ROUND ONE: What Is a Revocable Trust?

Just like the light, boring jabs at the start of a fight, this is the part we have to get through first.

Let’s cover the legal basics.

A revocable trust is a legal structure that holds your assets during your lifetime, and directs what happens to those assets after your death.

Here’s the most important part, you are still in full control.

A revocable trust allows you to:

1. Buy and Sell Assets
2. Spend Money
3. Change or Revoke the trust at any time

Nothing is locked away, nothing is out of your hands.

You are still the boss, this just changes how things are organized and handled.

ROUND TWO: Why People LOVE Revocable Trusts 

Here come the uppercuts, this is where the heavyweight starts to show its strength in the ring.

Reason 1: They avoid probate 

Assets in a properly funded trust do not go through probate. Let’s pause. What is probate? Probate is the court process that handles your assets after death, it takes time, costs money, and becomes public.

Reason 2: They handle incapacity 

If something happens to you, someone you trust can step in and manage things without court involvement. That alone can save a family from a stressful and expensive situation.

Reason 3: Creates a sound structure, if setup properly

Instead of your beneficiaries getting everything outright, you can control how and when assets are distributed.

Reason 4: After-death protection for your beneficiaries

Without planning, an inheritance is exposed to divorce, lawsuits, creditors, and bad decisions. A properly designed trust can keep those assets protected.

ROUND THREE: Where Things Go Wrong

The self-proclaimed champ just showed some flashes of greatness, but now the overhyped contender starts to make an appearance.

There are a lot of people out there with revocable trusts. The problem is they are not properly set up.

I see this all the time, a client comes in with a revocable trust, paid thousands of dollars for it, no one explained how it worked, no one helped transfer assets into it, and no one followed through.

That trust is worth the paper it is written on.

Another major issue is lack of understanding.

If a client is not shown how to use the trust, how to access accounts, or how to actually operate it, it starts to feel complicated when it really is not.

The problem is not the trust itself.

The problem is how it was done.

ROUND FOUR: When a Revocable Trust Might Not Be Enough

Here is where the fight gets more technical.

A revocable trust is a strong tool, but it is not always the full answer.

Sometimes you need more.

Depending on your situation, that could include stronger asset protection planning, or different trust structures that handle tax issues more effectively.

I see this mistake a lot, people try to simplify things by adding a child to an asset, like a house.

It sounds easy.

But it can create major tax consequences later.

Good planning is not just about avoiding probate.

It is about control, protection, and making smart decisions for the long term.

ROUND FIVE: My Experience From the Ring

Let’s put the heavyweight on the ropes.

Over the years, I have spent a lot of time in the camp that revocable trusts are largely overrated and should be avoided in many situations. Yes, they throw some nice uppercuts, they avoid probate, they create structure, and they can provide protection for beneficiaries down the road. But for a long time, I did not think that was enough. Because during your lifetime, a revocable trust does not protect you. The general rule I tell clients is simple, if you can spend the money, change the terms, revoke the trust, and maintain full control, your creditors can reach those assets. So while revocable trusts look strong on the surface, especially after death, they do not provide that same level of protection while you are alive.

Then the tide turned, the contender stopped backing up and started landing real shots.

But here is where my thinking evolved. The more I practiced, the more I realized I was looking at it too narrowly. I was focused on lifetime protection, and while that matters, it is not the only goal. Most clients are not just worried about themselves, they are worried about what happens after they are gone. They want to know if their kids will lose the inheritance in a divorce, if it will be taken by creditors, or if it will disappear in a few years. That is where revocable trusts started to change my perspective. While they may not protect you during your lifetime, they can do a lot of heavy lifting after death. They create structure, they allow you to control distributions, and they can protect assets for beneficiaries in ways a will simply cannot. I also started to see the administrative side, families avoiding probate, staying out of court, and having a smoother process during an already difficult time. That matters. So my view shifted, not because revocable trusts suddenly became perfect, but because I started to see where they actually fit. They are not the answer to everything, but in the right situation, done the right way, they are a very strong tool. 

JUDGE’S DECISION: Champ or Overhyped Contender?

So what is the answer?

A revocable trust is not automatically the right move.

But when it fits your situation, and it is done correctly, it is one of the most powerful tools available.

The real question is not, do I need a trust?

The real question is, what do I want my plan to do?

If your goals include avoiding probate, protecting your family, and keeping control, then a revocable trust becomes a very strong contender.

And in the right situation, it is the champion. 

Ready to Step into the Ring?

If you are not sure whether a revocable trust makes sense for you, that is where we come in.

At The Law Offices of McKelvey Kargo, we do not use one size fits all planning.

We build plans based on your assets, your family, and your goals.

If you want to make sure your plan actually works when it matters, reach out and schedule a consultation.

As I reflect on the Christmas season, I find myself thinking about George Bailey. My wife has made it a tradition to watch It’s a Wonderful Life every Christmas morning while the kids channel their inner barbarians and tear into their presents. It’s chaos, joy, and nostalgia all wrapped into one, and somehow that movie always lands a little differently each year.

I’m sure countless people have offered thoughtful reviews of George Bailey and the film over the decades. At some point I even joked to myself, “The world is clearly waiting for Colt McKelvey’s take.” I’m kidding, mostly, but here it is anyway.

The conclusion I keep coming back to is simple: George Bailey never stood alone because he never lived that way. His community showed up for him because he had always shown up for them.

When I decided to start my own law practice, I had zero clients, almost no money in the bank, a beautiful and supportive wife, one daughter, and another on the way. My office was a single room above a real estate agency that graciously let me use the space for a few hundred dollars a month. I remember sitting there more than once wondering whether I had made a terrible mistake.

The questions were relentless and familiar to anyone responsible for a family: How am I going to feed my kids? How will we afford a reliable car? Does this crushing stress ever ease, or is this just life now?

And then something happened, something that, at the time, felt almost divine.

The phone started to ring.

People began calling and asking if I would look at their case. They weren’t offering much money, but they were offering trust. These weren’t friends of mine, and they certainly didn’t know me as some exceptional attorney. I wasn’t Matlock or Harvey Specter, still probably aren’t. These calls came from friends of my parents, Bill and Jeanne McKelvey. From people and institutions rooted in Cambria County, Johnstown, and the surrounding communities.

My father was the kind of man who, sometimes to a fault, would lend money to just about anyone or help them find it for whatever project they were chasing. Employees, lifelong friends, the local jeweler, and anyone else who came knocking. My mother taught generations of students at the local Vo-Tech and spent nearly her entire life in Johnstown. To this day, former students from twenty-plus years ago still walk into my office and say, “I remember your mom, Jeanne.”

I could list their accomplishments and character traits at length, but that’s not the point. The point is that they lived engaged lives. They invested in people. They showed up for their community long before there was any benefit to be gained from it.

And when their son took a risk and started from nothing, that same community showed up, not because of anything I had done, but because of what my parents had done long before me. People didn’t see a young lawyer trying to make a buck. They saw a chance to return a favor. To help build something in the same way they themselves had once been helped.

The principle is simple: community engagement matters.

What I am about to say may draw some criticism, but it needs to be said plainly. We should be far more intentional about who we choose to do business with. When we consistently bypass local professionals in favor of distant, volume-driven institutions, we reinforce a system that values efficiency over relationship and extraction over responsibility.

Stated bluntly, and unapologetically, when we abandon our community businesses, we allow the Potters of the world to win. And Potter does not return loyalty, grace, or care. He returns leverage.

Of course, there are exceptions. This is not an argument for blind localism or rigid rules. It is an argument for awareness. Every choice we make strengthens a model. The question is whether that model is rooted in community or detached from it.

Estate planning, in particular, should be done by someone who is part of your community, someone whose reputation is shaped by the same people you see at church, at school events, and at the grocery store. It should be an attorney with whom you can develop a real relationship. It does not need to be deep or personal, but it must be genuine.

Because estate planning is not just about documents. It is about judgment, accountability, and trust, and, those are built most reliably face to face, over time, within a shared community.
You will leave this earth for a heavenly kingdom. Your family will remain. When they are grieving and vulnerable, it will not be an institution that helps them, it will be a person, in their community, carrying out the plan you entrusted to them.

I want people to walk into my office in Canonsburg, and into Tonilyn’s office in Johnstown, and trust us with their legal work, but only if we have earned that trust through real involvement in the communities we serve.

That trust is never automatic. It must be built the same way it always has been: by showing up, by giving back, and by putting people ahead of profit. My parents understood that. George Bailey understood that. They invested in their communities long before there was anything to gain from doing so, and when the time came, the community responded in kind.

This is the model we strive for. Not extraction, but stewardship. Not scale, but service. Not the Potters of the world, who profit from distance and detachment, but the quiet faithfulness of people who live among those they serve.

So don’t settle for a Potter. Look for a George Bailey. Look for people like Bill and Jeanne McKelvey. And if we are doing our jobs well, if we are present, accountable, and committed, then, hopefully, you will find that same spirit in the work Tonilyn and I do every day.

I was wrapping up a real estate closing with a client when he asked me, “Why do I need a will?” This was not the first time I had been asked this question. In fact, I remember the first time someone had asked me this question.

I was just starting my career at my first firm. I was consulting with a woman and her family about their case regarding an upset sale. Their home was sold at a tax sale a few weeks ago due to delinquent taxes. The clients were visibly concerned and shaken by their case. Luckily, I was able to get their home back, get the taxes paid off, and restore some normalcy to their lives. The clients were thrilled. The client had little to no idea that I had just passed the Bar Exam and had little to no experience. It was the first rewarding moment of my short career. However, the feeling quickly faded.

The woman went on to tell me about her mother having a will. The client asked me why she needed a will. My response to her question was less than spectacular. At one point I said to my client that you just need one with zero reasoning as to why. After the consultation ended, I left the conference room feeling defeated. I felt I had left my client uneasy about my ability to help them and possibly left them confused about the importance of estate planning. As I walked back to my office, I told myself I could not let that happen again. I began reading and researching wills. I realized that wills are not just a luxury or something to have, but rather, they are a necessity.

The Necessity of a Will

A will is something everyone needs to have drafted. People who have little to nothing still need a will. A will is necessary to dispose of property, decide how your children are to be taken care of in the event of your death, avoid a timely probate process, minimize taxes, appoint a representative to handle your estate at the time of your death, make gifts or donations, or even avoid legal issues. These are just a few items that a will can address. In a future article, I will address in length these items, but for now, it is important to recognize that a will covers a wide array of areas.

These areas or items may not be important to everyone, but each individual or family will be impacted by one or more at some point in their life. A common issue that arises is what happens to my children if I die? Will they go to an orphanage? Will their grandparents take them? This is something that can easily be planned out by having a will. A will can appoint guardians for your children in the event of your death. Having a will is one of the best acts of love you can do for your family. It allows them not to have anxiety about what happens to the house or who is going to make sure the children are cared for. We live in a world of uncertainty, and a will can lessen that uncertainty for your family once you are gone.

How to Draft a Will

Pennsylvania has adopted specific statutes to address this question.

• A will can be made by someone who is at least 18 years old and of sound mind.
• The will must be in writing and signed by the testator. This means no video wills like the ones you see on television or verbal wills.
• A will needs to be signed. However, not every individual is able to sign their name to a will. Pennsylvania allows a person to sign by making a mark. The statute states that if a person is going to sign by mark, two witnesses must be present during the person’s signing by mark, and the witnesses must sign their names on the will.
• Pennsylvania law also permits another person other than the testator to sign the will. This process also requires two witnesses to be present during the time of signing and to sign the will. The testator must expressly state to the witnesses that the will is his. While signing by mark or by another is generally not common, it is something that could arise and cause issues down the road if not done properly.
• A common practice is to have the will notarized. A notarized document ensures that the signers to the document are legitimate. This can help avoid several potential issues later on.

It is worth noting that you are able to use programs that help draft a will without consulting an attorney. However, I would caution individuals from using such programs. These programs might save money initially, but in the future, they may cost you. An attorney can help you draft a will and advise you on any potential issues you may face regarding your estate.

This is only an introduction to wills and what they can do. If you wish to know more, The Law Offices of McKelvey Kargo is an estate planning law firm that can answer your questions. We can walk you through the complexities of estate planning and give you peace of mind.

Please contact The Law Offices of McKelvey Kargo to schedule an appointment.

Last October, my wife and I had our first child. What a crazy, awesome time it has been since then! However, I began thinking about what happens if I die tomorrow? Will I have left my family in a stable financial situation? Will they be able to continue their lifestyle? These questions weighed heavily on my mind. As the sole financial supporter of my family, I am tasked with the burden of ensuring my family’s financial well-being. New parents probably have asked the same questions I have when our child was born. However, I have an answer for them. There are three things that I believe are critical and necessary to making sure new parents ensure their family’s financial well-being.

1. Speak with an Estate Planning Attorney…IMMEDIATELY!

An estate planning attorney can direct new parents on how to plan for life in the event they die before their children reach adulthood. It is important for parents to appoint guardians for their children in the event they die before the child reaches the age of 18. Simply stating that someone is to take the children is not enough. A formal legal document must be drafted to ensure guardians are truly appointed. An estate planning attorney can do this for you and your family. Additionally, there are several estate planning tools available to new parents in the event their child has a disability or parents want to plan for college savings. These things will all be covered when you speak with an attorney.

2. Meet with a Certified Financial Planner

Although attorneys are probably the best professionals around (not biased at all), they may not always be the best to discuss day-to-day finances or retirement. A certified financial planner will be able to advise you on retirement strategies, day-to-day financial planning, and other related financial matters. I am an attorney, a business owner, and a former accountant. I utilize a financial planner extensively. Do not be too proud to ask for financial guidance because it will drastically help your family in the long run.

3. Set Goals

Setting goals. Easy thing to do right? Not exactly. I always ask my clients what are their goals for their estate plan. More often than not, the client sits there shell-shocked by the question. It is a difficult question that many have not answered. Setting goals will set the compass heading for the entirety of your estate planning. A common goal of my clients is to buy their first home. What a fantastic goal to have. Buying a home is not as simple as it is made out to sound. First, you need to set a price range for a home. Second, you need to find a home within your price range. Third, you need to figure out how you are going to pay for the house. Are you financing? If so, are you able to acquire financing? How do you get financing? Is your mortgage at a good interest rate? What even is a good interest rate? See what I mean? Nothing is simple in today’s world. Everything requires planning. That planning starts with setting a goal.

The Law Offices of McKelvey Kargo are able to help with all these things mentioned. It is our firm’s mission to help our clients achieve their goals and maximize their opportunities. Your plan for the future can start today. Do not wait!

A Power of Attorney, POA for short, is one of the most important legal documents an individual should have in today’s world.

What are POAs? A Power of Attorney is a legal document or documents giving an individual the authority to act on your behalf. This individual is called an Agent. You are titled as the Principal. Once the POA is drafted it must be signed by the Principal, signed by two witnesses, and notarized. The witnesses and the notary cannot be named as an agent within the document. Additionally, there are other requirements Pennsylvania has stated that must be present in the document. An attorney licensed in Pennsylvania will be able to draft a POA that is considered valid by the Commonwealth.

There are two common types of POAs. The first is a Financial Power of Attorney. As indicated by its title, the agent will handle financial decisions. This can include anywhere from making deposits to your bank account to selling property. The terms of the POA will be set by the Principal when drafting the document.

The second type of POA is a Health Care Power of Attorney. Again, the title is self-explanatory. The agent will be authorized to make health care decisions on your behalf due to your incapacity. However, there is an alternative option to a Health Care Power of Attorney. It is called an Advanced Health Care Directive. An Advance Health Care Directive is a health care power of attorney, living will or a written combination of a health care power of attorney and living will. Pennsylvania does not require this document to be notarized. However, the Principal and two witnesses must sign the document. The most common of these is a Living Will. A Living Will expresses a principal’s wishes and instructions for health care and health care directions when the principal is determined to be incompetent and has an end-stage medical condition or is permanently unconscious. Pennsylvania has specific rules as to who can make a Living Will and the requirements of how the Living Will is to be drafted.

Why are POAs important? POAs allow a person to make decisions on your behalf in the event you cannot. In one instance, a wife was not able to make decisions in regard to financial matters because she was not given the Power of Attorney by her husband. You can be reassured about your finances and health care in the event you become incapacitated by executing a Power of Attorney.

The Law Offices of McKelvey Kargo can assist you in drafting a Power of Attorney.

A question many parents and grandparents ask is, “How do I make sure my children or grandchildren are taking care of in the event I die before they reach 18 years of age?” Maybe not exactly that question, but I hear some form of that question from clients with children. One answer I tend to give these clients is to create a testamentary trust.

A testamentary trust is a trust created in a person’s last will. The trust will detail the terms of the trust. A testamentary trust becomes effective upon the death of the settlor. The settlor is the individual who makes the trust. The settlor is able to modify the trust up until their death. Unlike other trusts, a testamentary trust is subject to probate because the assets that will belong to the trust are still owned personally by the settlor at the time of death.

The settlor is able to allocate and specify exactly what assets will belong to the trust at the time of their death. The purpose of the testamentary trust is so the settlor can indicate at a certain point in time in which the beneficiary of the trust may receive the asset. This is relevant to parents because they can state that their children will not receive the assets until they reach the age of 18 or later. Once the beneficiary receives the assets, the trust is terminated.

There are three (3) parties to this transaction. The first being the settlor or can be called the grantor. The settlor/grantor creates the trust and indicates what assets are going into the trust and sets the terms for the trust. The second is the beneficiary or beneficiaries. The beneficiary is the party who will receive the assets from the trusts. Finally, the third party is the trustee or trustees. The trustee is the party who will handle and manage the assets of the trust until the beneficiary receives the assets.

Example of what a testamentary trust looks like is as follows: A settlor may have an 11-month-old daughter to whom the settlor wishes to leave a certain number of assets to at the age of 21. The settlor will appoint a trustee, generally someone trustworthy and close to the settlor, who will be managing the assets for the beneficiary until they reach the age of 21. Once the settlor’s daughter reaches the age of 21, she will receive the assets. The trust then terminates.

Some advantages of a testamentary trust are that it can give the settlor control over how their assets are disbursed at the time of their death, a testamentary trust can be funded by life insurance policies, and there can be multiple testamentary trusts within a will. A disadvantage of a testamentary trust is that it will go through probate. Since the trust will go through probate, the trustee also may attend court regularly to update the court on how the trust is being managed. Another negative point is that a testamentary trust is public knowledge. A will becomes public knowledge when submitted for probate and the will contains the testamentary trust, meaning it is not private. A final point worth considering that can be a negative of a testamentary trust is that a trustee may wrongly interpret the testamentary trust and not follow the settlor’s intended wishes. This can be easily avoided if the will and the trust are drafted by a licensed Pennsylvania attorney. If this is a concern, a revocable trust may also be a more suitable option. An attorney will advise an individual on their best strategy.

Testamentary trusts are excellent planning tools for parents and grandparents with children. Testamentary trusts can be used for a wide array of things not just for parents and grandparents. The Law Offices of McKelvey Kargo practices estate planning and can help draft your trust and plan for the future.

What is a revocable trust? Many people talk about trusts, but have little idea to as what they are or how they operate. The Law Offices of McKelvey Kargo, LLC are here to help.

1. Basics

A revocable trust is an inter vivos trust. Inter vivos means between living persons; as a gift made between one living person to another. A revocable trust in short is a “Living Trust.” This means it is created during the lifetime of the settlor. The trust creator is called a settlor or a grantor. A revocable trust is an alternative to a will.

Revocable Trusts will appoint a trustee to manage the assets of the trust. The trust will also include beneficiaries. Beneficiaries are the ones entitled to receive the assets according to the terms of the trust.

A key feature of the revocable trust is that the settlor retains the power to revoke the trust and reacquire its assets. A revocable living trust may be (1) unfunded, which would require a pour-over from a will, (2) fully funded or (3) partially funded. An attorney will discuss what is the best course of action in regard to funding in accordance with the client’s wishes. At the time of the settlor’s death, the revocable trust may continue or dissolve and the assets distributed to the beneficiaries without having to go through probate. Finally, a revocable trust is a tax-neutral trust in which the grantor is treated as the owner of the trust assets for income, gift and estate tax purposes.

2. Why Use a Revocable Trust?

• Management
  When a revocable trust is funded, the settlor has current and future management of trust assets.
• Avoiding Probate
  Assets within the revocable trust at the time of the settlor’s death are not subject to probate administration. The client will possibly save on extensive costs that come with the probate process.
• Privacy
  A revocable trust is generally private and not public record. However, the trust assets and the terms may become public once filing a Pennsylvania Inheritance Tax Return.

These three advantages are not the only benefits that a revocable trust offers. However, I believe these are the most important for a client to consider when deciding on their estate plan. It is important and worth noting that a revocable trust is not for everyone and should be discussed with a licensed Pennsylvania attorney and Certified Financial Planner.

A revocable trust is not always the best option. A revocable trust has little to no estate tax or Pennsylvania inheritance tax benefits a client can utilize. Also, a client will pay costs for an attorney to draft the trust. Finally, it will cost the client to transfer their assets into the trust.

3. Where to start?
   Contact The Law Offices of McKelvey Kargo if you are interested in having a revocable trust drafted. Trusts are complex legal documents that should be drafted by an attorney. Our mission is to plan for your future and maximize your opportunities.

An article in Kiplinger, a top-tier personal finance magazine, discusses an aggressive approach to financial planning in your forties. The highlights are summarized below to better help you reach your personal financial goals.

Make Saving for Retirement a Priority and Bulk Up Your Investments

You’ll want to start by making the largest possible contributions to your employer’s retirement plan. At the very least, you should put enough into your company’s retirement plan to take full advantage of its contribution matching program.

A word of caution—if you put all your retirement savings into tax-deferred accounts, you might get hit hard by taxes when you retire. That’s because withdrawals from 401 (k) plans and traditional IRAs are taxed at the retiree’s ordinary income tax rate. This makes contributing to a Roth IRA a good idea. Your contributions are after-tax, but your withdrawals are tax-free as long as you are over 59½ and have owned the Roth IRA for five years or more.

It is important to note that employees in lower tax brackets are typically better off diverting some of their savings to Roth IRAs and other taxable accounts because the benefit of tax deferral is not as valuable as it is to those in high tax brackets. Conversely, if you are in a high tax bracket, you should contribute as much as possible to tax-deferred accounts. This is because when you take withdrawals in retirement you will likely be in a lower tax bracket.

Don’t Skimp on Your Retirement Savings to Pay for Your Children’s College Education

Why? Simply put, you or your children can borrow money to pay for college, but you cannot borrow money to pay for retirement. In addition, when investing for retirement, time really is money. The more you can invest early on, the greater the likelihood that you’ll have more money when you retire. Also, working longer, say well into your sixties, may not be an option. Corporate downsizing and/or health problems could limit how long you can work. The fact is, saving more than you need for retirement will allow you to help pay off your children’s student loans when you do retire.

Make the Most of What Your Employer Is Offering

Your employer may well be offering more than a paycheck. For example, some companies match employee contributions to health savings accounts. Others offer retiree health benefits, pensions and more. Taking advantage of employee benefits like these can help you build additional wealth and provide for a greater sense of security in retirement.

Pay Off Your Debt Logically

Sure, it would be great to retire without a mortgage. You would eliminate one of your greatest expenses, which in turn could allow you to withdraw less money from your retirement savings during market downturns to pay for unforeseen expenses. However, in your forties there may well be better ways to use your money, particularly if you have a low interest mortgage. For example, it’s better to pay off debts with higher interest rates, such as credit cards or vehicles. Then, if you have money left over, you could make extra mortgage payments. Consider this: on a 30-year mortgage, if you make one extra monthly payment a year, you will knock four years off the term of your loan.

The Law Offices of McKelvey Kargo practices estate planning in Johnstown and Canonsburg, Pennsylvania. We aid clients so that they feel confident in their future retirement planning.  Please contact us today so we can help you achieve your financial goals.

Perhaps you have heard about trusts but wonder exactly what they are and what they can help you accomplish. Simply put, a trust is an agreement outlining how assets will be managed and held for the benefit of another person. There are many types of trusts, capable of addressing a wide range of concerns and accomplishing several important goals. Let’s begin our discussion by looking at the elements and terminology shared by most trusts.

The Grantor

All trusts have a grantor (also known as a trustor or settler). The grantor is the person who creates the trust and has the legal authority to transfer property held in the trust.

The Beneficiary

The beneficiary is the person who “benefits” from the trust. A beneficiary can be one person or several different parties. A beneficiary can also be an institution, such as a charity.

The Trustee

The trustee is the individual (or in some cases, the institution) authorized to take title to property on behalf of a beneficiary. The trustee is responsible for managing the property according to the rules described in the trust document. Additionally, the trustee must act and make decisions based on the best interests of the trust’s beneficiaries.

Trust Funding

For a trust to accomplish its goals, it must be funded by the grantor. “Funding a trust” refers to the process of transferring ownership of assets from the grantor to the trust. These assets can include money, real estate, stocks, jewelry, and more. It is important to note that assets “outside” the trust are not controlled by the trust.

On the next post, we’ll discuss the difference between a revocable and irrevocable trust, together with the benefits of planning with trusts. Although defining these terms, or the idea of even having a trust may be new to you, it is our specialty at The Law Offices of McKelvey Kargo. Give us a call to schedule an appointment to discuss the possibility of creating a trust for you! Johnstown 814- 961-2050 or
Canonsburg 724-276-5066.

Last time we discussed some of the terminology associated with trusts. Now let’s look at how revocable trusts differ from irrevocable trusts and the benefits of having a trust.

Revocable Versus Irrevocable Trusts

A revocable trust is a trust that can be altered by the grantor during his or her lifetime. (If you need a refresher on the term grantor, reread our previous blog post.) An irrevocable trust, on the other hand, is a trust that cannot be changed by the grantor (except under extraordinary circumstances). In the case of irrevocable trusts, the grantor typically foregoes total control of the property and must obey all trust rules and guidelines. Furthermore, a trust can be revocable during the grantor’s lifetime and then become irrevocable upon the grantor’s death.

When most people use the word “trust” in the context of estate planning, a revocable living trust is the one they have in mind.

A revocable living trust allows you to maintain complete control over your assets while you are alive and after you have passed away. You don’t have to transfer your assets to the trust all at once, you can do so over time and even add to the trust as you acquire new assets.
Other benefits of a revocable living trust include:

• Avoiding probate. The probate process is time-consuming, needlessly expensive and exposes your assets and estate to public scrutiny.
• It can be changed over time, to compensate for changes in your financial and family situation.
• Basic wills can lead to disagreements among family members. A revocable living trust can help eliminate challenges to the will and ensure beneficiaries receive what you have intended for them.
• It allows for ongoing financial management. As your wealth accumulates, so too will assets in the trust.

One of the questions frequently asked by clients is whether or not they need a trust. The answer depends on the client’s unique needs and goals. Would you benefit from a trust? We’d be happy to discuss the matter with you at your earliest convenience! Call The Law Offices of McKelvey Kargo today to set up an appointment! We are located in Johnstown at 814-961-2050 and Canonsburg at 724-276-5066.

When your children turn 18 they are legal adults. They might not act like adults all of the time, and you may still be supporting them financially, but in the eyes of the law they are indeed adults. This means that you can no longer make certain decisions for them, including health care decisions. Furthermore, you can no longer obtain medical information about your adult children with out their authorization-even in an emergency.

Consider the following scenario. Your son is away at college and gets severely injured in a car accident. When you become aware of what has happened you immediately call the hospital for information about his condition, but nobody will tell you anything. This is because the law specifically, a statute enacted in 1996 called the Health Insurance Portability and Accountability Act (HIPAA)-prevents the disclosure of a patient’s health in formation without the patient’s consent. The hospital in question could be prosecuted for violating HIPAA guidelines.

This is why your adult children need a legal document called a HIPAA Release. It allows your adult children to list the people who are permitted to receive medical information about them.

Another crucial legal document your adult children need is a Power of Attorney for Health Care, which is also called a Health Care Proxy. It allows them to name a person they trust to make health care decisions on their behalf if they cannot do so themselves. Medical decisions covered by a Power of Attorney for Health Care can include the types of treatments allowed in an end-of-life situation, such as the use of a feeding tube, as well as do not resuscitate orders.

Similarly, a Power of Attorney for Finances allows your adult children to designate a trusted individual to make financial decisions if they cannot make them on their own.

If your adult children have their own Powers of Attorney for Health Care and Finances, and they name you as their agent in the documents, you will be able to make medical and financial decisions on their behalf if they become incapacitated. If you are named in your adult children’s HIPAA release, you can get medical information about their condition in an emergency.

The Law Offices of McKelvey Kargo understand that each family situation is unique and, therefore, so are your legal needs. Reach out to our office today so we can assist your family in being well- equipped for the future. We assist clients with a variety of legal needs, especially estate planning.

A spendthrift trust is typically used to prevent a beneficiary from receiving his or her inheritance all at once. There are several reasons why a grantor (the person who creates the trust) might want to consider such an approach. The most obvious reason is that the grantor believes the beneficiary will quickly squander the inheritance. That is, the beneficiary is a spendthrift.

Other reasons to consider a spendthrift trust include:

• The beneficiary (or the beneficiary’s spouse) has many debts and, consequently, the inheritance could be lost to creditors
• The beneficiary’s marriage is troubled and seems likely to end in divorce
• The beneficiary’s friends are spendthrifts (or worse) and have undue influence over the beneficiary’s behavior
• The beneficiary is simply “not good with money”
• The beneficiary suffers from alcohol or drug addiction

How does a spendthrift trust protect the beneficiary’s inheritance in situations like these? First, the beneficiary cannot access the assets in the trust, or promise them to someone else. Thus, creditors and other threats cannot reach the trust’s assets either. In addition, since the beneficiary’s inheritance can be distributed in specified amounts over time, the entire inheritance cannot be lost all at once. Of course, the portion that is distributed would be vulnerable unless other protective measures are taken.

The Role Of The Trustee

It is crucial to choose one’s trustee carefully because the terms of the trust give the trustee control over trust assets and their distribution to the beneficiary. Similarly, it is extremely important to outline the trustee’s authority in detail. Here are some examples of factors to consider when setting the terms of the spendthrift trust:

• Should the trustee be instructed to make fixed payments according to a specified schedule, or does the trustee have some discretion to choose the amount and timing of distributions?
• Should the trustee make distributions in cash or provide the beneficiary with goods and services instead?
• Can the trustee withhold distributions if the beneficiary behaves inappropriately? If so, what types of behavior would trigger the withholding of assets?

Given the importance of the trustee’s role in administering the trust and managing the beneficiary’s inheritance, the choice of trustee should not be taken lightly. The decision to serve as trustee should not be taken lightly either. In certain situations, the trustee could very well be performing the role of mentor, or disciplinarian, or even parent. In addition, the trustee can be held legally and financially responsible for failing to follow the mandates of the trust.

Other factors to consider when creating a spendthrift trust include how and when the trust will end, what will happen if the beneficiary “grows up” and develops the maturity to manage the inheritance, and what should be done with trust assets if the beneficiary passes away.

If you want to leave a loved one an inheritance but are concerned about his or her ability to manage it, The Law Offices of McKelvey Kargo can help you determine whether a spendthrift trust is a good solution. With offices in Johnstown and Canonsburg, Pennsylvania, we service clients throughout the state and beyond. Reach out to us today to ask about establishing a trust or other estate planning questions. Feel free to visit our past article titled “Estate Planning Basics: An Introduction”, if you need a refresher on the terms used throughout this article.

Approximately 3 million Americans move to another state each year, while last year alone the number was 4.7 million. Given the stress and myriad changes that come with such a move, it’s not surprising that many people forget to review their estate plans. However, differences between states regarding taxes, ownership of property, inheritance, and more make it extremely important to review, and if necessary, update your planning documents with an attorney who focuses on estate planning.

Let’s look at some of the legal issues involved when moving to a new state and the changes that may have to made to your plan.

Estate Taxes

With the current exemption on federal estate taxes set at $12.06 million for individual filers and $24.12 million for married couples filing jointly, most of us don’t have to worry about federal estate taxes (at least this year). Unfortunately, as of 2021, 11 states levy their own estate taxes, and exemption amounts are considerably less than the federal level. In addition, six states levy an inheritance tax and Maryland imposes both. The good news is that with proper planning, you may be able to minimize or even eliminate your estate’s vulnerability to state “death” taxes. You can find a complete list of states with estate and/or inheritance taxes here: https://www.aarp.org/money/taxes/info-2020/states-with-estate-inheritance-taxes.html.

Key Planning Documents

Contrary to what many people believe, a will that is valid in one state may not be valid in another state. The same is true of other important legal documents, including living wills or advance directives, health care proxies, powers of attorney, and more. (It is worth noting that the Uniform Power of Attorney Act, which was designed to help eliminate conflicting laws between states regarding powers of attorney, has not been enacted in all 50 states.)

Consider, for example, what might happen if health care providers in your new state won’t recognize and accept the medical power of attorney or health care proxy you made in another state? Your agent or attorney-in-fact might not be able to make the decisions you empowered him or her to make on your behalf in a medical emergency. Your loved ones might even need to take the matter to court to enforce a document’s validity so that your wishes will be carried out. A medical emergency is not the time to be worried about, or trying to enforce, the validity of key legal documents.

Your “Helpers”

When moving to a new state, it is not realistic to expect your helpers, such as your agent, attorney-in fact, or executor, to continue to serve in this capacity. We’ve mentioned the issues surrounding powers of attorney. In addition, the vast majority of states do not allow a non-resident to serve as an executor, and of those that do, the executor must be related to you directly. Other states have additional restrictions as well.

Finally, states differ with regard to the laws governing community property, titling (which could impact your trusts), tenants by the entirety, and joint tenancy with or without right of survivorship.

The bottom line is this: If you are planning to move to another state, or you’ve already done so, be sure to speak with a qualified estate planning attorney, like The Law Offices of McKelvey Kargo, to review and update your plan. You can reach us at our office, in Johnstown at 814-961-2050 or Canonsburg at 724-276-5066.

The 2013 United States Census indicated that 54 percent of women over the age of 65 were not married. The figure for men over 65 was 27 percent. There are many reasons for this, of course, including divorce, the death of a spouse and changes in the way couples today view marriage. However, one thing unmarried people seem to have in common is that their planning needs can be quite different from those of married couples. And, according to an article in the Wall Street Journal, many singles are unprepared for retirement.

For example, a Rand Corporation study showed that 20 percent of married couples will not save enough for retirement, whereas 35 percent of single men and 49 percent of single women will enter retirement financially unprepared. Why is there such a large disparity? One reason is that there are factors working to lower singles’ income and investible resources. For example, newly widowed or divorced individuals may see housing costs jump as a proportion of income and that certain income streams may become less predictable. The cost of living for a single person is not 50 percent of that for a couple. A more realistic figure is between 60 and 80 percent, unless the single downsizes his or her home, or finds a roommate. In fact, research by the AARP indicates 40 percent of adults do in fact consider taking on a roommate.

In addition, singles often cannot take advantage of tax breaks, such as filing jointly, that are available to married couples. Singles may also feel a greater need to purchase expensive long-term care insurance because there is no spouse to serve as caretaker in an emergency or over the long term.

For retirees who have recently gotten divorced, there can be other challenges as well. Assets like alimony and life insurance become less reliable sources of income. For example, alimony payments designed to cover a former spouse for life may disappear if the former spouse who was making them passes away. In the case of life insurance, owners of the policies name the beneficiaries. Singles who don’t own a shared policy may find themselves without any benefits at all if an ex-spouse changes the beneficiary designations.

It is important to note, however, that there may be certain benefits available to divorcées, such as eligibility for an ex-spouse’s Social Security benefits. If the marriage lasted ten years or more, the divorced spouse can receive these benefits even if his or her ex-spouse has remarried—with no impact to the ex-spouse’s benefits.

Given the unique planning challenges faced by singles, it is important to consult with an experienced estate planning attorney. If you are single, The Law Offices of McKelvey Kargo welcomes the opportunity to design a plan to meet your particular needs. You can reach us at 814-961-2050 in the Johnstown area or 724-276-5066 in the Canonsburg area to make an appointment.

Charitable giving allows you to assist the people and organizations that have come to mean the most to you over the course of your life. It represents a thoughtful expression of your values and can ensure your legacy for generations to come. If done properly, it can also be an excellent way to significantly lower taxes, so that the greatest possible amount of your gift is available for the recipients of your generosity, and at the same time, more of your hard-earned wealth is preserved for you and your loved ones.

Some of the benefits of giving to charity, and the advantages of having an experienced estate planning attorney design your charitable giving plan, include:

• Memorializing your family name
• Reducing capital gains or estate taxes
• Supporting causes and institutions important to you and other family members
• Allowing you to make charitable contributions while you are alive and after you are gone
• Receiving an income stream as part of your donation
• Giving more to charity than you thought possible

There are many different strategies available to maximize the value of your gift. Some of the more popular and effective options include:

• Gift Annuities
  These allow you to contribute funds to a nonprofit organization and receive a fixed annuity payment from the nonprofit’s general assets for the rest of your life.
• Charitable Remainder Trusts
  These let you establish a trust and receive income from the trust for a set number of years. Afterwards, the balance of the trust transfers to the charity you have chosen.
• Charitable Lead Trusts
  These distribute income to the charity you have chosen for a set number of years, and then the remainder of the trust passes on to your beneficiaries. In essence, charitable lead trusts are the opposite of charitable remainder trusts.
• Bequests
  A charitable bequest is a gift to a charity of cash, land or a percentage of some other asset such as a life insurance policy, 401K or pension. It is most commonly given through a Will or Living Trust and is one of the ways families of modest means can give valuable assistance to a charity of their choosing.

If you are interested in giving to charity and would like additional information about these and other strategies for effective charitable gifting, please contact our office at 814-961-2050 or 724-276-5066 to schedule an appointment. We have offices in Johnstown and Canonsburg, Pennsylvania.

If you have more than one child, you’ve probably wondered if you should leave each of your children the same amount in your will or trust. While this seems like the best approach in most situations, there are some instances where it might not be the wisest strategy, or even the fairest. Factors you might want to consider include:

• One child earns considerably more than your other children
• One child has several children of his or her own, while another child does not
• One of your children serves as your caregiver, runs errands or helps you in other ways much more frequently than your other children

Sadly, you may have to ask yourself another, more troubling question: Has one of my children disappointed me so often, or behaved so irresponsibly in the past, that I feel like I must disinherit him or her entirely? In cases where one of your children suffers from drug dependency or severe mental illness, inheriting money may actually do more harm than good.

It’s a tough decision, made more difficult by the fact that unequal inheritances can lead to hard feelings and even challenges to your will or trust. If you believe that the best approach is to treat your children differently regarding inheritances, here are some ways to avoid potential problems.

First, talk to your children about your will (or trust) and its contents. This might not be an easy topic to bring up, but explaining your decisions to your children will help them understand why you have made them. Such a conversation can go a long way toward lessening any shock and the potential for disputes that might occur if your children first learn about the contents of your will or trust after you are gone.

In situations where one of your children has consistently “been there for you” when you needed help around the house or running errands, consider rewarding him or her while you are still alive. Similarly, you might want to provide financial assistance to a child who is going through a difficult time, such as the loss of a job or a divorce.

Various clauses can be added to wills to reduce the potential for litigation. For example, you could stipulate that any disputes after you pass away must be mediated rather than litigated. A no-contest clause can stipulate that a beneficiary forfeits his or her interests if the will is challenged.

Perhaps most important of all, make sure to take steps when you create your will that show you are of “sound mind.” These can include getting an evaluation from a doctor as well as a psychiatrist shortly before your documents are signed. If you are making changes to your existing will or trust, this precaution is even more important.

If you are struggling with the idea of unequal inheritances for your children, we can assist you with making these difficult decisions and help ensure that your wishes will be carried out. Call our office and make an appointment so we can discuss your financial situation in more detail – Johnstown office 814-961-2050 or Canonsburg office 724-276-5066.

Many people believe that estate planning is only for elders. The truth is that the younger generation, including millennials, can benefit from having an estate plan of their own.

Millennials are generally defined as individuals born between 1981 and 1996—that is, people between the ages of 25 and 40. This is the age at which many people begin their careers and start families of their own. If you have a child, you should at the very least have a last will and testament. It allows you to name a guardian for your minor children, which helps ensure they will be raised according to your wishes if you and your spouse pass away unexpectedly.

Another reason millennials need an estate plan is to ensure people of their own choosing can make medical and financial decisions on their behalf in the event of incapacity. Legal documents such as powers of attorney for health care and finances can accomplish this goal and spare your loved ones from having to make difficult decisions about your care and/or finances if you can no longer make them yourself.

Estate planning can help you accomplish many other goals depending on your needs. We welcome the opportunity to discuss your options here at The Law Offices of McKelvey Kargo. We service clients all around Johnstown and Canonsburg, and throughout the state of Pennsylvania.

 

Clients often ask us about the estate planning tools we use and what each of them can accomplish. Here is a list of the most used tools and brief descriptions of their purpose.

Last Will and Testament 
This allows you to specify “who gets what” when you pass away. Without your own Last Will and Testament, your assets will be distributed according to state guidelines. A Will also allows you to name guardians for your minor children. This is important because if something happens to you and your spouse, the state will decide who will have legal authority over your minor children. This could very well be a person or institution you would never have chosen to have such authority.
Durable Powers of Attorney 
These allow you to name people of your own choosing to make decisions for you in the event of incapacity. A power of attorney for healthcare lets you designate a person you trust to make decisions about your medical care, while a power of attorney for finances lets you name the person you want to make financial and legal decisions on your behalf.
Advance Directives 
An advance healthcare directive, also known as a living will, allows you to choose, in advance, the types of medical treatments you want (or don’t want) in an end-of-life situation.
HIPAA Authorization 
The Health Insurance Portability and Accountability Act (HIPAA) established national standards to protect the privacy of patients’ health care information by regulating the use and disclosure of “protected health information.” A HIPAA Authorization ensures your loved ones and decision makers can gain access to medical information about your condition when they need it.
Trusts 
There are many types of trusts, capable of helping you accomplish a variety of goals. However, when most people think about trusts, a revocable living trust is the one they have in mind.

A revocable living trust allows you to maintain complete control over your assets while you are alive and after you have passed away. You don’t have to transfer your assets to the trust all at once, you can do so over time and even add to the trust as you acquire new assets.

Other benefits of a revocable living trust include:

• Avoiding probate. The probate process is time-consuming, needlessly expensive and exposes your assets and estate to public scrutiny

• It can be changed over time, to compensate for changes in your financial and family situation
• Basic wills can lead to disagreements among family members. A revocable living trust can help eliminate challenges to the will and ensure beneficiaries receive what you have intended for them
• It allows for ongoing financial management. As your wealth accumulates, so too will assets in the trust

Contact The Law Offices of McKelvey Kargo today to discuss additional estate planning tools and strategies that can help you achieve your goals. Johnstown 814-961-2050 or Canonsburg 724-276-5066.

One of the first questions many clients ask is whether they need a trust. It’s a great question, but it leads to another: What do you want your plan to accomplish? Let’s begin with a brief discussion of what trusts are and how they work. Then we’ll explore their benefits, which should give you a better idea of whether a trust is right for you and your family.

What is a Revocable Living Trust?

There are many different types of trusts, and they can accomplish a wide range of goals. However, when most people think about trusts, the one they have in mind is a Revocable Living Trust.

A Revocable Living Trust is a legal document that allows the grantor (the person who creates the trust) to take personal assets and transfer them to the ownership of the trust. While the trust technically owns the assets, the grantor can continue to use them as he or she normally would.

When a Revocable Living Trust is established, the grantor names a trustee to manage the assets in the trust during the grantor’s lifetime. Most grantors name themselves as trustee, giving them complete control over the trust’s assets. Typically, a successor trustee is also named to take over management of the trust and distribute trust assets after the grantor passes away.

What Are the Benefits of a Revocable Living Trust?

One of the primary benefits of a Revocable Living Trust is that it enables assets held in the trust to avoid probate after the grantor’s death. This allows trust assets to be distributed to heirs quickly. The costs associated with probating the estate are also avoided. In addition, a Revocable Living Trust protects the privacy of the grantor (and beneficiaries) because the trust’s provisions are confidential. A Last Will and Testament, on the other hand, is a matter of public record. Anyone can access information about the decedent’s assets, creditors, debts, and more.

Another benefit of Revocable Living Trusts is they not only allow the grantor to control trust assets during life but also after he or she passes away. The grantor can stipulate when, how, and under what circumstances the successor trustee is authorized to distribute trust assets to beneficiaries. This is particularly important if the beneficiaries are not yet mature enough to manage an inheritance on their own, or in situations involving blended families. For example, the grantor could stipulate that the children from a first marriage receive assets from the trust, not just the children from a more recent marriage.

Revocable Living Trusts can also be used to protect the grantor and the grantor’s family from a stressful and expensive guardianship proceeding if the grantor becomes incapacitated.

As we mentioned earlier, there are many different types of trusts. If one of your primary goals is to protect assets from long-term care costs, creditors, lawsuits, and other threats, an Irrevocable Trust or an Asset Protection Trust may be a much better option then a Revocable Living Trust. If you have a loved one with special needs, a Special Needs Trust can allow you to create a fund for goods and services not provided by Medicaid or Supplemental Security Income while protecting eligibility for these vital programs. A Charitable Trust allows the grantor to set aside money for both a charity and beneficiaries, realize certain tax advantages, and generate an income stream.

These are but a few examples of various trusts and what they can accomplish. If you’re still not sure whether you need a trust, we welcome the opportunity to explain your options in detail and, if appropriate in your circumstances, design and implement the trust that’s right for you and your family. Simply call our office today to schedule an appointment! We’re located in Johnstown and Canonsburg Pennsylvania and service clients all throughout the state.

Loss of Control

Losing control over how your assets are distributed after death isn’t the only negative consequence of failing to plan. You and your family may suffer physically, financially and emotionally while you are still alive. For example, a properly designed and implemented plan allows you to name people you trust to make medical and/or financial decisions on your behalf if you become incapacitated. Without a plan, someone will petition the court for the right to make these important decisions for you. The court could very well decide to choose a person or persons you would never have wanted to have such authority. The result? You may not receive the level of medical care you would have wanted. Conversely, you might be subjected to medical procedures you would not have wanted to keep you alive in an end-of-life situation. Similarly, financial decisions might be made about the management of your assets and lifesavings that you would never have taken on your own.

Then there is the emotional impact on your family to consider. Your loved ones will be forced to make difficult decisions about your care. This is not only stressful for them, but it also often leads to infighting and hard feelings that endure for years. Disputes over your assets may also arise, leading to costly court battles and bitterness that can last a lifetime. Many families are torn apart by disputes over “what mom or dad would have wanted.”

Finally, if something terrible happens to you and your spouse, and you have minor children, who will care for and raise them? Proper planning allows you to give this authority to a person or persons you trust. Without a plan the court will decide. The court’s decision could lead to your children being raised in a place and manner you never would have wanted.

As you can see, the failure to plan can have unforeseen and dire consequences. Don’t settle for the state’s estate plan. Put a plan of your own in place, one created by an attorney who focuses on estate planning. Many of our clients tell us that they experience a sense of relief and peace of mind following the implementation of their plans. Chances are, you will too. We assist clients with a variety of legal needs, especially estate planning.

There are many reasons you might consider giving your adult children a portion of their inheritance now, while you’re alive and well. Maybe you’ve seen your nest egg grow thanks to a robust stock market, and you have more in savings than you thought you would at this stage of your life. Perhaps you and your spouse enjoy excellent health and have received nothing but good checkups for years, so you’re not overly concerned about medical expenses. Or maybe you just want to be there to experience how your financial assistance helps your children pursue their dreams and achieve their goals.

While many parents would like to help their adult children financially as much as possible, before acting on your generous inclinations, you should consider a number of potential problems.

For instance, what if one of your children could use some help right now, perhaps with paying off student loans or starting a business, while your other children don’t need any help? If you give one child money, are you required to give the same amount to each of your children, regardless of need? Your other children may very well think so. Do you really want to set the stage for the family drama that could unfold by violating the “fairness principle?”

Of course, you could tell the recipient of your gift, along with your other adult children, that the gift will be deducted from the recipient’s inheritance when you pass away. This might solve the problem, but then again, it might not. As you’ve no doubt learned by now, your “kids” may be grown up but that doesn’t mean sibling rivalries and other powerful emotions from childhood simply disappear.

Another factor to consider, particularly with respect to large gifts, is whether your children are mature enough to handle a sizable amount of money on their own. It’s one thing to watch your children make sound financial decisions and achieve success as a result of your generosity, but quite another to watch them squander the money you worked so hard to attain and preserve. If your children use your gift in ways you never intended, will you resent it? Will they resent you for having “strings attached” to the gift?

Finally, while you and your spouse might be healthy now, people are living longer than ever before. The majority of us will require long-term care at some point in our lives. Long-term care is already expensive, and costs are expected to increase significantly in the future. Even basic services are expensive: According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2021 may need approximately $300,000 saved (after taxes) to cover health care costs in retirement.

We never really know what the future holds. Change is the essence of life, and your situation could change dramatically in the years ahead, hopefully for the better but maybe for the worse. The last thing you and your spouse want is to discover five, ten, or twenty years down the road that you no longer have the money to support yourselves, let alone afford the lifestyle you have now.

What you do with your money is your business, of course. Just think long and hard before giving your adult children a significant financial gift. As always, we are here to help and welcome the opportunity to sit and discuss your financial goals through estate planning. Call 814-961-2050 in Johnstown or 724-276-5066 in Canonsburg to schedule an appointment with us Let us help you feel safe and secure with all your present and future financial needs.

For generations, the children in your family have learned to swim by jumping off the dock of your family’s vacation home. It’s a rite of passage for each grandchild to learn how to bait a hook from grandpa while fireflies flicker in the summer heat. The legacy of a vacation home is the pinnacle of the American Dream. Many people work their entire lives to afford a home in their dream destination. While you dream of passing down this home (and the memories) for generations to come, have you thought of how to protect this family legacy?

Leaving the family vacation home directly to your children may be the simplest way for transferring ownership, however, when multiple children are involved, they would all need to agree with how the property is managed and maintained in the future. These decisions are proven to be challenging not only for your children to agree on, but also their future spouses.

An LLC is often used by families, in which each family member would have a certain membership interest in the home or to give away in a controlled manner. If the home is rented at certain times of the year, the LLC can help limit the liability of the family and profits could be used to help maintain the property.

Trusts are another tool used to protect a family home. This legal agreement allows you to specify how you would like the property to be managed once you die. You can use the trust to identify who will own your vacation home, when they will have access to it, and what they will be allowed to do with the property.

One of the many benefits of placing your vacation home in a trust is to avoid probate. When you pass away, assets that legally belong to a trust will be passed on to your beneficiaries without going through probate. There are several trust options available to align with your specific needs. The few most common trusts are:

• IRREVOCABLE TRUST
  The house can be placed into an irrevocable trust with your children named as beneficiaries. The terms of the trust would outline the management and use of the home. An irrevocable trust helps to protect the family from possible creditor liens.
• REVOCABLE TRUST
  A revocable trust can be used to transfer the property to family members at the time of your death. This option can set up what is called a subtrust to manage your vacation home after your death. There is usually a set amount of money set aside in the trust to help care for the property for a period of time.
• QUALIFIED PERSONAL RESIDENCE TRUST
  This allows you to gift the property at a reduced value, while allowing yourself to use the property for a set amount of years, after that time has expired, the home can transfer directly to family or to a trust for future generations.

Preserving your family’s legacy of summers full of fun is important to avoid future family conflicts and avoiding litigation. Choosing the right financial structure for your family to enjoy and use the property will help guarantee family fun for future generations. Reach out to our office if this situation rings true with your family. It is never too early to think about your family’s futures and preserving your legacy.

The statistics are rather alarming. In 2005, 50 percent of Americans had a will; today, only 32 percent of us have one. Meanwhile, only one in three Americans over the age of 55 has a durable power of attorney, and a mere 41 percent of this same demographic has advance health care directives.

Why is this? According to statistics culled from a range of sources, Americans lack estate plans for the following reasons:

• 47 percent say “they haven’t gotten around to it”
• 29 percent think they “don’t have enough assets to leave to anyone”

• 49 percent don’t believe their assets are worth enough to worry about estate planning

Other common explanations include being too busy, thinking estate planning is only for “old” people, and not wanting to think about the inevitability of death.

In truth, proper estate planning isn’t just about what happens to one’s assets after death, it’s about taking control of one’s life. Everyone can benefit from having an estate plan. At the very least, your plan should include all the following documents:

Last Will And Testament

A last will and testament allows you to accomplish a number of important goals. You can name your beneficiaries and specify the assets you want them to receive; name a guardian for your minor children; and choose the person you want to settle your estate (known as the Executor).

Power Of Attorney For Health Care

Also known as a health care proxy, this important legal document allows you to name a person you trust to make health care decisions on your behalf if you are no longer able to make them on your own.

Power Of Attorney For Finances

A power of attorney for finances is similar in concept to a power of attorney for health care. It allows you to designate another person to make decisions about your finances, such as income, assets, and investments, when you can longer make them yourself.

Living Will

This allows you to express your wishes regarding what medical treatments you want, or do not want, in an end-of-life situation. A living will differs from a power of attorney for health care in that it details your specific wishes, whereas a power of attorney for health care allows someone else to make health care decisions for you.

HIPAA Release

A HIPPA release lets you choose who can receive information about your medical condition. Hospitals and medical providers can be prosecuted for violating the Health Insurance Portability and Accountability Act (HIPAA) if they reveal your medical information to people not named in your HIPPA Release. 

Estate planning can help you accomplish many other goals as well. For example, trusts can protect your privacy and enable your estate to avoid the delays and frustration of probate. Trusts can also stipulate when and under what conditions your heirs will receive their assets, which is helpful if you think your children are not mature enough to manage an inheritance. An irrevocable trust can protect your assets against threats like long-term care costs, divorce, creditors, lawsuits, and more.

As you can see, proper planning allows you to seize complete control of your affairs while you are alive and after you pass away. Take control of your finances by calling our office to schedule an appointment to create your own, unique estate plan. You and your loved ones will surely benefit from a concrete outline of your wishes and financial decisions. Our offices are located in Johnstown and Canonsburg, Pennsylvania, however we assist clients all over the state. Estate planning is our specialty.

When we hear the word legacy, many of us think of money left to people and institutions that have come to mean the most to us over the course of our lives. But your legacy is much more than that. It includes your memories, values, wisdom, family history, and more that do not necessarily have monetary value. How can you pass those on to future generations?

You could begin by writing down, or making a recording of yourself sharing, stories about your parents, grandparents, and other relatives. Don’t just talk about where they lived and what they did for a living. Try to convey a sense of who your family members were, what was important to them in life, and the values they held dear.

You’ll want to take a similar approach in telling your own story. Describe why you made certain decisions, what you learned from mistakes, how you achieved success, and what you would do differently if you could. It’s been said that a picture is worth a thousand words, so be sure to preserve photos that depict your history and that of other family members. You might even want to create a website featuring your stories and photos and invite family members to contribute to it.

Now let’s consider items that may not be worth much money but have a great deal of sentimental value: an old watch owned by your uncle, for instance, or the rocking chair that your mother used for many years. You’d be surprised at how many family disputes arise over items like these. If one of your children has shown interest in such an object, you could specify in your will that he or she receives it when you pass away. Regarding sentimental objects that have not been “claimed” by your children, consider using an estate planning letter to designate the person you would like to inherit it, and why.

What about your values, is there a way to increase the likelihood that these will be passed on as well? One approach is to use an estate planning tool, such as an Incentive Trust, to encourage certain behaviors while discouraging others. For example, your trust could reward your children for graduating from college, entering a certain profession, purchasing a home, or doing charitable work.

In the end, you may be surprised by how much your values, wisdom, and family history—the nonmaterial aspects of your legacy—mean to the people you love and future generations. If you would like to discuss using estate planning as a tool to plan your nonmaterial and/or material legacies, give our office a call. In Johnstown at 814-961-2050 or Canonsburg at 724-276-5066. We understand the importance of leaving certain values within the family.

A dementia diagnosis is a traumatic time for any family. Dementia happens slowly and progressively over time. In the early stages, some symptoms are often thought of as just signs of aging. Beginning signs can be as simple as losing car keys, forgetting where the car is parked, or even forgetting to turn off the oven. Unfortunately, dementia is incurable and progresses over time. It is important to have difficult conversations sooner than later. There are a few things you can do to protect your loved one during this challenging time.

Gather Financial Documents

There are several advantages to having all financial documents in one place during an early diagnosis of dementia. Dementia patients usually have difficulty remembering where they put things. It is important to not only put all financial documents in one place, but to also make copies and have them kept with a trusted member of the family. It is a good idea to make a binder that consists of insurance documents, health care wishes, will, power of attorney, bank statements, and car titles. Original documents should be kept in a safe place. It is important to have discussions early on, while your loved one can remember important financial information.

Protect Their Assets

Elderly individuals are often a target for financial fraud. A dementia diagnosis could mean even more risk for your loved one. Financial fraud is not always done by strangers. It is important to keep a close watch on new “friends” your loved one starts spending time with. Keep a close watch on their finances to ensure they are not a victim of fraud.

Establish a Power of Attorney

Dementia can be scary. Your loved one will likely feel like they are losing control and may be reluctant to freely give their perceived freedoms away. However, it is important to create a Power of Attorney. This will allow a trusted loved one to make financial decisions, conduct banking transactions and pay bills when the time comes.

Create a Health Care Directive

After a diagnosis such as dementia, it is important to understand your loved ones wishes. Health care, long-term care, and end-of-life treatment are very personal. Every person has different beliefs and concerns regarding what they would like to occur in the event they are not able to make decisions for themselves. These wishes should be very clear and stated in writing. Does your loved one want to be put on life support? Do they want to be resuscitated? Do they prefer an assisted living facility or in-home care? A Health Care Directive will outline the person’s wishes and it will also appoint a person that will make healthcare decisions when the time comes. Be sure to post health care wishes somewhere visible in the house and in your loved one’s wallet, if emergency services are needed.

Review Estate Plan

Estate planning in the best of situations can seem overwhelming. There are financial implications for present and future generations. Emotional stressors include preparing for one’s own passing and trying to equitably distribute properties, investments, cash, and family heirlooms. However, when a spouse or loved one begins to suffer from dementia, forming a comprehensive estate plan is more important than ever. A basic understanding of the legal rights of someone suffering from dementia can help smooth the process. Having the trusted advice of an elder law and estate planning attorney can help navigate the process. At The Law Offices of McKelvey Kargo, we have your family’s best interest at heart and are equipped to handle a variety of financial planning needs. Give us a call to schedule an appointment.

Numerous studies have shown that Americans’ greatest fear regarding retirement is running out of money. Even so, myths abound about planning for retirement, Social Security, the cost of medical care, and more. Let’s explore the reality behind some of the most common retirement planning myths.

Social Security is Going Broke.

Approximately 50 percent of elderly Americans derive at least half of their income from Social Security. For decades, Social Security has collected more than it paid out, with excess income going into the Social Security Trust Fund. According to the Social Security Administration, this fund held $2.91 trillion by the end of 2020. However, due to the retiree population growing faster than the working population, as well as the fact that people are living longer, Social Security is starting to pay out more than it takes in. Without changes to the way Social Security is financed, the trust fund is projected to run out in 2034.

Of course, Social Security still collects taxes and pays benefits. According to recent estimates, however, it will only be able to cover 78% of scheduled benefits after 2034. To avoid that scenario, Congress will have to take measures to strengthen Social Security’s finances, as it did in 1983 when the program’s reserves were nearly exhausted. Given the program’s importance to retirees, and the fact that millions of older Americans have been paying into the system for decades, it is highly unlikely Congress would fail to take the necessary steps to protect it.

You Can Receive Your Full Social Security Benefit When You Turn 62.

While it is true that you can begin taking Social Security benefits at age 62, this will lead to a lower monthly benefit than if you wait until full retirement age. What is your full retirement age? It depends on when you were born. If you were born:

• In 1960 or later, your full retirement age is 67

• Between 1955 and 1960, full retirement age ranges from 66 and two months to 66 and 10 months
• Between 1943 and 1954, full retirement age is 66
• Between 1938 and 1942, full retirement age ranges from 65 and two months to 65 and 10 months
• Before 1938, full retirement age is 65

Should you take your benefits at age 62? “Expert opinion” differs, but the consensus seems to be that if you are in good health, and you have enough money to live comfortably without Social Security benefits, you may want to delay taking them to maximize your monthly benefit later.

All Your Medical Care Will Eventually Be Covered by Medicare.

Medicare does not pay for all a person’s medical care. Original Medicare (Parts A and B) covers hospital visits and outpatient care but not dental and vision care. Nor does it cover the cost of prescription drugs. Although Medicare Advantage plans can provide greater coverage, they generally have high premiums. Most Americans fail to include enough money in their retirement budget to cover the expense of annual medical care, let alone the cost of long-term, in-facility care. It is estimated that for a couple aged 65, out-of-pocket medical costs will approach $600,000 over the course retirement.

You Don’t Have to Plan for Retirement Because You Want to Keep Working. 

This may seem like a reasonable assumption when you have a well-paying and satisfying job, you’re young, and you’re healthy. The reality is quite different. According to a Retirement Confidence Survey, 43 percent of current retirees left the workforce earlier than they expected. While mandatory retirement at a set age was abolished in 1986 by an amendment to the federal Age Discrimination in Employment Act, many of us lose our jobs for other reasons or cannot continue to work due to health problems. Simply put, you may not be able to work as long as you want. The best protection against running out of money in retirement is to have a realistic, detailed retirement plan.

At The Law Offices McKelvey Kargo, we will work with you to create a financial plan that sets you up for a timely retirement. By using our estate planning services, we can guarantee your confidence in future finances, making the decision to retire easier and more concrete. If you would like to schedule an appointment to discuss your specific situation, please call our office in Johnstown at 814-961-2050 or Canonsburg at 724-276-5066. We look forward to hearing from you.

Who should raise your children if, for some reason, you or your spouse are unable to do so? It’s not an easy question to answer, but if you have young children, it is a topic you most certainly should address in your estate plan. Otherwise, a court will decide, and their decision will probably not be the same as the one you would have made and may not even be in the best interests of your children.

Some of the Most Important Issues to Consider When Choosing a Guardian Include:

• Does the prospective guardian have a genuine interest in your children’s well-being?
• Does the prospective guardian share your values?
• Can he or she handle the role physically and emotionally? What about financially, if you cannot provide him or her with enough assets to raise your children?
• Does the prospective guardian already have children of his or her own? Will he or she be able to make enough time to adequately care for and look after your children?
• Where does the prospective guardian live? Would that be a good fit for your children? Would having to move far away make an already stressful situation for your children even more so?
• Is it essential that all your children share the same guardian? Most parents say yes, but in some circumstances, such as when your children are of significantly different ages, naming more than one guardian is an option.
• Should you choose one person to act as personal guardian and another to manage the financial arrangements for your children—that is, name a second person to act as Custodian or Trustee? In certain situations, such as when the best surrogate parent for your children is not necessarily the best person to handle financial matters, this option is worth considering.
• Perhaps most important of all, have you spoken to the prospective guardian about taking on such a responsibility, and does he or she seem readily willing to do so?

We have helped many couples select the ideal guardian for their children and designed wills or other planning documents to ensure their wishes are carried out. We welcome the opportunity to do the same for you. Give our office a call in Johnstown at 814-961-2050 or Canonsburg at 724-276-5066 to discuss this estate planning topic, as well as other questions or concerns you may have. We have a lot of experience working with families and their individual, specific needs.

Emotions can run high after a loved one dies, particularly if your family’s assets include items with sentimental value, and the last thing you want is for your family to start fighting after you pass away.

Defuse Conflict Over Sentimental Items Before You Pass Away

How can you prevent your heirs from fighting over items with sentimental value? Many people believe that a statement in a will or trust that basically says “tangible personal property should be divided as my heirs see fit” will solve the problem. However, this can lead to a host of potential conflicts. A better approach is to put specific items that you believe are of interest to certain family members in writing, and then discuss your decisions in advance with your family. In this way, many emotionally charged disputes can be avoided.

What if you are convinced that a former spouse, one of your children, or the spouse of one of your children will cause trouble no matter what you specify in your will? In this case, you might want to consider a no contest clause. In essence, this clause makes the risk of challenging your will outweigh the potential benefit of doing so. A no contest clause generally stipulates that if a beneficiary contests the will’s provisions or its validity, his or interest in the will is forfeited. It is important to note, however, that you have to leave the heir in question enough of an inheritance to motivate him or her not to challenge the will.

When a Challenge to Your Will is Inevitable

The good news is that challenging a will isn’t easy. And that’s especially true if there is a valid document in place that was drafted by an experienced attorney, signed by you, and duly executed according to your state’s law. Even in cases without all those dotted i’s and crossed t’s, successfully overcoming a will can prove difficult. However, it does happen.

Challenging a will must be done in a formal process called a will contest, or caveat. Caveat proceedings are most common in cases where more than one document exists, and the beneficiaries disagree as to which is the “true will.” Contests can also arise when there are holographic (i.e. handwritten) wills, confusing written statements, uncertain verbal statements, surprising or grossly unfair provisions, apparent deathbed revisions, or questions about the circumstances under which a will was made.

As a general rule, if your beneficiaries wish to start a caveat process, they must successfully allege one of the following claims:

Lack of Testamentary Capacity — The testator (i.e. the deceased) was not of sound mind when the will was made, did not know the value of their estate, or otherwise did not understand the consequences and effects of the will.

Invalid Execution — The will was not executed according to the laws of your state. This argument is raised when there are questions about the capacity and/or signatures of either the testator or the witnesses. The court will typically presume that the will was properly executed, so the caveator (the person challenging the will) must overcome that presumption, usually with the help of their attorney.

Negligent Execution — A clerk or attorney made a mistake when drafting or executing the will, thereby accidentally contradicting your intentions.

Undue Influence — The caveator claims you were coerced, wrongfully pressured, or subjected to duress when making the will.

Fraud — The will is fraudulent or a forgery. Caveators may also argue that your intentions were colored by fraud. For example, let’s say you disinherit your nephew because your niece falsely accuses him of stealing your money.

A Second Will — The caveator believes there is another document that supplements or supersedes the purported will.

If you have questions about how you can start protecting assets of sentimental value or how the caveat process works, our office is here to help. We are experts when it comes to carrying out our clients wishes through estate planning.

The term “sandwich generation” refers to people who are raising their own children while simultaneously trying to care for aging parents. If you are “sandwiched” between these two roles, the stress can seem overwhelming. Here are some tips for managing the challenge.

Have “The Talk” with Your Parents as Soon as Possible

“The Talk” involves speaking with your parents about their wishes regarding long-term care and who will be able to make decisions on their behalf in the event of incapacity. By addressing these issues early and openly, you can then take steps to create legal documents to ensure your parents’ care will reflect their wishes (more about these documents later). Be sure to include your siblings and other members of your extended family in these conversations so that everyone is on the same page. This will help eliminate disagreements, which can quickly turn ugly, about what mom and dad would have wanted.

Determine How to Pay for Long-Term Care Before It’s Needed

Long-term care is expensive. While costs vary based upon where you live and the level of care needed, in the U.S. the median cost for a private room in a nursing home was $8,517 per month in 2019. A one-bedroom unit in an assisted living facility was over $3,600 per month. Costs are expected to rise dramatically in the years to come. Unfortunately, Medicare will only cover skilled nursing care in a nursing home for a maximum of 100 days, and even then, co-pays of more than $160 per day kick in after the first 20 days. No wonder many families exhaust their life savings within two years of a family member entering a nursing home.

The good news is that Medicaid will pay for long-term nursing home care. In fact, with proper planning (which is often called Medicaid Planning), it is possible to protect your parents’ assets while at the same time ensuring they receive the care they need. The sooner you investigate this option, the better. When exploring your parents’ eligibility for Medicaid, it is important to consider rules that may disqualify them from coverage. Medicaid has a “look back” policy that could result in penalty periods or disqualification, and missing this important piece of information could be financially devastating.

Draft the Proper Legal Documents

For adult children raising kids of their own, assuming the role of caregiver for one’s parents can be extraordinarily difficult without the help of proper legal documents. We have discussed the importance of The Talk. The information gleaned from this discussion provides a foundation for the creation of effective legal documents that express and protect your parents’ wishes. These documents include a Will, a Power of Attorney, a Living Will/Healthcare Proxy, and a HIPAA Medical Release. Let’s take a quick look at these documents.

A Will directs how a person’s estate is to be administered and how his or her assets will be distributed after death. The person who creates the Will is called the Testator while the individual who settles the estate is known as the Executor. Naming the Executor and specifying “who gets what” in advance can help eliminate family infighting.

A Power of Attorney allows an individual to name someone (the Agent) to act on his or her behalf in the event of incapacity. The Agent can make decisions regarding property as well as legal, financial, and personal matters.

A Living Will details a person’s wishes concerning his or her medical care, including artificial life support, surgery, or other medical treatments related to an end of life situation or permanent unconsciousness. A Healthcare Proxy names a trusted person to make medical decisions on behalf of an individual who has become incapacitated.

A HIPAA Medical Release allows people to specify who has access to their medical information. Without a HIPAA Release, family members may be denied access to medical and insurance records in an emergency.

Effective estate planning can include many other strategies and tools to accomplish a wide range of goals, but the above documents are absolutely essential to carrying out your parents’ wishes and fostering harmony among extended family members.

Plan Accordingly Ahead of Time

The last thing anyone wants in an emergency is to run around hysterically searching for important medical and financial information. You should have all the following information readily available:

• Copies of the front and back of insurance cards, prescription cards, and, if applicable, military IDs
• Names and contact information of primary care physicians and specialists
• Basic medical history, such as medications, previous surgeries, and allergies
• A current list of medications and dosage
• Contact information for banks, financial advisors, insurance agents, attorneys, and other key advisors
• A list of financial accounts and safe deposit boxes, as well as the institutions where they are held
• The location of all estate planning documents, including Power of Attorney, Living Will/Healthcare Proxy, Will, HIPAA Medical Release, and, if applicable, trusts

Involve Your Children in Your Parents’ Care

One advantage of being in the sandwich generation is that you have help at hand—your kids. Maybe your daughter has a driver’s license. If so, she can take her grandparent to a doctor’s appointment from time to time. Or you can take your son to visit with his grandparents at the nursing home or assisted living facility. Even young children can help. If your parents live with you, one of your young children can bring them a snack or show them how to use the television. Perhaps best of all, by spending time with their grandparents your children will likely have less anxiety about what your parents are going through.

While being a member of the sandwich generation isn’t easy, planning in advance can help lighten the load and ensure your parents receive the care they need. Proper planning can also provide you with greater peace of mind. We invite you to contact us at your earliest convenience to discuss your particular needs and goals. We strive to make your stress load lighter and easier through careful planning. This is our specialty. Call us at (814) 961-2050 in Johnstown or 724-276 5066 in Canonsburg to schedule an appointment for a day and time that works best for you.

Digital technology has transformed the way we live. Our society has irrevocably plunged into the digital world. As technology becomes ever more deeply embedded into our daily lives, we need to plan accordingly. “Digital Assets” is a broad term that includes a multitude of online accounts and records. A digital Will enables you to identify how you want each one of these profiles to be handled after your death. A digital Will is not the same as a traditional written Will, which is a legal document specifying how your assets will be distributed after death. You can pass some types of digital assets through your Will, but most digital assets transfer in other ways, or not at all. Online accounts and digital media have value, and they could be locked or even lost if you don’t set up the appropriate protection in your Will.

Practically speaking, most of your digital assets won’t pass through your Will. However, even if you can’t pass these types of digital assets through your Will, you can (and should) make a plan for what happens to them after you are gone. In addition to notifying your loved ones of what online accounts do exist, your Will should also describe where to find them.

In most cases, your family members won’t know what you have floating in cyberspace once you die. Each website has its own requirements and legal processes for accessing accounts after death. There are a few actions you can take to make things easier to access and for your loved ones to know how you would like your digital accounts to be handled after you are gone. Between the many types of digital wallets and various online exchanges, your family will most likely be on a wild goose chase unless you make it clear where this information can be found.
Some digital accounts will have a measurable monetary value, while others will have values that differ from person to person. While your cryptocurrency can be cashed out for cold hard cash, removing your online dating profile may have other complications.

Below are a few digital assets and accounts to consider when documenting your digital footprint:

• Bitcoin and other cryptocurrency
• Social media profiles
• Frequent flier miles
• Credit card reward points
• PayPal
• Venmo
• Online dating profiles
• YouTube accounts
• Prescription subscription accounts
• Crowdfunding accounts
• Access to digitally filed tax returns
• Website ownership
• NFTs
• Email accounts

Leaving digital assets to your loved ones after your death requires more planning than traditional and tangible assets. With a little planning, you can ensure that your beneficiaries inherit your accounts as you intended. We can help you with documenting the appropriate information and notifying your loved ones of your digital assets, along with your traditional will. Call our office to schedule an appointment in Johnstown at 814-961-2050 or Canonsburg at 724-276-5066. The Law Offices of McKelvey Kargo specialize in making estate plans for unique family situations and assets.

Once upon a time, amassing a million dollars for retirement meant that your golden years would be very golden indeed. But what about now—is a million dollars still enough money to enjoy a luxurious retirement?

The good news is that more than 20 million people in the United States have over a million dollars. The bad news is that depending on your lifestyle, and how you want to live in retirement, one million may not be enough. Today, the opportunities for what once might have been considered a retirement on par with the “lifestyles of the rich and famous” could require closer to one million dollars, perhaps more.

Why? One reason is that in today’s economic climate, a million dollars translates into a sustainable annual income of $30,000-$40,000. That’s down from over a decade ago, where a million dollars could generate approximately $70,000-$80,000 in sustainable annual income.

While a sustainable annual income of $30,000-$40,000 is nothing to sneer at, a successful retirement depends on proper management and prudent decisions. One of the classic mistakes is to make a major purchase upon retirement, such as a boat or membership in a private golf club.

The consensus among investment professionals is that a million dollars can still provide you with a comfortable retirement, but proper planning, realistic expectations, and a sustainable cash flow are the keys to success.

One realistic expectation to set when saving for retirement is the expense that comes with funding long-term care costs. Americans are living longer than ever before. And while this is great news, it comes with a downside. For example, the median annual cost of a private room in a nursing home has hit six figures in the U.S. at $111,000 in 2022, and the cost of nursing home care and other types of long-term care are expected to rise dramatically in the future. Sadly, many families exhaust their life savings within a year or two of a family member entering a nursing home. Meaning your one- or two-million-dollar nest egg could disappear in the blink of an eye. Fortunately, we can help you obtain the care you need without losing the assets you have worked a lifetime to build.

One way to ensure you and your family are protected for the future is to start pre-planning now. Together, we can use a wide range of tools to help you create a plan that will give you the peace of mind by knowing you will be able to receive the care you need in the future, without losing your life savings. If you think you would benefit from sitting down with our office to discuss a financial outline that ensures your comfort in the future, call us today to schedule an appointment in Johnstown at 814-262-8058 or Canonsburg at 724-276-5066. The Law Offices of McKelvey Kargo are a Christian-based law firm that strives to give all our clients financial peace. We look forward to hearing from you.

When most people think of estate planning, usually writing out their will comes to mind. While a will can help you accomplish a few important planning goals, it’s certainly not a complete plan to protect your future.

Many people know that a will allows you to control how your assets are distributed after you pass away. And, that without a will, your assets would simply be distributed in an action carried out by the state. Known as intestate succession, the state acts in an objective, and simply procedural, manner because your assets are required to be distributed. The process of intestate succession will completely ignore your wishes because what you “would have wanted” is simply irrelevant to the state without a formal will in place.

A will is also critical when you have minor children. The terms of your will can give you control over how your minor children are raised should you and your spouse pass away. In your will, you can name a trusted person to serve as a guardian, someone who will raise and care for your children when you cannot. However, without a will, a court decides who will raise your children; a decision that may appoint a person you never would have selected yourself.

In sum, yes, a will is an important document to create so you can rest assured your wishes will be respected after you’ve passed away. Yet, it’s important to consider the limitations of a will as well. For instance, your will does not allow you to manage your affairs should you become incapacitated.

Working with an experienced estate planning attorney to establish a durable power of attorney and advanced medical directive will ensure that you retain some control over what is done on your behalf if you become incapacitated. Each of these documents empowers one or more individuals to make decisions about your assets or medical care when you are unable. If you do not have either document in place, a court will decide who to appoint to fill these roles for you. Again, leaving the decision open for the court to decide could lead to the appointment of someone you would not have chosen for yourself; someone who would then have the power to take actions they believe are in your best interest regardless of your personal preferences.

Further, many financial accounts require a beneficiary designation, instead of a will, to determine how the assets will be distributed. Ownership of assets such as life insurance, annuities, retirement accounts like IRAs and 401(k)s, and jointly-owned property all look to the beneficiary designation form for guidance on how the asset is to be distributed after the owner’s passing. In fact, many IRS rulings and court cases have concluded that the owner’s statements and intent in his or her will do not matter if they contradict what was written on the beneficiary designation form. Therefore it’s important to also review your beneficiary designations periodically to ensure they reflect your wishes now, and not what you wanted when, for example, you opened the IRA 20 years ago.

A trust is another estate planning tool families can utilize to provide a greater level of flexibility in how their future is managed. For example, a revocable living trust allows your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats while protecting your heirs’ inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.

In short, while a will can help you accomplish important goals, additional estate planning tools and strategies are available to protect you and your loved ones both after you pass away and in the event of tragedy while you are still alive. An experienced estate planning attorney can help you determine the best tools and strategy for you. We strive to make each of our clients feel confident and at peace if any unforeseen situation may arise. The Law Offices of McKelvey Kargo also provide monthly, free workshops for clients who are wanting to know their wide range of options before forming an official estate plan.

An “I Love You Will” is a last will and testament in which the testator—the person who makes the will—leaves everything to his or her spouse. If you have thought about making a will in the past, you likely considered this approach. Perhaps you have already created such a will.

While an I Love You Will may be appropriate for certain situations, there are several potential problems you should take into account. First, it could unintentionally disinherit your children. How? Think about what would happen if you passed away and your spouse, who has inherited your assets through the I Love You Will, remarries and creates the same type of will. If your spouse passes away before his or her new spouse, the new spouse would inherit these assets. That is, your children might receive nothing.

Of course, an I Love You Will shares the limitations of basic wills in general. For example, if the surviving spouse develops Alzheimer’s disease or another form of dementia, and no advance directives were created, estate assets may fall under the jurisdiction of a guardianship or conservatorship court. In that case, your wishes and those of your surviving spouse may be thwarted.

An I Love You Will also ensures your estate will have to go through probate. The probate process can take several months (or considerably longer) to complete. During the probate process, your spouse may be unable to access estate assets, which could make it difficult to pay expenses such as a mortgage, homeowner’s insurance, property taxes, automobile loans, credit card bills, and more. In addition, probate is a public process, meaning anyone can discover information about your assets and debts that you would have wanted to remain private. Finally, the costs associated with probating an estate can be significant.

An I Love You Will may sound like a good idea, but to ensure your wishes are carried out and your assets are distributed efficiently to your loved ones, you may want to consider a trust-based estate plan. We invite you to contact us at your earliest convenience to discuss your options at our Johnstown office at 814-262-8058 or Canonsburg office at 724-276-5066. We specialize in all things estate planning and strive to give all our clients a peace of mind for whatever the future may hold.

For most people, choosing an executor or trustee means choosing someone close to them – a family member or a friend. However, this often means their executor or trustee is also a beneficiary. But, will choosing a beneficiary create a conflict of interest?

The short answer is, the best way to avoid a conflict is to be as specific as possible in your instructions to your executor and beneficiaries.

An executor or trustee has a legal duty to manage the property and assets in the decedent’s estate for the benefit of the trust or estate beneficiaries. This means that while the executor/trustee should be compassionate, they must also act in an equal and unemotional manner toward every beneficiary.

A beneficiary, on the other hand, is often emotionally involved. Even those beneficiaries who are not concerned with the monetary aspect of their inheritance will likely be emotionally invested in the heirlooms of the estate. Sadly, many family feuds are sparked when siblings can’t agree on who gets sentimental items such as the family silver or great grandma’s engagement ring.

That is why adding as much clarity as possible to the terms of your estate will decrease the chances that the executor will be tempted to take advantage of their position. However, you may also want to consider naming a disinterested party as a trust advisor or co-executor to provide checks and balances throughout the administration process.

If you are a beneficiary who is also serving as an executor or trustee there are a few things you can do to ensure you keep your roles separate.

You can:

•  Contract a probate or estate planning attorney to mediate or oversee the process.

•  Involve an impartial appraiser if real property is involved.

•  Step down and hand the role over to a qualified and disinterested party if all else fails.

If you are concerned about naming an executor or trustee that is also beneficiary, or facing difficulty in serving in the role yourself, we can help you navigate the process in a fair and compassionate manner. At The Law Offices of McKelvey Kargo, we specialize in considering a client’s family dynamic while drafting personalized estate plans. If you are unsure how to proceed in your planning, especially while factoring in immediate family, do not hesitate to schedule a consultation.

It can be tempting to avoid costs of creating an estate plan when your only significant asset is your home. After all, what’s the harm of simply putting your home in your child’s name to avoid probate and be done with it?

We hear this question more than you’d think at our office, and we almost always advise against it. The truth is, there are a number of reasons to keep your home in your own name, the biggest ones being property taxes and your child’s liabilities.

Other reasons include:

• Is your relationship with your child as good as you think? Once the home is in their name, they have no obligation to continue to let you live there.
• Do you have more than one child? Putting your home in only one child’s name can cause a rift between siblings. Alternatively, if you put the home in the names of all your children, it can make the home more vulnerable to liabilities and paperwork errors.
• Have you considered a Revocable Living Trust? A Revocable Living Trust can be a safer way to avoid probate. A Revocable Living Trust is flexible and reliable and doesn’t have to be expensive. In fact, a Revocable Living Trust can actually save your family money in the long run!

Don’t make a mistake that could end up causing you to lose your home. Contact The Law Offices of McKelvey Kargo at either our Johnstown office at 814-262-8058 or our Canonsburg office at 724-276-5066 to discuss how we can help you protect your family and your assets from probate and liabilities. Our office looks forward to scheduling you an appointment to discuss these important life decisions. Colt McKelvey and his family have served the legal needs of the Greater Johnstown Area for generations. With our new office in Canonsburg, we look forward to continuing that tradition and supporting new generations of clients.

If you already own a business or are considering starting one soon, you are likely exploring strategies to ensure your venture can maintain profitability and staying power. As one of your most valuable assets, any successful proprietorship will require a significant investment of both time and money. A comprehensive business plan is imperative when forming an entity that fosters rapid growth and protects against losses and threats, including lawsuits, termination, tax minimization, and challenging partners and employees. Selecting a suitable business entity is a key component in building a solid foundation.

Sole Proprietorship:
For those self-employed individuals who conduct their business on an informal basis, sole propriety may be a suitable option. This is the simplest form of business ownership, as there is no legal distinction between the owner and the business which allows for complete control and responsibility for all profits, losses, and debts.

Partnership:
When two or more parties agree to work together either formally or informally, this is called a Partnership. There are General Partnerships, in which all parties share profits, losses and liability. Whereas Limited Partnerships permit one or more of the partners to contribute to capital, share in profit or loss, without playing an active role in business operations. Partnerships can be beneficial for several reasons. They allow for the pooling of resources, skills, and expertise, which can lead to higher profits and offer management flexibility.

Corporation:
A popular choice for larger organizations is the corporate business entity. A corporation is owned by its shareholders and operated by a board of directors. Corporations are separate legal entities from their owners, which means the corporation can engage in lawsuits, contracts, and own property in its own name. Shareholders hold no personal liability for the debts and obligations of the corporation. They offer significant advantages, including access to capital, limited liability protection for shareholders, and a clear management structure. In order to raise larger capital to finance operations and expansion, corporations can issue stocks or bonds to raise capital, which can then be marketed to investors.

Limited Liability Company:
An LLC combines the liability protection of a corporation while maintaining the flexibility and tax benefits of a Partnership. In an LLC, the owners, known as members are not personally liable for the debts and obligations of the business. This means that their personal assets are generally protected from any of the company’s creditors. LLCs are a popular choice for small businesses and startups because they are relatively simple to set up and maintain, and provide the benefits of liability protection without the formalities and administrative burdens of a corporation.

Selecting a business entity can be confusing and stressful as there are several caveats to consider. Seeking the advice of a qualified Estate Planning attorney who can offer guidance and clarity for any important decisions regarding your business(es). Reach out to our office to schedule an appointment to discuss your business and/or personal financial plans. We have two office locations: Johnstown, PA and Canonsburg, PA, serving clients around the Johnstown and Pittsburgh area, as well as throughout the state.

If something terrible happened to you and your spouse, what would become of your children? It’s not something anyone wants to think about but think about it we must. By naming a guardian for your minor children, you can help ensure they will be raised according to your wishes. The question is, how do you choose the proper guardian? Here are several factors to consider.

1. The Ability and Willingness of The Guardian to Serve.

Will the prospective guardian be able to meet the physical and economic demands of raising a child? Even more important, is the prospective guardian willing to serve in the first place? The last thing you want to do is name a guardian before speaking at length with the person you have in mind.

2. Values.

Ideally, the prospective guardian will share your child-rearing philosophy, values, views on education, religious beliefs, and other fundamental principles.

3. Geography.

If the prospective guardian lives in another state, moving there might be too drastic a change for your child, particularly an older child.

4. The Guardian’s Family.

If the potential guardian has children of his or her own, would your child get along with them? And would the guardian be able to give your child enough attention in a busy household?

5. The Age of Your Children.

If your children are older and relatively mature, you may want to seek their input before naming a guardian.

Through proper planning, you can ensure your children will be raised according to your wishes in the event you cannot raise them yourself.

Wealth transfer is not merely the movement of financial assets from one generation to the next; it’s a process that involves the delicate balance of preserving family values, fostering financial responsibility, and ensuring a lasting legacy. As families embark on the journey of estate planning, the integration of values becomes a crucial aspect of passing on wealth beyond monetary considerations.

Understanding the Dynamics of Wealth Transfer
Generational wealth transfer involves the transmission of assets, such as real estate, investments, businesses, and personal property, from one generation to the next. While the financial component is evident, successful wealth transfer requires a broader perspective that includes family values, traditions, and wisdom.

The dynamics of wealth transfer can be complex. Different generations may have varying perspectives on money, spending, and the purpose of wealth. Successful estate planning involves acknowledging and navigating these differences to create a plan that aligns with the family’s values and goals.

Incorporating Family Values into Estate Planning
Establishing open lines of communication is the cornerstone of successful wealth transfer. Family members should feel comfortable discussing financial matters, values, and expectations. Regular family meetings can facilitate these conversations and foster understanding among generations.

Additionally, clearly articulating and documenting family values is essential. What principles and beliefs does the family hold dear? How should wealth be used to further these values? By defining these core principles, the estate planning process becomes a tool for expressing and perpetuating the family’s identity.

It’s also important to empower the next generation with financial education. This includes understanding investment strategies, managing debt, and making informed financial decisions. A financially literate heir is better equipped to manage the family’s wealth responsibly.

Remember, trusts can be powerful tools for aligning financial assets with family values. Establishing trusts with specific purposes, such as education, charitable giving, or supporting family businesses, ensures that the wealth serves meaningful objectives. Consider incorporating incentive structures within the estate plan. This can motivate heirs to pursue education, charitable endeavors, or business ventures that align with the family’s values. Well-crafted incentives can guide the next generation toward responsible wealth management.

Introduce philanthropy as a family tradition. Creating a family foundation or participating in charitable activities together fosters a sense of social responsibility and reinforces the idea that wealth can be a force for positive change in the community.

The true success of generational wealth transfer lies not just in the accumulation of financial assets but in the preservation of a lasting legacy. By integrating family values into the estate planning process, individuals can ensure that their wealth becomes a tool for promoting the well-being and values of future generations.

Estate planning is not solely a legal and financial exercise; it’s a reflection of a family’s values, aspirations, and commitment to a shared legacy. By embracing the complex nature of generational wealth transfer, families can create a roadmap that not only preserves financial prosperity but also enriches the lives of those who come after them.

As autumn paints the world in colorful hues, farmers across the country are busy preparing for the harvest. This season offers a perfect metaphor for a crucial aspect of personal finance: updating your estate plan. Just as farmers meticulously plan for a successful harvest, individuals should take this time to ensure their estate plans adequately reflect their current wishes and circumstances.

The fall season is a natural time for reflection and preparation. Just as crops are carefully inspected and fields are tended to, your estate plan deserves a thorough review. Life changes, such as a new family member, a significant shift in financial status, or even changes in relationships, can all impact the efficacy of your estate plan. If you haven’t revisited your plan recently, now is the ideal moment to ensure it still aligns with your current goals and circumstances.

Much like farmers evaluate their crops for ripeness, assess whether your estate plan is “harvest-ready.” Begin by reviewing your will and any trusts you have in place. Ensure that these documents accurately reflect your wishes and that they incorporate any recent changes in your life. For instance, if you’ve welcomed a grandchild or experienced a significant financial change, it’s essential to update your plan accordingly.

It is also a great time to review your beneficiary designations. You should review and confirm that the beneficiaries named in your estate plan and on accounts like retirement funds and insurance policies are still accurate. Life events such as marriage, divorce, or the death of a beneficiary can necessitate updates to ensure that your assets are distributed according to your wishes.

Your estate plan should also reflect any changes in your financial landscape. If you’ve accumulated new assets, such as property, inheritance or investments, or if your financial situation has improved or worsened, it’s vital to address these changes in your plan. By doing so, you ensure that your assets are managed and distributed as you intend, optimizing the benefits for your heirs.

Just as farmers consult almanacs and weather patterns to prepare for the harvest, consider consulting with an estate planning professional to guide you through the process. They can offer insights into how recent legal changes may affect your plan and help you navigate complex decisions. This is why it’s essential to meet with a dedicated estate planning attorney, to ensure your plan still works the way you originally intended.

As autumn brings a sense of completion and reflection, take this opportunity to revisit and update your estate plan. By preparing your estate plan for the future, you ensure that it serves as a true reflection of your wishes and provides security for your loved ones. Embrace the season’s spirit of renewal and harvest the peace of mind that comes from knowing your legacy is well-prepared for the future.

When reading obituaries, you may start noticing a trend. The line “In lieu of flowers, please…” is becoming more prevalent, with families instead asking for a donation to a particular organization that was meaningful to the deceased. As environmental awareness grows, many individuals are seeking ways to align their end-of-life plans with their commitment to sustainability. Green burials and eco-friendly estate planning offer meaningful options for reducing the environmental impact of traditional burial practices.

Unlike conventional burials, which often involve embalming chemicals, non-biodegradable caskets, and concrete vaults, green burials emphasize natural decomposition and minimal ecological disturbance. Options for green burials include the use of biodegradable caskets or shrouds, natural burial grounds that forego headstones in favor of native plants, and conservation burial sites that actively support land preservation efforts. These practices not only honor the deceased but also contribute positively to the environment.

Legal and logistical considerations are crucial when planning for a green burial. Regulations regarding green burials vary by state and locality, making it essential to research the legal requirements in your area. Some regions may have specific guidelines for burial containers, cemetery certifications, and land use. Additionally, pre-planning and clear communication with family members and funeral service providers can ensure that your wishes are respected and legally compliant. 

It’s also important to include your green burial preferences in your relevant estate planning documents to avoid potential conflicts or confusion among your family members, and those you leave in charge of executing your wishes. You can achieve this through a Disposition of Remains document. A Disposition of Remains is a standalone document that details your wishes upon your death, and appoints someone to carry out those wishes. You may also want to put the same instructions in your Last Will and Testament, but funerals, burials, and the like are often decided very quickly after death, before anyone has reviewed or searched for your Will. 

Incorporating sustainability into your estate planning extends beyond burial choices. Consider setting up a green legacy by supporting environmental causes through charitable bequests or establishing a conservation trust. If you own a particularly large or undeveloped area of land, you may consider an easement to conserve the property. You can also opt for digital estate planning tools to reduce paper waste and promote the use of eco-friendly materials in any necessary documentation. 

By integrating these practices into your estate plan, you not only reduce your environmental footprint but also inspire future generations to prioritize sustainability. Ultimately, eco-friendly estate planning reflects a holistic approach to life and death, ensuring that your values endure long after you are gone.

Cultural beliefs and traditions play a significant role in shaping estate planning decisions. Different cultures have unique perspectives on inheritance, family roles, and wealth distribution, which can greatly influence how an estate plan is structured. For instance, some cultures prioritize passing wealth along the male lineage, while others may emphasize equal distribution among all children. Some cultures prioritize keeping land in the family over anything else.

It’s important to make your attorney aware of any cultural nuances, in order to create an estate plan that aligns with your values and familial expectations. Ignoring these cultural factors can lead to family disputes, unintended tax consequences, or the alienation of certain family members.

Customizing your estate plan to respect and incorporate cultural values involves careful consideration and detailed communication with family members and legal advisors. It’s important to discuss your cultural priorities with your estate planning attorney to ensure that your wishes are accurately reflected in your legal documents. 

In your Health Care Directives, it’s important to name an agent who will carry out your end-of-life wishes. This includes the decision to prolong your life, even if there is no chance of meaningful recovery, and the decision to receive comfort-care medication, even if it may shorten your remaining life. Culturally, there may be very different viewpoints for these tough decisions, and naming the right person to make these decisions for you is extremely important.

You may also execute a Disposition of Remains document, which identifies your wishes for your body after death. This includes the option to donate organs or donate your body to science, whether you’ll be cremated or buried, and whether there are no services, small services with family only, a funeral, or a big party at your favorite location. 

In your Will or Trust, cultural reflections may include specific bequests, traditional ceremonies, or special instructions for family heirlooms. Additionally, you might consider appointing a Trustee or Executor who understands and respects your cultural background, ensuring that your estate is managed in a way that honors your heritage. Incorporating cultural values into your estate planning can provide peace of mind, knowing that your traditions will be upheld and your legacy preserved.

Examples of cultural considerations in estate planning are varied and reflect the rich diversity of global traditions. Even during life, estate planning decisions fall back on certain cultural norms. For example, in many Asian cultures, there is a strong emphasis on caring for elderly parents or grandparents in their old age. On the other hand, some Western cultures may prioritize individual autonomy because mom and dad do not want to burden their loved ones.

By understanding and integrating these cultural considerations, individuals can create estate plans that not only meet legal requirements but also honor their unique cultural identities.

Life insurance plays a crucial role in estate planning, offering a financial safety net that ensures loved ones are protected against unforeseen events. One of the primary uses of life insurance is to cover funeral expenses, which can be a significant financial burden. The average cost of a funeral can range from $7,000 to $12,000, and life insurance can provide immediate funds to cover these costs, ensuring that family members are not left scrambling to pay these expenses during a time of grief.

In addition to covering funeral costs, life insurance policies can be structured to provide direct financial support to beneficiaries. When a policyholder passes away, the death benefit is typically paid out directly to the named beneficiaries, bypassing the probate (court) process. This direct payout can offer immediate financial relief, helping to cover living expenses, pay off debts such as mortgages, or even fund education for surviving young children. 

Besides the immediate cash influx, some people opt to use life insurance policies to mitigate potential estate tax liabilities. This is done through Irrevocable Life Insurance Trusts (ILITs). An ILIT is a trust designed to own a life insurance policy, removing the policy from the policyholder’s estate. By doing so, the death benefit can be excluded from the estate, thereby reducing the overall estate tax burden. This strategy can be particularly beneficial for individuals with large estates who are concerned about minimizing taxes and maximizing the inheritance left to their beneficiaries. 

This strategy may become more prevalent in coming years, with the impending sunset of the federal estate tax exemption 2025 (subject to an extension by Congress). However, establishing an ILIT involves relinquishing control over the policy, as the trust must be irrevocable, meaning it cannot be modified easily or dissolved after its creation.

While life insurance offers numerous benefits, it also comes with certain considerations that should be carefully weighed. One of the primary advantages is the financial protection and peace of mind it provides to policyholders and their families. Additionally, the tax-free nature of death benefits can be a significant advantage. However, life insurance premiums can be costly, especially for older individuals or those with pre-existing health conditions. Furthermore, the complexity of certain life insurance products, such as whole life or universal life policies, can be confusing, making it important for individuals to thoroughly understand their options and consult with a financial advisor, in conjunction with an estate planning attorney.

In conclusion, life insurance is a vital component of comprehensive estate planning, providing financial security and helping to manage potential estate tax liabilities. Whether used to cover immediate expenses like funerals, provide direct financial support to beneficiaries, or using an ILIT for tax efficiency, life insurance can offer significant benefits. However, the decision to purchase life insurance should be made only after careful consideration of the associated costs and complexities, ensuring that the chosen policy aligns with the policyholder’s financial goals and estate planning needs.

According to Forbes, more than 65% of all U.S. households have a pet. More and more, people want to make sure their pets are taken care of after they pass away. Whether it’s a cat, dog, horse, or any other beloved pet, it is important to provide instructions – and possibly money – for their care after death.

One option is a pet trust. A pet trust is a legal agreement to provide for the care of one or more pets in the event that the pet owner dies or becomes unable to care for them. The trust names a caretaker for the pet and sets aside funds to provide for the pet. As of 2022, all 50 U.S. states have a statute or law covering pet trusts after the owner passes.

So how do they work? Pet trusts allow the pet owner to decide whether they want to provide money for their pet, who should take care of the pet after the owner is gone, even what kind of food or health care the pet should receive. The trust typically terminates when the animal beneficiary or beneficiaries of the trust are no longer alive. After that, any remaining funds will be distributed per the wishes of the creator of the Trust. However, each state’s law differs on what exactly is covered, and the time period allotted before termination.

When preparing such a trust there are some important questions you should consider. These include, but are certainly not limited to:

• Who will be named as the Caretaker for your pet(s)?
• Who will be named as Trustee to distribute funds to the Caretaker?
• How much money will you initially put in trust?
• How often will the payments be made and in what amounts?
• What are the Caretaker’s responsibilities and instructions regarding housing, food, veterinary care and whatever else is needed throughout the pet’s lifetime?
• If you have multiple pets, should they stay together?

As you can imagine, there are potential problems with pet trusts. One issue is that they have been the subject of fraud. This happens because the beneficiaries – the pets – cannot complain about any mistreatment or wrongdoing from their appointed caretakers and cannot take them to court. There also have been issues of pets being replaced with other pets that look similar upon their death so funds will continue to be distributed to the caretaker. The latter issue can be resolved through microchipping pets to make sure the original pet is not replaced.

Though there are potential problems, it is still worth considering providing for your pet once you pass away. Even if you do not want to leave money for the care of your pet, at least name someone you can trust to take care of them after you’re gone – or at least someone who is going to find them a loving home. Pet trusts are becoming more popular, so consider including some provisions in your estate plan today.

In the realm of estate planning, married couples have traditionally used “sweetheart wills” to leave assets to each other. A sweetheart will describe any joint or separate will where spouses leave everything to each other, and then typically to their children, or other joint agreed upon beneficiaries. However, it’s essential to consider both the advantages and drawbacks before deciding if a sweetheart will be the right choice for you and your family.

Pros:

Simple & Affordable: Sweetheart wills are relatively simple and cost-effective to create. They provide an uncomplicated framework for couples who wish to leave their assets to each other.

Mutual Trust and Understanding: By creating a joint will, couples demonstrate trust and a shared understanding of their wishes. This can strengthen the bond between partners as they navigate their financial future together.

Streamlined Decision-Making: Sweetheart will typically simplify decision-making processes for surviving spouses. Assets are transferred smoothly, reducing the potential for legal disputes or family conflicts.

Cons:

Lack of Flexibility: Sweetheart wills may lack the flexibility required to adapt to changing circumstances. Life is dynamic, and a joint will may not account for unforeseen events such as divorce, estrangement, or significant changes in financial situations.

Limited Control: Joint wills can limit an individual’s control over their assets after their partner’s death. This may be a concern if the surviving spouse wishes to change beneficiaries or modify the distribution of assets.

Potential for Disputes: In some cases, joint wills can lead to disputes between family members, especially if beneficiaries disagree with the distribution outlined in the will. This can strain relationships and lead to legal challenges.

Tax Implications: Depending on the size and nature of the estate, sweetheart wills may not be the most tax-efficient option. Individual circumstances, such as estate tax laws and exemptions, should be carefully considered to minimize tax implications.

In conclusion, while sweetheart wills can be a touching expression of commitment and trust, they are not without their challenges. Couples should carefully weigh the pros and cons, taking into account their unique circumstances, values, and long-term goals. Seeking professional legal advice is crucial to ensuring that the chosen estate planning strategy aligns with individual and shared objectives.

In the hustle and bustle of our youthful years, contemplating estate planning may seem like a task meant for a far-off future. Yet, the importance of having crucial documents in place cannot be overstated, even for those under the age of 40. Particularly, health care directives and powers of attorney are not just for the older generation; they are essential tools for safeguarding our well-being and financial affairs, especially as we embark on new life chapters.

It’s Not Just for the Wealthy:One common misconception among younger individuals is that they don’t have enough assets to warrant estate planning. While it’s true that complex estates may necessitate more intricate plans, everyone, regardless of wealth, should have basic documents like a will, trust, health care directive, and power of attorney in place. These documents provide clarity and protection for your wishes, ensuring that your assets are distributed as you see fit and sparing your loved ones from unnecessary legal complexities.

The College Conundrum: As young adults head off to college, it’s natural for parents to assume that they retain access to their child’s health records and can make financial decisions on their behalf. However, this is not the case once a child turns 18. Health care directives and powers of attorney become indispensable tools in granting parents or trusted individuals the authority to make medical decisions and manage financial matters should the need arise. It’s a crucial step towards ensuring seamless communication and decision-making during unforeseen circumstances.

Beyond Joint Accounts: While joint accounts are often considered a convenient way to manage finances, they fall short when it comes to comprehensive protection. A power of attorney document goes beyond what joint accounts offer, by granting someone the authority to act on your behalf in a variety of financial and legal matters, even if you become incapacitated. This ensures that your financial affairs are managed according to your wishes, safeguarding your interests in a more robust way.

Plus, in most states, if a parent is joint on a child’s bank account, that money may all be considered the parent’s money for Medicaid or other needs-based benefit programs. This unintended consequence could result in harsh treatment when applying for such programs. Further, joint accounts typically use the “survivor wins” rule, wherein the living account owner takes all, which may hinder your post-death distribution plan.

In conclusion, health care directives, powers of attorney and wills are not just for the aging demographic; it’s a crucial step for anyone who wishes to have control over their life decisions. By establishing health care directives and powers of attorney early on, we not only ensure our own well-being but also provide clarity and support for our loved ones during challenging times. It’s an investment in our future, giving us peace of mind and the ability to face life’s uncertainties with confidence.

Are You Prepared for the New Business Reporting Requirements?
Do you own a business? Have you established a LLC for any reason? Did you transfer a business or LLC into a Trust? The reporting landscape for businesses is undergoing a huge transformation with the introduction of the Corporate Transparency Act (“CTA”). This legislation creates a new framework for ownership reporting, impacting smaller and larger businesses alike.

The CTA was passed in an effort to combat money laundering and other illegal activities. This federal law applies to any businesses that are formed by registering or filing paperwork with the state or commonwealth. If you do not fall into one of the few, very narrow exceptions, that means your business now must report certain business information to the Financial Crimes Enforcement Network (“FinCEN”), a part of the U.S. Treasury Department.

If the CTA applies to a business entity, that business must now disclose the following information about the business itself:

The legal name of the business

Any trade names of the business

Current U.S. business address

Jurisdiction of formation

Taxpayer identification number

Additionally, it must provide beneficial ownership information about the business, including:

Each beneficial owner’s name, date of birth and residential (not business) address

Identification number from a non-expired passport or driver’s license

An image of the passport or license used for the identification number

This imposes a new burden on business owners; too great a burden, perhaps? The National Small Business Association (“NSBA”) thinks so. The NSBA recently sued to stop the law from taking effect, arguing it will unfairly and disproportionately harm small businesses. The court ruled in favor of the NSBA, but limited the ruling to the individual plaintiff, the NSBA itself, and members of the NSBA as of March 1, 2024. Everyone else is still expected to comply with the reporting requirements until the appeals process is complete.

For entities or businesses created before January 1, 2024, initial reports must be filed by January 1, 2025, with subsequent updates within 30 days of any changes. Entities created after January 1, 2024, but before January 1, 2025, must file initial reports within 90 days, while those created on or after January 1, 2025, have 30 days for their initial filing. Failure to comply carries severe penalties, including fines and potential jail time.

If you own a business, or exert significant control over a business, or you have a Trust that owns a business, or if you are unsure about any of these things: Please reach out to us to discuss what – if anything – needs to happen going forward.

In our increasingly digital world, we leave behind a substantial footprint of online assets and digital legacies. From social media accounts to email subscriptions, these digital assets hold both sentimental and financial value. However, many individuals overlook the importance of incorporating these assets into their estate plan.

When we talk about “digital assets,” this may cover a wide range of items, including but not limited to:

Social Media Accounts such as Facebook, Instagram, and LinkedIn profiles. What needs to be done with those? Is there a way to keep the content?

Email Accounts including Gmail®, Outlook®, Yahoo® and other email services. Who can access that?

Digital Subscriptions like our beloved streaming services, online publications, and software licenses. This includes ancestry profiles, picture storage sites, airfare miles, and other points and rewards.

Cryptocurrencies and Online Financial Accounts: Bitcoin, PayPal, and online banking accounts.

Failure to account for these digital assets in your estate plan can lead to complications and potential loss. Without clear instructions, loved ones may struggle to access or manage your digital accounts, facing obstacles such as password protection, user agreements, and legal complexities. Moreover, neglecting digital assets can result in financial losses and irreversible loss of sentimental data.

So how can we take caution and protect our digital legacy? Start by creating a comprehensive list of your digital assets including login credentials, account details and other instructions for accessing. This will prevent your family from an additional struggle during an emotional and stressful time.

Make sure you designate a digital executor in your estate plan. This should be a trusted individual who will manage your digital assets after your passing. Ensure they have access to all the necessary information to access and know your wishes regarding each asset.

Most importantly, review and update your estate plan regularly, to ensure new accounts are added to the list, passwords are updated, or changes in ownership are noted. As the digital world becomes even more entwined in our day-to-day lives, laws are being updated to account for those changes. Many statutes now include references to digital assets and have established rules for the management and deletion of those assets.

In conclusion, digital estate planning is a critical aspect of estate planning in the digital age. By proactively addressing your digital assets, you can safeguard your legacy and provide clarity for your loved ones during a challenging time. Take the step and call us today to begin to protect your digital footprint.

Estate planning is a difficult topic to broach no matter what, but conversations can also make things much easier for your loved ones and limit the possibility of disputes in the future by holding these conversations in advance.

Clear communication can reduce stress and provide clarity around your intentions, making it easier for your loved ones to receive the assets you wanted for them in the future.

Avoiding division is a key goal for many people approaching the estate planning process. Through clarity and communication, your loved ones may better understand why you’ve gifted what you did to certain people. This reduces the possibility of arguments among family members.

In some cases, an advance conversation may help them more effectively manage the new asset. You may need to discuss IRA distribution rules, for example, or cover details around options for managing or selling a specific collection of items.

Take it Beyond Items: Focusing on Values
A discussion about asset division goes beyond sharing who will receive what. It can also discuss your values and hopes for them in the future. Those memories may be cherished for years to come by your loved ones.

Whether it’s family heirlooms, proceeds from a life insurance policy, real estate, or money, setting expectations early on helps people understand your frame of reference and your goals in the planning process.

Remember that if you revisit your estate plan and adjust things over time, it is well worth having this conversation again with impacted people.

Tell Your Chosen Key People About Their Roles
You may choose to include a few or many people in your conversation about your estate, but you must share your goals with anyone who will play a role in your future life or after you pass away.

Depending on the structure of your estate, you may have loved ones playing various roles such as:
Trustee
Executor/estate administrator
Power of attorney agent
These people should know about their roles well in advance, especially since they may be unaware of what’s involved. They may also become a point of contact for distribution of assets in the case of a trustee or POA agent.

Be Upfront and Clear

Look at the asset distribution equation when you’re alive and healthy to think about how you could best support your family members and get them to understand why you made the decisions that you did.

For example, perhaps you’ve earmarked funds and a trust for a relatively young child to use for their college education. You may place those in a trust for educational purposes. Telling your child how to access and use these funds in advance is helpful.

Avoid Disputes

Far too many estate planning disputes and the legal conflicts that follow are associated with a disconnect between someone’s perception about what they would receive and what they actually received. Loved ones may feel that something is unfair or incorrect, ultimately triggering a probate dispute.

Where possible: don’t try to divide indivisible assets to bring siblings together. They may instead disagree about these, causing further problems. If someone feels that one person receiving a certain asset is unfair, you may want to explain why you chose to structure your estate this way.

There’s no one right way to create an estate plan, and it’s important to realize that your loved ones may not agree with what you’ve done. A conversation, however, helps them recognize your wishes more clearly and sets the tone for the future.

 

COVID-19, civil unrest, and Presidential elections have dominated the news cycle and the minds of many Pennsylvania citizens. However, there is one topic that is seeing an increase in consideration by many amidst the several issues pressing this nation. That topic is living wills.

In an article by Jeffrey Jones, titled Prevalence of Living Wills in U.S. Up Slightly, which can be found below, Mr. Jones highlights a recent Gallup poll showing that there has been a five (5%) percent increase in U.S. adults drafting a living will. Additionally, when specific socioeconomic classes were asked whether they had a living will, the data showed a double increase in several of these targeted classes.

What exactly is a living will? A living will is a legal document that states an individual’s end-of-life wishes. A living will allows a person to make decisions governing the initiation, continuation, withholding or withdrawal of life-sustaining treatment.

When a person is unable to make their own health care decisions, their wife, husband or other family member may be called in to make those difficult choices. Fortunately, a person can make health care decisions prior to becoming incapacitated by executing a living will. Having this document will aid your family when making hard choices, prevent possible conflicts, and guide your physicians when deciding a patient’s end-of-life issues.

In the Commonwealth of Pennsylvania, there are several requirements that must be met when drafting a living will. Some of the requirements deal with age, education level, marital status, and competency. Additionally, there are requirements with how the document is signed.

Deciding whether to have a living will can be a difficult choice for many. However, this document can help your loved ones make extremely challenging issues. In the article mentioned above, 25% of U.S. adults have had to make decisions about end-of-life procedures. This number is ten (10%) percent higher when older U.S. adults were asked whether they have had to make end of life decisions.

In addition to the requirements when drafting a living will, there are several issues that may arise after the drafting and execution of the living will. Some of these issues may include revocation, duration of the living will, and issues about whether the living will is valid. These issues can be possibly prevented if a living will is drafted by a licensed Pennsylvania attorney.

A living will can save time, ease difficult situations, and provide security and comfort. It is important and almost necessary to begin planning for the future in today’s world. Your loved ones will appreciate and remember your care and love even more because of your planning.

If you are interested in having a living will drafted or want to know more, The Law Offices of McKelvey Kargo will be able to help.

Click Here to view Jeffrey Jones’ Article Mentioned in this Blog

There’s Still Time: End-of-Year Tax Planning Considerations
Many people think of estate planning as merely a set of documents that lays out their instructions after they die. However, estate planning also involves strategic preparation during your lifetime.

Everyone has different goals with their estate planning including protecting their vulnerable beneficiaries, leaving instructions for end of life care, providing for children and grandchildren, or even maximizing gifts to charities. But there is one goal that everyone can typically agree on: Minimizing taxes. Here are some steps to take before the end of the calendar year to reduce your tax bill.

Tax Losses
If some of your investments have done really well this year, and you have significant gains, you might want to offset some of those with tax losses. While you might not think of investment losses as a good thing, they could really help reduce your tax bill. In order to “harvest” your losses, you’ll need to actually sell the investment for a loss. While this is not something that always has to be done at the end of the year, now is a good time to look at what kind of gains you’ve already had for the year, to determine whether taking a loss before year end is a good idea.

Gifting to Children & Charities
While gifting is not always a good strategy, depending on your circumstances, giving away assets to children, grandchildren, or even charities might provide helpful tax benefits. Generally, gifting to other individuals is not a good long-term strategy, and you should consult with your attorney to discuss the consequences of doing so, especially for Medicaid planning purposes. However, high-net-worth individuals should take advantage of the gifting rules.

Each year, individuals can gift up to $17,000 per person, per year (as of tax year 2023); and you can double that to $34,000 for a married couple! This is a huge benefit for individuals who need to reduce their estate during their lifetime, to avoid estate taxes at death. Right now, this strategy is especially important for the ultra-rich, but estate tax rules are scheduled to change in 2025, which will make this strategy more important for more people. This gifting can be done each year, and if you miss one year, you cannot make up for it later!

Gifts to charities also create a tax deduction. Simply choose a charity, and make a cash donation. Or, if you are donating something other than cash, such as property or a vehicle, make sure you do this sooner rather than later, to ensure the gift is completed by December 31st. If you cannot choose a charity, you can instead donate to a Donor Advised Fund (“DAF”) which counts as a completed gift for tax purposes, but doesn’t actually distribute to a charity until later.

Retirement Plans
Make sure you are contributing as much as you can to your retirement accounts. There are limits on how much you can contribute each year, so be sure to check with your financial advisor to make sure you’re doing all that you can.

Also, if you have to take required minimum distributions (RMDs) make sure you are taking them on time to avoid penalties. This could apply to your own retirement account, if you are old enough, or could apply to you if you’ve inherited an IRA. There have been many changes recently with the passing of the SECURE Act, so again, be sure to check with a financial advisor to ensure you are withdrawing a suitable amount.

So while you are planning for the upcoming holidays, make sure your finances are in order as well. Schedule time with your estate planning attorney, your financial advisor, your accountant, and any other relevant professionals to make sure you can meet your financial and estate planning goals!