Often people will ask me if their assets are large enough to justify an estate plan. The simple answer is that if your life never changes, if you never get ill, if your assets never change and if your children’s lives are worry free, you might not need an estate plan. Otherwise, if your life is like the rest of ours, you will benefit form an estate plan. It might not be a complicated plan, but the chances are that even a simple estate plan will provide you great benefits.
A Will is a legal document which:
Specifies the beneficiaries who are to inherit your assets either outright or in trust.
Names a representative (an executor or personal representative) to administer the estate, pay your debts and any taxes and then to be responsible for distributing your assets to the beneficiary or to a trustee.
Nominates a guardian for your minor children.
All your assets are included in your estate. For estate planning purposes, your estate includes all the assets that you own at your death that could be used to pay your debts. This would include things that you own in your own name or things that you own jointly with others, including real property and bank accounts. It also includes your personal property, such as jewelry, cars or furniture. Your assets may also include your qualified plans (IRAs, 401ks, etc.) and life insurance, assets that you typically would have beneficiary designations.
Rich or poor, everyone needs to designate a person to manage assets or make medical decisions in case of incapacity. No matter what your age, you could become ill or have an accident. If you were unable to pay your bills or decide which medical treatment to receive, who would have that power? Working through that decision and then signing a General Durable Power of Attorney and a Medical Power of Attorney is the bare minimum estate planning everyone should accomplish.
A Will is a legal document that specifies the beneficiaries who are to inherit your assets either outright or in trust. It is a good idea to consider the possibility that any beneficiary that you name in your will might die before you. If so, you can name an alternative beneficiary who will receive the asset.
If you are the executor or administrator of a Pennsylvania estate you will need to file a Pennsylvania Inheritance Tax Return.
If you are not familiar with the Pennsylvania Inheritance Tax, this return can be rather difficult and confusing.
The Bucks County Register of Wills has bowed to popular demand and the changing electronic (and plastic) world in which we live. As of February 2014, the Bucks County Register of Wills will accept credit cards. This means that when you are filing a Will for probate at the Register of Wills, you no longer need to use your personal funds to cover the cost until you can obtain Letters allowing you to access the deceased’s accounts. By using your credit card, you can now obtain the letters and have your estate planning lawyer access the accounts and free up the funds to cover the cost before the card payment comes due.
Whenever a fiduciary files an Orphans’ Court Accounting, whether the filing is by an Agent under a Power of Attorney, a Trustee of a Trust or the Executor of an Estate, a person interested in that accounting has a handicap. The person filing the accounting has all the information; the beneficiary has only what the fiduciary has given them.
Interested persons do have a right to object to an accounting, but if, for example, the beneficiary does not have access to the bank statements, how exactly does the beneficiary know if the charges reflected on the accounting are accurate?
Robinson Estate: Discovery in an Orphans’ Court dispute can be tricky to understand. Read Peter Klenk’s new article dissecting a real, Pennsylvania Orphans’ Court case that ruled on a subtle discovery issue. Reviewing a real case can help you understand rules that otherwise are difficult to follow.
Tax Returns for Pennsylvania Estates and Probate: If you are the executor of a Pennsylvania estate, you are responsible for filing all required tax returns. This will likely include the deceased’s last personal income tax return, both Pennsylvania and federal for all income from January first through the date of death. These are Forms 1040 and PA-40. If after the date of death the estate had income, for example from a bank account, stocks or rent, the estate will also need to file a federal and states income tax return. These are Forms 1041 and PA-41. Beyond income tax, you will also file a Pennsylvania Inheritance Tax Return (Form 1500) and you might have to file a Federal Estate Tax Return (Form 706).
