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Late singer's estate case off to tumultuous start

Many in Pittsburgh have likely heard of how costly a process probating an estate can be. That can be true, depending on the amount of time that is required to complete it. Court costs and attorneys fees can add up over time, and those expenses are typically paid from the estate's assets. Yet there are steps that one can take to ensure that their estates are not delayed when going through probate (one might even be able to plan to avoid the process altogether). It is for this reason why so many estate planning experts encourage people to take up the process early on in their lives. 

The consequences of not doing so can be costly. Take the estate case of the late singer Aretha Franklin. When the signing icon passed away last year, she left no will, trust or any other instrument meant to deal with her vast fortune. What has resulted is a complex case that threatens to eat away at her estate's assets. Her estate administration case began initially under shady circumstances, as law enforcement authorities in Michigan have confirmed that there is an active investigation into the theft of some of her assets. Then there is the $6.3 million tax bill that the IRS claims the estate owes (of which $3 million has already been paid). Recently, one of her ex-husband's claimed that he should also be paid a portion of her music royalties. 

Medicaid trusts and other long-term care planning strategies

People in Pennsylvania who are evaluating their estate plans should give careful thought to how they might choose to fund any long-term care needs they may experience in the future. If no long-term care insurance policy has been maintained and there is not enough value in a person's estate to ensure proper care for as long as a person may need, Medicaid may be the next option. However, there are some limits to when Medicaid will cover the cost of this type of care.

As explained by NextAvenue, too many people find themselves stuck in a precarious position where they do not have enough savings to pay for necessary care but the value of their assets or their income level is too high to qualify for Medicaid. It is difficult to know if or when such a situation may arise so proactive planning is important.

Are no-contest clauses enforceable?

As you work through your estate plan, your hope is that those you leave behind in Pittsburgh will respect your decisions. Yet, making everyone happy (especially when it comes to the matter of an inheritance) can be difficult. Should one of your beneficiaries question the validity of your Will, working through the dispute can be a long, drawn-out process, depriving others of what you have earmarked for them an potentially eating away at your estate's funds. Some might say that it is best, then, to include a no-contest to deter anyone from challenging your will. Could such a move work? 

It depends on the motives of whomever is making the challenge. A no-contest clause can reduce or eliminate one's stake in an estate if they question the testator's wishes. Threatening your beneficiaries with being disinherited might serve to confirm how resolute you are in your wishes being respected (it may also show how much you hope to avoid any conflicts amongst your beneficiaries). However, there may situations where a no-contest clause in considered to be unenforceable. 

Determining incapacity in Pennsylvania

No one in Pittsburgh wants to lose their decision-making ability and become incapacitated. Typically, guardianships are established at the request of concerned parties who feel that a loved one has become incapable of caring for themselves. The trouble is that "incapacity" may seem like such a subjective term, with some defining it as any limitation that makes conducting seemingly mundane tasks more difficult to a complete inability to function without assistance.

Fortunately, state law has established a standard to determine incapacity. According to the Pennsylvania General Assembly, one is considered to be incapacitated if their "ability to receive and evaluate information effectively and communicate decisions in any way is impaired to such a significant extent that" they are "partially or totally unable to manage" their "financial resources or to meet essential requirements for" their "physical health and safety."

Intestate succession explained

A common question posed to us here at Sikov and Love, P.A. is what happens when a Pittsburgh resident dies without a will. When a loved one dies whose estate you may have an interest in, your first thought might be that without a will in place, it is left to you and other heirs to decide how their assets are to be dispersed. Unfortunately, that is not the case. One who dies without a will is viewed as being "intestate," and Pennsylvania has established laws detailing exactly how intestate estates are to be handled. 

According to the Pennsylvania General Assembly, if you are the surviving spouse of one who has died intestate, your rightful claim to the estate is: 

  • The entire value if your spouse has no issue (direct descendants) or surviving parents
  • The first $30,000, plus one-half of the remaining value of there are surviving issue (who are also your issue)
  • One-half of its value if there are surviving issue who are not your issue
  • The first $30,000, plus one-half of the remaining value if there no surviving issue but your spouse is survived by one or both of their parents

Should you use an annuity to pay for long-term care?

As people age, certain tasks become more difficult, and health concerns multiply. Some illnesses may be short-lived, but other conditions may linger or become long-term issues. The Pennsylvania Health Care Association estimates that 70 percent of people turning 65 will need long-term care during their lives.

The average annual cost for a private room in Pennsylvania nursing home is $116,800, though it varies by region. On average, people need long-term care for about three years. That means the typical need for long-term care will add up to more than $350,000.

What to know about Orphans' Court Litigation

Orphans' Court litigation does not necessarily involve cases for children with deceased parents. However, it sometimes can.

In Pennsylvania, the lowest level courts are known as the Courts of Common Pleas. In Allegheny County, the Courts of Common Pleas are separated into four divisions: Civil Division, Criminal Division, Family Division and Orphans' Court Division.

Orphans' Court received its name from the idea that orphans are "lacking protection." Orphans' Court litigation deals with cases involving people who cannot take care of themselves. Many of these people include incapacitated individuals or minors, who are being looked after by guardians, or the estates or trusts of decedents, which are being handled by executors or trustees.

3 long-term care misconceptions that can cause problems

Long-term care needs are something many people are likely to have at some point in their life. According to some estimates, around 68 percent of individuals age 65 and up will need such care within their lifetime.

People can take measures to prepare for the possibility of needing long-term care and set up plans aimed at ensuring the costs of such care don’t endanger their overall goals. However, not everyone takes advantage of these options. Among the things that can lead to people putting off such planning are misconceptions about long-term care. We’ll go over three such misconceptions today.

Pet trusts and how to avoid probate litigation

More pet owners are creating pet trusts that ever before. Unlike you might think, they are not just for the super wealthy.

Pet trusts are created like any other trust. Once you determine the amount of money you wish to leave for the benefit of your pet, you need to decide who will act as the trustee. The trustee will manage the assets in the trust and ensure that the funds are used appropriately for your pet with its new owner.

Commonly, funds in a pet trust pay for feeding, grooming, boarding, veterinary care, end-of-life care and other pet related expenses. You can also leave instructions as to the type of care that you wish your pet to receive. It is the trustee's responsibility to make sure your wishes are followed.

What is a power of attorney and do you need one?

Perhaps you have heard of powers of attorney (POA) and are wondering if you should have one. Or, maybe you have an elderly parent who may soon need help making financial or medical decisions. These are all great reasons to learn more about powers of attorney and what they can do. There are several types of powers of attorney in Pennsylvania:

 

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