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Hollidaysburg Pennsylvania Legal Blog

Estate planning for people with digital assets

Pennsylvania residents who are looking to create an estate plan should include their digital assets as well. These assets could be anything from a Facebook account to the password to get into a computer or flash drive. As with physical items, an individual will want to create a list of digital assets that need to be accounted for. Ideally, an individual will include the username and password of his or her primary email account.

This is worth doing because that is where passwords to other accounts are likely going to be sent. If a password or username for other accounts are lost or not included in a list, family members may be able to have that information sent to the email account. Those creating an estate plan should also determine if data is to be kept or deleted after a certain period of time.

A quarter of divorces caused by household chore disputes

Disagreements are common in marriages, but some fights may be more likely to lead to divorce than others. A recent Harvard Business School study found that of the 3,000 couples interviewed, 25 percent of them listed arguments over housework as the top reason for their divorce. There are some things a Pennsylvania couple can do to avoid fighting over housework and spend more time together.

One way to put a stop to a dispute over household chores is to outsource them. Instead of one spouse or the other doing a disproportionate amount of work, couples who can't agree could simply hire someone else to clean the house, do the laundry or mow the lawn. For $200 a month, a couple might be able to save their marriage as well as their sanity. Outsourcing things they don't want to do gives them more time to enjoy the things they do like.

Who will receive your property if you die intestate?

You may find yourself among the numerous individuals who wonder whether creating an estate plan suits their needs. In reality, anyone can benefit from having an estate plan. The tools used when planning can address many areas of life, and even if you do not have substantial assets, your plan could address the assets you do have. Additionally, if you have children, you can use your plan to name guardians for them.

Of course, you may remain unconvinced that you truly need a plan. If so, you may want to consider what will happen to your assets if you die intestate, or without a will. In broad terms, your assets will go through estate administration in accordance with Pennsylvania intestate laws -- but what does that mean?

Guiding children through a Pennsylvania divorce

Pennsylvania parents often worry about the effects of divorce on their children. This is understandable as it's difficult to guide kids through a separation and the negative feelings that come along with the process. Therefore, family therapists caution parents not to conduct themselves in certain ways that could confuse children or make them feel caught between their parents. They also recommend a few actions parents can take to help children transitioning to life after divorce.

Parents who are dealing with their own feelings of anger, regret or jealousy may find it difficult to refrain from disparaging their ex-spouse. Furthermore, many parents rely on their children to communicate with their ex instead of talking to that parent themselves. This can make children feel as though they must pick a side.

OCSE beefs up child support collection procedures

The vast majority of child support payments in the United States are processed via payroll deductions. Pennsylvania parents receiving child support in this manner will be pleased to learn the federal agency in charge of regulating the process has announced improvements that should increase compliance and shorten the timeline for initial payment processing.

The Office for Child Support Enforcement (OCSE) is a federal agency that works in concert with state agencies and employers to deduct child support payments from paychecks. Historically, employers have been allowed to outsource employment verification to third-party agencies in charge of their payroll or human resources. This has led to delays and finger pointing when verification paperwork is ignored or not timely submitted. A clarification of existing rules has made clear that the employer has a singular obligation that may not be delegated to third parties.

Reasons an estate plan may be incomplete

Pennsylvania residents and others who haven't updated their estate plans recently may find that they don't necessarily meet their needs anymore. For instance, a plan may be missing key documents such as an advanced medical directive and a financial power of attorney. That should be accompanied by a will in almost all cases. Failing to review an estate plan may result in outdated beneficiary designations.

Over time, an individual may want to add a grandchild to an estate plan or remove a former spouse. By designating a grandchild to receive a 401k or IRA, it may allow that person to inherit the account tax-free. Furthermore, money may be allowed to remain in those accounts where the cash can compound in future years. It may also be a good idea to make sure that the person chosen to be the estate's executor is still the right choice to fulfill that role.

Covering certain scenarios during child custody negotiations

If you are going through the end of a marriage, you may be facing a multitude of difficult decisions that could have a significant impact on your future. As a parent, one of your major areas of focus may pertain to protecting your child throughout the process and ensuring his or her needs are taken care of.

Similar topics can be stressful to even think about, and with numerous areas to cover, you could be feeling somewhat overwhelmed by the process. However, there can be certain factors to consider prior to entering child custody negotiations that could help you gain a better understanding of the process.

Errors in dividing retirement accounts can be costly

Pennsylvania couples who are getting a divorce might have a retirement account they need to divide. Distributions can be made from a retirement account during a divorce without incurring penalties for early withdrawals or taxes, but they must be done according to certain regulations.

For a pension plan or a 401(k), a couple will need a document called a qualified domestic relations order that should be prepared by an attorney. It must be reviewed and approved by a plan administrator. Its contents should be consistent with the portion of the divorce agreement that addresses the retirement account, and it should say whether the distribution will be rolled into an IRA. This will exempt the recipient from both taxes and penalties. A direct distribution is also an option. The recipient will have to pay regular income taxes, however.

Pitfalls to avoid when creating a living trust

Pennsylvania residents who are creating an estate plan might want to use a living trust to keep the estate plan more private and avoid probate. A living trust can be a powerful tool in an estate plan, but there are some common mistakes that can mean beneficiaries are unable to take advantage of its benefits.

One of the most common errors is failing to fund the trust. Setting up a living trust does not stop with creating trust documents. Car titles and real estate deeds must be changed so that they are in the name of the trust. For various types of accounts, most financial institutions will have paperwork that must be completed to transfer the accounts into the trust. Without taking these steps, the assets may go through the public process of probate and be distributed based on a person's will or on state law if there is no will.

Higher exemptions with federal tax reform law

Pennsylvania residents should be aware of how the Tax Cuts and Jobs Act will affect their estate plans. The legislation allows individuals a short-term opportunity to reallocate a substantial amount of money without being assessed federal estate, generation-skipping transfer or gift taxes.

Beginning on Jan. 1, 2018, the exemptions for the estate, estate and gift taxes were doubled. Single individuals are able to transfer up to $11,180,000 without taxation while married couples are allowed to transfer up to $22,360,000. The exemption amounts also account for annual inflation increases.

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