Blue Bell Probate and Estate Administration Law Blog

Wise gifting can reduce both capital gains and estate tax

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Tax on Jan 1, 2016.

With the right attention to detail, Pennsylvania families can save a great deal on taxes. This is true in regard to income taxes, and also other types of taxation. The creative use of gifting can help multiple generations avoid excessive capital gains and estate tax burdens. This form of gifting is sometimes referred to as “upstream gifting.” It involves making a gift of real estate to an older relative. This effectively removes the property from the estate of the original owner, which can reduce estate taxes. It can also reduce capital gains tax for the party that will eventually inherit the property from the older relative. When a property is sold, capital gains tax is calculated on the difference between the original purchase price (the “cost basis”) and the final sales price. The higher the basis, the lower the taxes. Basis can be increased by making improvement to the property, but inheritance is an even more powerful tool. When a person passes away, the current market price of the property becomes the new cost basis, and the individual who inherits the property also inherits that “stepped up” basis. So, by gifting property to an older relative, the piece of real estate is removed from the original owner’s estate, thereby saving on estate tax. When the recipient passes away, the property can be handed back down to Pennsylvania family members. They will receive the stepped up cost basis, which will reduce their capital gains tax burden if and when the property […]

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Consider giving loved ones the gift of estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Dec 24, 2015.

This is the time of year when Pennsylvania families gather and reconnect; when they share the things that they are grateful for from the past year and look forward to the next. It is also the perfect time for more experienced loved ones to impart their wisdom and knowledge to newer generations, which is a gift that is beyond compare. For many, integrating estate planning into the holidays is a simple and natural process. One of the most powerful things that parents can do for their adult children is to provide a leg up on estate planning. Often, individuals do not turn their attention to such matters until later in life. If there is an unexpected loss of life, their families can encounter significant difficulty as a result. One way to assist adult children through this process is to pre-pay for the legal services required to get the estate planning ball rolling. This gives the recipient a push to begin the process, which is often just what they need. In many cases, the end result will be a fully formed estate plan, and the peace of mind that comes with having taken care of that goal. As the holiday season comes to a close, Pennsylvania families should consider whether estate planning services might just be the perfect gift. It may be somewhat unconventional, but it is certainly a gesture that conveys love and care. It is also something that many adults have not yet considered procuring for themselves, but if […]

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Avoiding conflict during trust administration

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Trust Administration on Dec 18, 2015.

A great many Pennsylvania residents take a narrow approach to estate planning. They focus primarily on how to pass down assets to their intended heirs, and they give little thought to how to decrease the risk of conflict between family members. When the time comes for trust administration to take place, there can be significant infighting among surviving loved ones. Often, the problem does not lie with faulty estate planning but,instead, with a lack of adequate communication between family members before those plans need to be called into action. By sitting down and discussing these matters with one’s chosen heirs, everyone involved can be clear on the manner in which assets will be distributed. This is also the time to address the reasons behind those decisions. Once those discussions have taken place, it is equally important to revisit the issue any time that a significant change occurs. Failing to do so can result in an outcome that is even worse than never broaching the subject at all. Loved ones may remember exactly what was discussed previously and then cling to those plans against all reason, even if the final estate planning documents contain a different division of wealth. Trust administration is a demanding task, and a Pennsylvania resident asked to fill that role will already have his or her hands full. Adding family tensions to that mix can be too much and can place an undue burden on the person who is the designated administrator. The best way to avoid […]

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Online storage can help with estate administration

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Administration on Dec 11, 2015.

After a loved one passes away in Pennsylvania or elsewhere, the person or persons entrusted to manage the estate will step into a very important role. Estate administration can be a challenging process and involves a number of important tasks. The first step in fulfilling that role is to access the full range of planning documents so that the provisions laid out within them can be undertaken. In many cases, finding estate planning paperwork is not a simple matter. Many people fail to talk about where these important documents are stored. In some cases, family members think that the documents are in one place, but are unaware that their loved one changed the storage location, began working with a new estate planning attorney or made other changes to the existing plan. A solution lies in online storage. There are a number of companies that offer these services, and consumers have a wide range of choices. Some companies offer a complete document storage option, and they will even guide clients toward additional estate planning approaches. Others serve as a simple go-between to notify loved ones of where the paperwork is stored when the time comes. The differences between various services give families the ability to find a solution that works for their particular set of needs. Online document storage can give loved ones the tools they need to begin the estate administration process. As technology improves, so will the options for online storage. For now, many in Pennsylvania view these tools […]

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Estate planning is not just for the rich or elderly

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Dec 4, 2015.

Many young people in Pennsylvania and elsewhere do not want to think about end-of-life matters, which is understandable. It can be a depressing thought, and too many people do not feel it is anything they have to worry about until later in life. However, these younger individuals may find that estate planning truly does have its place and could be very beneficial for them in the long-run. When younger generations think about estate planning, they often think they need to have a lot of assets or that they need to be older before it really matters. Estate planning, however, is not something that is just for the rich or elderly. This type of planning is about more than just deciding who gets one’s assets after he or she dies. An estate plan can include very specific instructions regarding health care, disability and long-term care in the event of incapacitation. One can name a representative who will be responsible for making any medical or financial decisions on his or her behalf. This can help prevent any arguments among family members and can ensure one’s final wishes are honored. Of course, making a plan for assets is important as well regardless of one’s current financial status. Taking this step will ensure that strangers are not the ones deciding how one’s assets are distributed. While estate planning may seem like something that is okay to put off until later in life, Pennsylvania residents of all ages could benefit from the protections that having one […]

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Storage and protection of digital assets in estate planning

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Nov 27, 2015.

The topic of digital assets has been covered in depth, both here and in the wider media. Often, the discussion has focused on preserving personal items, such as photos, so that one’s heirs can enjoy those assets once a loved one passes on. A recent article takes a different approach to digital assets and estate planning and considers how to handle online assets that have a considerable value. The topic may be of interest to many in Pennsylvania. A prime example would be a photographer who has spent a lifetime amassing a body of work. Suppose that photographer has been selling images, either through direct sales, client assignments or via stock photography. The collected works of such an individual could be worth a considerable amount of money, and would likely be of interest to surviving loved ones. Without the proper planning, family members can be left with little or no ability to access these types of digital assets. This means that they would also have no way to monetize such a collection or to determine how to address issues of marketing, storage or valuation. As with so many estate planning matters, the key to success is working with loved ones to inform them of the presence of such assets, as well as instructions on how to handle the eventual disposition of a collection of digital assets. In addition, some families may choose to create a back-up storage source for valuable digital assets. This can take the form of an external […]

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Estate planning beneficial at any stage of life

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Nov 13, 2015.

Estate planning is often neglected, as people in Pennsylvania may prefer not to talk about death, or they become wrapped up in their busy lives. However, estate planning is designed to assist people with managing and preserving their assets while they are alive. Estate planning additionally enables people to control and conserve their assets’ distribution following their deaths. What an estate plan looks like depends on one’s wealth, health, lifestyle, goals, life stage and age. Incapacity has the potential to impact a person at any time. Thus, it is wise for people over the age of 18 to have a durable power of attorney. This document allows people to name others to manage their property for them in the event they become incapacitated and, therefore, cannot do this themselves. People who are young and not married would benefit from putting a will together. If they fail to do this, any wealth — no matter how little — that they leave behind if they die will most likely go to their parents. This may not be what one wants to happen. With a will, a person can let his or her possessions go to anyone he or she chooses, such as a favorite charity, other relatives, siblings or even a significant other. With a will a person can posthumously control what happens to his or her valuable assets. This ensures that the person’s wishes are met and that the intended beneficiaries receive the desired assets. Proper legal guidance may help people […]

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Estate planning beneficial at any stage of life

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Nov 13, 2015.

Estate planning is often neglected, as people in Pennsylvania may prefer not to talk about death, or they become wrapped up in their busy lives. However, estate planning is designed to assist people with managing and preserving their assets while they are alive. Estate planning additionally enables people to control and conserve their assets’ distribution following their deaths. What an estate plan looks like depends on one’s wealth, health, lifestyle, goals, life stage and age. Incapacity has the potential to impact a person at any time. Thus, it is wise for people over the age of 18 to have a durable power of attorney. This document allows people to name others to manage their property for them in the event they become incapacitated and, therefore, cannot do this themselves. People who are young and not married would benefit from putting a will together. If they fail to do this, any wealth — no matter how little — that they leave behind if they die will most likely go to their parents. This may not be what one wants to happen. With a will, a person can let his or her possessions go to anyone he or she chooses, such as a favorite charity, other relatives, siblings or even a significant other. With a will a person can posthumously control what happens to his or her valuable assets. This ensures that the person’s wishes are met and that the intended beneficiaries receive the desired assets. Proper legal guidance may help people […]

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Proper planning can help avoid probate litigation

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Probate Litigation on Nov 6, 2015.

Not every Pennsylvania family is in line with the Norman Rockwell-inspired ideal that many people aspire to. In reality, it is probably more common for families to have a blend of different personalities and approaches. While this diversity can create an interesting and entertaining sibling environment, it can also lead to serious contention when one or both parents pass on. The best way to avoid conflict and the potential for probate litigation is to take a proactive stance in regard to estate planning. This is especially true when it comes to real estate. There are a number of options that a family can choose from in determining how to hand down one or more pieces of property. For couples, joint tenancy is a solid choice. Under this plan, both spouses own equal shares of a piece of real estate; when one dies, the other will inherit his or her share, leaving that party in full possession of the property. From that point forward, a new decision must be made as to how the property will pass down to children and grandchildren. Tenancy in common is an attractive choice for many families as it helps to ensure that property remains within the family. Under this approach, individuals can own unequal shares in a property, and that ownership can be granted at different times. When one owner dies, his or her share is divided equally among the surviving parties. No matter which approach is chosen, the key to estate planning success involves […]

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Will digital wills become the next estate planning norm?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Oct 30, 2015.

For many in Pennsylvania, technology has become an integral part of everyday life. People turn to the digital realm to find recipes, connect with friends and family, and find videos on how to repair our vehicles. It should come as no surprise that technology can also provide estate planning solutions, although there is some debate over the wisdom of relying too heavily on such new tools. Digital wills have received a great deal of attention recently. These estate planning tools allow users to create a comprehensive estate planning package then upload those documents to be stored online. This means that when the time comes to turn to those documents, loved ones will be able to access all of the information they need in one central location. This appeals to many who worry that their important paperwork could be lost due to fire, flood, theft or other calamities. Some worry that their loved ones will simply be unable to find the documents when the time comes. Others are concerned that heirs might experience high levels of stress over the possibility that some documents might be missing. When considering digital wills, it is important that Pennsylvania residents understand that there are potential drawbacks to these tools as well. For one, there are issues of security to think about as estate planning documents contain a wide range of personal and financial information. Also, if the company that provides the online storage goes out of business, clients could be left with no ability to access […]

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