Tag Archive for: inheritance

Estate planning tips for blended families

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Careful estate planning may help people prevent inheritance disputes between their new spouses and their children from prior marriages upon their passing.

It is fairly common for people in Pennsylvania to remarry after a divorce, and often, one or both spouses may have children from a previous relationship. While these blended families offer people new opportunities to love and live, they can pose some challenging estate planning and inheritance issues. Therefore, having a carefully thought out estate plan that takes into account their new spouses’ needs, as well as those of their children’s, may help people prevent family disputes following their deaths.

Review beneficiary designations

The way people list their beneficiaries on retirement accounts, life insurance policies and other such accounts will affect how these benefits are disbursed upon their deaths. For example, it is common for people to update their beneficiary designations to their new spouses upon getting remarried. However, if they name only their new spouses, then they are able to specify their own new beneficiaries. This means that the original policy holders’ children may be bypassed altogether.

As such, people should make their intentions clear when designating their beneficiaries. They may name who the accounts should pass to after their spouses’ deaths or indicate specific percentages that each of their beneficiaries should receive.

Designate specific property separately

People often have family heirlooms or cherished personal property that they intend to pass on to certain children. Without a carefully designed plan, however, AARP points out that their new spouses may be entitled to claim up to half of the assets in people’s wills. Thus, it may be helpful if people leave a separate list of this property, sometimes referred to as a personal property memorandum. This list should describe each item to be gifted in detail and provide specific instructions as to who should receive each item upon their passing.

Consider inheritance timing

For couples who have not previously been married, inheritance timing is somewhat easy. People often leave their assets to their spouses, and their estates are passed on to their children after their spouses pass away. When it comes to second or subsequent marriages, however, withholding distributions of their children’s inheritances until after the death of their new spouses may create hostility and impatience. Therefore, people may consider establishing trusts or outright transfers that occur at the time of their deaths in order to accommodate the needs of both their surviving spouses and their children.

Working with an attorney

In the ideal situation, people in Pennsylvania could rely on their spouses and their children to work out inheritances to all their benefit after they pass away. However, even in long-term second marriages, new spouses and children from prior marriages may have drastically different ideas of what they are entitled to. As such, it will benefit people who have remarried or who are planning to get remarried to seek legal guidance. An attorney can explain their rights, including establishing wills and trusts, and help them set up a plan that provides for the needs of both their current spouses and their children from prior marriages.

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Estate planning tips for blended families

,

Careful estate planning may help people prevent inheritance disputes between their new spouses and their children from prior marriages upon their passing.

It is fairly common for people in Pennsylvania to remarry after a divorce, and often, one or both spouses may have children from a previous relationship. While these blended families offer people new opportunities to love and live, they can pose some challenging estate planning and inheritance issues. Therefore, having a carefully thought out estate plan that takes into account their new spouses’ needs, as well as those of their children’s, may help people prevent family disputes following their deaths.

Review beneficiary designations

The way people list their beneficiaries on retirement accounts, life insurance policies and other such accounts will affect how these benefits are disbursed upon their deaths. For example, it is common for people to update their beneficiary designations to their new spouses upon getting remarried. However, if they name only their new spouses, then they are able to specify their own new beneficiaries. This means that the original policy holders’ children may be bypassed altogether.

As such, people should make their intentions clear when designating their beneficiaries. They may name who the accounts should pass to after their spouses’ deaths or indicate specific percentages that each of their beneficiaries should receive.

Designate specific property separately

People often have family heirlooms or cherished personal property that they intend to pass on to certain children. Without a carefully designed plan, however, AARP points out that their new spouses may be entitled to claim up to half of the assets in people’s wills. Thus, it may be helpful if people leave a separate list of this property, sometimes referred to as a personal property memorandum. This list should describe each item to be gifted in detail and provide specific instructions as to who should receive each item upon their passing.

Consider inheritance timing

For couples who have not previously been married, inheritance timing is somewhat easy. People often leave their assets to their spouses, and their estates are passed on to their children after their spouses pass away. When it comes to second or subsequent marriages, however, withholding distributions of their children’s inheritances until after the death of their new spouses may create hostility and impatience. Therefore, people may consider establishing trusts or outright transfers that occur at the time of their deaths in order to accommodate the needs of both their surviving spouses and their children.

Working with an attorney

In the ideal situation, people in Pennsylvania could rely on their spouses and their children to work out inheritances to all their benefit after they pass away. However, even in long-term second marriages, new spouses and children from prior marriages may have drastically different ideas of what they are entitled to. As such, it will benefit people who have remarried or who are planning to get remarried to seek legal guidance. An attorney can explain their rights, including establishing wills and trusts, and help them set up a plan that provides for the needs of both their current spouses and their children from prior marriages.

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Frequently asked questions about pet trusts

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Pet owners who anticipate their pets outliving them should know the essential facts about pet trusts to be able to decide what is right for their situations.

Estate planning in Pennsylvania involves a lot of different considerations, including drafting a will, selecting an estate administrator, planning for the probate process and setting up any trusts. One kind of trust that people often overlook is a pet trust. A pet trust is a great way for pet owners to ensure that their animal companions will receive the optimal level of care necessary for them to have happy lives after their owners’ deaths. Knowing the answers to some common questions about pet trusts can help pet owners to decide if a pet trust is right for their estate plans.

What exactly is a pet trust?

A pet trust is a legal arrangement to ensure that a pet will receive the proper care and maintenance it needs after its owner passes away. While typically used for animals with longer lifespans such as parrots and horses, a pet trust can be set up for any animal and will last for the duration of the animal’s lifetime. When it is set up, a designated caregiver is set up as a “trustee” who will be given a set amount of funds that is determined by the grantor of the trust, based on what the pet’s needs are anticipated to be. This may be done in whatever manner the grantor specifies in the trust, but it is usually done as a disbursing of funds at regular intervals.

How is a pet trust different from putting a pet in a will?

There are limitations to what can be put in a will, and when someone inherits money from a will, he or she is not necessarily going to be monitored as far as what he or she spends the money on. A pet trust instills in the trustee a legal obligation to utilize the designated funds exclusively for the care of the specified pet. A pet owner can also specify the expected standard of care for the pet to receive for the remainder of its life. Another benefit to a pet trust is the option to designate a remainder beneficiary. In the event that the pet passes on before all of the funds of the pet trust are exhausted, this beneficiary will receive anything that is left over in the trust.

The decision as to whether or not to go with a pet trust can be a complex matter. There are many details to be worked out, especially if there are multiple pets involved. It may be prudent for someone who is considering this option to discuss the matter with an attorney in the local area who practices estate planning law.

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Inherited Assets

The receipt of an inheritance may impact your divorce or support case. Section 3501 of the Divorce Code defines what will be considered marital property, and up for division, versus what will be considered non-marital property. Property received as a gift, bequest, devise or descent is non-marital per 23 Pa. C.S. 3501(a). Accordingly, an inheritance that is received during the marriage can be classified as non-marital property. A problem is created if the party who receives the inheritance places the funds into a joint account and/or commingles with other funds properly classified as marital. In that scenario, it can be difficult, if not impossible, to trace which funds were from the inheritance versus which funds were marital when trying to figure out equitable distribution at some later date. As a practical tip, parties should avoid commingling inheritance funds with other marital funds. Inheritance funds should still to be disclosed in a divorce action since the separate assets of the party are a factor for equitable distribution under 23 Pa. C.S. 3502.

As it relates to support matters, money received by way of an inheritance is not to be considered income. This was established in the case of Humphreys v. DeRoss, 790 A.2d 281 (Pa. 2002) wherein the court noted that the term “inheritance” was not expressly listed in the statutory definition of “income” under 23 Pa. C.S. 4302 and so was not intended to be included. However, Humphreys also established that receipt of an inheritance may still be a factor under Pennsylvania Rule of Civil Procedure 1910.16-5. Rule 1910.16-5 lists factors for the court to consider for possible deviation from a guideline support obligation. One of the factors the court may consider is the assets and liabilities of the parties, including inherited assets. In E.R.L. v. C.K.L., 2015 PA Super 220, the court upheld an upward deviation of a child support award where father had just received a $600,000 inheritance. The base support award was appropriately calculated in that case without the inclusion of the inheritance money as income.

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Receipt of an Inheritance

The receipt of an inheritance may impact your divorce or support case. Section 3501 of the Pennsylvania Divorce Code defines what will be considered marital property, and up for division, versus what will be considered non-marital property. Marital property includes all property acquired by either party from the date of marriage through the date of separation. There is a presumption all property acquired during the marriage is marital regardless of how title is held (e.g. individually vs. jointly). However, property received as a gift, bequest, devise or descent is non-marital per 23 Pa. C.S. 3501(a). Accordingly, an inheritance that is received during the marriage can still be claimed as non-marital property. As a practical tip, parties should avoid commingling inheritance funds with other marital funds. Inheritance funds may still need to be disclosed since the separate assets of the party are a factor for equitable distribution under 23 Pa. C.S. 3502.

Money received by way of an inheritance should not to be considered income for a support matter. This was established in the case of Humphreys v. DeRoss, 790 A.2d 281 (Pa. 2002) wherein the court noted that the term “inheritance” was not expressly listed in the statutory definition of “income” under 23 Pa. C.S. 4302 and so was not intended to be included. However, Humphreys also established that receipt of an inheritance may still be a factor under Pennsylvania Rule of Civil Procedure 1910.16-5. Rule 1910.16-5 states factors for the court to consider for deviation from a guideline support obligation. One of the factors the court may consider is the assets and liabilities of the parties. In E.R.L. v. C.K.L., 2015 PA Super 220, the court upheld an upward deviation of a child support award where father had just received a $600,000 inheritance. The base support award was appropriately calculated in that case without the inclusion of the inheritance money.

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Impact of Inheritance

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The receipt of an inheritance may impact your divorce or support case. Regarding divorce, and specifically equitable distribution of marital property, Section 3501 of the Divorce Code defines what will be considered marital property, and up for division, versus what will be considered non-marital property. Marital property includes all property acquired by either party from the date of marriage through the date of separation. There is a presumption all property acquired during the marriage is marital regardless of how title is held (e.g. individually vs. jointly). However, property received as a gift, bequest, devise or descent is non-marital per 23 Pa. C.S. 3501(a). Accordingly, an inheritance that is received during the marriage can still be claimed as non-marital property. As a practical tip, parties should avoid commingling inheritance funds with other marital funds. Inheritance funds may still need to be disclosed since the separate assets of the party are a factor for equitable distribution under 23 Pa. C.S. 3502.

Money received by way of an inheritance is similarly not to be considered income for a support matter. This was established in the case of Humphreys v. DeRoss, 790 A.2d 281 (Pa. 2002) wherein the court noted that the term “inheritance” was not expressly listed in the statutory definition of “income” under 23 Pa. C.S. 4302 and so was not intended to be included. However, Humphreys also established that receipt of an inheritance may still be a factor under Pennsylvania Rule of Civil Procedure 1910.16-5. Rule 1910.16-5 states factors for the court to consider for deviation from a guideline support obligation. One of the factors the court may consider is the assets and liabilities of the parties. In E.R.L. v. C.K.L., 2015 PA Super 220, the court upheld an upward deviation of a child support award where father had just received a $600,000 inheritance. The base support award was appropriately calculated in that case without the inclusion of the inheritance money.

Click here to read more about division of property in divorce.

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