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Planning to avoid estate taxes

A major component of estate planning in Pittsburgh is ensuring that one's liabilities have a minimal impact on the anticipated amount of assets they will have to pass on to beneficiaries. One can typically plan to resolve a majority of their debts before their estate's are dispersed; they may believe that there is nothing that they can do to avoid paying estate taxes. Yet a closer review of federal tax law reveals that estate taxes need not be a major concern. 

Why? First off, only a small percentage of estates will actually be taxed (indeed, projections from the Internal Revenue Service show that in 2019, only around 31,700 are anticipated to be filed in the U.S.). This is because the federal government has established an estate tax threshold. If the total taxable value of one's estate is under that threshold, then it is not subject to federal estate taxes. 

Staying mentally sharp might help you age gracefully

Protecting yourself as you grow older is important. It may be natural for your perspective to change. Your life experiences have provided an education that is uniquely yours. You have likely succeeded in ways you did not think possible when you were younger.

At the same time, aging can have significant effects on your mind. While planning for the unexpected is helpful, it does not offer you any guarantees of prolonged mental health. Even though you have prepared financial and healthcare powers of attorney in case of your incapacity, there are things you can do to help stay mentally sharp.

What is a Medicaid spend-down?

Medicaid/Medical Assistance Planning is something that your family may need to consider. As your parents become older and their health deteriorates, it can be helpful to begin thinking ahead to a time when they might need to take up residence in a Pennsylvania nursing home. No one wants to go into a nursing home; so, this can be one of the most difficult situations a family ever faces. It will become even more difficult when you discover the high costs of long-term care.

Even if your parents are reasonably well-to-do people, they likely have not accumulated the assets necessary to pay for long-term care and may not have long-term care insurance to help cover the expenses, which, in 2019, may be over $10,000 per month in Pennsylvania. Consequently, they may need to spend down their assets and apply for Medicaid. This is when you discover that, while Medicaid does indeed pay for long-term care, there are medical eligibility requirements as well as income and asset limits to qualify. Not everyone is eligible for Medicaid.

Considerations for special needs guardianships

Residents in Pennsylvania who have children with disabilities or other types of special needs know that they may need to take extra steps to provide appropriate care for their loved ones. These extra steps do not just involve focusing on the years after the parents have died but may need to begin as soon as the child turns 18 and becomes a legal adult.

Special needs or not, a person who is 18 years old is deemed to be solely responsible for his or her own decisions unless other legal arrangements have been made. A guardianship through the Orphans' Court is one type of arrangement that may allow another person to take care of or assist a person with special needs. On the other hand, Powers of Attorney may be enough.

Which individuals can benefit from guardianships?

Guardianships may be of benefit to certain types of individuals in Pennsylvania. These individuals may include elderly loved ones, persons who are unable to handle their own financial or medical decisions due to some type of impairment or minors with special needs who are about to come of age. Sikov and Love, P.A., is here to help you through all the hurdles of determining if a guardianship is appropriate and establishing a guardianship though the Orphans' Court.

In the case of elderly loved ones or impaired family members, guardianships will let you manage their money and assets for them so that you don't have to worry about them recklessly spending or giving away money or losing track of paying their bills. Guardianships are also helpful for making healthcare and placement decisions, if your loved ones need medical treatment or possible placement in a personal care home, an assisted living facility or a nursing home.

Guardianships and elder abuse in Pennsylvania

People in Pennsylvania who have elderly relatives requiring professional care know how important it is to find the right persons or facilities that they feel can provide safe and quality care. For some people, there are no relatives able to help with this process or to provide the care themselves. In these situations, a third party may be required to be named as a guardian. The guardian may be a family member as well. Details on establishing guardianships have been previously discussed.

Regardless of the care situation for an elderly person, the concern that the ward may become subject to a form of elder abuse exists. The Erie County Bar Association's Orphans' Court Committee indicates that a person may be named as the guardian of an estate or the guardian of a person. In either situation, there is the potential for abuse. When acting as the guardian of an estate, a person has access to the ward's financial information and assets. This opens the door for financial exploitation to occur.

When or why you should review your Will

Creating Wills and other estate planning documents may feel a bit onerous for many people in Pennsylvania. Once an estate plan is in place, however, many people feel very good about having prepared a plan and then assume that they do not have to think about these matters again. However, the reality is that an estate plan should be considered a living set of documents. Knowing when and why to review Wills and other estate planning documents is important.

Aging Care recommends that a person make estate plan review a priority after any significant change in their personal estate value or personal life relationships. For example, if they buy or sell a piece of real estate or otherwise acquire a new asset of substantial worth, it would be important for a Will to reflect the current assets. If a person becomes widowed or divorced or gets married, he or she should also update estate planning documents. The same is true for the birth or death of any beneficiary.

Preserving your priceless collection

The things that matter to you may not always make sense to your loved ones, but any enthusiast feels a closeness to their collection – whatever the medium. While most of your personal effects may not matter to you once you’ve passed, your collection may be the only possessions you want a hand in deciding their fate.

This may be especially true if the collection is valuable. According to a survey, high-net-worth art collectors are most concerned with what happens to their artwhen the next generation inherits it. For collectors who own more than $5 million in investable assets, the distinction between garage sale prints and a rare and coveted piece is significant.

Potential help for grandparents as guardians

In Pennsylvania and across the United States, drug addiction and abuse continue to plague many families. The impacts of this epidemic seem to have no end and among them include the need for children to be cared for by someone other than their own parents. In some situations, it is a grandparent who steps up to the plate to take care of a granddaughter or grandson when their own adult son or daughter is not able to do so.

As reported last autumn by the Pittsburg Post-Gazette, a bill was passed in the state legislature that is designed to provide some assistance to families in which grandparents have had to take over parenting. Opioid addiction is one of the factors identified as a reason for this in many of the cases. The effort is intended to facilitate access to financial resources.

How to assess a nursing home

When a family in Pennsylvania realizes that a parent, grandparent or other aging relative may be in need of care beyond what they can provide at home, many may consider moving their loved one into a nursing home. This decision is rarely made easily, especially with the knowledge that some facilities may not provide the level of care they desire.

In late 2018, PennLive published a report highlighting some of the gaps and concerns about nursing home care in Pennsylvania. Since then, two state lawmakers have been promoting the need for increased oversight of these facilities. The state Health Department is said to be updating its regulations, including those that outline required or recommended staffing levels. In the meantime, people should learn how to assess different facilities, so they can find one they feel good about moving their loved one into.

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