Faq - Estate planning

What is an estate plan?

Simply, it is the best method of preserving your current wealth and passing it on to your heirs in a way that reflects your true wishes.

How can an Estate Plan do this?

By ensuring that your assets are arranged to fulfill your objectives with the minimum expenditure for taxes, and by creating the legal structures to ensure the distribution to your heirs in accordance with your desires.

Wasn’t the Estate Tax repealed?

Not quite. The 2001 tax act, which reduced individual income tax rates, increases the amount that can be passed free of Federal Estate Tax and reduces the Federal Estate tax rates through 2009. In 2010 the legislation calls for no federal estate tax, BUT on January 1, 2011, the current law springs back increasing the maximum rates back to 55 % and reducing the exemption amount. It is likely this law will be changed prior to 2010 although no one can predict when or how.
Click here for more information on the 2001 Tax law.

For Pennsylvania residents there will still be a Pennsylvania Inheritance Tax, which has no exemption and rates as high as 15 %. Even an estate as simple as an individual owning a house worth $100,000 which is left to a nephew could have a $15,000 tax bill!
Click here for more information on the Pennsylvania Inheritance Tax.

Does a revocable (or living) trust avoid the need for an estate plan?

NO!! Revocable trusts are one of the ways to avoid probate (the court administered process of transferring your wealth to your heirs) but does NOT REDUCE TAXES. It should be one of the structures considered in your estate plan. Revocable trusts are not for everyone and will not reduce costs for everyone. Often, there are simpler ways to avoid or reduce the property subject to probate.

WHAT SHOULD YOU LOOK FOR IN AN ESTATE PLANNER?

You need to work with someone both you and your spouse feel comfortable with – this will, after all, hopefully be a long term relationship, one involving an unusual form of business and personal trust and confidence. Also, you want someone able and willing to ask the difficult but necessary questions required to create the kind of estate plan that most completely meets your real needs and desires.

You also need someone with the experience and expertise to design a plan that you understand and that correctly creates the legal structures to meet your goals without over complicating your life. The estate planner must not only have the capability of creating the legal documents that will put into place all the pieces of your Estate Plan but the ability to make certain that they are up to date with constantly changing tax laws.

Beyond these major areas, you want an estate planner with experience – one whose references you can trust – and whose interest and friendship you and your heirs can count on, yet who is young enough both in age and outlook, so that they will probably survive you and be able to assist in carrying out your estate plan and to work with and understand your heirs during what is often a difficult and trying time.

Wiener and Wiener LLP have the ability and experience to guide you through the estate-planning maze and, when the time comes, to assist your personal representatives through the entire estate administration process.

Our firm maintains offices in Allentown, Pennsylvania and West Palm Beach, Florida to enable us to serve you and/or your personal representatives in either state and we are prepared to spend the time with you to assist in working out the estate plan you want for your family.