Below is a list of all out frequently asked questions.
This is a full-service civil practice law firm for preparing your Will, Power of Attorney, Living Will / Advance Directive, and Trust when appropriate. All adults need to have their legal documents in place, especially those with young children and those with real and personal property. Our Elder Law practice area focuses on the special legal needs and concerns of those over 50. We have developed significant expertise in the area of elder law, particularly in asset protection planning.
Why do I need a will?
A will is a document in which you state your intentions of how you want your property distributed after you are dead. When you die, your property must pass to someone. Without a will, state law will determine how it is distributed. These laws are called the laws of intestacy. With a will, you are making the decision about how your property should be distributed. In addition, if you have minor children, you can make provisions for their care and support if you should die. Even if you have a trust, a will is necessary to cover all the property not a part of the trust.
What is a power of attorney?
A power of attorney gives legal rights and powers to someone who will act on your behalf in financial, business, or other matters when you cannot act for yourself.
What can someone holding power of attorney do?
The person holding power of attorney can withdraw money from bank accounts, trade stocks, pay bills, sign tax documents, sell real estate, and cash checks to the extent authorized in the power of attorney. The money must be used for your benefit. In Pennsylvania, the person receiving a power of attorney is called your "Agent." The Agent has a fiduciary responsibility.
Can the person with power of attorney give gifts of your money to himself or herself or to others in my family?
This depends on the wording in the power of attorney and on state laws. Some state statutes require gift-making powers to be specifically stated in the document. A well-drafted power of attorney will give the right to make gifts if you want to provide that privilege. The power of attorney may limit the amount of gifts or number of people who receive them. The agent acts in a fiduciary capacity and all actions under the power of attorney must be in your best interest.
Can the holder of a power of attorney be held liable for his or her actions?
Yes, but only if the person acts with willful misconduct or gross negligence. If the individual keeps your best interests in mind, he or she will not incur any liability.
Can I fire the person holding power of attorney?
Yes, you may revoke the power of attorney at any time by putting the revocation in writing and sending the writing to the agent. It can be just a simple letter.
What kind of records should be kept by the person holding power of attorney?
Accurate records of actions taken under the power of attorney should be kept in order to answer questions that may be raised in the future. The Agent’s funds must not be commingled with the person's funds.
What does it mean to be a fiduciary?
The person who has power of attorney serves as your fiduciary and must always act in your best interest and make decisions with your wishes in mind. The fiduciary shares control with you.
I need to get a power of attorney over a family member. I'm not sure the family member will give it. Can I get it anyway?
No, you can only have power of attorney if the person wants to give it and if the person is competent. You cannot just "take" power of attorney. If the person truly cannot handle his or her affairs and will not give a power of attorney to someone or is no longer competent to execute a power of attorney, a court guardianship proceeding may be needed.
What is a living will?
Living wills give instructions regarding treatment if the individual is in an end-stage medical condition or permanent unconsciousness and is unable to communicate his or her wishes. The living will states under what conditions life-sustaining treatment should be terminated. If an individual wants to avoid life-sustaining treatment when there is little or no chance of recovery, a living will should be drawn up which would take effect only when that person is incapacitated. It does not take effect if a person is not in these conditions and is just being treated. A living will is also called an Advance Directive. A Living Will or Advance Directive can be as simple or as complex as one wishes. A person may even state that they want "all possible treatments" even if there is little hope.
What is a health care proxy?
A health care proxy gives someone the authority to make health care decisions on another person's behalf when the individual is unable to communicate such decisions. Sometimes, it can be incorporated into the power of attorney.
What property is subject to probate?
The probate estate includes all property owned by the deceased in his or her own name at the time of death. Life insurance, annuities, IRAs, some other retirement benefits, and property owned jointly or in trust by the deceased is not part of the probate estate. Jointly owned bank accounts pass automatically to the surviving joint owners upon the death of one owner without going through probate. Non-probate property may still be part of the deceased person's taxable estate.
How is the probate process started?
A petition for probate of the will must be filed with the appropriate court with the original will and a certified copy of the death certificate. Notice must be mailed to all the deceased person's "heirs at law" and to those named as beneficiaries in the will. A notice also must be published in a local newspaper and sometimes in a legal publication. The notice advises people that the person has died and if anyone owes the decedent any money or is owed money by the decedent, they should come forward.
What does the executor do?
The executor gathers assets, pays estate debts, and pays the beneficiaries. Usually this is done through the attorney. The executor also files a state inheritance tax return. If the estate is worth more than the current minimum for federal estate tax, the executor also must file a federal estate tax return. The executor generally works with an attorney to settle the estate.
Can an individual probate an estate without help from an attorney?
Usually an attorney is needed. Most courts have rules familiar only to those who work with them regularly, and experienced attorneys know how to handle situations that may arise. In addition, an inheritance tax return is usually something that the lawyer would do.
What taxes are due?
State inheritance tax and sometimes federal estate tax must be paid. Your lawyer can explain in-depth what taxes, if any, may be owed on your estate. The Decedent’s final income tax return must be filed, and in many cases a "fiduciary" income tax return must also be filed.
Can probate be avoided?
Yes, in certain situations. Probate involves only the court process of transferring property. For example, if a husband and wife own everything jointly, the jointly owned property would go to the surviving spouse and no probate is necessary. This is the same for other joint owners of property. Property in a trust would go to the beneficiaries outside of probate. Life insurance proceeds and some retirement benefits go to the named beneficiary. Even when property does not pass through probate, if a tax return is required, similar work to administering an estate must be done.
Should I get a living trust? What about the living trust "kits" sold to avoid probate?
There are some good reasons to have a living trust, which your lawyer can explain. Many times, people who are in the business of producing living trusts portray the probate process as something to dread. It is not. In some states, probate can be time-consuming. In other states, it is not so time-consuming. Although probate can take some time, usually most of the estate can be distributed to the beneficiaries in the meantime. In addition, a trust does not prevent taxes from being owed. People who feel they want to avoid probate should consult an attorney before deciding to use a living trust kit or a non-attorney-drawn living trust.
Can I transfer assets to become eligible for Medicaid? Will my family or I have a legal problem if I do?
Laws concerning asset transfers are very strict. Those considering applying for Medicaid should contact an elder-law attorney well before the need arises so the attorney can properly advise them. Even if a nursing home admission is imminent, an elder-law attorney should be consulted to determine what assets if any can be protected.
This firm concentrates in estate administration in decedents’ estates. We are often called on to represent the executor or trustee in the process of administering a decedent’s estate. Services in this area include preparation of inheritance tax returns, appearing with the Executor or Administrator at the Register of Wills, administering the estate or trust, paying bills and gathering assets, and distributing assets to beneficiaries.
What is Probate?
Probate is the process by which the person named as executor of a decedent’s Will submits the original Will (along with a death certificate and petition) to the Register of Wills for his appointment as executor of the decedent’s estate. If the will has been duly proved (witnessed and notarized) and there is no contest with respect to the validity of the will (see "Will Contest" below), the Register of Wills will issue Letters Testamentary to the named executor.
What is Intestacy?
Intestacy is death without a will. Intestacy can also occur when a decedent has not fully disposed of his or her assets by a Will or other beneficiary designation. In these instances, the decedent’s property will not pass under a will and instead will pass under Pennsylvania’s Intestate Succession Act. The person appointed by the Register of Wills to handle the estate of an intestate decedent will receive Letters of Administration and is referred to as the Administrator. The Orphans’ Court has jurisdiction over all matters of intestate succession.
How Long Will the Administration Take?
This is one of the most commonly asked questions. The length of the administration depends upon the involvement and cooperation of the client and the complexity of assets. If information is exchanged in a timely and accurate manner, the administration process is much more efficient. Given these factors, the average estate or trust administration can take nine months to one year to complete. Some estates take less; some more.
Pennsylvania Inheritance Tax
The Pennsylvania inheritance tax return and payment of tax are due nine (9) months from the date of death. A small discount may be taken if a prepayment is made within three (3) months of the date of death. Pennsylvania inheritance tax is payable on all assets except for life insurance. Currently the inheritance tax rates are as follows: 0% to surviving spouse; 4.5% to lineal heirs (children, grandchildren and parents); 12% to siblings; 15% to non-relatives; 0% to qualified charities.
Pennsylvania Estate Tax
Pennsylvania estate tax is in addition to the inheritance tax and applies only when there is a federal estate. The Pennsylvania estate tax is equal to the difference between the federal credit for state death taxes and inheritance tax actually paid. Payment of the estate tax is due within nine months of the date of death.
Income Taxes
The executor/administrator or trustee is responsible for filing the decedent’s current year income tax return for the year preceding death and decedent’s final income tax returns for the period of January 1 of the year the decedent died to the date of death. The executor/administrator or trustee is also responsible for filing the fiduciary income tax returns for the estate and/or trust for each year the estate and/or trust is active.
Will Contests
Any aggrieved party can contest a will: the surviving spouse who would have received a larger share under another will, a trustee whose trust estate is prejudiced; the decedent’s intestate heirs; beneficiaries under a prior will; persons who would take in the default of the exercise of a power of appointment; the Commonwealth as a statutory heir if it is questionable whether decedent had close relatives. Grounds for a will contest include: Lack of testamentary capacity, undue influence, fraud, forgery, mistake in the identity of document executed by decedent; testamentary intent; and, improper execution.
We can establish guardianships to protect and provide for incapacitated adults and developmentally disabled family members and sometimes children. We represent families who need to petition the court for the establishment of a guardianship, or who can test the possible appointment of an inappropriate guardian. Guardianship is a legal relationship which authorizes one individual to act as substitute decision maker for another. Guardianship arises usually in two different situations: (1) when a person is an adult and becomes incapacitated but has no Power of Attorney, or the Power of Attorney is no longer proper; and (2) when a person is a minor and the minor’s parents (the natural guardians) are dead or incapacitated or for some other reason that they cannot act as parents. In Pennsylvania, both types of guardianship are created by order of the Court of Common Pleas, Orphans’ Court Division.
"Incapacitated Person"
An incapacitated person is an adult whose ability to receive and evaluate information effectively and to communicate decisions in any way is impaired to such a significant extent that he is partially or totally unable to manage his financial resources or to meet essential requirements for his physical health and safety.
Limited and Plenary Guardians
Whenever the Orphans’ Court determines that an adult individual is incapacitated, it can appoint a guardian for his person (health care, where he lives, and other non-financial issues) and/or his estate (real estate, investments, paying bills, and other financial issues). If the Orphans’ Court determines that the individual is totally incapacitated, then it will appoint a plenary guardian with the full powers authorized by law. If the Orphans’ Court determines that the individual is only partially incapacitated, then it will appoint a limited guardian with specific powers described in the court order.
Cost
Guardianship proceedings can be costly and there is yearly paperwork to file. A guardian is responsible to the Orphans’ Court and must file annual reports documenting the financial and personal status of the incapacitated individual. A guardian has less flexibility than an Agent under a Power of Attorney, and a guardian must obtain court approval to perform estate planning on behalf of the incapacitated individual. However, when there is no alternative, a Guardianship must be obtained.
Minors
When parents die, a guardian can be named for the minor children in the parents’ wills. Although this is not binding on the Orphans’ Court, the court typically follows the parents’ wishes unless there are compelling reasons not to do so. A guardian is not the same as a trustee. The guardian cares for the personal affairs of the minor children while the trustee manages the investments held for the minor children. The same person can serve as both guardian and trustee for minor children, but they don’t need to be the same person. Many times, courts prefer that these roles be held by two different people to avoid conflicts of interest.
What is needed for a no-fault divorce in Pennsylvania?
The marriage must be irretrievably broken, and there must be a waiting period. One type of no-fault divorce has a 90-day waiting period and the other a two-year waiting period. There are reasons for choosing one or the other or both in the complaint. Your attorney will explain.
Does every divorce in Pennsylvania have to go to court?
No. Many divorces are settled without court involvement. The attorney can draft a Property Settlement Agreement. After it is signed, it acts as a contract between the parties, spelling out property rights and resolving other issues. Divorces that require the use of the courts often are much more expensive.
When can I file for divorce in Pennsylvania?
You must have been a resident of Pennsylvania for at least six months (or your spouse must be present for at least six months) before you can file for divorce in Pennsylvania.
How soon can I get divorced in Pennsylvania?
In an uncontested divorce, you can get divorced in as soon as 90 days from the time the Complaint is filed and served. This time can be longer, depending on the willingness of the other party to cooperate, to return the signed papers, and complete any other related matters. It also depends upon how long other matters take, such as property division, custody of children, and support.
If my spouse is served with my divorce complaint, does that mean I will be automatically divorced in 90 days?
No. Both parties must sign the final papers, and then the paperwork must be submitted to court to obtain the final decree. In addition, your lawyer will want all the issues of the divorce to be settled before you sign the final papers, so it may take longer than 90 days. The 90 days is a minimum.
What are some grounds for a "fault" divorce?
Some grounds for the granting of a fault divorce are adultery, abuse, and abandonment.
Can my spouse contest the divorce?
Very often the actual divorce is not contested, but sometimes the property division and related issues such as custody are contested.
Will my spouse get half of everything I own?
Pennsylvania is an equitable distribution state. This means that the court may divide the property in a marriage as it sees is fair to both parties. Fifty percent is a starting point, but it may not be the ending point. Only marital property is divided this way. Marital property is that property which was acquired after marriage but before separation (or the increase in value during marriage for property obtained before marriage). If the parties don't go to court, they and their lawyers must divide the property in a way that is fair to both, under the law.
Can my spouse get part of my pension?
Yes, if the pension was accrued during the marriage. Pensions are assets that are divided during equitable distribution. A spouse may get the part of a pension that was acquired during the marriage. However, pensions fall under federal ERISA laws and cannot be transferred without a court order. Your lawyer may have to draft a Qualified Domestic Relations Order, or QDRO (pronounced "quadro"), that accomplishes division of a pension. Even if a pension is not divided, it is added into the list of property to be divided. The spouse without the pension may get other property with an equivalent value, for example.
Can I be in the process of a divorce but still live in the same house as my spouse?
In many cases, yes, although this can be difficult emotionally. Generally, the date of separation refers to the date one spouse left the marital residence, but this isn't the only way to separate. If economic circumstances do not permit one party to leave, the date of separation can be the date when the couple ceased living as husband and wife.
I've lived with my boyfriend/girlfriend for more than 7 years. Does that mean we're automatically married under common law?
No. It never did. Although Pennsylvania used to recognize common law marriages, that law has changed. Only true common law marriages formed before the law changed could be found today to be legal marriages. Ask your attorney to explain this further if you believe you have a valid, long-term common law marriage.
When must a parent pay child support?
In Pennsylvania, both parents must contribute to the financial support of minor children. When parents separate, the court may order child support be paid to the person who has custody. Support continues until the children graduate from high school or turn 18, whichever happens later. Pennsylvania law does not allow court orders to support a child in college unless both parents agree. This is usually done in the divorce Agreement.
Where and how do I obtain child support if my child's other parent won't pay it to me voluntarily?
To receive child support through the Domestic Relations system, a parent must have a complaint filed and served. Parents (or other persons with whom the children are living) can have their lawyer do this, or may contact the County Domestic Relations Office directly. Within a few months of the filing and serving of a complaint, a conference will be held to determine what support is due. This will be entered as a court order, effective when the complaint was filed. Either party can appeal, but the support order will be enforced until the appeal hearing.
How much support will I receive or have to pay?
The amount of support is usually determined by the Pennsylvania Support Guidelines, based on studies of the amount of money parents who are living under one roof spend on their children. To apply the guidelines, court officials will calculate the gross and net income of both parents. Your lawyer can also help you estimate what will be owed or received. For support purposes, gross income can include wages, overtime pay, bonuses, rental and retirement income, Social Security, workers' compensation, unemployment compensation, and other income. Net income is determined by subtracting all income taxes, Social Security and Medicare payments, mandatory retirement contributions, and union dues from gross income. If you have no income but are able to work, the court will estimate what you could earn and apply the guidelines using that figure. The court may also order a parent to help with daycare costs, health insurance premiums, and mortgage payments.
Can a support order be changed after it is entered?
If a significant change occurs in either party's income, or if other circumstances change, the court may modify the amount of support. To request a change, you must file a petition to modify. In addition, parties under a support order are obligated to inform Domestic Relations if there has been a change in address or job.
What happens if support is not paid?
Support orders are routinely paid by voluntary and involuntary wage attachments. If the support cannot be collected by attaching wages, the person may be jailed or fined after a contempt of court hearing. Also, he or she can face suspension of state-issued licenses, reports to credit bureaus, real estate liens, and interception of federal income tax refunds or injury settlements.
Will the court require receipts or other proof showing that the support is being spent for the children?
No.
Can I receive a credit against the support order if I buy my child shoes, gifts, etc.?
No.
If I paid support directly since the complaint was filed but before we had the hearing, will I get credit for that?
Possibly. You should mention this at the conference, and provide proof such as canceled checks. Discuss this with your lawyer.
What is the difference between Chapter 7 and Chapter 13?
A Chapter 7 Bankruptcy is also called an asset liquidation case. This means a debtor does not have sufficient income to pay his or her creditors and any non-exempt or excess assets are liquidated for the benefit of the creditors. In most cases, there are no excess assets to be liquidated, so the debtor does not lose any property. A Bankruptcy Petition filed under Chapter 13 of the Bankruptcy Code is also called a wage earner plan. This means the debtor has sufficient income to pay all or a percentage of their debts over time. A common Chapter 13 plan requires the debtor to pay a monthly sum to the Trustee over three to five years. Chapter 13 can also be used to pay mortgage arrears and allow a home-owner to avoid foreclosure.
Who determines what chapter I should file?
Most of the time, a debtor and his or her attorney can determine what chapter is best for the debtor. However, the Trustee will review your case and analyze the information to determine how the debtor should be treated under the code. This is why it is extremely important to tell your attorney everything, even if you think it is not important or relevant.
Will I lose my property?
In most cases, no. The law sets limits as to how much property a person can keep if he or she wants to discharge some or all of their debts. These limits are not meant to leave the debtor destitute but to ensure the debtor does not have excess assets that could be sold to satisfy some or all of the debtor's creditors. Of course if you have a house that has a mortgage, or a car that has a loan, you must continue to pay that lender in order to keep the collateral, regardless of a bankruptcy filing.
Will I have to pay my creditors?
It depends. The Bankruptcy Code governs all aspects of your finances to determine if you should pay anything to your creditors. People with high income or a lot of assets typically have to pay something to their creditors. People with lower than average income and few assets typically pay little or nothing to their creditors. Consulting an attorney who understands bankruptcy law is the only way to know how you would be treated under the Bankruptcy Code.
What does the Bankruptcy process involve?
A potential debtor must compile all his financial information and documents and prepare a petition to file with the court. Typically an attorney completes and files the petition. The debtor must take a credit counseling class prior to filing and a debtor education class after filing. After the petition is filed, the case is assigned to a Trustee who reviews the petition and holds a hearing with the debtor and creditors, if the creditors appear. The creditors are given an opportunity to object after which the debtor receives a discharge if he otherwise complies with the code.
Who is the Trustee?
The Trustee is an attorney or other individual appointed by the United States Trustees Office to oversee the administration of your case. You will meet your Trustee at your meeting of creditors, commonly called a 341-A Hearing. In a Chapter 13 case, the Trustee will also collect funds from the debtor and distribute the funds according to the debtor's court approved plan. In our area, the monthly payment to the Chapter 13 trustee must be by money order.
Can I keep my favorite credit card?
No. Even if you have faithfully paid the credit card bill, you must disclose all of you debts on your bankruptcy petition under penalty of perjury. Once you decide to file for bankruptcy protection, you should stop using all credit cards and incurring debt of any kind. You will find that once you file for protection, most creditors will automatically close your accounts.
Can I discharge my student loans?
Generally, no. Filing a Bankruptcy Petition is not enough to discharge student loans. It will “stay” their repayment, however. A debtor must file a suit against the creditor, called an Adversary Proceeding, to determine dischargability of student loans. The standard for discharging student loans is very high. Your attorney can give you advice on your specific circumstances as to whether you might meet this standard.
What is credit counseling?
Credit counseling under the Bankruptcy Code is a prerequisite for filing a Bankruptcy Petition. It is simply a one-time class a debtor must attend in person, over the phone or over the internet that assesses the debtor's financial situation and gives alternatives to filing bankruptcy. Some services also offer helpful financial advice and a budget analysis. The certificate of completion must be obtained before your attorney can file your case. The “credit counseling” class is the class you take before bankruptcy. The second part is “debtor education”. See the next section.
What is debtor education?
Debtor education, under the Bankruptcy Code, is a prerequisite to receiving a discharge. This is another one-time class a debtor can take in person, over the phone or over the internet. The main purpose of debtor education is to give the debtor the information they need to avoid financial pitfalls in the future. Think of the credit counseling and the debtor education as two parts of the same program. You can get more information at http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm.
I don't want to file bankruptcy. How do I know if I can avoid it?
Most people who file bankruptcy do not want to file. It is their last resort. A foreclosure on a personal residence, money judgments, imminent repossession or constant phone calls from creditors may be reasons a person is forced to file a Bankruptcy Petition. Low income or large unsecured debt may also force a person to file for bankruptcy protection. The alternatives to bankruptcy include selling assets, invading retirement accounts, returning collateral or reducing expenses. Anyone who is considering filing bankruptcy should consult an attorney experienced in bankruptcy law who can advise them of the law and how it would affect them, and if they have alternatives.
What if I filed before?
If you have filed before there are restrictions on your ability to file again. There must be eight years between chapter 7 filings and four years between chapter 13 filings. Other restrictions apply to specific circumstances, so consult your attorney.