This summer, the IRS issued interim regulations clarifying that excess deductions from a Trust or an Estate can pass out to beneficiaries.  In the early fall, the IRS issued final regulations to the same effect.  What does this mean for you?

History of Excess Deductions

The Trump administration passed the Tax Cuts and Jobs Acts (the “TCJA”) at the end of 2017.  The TCJA prohibited individuals, estates, and non-grantor trusts from claiming miscellaneous deductions for any years beginning after December 31, 2017, and before January 1, 2026.

Before the passage of TCJA, Trusts and Estates could pass out excess deductions to their beneficiaries in the year the estate or trust terminated.  The beneficiaries could then take such deductions on their personal tax returns as miscellaneous itemized deductions.  After the passage of TCJA, it appeared that the new IRS section 67(g) prohibited such excess deductions as TCJA specifically disallowed 2 % miscellaneous itemized deductions incurred in tax years 2018-2025.

Continue Reading Excess Deductions Are Back!

2020 has been a year of adapting, readapting, and then adapting again in an effort to combat a global pandemic.  Those in education have been hit particularly hard.  Most educators and administrators have had to develop multiple contingency plans, often with little warning.

The Lancaster Bar Association is concerned about the impact these unprecedented times are having on educators and the increased responsibilities they have been taking on.  Our teachers and administrators are putting themselves at risk daily to ensure the children of our community continue to get the education they need.  Some, like Manheim Township counselor Alexandra Chitwood, have even lost their lives.

Continue Reading Lancaster Bar Association is Offering Classroom Heroes Free Living Wills

As we enter another month of the Covid-19 pandemic, the stories of people becoming gravely ill without a Healthcare Power of Attorney and Living Will continue to mount.  Recently, a doctor on a Covid-19 unit shared a story about a young man who required a ventilator to breathe.  He never expressed to his family what his wishes would be in this situation, leaving them to guess.

To further complicate matters, his parents did not agree on a course of action for their son.  It added strife and stress to an already unimaginably hard situation.  This particular stress could have been avoided if the young man had a Health Care Power of Attorney and Living Will.
Continue Reading What is a Living Will, and Why do I Need One?

So you made the jump and finally decided to go paperless on all of your billing and banking!  Think of all the space and trees you will save eliminating that excess paper from your daily life.  But what happens if you can no longer access those accounts?

I don’t mean what happens if you lose

The March 16, 2020 declaration of a statewide judicial emergency has dramatically reduced the functions of the Lancaster County Courthouse. This declaration has also closed the Lancaster County Register of Wills, effectively halted the probating of any wills in Lancaster County. Consequently, all estates requiring probate have been in a holding pattern.  

For more information

One of my memories from childhood is watching my mother build and run her own business. I saw first hand how she lived the job, how seriously she took her responsibilities to her customers and employees, and how she never really stopped thinking about work. It was what she had to do to make the business successful. At the time, I didn’t always enjoy sitting at dinner and listening to my parents discuss the store finances or how to deal with a problem employee; however, I now realize that I was learning by just listening and it has helped inform my approach to working with small business owners and understanding what it takes to establish and maintain a successful business. I know how hard small business owners work. There can be so much focus on building the business and running it day to day that people often forget to address what happens when they no longer want to keep it going or can no longer work at the same pace. I don’t mean what happens when a business fails. What happens when a business succeeds? How do you transition it to the next owner? How do you protect the legacy you’ve worked hard to build?
Continue Reading What happens when a business succeeds? Estate planning for business owners.

When “Queen of Soul” Aretha Franklin died on August 16, 2018, her family thought she died without a Will. There were many questions about what would happen to her estate and what Aretha’s wishes were upon her death.

In legal terms, it was believed that Aretha died intestate, or without a Will. You can read more about Pennsylvania’s intestate laws and how an estate is handled when someone dies without a Will here.

In many cases, when someone dies without a Will, it can cause controversy in an already grieving family. For Aretha Franklin, we can only assume that the vast size of her estate and the legacy attached to it left her heirs wondering Who’s Zoomin’ Who?
Continue Reading Oh Me, Oh My It’s Time to Get Your Estate Plan in Order: Lessons from Aretha Franklin’s Death and Her Handwritten Wills

“Irrevocable Trust” sounds so formal and intimidating. Also, there are two very different pronunciations. Regardless of how you pronounce “irrevocable,” it can be intimidating if you are not properly advised during the drafting process. When a person creates an irrevocable trust, they relinquish ownership and control of the assets they are transferring to the trust. The assets are then controlled by the Trustee appointed in the trust document. The Trustee must control those assets in accordance with the rules outlined in the trust document. It is crucial that you are satisfied with the trust document before signing it, because unlike a revocable trust which can be amended at will in most cases, there are only a few limited circumstances where an irrevocable trust can be amended or terminated.
Continue Reading Revocable versus Irrevocable Trusts