Law Offices of Scott G. Hoh

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Estate Planning Elder Law, Protection & Care Probate & Estate Administration
Trusts Power Of Attorney Living Will - Advanced Care Directive
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Disclaimer:
  The following information is provided for general educational purposes only.  This does not constitute specific legal advice and each family and client’s situation is unique.  In reviewing this information, no attorney-client relationship exists between the Law Offices of Scott G. Hoh and the reader.  Our firm only officially represents clients when a signed client engagement letter in in place.  No one else may rely on this information or claim that in reviewing this general information, that an attorney-client relationship exists between the reader and our law firm.  Obviously, the internet, websites, blogs, robots and internet legal companies are not a substitute for a properly licensed attorney.  Accordingly, this information is for general informational purposes only.  



Estate Planning

  

Why do I need an Estate Plan?

Everyone who is concerned about what will happen in the event they become too sick to take care of themselves or what will happen to their property after they pass away needs a comprehensive estate plan. It is a tremendous gift for your family to have all of your affairs in order. Much confusion and stress can be avoided through a clear estate plan, and this provides peace of mind on knowing that personal affairs and wishes are in order.

What is the Cost of an Estate Plan?

The Law Offices of Scott G. Hoh provides 2 Wills, 2 Powers of Attorney, 2 Living Wills (Advanced Care Directive), plus our 3-ringed binder which organizes important financial, real estate, insurance, funeral planning and personal wish with clear instructions to your family.  The cost is only $400 for a couple, or $300 for an individual.  More complex estate plan and trust documents are not included in this fee.

Does the Law Offices of Scott G. Hoh provide home or hospital visits?

Like an old-fashioned country doctor, Scott Hoh is an old-fashioned country lawyer.  We pay home visits and make hospital visits, particularly in emergency situations or when someone cannot travel to our office.

What is the Law Offices of Scott G. Hoh Comprehensive Estate Plan?

Attorney Scott Hoh has developed a Comprehensive Estate Plan (CEP), taking this from several different estate organization guides. Families gather information about financial holdings, real estate, life insurance, medical wishes, funeral planning, specific gifts, and personal wishes in an organized 3-ringed binder. The law office keeps a copy of these documents in our fire-proof Will vault. The client also has the 3-ringed binder at home for review with family. In the event of an emergency, no stone is left unturned and family members have the tremendous gift of having all wishes, instructions and financial information organized at one location.

What happens if someone passes away without a Will?

If someone passes away without a Will, the die “Intestate.” In Pennsylvania, the Legislature has adopted an intestate statute, which means someone’s estate will be distributed based on this law. It is still possible to file for Probate and for a family member to be appointed as an Administrator to oversee the inheritance process.

In an Estate Plan only for older people?

No – everyone needs an Estate Plan.  Generally, people focus more on the end of life as they grow older and they accumulate more retirement assets as they age.  However, in the event of an emergency, an emergency plan must be in place.  Parents with younger children should have a Will to designate who will be the guardian of their children in the event of the death of both parents.

What does mental capacity and undue influence mean? 

The law is concerned about improper Wills or someone exerting too much influence over someone so that they unfairly distribute an Estate or act as an Agent under a POA and fail to protect an older person’s assets or unfairly disadvantage other family members.  By law, there are formal requirements for adopting a Will or POA, and the person must have a reasonable understanding of what is going on and who is in their family.   If one person has too much self-interested control and influence over an older person, the Will and POA can be challenged and nullified. 

What are the formal requirements in adopting a Will?

Under Pennsylvania law, there are formal requirements for adopting or amending a Will.  If someone could scribble anything, all Estates would be chaotic and tied-up in litigation.  If sections of a Will are crossed-out or destroyed, there is a chance that the entire Will can be invalided.  It is to prevent this type of mischief that Wills and POAs have formal requirements which include signatures, non-interested witnesses, notarization, etc.

Does it make sense to prepare my Will through a website such as LegalZoom?

Generally, no.   While all of us are interesting in saving money, computers and the internet are no replacement for a competent attorney.  For normal Estate Planning appointments, we spend between 1 to 2 hours meeting with a family, learning important background information, discussing unique family situations, thoroughly explaining the Probate process, discussing the difference between Probate and non-Probate assets, and preparing an Estate plan that is uniquely tailored based on every family’s different needs.  Computer programs just cannot provide this type of thorough and analytical service.

What exactly is a Probate and Nonprobate Assets, and Why Should I Care?

A probate assets is something that will come in to the Estate (each Estate has its own checking account), and after bills are paid, assets are distributed to beneficiaries as written in a Will.  Typically (but not always) this includes assets owned solely by a decedent such as money in a checking or savings account, stocks and bonds, personal property, a home or real estate, a vehicle, etc.  The bulk of many client’s assets are nonprobate in nature.  This means that, regardless of the Will, these funds are passed directly from a financial company to a beneficiary.  Examples of nonprobate assets (although not always) include investment accounts, IRAs, 401(k) accounts, annuities, certain joint accounts, and life insurance.   Clients often spend quite a bit of time preparing a distribution plan under a Will, but don’t spend much time reviewing how nonprobate assets will pass to named beneficiaries.   Frequently, clients are not aware prior to our meeting that the Pennsylvania Inheritance Tax rates apply to nonprobate assets as well as probate assets.  Life insurance payments are exempt from this tax. 

What taxes are due in an Estate?  Is it true that the government takes everything after someone dies?

For most Estates, including Estates valued at several million dollars, there is no federal gift and estate tax, however, we need to pay attention to lifetime gifting and certain investments under a deferred tax structure.  In Pennsylvania, regardless if an Estate is valued at $5,000, $50,000, $500,000 or $5 Million Dollars or more, the Pennsylvania Inheritance Tax must be paid, for both Probate and Nonprobate assets.  In other words, the Pennsylvania Department of Revenue monitors transactions and before funds can be inherited or passed on from someone who has passed away to someone who is living, there must be an accounting and taxes must be paid and a PA 1500 (PA Inheritance Tax Return) must be filed.   Tax rates range as follows 0% - Spouse and Charities;  4.5% Children, Grandchildren & Parents; 12% Siblings; 15% Friends, Others, Nieces & Nephews, etc.  Special attention must be paid to joint assets.

Can I avoid Probate all together? – I don’t want to pay any legal fees or taxes after I pass away. 

Many people don’t like taxes, don’t like paying fees and don’t like dealing with attorneys.  Wouldn’t it be simpler if all of this could just be skipped?  Probate is a necessary step in order to have a legal inheritance and for funds to pass from a deceased person to other family members.  Even if 100% of an Estate is nonprobate in nature (all in an IRA fund), it is still necessary to hire an attorney, obtain a short certificate, file a tax return, and follow the mandatory steps in administering an Estate.  The Pennsylvania Department of Revenue needs to ensure that appropriate taxes are collected and paid, and the State is diligent in its oversight.

What key information should I know about funeral planning?

The typical cost of a traditional funeral and cemetery burial ranges from $5,000 to $15,0000, depending on the services provided by a funeral home.  Similarly, the typical cost of cremation ranges between $1,500 to $6,000, again depending on the types of services provided.  It is important that family members have clear instructions about funeral arrangements.  Is it important to have some type of religious ceremony?  What information should be listed in an Obituary?   Should some type of celebration of life or family gathering occur?  Who should be in charge of making arrangements?  Is it important to you to pay for funeral services in advance?  Did you know that funeral homes are regulated by law and must hold pre-paid funeral costs in a separate Trust account?  When someone passes away and families are grieving, that is a difficult time to make key funeral decisions.  You can alleviate the stress and provide a tremendous gift to your family by discussing your wishes in advance.  There are many quality funeral homes who are happy to meet and provide planning services at no cost.

Should I give away all my property before I die?

For some people, their estate plan is – I’ll give away everything and die penniless.  If only things were so simple – they are not.   Under the Pennsylvania law that governs estate matters (Probate, Estates and Fiduciaries Code or “PEF” Code), any property that is given away or gifted 12 months prior to death is treated as if it wasn’t gifted at all.  Without such a rule, everyone would rush to give away all their property.

Does it make sense to put my house in my children or family’s name?

Like many legal questions, the answer is, it depends.  My duty as an attorney is to best protect that party making the Will and we need to make sure someone has sufficient assets for their care.  There are different look-back windows that can impact the transfer of real estate.  In other circumstances, it may be a very good idea to record a new deed and place a property jointly in the owner’s name, as well as in the name of other children or family members.  We normally recommend a Joint Tenants with Right of Survivorship deed structure. This may reduce some inheritance and real estate transfer taxes, but not all.  The bottom line is that finding the right solution depends on consultation with an experienced attorney.

What Does an Executor or Administrator Do?

The Executor (in the case of a Will), or the Administrator (no Will), is the person who is in charge of an Estate.  They have a fiduciary duty to make sure bills and taxes are paid, funds and assets are properly accounted, and to make sure that assets are distributed to beneficiaries.  Normally, a Will designates a spouse, child or multiple children or another close family member or friend to be the Executor of the Estate.  The Executor selects which law firm will handle the Estate, and the law firm does 90% of the work and follows a step-by-step process.

I’m concerned about my grandchildren, how to I ensure they will inherit something?

In some instances, a person may want some of their inheritance to go to specific children, grandchildren or other family members, but there may be very good reasons to exclude or disinherit other family members.  Specific language should be incorporated into a Will to clarify this intent.   Frequently, special educational funds can be designated for grandchildren.   If a beneficiary is under the age of 18, the funds must be placed in a Trust and the requirements of the Pennsylvania Uniform Gift to Minors Act applies.  In the event a parent or grandparent is concerned about safeguarding the inheritance of a younger child or grandchild, we typically incorporate a testamentary child trust into the Will.

I have valuable jewelry, antiques, a coin collection, firearms, stocks – how do I make sure specific people inherit these items?

Specific valuable objects should be given special treatment in an estate plan.  First, often for sentimental reasons, a person may want to give jewelry, an antique, a family heirloom, or a special cash gift to a child, grandchild, niece or nephew, or close friend.  These items can be included as specific bequests in a Will.  It is OK to give away objections during your lifetime, so long as you are preserving funds to support retirement cost of living.  The Comprehensive Estate Plan binder also has a location to maintain a list of specific items to be given to family and friends.  Special rules apply regarding gun registration and ownership and the inheritance of firearms requires added procedures.

What is the best procedure for keeping my Will and Estate Planning documents safe? What if I want to change or amend my Will – can I simply just write in a change or cross out information?

There is only one (1) original Will and it is important to keep this document safe for future probate.  Some clients have fireproof safes at home.  We generally do not recommend bank safe deposit boxes.   We maintain a fireproof Will vault at the law office, and we also maintain an index of all wills and trusts on file.  Pursuant to Pennsylvania law, there are specific requirements for how Wills and amendments are signed.  Never cross out or tear a Will – this may result in the unintended outcome of invalidating the entire Will!

What other professional advisors should be involved in my Estate Plan?

Everyone should have a team of professional advisors in planning for retirement and preparing an estate plan.  The attorney should be a trusted advisor who spends time learning about your family and wishes, and is the primary person responsible for preparing an estate plan and handling probate after death.  A financial advisor is the best party to review retirement investment assets and determine how funds should be invested to sustain retirement income.   Often, this same advisor can provide expert information about life insurance products.  An accountant or CPA is the best party to provide tax advice, including tax planning decisions now, and after death.  There are many reputable funeral homes and they are happy to meet and explain the funeral process, costs and options.  Your team of trusted professionals are here to help you – part of developing a comprehensive estate plan means working with a full team of experienced advisors. 

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Elder Law, Protection & Care

  

Mom or Dad are starting to become forgetful and I’m worried about them living on their own, what should I do?

One of the most difficult decisions is when should children step in supervise financial controls and coordinate care in order to best protect parents. There are many resources available regarding how to start a conversation. It is human nature that no one wants to relinquish control over their life. It is critically important to have a Power of Attorney in place before mental incapacity occurs. If no POA is in place, the only other avenue is to file a court action to declare the older person incompetent, and the court will appoint a guardian to best protect that person. It is crucial to act now before the problem becomes acute.

How do I start a conversation with Mom or Dad about nursing home care?

One of the most painful and difficult decisions is for children to tell their parents that they can no longer live on their own and steps are now being taken to move them to an assisted living facility. Most nursing homes and assisted living facilities have a conversation guide with tips how to start this conversation. The Law Offices of Scott G. Hoh also has a similar conversation guide. Finally, there are certain governmental resources through the Pennsylvania Department of Aging and each county’s Area Agency on Aging and guides for what to do when evaluating how best to protect older family members.

Will the federal or state government pay for my nursing home care?

Fortunately, we no longer live in a country where an older person is forced to live and die alone and hungry on the street. Through the federal and state government’s social safety net, impoverished seniors are entitled to Medicaid, which can pay for nursing home care the indigent elderly. Other assets must be extinguished before a person is eligible for Medicaid, and certain look back windows apply to make sure that a person has not given away all their assets to their family or friends and then ask for free Medicaid care. The Law Offices of Scott G. Hoh can help clients evaluate Medicaid eligibility requirements.

What if I have some retirement assets and own my home, what are the costs and options for nursing home care and how is this funded?

This is a somewhat complicated question. There are different types of senior apartments, assisted living and skilled nursing care choices, and services are provided at different price points. There are certain low income housing and assistance programs available for low income families, there are moderately priced facilities, and there are also high-end luxury retirement facilities. All facilities are licensed by the State and resources are available to review safety records and consumer complaints. All the facilities have a business office, and some have social workers who will help answer questions regarding fees and financial eligibility.

What is the difference between a Continuing Care Retirement Community (CCRC), a Life Care Community and a Fee-For-Service retirement center?

Different retirement communities are developed at different price points (i.e. high end luxury communities to moderately priced communities). Residents can enter in an independent living setting (apartment or cottage), and can increase care to assisted living when needed, and on to skilled nursing care when required. There are advantageous and disadvantageous for different pricing plans. A Type A contract includes a higher entrance fee and higher monthly fee, but this fee is set, even if more expensive skilled nursing care is provided later. A Type B Contract has a lower fees, but the number of days for advanced care are limited, after those days are exhausted, the regular daily fee rate is assessed. A fee-for-service or Type C contract is a pay as you go system. This type of structure is beneficial for residents who would like to take advantage of the independent living facility, but do not anticipate long durations requiring assisted living or skilled nursing care. If someone has Long Term Care insurance, a Type B or C contract often makes the most sense. Obviously, each situation is different and depends on the age, health, economic resources, insurance and goals of each resident. Again, there are many resources available to help consumers make informed decisions and find a facility that is best suited to each person’s economic circumstances.

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Probate & Estate Administration

 

What exactly is Probate and is it Always Necessary?

Probate or Estate Administration is the legal process for managing the transfer of assets from a person who has passed away to their beneficiaries. Under Pennsylvania law, a petition is filed with the Orphans’ Court division of the Court of Common Pleas, and an Executor, Administrator, Trustee or Personal Representative is appointed and deputized by the court system and now has the necessary legal powers to administer and close out an Estate. If a first spouse passes away, and the entire Estate is given to the surviving spouse, it is often not necessary to open Probate at that time, as the Pennsylvania Inheritance Tax rate from spouse to spouse is 0%. If anyone other than a spouse is receiving an asset, then it will most likely be necessary to commence some type of Probate process so that a person will have the legal power to commence an Estate, pay the required taxes, pay required bills, and properly conclude the Estate.

What are the steps in the Probate Process?

While there a too many steps to list in detail here, it is helpful to view Estate Administration in three phases. In Phase I, we file a Probate Petition, set up the Estate, establish an Estate checking account, prepare initial notices, and gather information regarding assets and debts. In Phase II, we complete the asset and debt information, pay administrative costs, sell or value real estate, and finalize the Pennsylvania Inheritance Tax Return. Taxes should be paid nine months following the date of death, and a 5% discount is provided for any early estimated payment paid within 3 months following death. Phase III of an Estate involves the proper finalization and closing of an Estate. This is done by filing an accounting and final notification subject to Orphan’s Court review and approval, or, if eligible, a private family settlement agreement.

How much does Probate Cost?

First, there are normal filing fees which are based on the size of the final Estate, there are newspaper notice fees and other administrative costs. If real estate must be maintained prior to a sale or transfer, the cost of repairing and maintaining the real estate can be paid by the Estate. An Executor or Administrator is entitled to take a fee, and a standard fee schedule is prescribed the Courts. The law firm handling the Estate is also paid a fee. This fee can be set either on an hourly amount or on a percentage amount. There is also a recommended fee schedule set by the Courts. However, if there are litigation or other circumstances, it may be necessary to charge additional fees to address these unique circumstances. The Law Offices of Scott G. Hoh typically charges a fee lower than the Court recommended fee structure, and is paid 33.3% of the agreed to Probate fee at Phase I, 33.3% at Phase II and 33.3% at Phase III.

Is Probate easy – can anyone do this or is it necessary to hire an attorney?

The old adage in law--a person who represents himself has a fool for a client. In general, while an Executor can file for Probate without an attorney, the process can be complicated, has multiple steps, deadlines, notices and requirements and almost every Estate has some unique issue or complication. In filing a Probate Petition, the Executor makes an oath and is financially liable until the Estate is closed. One of the most critical tasks in is the completion of the Inheritance Tax Return. The only parties who can sign Estate Administration documents, legal filings, tax returns, etc. are either the Executor or Administrator themselves, or a licensed attorney. No one else may prepare, sign and submit these documents to the Court of Common Pleas.

What federal and state taxes apply in an Estate?

In Pennsylvania, regardless if an Estate is valued at $5,000, $50,000, $500,000, or $5 Million, etc., the same uniform Pennsylvania Inheritance Tax rate applies. 1. Spouse or Charity = 0%. 2. Parent to Adult Child or Grandchild = 4.5%. 3. Siblings = 12%. 4. Unrelated Friends, Nieces and Nephews, Other Family Members = 15%. This is calculated on the net amount of an inheritance, after the administrative expenses of an Estate are calculated. Federal Gift and Estate taxes are being phased-out and only apply to a very high level of assets (2018 - $11 Million Inheritance or Lifetime Gift Exemption per spouse). Certain income producing assets may produce income and capital gain taxes for an Estate or Trust after death. In general, most Pennsylvania Probate Estates do not involve federal taxes, but do involve Pennsylvania taxes. Given this complexity, it is important to work with an experienced law firm, CPA and financial advisor.

What state law is applicable and which court has jurisdiction after someone passes away?

All matters regarding Wills, Powers of Attorney, Guardianships, Probate and Estate Administration, Trusts, Minor Children, etc. are set forth in the Title 20 – the Pennsylvania Probate, Estates and Fiduciaries (PEF) Code. There are numerous specific rules and technical requirements regarding how Estate Planning documents are adopted, and how Estates are administered. If someone is a legal resident of Pennsylvania (i.e. they own a home, they are registered to vote, they pay taxes at that address) Pennsylvania’s PEF Code will apply to that Estate and the County Court of Common Pleas will have jurisdiction. This applies even if a person who is deceased has moved to a nursing home, perhaps out-of-state, so long as the official residency remains in Pennsylvania.

I live outside of Pennsylvania, but my parent passed away in Pennsylvania. Do I have to pay an inheritance taxes to my own home state or to Pennsylvania?

It is unlikely that any inheritance tax must be paid at your home state, but laws vary from state to state. If any property is transferred and inherited (both probate and nonprobate assets other than life insurance), these amounts must be reported to the Pennsylvania Department of Revenue and an Inheritance Tax Return must be filed to show the proper tax calculation and tax payment.

What if my parent had a Trust and I am inheriting via the final wind-up and distribution of a Trust, does the Trust make all of these taxes exempt?

No. If someone is receiving an inheritance, regardless if through a Trust or a Will (Probate Estate), the same tax rates, rules and tax return must be filed.

Can any person prepare the tax return and file the paperwork for Probate?

This is generally not a good idea. Some CPA and accounting firms indicate that they can prepare the Inheritance Tax Return. However, they cannot sign this document and submit it to Court, only an attorney or Executor can sign this document. CPAs are not authorized to practice law and it is a violation if they indicate otherwise.

What makes the Law Offices of Scott G. Hoh different in providing an outstanding customer experience in Probate?

Our golden rule is, if the person who passed away was our own family member, how would we expect to be treated. It is important to work with an experienced Probate law firm, and for that firm to explain the steps in the process and costs at the onset. We send a monthly status letter to all Estate Administration clients, and welcome questions and dialogue with our clients to answer questions, provide education and guidance, and diligently speed things forward. We also normally charge a legal fee that is less than the recommended fee schedule set forth by the Courts. Through all of these steps, we are committed to frequent communication and create a pleasant and efficient process, so that our clients know they are receiving first-class, affordable, responsive and outstanding professional services.

My spouse has passed away, is it necessary to file for Probate if I am still alive?

Frequently, it is not necessary to file for probate upon the death of the first spouse. In Pennsylvania, the inheritance tax rate from spouse to spouse is 0%, so if the spouse’s entire estate is given to the surviving spouse, there are usually no tax consequences and no need to file an Inheritance Tax Return. However, if anyone other than a spouse will inherit property, then it is most likely that an Estate must be raised.

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Trusts

 

What exactly is a Trust?

A Trust, similar to a corporation, is its own stand-alone legal entity that can have its own bank account and a distinct federal tax identification number. Every Trust has 3 actors: 1) the maker or settlor – the person who establishes the Trust; 2) the Trustee – the fiduciary who is responsible for administering and carrying out the goals of the Trust; and 3) the beneficiary – the person or persons who will benefit from the Trust. Often in the case of a family trust, the settlor, trustee and beneficiary can be the same person. The Trust can survive after the settlor passes away, and the Trust assets can either continue to be administered, or can pass on to beneficiaries, depending on the express terms and intent of the Trust.

Should most middle-class Americans have a Trust? – What are the advantageous and disadvantageous of a Trust?

Of course, each family’s financial circumstances is different, and it is not a good idea to adopt a general blanket rule for all. There are some advantageous to a Trust, particularly for a family with multiple millions of dollars of assets and complex real estate and investment holdings. The management and distribution of these assets can be streamlined. There is also a higher level of privacy. However, most middle-class families are well served by having a Will. The Estate Administration process and amount of inheritance taxes are the same, regardless if an inheritance comes via a Will or a Trust. Sometimes a Trust is created but no one acts to fund the Trust. A funded Trust must file a separate annual tax return for every year it is in existence. Accordingly, sometimes a Trust is a smart estate planning tool, in many other cases, it is an added expense that does not achieve any greater benefit compared to a normal Will.

What is a testamentary Trust?

A testamentary trust is a trust created under a Will. There are different types of trusts for different purposes (i.e. Child’s Trust, Spendthrift Trust, Special Needs Trust, etc.). Often, it is not necessary to create, fund and manage the Trust right away. Instead, the Trust is created under the Will, and shall only be initiated if the correct circumstances are in place. For example, if younger children or grandchildren have grown to adulthood at the time a decedent has passed away, it may no longer be necessary to create a special child Trust. However, if there is still a young child who will inherit funds, it will then be necessary to establish a new trust that will be authorized under the Will.

I don’t want to deal with lawyers, pay expensive attorney fees or taxes, will a Trust avoid all of that?

Generally, no. For a long time, there are late night TV commercials and we have clients that have paid anywhere from $3,000 to $25,000 to set up a revocable living trust, with no real guidance or tangible benefits. Consumers should note with caution that the Pennsylvania Attorney General’s Office publishes guides to prevent elder scams and abuse, and include unnecessary family trust plans among potential scams. As discussed above, there are some advantageous regarding Trusts, particularly for families with multi-million dollar Estates and complex holdings. However, the same inheritance taxes must be paid, the same tax return must be filed, the same Estate Administrative steps must be taken, and the same fees for attorneys, accountants, advisors and trustee fees must be paid. In light of all of this, a Trust does not produce any better outcome or reduction of fees compared to a normal Will. Again, it is emphasized that each family situation is different.

What is the difference between a Revocable and Irrevocable Trust?

As the name implies, the settlor of the Trust can terminate and end a revocable Trust, but cannot do so for an irrevocable Trust. There are also some important tax and estate administration differences – funds transferred into an irrevocable trust have been removed from someone’s personal assets during their lifetime, which triggers different tax treatment. The rules are complex and each situation should be evaluated by an experienced law firm and tax professional.

What is a Special Needs Trust and how is this different than an A.B.L.E. account?

Family members and beneficiaries may be receiving Medicaid or disability income which may only be eligible based on economic status. In other words, if the federal and state government is providing economic assistance, it does not make sense to gift that person substantial funds, which may then be recouped by a governmental lien. At the same time, those family members suffering from a disability or medical condition often have extra expenses that are not met. A Special Needs Trust is a Trust that considers federal and state rules, and can provide supplemental funds for a disabled person, without removing eligibility for government assistance. The Trust could be funded now, or it could be funded as a Testamentary Trust via the future Probate of a Will. Recently, the federal A.B.L.E. Act allows bank and investment accounts to be established which operate in a similar manner to a Special Needs Trust. Pennsylvania, in turn, has adopted its own A.B.L.E. act. This program is administered by the Pennsylvania Treasurers office, and excellent resources and web links are available at the PA Treasurer’s Office, as well as the National ABLE Center.

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Power Of Attorney

 

What exactly is a Power of Attorney or POA and do I really need one?

A POA is as important as a Will. A POA is a document that authorizes someone else to step in (the Agent) and make decisions and be an advocate to help protect the person who makes the POA (the Principal). We typically combine financial decision making powers and medical decision making powers in the same POA document. For a married couple, they frequently first designate the other spouse as their first agent, and then designated children or other close family members or friends as a secondary agent. A POA is only in effect during the Principal’s lifetime, these powers end upon death.

What happens if an older person no longer has mental capacity to make decisions, but no POA is in place?

This can be a very serious and costly problem. If someone no longer has the capacity to knowingly sign a POA, the only recourse is to file an expensive legal action to have the person declared incompetent and to have a guardian appointed for that person. The guardian appointed by a court may not be the person the family wants appointed and is often a third-party attorney or agency. The good news is, even if someone’s thinking is not quite sharp and they are starting to become forgetful, so long as they generally know what is going on, who their family members are, and they are asking that someone step in to help them, they probably have the mental capacity to sign a POA.

What Pennsylvania Law controls POAs?

The POA regulations for both the adoption and the fiduciary administration is set forth in the Pennsylvania PEF Code. The Pennsylvania Legislature amended the POA law and new requirements went into effect in 2015. The Legislature was concerned about problems of elder abuse and the potential stealing of funds from older victims, and greater safeguards are built into the law. For the first time, banks and other financial institutions may have reimburse the victim of a POA breach, if it can be demonstrated that the financial institution permitted someone to act improperly under the POA and if those powers are not explicitly stated in the express terms of the POA.

What is the difference between a limited and a general POA?

When we meet with a family for Estate Planning, we typically prepare a “General” and “Durable” POA. General means that several general powers are authorized under the POA, including financial decision making powers and medical decision making powers. Durable means that the POA is in effect and will remain in effect for the rest of the Principal’s lifetime, unless they either amend or revoke the POA. A Limited POA is limited by scope and time. For example, someone may be out of the country for a 2 months trip, but a real estate closing is schedule during that time. They can adopt a Limited POA – the Agent is limited in that they are only authorized to sign documents regarding a specific real estate transaction, and the POA will lapse after the person returns from vacation.

When does the POA go into effect? I’m in good health right now, and I’m not ready for my children to take over my bank account?

This is the single most important and frequent question we hear when discussing POAs. The POA is in effect when the Principal signs, however, in most family situations, a smooth transition occurs. When an older person starts to need help, they ask for help, and family members start to step in and take a more active role in helping to manage finances, pay bills, make appropriate medical care decisions, etc. Think of a POA as a safety blanket for the future, the paperwork is in place for when it is needed.

What is the difference between a financial and medical POA?

Financial powers typically include the ability to write checks, pay bills, make financial investment decisions, make decisions regarding real estate, vehicles and other personal property. Medical powers include the ability to make decisions about taking medicine, surgery, being able to discuss matters with a hospital, doctor or nurse without violating HIPPA, decisions about home nursing care, assisted living care and skilled nursing care. These documents can be divided into two separate documents, but are usually combined into a single document.

Who should serve as my Agent in a POA?

An Agent has an important duty of trust. The Agent should be trustworthy, someone who makes sound decisions and someone who is responsible at handling money. Often, the Agent is a close family member. If that person is not available or there are other problems regarding a family member and how they make decisions or handle money, then someone else should be chosen.

What is the fiduciary duty of an agent in a POA?

A fiduciary duty is a duty of trust. If someone is acting as an agent under a POA, they have a fiduciary duty to act in the principal’s best interest and preserve assets for that person’s care. They cannot steal or spend this money on themselves, or foolishly waste assets. An agent who breaches their fiduciary duty is subject to both civil and criminal liabilities.

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Living Will — Advanced Care Directive

  

What exactly is a “Living Will” or Advanced Care Directive?

I find that clients are often confused or have questions about a Living Will. This is a document that you sign in advance, and it provides clarification to doctors, nurses, hospitals and family members regarding what services and medical intervention you wish at the end of life. The primary purpose is for you to make this decision while you have the ability to do so and to give direction to family members to avoid arguments and disagreements about disconnecting life support systems. Living Wills only apply to a narrow set of circumstances. Medical doctors must determine that there is nothing more that medical science can do to revive a patient and the patient is being kept alive by machinery or ongoing treatment. If your wish is not to be resuscitated when this time comes, it is important that you communicate your wishes to your family.

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Real Estate

  

I would like to sell my house, can the Law Offices of Scott G. Hoh help me?

The Law Offices of Scott G. Hoh specializes in all things real estate. Our office can handle all facets of a real estate closing. As discussed below, sometimes it makes sense to work with a qualified realtor to sell a home, and we enjoy working with realtors to help resolve problems so that a closing can occur. In other instances, our office can handle the entire sale without paying a real estate broker commission. We typically charge a 1% fee for real estate closings.

Do I need a Realtor or Broker in order to sell my property?

The answer is sometimes yes, sometimes no – it depends on the circumstances. As described above, the Law Offices of Scott G. Hoh can handle all aspects of a real estate transaction and can conduct the closing in the event no title insurance company is holding closing. However, we also love working with great Realtors and they work very hard at what they do. Brokers have the ability to market a property to a wider audience and list a property on the Multiple Listing Service (MLS). The MLS platform is the best way to get a property in front of the most serious and qualified buyers. As a law firm, we do not market properties and we are not a real estate brokerage with access to the MLS. If a buyer is identified or if a Seller wants to try to market a property on their own for a few months, we can handle all other aspects of the sale. If the goal is to market a property to the widest audience possible, paying the 6% commission (3% to the Seller’s Agent & 3% to the Buyer’s Agent), is usually money well spent.

Is it a good idea to put my home in the names of my children?

Again, the answer is, sometimes yes, sometimes no. When we meet with older clients, our job is to evaluate a family’s financial circumstances and to make sure there are sufficient assets to fund a retirement plan. In the event a family member will move to an assisted living facility, the sale of the primary residence is often applied to the entrance fee. On the other hand, sometimes it makes sense to add children to a deed. We recommend a deed structured as Joint Tenants with the Right of Survivorship (JTWRS). The house is transferred during the lifetime, so the children are already owners of the home, which will negate some, but not all, inheritance and real estate transfer tax considerations. Each family circumstance is unique, and a one-size-fits-all approach does not work well for real estate transfers.

Is a reverse mortgage a good idea?

Again, the answer is, sometimes yes, sometimes no. Reverse mortgages have gotten a bad reputation and have detractors, but in some instances these can work well. This is a loan program approved under federal law, a person can receive the funds for their home. Unlike other home equity or mortgage loans, the party does not have to make a monthly loan payment. If someone has a valuable home that is paid off or has significant equity, the reverse mortgage can provide a new source retirement funds. The downside of a reverse mortgage is a bank cannot lend 100% of the value of the equity, the bank will typically only lend 70% of the equity, which ties up funds in the unused equity in the house. The borrower remains as the property owner and still must pay utility, maintenance and tax costs. At the time the homeowner exits the property (either through death or moving elsewhere), the reverse mortgage amount must either be repaid, or the Bank will then sell the property to recoup the loan. The home can be passed on an inherited, but the reverse mortgage loan must be repaid. If the goal is to have increased funds for retirement planning, a reverse mortgage can make sense. If the goal is to pass a property on as an inherited assets, or to have the flexibility of using a home as an asset when entering a nursing home, then a reverse mortgage is not the right tool.

Is an Installment Purchase Agreement or Lease Purchase Agreement a smart way to sell my property?

Too often, the answer to this question is no. If a buyer cannot qualify for bank financing or assemble funds for purchase, they can ask the seller to play the role of the bank and fund the deal through a long-term purchase contract. These are often riddled with problems. It is a warning sign, if someone has credit problems and cannot qualify for a loan, it is not a strong indicator that the loan will be repaid on time. The Law Offices of Scott G. Hoh does prepare Installment Purchase Agreements, typically for commercial properties and for Landlords that want to sell properties and get out of the rental business. If that is the case, it is critically important to have an experienced law firm. The loan agreement must clarify which party is responsible for paying insurance, taxes and utilities.  There also must be a clear accounting system to keep track of the loan balance. Poorly written agreements frequently result in a default and litigation. In sum, Installment Purchase Agreements have significant risks and are not recommended, but in other instances, this may the only way to sell a property. If that is the case, an iron clad agreement from an experienced law firm is crucial.

I have a boundary dispute with my neighbor, how do I resolve?

As poet Robert Frost wrote, “Good fences make good neighbors.” The exact boundary line between properties can cause problems, particularly if the survey or legal description is unclear or contains errors. As part of our tool box of real estate services, a qualified real estate attorney can help resolve disputes and problems associated with disputed boundaries.

As a Landlord, what are the steps to legally evict someone from my rental property?

The Law Offices of Scott G. Hoh represents many landlord and property investment clients. Scott Hoh and his wife own and operate their own rental properties, and know the difficulties of being a landlord. The Pennsylvania Landlord-Tenant Act as well as other civil procedure rules have very specific requirements for the legal eviction of a Tenant. The law attempts to balance rights between Landlords and Tenants. Also, other federal and state fair housing laws and related statutes apply to Landlord-Tenant matters. We can help expedite the eviction process. It is illegal for a Landlord to take matters into their own hands and force the removal of a nonpaying Tenant.

I own several rental investments, what is the best way to protect my properties?

The Law Offices of Scott G. Hoh works with real estate investors and Landlords, with the goal of keeping Landlords out of trouble and helping to improve the return on investment in managing rental properties. It is easy to set up an LLC or other corporate entity and it is important that the new LLC is set up prior to purchase. In general, it is OK to have several properties under a single LLC, but when the number of properties exceeds 7 or 8, it makes sense to form a different LLC. Insurance is a great hedge against liability. Regardless of the form of ownership, work with an experience real estate investor’s insurance brokerage to make sure an umbrella insurance policy is in place to have ample coverage for all rentals.

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