Lindsay M. Schoeneberger

For those of you looking for your weekly myth, sadly, our myth series has run its course.  Now that we have covered commonly asked questions and the top 10 myths, I wanted to leave you with a few helpful tips- these tips are universal and not just for selecting an estate planning attorney.

  • Be open and honest with your lawyer
    • Your attorney is trained to know what is important. Chances are if they are asking about it, they need to know about it.  It might not seem like a big deal to you, but it could completely change their advice to you.
  • Make sure you are comfortable with your lawyer
    • Feeling comfortable with your lawyer will significantly increase your ability to be open and honest with him or her. This is key for you to get the best advice and for your own piece of mind.  Even if your attorney gives you the best advice in the world, if you are not comfortable with him or her, you may never fully trust what they’ve said.
  • Don’t price shop
    • Cutting corners now can cost you big time in the end. We are seeing a rash of people trying to do things on their own or do things piece meal because they are trying to save money.  While I will be the first to wait for a sale, cut coupons, and look for the best deal, legal dealings are not always the best place to do so.  Certainly you should inquire as to fees and not blindly hand over your hard earned cash.
  • Ask family and friends for referrals if you don’t know who to go to
    • Asking someone one who has actually worked with an attorney if they liked them can be far more effective than picking a name out of a random list. However, keep in mind your friend or family member’s personality.  If you are nothing like your cousin, will the same attorney work for you?  Ask the person what they liked and disliked about the person they are recommending.  Then decide if those are qualities you are looking for as well.
  • Have a trusted financial advisor or accountant? They can make referrals as well
    • Accountants and financial advisors work with attorneys all the time. They have seen the attorney in action and can make a referral based on real interactions.

Have a happy and healthy new year!

Lindsay Schoeneberger is an attorney at Russell, Krafft and Gruber, LLP in Lancaster, Pennsylvania. She received her law degree from Widener University School of Law and practices in a variety of areas, including Estate Planning.

By now, hopefully I have convinced you that you need a Will, Financial Power of Attorney, Health Care Power of Attorney, and that you need to consult with an attorney that focuses on estate planning in order to prepare these documents.

But my job is not done.  Having all of these documents prepared is only half the battle.  Making sure these documents are kept up to date, is the rest.  These documents are not once and done.  You should be reviewing these documents every few years and every time there is a major life change.

When someone in your family gets married or divorced you should review the documents.  When a new family member is born or a family member dies, you should review the documents.  When you start a new job or retire, you should review the documents.  Often times, reviewing the documents may not mean changing the documents.  If the documents still reflect your wishes, you probably don’t need to change them.  Continue Reading Myth #10- Once and Done!

Last week, I dispelled the myth that you only need a Will in order to have a proper estate plan.  This week, I am focusing on who you give power to in these documents.  The person you grant power to under a Will or Power of Attorney is generally known as a fiduciary.  As I previously explained a few years ago, a fiduciary is a fancy catch all word for personal representative (which is another way of saying executor, executrix or administrator, administratrix), guardians, agents, and trustees who are all subject to the jurisdiction of the Orphans’ Court in Pennsylvania.

Many times my clients feel a sense of obligation to name their children as their fiduciaries and use birth order as a method of selection.  Simply being the first born does not make a person more qualified to handle your finances than anyone else.  It is important to consider the nature of the position you are appointing the person to.  What kinds of decisions are they going make?  What kind of responsibilities are they going to have?  Who are they going to have to interact with?  How will others respond to them? Then look at the people you are considering for each position.  Who will fit best in each position?

Take for example Simon and Helena.  They have three children.  Eleanor, a doctor who is bad with money, Liam, an accountant, who is suspicious of medical professionals, and Robert, their oldest child who, while fine with money and generally trusting of medical professionals, tends to disappear for months on end and is unable to get along with either of his siblings. Eleanor and Liam, twins, get along well but are not on speaking terms with Robert.  Who should Simon and Helena name as their Fiduciaries for the Will, Financial Power of Attorney, and Health Care Power of Attorney? Continue Reading Myth #9 – I Must Appoint The Same Person For All Of My Estate Planning

If you come to see me asking for just a Will, I will ALWAYS discuss with you whether you need a Financial Power of Attorney and a Health Care Power of Attorney and Living Will.  It is not because I am trying to upsell my services or print more paper and kill trees.  No, it is because I want to make sure you have the documents you need to protect yourself and to simplify things for your loved ones.

A proper estate plan deals with the here and now, the near future, and the distant future.  A proper estate plan is not just what happens when you die.  It has provisions for when your health declines and you can no longer act on your own behalf.  Most of us don’t spend a lot of time thinking about the possibility of future illness, incapacitation or death, nor do you want to.  Leave that to me to guide you through the process of determining what you need.

The key to recognizing which documents are necessary is to understand each document and when it becomes active.  Most people know that a Will becomes active on death and deals with the distribution of your assets.  It can also name a guardian for your minor children, and set up trusts to protect those assets.  Continue Reading Myth #8- I only need a Will.

Last week, I covered the myth that you need to avoid probate.  One common reason people want to avoid probate is because they believe it is one way to avoid inheritance tax.  Not so fast.  Whether or not an asset is a probate asset has no bearing on whether or not it is subject to inheritance tax. Both probate and non-probate assets are subject to Pennsylvania inheritance tax. So while there are reasons to ensure your beneficiary designations are current to keep the assets out of probate, avoiding inheritance tax is not one.  Your IRA or 401(k) will still be subject to inheritance tax.

Are there ways to transfer wealth free of inheritance tax?  Sure.  Life insurance is a great way to do so.  But not everyone can afford or qualify for life insurance.  You can also gift during your life time.  However, this can create other tax concerns.  Under certain circumstances, trust assets may not be subject to inheritance tax, but you might spend more money putting those assets in trust than what you would ultimately be saving.  So what does all of this mean for you?  Finding ways to reduce inheritance tax is important and I always work with my clients to do so.  However, I am mindful of the fact that in some cases, paying inheritance tax is actually the lesser of two evils.  Don’t avoid inheritance tax when it ultimately can cost you or your beneficiary more money elsewhere. Work with a qualified attorney to discuss your goals, but keep an open mind.  A thoughtful estate planning attorney will take the time to understand your unique circumstances so that they are able to consider all options and recommend the best plan for you.

Lindsay Schoeneberger is an attorney at Russell, Krafft and Gruber, LLP in Lancaster, Pennsylvania. She received her law degree from Widener University School of Law and practices in a variety of areas, including Estate Planning.

“I need to avoid probate!”  I can’t tell you how many new estate planning consultations begin with questions relating to the belief that it is important to avoid the probate process.  Clients desiring to avoid probate often ask for a complex and costly estate plan.  When I first started practicing, I couldn’t figure out where this fear came from.  But a quick search of the internet provides some insight.  Countless articles, books, and lectures tout the importance of avoiding probate like it is some poison laced process that only the strong survive. Continue Reading Myth #5- I need to avoid probate!

If myths 1 through 3 haven’t convinced you that you need a Will, perhaps this one will.  At more than one networking event or social gathering, I’ve been cornered by someone who thinks they have found a way to “game the system.”  Often times, this master plan includes putting everything in joint names with their spouse, parents, or children in order to avoid inheritance tax and probate.  Unfortunately, this “solution” doesn’t accomplish the tax goals, and creates a lot of pitfalls that might not make avoiding probate worth it.

For more on inheritance tax and probate, stay tuned for myth 5 and 6.  If the solution is to put everything in joint names with your spouse, that will actually avoid probate and due to the 0% inheritance tax rate for a spouse, there is no inheritance tax due either.  But what happens when the surviving spouse dies or if you die in a joint accident?  This solution, if it works, will only work once.  I don’t know about you, but that is not good enough for me to consider this a viable solution.

Putting assets in joint names with your parents or children can create a Pandora’s box of problems.  Once you put an asset in joint names with someone else, you lose complete control over the asset.  You own your house free and clear.  You decide to put it in joint names with your son Billy.  When you put it in joint names, you tell Billy this is only for estate planning purposes and nothing else.  Billy may or may not decide to follow that.  The law doesn’t care why you put it in joint names, but now that you did, Billy is part owner of your house.  He has the same control over that you do.  Even if Billy agrees that the house in in joint names for estate planning purposes only, it opens the house up to Billy’s creditors.  If Billy runs up substantial debts, your house that you own free and clear can be considered an available resource to pay Billy’s debts now that you put it in joint names.

Still on the fence about whether putting assets in joint names without consulting an attorney is a good idea?  Let’s say you transfer your house into joint names with Billy and two years later you need to qualify for Medicaid benefits.  Your transfer of the house into joint names would be considered a transfer not for fair market value within the five year look back period.  This creates a penalty period during which you are ineligible for Medicaid benefits.  This applies to other assets as well.  If you are considering transfer assets for whatever reason and are even remotely close to needed to plan for Medicaid assistance, it is a good idea to consult an attorney to ensure you are not inadvertently making yourself ineligible for services.

Lindsay Schoeneberger is an attorney at Russell, Krafft and Gruber, LLP in Lancaster, Pennsylvania. She received her law degree from Widener University School of Law and practices in a variety of areas, including Estate Planning.

This is a big one among couples with kids from previous relationships.  People come in and say they want to leave everything to their spouse and then their kids.  Often time people think they can control what happens to their belongings after their surviving spouse dies through a basic Will. Continue Reading Myth #3- When my spouse dies, my kids get what is left.

You might have read myth one and said, “Lindsay I don’t have kids and I’m married.  I don’t need a Will because everything will go to my spouse.”  You may be right.  Then again you may not be.  Do you really want to take that chance?  The intestate statute has limited circumstance where the spouse inherits your entire probate estate.  Many times people do not realize that still having living parents can prevent your spouse from inheriting everything.  Let’s put this into real terms.  You and your lovely bride are freshly married and own a business together.  You haven’t done any estate or business succession planning.  You own the business as individuals with no right of survivorship and the house you live in is in her name alone.  You wife dies without a Will while her parents are still living.  As a result of how your assets are titled, her house and her share of the business are probate assets.  You are entitled to the first $30,000 of her estate and then you must split the remaining estate 50/50 with her parents.  That’s right, you now own a house and a business with your in-laws.  I hope you have a good relationship.

Now you may be asking yourself, what if we had kids?  Well if you add kids into the equation above, instead of splitting the assets with your in-laws, you now own a house and business with your children.  If the children were your wife’s from a previous marriage, you don’t even get the first $30,000 of the estate.  The moral of the story is, if you don’t want to end up in business with someone you never intended to take as a business partner, make sure you and your spouse have a Will.  You probably want to speak with an attorney about business succession planning as well, but that is a different article.

Lindsay Schoeneberger is an attorney at Russell, Krafft and Gruber, LLP in Lancaster, Pennsylvania. She received her law degree from Widener University School of Law and practices in a variety of areas, including Estate Planning.