Shields and Boris Blog on Elder Care, Health Care, and Caring in General

Want to avoid probate? You have options!

One important goal for many people seeking help with their estate plan is how to avoid probate.  If you’re also looking to keep your estate out of probate when you pass away, the good news is that you have several different ways of doing this. 

Why would you want to avoid probate?  There a few good reason.  Probate is a public process and many people prefer that their assets be distributed privately.  Probate can also be very time consuming and costly for your heirs, so it makes sense to avoid it whenever possible.

Consider these three ways of avoiding probate:

1. Living trust: you can set up a living trust to hold your assets.  You maintain control of the trust while you are alive, but when you pass away the trust goes to your beneficiary. 
2. Joint ownership: when you purchase property with your spouse or partner, you can chose to own it jointly or by tenancy by the entirety (which is only available to married couples in Pennsylvania).  In both types of ownership when one partner dies the other has the right of survivorship, so they take over complete ownership of the property.
3. Payable or transfer on death: you can add a payable on death (POD) designation to your bank accounts so your beneficiary receives them when you die, and you can set up your securities to transfer on death (TOD) to your beneficiary.

Please click on the links above to read more about these issues in our law library articles.

Is it time for a beneficiary audit?

It is an unpleasant scenario and unfortunately one you won’t be able to do anything about: after your death, your assets are given to a former spouse or somebody you no longer wanted them to go to because you forgot to update your beneficiary list before you passed away.  It is a situation that some families find themselves in after the death of a loved one, but it is a sad scenario that you can avoid now.

It is always a good idea to check in on your estate plan documents periodically and make sure that the information they contain is still relevant.  One area to focus on is your beneficiaries – the people who will inherit your assets after you pass away.

It isn’t uncommon for life changes to necessitate a change to your beneficiary list, and unless you want your estate to end up in probate or contested by your survivors it’s a good idea to keep the list current.

Don’t think of estate planning as a once-in-a-lifetime event.  It isn’t an event – it is a process, something you take care of and manage throughout your life.  To learn more about estate planning and elder law in Pennsylvania, please contact the law offices of Shields and Boris.

Will proposed changes to medical estate recovery laws swallow what is left of your estate?

The Pennsylvania Department of Public Welfare (DPW) has a repayment requirement for anybody who receives Medicaid after the age of 55 called Medical Assistance Estate Recovery (MAER).

Under MAER, the DPW can seek repayment for the amount of medical assistance (Medicaid) paid out for long term care related services provided on behalf of certain recipients.  Since repayment does not happen until after a person has died, some people refer to MAER as the Medicaid death tax.

Current law states that the state can make a claim against a deceased person’s probate estate.  Only items in probate could be used for repayment.  However, a bill has been introduced that would expand Medicaid Estate Recovery to non-probate assets.

Non-probate assets that could be targeted under the new bill – if it passes – include real and personal property held in joint names, life estates, and other traditionally exempt forms of ownership.  In addition, the bill would give Pennsylvania expanded lien powers and control over disputes.

This could spell bad news for many elderly citizens, especially surviving spouses.  Imagine if your spouse was to die, and because of this new law you lost your home and much of the remaining estate to the government.  It is a frightening scenario to consider.

If you are concerned about losing your non-probate estate to the government, talk to your state senators and representatives about this bill (HB 1351, section 1214).  If you have questions about asset protection and planning for future health-care costs, talk to a knowledgeable elder law and estate planning attorney like those at Shields and Boris.

What's So Bad About Probate?

Probate is a court proceeding. 

Nobody (except attorneys who do so for a fee) likes going to court.

It takes time. 

When we have to probate an estate, we usually tell clients to expect the process to take about a year. 

You have no privacy. 

All the details of your will, your beneficiaries, your assets and expenses are public record for anyone, even a nebby neighbor, to do what they want.

It is expensive. 

In Pennsylvania, attorneys can charge a "reasonable fee" to go through probate.  On a typical estate this "reasonable fee" is usually 3 to 7% of your gross (not net) estate.

AAPR did a study about probate and called it a "cash cow" for attorneys.  The old attorney joke is how do you make a lot of money as an estate planning attorney?  You write a lot of wills and outlive your clients.  Why make an attorney a beneficiary" of your estate?  Learn how you can avoid probate, and preserve your assets for your loved ones.