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Sep 07
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Fully Fund or Even Over Fund a #529 Plan Account?

By Estate Planning, Food for thought, Wills

If you have the means, and want to support your kids’ or grandkids’ educational efforts, I would consider funding or even overfunding 529s for them.

If you use a 529 plan, and you use the Pennsylvania plan, it escapes inheritance taxes and grows tax free if the money is used for education for as long as the money is in the plan. Now that means, you might want to consider funding it more fully than it might have been in the past or fully funding it if you can keep it in the plan for a long time.

It’s tricky with education because you don’t know how much they’re going to need because few pay the sticker price for private schools, and you don’t want to overfund it because it is stuck with education; but if you think about it, if you do have the means, and you have enough for your own retirement and are otherwise secure, if there’s more in the child’s plan then they need and there’s money left over, that money can stay in that plan and then you can change it to another beneficiary, like say their children, and grow tax free and compounding for a generation.

That can really have a nice snowball effect, it might even be able to keep up with the cost of college inflation! Anyway, it’s not something that a lot of people can think about or do, but it’s something that I’ve been thinking a lot about the past couple months and I think for some, it’s something to consider. Think about full funding your 529 fully or even putting in more than you necessarily need. Again, if your retirement is secure and you don’t otherwise need the money. You could get some great tax and investment gains out of that.

Aug 24
Love0

You do Estate Planning for Your Loved Ones

By Estate Planning, Food for thought

Recently I was talking to a friend of mine who lost his dad and we talked for a while, as I had known his dad and we shared some stories.

He then started talking about all the stuff he must go through to settle his dad’s estate and finish up his affairs. It really struck me then, more so than any other time, that you do your Estate Planning because it’s something you’re supposed to do sure, but you really do it for your loved ones, your heirs, the people who are going to be left behind putting your affairs in order and transferring them to your beneficiaries.

Keep that in mind when you update your Wills and other documents and when you update everything that you have for them, like the organization of all your stuff.

Make sure your heirs know where they can find your things, make sure they know where to find passwords or they know where everything is.

You don’t necessarily have to tell them everything, although that might be really helpful, but make a nice list and make it easy for them to find and tell them where to find it. It’ll make things much much easier, and they’ll be going through something that is very hard when you pass, and if you can make it a little bit easier and do this, then it’s a great service you can do for them.

Aug 13
Love0

Ask an Elder Law Attorney – What can I do if my elderly parent is losing the ability to make decisions and manage his or her affairs?

By Elder Law, Estate Planning

Ask an Elder Law Attorney – What can I do if my elderly parent is losing the ability to make decisions and manage his or her affairs?

By Joellen Meckley, Esq.

Here are three things you should keep in mind:

  1. The best time to plan is now. Oftentimes, mental decline in old age does not happen suddenly, it happens gradually. The signs can begin to show in subtle ways, such a noticing your mother isn’t paying her bills or has bounced a check or noticing that your father’s personal hygiene has begun to decline. Don’t ignore those signs, because the best time to plan is when your parent is still relatively healthy and competent. Planning can always be done, but the longer you wait, options become more limited.

 

  1. These conversations are often difficult. Older adults are no different from the rest of us – some are more resistant to change than others and it can be difficult to raise this subject. If you as a child are worried that your relationship with your parent may be damaged by raising these issues, a subtle approach may work best. Consider relating what a friend is going through with her own elderly parents and use that as a spring board to raise the issue of how you’re worried about what to do if it ever happens to them. Many elderly parents don’t want their children to feel burdened and will be more motivated to address certain issues if they see the potential negative impact their problems could have on their adult child. If there are siblings involved, try to reach a consensus beforehand. A united front can be more effective.

 

  1. A range of options are available based on existing mental capacity.   Depending on how receptive the parent is, the first step is generally to meet with an elder law attorney who can lay out the options. Hopefully the parent still has some capacity in decision-making and can dictate what he or she wants. They can then be walked through the process of appointing financial and health care powers of attorney, which saves the process of going through court to have a legal guardian appointed. An elder law attorney also can lay out common techniques that can be employed or pitfalls to be avoided when managing the affairs of an aging parent, as well as putting you in contact with a wide range of support resources in the community who are available to help in such a situation such as geriatric care managers, home health agencies, and daily money managers.

 

Throughout the process, don’t forget that remaining as independent and autonomous as possible may be critical to your elderly parent’s long term well-being and happiness. Obviously, safety and independence must be balanced and decline often continues. However, taking the time to recognize their dignity and promoting independence whenever possible can go a long way in sustaining their quality of life into the future.

Mar 31
Love0

Estate Planning for Young Families

By Uncategorized

Estate Planning for Young Families

By Joellen C. Meckley, Esq.

Many people don’t consider estate planning until they get married or have their first child. It’s natural to resist considering your own mortality until it occurs to you that your untimely death could seriously jeopardize the well-being or financial security of someone else. Particularly for young parents, that realization is enough to keep you tossing and turning at night, however, a well-written estate plan can put those worries to rest.

There are 6 basic components to a simple and thorough estate plan for someone with young children. A qualified estate planning attorney can help you sort through all of them and decide which steps are necessary given the unique facts of your situation.

  1. Write a Will

A will, in its most basic form, directs who will inherit your assets when you die. Some assets pass to your beneficiaries when you die regardless of whether or not you have a will, such as joint bank accounts, real estate owned jointly, or any other assets for which you can name a payable on death beneficiary. Other assets will pass to your heirs according to state law if you die without a will. Having a simple will in place enables you to dictate clearly and definitively who will inherit your property and assets when you die. Taking the time to think ahead about how your property will pass on to those you love and then legally documenting that plan also can potentially save your loved one thousand’s of dollars in taxes if done correctly.

  1. Appoint a Guardian

When you have young children, one of the scariest scenarios to contemplate is what will happen to them if something ever happens to you. It can be an uncomfortable conversation to have with your spouse and the rest of your family or friends – but it’s a conversation that needs to happen. When children are involved, one of the primary reasons to have an estate plan is because it gives you a vehicle by which to officially appoint the person of your choice to serve as guardian in the event that you and your spouse are unable to care for them. An experienced estate planner can help you work through that decision making process.

  1. Buy Life Insurance

While an estate planning attorney won’t be selling actual insurance products to you, he or she should be asking you about any life insurance you already have in place and will make sure that the potential proceeds of that life insurance policy are fully incorporated into your estate plan. Term life insurance is often a smart, affordable way to ensure that your loved ones can remain financially stable after your death, and it’s absolutely essential that it be taken into consideration when drafting your estate plan.

  1. Appoint Retirement Account Beneficiaries

When you nailed down that first “real” job, hopefully you were lucky enough to sign up for some sort of employer sponsored retirement plan, or perhaps you have an IRA. Many people don’t realize that if a retirement plan passes directly to your estate upon your death, the proceeds from that account will be subject to significantly higher taxation than if the proceeds passed directly to a named beneficiary. An estate planning attorney can help you go through your current retirement plans to help you determine the most optimal way to distribute those funds to your beneficiaries upon your death.

  1. Include a UTMA provision or a Trust

Providing for your children in the event of your premature death requires more than just choosing someone to serve as their legal guardian. You also need to plan for what will happen to any money that your minor children inherit from you. One common way to address this in an estate plan is to choose who will manage your children’s money under your state’s Uniform Transfers to Minors Act (UTMA), which will enable their money to be managed by a custodian up until the maximum age permitted under state law (often age 21). Alternatively, you can include a trust in your will which would enable you to appoint a trustee to manage your child’s property and money until whatever age you specify. Your will can be drafted to include a UTMA provision or a trust, either of which can meet your needs depending on the unique circumstances of your family and your children.

  1. Durable Power of Attorney and Advanced Directive

The final component of a basic estate plan is to plan for your potential incapacity. In the event that you are unable to manage your own financial affairs, a durable power of attorney enables you to appoint an individual to have the authority to manage it on your behalf.   A similar document should be executed appointing someone to act as your health care decision-maker in the event that you become incapacitated and cannot speak for yourself. With a valid power of attorney, the person who you trust will be legally permitted to take care of important matters for you.

The attorneys at Yardley Estate Planning LLC are ready to meet with you to discuss your family’s estate planning needs at any time. We look forward to walking you through the process to ensure that your family’s needs and interests are protected for years to come.