments that radically change your return ( a red flag to the IRS as well), investments where you are prohibited from getting a second opinion by a non disclosure agreement, returns or results that are simply too good to be true, and many more.

In any case, be sure that you really know the law, get good advice, and do your due diligence before investing in any type of investment promising tax results that are too good to be true.

Warning Signs of Bad Tax Investments from the New York Times

The Eight Warning Signs of Tax Fraud in Your Asset Protection