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Philadelphia Family Law and Estate Planning Law Blog

Digital assets require valuation for estate purposes

Increasing numbers of Pennsylvania residents possess digital assets. Some of them, such as digital photographs on a smartphone, might only have sentimental value, but other forms of digital assets could be worth quite a bit of money. An estate plan should include information about how to access a digital portfolio and assign a value to the assets.

Bitcoins, internet domain names, logos and digital music libraries present examples of potentially valuable digital assets. An online business without a physical location could be another form of digital asset. After a person dies, digital wealth needs to be included in the inventory provided to a probate court. These types of assets will also have to be listed on Form 706, the federal estate tax return form.

What happens when a custodial parent dies

If a Pennsylvania parent who has custody of a child dies, other members of the family may be concerned when it comes to who will get custody. Depending on the circumstances, some candidates who may become the child's guardian includes the noncustodial parent, grandparents, aunts or uncles, other family members or family friends.

If a noncustodial parent wishes to take custody of the child, they must ensure that paternity has been established. This is done either through a signature on the child's birth certificate by the biological father or a signed acknowledgement of paternity form. This form should be filed so that the court has it on hand. If paternity has not been established prior to the custodial parent's death, the noncustodial parent can still request a paternity test.

The Deadbeat Parents Punishment Act

Pennsylvania parents who receive or are required to pay child support should be aware of the Deadbeat Parents Punishment Act, or DPPA. Created in 1998, it is a federal child support law that targets individuals who purposely try to avoid making child support payments by relocating to another state.

Parents who travel to another state with the express purpose of avoiding paying child support, fail to make payments for more than a year and are in arrears for more than $5,000 are subject to punishment by the DPPA. The same goes for those who relocate to other states to get out of paying what they owe, have not made payments for over two years and are delinquent for $10,000.

Avoiding probate in Pennsylvania

Probate is designed to ensure that a person's possessions are passed on to the individuals that they were intended to go to. Although this is a good thing, the process is one that is often time consuming and can be very costly. It can take months for a will to go through probate, and this is why many people create estate plans with the purpose of avoiding the process altogether.

One popular method of avoiding probate is to create a living trust. With a living trust, there are three roles that must be filled: the grantor, the trustee and the beneficiary. The grantor is the individual who creates the trust, the trustee controls and manages the trust and the beneficiary is the individual who is provided with benefits from the trust.

Divorce rates vary among different generations

Divorce is on the decline for younger adults in Pennsylvania and throughout the country, but that may not be the case for their parents and grandparents. Since the 1990s, divorces among people over 50 years of age have increased by about twice as much. In 1990, only five out of every 1,000 married people older than 50 divorced while in 2015, that number increased to 10. Divorce among people over 65 years old has increased at an even higher rate although the actual figure is lower. In 2015, six out of 1,000 people over 65 years of age got divorced, and this number was three times higher than it was in the 1990s.

Overall, the divorce rate for people over 50 years old is twice that of their younger counterparts. While the rate has sharply increased since the 1990s, this age group has not experienced a significant change since 2008. The number of divorces increased among those in the 40-to-49 age group from 18 per 1,000 in 1990 to 21 per 1,000 in 2015, but it has decreased among adults aged 25-to-39.

Creating a functional estate plan

When creating an estate plan, it's important that people in Pennsylvania think about a variety of things, including who they want to give their assets to when they pass on. While this can be an important part of estate planning, individuals should also ensure that people named in a will won't be prevented from collecting assets and that heirs are provided these assets in the best manner possible.

It's important to be aware that just because someone is named in a will, it does not necessarily mean that they will have access to the property left to them. Beneficiary designations on things like life insurance policies override what is in a will, so it is essential to be sure that the named beneficiaries match what is in a will.

How parents can help prepare children for divorce

Pennsylvania parents whose marriages are coming to an end should talk to their children together about divorce if possible. Children should be reassured that they are safe and secure, and parents should not fight in front of them. In some cases, parents might get along well enough that they can agree to share the home on a rotating basis while the children remain there.

A temporary custody and support order may be necessary. Parents should try to be on time for any custody exchanges. They can communicate by text and only about custody if necessary to keep the situation as neutral as possible.

Administration of an estate

Pennsylvania residents who have been honored with the task of administering an estate may want to know more about the requirements of the process. The personal representative who is named in the will could expect to take a number of actions in order to fulfill the duties of the role in accordance with the decedent's wishes. In the event that the instrument in question is a trust, the role of administrator would fall to the trustee.

From the start, it is important to recognize that the assets are the property of the estate and must only be used in connection with expenses that are incurred by the estate or trust. Personal representatives and trustees are generally permitted to pay themselves for their time spent in estate administration, but otherwise, it may be best that each designated party keep personal funds and those of the estate completely separate. This practice could ultimately make it easier to successfully balance the final accounting.

The benefits of a prenup

Couples in Pennsylvania who are considering marriage may also want to consider completing a prenuptial agreement. There are various situations in which having a prenup may be beneficial.

A prenup is a written contract that details the obligations of both parties should the relationship end in divorce, annulment, separation or death. It specifies the ownership of certain assets, how the assets are to be allocated and which assets are considered joint property. In addition, it provides clarification regarding other important issues, such as alimony, child support and inheritances.

Reasons everyone should have an estate plan

If people are married with children, assets tend to go to either their spouse or children when they die in the absence of a will. However, those who are married without children may want to create an estate plan to account for where their assets go upon their death. While they may first transfer to a spouse, they may be transferred to the surviving spouse's family upon his or her death.

This may mean that a decedent passes items to an individual who was never supposed to get them. In addition to creating unintended beneficiaries, it could take time to settle an estate in probate court. Those who are cohabiting may want to create an estate plan as assets may not automatically pass to a life partner. In addition to taking control of assets after passing away, it may be possible for an individual to gain more control of how assets are treated while still alive.

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