Pennsylvania residents who are contemplating marriage in the near future know that planning is essential and helps to make the experience seamless. While that is true for a wedding, it is also true for financial planning after the ceremony is over. There are issues that require attention to enable future security for the couple and their family.
When it comes to estate planning, a little foresight can go a long way. This is because what the law says about passing down assets may contradict with the wishes of someone who has passed away. For instance, it may not be possible to pass down assets from a grandparent to a grandchild without specifically including the grandchild in a will or trust.
Many families do not plan adequately for the care required for older individuals. When an aged adult acquires a disability that demands additional services, Medicare and other plans are often not sufficient to meet these needs. It may be important for Pennsylvania families to have an estate plan put in place to handle possible disability expenses.
As a person's health changes or as he or she gets older, there is often a greater need for an individual to exert control over their belongings. One of the primary methods that Pennsylvania individuals can have the sense of control that they long for is to establish it through estate planning.
A living trust is a legal arrangement that protects an individual's assets and distributes them according to his wishes. The history of living trusts goes back at least a few centuries, with early trusts being called inter vivos trusts as a way to avoid confusion with testamentary trusts that are set up upon a person's death.
Some readers from Pennsylvania may be interested in establishing a special needs trust for their children. Special needs trusts are intended to allow a disabled child to supplement their government benefits, such as Medicaid and Supplemental Security Income, while still providing for a child's financial future. Through a properly established special needs trust, a child can benefit from the trust's assets without losing eligibility for these government benefits.
Pennsylvania residents may choose to establish a living trust in order to make certain that their wishes are carried out after their passing. A living trust may replace a will or work in conjunction with one. Although there are similarities between a revocable living trust and a traditional will, they both have advantages for particular situations.
It is important for Pennsylvania residents to consider their estates and decide how their life savings and assets will be divided between heirs, charities and other groups. There is more to consider than just which people should be included in the division. The Internal Revenue Service taxes the estate taxes on the amount leftover after final income taxes, debts, funeral expenses and gifts to charity are deducted from the original estate amount. Currently, the IRS only imposes taxes on estates valued at more than $5.34 million. Once the taxes are paid, the balance may be distributed to the names heirs.
The estate planning mistakes of some celebrities can teach Pennsylvania retirees some very important lessons. Michael Crichton, Casey Kasem, Phillip Seymour Hoffman and Robin Williams all made some critical errors that could have been avoided. These mistakes affected the privacy of their estate, the amount of money their heirs paid to the government and, in Chrichton's case, the inheritance of one of his children.
A Pennsylvania resident with few assets may figure that there is not really a need for an estate plan. However, this is just one of many errors that could affect the outcome for that person as well as for possible beneficiaries. It is easy to put off estate planning, but the issue should not be ignored. Even with a modest estate, a plan may help in limiting challenges for those expecting to inherit a decedent's assets.