Estate planning should address the broad range of scenarios that can impact a person’s care and his or her assets both during life and after death.  When a person becomes incapable of making his or her own personal decisions, whether temporarily or permanently, that authority will be assumed by someone else.  It is best for the disabled person to designate the person(s) he or she would want to make decisions under such circumstances, to avoid disputes among concerned individuals or, worse yet, involvement of the Courts.  What can be a rather simple and cost-effective procedure then becomes cumbersome, time-consuming and expensive.  We prepare durable powers of attorney for both financial and medical decision-making purposes, as well as living wills to express the client’s wishes under extreme, end of life circumstances.

Revocable living trusts, discussed in more detail later, are another means of addressing disability concerns in the context of financial decision-making.  While a revocable trust would not ordinarily be appropriate solely for incapacity planning purposes, they are an effective tool in this regard. When advance planning has not been implemented and it becomes necessary to obtain Court authorization to act on behalf of an incapacitated person, we can shepherd the family through the process.

When a person dies, the law dictates a procedure for ensuring compliance with a person’s Last Will and Testament and payment of any taxes due that are due the State.  This process essentially involves identifying the deceased’s assets, gathering and securing them, satisfying the person’s legitimate obligations, including those necessary in connection with the probate process, and distributing the assets as directed in the Last Will and Testament.  A number of documents must be filed with the Register of Wills and/or Orphans’ Court during the process, including a Petition for Probate, Inventory, Information Report, and Accounting, and potentially several others.  The individual’s final income tax returns must be prepared and steps taken to ensure that the tax authorities are satisfied with the amounts paid on prior returns within the Statute of Limitations.  When the property remaining after the estate obligations have been satisfied is comprised of assets other than cash, the distributive shares must be equalized in a manner that is equitable to all beneficiaries.  In many instances it is important for the Personal Representative to obtain Indemnification Agreements from the beneficiaries in the effect bona fide obligations surface after the estate has been closed.

The complexity of probate proceedings often depends on the nature of a person’s assets, whether estate tax issues exist, and whether there is agreement and cooperation among the beneficiaries or outside parties.  Even where an estate is seemingly simple, the duties of a Personal Representative can seem daunting to someone contending with the requirements for the first time, particularly during the grieving process.  We have assisted families with estate administration for more than 25 years, making the process simpler and less burdensome to them.  This extensive experience produces efficiency, and lessens the cost of ensuring that the Personal Representative has promptly and satisfactorily fulfilled all of his or her duties.

Families with potential estate tax exposure in excess of what can be protected utilizing the basic estate tax exemptions may create a family partnership or similar entity that affords valuation discounts.  The documents that spell out the rights of those owning interests in such an entity typically contain certain restrictions that make the value of an ownership interest less than it would otherwise be.  This planning technique requires meticulous care in its creation and ongoing operation, in part because it is very often targeted and scrutinized closely by the Internal Revenue Service.

We also assist clients with the creation of Corporations and Limited Liability Companies for traditional income tax and liability protection purposes.

Charitable giving in the context of estate and gift tax planning takes many forms, and as with most tax planning, ranges from simple, outright gifts and bequests to more complex trust arrangements.  As one example, a charitable remainder unitrust (sometimes called a CRUT) can enable a person to convert a non-income producing asset with significant potential capital gains liability into a fund that produces an income stream for life without liability for the capital gains tax.  After creating such a trust, the person gives the highly appreciated asset to the trust where it is then sold.  The trust reinvests the proceeds and pays the creator of the trust a specified amount, usually for life.  Because one or more charities designated by the trust creator is the ultimate recipient of the property remaining in the trust at its specified termination date, this planning technique allows the sale of the initial property to escape capital gains taxes, and also gives the donor current income tax deductions as well as estate tax savings.