So You Think You Want to Disinherit a Child? Be Careful!

There is no one size fits all estate planning solution. Some people opt to devise property to their children in their will, but for others it may make sense to exclude one or more of their children or relatives. As people attempt to address the unique demands of their situation, they may have questions about disinheriting a child. Sometimes people ask about either (1) their legal ability to disinherit a child; or (2) whether they must specifically disinherit a child in their will. Although an individual in Pennsylvania can never completely disinherit a spouse, the same is not true for children.

The Pennsylvania Supreme Court has explained that “a parent does not have to leave any of his property to any of his children, irrespective of whether he likes them or dislikes them, or hates them, and he does not have to disclose his reasons for disinheriting them.” In re Sommerville’s Estate, 177 A.2d 496, 499 (Pa. 1962). However, in the absence of clear and plain language in a will indicating otherwise, it is presumed that a parent does not intend to disinherit their children. In re Newlin’s Estate, 80 A.2d 819, 823 (Pa. 1951). Because of this presumption, it is always better for a will to include plain language which expresses a desire to disinherit a child by name rather than simply leaving them out of the will.

If you would like to learn more about estate planning devices, please contact Adam G. Anderson at 412-434-4911 x14 for a free consultation.

Power of Attorney – Elder Financial Abuse or Appropriate Tool?

A power of attorney can be an extremely useful and flexible tool for people who want to delegate authority to others to act on their behalf. Many times however, people do not fully understand the significance of a power of attorney and its full range of consequences. As statistics show us, with most cases of elder abuse going unreported, the power of attorney can easily lead to this abuse of loved ones.

A power of attorney is a document that creates an agency relationship between the person granting the power (principal) and the person receiving the power (agent). The agency relationship gives the agent the power to act on behalf of the principal in either a general or limited capacity. A general power of appointment may give an agent financial and medical powers and will often contain a catch-all phrase giving the agent the authority to perform all things the principal could do for himself.  A limited power of attorney, on the other hand, only gives the agent the power to act on behalf of the principal in specific situations.

While, a power of attorney is perhaps the single most useful tool “to deal with the possibility of future incapacity because of its flexibility, reasonable cost, and ease of use,” a power of attorney can also be abused.

Questions and concerns of abuse often arise when an agent changes the beneficiaries of life insurance or employment benefits pursuant to a power of attorney.  In the absence of fraud, the general rule in Pennsylvania is that an agent acting under a general power of attorney has the right to make these types of changes to beneficiary designations.

With the ease of financial abuse through a power of attorney, the temptation can be great, even for loved ones.  Thus, we should remember to take great care in selecting an appropriate agent.

If you would like to learn more about powers of attorney and other estate planning devices, please contact Adam G. Anderson at 412-434-4911 x 14 for a free consultation.

Three Basic Necessities for Estate Planning

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Over the past decade, not only have you grown older, but your retirement planning needs and your family’s financial needs have drastically changed.  Similarly, over the past decade, the laws of Estate Planning have drastically changed.  No longer is the Federal Estate tax a concern merely for those with extreme wealth.  No longer are same sex couples excluded from certain Estate Planning benefits.  No longer can you expect to receive your share of Social Security benefits.  And, most importantly, no longer can you put off adhering to three basic necessities of Estate Planning.

1) Put together a great team.

A proper team is the very foundation of proper Estate Planning.  Estate Planning involves giving due consideration to investments, tax considerations, and utilizing the right legal documentation to ensure your assets provide for you during your retirement years  and provide for your loved ones beyond your life.

Attorney Adam Anderson works closely with your investment advisor to ensure full knowledge and to allow for proper planning vehicles.  Adam Anderson’s practice is unlike other Estate Planning attorneys who practice on their own or who claim to be a boutique law firm.  Attorney Anderson’s firm of Elliott & Davis is a full service firm which enables you to take advantage of its experienced tax planning attorney and domestic relations attorneys.  Further, Elliott & Davis has built strong relationships with local Accounting Firms and Investment Firms.  Whether working with your own team or building one through Attorney Anderson, a full squad is necessary to ensure the wealth you worked your life to create is fully protected.

2) Update your Beneficiaries.

Updating your beneficiaries is one of the most forgotten and neglected items.  Yet, it is also one of the simplest to do.  Many people who have not assembled the proper team still list the same primary beneficiary on their insurance policy or retirement plan as they did when they got their job at upon graduation.  Listing the proper beneficiaries enables you to avoid costly estate and inheritance taxes.

 3) Prepare a Will, Living Will and Power of Attorney

If you’re reading this, you have likely realized a Will is necessary to proper Estate Planning.  However, you may not know Wills are not all the same.  The proper will may create a trust, establish a guardian for your minor child and even dictate how your child is cared for.  Additionally, while we are all asked by our doctor if we have a Living Will, how many actually say, “yes”?  We have strong feelings about our body and what type of life sustaining treatment we would want.  Whether those convictions are founded in religion, past experiences, or other beliefs, would your doctor know you wanted treatment refused, or would a funeral director know to embalm your body as opposed to cremation?  These considerations and more are encompassed in Living Wills and Powers of Attorney.

Contact Attorney Adam Anderson at 412-434-4911 x 14 to begin assembling your team and to ensure your financial wishes are met and personal desires are known.

Financial Considerations for New Empty Nesters

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Well, your child has graduated from college and you’ve cut the strings….so you hope.  The question now becomes, “What impact does this have on my Estate Planning?” 

A variety of concerns are raised.  Importantly, in light of the turbulent job market, hopefully you have come to understand a salary cannot be taken for granted.  While you likely appreciate this in your own life, you too must understand this consideration for your recent grad.  Planning for the future means you also need to ensure you have the proper means to support your grad who becomes unemployed and has nowhere to turn.

What about that 529 Plan?  Are you fortunate enough to have your contribution amounts ready for investment elsewhere?  Do you have a balance remaining in that 529 Plan?  There are certain tax considerations you should understand before cashing out.  There are roll-overs and estate tax savings that can be had.

As to your existing Estate Planning documents, your child has been an adult for several years now.  Does your Will or Trust need updated?  Should beneficiaries on your financial policies be updated?

Most importantly, if you have no Will, Living Will or Power of Attorney, now is the time to have those documents drafted.  These documents, while minimal in cost, can save drastic amounts in the future and ensure your loved ones are protected.  You have worked your entire life to create your wealth and provide for your loved ones.  Take the time to ensure you’re life’s wealth is protected.

Contact Attorney Adam Anderson at 412-434-4911 x 14 for a free initial consultation or review of your  current Estate Planning documents.