412-209-3200
Estate planning and asset protection are important, but they can be complicated areas of law. Many people view estate planning as important only for the wealthy. In reality, everyone, regardless of age or wealth, can benefit from some form of estate planning. While planning your estate on your own is doable, there are certain standards you must meet. And, without the careful guidance of a lawyer, you may make mistakes. You may not consider details such as taxes, titling concerns, and beneficiary listings, which are essential to estate planning.
For example, did you know Pennsylvania is one of only 6 states that has an inheritance tax, or what some call a death tax? This tax affects everyone and is relevant to every estate, regardless of wealth level. Or, did you know that a simple Power of Attorney is one of the most important documents you can have? The attorneys at Anderson Law Firm have seen these issues play out in their decades of practice, helping families.
Estate Planning Strategies to Protect Your Future
Whether you are just beginning to build your estate or want to protect the wealth that you have amassed over a lifetime, we are here to develop, refine, and implement the best strategy. We have successfully helped numerous families protect their hard-earned assets for second- and third-generation family members and ensure their loved ones’ wishes are carried out efficiently and economically.
While a Last Will and Testament is a good starting point, we offer a broad scope of services to create a comprehensive plan, including:
- Wills
- Trusts
- Powers of Attorney
- Living Wills
Wills
Wills are the foundations of most estate plans. In order to be effective, however, they should be comprehensive and detailed, and your attorney must work intimately to understand the family. As your attorneys, we will help you draft a will that leaves no room for doubt. With 15 years of experience, we know which details to include and which language to use to ensure your Will accomplishes your goals and withstands challenges in a clear manner.
Revisions of Wills. We can help you review or update an old will. We have knowledge of Pennsylvania law to keep your will up to date with current statutes. It is important to review your will at least every five years to ensure it still meets your wishes and desires.
Even if you have a Will prepared by another attorney, we are happy to help. Some people have the misconception that they must return to the same lawyer who drafted the original will to update matters. This is not true. We have helped many clients revise their Wills and are happy to communicate with your previous lawyer to ensure there are no confusing copies out there.
If it has been a while since you reviewed your will, we are happy to review your documents and provide guidance to help you meet your goals and desires.
Out of State? We’re Happy to Assist Your Loved Ones. Maybe work or family has required you to move out of state, but your mother, father, or other loved one still resides in western Pennsylvania. As your loved one ages, you might notice that their personal bookkeeping and day-to-day management are faltering. This can be extremely difficult to manage from afar. We can help you assist your loved one by meeting one-on-one to ensure proper planning is in place or up to date, avoiding problems down the road.
Trusts
Trusts are advanced estate planning instruments designed to help an individual minimize estate taxes and avoid the difficulties of probate. The attorneys at Anderson Law Firm are well-versed in determining when a trust is appropriate and which type of trust best aligns with the individual’s goals. Broadly speaking, the most common types of trusts are: a Revocable Trust, an Irrevocable Trust, a Special Needs Trust, and a Testamentary Trust.
Revocable Trusts. A revocable trust is one of the most widely used and versatile estate planning tools, providing flexibility and control. It allows an individual (the grantor) to transfer assets into the trust to help avoid probate. In real estate, a revocable trust can also facilitate transfers without incurring a transfer tax. An advantage of a revocable trust is that it permits the grantor to change the terms of the trust and add (or remove) assets from the trust during the grantor’s lifetime.
Upon the grantor’s death, a revocable trust becomes irrevocable. In the case of a married couple, it becomes irrevocable upon the death of the last surviving spouse. While a revocable trust allows the grantor to change his or her trust during their lifetime, such flexibility also means that assets in a revocable trust may be countable by entities examining the individual’s assets for eligibility to means-based programs, such as Medicaid, and accessible to creditors.
Irrevocable Trusts. The irrevocable trust, while less common than the revocable trust, is also an important tool in protecting an individual’s assets. Unlike a revocable trust, once assets are transferred into an irrevocable trust, the grantor relinquishes all control and ownership of those assets.
The irrevocable trust offers many benefits for an individual, including, but not limited to, asset protection, reduced estate taxes, and inheritance tax exemption. By placing assets into the irrevocable trust, the assets are exempt from the Pennsylvania Inheritance Tax. Additionally, the irrevocable trust protects assets from the beneficiary’s creditors while also removing them from the individual’s estate and from consideration of available assets, if done properly.
An irrevocable trust is particularly useful when the grantor wants to pass assets to beneficiaries who may face financial challenges, who suffer from substance abuse disorders, or who have creditors that could come after their assets. However, unlike a revocable trust, once an irrevocable trust is established, it cannot be changed without significant difficulty and potential court intervention.
Testamentary Trusts. A testamentary trust is a trust created by a client’s last will and testament, and is funded only upon the death of the client. Unlike revocable or irrevocable trusts, which are established and funded during the grantor’s lifetime, a testamentary trust takes effect only after the client’s death. A testamentary trust is typically included in a last will and testament and is commonly used to manage assets when a client has minor children or would like to leave a beneficiary his or her share of the estate in trust for the beneficiary’s benefit. Although testamentary trusts can provide long-term asset protection, they are subject to probate and may entail additional administrative costs.
Special Needs Trusts. A special needs trust is a type of irrevocable trust that protects assets for beneficiaries receiving government benefits, helping them maintain their eligibility for those benefits. There are two types of special needs trusts: third-party and first-party.
A third-party special needs trust is a trust established by an individual other than the beneficiary (typically a family member) for the benefit of an individual who is receiving government benefits. The third party may transfer assets into the trust without jeopardizing the individual’s eligibility for such benefits.
A first-party special needs trust, on the other hand, is a trust established by the beneficiary themselves when they receive a sum of money in their own right to protect their eligibility for government benefits. A first-party special needs trust can only be established if the beneficiary is under the age of 65, and contributions are only permissible to a special needs trust until the beneficiary reaches this age. The funds in a third-party special needs trust do not need to be repaid to the Department of Human Services upon a beneficiary’s death, whereas the funds in a first-party special needs trust do.
Powers of Attorney
A Pennsylvania Durable Power of Attorney is a very powerful document, but it is one of the most important for your Estate Plan. Through the use of a Power of Attorney, you can give your named agent the power to handle your financial affairs in critical times. This power can be used to make handling everyday affairs easier between spouses, to ease bookkeeping matters for an elderly loved one, or even to avoid potentially costly guardianship proceedings. A Power of Attorney can also be key in ensuring your Estate Plan matters are handled appropriately.
Probate Avoidance, Asset Protection, and Tax Planning
With proper planning and guidance, along with the use of other techniques and services we provide, it is possible to avoid the expensive and lengthy probate process and minimize inheritance taxes.
Living Wills and Healthcare Powers of Attorney
The question is often posed: How do you want your medical care handled in an end-of-life situation? Do you want doctors to do everything possible to keep you alive, or do you want them to cease treatment at a certain point?
While difficult to think about, these are extremely important questions to answer while you are in good health. Not only will these documents give doctors guidance to make the right choice based upon your own expressed desires, it will also remove the stress from your family in having to make this decision for you.
Your healthcare agent is someone you choose to follow your written guidance and make healthcare decisions for you. You can name a family member or a friend who is familiar with your beliefs and values to follow your Healthcare Power of Attorney and Living Will and make decisions for you.
As your attorneys, we will help guide you through the difficult but important decisions that are necessary to create a Durable Health Care Power of Attorney and Living Will. We will make sure your wishes are expressed clearly, so there is no room for dispute, and to eliminate the stress often experienced by loved ones.
We are available to our clients during emergencies. Our firm can meet clients at health care facilities or during an emergency. If you or a loved one has been seriously injured and needs to quickly draft a will, financial power of attorney, or medical power of attorney, we can help.
Frequently Asked Questions
Trust, estate, and tax laws are constantly changing. We counsel clients with up-to-date advice to properly plan their estates, protect the assets they build over a lifetime, and ensure their families are protected.
Call us now at 412-209-3200 or contact us to schedule a free, no-obligation conference to assess your needs.
What is the Estate Administration Cost Structure?
The cost for administering an estate is determined by the administration method. Our cost structure consists of either hourly rates, percentage based rates, or simple flat fees.
What happens to my estate if I do not have a will?
- Without a will, the disposition of your estate is determined by the structure of your family.
- For example, if you are married and have no children, but your parents are still alive, your spouse will receive the first $30,000 of your estate. The remaining amount of your estate will be equally divided between your spouse and your parents.
- Another example would be if you were married with children, all of whom you shared with your current spouse. Your spouse would again be entitled to receive the first $30,000 of your estate. The remaining amount of your estate would now be equally divided amongst your spouse and your children.
- Although the laws of the state assume disposition based on relationship, this could create problematic outcomes. For example, if your estate fell under the first example, this may create problems for your elderly parents trying to apply for medical assistance. If your estate fell under the second example, this may create issues if your children are still minors, as minors are not able to directly inherit.
- This is why it is important to ensure you have proper estate plans in place, which our Estate Planning attorneys at Anderson Law Firm are able to assist you with.
What if my kids are minors or if my parents left money to my own kids?
With no Testamentary Trust in place, the Executor will be forced to go through trust proceedings to either set up a restricted account or a Trust that will hold the money for your children. By setting up a simple Testamentary Trust, these court proceedings could have been fully avoidable and the funds could have been accessible to benefit the children.
Do I have to pay the Inheritance Tax or “Death Tax” bill from the Department of Revenue?
Generally speaking, Yes. However, oftentimes there are write-offs or deductions which may be taken to minimize the tax consequences.
Pennsylvania is one of six states with an Inheritance Tax or death tax on inherited assets. Inheritance Tax Returns are necessary even if there is no probate estate. Inherited IRAs, Joint assets, and other assets with beneficiary listings are taxed in most circumstances! Generally, Life Insurance is the only asset for which there is no tax due payable to Pennsylvania.
Will a trust help me avoid probate?
Yes! Generally speaking the creation and funding of trusts are one of the best ways to avoid the court costs and time it takes to probate an estate.
When should I consider setting up a trust?
There are a number of situations in which a trust would be the best way to transfer wealth to your beneficiaries. If your loved one has special needs, issues with substance abuse or addiction, or is irresponsible with money, a trust is an excellent way to provide for your loved one while still ensuring that the funds are protected for your loved one’s benefit.
I want to leave my house to my children without going through probate. How can a trust help achieve this?
A revocable trust is an excellent way to transfer a house to a child without going through probate and without having to pay a realty transfer tax. The client can establish the revocable trust and transfer his or her residence into the trust prior to his or her death. By naming your child as a beneficiary of the revocable trust, your child will receive the house free of probate.
I have property in another state. Can a revocable trust help with probate in another state?
Yes! By placing property you hold in another state into your revocable trust, your loved ones will not need to open probate in the state in which the property is located.
I have a special-needs daughter who is over 65, and I want to leave her money in my will. Can I do that?
Yes! Our office can include provisions for a third party special needs trust in your estate planning documents to make sure that your daughter’s share is held in a special needs trust and she maintains her government benefits.
