Category: Estate Planning

Parents as intestate heirs or ‘No, really, where have you been?’ p2

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Mar 9, 2015.

Parents should not outlive their children, but it happens. A car accident, a terminal illness, a congenital anomaly, a drug overdose — the world is a dangerous place, and life is fraught with risks. Parents try to keep their children safe and to teach them how to protect themselves from all the bad things that can happen. Parents cannot, however, turn back the clock or take the child’s place in that car or in that examination room. In our last post, we were talking about actor Cory Monteith’s lack of an estate plan at the time of his death in 2013. The rules of intestacy dictate that his parents will take equal shares. However, his mother pointed out in court documents that his father had been absent from Monteith’s life for more than a decade. Monteith was 9 years old when his parents split; his father did not pay child support and did not spend time with the boy. They reconnected before Monteith died, but, according to his mother, that was not enough. His father agreed and relinquished his share of the estate. Pennsylvania law has some strict laws about what a parent must do in order to qualify as an intestate heir. The state has limited those behaviors, however, to periods of one year or greater. If a parent walks out in January but comes back from Christmas, he or she could still inherit. First, a parent must support the child or, at the very least, not desert the […]


Naming beneficiaries isn’t as easy as it sounds, p3

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 20, 2015.

The weather in the Philadelphia area has not been as bad as last year, but we are still having a tough winter. Icy roads, multi-vehicle pileups, and a general sense of gloom this past weekend had many of us curled up at home with a book or a good movie. Not that there’s anything wrong with that, but wouldn’t those hours have been the perfect time to review and to update your beneficiary forms? For people with small children — or a dog, for that matter — winter weather probably means cooped up rather than curled up. If you were thinking about beneficiary forms while trying to entertain the little ones, perhaps you had an epiphany; perhaps you realized that, if you passed away while your children were still young, they would have a little trouble managing their inheritance. And that brings us to another mistake people make when designating a beneficiary. Mistake #3: Not naming a guardian for young children. This is an easy mistake to make, but, again, the consequences may go exactly counter to your intention. Say you name your children as beneficiaries, but you die before they turn 18. If you have not appointed a guardian, the court will appoint one for you. Remember, there is no default, go-to relative in these cases. The court considers all the facts and makes a decision that could be the last thing you wanted. Naming a guardian can, as one financial planner told us, keep the money out of […]


Naming beneficiaries isn’t as easy as it sounds, p2

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 16, 2015.

You can think all you want about how you want your property distributed after your death. You can talk and talk about who will inherit your retirement accounts or who is the beneficiary of your life insurance policy. None of it will mean a thing if you don’t tell the bank or the insurance company what you want. They need to know, perhaps more than anyone, what will happen when you die, and they generally ask for that information on a beneficiary election form. Just naming a beneficiary, though, can put the insurance payout in the wrong person’s hands. Some mistakes can dramatically reduce the amount of money that goes from the bank to the beneficiary. There are common mistakes that we can all easily avoid. Mistake #2, continued: Not establishing financial controls. We left off in our last post talking about what can happen if you hand an irresponsible loved one even a moderate amount of money. The risk that the money will be wasted is only compounded by the fact that some assets will be added to the estate and, so, subject to Pennsylvania and federal taxes. One solution is to establish a trust and name that trust as beneficiary. In the trust document you can specify who will get distributions. It is also possible to specify when the beneficiary will get the distribution — say, his 21st birthday or the day she graduates from medical school. The trust will keep the funds out of the probate estate, […]


Naming beneficiaries isn’t as easy as it sounds

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Jan 10, 2015.

Now that the holidays are behind us, we can circle back to our discussion about naming beneficiaries for your 401(k) retirement accounts and life insurance policies. The title of this post is not exactly right: It is easy to name a beneficiary. It is also easy, however, to leave critical information out. And, as we said in our Dec. 16 post, a mistake here can mean the money you wanted your children to have will go instead to your ex-husband. Naming your children as beneficiaries is a little more complicated if they are minors or if you think they may not be good with money. Did they save their allowance or spend it right away? Do they share your values when it comes to, for example, college or homeownership? For a number of reasons, estate planning professionals recommend thinking twice before filling in your children’s names and filing the beneficiary form away. Mistake #2: Not establishing financial controls. Remember, your beneficiary will get a pile of money with no restrictions on how it should be spent or when it should be distributed. Philadelphia must have its fair share of 18-year-olds who would blow a windfall on a sports car when you had hoped she would use it for college or the down payment on a house. Without putting any controls in place, that kid — a legal adult — could go through the money in a day, rather than thinking of it as an emergency fund or the seed funds […]


No, really, where was I? Back to naming beneficiaries for IRAs

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Dec 16, 2014.

In our Nov. 20 post, we promised to review some tips about IRA beneficiary forms. As we said then, this is the time of year when people tend to take care of these things. We quickly review our beneficiary designations when we sign up for employer-sponsored benefits — 401(k)s, life insurance, etc. — or we glance at them as we plan for the coming year in the wake of a year-end salary review. These details are easy to breeze by, but they are the most important part of those accounts and policies: Our objective is to save as much as we can for our retirement and for our loved ones after we’re gone. If we don’t name the right beneficiary, our hard-earned retirement accounts could empty into the pocket of someone we haven’t spoken to for 10 years. Take a few minutes away from the Philadelphia winter, and curl up with your account information and beneficiary forms. If you keep the following tips handy, you may avoid the kinds of mistakes that mess things up for the next generation. Mistake #1: Naming your estate as beneficiary. We know plenty of people who wait until they have all of the necessary information before they put anyone down as beneficiary. Bob is unmarried and childless, so he wants his cousin to be his beneficiary. The form includes a field for the beneficiary’s Social Security number, but Bob doesn’t have it. He leaves the form blank, fully intending to take care of it […]


Estate planning for those who are unmarried

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Dec 10, 2014.

When considering estate planning, many Pennsylvania residents focus on creating a system to handle the distribution of their accumulated assets to one’s chosen heirs. However, this focus is not universal, as there are many individuals who are unmarried and have no children. For these individuals, estate planning needs take a different form, and they often center on making sure that one’s end-of-life needs are taken care of. This involves the creation of a set of documents that assign various responsibilities to carefully selected individuals. Among these is an advance health care directive, which clearly outlines the type of medical treatment that an individual wants to undergo in the event of a serious illness or injury. These planning tools can be general, such as stating that one does not wish for excessive lifesaving methods to be employed if there is no chance of extending a high quality of life. These directives can also be incredibly detailed, allowing individuals to list specific treatments to which they do not want to be subjected. Another type of directive is the designation of a health care power of attorney. This is a document that lists the name(s) of the person(s) tasked with making one’s health care decision in the event that an individual becomes incapacitated. The same level of responsibility can be assigned to financial matters through the use of a general power of attorney. Single Pennsylvania residents should consider how to structure a simple estate planning package that meets their unique needs. End-of-life planning […]

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Reasons to avoid last minute estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Dec 2, 2014.

When considering how to structure one’s final wishes, there are a number of valid reasons to take care of such matters long before the needs arises. That said, many in Pennsylvania will postpone the creation of an estate planning package far too long, under the assumption that there will always be time to address these matters. In reality, however, time is something that none of has has any control over, and the events that define our lives often play out without our active participation. When it comes to estate planning, waiting to the last minute can lead to a poor outcome for those left behind. Consider, for example, an individual who is unexpectedly diagnosed with a terminal illness. Upon hearing such news, the normal course of one’s life will be immediately and forever altered. Attention will turn to making important medical decisions, as well as organizing end-of-life care. Most importantly, spending time with loved ones will become a top priority. For those who have to add estate planning to this list, an added level of stress will result. As with all significant decisions, incorporating a high degree of stress and pressure is not the best way to create an estate plan that meets an individual’s goals. It is easy to become wrapped up in the moment and make choices that are not rational or fully thought out. In addition, going through medical procedures and taking various medications can also have an impact on one’s decision-making. This leads to a final […]

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Now, where was I … oh, yeah, estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Nov 20, 2014.

We cannot think of a single person we know who is perfectly calm at the holidays. Look around, wander through Center City and watch how people move. We wager they all have a lot on their minds and are feeling pressured to get everything done in time. Busy lives get a little frantic this time of year. It’s the joy of the season. When you think about it, then, the holidays may not be the best time to sit down and fill out forms for your estate plan. There are times, though, when it just needs to be done. This is the time of year, for example, that employers decide to fling wide the doors of benefits enrollment. And, while many believe that just means health and dental insurance, open enrollment often includes looking at 401(k) contributions. Any time you review your 401(k) contributions and investment options, you should really take a look at all of your other retirement accounts. They are all part and parcel of your estate plan, after all. It is never a bad idea to look them over in aggregate to make sure you are prepared for your retirement and to make sure your assets will go to the right people when you pass away. As you are updating your IRA beneficiary form, you may want to keep a few things in mind. You may be busy preparing for your in-laws to visit; you may be keeping an eye on flight delays while you wait for […]


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