If you are ready to plan for your future but are not sure where to start, our team at Mt. Jackson Group can provide the knowledgeable guidance you need. Our attorney is familiar with a wide variety of estate planning instruments and can answer all of your frequently asked questions about estate planning in Pittsburgh.
Do I Need to Update My Estate Plan?
Yes. You should immediately update your estate plan when a significant life event occurs. Even if you experience no substantial change in circumstances, you should still plan to review and adjust your estate planning documents every few years.
Examples of significant life events include:
- A marriage, divorce, or separation
- The birth or adoption of a child or grandchild
- A move to a new state
- The death of or a change in circumstances involving one of your beneficiaries, your chosen guardian, and/or your personal representative
- A significant change in financial circumstances
Do I Need to Protect My Assets?
Asset protection works to limit the likelihood of legal action and protect your property from creditor claims, lawsuits, and judgments. If you are not a business professional or are not a high-net-worth individual, you may be wondering if asset protection or asset transfers are necessary. The reality is that people from all walks of life can benefit from asset protection. If you become delinquent on a debt, for example, the creditor may attempt to seize your assets. Asset protection can also work to protect you from the consequences of a contentious divorce or a personal injury lawsuit. We can help you implement the appropriate asset protection vehicles and facilitate strategic asset transfers that work to protect and insulate your estate.
Do I Need to Be Concerned about Pennsylvania Inheritance Taxes?
Possibly. Pennsylvania levies inheritance taxes on many types of asset transfers that occur after someone has passed away. The inheritance tax rate varies depending on the familial relationship between the person passing away and the person receiving the assets. The tax rates are as follows:
- 0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
- 4.5 percent on transfers to direct descendants and lineal heirs;
- 12 percent on transfers to siblings; and
- 15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax.
Our team can help you explore strategies for limiting the impact of inheritance taxes, including strategically using joint ownership of property, leveraging life insurance policies, and utilizing lifetime gifts and transfers of ownership.
Should I Just Take the Standard Deduction When Filing my Taxes?
No. In many cases, you will pay less if you take the time to carefully itemize your taxes. The standard deduction offers convenience and an expedited means of completing the tax-filing process, but it is not the most financially advantageous strategy. Our firm’s attorney and CPA can assist you with thorough tax preparation and identify what tax credits and deductions may be available to you.
Do I Need to Be Worried About Estate Taxes?
A grand majority of people will not have to seriously worry about estate taxes. As of 2021, estates valued at $11.7 million or more will be subject to federal estate taxes. If you have a sufficiently large estate, we can help you implement tax planning strategies designed to minimize the impact of both income and estate taxes. Keep in mind that your personal representative will be responsible for settling any outstanding tax obligations once you pass away.
Why Do I Need Medicaid Planning?
Long-term care can unfortunately be prohibitively expensive for many families. You will want to do everything possible to avoid a scenario where you are forced to pay out-of-pocket for a nursing home, in-home care, or assisted living facility expenses. Proactive Medicaid planning can help you or your loved one qualify for crucial government benefits. You will only be eligible for these benefits if you meet strict income and resource limits, and our attorney can help you restructure your estate so that you meet all eligibility requirements. You should start the Medicaid planning process as soon as feasibly possible. If you wait until an immediate arises, it may be too late to effectively plan.
Why Do I Need to Avoid Probate?
Probate is the legal process through which a deceased person’s estate is settled. Going through probate can be expensive, time-consuming, and burdensome. Will contests and other conflicts may require can prolong probate and may require litigation to resolve. By placing assets in trusts and engaging in other forms of strategic planning, you can safeguard much of your estate from the probate process. This may qualify your estate for simpler and expedited estate settlement procedures. It can also help you protect your assets from creditor claims and minimize the impact of estate taxes.
I Have Written a Last Will and Testament. Is that Enough?
While your will is an important foundational document that will establish who will oversee the estate settlement process and who will serve as a guardian to your minor children, the document should not serve as the entirety of your estate plan. Contents of your will are subject to probate, and resulting will contests and outstanding debts could prevent your beneficiaries from receiving planned inheritances. To maximize your assets and achieve asset protection, you will likely need to consider implementing additional estate planning tools. We can help you explore all available options.
What Happens If I Pass Away Without an Estate Plan?
At the bare minimum, your estate plan should include a last will and testament. If you pass away without a will, one of your surviving relatives will need to initiate the probate process and volunteer to serve as your personal representative. They will be responsible for settling your estate. Without a valid will, your representative will be obligated to distribute your assets in accordance with Pennsylvania’s intestacy laws. Assets will be divided amongst your most immediate surviving relatives, such as your spouse or adult children. You will have no say in who gets what or who will care for any minor children.
I Am Young and Healthy. Why Do I Need an Estate Plan Now?
It is never too early to start building your estate plan. A comprehensive estate plan will plan for incapacity, and circumstances in which you are unable to communicate could conceivably arise at any time. For example, a serious car accident could put you in the hospital. Without an estate plan in place, you will have no say in what types of treatment you receive. No one will be authorized to manage your affairs or who will care for your children while you are incapacitated. If you pass away as a result of your injuries, you will have no opportunity to prepare or validate a will or any other type of estate planning document. Consequently, you should start building your estate plan as soon as possible. We can help you get started, review essential tools and instruments, and answer various frequently asked questions about estate planning in New Castle.
Does Everyone Need an Estate Plan?
Yes! Many people mistakenly believe that they do not need an estate plan if they are not high-net-worth individuals. No matter your personal or financial circumstances, every adult should have an estate plan. A well-designed plan will work to protect you and your loved ones throughout your lifetime and once you are gone. Proactive planning can help you grow and preserve your finances and maximize the value of your assets for future generations.