Six Things to Consider When Writing Your Will
By H. Amos Goodall, Jr., CELA
Procrastination is always a problem. Thinking about dying often makes us anxious. Still, there are six things to consider so that your estate is properly handled.
Nonprobate property:
Your will controls only property in your estate. Certain property transfers automatically: most jointly owned property (called joint tenants with right of survivorship or tenants by the entirety), “payable on death” accounts, insurance proceeds, annuities and IRAs all usually go directly to the named beneficiary rather than passing through probate. These forms of ownership are generally less flexible than a will, and most are still taxable. More important, they are often outdated and inconsistent with your estate plan, and often less property gets held back to carry out your plan.
Major Changes to the Tax Code for Retirement Accounts
By Landon Hodges, Esq.
As part of the spending bill passed by Congress and signed by the President in December 2019, the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) is now law and is effective beginning January 1, 2020. This law makes major changes in the way required minimum distributions in IRAs and Roth IRAs are treated as you age and when they are inherited by your beneficiaries. Prior to the SECURE Act, all owners of an IRA were required to begin taking required minimum distributions (RMDs) from their IRAs once they attain age 70½. Once the account holder passed away, the RMDs a non-spouse beneficiary must take were determined based on the life expectance of the beneficiary. For example, if you designated a 40-year old child as a beneficiary of your IRA, he or she may stretch those RMDs across his or her life expectancy, which allowed beneficiaries to stagger the income taxes across a larger period of time while taking advantage of tax-free growth on the funds remaining in the IRA.
Should I Give My Home to My Children for $1.00?
The Hidden Costs of a $1.00 Real Estate Transaction
Elder law attorneys at Steinbacher, Goodall & Yurchak, help clients answer the questions, “What happens if I die?” and “What happens if I don’t die, but get sick and need long-term care?” Another question that they face on a nearly daily basis is, “Should I sell my home to my children for $1.00? “
While this transfer may protect the home from nursing home care, there are many disadvantages:
• The transfer is still subject to the Medicaid Five Year Look-Back rule, and your children could be responsible to pay for your care.
• The home would be subject to your child’s death, divorce, lawsuit, bankruptcy, and/or disability. You could lose your place of residence and would have no control over the home because you no longer retain ownership.
• When the home is sold, the new owner may not be eligible for a tax break for the sale of a primary residence, and they could be faced with a large capital gains tax bill.
• Finally, without proper legal documents, the new owner could still be faced with paying Pennsylvania Inheritance tax.
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