Menu

Hollidaysburg Pennsylvania Legal Blog

Estate planning errors to avoid when donating to charity

People in Pennsylvania who are creating an estate plan might want to donate a portion of the estate to charity. However, it is important that they do so in a way that is tax advantageous. Failing to do so is a common mistake.

As an example, a person might have three major assets worth a total of $3 million. If the home, the IRA and the after-tax savings account are all worth the same amount, the person might leave the first two to the children along with $900,000 of the after-tax savings account. The remainder might go to the charity.

Is a collaborative divorce right for us?

Quite a few married couples in Pennsylvania end their marriages every year. Some are comfortable with the traditional divorce process, but others are looking for a different way to go about it. If you want to keep your divorce out of court and are willing to put in some work, a collaborative divorce might be the right fit for you.

How is collaborative divorce different? Why should we consider it over other marriage dissolution methods? Can I really walk away with a fair settlement going this route?

The growing rate of "gray divorce"

An increasing number of people in Pennsylvania who decide to divorce are in their older years. While people often think of younger couples as more likely to split, the divorce rate continues to grow for people ages 50 and over across the United States. Divorce has become more common in general in recent decades, and family familiarity with divorce may encourage comfort with it in future generations. For example, the daughters of divorced parents are 60 percent more likely to separate themselves, and the sons of parents who split are 35 percent more likely to get divorced.

There are a number of factors contributing to the growing divorce rate among older Americans beyond the increase in social acceptability of ending a marriage. Since 1990, the divorce rate for people aged 50 and older has doubled while the divorce rate for people 65 and older has tripled during that time. The phenomenon has been termed "gray divorce," and there are specific circumstances that may concern people in this demographic.

Financial factors to consider during divorce

Couples who get divorced in Pennsylvania may struggle with finances after separation. According to a 2008 study conducted at the University of Essex, divorce may affect women's income more adversely than men's. The study found that women's income decreased by about a fifth after divorce while men's income increased by about a third.

A new study conducted at Boston University found that divorced women statistically were better off financially than women who had never been married. One key factor was that women who had been previously married were more likely to own a home.

Aretha Franklin died without an estate plan

Pennsylvania residents have likely heard that Aretha Franklin recently passed away after a battle with pancreatic cancer. While her estate was worth an estimated $80 million at the time of her death, the music legend never created a will. An adviser for the singer urged her to go through the estate planning process, but she never followed the advice.

Instead, the state of Michigan is going to write a will for Franklin. Her heirs will need to agree on who controls the estate and assets such as Franklin's music catalog. With multiple heirs, there is a chance that infighting could occur, and this may lead to strained relationships among family members. Franklin's niece has petitioned the court to be the executor of the estate.

How child support orders are established

When parents in Pennsylvania decide to separate, there may be confusion as to how the child support system works. Noncustodial parents have a responsibility to provide financially for their children, and the support system functions to make that a reality. August marks Child Support Awareness Month, an initiative designed to draw attention to support programs and their importance for children.

In order to establish child support in the first place, it is necessary to determine who the parents of the child are. Maternity can be established by showing that the mother gave birth to the child, and there are several ways that paternity can also be established. If a woman gives birth to a child while married, her husband is the putative father. In addition, an unmarried father can sign an affidavit affirming paternity immediately following the birth or at any time thereafter. In some cases, paternity is doubtful or in dispute. Such parents can seek a DNA test to verify the identity of the father. Once the father has been established through genetic testing, the court can issue an order of paternity.

Estate planning on a micro level

In addition to addressing inheritance issues, an estate plan can also be used to plan for the possibility of becoming incapacitated and to appoint a guardian for minor children. However, Pennsylvania parents may also want to think about making plans for the immediate aftermath of becoming incapacitated or death.

The person who is the guardian may live some distance away or may not be immediately reachable. Police or other emergency workers would most likely call Child Protective Services, and the child might be placed with strangers until family is notified and can get there. However, parents may want the child to go with neighbors or friends in such a situation until the guardian could get there.

Your children may need care before a guardian takes over

As a parent, you may have painstakingly considered many aspects of your children's lives and futures. While you certainly hope to be there for them every step of the way, you likely also understood from your first child's birth that a sudden accident could easily leave your kids without parents. This idea was certainly hard to imagine, but you felt it necessary to consider in order to plan for their futures.

This idea played an important role in your estate planning journey as you thoroughly considered who would act as the best person to care for your kids in the event that they were left parentless. Your choice of guardian may have graciously accepted the role, and for a time, you felt more at ease knowing you had a plan in place.

Student loan stress can play role in divorce

While a growing national conversation has pointed to the damage that massive student loans have done to millennials' financial well-being and future, that student loan debt could also pose a risk to their marriages. Student loan debt is a significant financial issue for many, especially young people. Across the country, the average educational debt burden is $34,144 while that number is $39,400 for people who graduated as part of the class of 2017. In addition, over the past decade, the percentage of borrowers who owe $50,000 or more has gone up by three times.

Student loan debt, like other types of debt, can impose severe financial pressure on a person. Borrowers may feel rushed to rid themselves of the debt and work longer hours in less desirable jobs in order to meet their financial goals. The debt itself can also be a major source of psychological stress that weighs on the mind and interferes with relationships. Surveys show that a number of millennials have delayed marriage because of their debt, including educational debt. For those who do decide to marry, the stress created by this burden can also put stress on the relationship and lead to divorce.

Divorced parents should agree on a co-parenting plan

The trauma of divorce doesn't always end when the final documents are signed. For warring Pennsylvania couples with children, the trauma is likely to continue unless they can agree on a suitable co-parenting arrangement.

No matter what happens, the parents should always keep the best interests of the children in mind. This means not speaking negatively about an ex in front of the child. Doing so might cause the child to feel caught in the middle. It is preferable to let the child draw their own conclusions.

LogoLarge.jpg

Blair-County-Chamber-Award.jpg

Call Or Visit Us Today

Hollidaysburg Office
401 Allegheny Street
P.O. Box 415
Hollidaysburg, PA 16648

Phone: 814-317-6914
Fax: (814) 695-1750
Map & Directions

Roaring Spring Office
902 E. Main Street
P.O. Box 5
Roaring Spring, PA 16673

Phone: 814-224-5162
Fax: 814-224-5163
Map & Directions

Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.

Map data © Mapbox © OpenStreetMap.

top