Monthly Archives: May 2015

A generation-skipping trust can eliminate estate tax

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Tax on May 29, 2015.

When a Pennsylvania family has concerns over how their wealth will be passed on after their death, a number of solutions are available. One is the creation of a generation-skipping trust, which allows a family to pass wealth down to their grandchildren while also providing value to their adult children. This type of trust also protects the wealth from the estate tax, which is a big draw for many families. When creating a generation-skipping trust, adult children can be granted the ability to withdraw any earnings that the trust makes, while leaving the base of wealth in place for their own children. When the time comes for the grandchildren to inherit, they will do so without incurring the estate tax. It should be pointed out that the earnings from a sizable trust can be significant, giving adult children a valuable stream of income. Creating and funding generation-skipping trusts is also a great way to protect an inheritance from losses that can accompany divorce or legal troubles. Because the base wealth is owned by the trust itself, and not the heirs, that wealth is protected from seizure through divorce or legal judgments. This provides an added layer of security for Pennsylvania families that wish to provide for their grandchildren. Generation-skipping trusts are just one way to ensure that loved ones receive their intended inheritance and avoid the estate tax. There are numerous other options that will also meet that goal. Each Pennsylvania family has a unique set of estate-planning needs and […]

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Helping business owners plan for the future

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on May 18, 2015.

Business owners often put their heart and soul into their business. Thus, for many business owners, their business represents not only a big financial investment, but also a big emotional and personal investment. Consequently, business owners often care very much about what will happen with their business when they retire, become no longer able to run it or pass away.  Thankfully, what will happen to a business in such circumstances is not something a business owner has to simply leave to chance. Advanced preparations can be made to set up what will happen in such an event. The process of making such preparations is called business succession planning.  Businesses are often remarkably complex things with all sorts of different moving parts and things to consider in connection to them. Consequently, business succession planning can also be quite complex and touch on a myriad of issues. How these various different complex issues are addressed in a business succession plan can have the potential to have significant future impacts on a business owner and their business.  Our firm is committed to using our extensive legal experience and business succession planning knowledge to help guide our business succession planning clients through the process of developing a succession plan. We understand how important having a good succession plan in place can be for a business owner and how to go about addressing the various complex issues that can arise in connection to business succession planning, and we strive to help business owners with forming […]

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To sleep, perchance to dream – but where, and for how much? p3

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Long Term Care Planning on May 17, 2015.

As we have said — and as most everyone knows — part of an estate plan is preparing for retirement and the health issues that come with age. It’s hard to plan for the next generation if you haven’t already planned for this one, so understanding some of the issues that are facing retirees now should help as we deal with aging loved ones or face our own later years. We have more options these days when it comes to caring for the elderly. Nursing homes are still around — and more expensive than ever — but there are also assisted living facilities and home care programs, too. One deciding factor is certainly the level of care necessary. Another, unfortunately, is the cost of care. To develop an effective plan for those years, you have to understand what the payment options are. Perhaps the least attractive is paying out of our own pockets. Some of us will rely on long-term care insurance when the time comes. What we may not realize is that the policy may not cover less expensive care, like home care. It is easy to assume that Medicare will pay for everything, but there is no such guarantee. Medicare is just as complicated as every other type of health insurance, laden with conditions and exceptions. For example, Medicare covers home health care only if the patient’s medical team also requires visits from a “higher ranking” health care worker like a registered nurse or physical therapist. Custodial care […]

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To sleep, perchance to dream – but where, and for how much? p2

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Long Term Care Planning on May 2, 2015.

We are picking up the discussion about nursing home and home care expenses started in our April 17 post. It almost goes without saying that none of this care is getting any cheaper. The question for older individuals and families — or, for that matter, younger people putting together an estate plan — is how much will those costs increase between now and when they’re needed? Genworth Financial Inc., an insurance company that sells, among other things, long-term care coverage, recently released a study comparing the costs of nursing home care, adult day care, assisted living facility care and home care. According to Genworth’s analysis, the cost of nursing home care has increased by 4 percent every year over the past five years, landing at a nationwide median of more than $91,000 a year for a private room. Pennsylvania outpaces the national median. Nursing home care here increased 5 percent year-over-year. A private room now costs $113,150 (again, median) per year. In Philadelphia, it’s even higher: $127,750 annually. Other care arrangements are less expensive, and the difference offers a good deal of food for thought. If your care will cost more than $125,000 a year in a nursing home, for example, you may want to talk with family and your health care team to determine if that level of care is really necessary. An assisted living facility in Philly would cost $58,626 annually; home-based care would cost a little less, and adult day care would run to about one-third the […]