Category: Estate Planning

A dual-pronged approach to marital and estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on May 26, 2016.

Planning for the future is one of the most savvy moves that any Pennsylvania resident can make. This is true in regard to personal financial planning, and also for estate planning. One approach helps to ensure that assets are protected during one’s lifetime, while the other ensures that those assets are handed down in the manner of one’s choosing. One way to combine those efforts is to think about the risk that an heir could lose a sizable portion of his or her inheritance. Divorce represents the most significant risk, as statistics show that many marriages will not stand the test of time. If proper precautions have not been taken, an inheritance could become part of the property division process. A great way to protect an inheritance is to hand down assets in trust. A well-drafted trust can ensure that the beneficiary does not actually “own” the assets placed within the trust, even though he or she can benefit from those assets. The trust itself will be the actual “owner” of the assets, which can protect the wealth held within from attack from outside. An additional layer of protection can be obtained by encouraging one’s heirs to draft a prenuptial agreement prior to walking down the aisle. Within that agreement, it is possible to state that any inherited wealth would be excluded from the property division process. The combination of proper estate planning and a premarital contract can effectively shield an inheritance from loss, and can help ensure that Pennsylvania […]


Another reason to add life insurance to estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on May 13, 2016.

Many Americans think of insurance policies as safeguards against the unpredictable nature of life. There are policies that can help pay for health care, auto repairs and damage to one’s home. Purchasing insurance is required when a home or vehicle is financed, and many in Pennsylvania purchase other types of coverage simply to have a degree of peace of mind. When it comes to estate planning, there are certain types of insurance that should be considered. It is estimated that as many as seven out of 10 people who are nearing the age of 65 will eventually require some type of long-term health care. However, only one out of 10 people have purchased long-term care coverage to help with that expense. The reason why many people shy away from long-term care insurance is the fact that there is no benefit from such a policy unless the policyholder ends up having to seek long-term medical or nursing care. Often, people are more comfortable buying a life insurance policy that will ensure that their beneficiaries are taken care of after the policyholder has passed on. What many people don’t know is that there are life insurance policies available that include a long-term care rider. This means that if the policyholder ends up needing long-term care, the death benefit can be accelerated and can be used to help fund a move into a long-term care facility. Best of all, if the policyholder does not end up needing long-term care, then the full value […]


Estate planning changes increase exemption amount

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on May 6, 2016.

Many Pennsylvania residents have heard that Congress has raised the estate tax exemption threshold to $5.45 million for 2016. That means that individuals who have amassed less than that amount will be able to pass that wealth down to their chosen heirs free from estate tax. This estate planning change is welcome news for some, but others feel that the increase is not large enough. Regardless of where one stands on the matter, the news serves as a reminder of the need to review one’s existing plan. Married couples can still double the exemption amount, bringing them up to $10.9 million. Any assets that exceed that amount will be subject to estate taxes, which can significantly reduce the amount of wealth that is able to be handed down to heirs. In order to protect additional wealth from excessive taxation, a detailed estate planning strategy is required. For many people, the best course of action is to transfer wealth into one or more trusts. A trust is an excellent way to remove wealth from one’s taxable estate while also protecting that wealth from loss due to court awards, liens, bankruptcy and divorce. There are a multitude of trusts available, and these financial tools are highly customizable. For those in Pennsylvania who have already worked out an estate planning package, news of the recent increase in the estate tax exemption may prompt a review of those plans. In many cases, estate plans can be streamlined or simplified. The process of planning for […]


Did Prince fail to create an estate planning package?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Apr 29, 2016.

Very few Pennsylvania residents will have escaped media coverage of the passing of one of America’s great performers. When Prince died recently, his family was thrown into the chaos of having to sort through his affairs, as is the case for so many families who experience a sudden loss. It appears that the musician did not have an estate planning package in place, as one of his siblings has asked the court to assign a special administrator to begin working on the process of sorting out Prince’s estate. Prince was known around the world for his music and showmanship, and his work has stood the test of time admirably. He is also famous for his vehement assertion that artists must take care to maintain control over their own body of work. He fought bitterly with his record label to wrest control over his music, and he advised younger musicians to do the same. However, it seems as if Prince failed to protect his work from loss after his death. If Prince did not create a will or other estate planning documents, as suggested by one of his siblings, his estate will be handled according to the laws of his state of residence. As Prince was unmarried and had no children, his fortune is likely to be divided among his six surviving siblings and half-siblings. However, there is another aspect of his estate that could cause contention. The Internal Revenue Service has an interest in how Prince’s estate is handled. When […]


Creative estate planning for second marriages

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Apr 22, 2016.

One of the most interesting things about estate law is the fact that no two Pennsylvania individuals or families will share the exact same set of needs when it comes to planning their estates. Estate planning is incredibly flexible and easily customizable. There are options available to suit a wide range of goals and priorities.  Consider the example of a man who has built a successful business and is preparing to marry for the second time. He has two children, only one of which is involved in the family business. He wants to provide for both his new wife and his kids in the event of his death, but he is unsure how to balance the needs of everyone he loves. This scenario requires a careful touch, but a solution can be found in a multiple-step planning approach. First, the man can transfer his business to the child who is involved by means of an intentional defective trust (IDT). This removes the business from the estate and ensures that it will end up where the owner intends. Best of all, the owner can retain control over the business during his lifetime and will incur no income or capital gains tax from the transfer. The child who is not a party to this transfer can be accommodated in the estate plan by being given a larger share of other assets. Next, the man creates a qualified terminable interest property (Q-TIP) and transfers all significant assets into that vehicle. He creates a […]


Estate planning tips for Pennsylvania business owners

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Apr 14, 2016.

Many Pennsylvania residents will spend a great deal of time and effort building and growing their businesses. Determining what will happen to their business once they have passed away is a primary concern for many business owners, especially as they near retirement or advance in age. There are many estate planning tools that can help a business owner guide the way that his or her venture will be handled once the owner is no longer there to direct the course. One of the most powerful tools that is available to business owners is a grantor retained annuity trust, or GRAT. These trusts allow business owners to transfer assets into the trust. Those assets will then be “owned” by the trust, which means that they will be effectively shielded from taxation. In the meantime, the business assets will continue to appreciate in value. The trust is set up as an annuity, giving the donor (the individual who funded the trust) the ability to receive payments from the trust for a predetermined period of time. Once that period of time has passed, the assets held within the trust pass on to the named beneficiaries, free of gift tax. However, if the donor passes away before the predetermined period of time has passed, then the assets will become part of his or her estate. That eliminates the opportunity to avoid gift taxation, which makes it important to choose the timeline carefully. Grantor retained annuity trusts are only one tool that is available to […]


Who can make a will in Pennsylvania?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Apr 6, 2016.

Here in Pennsylvania, a vast majority of adults are eligible to make a will. Under state law, there are only two requirements a person has to meet in order to be allowed to make a will.  The first is an age requirement. To be eligible to form a will, a person must be 18 or over. The second requirement regards mental capacity. A person must be of sound mind to create a will. As a note, these are just the requirements for who can form a will, there are other requirements regarding what needs to happen for a will an eligible person formed to be legally enforceable. Given the very small number of personal eligibility requirements for wills, individuals in all different sorts of life circumstances have wills as an available estate planning option. Also, having a will is not something that is only useful for certain limited groups of people. Having one’s wishes regarding the after-death treatment of their assets and other important matters in a legally enforceable form can be a helpful thing for individuals in all different kinds of life circumstances. So, the range of people who can form a will and for whom having a will can be helpful is very wide indeed. However, this does not mean that personal circumstances are irrelevant when forming a will. A person’s unique situation (such as their family situation and their particular goals) can greatly affect what sorts of will terms they may want to include when forming a […]


Is it time to take the “estate” out of estate planning?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Mar 25, 2016.

Think about the word “estate.” Does that word conjure up images of a stately home atop rolling hills, perhaps with a few horses grazing and a massive iron gate? Many people in Pennsylvania have their own version of what an estate entails, and very few consider the word in its proper definition. An estate is nothing more than the body of assets that an individual has acquired at the time of his or her death. No two estates are ever exactly alike, just as no two people share the same set of estate planning needs.   An individual’s estate might include a home, as well as all of the contents within. Some people have retirement savings that will be included in their estates. Others have life insurance policies, investments or valuable collections that would make up part of their estates. The contents of one’s bank account, the contents of one’s computer files, even the contents of one’s wallet are all part of one’s estate. In order to pass those assets down to loved ones, it is necessary to create an estate plan. This is nothing more than the set of instructions provided to the individual(s) who will be tasked with distributing those assets when the time comes. Some people will require a very complex estate plan, while others can get by with a simple will and a few incapacitation documents. No matter how simple or involved one’s estate, it is imperative to make plans for those assets. Without an estate […]


Estate planning tips for caregivers of aging parents

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Mar 18, 2016.

Much has been said of the Baby Boomer generation and the impact that this set of Americans will have on the nation’s economy. As Boomers age, many will face an unusual set of needs in regard to estate planning. Addressing those needs takes a careful and considered approach, guided by the fact that no two Pennsylvania families are exactly alike and that a tailored solution provides the best possible fit. As many Boomers age, they will assume responsibility for caring for their own aging parents. Some will take their elderly parents into their own homes to provide care, while others will find suitable residential care options. Caring for aging parents is a loving and admirable choice, but it also creates a unique set of financial needs. Should the caregiver predecease his or her parents, how would that level of care be continued? Some Boomers will purchase life insurance policies with the intent of funding continuing care for their elderly parents. Others will create trusts that will serve the same purpose. There are a number of ways to ensure security for loved ones, and a customized solution is available for virtually any set of needs. Anytime that an individual assumes responsibility for the care of another, those responsibilities extend to a number of potential circumstances. In regard to aging caregivers in Pennsylvania, there is a need to provide a means of continuing care in the event that the caregivers pass away before their loved ones. In many cases, that level of estate […]


Finding answers to questions re estate planning in Pennsylvania

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Mar 11, 2016.

Most Pennsylvania residents understand the importance of clearly stating their wishes in a legally enforceable fashion to protect their assets and provide for their families in the event of their own deaths. The estate planning process can be complicated, depending on individual circumstances. It is not uncommon to have legal questions when determining how best to prepare a thorough plan. Minimizing risk and avoiding potential family conflict are matters of importance often considered by those who wish to develop estate plans. An experienced estate attorney can offer guidance as to how to avoid probate litigation or secure a plan for a blended family. Issues involving taxes, business succession, wills and trusts are also pertinent to a discussion regarding thorough estate planning. At Kaplin Stewart Meloff Reiter & Stein, P.C., our clear understanding of the law enables us to provide effective representation to clients throughout the state. Because every family situation is unique, we strive to customize our service to meet the particular goals of each client. Whether you are single, a business owner or married many years and simply wish to plan for the future, we are prepared to answer your questions and help you explore all available options toward executing a solid estate plan. Though many Pennsylvania residents avoid discussions regarding their own mortality, or the possibility of becoming incapacitated, it is crucial to consider such issues if one wants to be as prepared as possible and protect the best interests of one’s family. By calling Kaplin Stewart Meloff […]


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