Tuesday, December 25, 2012

A will for your facebook account?

A will for your facebook account? It might not be as strange as if seems. Most Americans spend hours online posting pictures on facebook, writing a blog about their personal views or how-to tips or even create a website. What will happen to these sites when you pass? For emotional reasons you may want to decide who is able to post article or comments on your pages. If your sites generate income, then even more so do you need to determine who is the moderator and what you want to be done with your sites. The first decision you will have to make is whether or not you want to keep the web site up and running after you are gone. Even if you decide it should be shut down, there are things you need to prepare for. First, you’ll need to select someone to shut things down for you and provide them with a contact list and a set of instructions, including whether or not you want your web site saved to disc for posterity. If you have young children, such a keepsake memory might be a good idea. In addition, it needs to contain the details for your web hosting service and passwords and contact details for any advertising or affiliate programs you might have operating. Perhaps the most important issue is password information. For this you want to make sure you have someone you can trust. There is an Internet web site called Dead Man’s Switch that automates this process for you if you have no one to handle it. What happens is the system starts kicking into action when you begin failing to reply to emails. You store your contact information on the site – which has adequate security – and it begins the process of notifying whomever you want notified. If you want to keep the web site up, you’ll need to select someone to manage it. They’ll need the same kinds of contact information you would need to record and store should you want the site shut down. If you have a life partner who knows little about your Internet business, a discussion of how she or he would want things handled in the event of your passing is highly appropriate. In this way, you can take more time to teach your partner what he or she needs to know to run the site, or to whom they can turn for help. Finally, there’s the matter of an obituary. If you’ve had your web site up for awhile you have undoubtedly made contacts, some of which may have become personal as well as business related. The Internet stretches across the globe and a friend in China will never see the announcement in your local paper. There are Internet businesses that can handle this for you. You simply need to supply them with a list of people to contact and they will email those who should know once the company has been informed of your passing. While planning for anything involving your own death can be stressful, doing so will help alleviate the burdens of those left behind.

Monday, December 17, 2012

Update on Fiscal Cliff

House Speaker John Boehner (R-Ohio) has agreed to raise taxes on Americans making more than $1 million, reversing an earlier decision that Bush-era tax cuts should remain intact for all Americans, rather than just those making less than $250,000 a year as President Obama requested. The move is a "gesture toward compromise" as Republicans and Democrats work to resolve budget issues to avoid looming tax hikes and spending cuts scheduled to take effect Jan. 1. The millionaire tax hikes would increase federal coffers by some $1 trillion over 10 years. President Obama has demanded $1.4 trillion in new revenue

Sunday, December 16, 2012

Sandy Hook Elementary

As a mother and daughter, I am sending my love, prayers and tears to all those innocent souls affected by last Friday's horrible school shooting. Every day I drop my daughter off at school believing that she will be safe. It's events like this that show how fragile life really is and how we can never take our children's hugs for granted. In learning more about the details of that sad event, I hope that my daughter has such heroic teachers in her life. Despite everything, they tried to create a haven of calmness, love and safety. Their acts of bravery still send chills down my spine. May their names never be forgotten. And, may those parents, who had their worst nightmares come true, know that they are not alone.

Tuesday, December 11, 2012

How does the fiscal cliff affect you!

When you turn on the news you will hear a lot of talk about the fiscal cliff. So far the conversation has revolved around the top wage earners and entitlement reform. However, there is a lot more at play. Currently, estate tax laws reduce the rate Americans pay on inheritances and increase the threshold amount under which estates are exempt from the tax. The tax was briefly repealed altogether in 2010, before it was reenacted in a 2010 compromise which set the estate tax rate at 35% for estates valued at more than $5 million ($10 million for a couple), indexed to inflation If we go over the cliff ie no Congressional action, the estate tax will revert to its pre-2001 form January 1st. Under that version of the law, estates valued over $1 million were subject to an estate tax on a graduated basis from 37% to 55%, and a 5% surtax was imposed on some estates valued at over $10 million, which would eliminate the benefit of the graduated rate for very large estates. Once Congress and the President conclude the fiscal cliff debates, it will be a good idea to sit down with your estate planner to discuss how the new laws affect you and your family.

Thursday, November 29, 2012

Duplicate wills

I have spoken with people who drafted their own will and think "Wouldn't it be easier if all of my children have a copy of my will? That way they wouldn't have to locate it after I pass." That may be a very sweet, thoughtful idea, but DONT DO IT. At least if those copies are all originals, meaning they are executed at the same time. Duplicate original wills are a mistake. Execute one will and only one will. Keep that will and have your family know where it is. The reason why you only want one original will is that your, the testator, are able to revoke a will by destroying it with the intent to revoke it. If you have duplicate original wills, then once you pass your Executor must prove to the court that he has all of the original wills. If one is missing, your will, which you spent so much time and energy on will be considered void and intestacy law will over ride your wishes.

Sunday, November 25, 2012

Happy Thanksgiving!

I first would like to apologize for not writing everyone a Happy Thanksgiving on Thursday. Like many of you, I was blessed enough to spend Thursday through the weekend with my family. That also means I was cooking wonderfully yummy food and didn't have access to my computer. In addition to my health and family, I am truly grateful for living in a country that allows individual success and provides freedom. Sadly, my thanksgiving table was missing my brother in law who is in Afghanistan with the US Air Force. I wanted to thank him and all of the members of our armed services for volunteering to spend holidays away from loved ones and in the presence of danger. Thank you so much for your sacrifice.

Sunday, November 11, 2012

Happy Veterans Day

To all readers who serve, or have served, in our military -- Happy Veterans Day and thank you for you do or have done for our country.

Sunday, October 28, 2012

Several tax changes to expect in 2013

The outcome of the election will effect domestic and foreign policy to be sure. Many have heard about how in 2013 historically low gift and estate taxes will revert to pre-2010 levels. However, 2013 could bring more surprises to your wallet. Here are some surprises to anticipate. Unless congress acts income tax rates will increase. Currently the lowest tax rate at the federal level is 10% and that would be increased to 15%. Additionally, for married taxpayers who earned between $58,900 and $70,700 during 2012 … the tax bracket would increase from 15% to 28%. For single taxpayers earning more than $85,650 and married taxpayers earning more than $142,700, the tax rates will all increase by a minimum of 3% with the highest rate jumping from 35% to 39.6%.” For more information - http://www.jdsupra.com/legalnews/how-will-the-expiration-of-the-bush-tax-58195/ There will be a new Medicare tax Under current law, wages are subject to a 2.9% Medicare tax, with individuals and employers paying 1.45% each. However, with the implementation of the additional Medicare tax, individuals whose income exceeds a threshold amount will have to pay an additional 0.9% Medicare tax on wages in excess of the threshold. As a result, in 2013, the top Medicare tax rate for individuals will be 2.35% (1.45% plus 0.9%) for wages above the threshold. There is no corresponding Medicare tax increase for employers. For more information - http://www.jdsupra.com/legalnews/irs-guidance-on-additional-medicare-tax-59116/ Medicare investment on investment income will become due The Medicare Contribution Tax will be levied on net investment income and higher-income bracket trusts, estates, and individuals. A taxpayer will be required to pay 3.8 percent of the lesser of the taxpayer’s net investment income, or the amount by which his or her modified adjusted gross income exceeds $250,000 (for a couple filing a joint return), $125,000 (for married individuals filing separate returns), and $200,000 (for all other individual taxpayers). Net investment income includes interest, dividends, annuities, royalties, rents, capital gains, and passive activity income. For more information - http://www.jdsupra.com/legalnews/estate-planning-update-september-2012-08742/ Social Security tax cuts will end The temporary 2% cut in the employee Social Security tax rate is scheduled to expire on December 31, 2012. The current 4.2% rate will revert back to 6.2% unless it is extended in federal legislation. For more information - http://www.jdsupra.com/legalnews/fica-tax-rates-will-change-for-2013-56208/

Monday, October 15, 2012

Free Flu Shot for Seniors in Ardmore

Residents ages 65+ can register to receive a free flu shot on Tuesday at the Merion Fire Company of Ardmore, according to a Lower Merion Township news release. The release is reprinted below: Adults ages 65 and older can take advantage of free flu shots that will be offered on Tuesday, October 23, 2012. From 1 to 3 p.m. at the Merion Fire Company of Ardmore, 35 Greenfield Avenue in Ardmore, senior citizens are invited to participate in this program affiliated with Bryn Mawr Hospital's Community Health Services Department. Main Line Health will assist in pre-registration and paperwork. Advance registration is required: only 50 vaccine shots are available. Call 1-866-CALL-MLH (or 1-866-2255-654) for more information.

Sunday, October 14, 2012

The passing of Arlen Apecter

I just hear about the passing of the former PA Senator Arlen Specter. My thoughts are with his family, friends and his extended PA family.

Sunday, September 23, 2012

Who can you Trust?

Once you have decide to create a trust,a legal document that leaves property and other assets to your heirs, you then must decide who will be administrating this trust after you pass. This person will be acting in a fiduciary capacity and be responsible for running the trust and making the distributions. People choose between a family member, close friend, law firm or another such professional. Several factors should be weighed in determining who to choose. 1) What is the size and complexity of the Trust? Professional services can be expensive. Professionals typically get paid based on the percentage of assets they have to manage and sometimes charge a minimum fee, which can make their services costly for more modest estates. This cost might be worth it if your trust is meant to last generations. Because an entity like a bank is likely to outlive a friend or family member who would otherwise do the job. Also, if your trust is complex, unless your family member or friend has a high degree of knowledge, administration will take many more hours and considerable frustration. Even if the trustee is a beneficiary, this isn't the type of gift you would want to leave him or her. 2) What is the knowledge base of the family member you would choose? As stated earlier, trusts can be a complex matter. Make sure the person you tap for the job is up to the task. Trust administration can be a heavy workload, including routine administrative duties, investment-diversification decisions, tax filings and the distribution of assets to beneficiaries. If your trustee doesn't have thee time and skills for the job, he or she can hire professionals to assist with certain facets of this workload—say, property management or investment strategy—but it still takes a certain amount of knowledge to assemble and manage a good team. 3)What is the relationship between the beneficiaries? If your family does not get along or has a complicated relationship, then placing one person as a trustee will place additional strain on that person as well as increase their workload. Think of hiring a professional instead of a family member who might go against their final wishes. For instance, it may be a bad idea to put a spouse who has a hard time saying no to a child in charge of a trust you would like to see paid out over a long time period. *This article was inspired by The Wall Street Journal article of September 10, 2012 " A Matter of Trust" by JEANINE SKOWRONSKI

Sunday, September 9, 2012

How estate tax laws afftect non-citizens

I have spoken to several people lately about why an immigration status affects one's estate planning. To me, there are many benefits of being a US citizen, here is just another. Estate tax laws permit spouses to transfer unlimited amounts of property to each other without gift or estate taxes. The “unlimited marital deduction” does not apply, however, to non-citizen spouses. Congress is concerned that a non-citizen spouse might move to another country, thereby avoiding the U.S. gift and estate taxes. Therefore, providing for a non-citizen spouse requires special planning. In short : No estate tax marital deduction is available for transfers at death unless the property is held for the benefit of the non-citizen spouse in a “qualified domestic trust” (QDOT). However, a deceased spouse can leave assets to a surviving non-citizen spouse – estate tax free – up to the decedent’s estate tax exemption. But assets left to a surviving non-citizen spouse using the decedent’s estate tax exemption will be subject to estate taxes when the non-citizen spouse dies, thereby “wasting” the deceased spouse’s estate tax exemption. An experienced attorney can work with you to create a QDOT that would allow the deceased spouse to defer estate taxes until the surviving non-citizen spouse’s death, while “sheltering” his/her estate tax exemption. During the non-citizen spouse’s lifetime, the trustee of the credit-shelter trust can provide the surviving spouse with income and principal as needed for health, education, maintenance and support. The surviving spouse is also able to receive income from the QDOT. However, the surviving spouse will incur estate taxes at the tax rate in place at the time of the first spouse’s death upon two taxable events: 1)the trustee distributes principal from the QDOT to the surviving spouse or 2) the surviving spouse dies. Any distributions of principal to the non-citizen spouse are subject to estate taxes, and the trustee must withhold funds equal to the tax. However, exceptions are made in certain circumstances. As always this information is intended for general information purposes only and is not intended to be the rendering of legal advice for specific cases. Because your legal matter is unique, it is recommended that you obtain the advice of an attorney. My office would be pleased to meet with you and assist you with your legal needs

Sunday, September 2, 2012

Changes to Pennsylvania Inheritance Tax and Realty Transfer Tax Signed into Law

Below is the article from Penn State College of Agricultural Sciences. This article is written by Gary Hennip, Penn State Extension Educator and has been written for educational purposes only. These issues should be discussed with professional financial advisors and attorneys who have a good understanding of state and federal estate laws. A new tax code change in Pennsylvania recently signed into law could provide some real benefits to our local farming community. These changes relate to both Pennsylvania inheritance taxes, and to Pennsylvania realty transfer taxes that have been paid by local landowners or might have been paid in the future. Let’s first be reminded of the Pennsylvania inheritance tax laws that were in effect prior to the tax code changes recently implemented. In Pennsylvania, inheritance taxes are imposed as a percentage of the value of a decedent’s estate transferred to beneficiaries by a will. The tax rates imposed vary depending on the relationship of the beneficiary to the decedent. 1. 0 % on transfers to a surviving spouse or to a parent from a child aged 21 or younger 2. 4.5 % on transfers to direct descendants and lineal heirs 3. 12 % on transfers to siblings 4. 15 % on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax Here is a quick true life example of the impact the Pennsylvania inheritance tax laws had on the next generation. A local farmer that I know very well worked almost all of his life for his uncle on his uncle’s family dairy farm. When the Uncle passed away, the farm was passed down to the nephew through a will. When it came time to pay the Pennsylvania inheritance tax, the nephew, according to the table above, fell into Number 4, a 15 % inheritance tax on the value of the farm’s assets owned by the Uncle. Just like many dairy farm families, the estate had very little in cash assets, but did own around 400 acres. In order to pay the Pennsylvania inheritance taxes that were due, the nephew had to sell off a good portion of the farm’s land to generate the cash that was needed to meet this tax obligation. He soon after sold the rest of the farm and the dairy operation ceased to exist. With this as background information, here are the changes to the Pennsylvania tax code that will benefit folks that find themselves in a similar situation to the example I have shared. House Bill 761 and Act 85 exempts from Pennsylvania inheritance tax, real estate that meets any of the following criteria: 1. If the farm was “devoted to the business of agriculture” and transferred to other family members through a will at the time of death. 2. If the decedent’s farm was being leased to members of the family or to a partnership or corporation owned by members of the same family, (this would include parents, grandparents, brothers and sisters, aunts and great aunts, uncles and great uncles of the deceased owner, as well as all of the ancestors of the persons listed above along with their spouses), and was devoted to the business of agriculture. 3. The farm must continue to be devoted to the business of agriculture for seven years after the owner’s death and must generate a yearly gross income from agriculture of at least $2000. The new legislation does spell out what is not considered an agriculture business for the purpose of exemption from Pennsylvania inheritance taxes. These include: • The use of land for recreational activities. • The raising of game animals or animals for sporting or recreational purposes or use as pets. • The business of fur farming. • The business of a stockyard, slaughterhouse, or manufacturing or processing operations. The second portion of the changes to the Pennsylvania Tax Code may offer a more current $$ savings to Pennsylvania farm owners. These changes provide an exemption to family farm owners from paying real estate transfer taxes when reorganizing the family business into entities such as a Limited Liability Company (LLC) or a Limited Family Partnership (FLP). This practice of developing an ( LLC) or an(FLP) became rather commonplace here in the northeast over the past few years helping landowners with the potential windfalls of natural gas leases and potential federal estate tax consequences. In many cases prior to this new tax law change in Pennsylvania, the transfer of farm assets to an (LLC) or an (FLP), caused the farm owner to be responsible for paying the Pennsylvania Realty Transfer Tax. This tax is calculated at 1% of the asset value of the asset being transferred. House Bill 761 and Act 85 now exclude from the Pennsylvania Realty Transfer Tax law any conveyance of assets from one family farming business to another type of family farming business such as a (LLC) or (FLP). In addition, House Bill 761 and Act 85 exempt the Pennsylvania Realty Transfer tax from being applied in these types of business transactions retroactively to on or after July 1, 2010. This could mean that several thousand dollars that had been paid out in realty transfer taxes on or after July 1, 2010 when family farming businesses formed (LLC’s) or (FLP’s) may be returned to the farm owner. More information on the changes to the Pennsylvania inheritance tax laws and/or Pennsylvania realty transfer taxes can be obtained by going to the websites of the Pennsylvania Farm Bureau (www.pfb.com) , the Pennsylvania Department of Revenue (www.revenue.state.pa.us ), or by contacting the Bradford County Extension Office, Gary Hennip, Penn State Extension Dairy Team member at glh11@psu.edu or by calling 570-265-2896.

Does a Power of Attorney have an expiration date?

In New Jersey,a power of attorney given to someone other than a spouse or civil union partner, banks and other financial institutions may reject the power if it is over 10 years old. All powers should be "refreshed" periodically to avoid any problems and also to make sure that the principal - the maker of the power - is still in agreement with the agent he/she selected. The good news is that these Powers of Attorney's or POAs are easy and affordable to refresh.

Wednesday, April 25, 2012

How a haircut can lead to a tax deduction

You wouldn't know it to look at me, but I have really long hair. Its not quite Repunzel like, but its long enough. The reason why you wouldn't know this is because I always keep it tied up or covered. I grow out my hair and, after a couple of years, I lop it off to start anew. I donate my hair to locks of love, a non profit that provides hairpieces to financially disadvantaged children suffering from long term medical hair loss. This hair cut always has be feeling better about myself (because how often can you do something good and get a free haircut?). But there is a way that this donation can be tax deductible. Donations of the body ie blood, organs and even hair are not able to be deducted. However, if you sell your hair to a wig shop and donate that money to locks of love or other such organizations, your donation can qualify as a tax deductible gift. It may take a little longer to prepare this donation, but the charity of your choice could be the beneficiary of a couple hundred dollars.

Tuesday, April 24, 2012


Today is Primary Day in Pennsylvania. Dont forget to vote and let your voice be heard!

Sunday, April 22, 2012


I had a wonderful meeting with Daniel Israel who works for New York Life. This meeting started me thinking how little people know about how life insurance can help you plan your estate and insure your beneficiaries get more money. Normally life insurance proceeds are included in your estate for tax purposes. However, one way to avoid the taxing of life insurance proceeds at death is to establish an Irrevocable Life Insurance Trust or an ILIT for short. This makes ILITs a powerful and often underutilized estate planning tool. A properly drafted ILIT can remove the life insurance proceeds from the insured-grantor’s estate and the surviving spouse’s estate, while allowing the proceeds to be available to meet the needs of the surviving spouse and children. Beyond the ability of being able to remove life insurance proceeds from a grantor's estate is that it provides liquidity to the grantor's estate. This means that beneficiaries will be able to pay estate taxes and other obligations without aggravating the estate tax liability. The insurance proceeds can be available to support a surviving spouse and minor children. The proceeds can also be used to purchase assets from the insured-grantor’s estate to provide the estate with liquidity without forcing it to sell assets to outside parties. This is especially helpful in cases involving appreciating assets such as real estate. ILITs have other benefits that this blog does not address. If you have any question about ILITs or any other estate planning documents please contact me.

Sunday, April 15, 2012

An agent acting under a power of attorney can revoke an existing trust created by the principal and transfer assets to a new trust, a New Jersey Chancery Court has held.
Do you find this dangerous?

Thursday, April 12, 2012

Speaking at Temple

I will be on a panel today at Temple Law School regarding "Women in the Profession: How to Balance Work with Family." If you are in the area, stop by

Sunday, March 25, 2012

Executor's commission

Every will must designate an executor. While some people think it is an honor to be named, in reality it involves a lot of work to make sure that the testator's wishes come to fruition and that state law is followed. That being stated, what is an executor entitled to for accomplishing this work?
In many states, the commission of an executor is set by statute and percentages are clearly defined. This is not the case in Pennsylvania. PEF 3537, Section 9.7 states, "The Court shall allow such compensation the personal representative as shall in the circumstances be reasonable and just, and may calculate such compensation on a graduated basis." In determining the reasonableness of a commission, a variety of factors should be examined including the complexity of the matter and most notably the actual time expended.
In the instance in which there is more than one executor, allocation of the overall commission should be undertaken based on the percentage of work performed by one party as compared to the other

Thursday, March 22, 2012

Irrevocable v. Revocable Trusts

The difference between these types of trust is vast and can be used to accomplish your personal estate planning goal.
A Revocable Trust allows a person to amend, change the conditions under which the assets are held, reclaim the assets for personal use or even revoke the trust at any point. These trusts are commonly used to avoid Probate, which is required when an individual dies with assets that pass through their estate. With a revocable trust, once the testator passes, a successor trustee can distribute the trusts assets to the named beneficiaries without the supervision of the probate court. Due to this nature, the process tends to be quicker and more private than probate. These trusts are tax neutral.
An Irrevocable Trust is one where a person relinquishes all the rights to the assets in the Trust. The person cannot amend, alter or revoke the terms of the trust. The trusts assets also are not subject to probate. Further, unlike revocable trusts, these assets are excluded from the Settlor's estate. This helps to reduce the grantor's estate tax burden.

***Mrs. Berdugo is licensed to practice law in PA and NJ. If you have any questions or would like to contact me regarding planning your estate my phone number is 215-992-9662 or my email address is rebecca@berdugolaw.com or you can follow me on twitter @Berdugolaw ***

Sunday, February 26, 2012

Plan to succeed

I heard a very talented attorney talk last week and she said something that stuck our to me. "Failing to plan is planning to fail." Its very true. Now that is it tax season, we have a time to reflect on our year financially and take into account of where we are and where we want to be. I know that I am going to ask myself how can I better plan for the next year, next five years and next ten by taking an hour out of a week to craft a tailored plan that addresses where I am and where I want to be.

Monday, February 20, 2012

NJ law on fiduciary's commission

Statute NJ SA 3B 18-13 states Commissions in the amount of 6% may be taken without court allowance on all income received by the fiduciary. For the purposes of this section, income which is withheld from payment to a fiduciary or fiduciaries pursuant to any law of this State, or of the United States, or any other state, country or sovereignty, or of any political subdivision or governmental unit of any of the foregoing, requiring the withholding for income tax or other tax purposes, shall be deemed to be income received by the fiduciary, and shall be subject to income commissions as provided in this section in the same manner as if actually received by the fiduciary.

New Jersey will advertising

As of February 2005 NJ courts no longer require an advertisement of a will. All that needs to be done is notify the next of kin and beneficiaries. If a beneficiary is a charity, you must notify the Attorney Generals office.
4:80-6. Notice of Probate of Will

Within 60 days after the date of the probate of a will, the personal representative shall cause to be mailed to all beneficiaries under the will and to all persons designated by R. 4:80-1(a)(3), at their last known addresses, a notice in writing that the will has been probated, the place and date of probate, the name and address of the personal representative and a statement that a copy of the will shall be furnished upon request. Proof of mailing shall be filed with the Surrogate within 10 days thereof. If the names or addresses of any of those persons are not known, or cannot by reasonable inquiry be determined, then a notice of probate of the will shall be published in a newspaper of general circulation in the county naming or identifying those persons as having a possible interest in the probate estate. If by the terms of the will property is devoted to a present or future charitable use or purpose, like notice and a copy of the will shall be mailed to the Attorney General.

Note: Source-R.R. 4:99-7; former R. 4:80-8 amended and rule redesignated June 29, 1990 to be effective September 4, 1990.

Monday, February 13, 2012

who handles probate

The person responsible for handling probate is the executor if there is a will. If there isn't any will, or the will doesn't name an executor, the probate court names a person, called the administrator, to handle the process. Often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person's assets.

Friday, February 10, 2012

Does all property law have to pass through probate?

Does all property have to pass through probate? NO! Most states allow a certain amount of property to pass free of probate or through a simplified probate procedure.
In addition, property that passes outside of your will -- say, through joint tenancy or a living trust -- is not subject to probate.

Monday, February 6, 2012

Importance of a Living Will

We are young! We think we can live forever. Only old people need legal documents. Sound familiar? Its not true. Terri Schiavo was only 27 years old. Her situation could have been prevented if she had a living will. A living will is only applicable when you are facing death, this document specifies what your wishes regarding end-of-life care.