Wealth Preservation, Trusts and Estates

By: David M. Frees III Pennsylvania Trust and Estate Lawyer

Is A Bank Ever The Best Trustee?

There are many reasons to set up a trust (either during life or under your will). Some people set up a trust to protect a young child from having access to money at a young age. Others use a trust to protect and to provide for a child with special needs.

Many trusts are established to provide income and assets to a surviving spouse and then to pass on the assets to family members such as children and grandchildren.

Some of our clients set up GRATs and or nursing home trusts to move assets to the next generation, or to protect them from being lost to a nursing home.

And, with each situation where a trust is the best solution another equally important question arises: Who should be the trustee of this trust?

There are many possible trustees to choose from. For example, you can select the following a trusts of your Pennsylvania trust:

you
a friend
a family member
a professional adviser
a bank or trust company

However, depending on the purpose of the trust, you may need to limit cases where you name yourself or family members as trustees since a trust is often taxable or reachable by creditors in a lawsuit, when a family member, spouse, or parent is the trustee. In fact, there is a specific section of the IRC (Internal Revenue Code) (Section 672) that will cause such trusts to be included in a beneficiary’s estate and then taxed.

So, it may be that you want to avoid family members or at least make them a co-trustee. Also, family members are often unaware of all of the new rules which apply to trusts under the UTA (Uniform Trust Act) and the Prudent Investor Rule. Family members also often fail to file income tax returns for the trust or to keep the trust records properly. Accordingly, family members might actually end up exposed to liabilities and law suits that they never anticipated.

But, if you want to avoid using a family member as trustee, what are the alternatives?

Friends, Advisers, and Banks.

And, while many families have family members and friends that will undertake the risks of being a trustee, and who will seek the right advice to make sure that they follow the new legal compliance requirements of trustees, it may be that a bank or trust company offers a viable alternative and may be the best choice.

Banks are well insured, are highly regulated, have procedures and specific policies, and they regularly file the returns and keep the records accurately.

I know that almost everyone has heard about a beneficiary that did not like their bank trustee, but banks can be the best choice and that can be especially true when a family member or friend is appointed as a co trustee or a trust protector and can fire and hire bank trustees to ensure that the bank is charging appropriate fees, getting good investment returns and is looking out after the beneficiary.

Of course, there are advantages and disadvantages to each approach. But make sure that you discuss trustee selection with your lawyer and accountant because the wrong choice of trustee can mean that the trust will not work to accomplish your tax and planning goals.

For more on trust protectors and trustee alternatives click here and watch for upcoming posts.

David M. Frees III, Esquire
610-933-8069
dfrees@utbf.com

P.S. If you would like to create a trust now or under your will, please call

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Why Having A Trust Doesn’t Eliminate The Need For A Will In Pennsylvania

If you have used a lawyer to prepare your trust, you will also find that a well structured estate plan will also contain a pour over will.

Why?

Many people pay the extra legal fees for a living trust so that they can place all of their assets into that trust and escape the need to probate a will. However, the mere fact that you have a trust does not eliminate the need for a will. In fact, a plan without a pour over will is a disaster waiting to happen.

If you have created a trust, your will is still the document that will control assets remaining in your name at the date of death. And, even if you are meticulous in changing the title and account names of all of your assets over to the trust, you may 1) miss an asset, 2) inherit or otherwise receive assets which do not get titled into the trust before your death, or 3) become involved in an accident or other lawsuit that results in an award being paid to you (or your estate) rather than your trust.

If that happens, and you do not have a will, you will then have a partial intestacy and the courts will decide where those assets go based on the Pennsylvania intestate laws.

And if you’re the type of person who wants his or her affairs to be organized so that your heirs have lower costs and simplicity, that is not a desirable result.

So what is the solution?

Make sure that your lawyer prepares both a living trust, and a pour over will. The pour over will is a simple document that instructs your executor (only if needed) to take any assets which remain in your name, and which have not been transferred into your trust prior to death, to be added to and distributed under the trust.

Simple. Inexpensive. And, your plan works.

Trust Warning For Living Trusts Purchased in The Last Ten Years:

P.S. Be sure, that if you have a living trust, that was prepared by a non attorney in the last few years, to consider having it reviewed. It may be fine. However, the Pennsylvania attorney general pursued a number of “trust mills” over the last few years who used non-lawyers – or vague references to lawyers that the consumers never saw. These trusts are often presented in customized binders but the documents themselves are very standardized and may not actually state your true intentions. To make matters worse, many of these trust documents are way too complex and might actually cost your estate money rather than save dollars.

Finally, due to a number of changes in the federal estate tax laws, your trust may be able to be simplified to remove estate tax references and techniques that you might no longer need and which might make your estate and trust costs higher for your surviving spouse or children.

You can have your estate plan reviewed by calling 610-933-8069 and mentioning this discount code for a complimentary consultation – Code: Frees2010.

David M. Frees III is a trust, estate, and estate planning lawyer with offices located throughout Chester County including law offices in Phoenixville, West Chester and Malvern.

These offices serve clients in Devon, Berwyn, Wayne, Exton and Chester Spring as well as many other communities.

David Frees is also the Chairman of the Trust, Estate, and Wealth Preservation Section of Unruh, Turner, Burke and Frees.
dfrees@utbf.com

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Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning                                   Douglas Kaune, Esquire Attends 11th Annual Pennsylvania (PA) Elder Law and Estate Planning Symposium.  It is great to get an update regarding the law changes, new cases and politics that shape Elder Law, Estate Planning, Trust Planning and Probate.  Here is a link to this Pennsylvania Bar Institute (PBI) course and the interesting topics covered.  I will be providing much of the interesting information in upcoming Unruh, Turner, Burke & Frees Estate and Elder Law Blog postings.  

Stay tuned for updated information on the following topics and more: 1. How to make sure joint accounts actually pass to the person you intend.  2.  How to insure the tax clause in your last will actually confers tax lability on the correct beneficiary or your estate.  3.  How to make use of annuities to protect assets in Medicaid and Nursing Home Planning.  4.  How to take advantage of the Medicaid Gifting exceptions to allow assets to pass to certain loved ones and family members.  5.   How to properly plan your estate in a second marriage or where there are children from different relationships.   6.  Is a Special Needs Trust right for you or for a member of family, if so how can we make sure it properly protects assets and government 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, Probate, Trust, Asset Protection or Elder law case to determine the appropriate steps for you and your family. Unruh, Truner, Burke & Frees, P.C. is a full service law firm with offices in Phoenixville, West Chester and Malvern and providing legal representation in the Chester County, Montgomery County, Delaware County, Bucks County, Berks County and Philadelphia County. Among the many towns served are Phoenixvile, Malvern, West Chester, Royersford, Collegeville and King of Prussia.

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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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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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By David Frees Law Office: Phoenixville, Malvern and West Chester

You think retroactive taxation for estate tax purposes is a problem?

Well, according to Russia, we have bigger problems…. click here to read more about estate planning and the pending fall of the United States governmentt.

If you need more information about planning your estate or acting as a trustee or executor, we have many free resources. Appointments are also available with David Frees by contacting Beth MacNulty, Donna Brownback, or Denise Fox at 610-933-8069.

Attorney David Frees can also be reached by email at dfrees@utbf.com

Mention this blog to get a free report at the time of your appointment or to request that a free report on executors or estate planning be sent to you. You can also request these reports on line at www.PaEstatePlanners.com

David Frees has attained AVVO’s highest possible lawyer rating.

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Estate Planning For Pennsylvania Families With Young Children By: Pennsylvania Attorney David M. Frees III

On Friday, December 12th 2009 Chester County Attorney David M Frees was a faculty memeber at the Philadelphia Convention Center to present his well attended program: Estate Planning For Families With Young Children.

Frees, who spoke for the PBI (Pennsylvania Bar Institute) was asked to return to the event faculty for his second year of presenting on this topic. Frees, who Chairs the Unruh, Turner, Burke and Frees Trust, estate and Wealth Preservation section, taught lawyers from around the state about the most important topics for lawyers representing families with young children and how to best serve their clients.

Frees’ topics included many of the best practices in estate planning including: how to help families to select guardians, 2) the advantages and disadvantages of trusts vs uniform transfers to minors accounts, 3) who should be the trustee?, 4) At what ages should distributions be made and how should you instruct the trustees when you’re no longer available?, as well as how to use 529 plans for Pennsylvania residents and, 5) should parents consider a sprinkle trust where there is an age gap between the children and until they graduate from college?

Other topics included planning to protect children and grandchildren from divorce and lawsuits.

Many of the lawyers in attendance have returned to see David on this topic for more than one or two sessions knowing that they will get the latest thinking and a real overview of the pros and cons of many different estate planning options to share with their clients.

If you need to update a will, trust, or estate plan, or if you are the parent or grandparent of young children and want your plan to truly reflect your thinking and wishes, please call Donna or Denise in the office of David M. Frees III at 610-933-8069. Mention this press release to receive a free copy of David M. Frees’ recent report: The Ten Most Common Mistakes Executors Make and How To Avoid Them.

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There is a lot happening in the normally calm, cool, and collected world of the estate tax, and estate planning. The Wall Street Journal Article on the latest failure of Congress to act on Federal Estate Tax issues actually called the situation “frenzied” and not without reason.

While we, as your advisers, are keeping our usual cool and focused demeanor, there are reasons to be cautious and to keep an eye on this situation if you have total assets (husband, wife or single person) of over one million dollars including your life insurance.

We are bringing you news and analysis as soon as it breaks and we have a chance to crunch the numbers, read the bills, and think about the unthinkable (or previously believed to be unthinkable) a year without the federal estate tax.

That’s right, Congress has fumbled the ball and an extension of the bill seems almost impossible at this point. But, many members are threatening to reenact the law after the holiday break and to have it apply retroactively to January 1, 2009.

There are a few unexpected consequences of the federal estate tax going away and this Wall Street Journal Article has a good quick review and a couple of important alerts.

Stay tuned for more news and information as it becomes available.

David M Frees III
610-933-8069

David Frees focuses his practice in the following areas of law: estate planning, estate administration, asset protection planning and wills, trusts, and related topics.

Frees is a Phoenixville lawyer, Malvern Lawyer, and West Chester Lawyer, with offices throughout Chester County, Pennsylvania.

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David M Frees III, Esquire has just been awarded AVVO’s highest lawyer and attorney rating of 10.0. Frees heads the Trust, Estate, and Wealth Transfer Section of Unruh, Turner, Burke and Frees with offices in Phoenixville, Malvern, and West Chester, Pennsylvania.

Frees whose practice is limited to trusts, wills, estates, probate, asset protection, and estate planning helps families and individuals to create effective estate tax, asset protection, and business succession plans.

However, Frees notes that “The firm has lawyers that work in many different areas so that our clients’ needs ranging from personal matters such as estate planning, personal injury and related matters are well protected and served by the firm. And, many other firm practice areas help clients in their business, real estate, and related commercial matters.”

“I am honored to receive AVVO’s highest professional rating. AVVO is one of the premier lawyer search and referral sites on the internet and rates lawyers on a variety of factors. I regularly publish legal guidelines and answer estate planning, will, trust, and probate questions for AVVO users and I believe that it is a powerful tool for consumers.”

Thanks to everyone, including my partners and associates, my support staff, and the other lawyers and clients who have helped me to achieve this honor. I have a great team of people that I work with and great clients that we serve.”

Frees’ offices provide trust, estate, and estate planning services to the entire Philadelphia region, including but not limited to Chester and Montgomery Counties, Berks, Bucks and Lancaster Counties and many communities such as Ardmore, Devon, Berwyn, Paoli, Malvern, Willistown Township, Charlestown Township, East Pikeland, Schuylkill Township, and Doylestown

More information about AVVO rating and search services for Pennsylvania residents can be viewed by clicking this link.

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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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