Estate Planning

Wednesday, February 7, 2018

Disinheriting Someone: Things to Consider

There are situations that arise when your estate plan may include specifically disinheriting someone.  My clients have mentioned several reasons to disinherit an individual, including: an estranged relationship with the individual, the individual is financially irresponsible, or the individual is already financially better off than other potential beneficiaries.  Of course, there are many other reasons that a person may be disinherited. 

Who Is Disinherited?

Who are the usual disinheriting targets?  There is no need to disinherit someone that wouldn’t naturally receive an inheritance at your death.  Disinheriting targets are those that stand to lose out if you move forward with a new Will.

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Thursday, February 1, 2018

Protecting Your Spouse with Estate Planning

My clients tell me that protecting the financial well-being of their spouse is one of their most important planning objectives.  Clients are often concerned with ensuring that sufficient assets go to their spouse and ensuring that their spouse has the experience to confidently manage the assets.  Estate planning can solve these issues to protect a surviving spouse.

Ensure Transfer of Assets to Your Surviving Spouse

In many states (including Pennsylvania), a surviving spouse may not automatically receive all the assets owned by a deceased spouse.  For assets that are jointly owned by both spouses, this is not usually an issue.

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Thursday, January 4, 2018

Five Myths of Estate Planning in 2018

There are numerous myths associated with estate planning and I have listed five that I commonly see in my practice. 

Myth #1

I do not need estate planning because I’m not wealthy, sick, or old.  This is by far the most common estate planning myth and it is simply not true.  If you have people in your life that you care about, then you need estate planning.  Most of the time estate planning is not about the money.

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Thursday, January 4, 2018

When Should You Update Your Will

Clients often ask me when they should update their Will?  My answer is that a Will should be updated when circumstances change, which could be after one week or five years.  I like to compare a Will to a new house.  On the day that you purchase your new home it appears perfect (if well-constructed).  Likewise, on the day that you sign your Will, it should be optimal (if you had comprehensive planning).  However, in the same way a house deteriorates over time, your Will is likely to become less effective as your life changes.

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Thursday, September 14, 2017

Planning for Your Young Adult Child’s Incapacity

Once your children turn 18, being a parent does not automatically grant you the right to access their health care and financial information.  In the eyes of the law, your 18+ year old child is an “adult” despite their actual maturity level.  With adulthood comes certain privacy rights and independence.  All adults, even young adults, have the power to appoint individuals to assist them with health care and financial decision making via properly executed power of attorney documents.  With a little planning, your children can name you as their health care and financial agent.
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Thursday, September 14, 2017

Planning for Your Digital Assets and Online Accounts

With the Internet boom over the past twenty years, many people maintain online accounts and have accumulated digital assets.  Unlike paper statements that arrive in the mail or tangible property that is located in your home, your online accounts and digital assets are extremely difficult for other people to locate without your help.  With a little planning, you can remedy this problem.

The term digital assets does not yet have a well-established definition, but a simple definition for digital assets is content that is owned by a person and is stored in digital form.  For example, digital assets include photographs stored on your smartphone or the cloud (e.
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Tuesday, January 17, 2017

Trusts: Federal Estate Tax Planning (Article 3 of 8)

Using trusts for federal estate tax planning has been a very common estate planning strategy, but is becoming less critical for the vast majority of people.  Historically, most tax planning strategies were intended to reduce the amount of federal estate tax owed by an estate because the federal estate tax rate has been very high (max rate is currently 40%, but was 55% 20 years ago).  The federal estate tax is only implemented when an estate is valued above a certain threshold, called the applicable exclusion amount.  That is, the federal government only taxes the value of an estate over the exclusion amount. 

Over the past twenty years the applicable exclusion amount has increased from $600,000 per person to the current value of $5.
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Wednesday, July 13, 2016

Naming Guardians for Minor Children

For couples with minor children, there is no more important estate planning decision than naming guardians for your children.  In fact, the birth of a child is one of the major life events that triggers my clients to begin estate planning.  A guardian is an adult that you designate in a will to care for a child if both parents pass away before the child reaches the age of majority.  While it’s difficult to imagine that situation, it is important that parents designate a guardian so that the decision will not be left to a court. 

Quite often parents struggle to designate a guardian.
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Wednesday, July 6, 2016

Pet Trusts

About 10 years ago, Pennsylvania joined numerous other states by allowing pet owners the option of setting up a trust to care for their pets.  Pennsylvania’s pet trust statute is important because pets would otherwise be treated like property and not be eligible to receive a portion of your estate for their care. 

Your pet trust should name a trustee to manage the pet trust assets and to take care of your pet.  Alternatively, your pet trust may appoint someone other than your trustee to manage day-to-day care.  You will want to provide the trustee and care giver instructions regarding your pet’s food preferences, medical care (e.
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Tuesday, July 5, 2016

529 Plans and Estate Planning

The vast majority of people believe that a college education is important, but only a small minority of people are adequately saving for the ever growing costs of their children’s education.  While college education is definitely not the only path to future financial success, it is a proven head start that should not be ignored.  Over the past couple decades, Congress and state governments have shifted their priority from subsidizing higher education costs via grants and direct institution support to tax incentives for individuals. 

Therefore, if an individual does not adequately plan to take advantage of tax incentives offered via 529 plans, then the net cost of college will increase at an even faster rate than the current average 5% increase.  529 plans allow parents/grandparents to more efficiently save for college expenses in a tax favorable environment without income-based limitations that are found in most tax laws.
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Wednesday, June 22, 2016

Planning for Estate and Inheritance Taxes in Pennsylvania

Planning for Estate and Inheritance Taxes in PA

One of the most common goals of my estate planning clients is to minimize the tax burden on their estate.  No one should pay more taxes than legally obligated.  There are two potential taxing authorities that we consider when minimizing your estate tax burden: the federal government and your state government. 

From a federal perspective, very few estates are taxable because the taxable threshold is over $5 million per individual.  Therefore, you must leave an estate worth more than $5 million (currently $5.
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McClellan Legal LLC is located in Kennett Square and serves clients throughout the areas of Avondale, Chadds Ford, Coatesville, Downingtown, Landenberg, Oxford, Phoenixville, Pottstown, West Chester, & West Grove. We also serve the following towns in Lancaster County: Lancaster, Lititz, Strasburg,Millersville, Ephrata, Leola, Manheim, New Holland, Willow Street, Quarryville, Elizabethtown and Mountville.

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113 South Broad Street, Kennett Square, PA 19348
| Phone: 610-444-5552

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