Why Plan Your Estate?
To protect your family and ensure your wishes are met. No one likes to think about the possibility of their disability or death. If you postpone planning for these events until it is too late, however, you run the risk that your needs will not be met or that your intended beneficiaries — those you love the most — may not receive what you would want them to receive.
This is why estate planning is so important even if you believe you have a small estate. It allows you, while you are still living, to ensure that your needs will be met and that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes and costs and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened.
My husband and I contacted Rob to assist with our estate planning based on a referral from a coworker. We had been putting off the task for a couple of years because who really wants to plan their demise, right? We were pleasantly surprised to find that Rob was very knowledgeable and easy to talk to which made the process simple and painless. I’m glad we were able to check off estate planning from our to-do list and I would absolutely recommend Rob to my friends and family.
The Components of a Good Estate Plan
Many people believe that if they have a will, their estate planning is complete, but there is much more to a solid estate plan. A good plan should be designed to avoid probate when possible, save on inheritance taxes, protect assets from potential nursing home costs, and appoint someone to act for you if you become disabled.
All estate plans should include, at minimum, three important estate planning instruments: a Durable General Power of Attorney, a Healthcare Power of Attorney and a Will. A Trust may also be useful to avoid probate and to manage your estate both during your life and after you are gone. In addition, an Advanced Directive or “Living Will” allows you to make healthcare decisions regarding what treatment you may or may not want at the end of your life.
A will is a legal document containing your directions as to who will receive your property at your death. If you do not have a will, there is a law that determines how your property will be distributed. In your Will, you will appoint a legal representative, called an Executor, to manage your estate and carry out your wishes. A Will is especially important if you have minor children because it allows you to name a guardian for the children.
A Trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for the benefit of another person, called a “beneficiary.” There are several different reasons for setting up a Trust. The most common reason is to avoid probate. Privacy concerns, continuity of care and time saving are also common reasons for selecting a Trust. Trusts can also provide tax advantages, control assets for those who require management of money, protect property from creditors, help one qualify for Medicaid or provide for those with special needs.
Common Trust include:
- Revocable Living Trust: this Trust enables you to avoid probate, maintain the privacy of your estate and save your heirs administrative time upon your death.
- Asset Protection Trust: this is a Trust that is built to protect your assets from creditors as well as from Long Term Care costs such as nursing home expense.
- Retirement Plan Trust: this Trust enables you to transfer your retirement savings to your heirs while protecting the funds from threats such as bankruptcy and divorce. It also enables your heirs to “stretch” the income taxes due on the funds over their lifetime rather than all at once.
- Special Needs Trusts: this Trust enables you to leave your estate to a special needs loved-one without disqualifying them from assistance that they may be receiving such as SSI and Medicaid.
- Pet Trusts: this Trust enables you to preserve a portion of your assets to ensure the care of your pet.
Power of Attorney
A power of attorney allows a person you appoint, your agent or “attorney-in-fact”, to act in your place when you are unable. The agent you name will be able to step in and manage your financial affairs and property. Without a Durable Power of Attorney, no one can manage your affairs without Court approval. The Court process takes time, is expensive, and the Judge may not choose the person you would prefer. In addition, under a Guardianship or Conservatorship, your representative may have to seek court permission to take planning steps that they could implement immediately under a simple Durable Power of Attorney.
Living Wills and Health Care Power of Attorney
A Healthcare Power of Attorney allows you to designate someone you choose to make health care decisions for you if you are unable to do so yourself. A living will instructs your health care providers what treatment you may want or not want when faced with an end of life situation. Without these documents, conflict may arise among families as to treatment decisions.
Non -Probate Property
Non-probate property, passes outside of the probate process and must be planned for separately. Jointly-owned property, property in Trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate and are not covered under a will. Non-probate property passes via operation of law or your beneficiary designation within the document(s).
What is Probate?
Probate is the process by which an “Estate” is distributed according to Will or law to heirs of a deceased. It involves the appointment of an Executor or Administrator, the collection of assets and debts, the filing of an Inheritance Tax return and the distribution of assets. Dealing with the probate process while grieving can be a trying experience. At Pecori & Pecori we have guided thousand of estates through the probate process. It is our goal to make what can be a confusing process as simple and stress-free as possible.
Please view our FAQ page for answers to common questions.
Over the last several years, I am not special in the sense to have experienced the death of some family members. I am special however in the sense that I had been named executor over a few of those estates, all of which have “special” circumstances. It seemed as though every circumstance came with a question which lead to another question which lead to frequent discussions with Rob and his need to visit the courthouse on my behalf on more occasions than either of us anticipated. No matter the issue at hand or no matter the questions I had, Rob always made himself available to me and provided me with counsel on how to proceed with some of the delicate matters at hand. For this reason, I would confidently use the services of Pecori and Pecori for myself as well as recommend anyone else whom I know personally to use their services.
What is ElderLaw?
Elder law and Special Needs Law are specialized areas of law that involve representing, counseling and assisting seniors, individuals with a disability and their families in connection with a variety of legal issues from Estate Planning to Long Term Care planning to coordination of government benefits and insurance.
Medicaid is a public health insurance program administered by the State of Pennsylvania. In general, it provides healthcare services for eligible individuals. These services may include nursing home long-term care as well as home and community based services to enable individuals to remain in their homes.
Medicaid benefits are available to certain populations of people such as those with disabilities and seniors who meet certain financial and medical criteria. You may be surprised to find that you are eligible for Medicaid despite owning fairly substantial assets. With proper Medicaid Planning, you can continue to own or transfer assets and gain or maintain Medicaid eligibility. Determining eligibility for Medicaid and applying for benefits is a complex and confusing task. At Pecori & Pecori, we strive to make this process as smooth as possible.
Special Needs Planning
For those individuals receiving government benefits such as from the Veterans Administration, Medicaid, SSI and/or HUD there are restrictions on the amount of income and assets they may own to remain eligible. The receipt of additional income or assets such as from an inheritance or injury settlement may disqualify recipients from their benefits. While the receipt of such funds may be a good thing, it can upset what is often an independent, stable and safe living environment. To enable recipients to continue to receive their benefits and utilize additional income or assets, Special Needs planning is required.
A Special Needs Trust can be created to hold the additional assets for the benefit of the recipient without disqualifying them from their benefits. The funds from the Trust are not directly controlled or reachable by the recipient but, through a Trustee, they are available as a supplement to existing benefits.
Last year my wife and I were looking for a law firm to help us craft wills, power of attorney, and health care directives. After looking at a few other services, we contacted Pecori and Pecori about preparing those documents. We couldn’t have been more impressed. Rob took time to explain to us details behind the different options we had available to us. Others we visited were quick to rush us into more expensive options without considering our full story. Instead Rob recommended for us the right mix of documents we needed to feel secure that our loved ones would be taken care of should something happen. I was really impressed with the time they took to make sure everything was exactly as we wanted it and also gave some really great common sense options for handling money distribution to our heirs. I would recommend Pecori and Pecori to anyone looking for a trust worthy advisor for your any of your complex legal needs. I know we will return should we need the services of a law firm in the future.
Frequently Asked Questions
When Should You Update Your Estate Plan?
Once you have created an Estate Plan, it is important to keep it up to date. You need to revisit your plan after certain key life events.
- Marriage (first or subsequent)
- Birth (children or grandchildren)
- Divorce or Death of a Spouse
- Increase or Decrease in Assets
What if I die with no Will?
When a person dies without a Will, it is called Intestacy. In this case there is a law that determines how the deceased’s assets are distributed. In general, surviving spouses and direct heirs are first to inherit an intestate estate. In their absence, aunts, uncles and cousins may inherit. It is a common misconception that the State will take all of your assets if you die without a Will. It is only in the absence of any surviving heirs that the State would stand to inherit. To open an Intestate Estate, an Administrator must be appointed.
Do I have to spend all of my money to become eligible for Medicaid benefits?
No. While there are strict requirement to meet for both income and assets, with proper planning you and/or your spouse may become Medicaid eligible while maintaining assets.
Will my spouse be able to keep our home and assets if I have to go to a nursing home and apply for Medicaid?
Yes, your spouse can keep a portion of your assets, including your home, and you may still qualify for Medicaid benefits. This can be a very challenging situation but with proper advanced planning and legal counseling it can be managed.
Are there Medicaid benefits available to help me stay in my home instead of a nursing home?
Yes. Medicaid has benefits called Home and Community Based Services available to assist you in your home if you qualify. Such benefits can include nursing, personal assistance, respite care and adult day care. The goal of these services is to keep individuals in their own home as long as safely possible.
I have a special needs child and I am afraid of what may happen when I am gone. What can I do?
With proper planning you can ensure that your special needs child or loved one has proper personal supervision, money management and coordination of benefits. This can be a daunting task but the right Elderlaw lawyer can help you through it.
I have a special needs child who lives semi-independently in a group home with the assistance of government benefits. How can I leave him an inheritance without jeopardizing his benefits or situation?
With a Special Needs Trust your child can remain in his environment and eligible for all of his benefits. The inheritance you provide can supplement his needs where required.
I am on SSI, can I protect money I might receive from my car accident case?
Yes, with proper planning, your proceeds from your car accident settlement can be set up to supplement rather than supplant your SSI benefits. There are also situations where it may be advantageous to take the money and disqualify yourself from your benefits for a period of time.
My Mother passed away, what do I do now?
If your Father is still alive and he and your Mother owned their property jointly, you likely do not have to do anything. Assets owned jointly by married individuals pass by operation of law to the survivor.
If your Mother was a widow and she had a Will, the Will must be probated so the assets may be distributed accordingly.
Your first step is to seek legal counsel for assistance.
Do all “estates” have to be probated?
No. Only certain property in the name of the deceased requires Probate. Assets of a deceased such as jointly held property, property held in Trust, retirement accounts and life insurance proceeds all pass outside of the Probate process.
How long does Probate take?
The length of the Probate process depends on the complexity of the Estate and the assets included. Estates are generally open for at least a year to ensure that there are no creditors to the Estate.
Do I really need a Financial POA?
Yes! Depending on your situation, a Durable Financial Power of Attorney is arguably more important that a Will. Without a POA, your funds are essentially “locked” if you become incapacitated.