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.
Pennsylvania parents might want to gift part of their estate to their children while they are still alive. However, there are some pitfalls they should be aware of. For example, cash or stock that is only minimally appreciated is a better gift than an asset that is highly appreciated because of future capital gains tax. Highly appreciated assets are best passed on after an individual's death.
Married couples in Pennsylvania may be able to pass on more of their assets to their children and grandchildren if they use an AB trust. An AB trust is specifically designed for married couples who want to maximize their estate tax exemptions. With a well-planned AB trust, a married couple that would otherwise owe federal estate taxes may be able to pass a tax-free inheritance to their beneficiaries.
The owner of an estate can place assets into a trust and assign a trustee to manage it for a beneficiary. The guidelines for how the assets are to be managed and taken care of will be detailed a written document referred to as the trust document. It is a convenient legal mechanism for an individual to use if he or she will not be able to manage the property in the future. However, Pennsylvania residents who are considering using a trust as part of their estate planning should be aware that a trust will eventually end.
Pennsylvania entrepreneurs might want to put some thought into the disposition of their business ownership interests after they die. Simple steps taken now can be of great benefit to those who wish to continue to nurture their business and their family after their demise.
Pennsylvania residents who do not want to leave their estate in the hands of a probate court might look into the option of creating a trust for management of important assets after they die. However, there could be some concerns about how money or other assets would be handled by some heirs, especially those who may have demonstrated poor skills in doing so in the past. Others might want to encourage their heirs to reach certain goals before receiving an inheritance. An incentive trust is an excellent option to consider in this case.
Pennsylvania residents who like to spend part of the year at home and winter months in warmer climes may consider extending this lifestyle into their retirement years. They should mindful of which state they claim as their legal residence, as it can have an effect on how which strategies they should employ for their estate planning. This may be particularly important for individuals with substantial assets.
Angel investors in Pennsylvania might have their attention on helping a start-up company succeed, but the profits of that future success should also be considered during estate planning. Financial planners suggest setting up trusts where gifts of company stock could be placed. If the investment proves fruitful and the stock value rises, then the proceeds could be available to heirs and not be included in the investor's estate for federal estate tax purposes.
The Pennsylvania probate system might be one of the best reasons to consider creating a living trust for assets such as the family home. Probate court can cause the management of an estate to drag on for many months after an individual dies. A trust, on the other hand, could provide for a prompt disposition of assets, requiring only a few weeks to wrap up a decedent's affairs. However, there are some important issues to consider in creating a living trust and including properties in it.
Some people in Pennsylvania might think they do not need an estate plan because they are wealthy. However, an estate plan is not just about distributing wealth, and most adults could benefit from one. One important aspect of an estate plan is preparing for incapacity or for having to go to a nursing home.