Estate Planning

We have told people in the past that they do not need a Will, but it is rare. If you are single or widowed, and have all your assets in joint names with someone else, then you may not need a Will. But if you are married, or single with assets in your own name alone, then we suggest you need a Will.

A trust is a contract with someone else, called a trustee, who you ask to manage your assets. The trust management of your assets could be during your lifetime or after you die. The most common is called a “Living Trust”, which simply is a written trust contract that you sign during your lifetime, which takes effect immediately. Your assets may be transferred to the Trust either during your lifetime or after you die, depending on your choice.

A Power of Attorney is a written document that appoints someone to take care of your assets and/or health care decisions if you become disabled and can’t do it for yourself. It could include the power to sell real estate, pay bills, and make decisions about medical treatment. It is a very important document if you become disabled. If you don’t have a power of attorney and become disabled, your family must have you declared “incapacitated” by the Court in a “Guardianship” proceeding to be able to help you.

The Commonwealth of Pennsylvania has a Statute that tells us exactly what to do with your assets if you die without a Will.

Elder Law

Yes, the area of law practice known as “ELDER LAW” includes the process of nursing home care payments. We are trained to help you protect your assets, and qualify your loved one for Medicaid to help pay the extremely high costs of nursing home care.

Medicaid is a federal and state program that pays nursing home costs for senior citizens and disabled individuals. It is a “need based” benefit, so your assets must be limited to qualify. This can present a stressful situation for people, especially married couples, who are concerned about spending all of their hard-earned assets on nursing home. Medicaid does not cover personal care or assisted living homes – these facilities provide a lower level of care and greater independence for their residents. To qualify for Medicaid, you must require custodial care and assistance with your activities of daily living such as bathing, toileting, dressing, eating, and transferring from bed to chair. Generally, you must receive this care in a nursing home to qualify for Medicaid. However, there are some limited cases where you can remain at home and still receive Medicaid under a state waiver program.

It is essential that Medicaid planning begin as soon as possible once admitted to a nursing home. We have several goals in Medicaid planning:

  • Limit money spent on care by qualifying for Medicaid as soon as possible
  • Protect assets and income for a spouse at home
  • Preserve a future inheritance for family
  • Ensure that the Medicaid recipient can continue to receive necessary care

Emergencies can happen that require nursing care when you least expect it. However, it is also important to be proactive. There are many strategies that can protect your assets from future long-term care costs, including Irrevocable Asset Protection Trusts and asset transfers. These options require advance planning before nursing care is imminent. Whether you are in crisis mode or planning for the future, our office is here to help you navigate these complex issues. It is also important to include your financial advisor and accountant in this discussion.

Estate Administration

Probate assets are distributed to a decedent’s heirs through a Last Will and Testament or by the intestate laws. If someone dies with a valid Last Will and Testament, the Will dictates how probate assets are distributed and to whom. If someone dies without a valid Last Will and Testament, they are said to have died “intestate” and the state intestate laws determine the distribution of the probate assets. In Pennsylvania, a formal estate administration is needed if a person dies owning probate real estate or other probate assets totaling over $50,000. However, there are some exceptions to this general rule. You must speak to a qualified estate attorney to determine the correct process for your specific case.

An Executor is appointed to administer an estate through a Last Will and Testament. An Administrator has the same rights and obligations as an Executor, but with a different title. The Administrator is not named in the Last Will and Testament and is appointed either in an intestate situation or where the named Executor is unable or unwilling to serve. In either case, the Executor or Administrator is the personal representative of the estate and administers the estate according to the Last Will and Testament or applicable intestate laws.

Estates are overseen by the Register of Wills and the county Orphans’ Court divisions. To open an estate, the proposed Executor or Administrator must file an original Death Certificate and the original Last Will and Testament (if any) with the Register of Wills in the decedent’s county of residence. The Executor or Administrator must also file a petition requesting that the Register of Wills officially appoint the person as the Executor or Administrator, and an information sheet providing details on the decedent and his/her assets. Finally, the Executor or Administrator must take an oath in front of the Register of Wills and promise to administer the estate according to the Last Will and Testament or applicable intestate laws.

Well, this can be a loaded question. There are statutory requirements that must be met for every estate such as notices to estate beneficiaries and advertisements. The Executor or Administrator must liquidate all assets, which may include closing bank accounts or stock and selling real estate. All estate funds should be maintained in a fiduciary estate account. A Pennsylvania Inheritance Tax Return must be filed and inheritance taxes paid. Finally, all creditors of the estate must be paid before any distributions to estate beneficiaries. This is a simplified outline of the estate process. Before being sworn in as an Executor or Administrator, we strongly recommend contacting a qualified estate attorney for assistance in administering any estate. Our law office handles estate administrations and will be happy to speak with you about a specific estate case.

Pennsylvania applies an inheritance tax to most probate and non-probate assets, regardless of the asset’s value. There are a few tax exemptions, with the most common being life insurance death benefits. Pennsylvania Inheritance Taxes are due within 9 months of death. The taxpayer gets a 5% discount if the taxes are paid within 3 months of death. The tax rates are:

Lineal Descendants Children, Grandchildren 4.5%
Siblings 12%
Collateral Nieces/nephews, cousins, friends 15%
Spouses 0%
Charities & Churches 0%

Like an estate administration, we strongly recommend contacting a qualified estate attorney for assistance with Pennsylvania Inheritance Tax Returns. Our law office routinely prepares and files Inheritance Tax Returns and will be happy to assist you.

A formal estate administration typically takes 12-18 months to complete, especially if there is real estate that needs to be sold.

First, a qualified estate attorney will know the correct laws and procedure for your individual situation. We see many cases where people have opened formal estates unnecessarily because of online research or “non-legal” advice. Our knowledgeable attorneys can determine the most efficient and cost-effective legal procedure for your estate situation. Second, if a formal estate administration is necessary, there are several statutory requirements that must be met. This includes the proper payment schedule for creditors. Our attorneys are well-versed in the statutory rules to ensure that your estate is administered correctly.

This depends on whether your surviving parent has any probate assets. Typically, the assets held in a revocable trust are not considered “probate” and will pass to the trust beneficiaries according to the trust document. A formal estate administration is not needed for the trust assets. However, if your surviving parent has other probate assets such as real estate or stock, then a formal estate administration may be necessary.

We always recommend taking a few days, or even a few weeks, to grieve and adjust to life after losing a parent. The grieving process is just as important as the legal estate process. When you are ready, contact a qualified estate attorney to review your specific case. Please remember that the inheritance tax discount deadline is 3 months after the date of death. Ideally, you will want to consult with an attorney within 1-2 months of the date of death to ensure that deadline can be met.

Special Needs Planning and Guardianships

Special care and planning are necessary for disabled individuals, especially if they receive need-based public benefits such as Medicaid or SSI. It is possible to include our disabled loved ones in our estate planning, but we must ensure that their benefits are not jeopardized as a result of receiving inheritance. We commonly use a Special Needs Trust in these situations.

A Special needs trust is a unique type of trust that allows the disabled Beneficiary to use assets without affecting his eligibility for benefits. The Trust assets are not considered to be owned by the Beneficiary because the Trustee has absolute discretion as to how the assets can be used. Of course, the Trustee can only use the Trust assets for the Beneficiary, but the Beneficiary has no personal access to the Trust assets. The Trustee should not pay Trust money directly to the Beneficiary, as that could lead to a reduction in SSI. The Trustee also should not use Trust assets to supplant any public benefits. For example, if the Beneficiary receives a monthly stipend to pay his heating bill, the Trustee cannot use Trust money to pay the heating bill instead. However, the Trustee can and should use the Trust assets for supplemental needs, such as extraordinary medical costs not covered by Medicaid, a new vehicle, or leisure items such as tickets to a sporting event. In some cases, the Trustee can even purchase a house for the disabled Beneficiary.

A Special Needs Trust must be administered correctly or the Beneficiary’s necessary benefits could be affected. Therefore, it is very important that the Trustee be someone who is financially responsible and willing to take on this important role. Ideally, the Trustee should be a professional trust company with experience in Special Needs Trusts. However, this is not always possible as most trust companies have minimum requirements as to the value of the Trust. When the Special Needs Trust does not meet those minimum requirements, the Trustee should be a family member or close friend who has a close relationship with the disabled Beneficiary and intimate knowledge of his special needs.

There are three types of Special Needs Trusts: 1. First Party, 2. Third Party, and 3. Pooled. A First Party Special Needs Trust is funded with the disabled Beneficiary’s assets. In Pennsylvania, there is a Medicaid payback when the Beneficiary dies or if the Trust is terminated. This means that any assets remaining in the Trust will be paid to the Pennsylvania Department of Human Services in repayment of Medicaid benefits paid out for the Beneficiary. First Party Special Needs Trusts are used when a disabled person unexpectedly receives an inheritance (and proper planning was not done) and also to hold judgment or settlement proceeds that were received through a personal injury action.

A Third Party Special Needs Trust is funded with third party assets – not from the disabled person. A Third Party Special Needs Trust is most often used in estate planning as a way of “catching” inheritance for a disabled loved one, without affecting eligibility for public benefits. There is no Medicaid payback in a Third Party Special Needs Trust. When the Beneficiary dies, the contingent Beneficiaries receive the Trust assets.

There are two types of guardians: guardian of estate and guardian of person. The guardian of estate manages the incapacitated person’s finances and handles paying bills, buying/selling real estate, overseeing bank accounts, and applying for public benefits such as Medicaid. The guardian of person assists the incapacitated person in making medical decisions. The guardian of person gives the required consents for medical treatment, including admission into a hospital or nursing home. The guardian is appointed by the Orphans’ Court and is subject to the Court’s supervision. The guardian must file annual reports to keep the Court informed of the incapacitated person’s situation and to ensure the guardian is acting appropriately. The guardian of estate must report all assets, including bank accounts and real estate, and give detailed information on all money spent by the guardian. The guardian of person report tells the Court about the incapacitated person’s personal needs and medical care. The annual reports can be filed online through the Pennsylvania Guardianship Portal.

In most cases, no, you will not need a Guardianship so long as a valid Durable Power of Attorney is in place. If a Durable Financial Power of Attorney was prepared before the year 2000, most banks will not accept the document and will not allow you to act as agent. In that case, a Guardianship may be necessary to give you access to bank accounts and other financial assets. A Guardianship may also be required when the appointed agent in a Durable Power of Attorney dies or is unable to continue in that role – for this reason, it is strongly recommended that you name successor agent(s) in your Power of Attorney.

Real Estate

Usually, no. Most of the time, there is no reason to do a new deed when a spouse dies unless you wish to add someone else’s name to your title, such as a child. We always recommend consulting with an attorney when a loved one passes away, so that you can get detailed advice for your specific situation.

Yes, unless you are really certain that there are no liens or title defects in the title history, you should have the title examined. An example would be if you take the title from a close relative who you trust. Even then, possibly the relative doesn’t know of the title problem. If you invest in real estate, invest the extra money and have the title checked by a real estate attorney.

A Deed conveys or transfers ownership of real estate. In Pennsylvania, a valid Deed must be in writing, give a legal description of the property, and state the name of the new owner. The current owner who is selling or transferring the property must sign the Deed.

Our office currently represents sellers only. If you are buying a new home, you will need an attorney or settlement company who writes title insurance and can represent you as the buyer for the closing. We will be happy to refer you to a reputable attorney or settlement company to assist you.

Your first step is to market the home for sale. You can do this “for sale by owner” or through a licensed realtor. A realtor will help you negotiate with potential buyers and can write an agreement of sale when you accept a buyer’s offer. If you sell without a realtor, you or the buyer will be responsible for preparing an agreement of sale. Our office can prepare an agreement of sale if you are selling by owner. Once you are under contract, we can represent you in working with the buyer’s attorney or settlement company for the closing. This includes preparing your deed, clearing title issues, and preparing other documents that may be required for the closing. We will represent your best interest as the seller and ensure the transaction is completed smoothly and efficiently.

Most municipalities in the Greater Johnstown area, including in northern Cambria County, have ordinances that may require testing of your sewer lines. If you are selling or transferring real estate, you must check the requirements of your local sewer authority before completing the sale or transfer.

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