Q: Are life insurance proceeds paid to a beneficiary need to be listed on the Inventory for probate?
A: Generally, in Pennsylvania, insurance proceeds, if payable to a living beneficiary, are not part of the estate and therefore do not appear on the estate Inventory nor are they subject to inheritance tax.
Q: I live in Florida and am executor for a will in probate in PA, Allegheny County. Do I need a lawyer licensed in both states to help me file tax papers. (Bradenton, FLA)
A: The state where the decedent had residency, is the state where the estate must be opened. If all of the property is in PA, a NJ lawyer may set up an estate in PA. For convenience, depending on the local PA law, you may be able to be sworn in as executor in the FLA probate court, to save some travel time. The FLA probate court then certifies the paperwork then sends your papers to the PA probate court. The PA probate court then admits them and certifies you as executor. If there is property in FLA, you may need to have a lawyer file for an ancillary estate in FLA, to handle the FLA property. I would consult with the PA lawyer first.
Q: How can durable power of attorney be revoked form an incompetent person? My sister and I have durable co- POA for my mother who is incompetent. Now my sister is suffering from dementia. We have one other sibling.
A: Do you mean how does an incompetent person revoke their POA? An incompetent person has insufficient competency to revoke their own POA. Read the POA carefully or have a lawyer review it for you. The POA either requires both of you to act together as co-agents or allows you to act independently of each other. So, if it allows you to act independently of each other and your sister develops dementia, you can act for mom and you don’t need your sister. If the POA requires you to act together, you have a problem. Since mom is incompetent, she cannot sign a new POA and you will need to file for a Guardianship through an attorney. It would be well worth the consultation fee to have a lawyer look at the POA. If you are co-agents with your sister, perhaps a motion in Orphan’s Court to remove your sister as agent due to her being incompetent, if that is the case, may work. A closer look at the facts will be necessary before advice can be given.
Q: How can durable power of attorney be revoked form an incompetent person? My sister and I have durable co- POA for my mother who is incompetent. Now my sister is suffering from dementia. We have one other sibling.
A: Do you mean how does an incompetent person revoke their POA? They cannot, if they are incompetent. Read the POA carefully or have a lawyer review it for you. The POA either requires both of you to act together or allows you to act together OR independently of each other. So, if it allows you to act independently and your sister develops dementia, you can act for mom and you don’t need her. If the POA requires you to act together, you have a problem. Since mom is incompetent, she cannot sign a new POA and you will need to file for a Guardianship through an attorney. It would be well worth the consultation fee to have a lawyer look at the POA.
Q: If I have a whole life insurance policy. Do I have to cash it in to qualify for MA or do they put a lien on proceeds at my death? I have $300,000 whole life with $25,000 cash value. Do I have to cash in to access the cash value or would they put a lien on the proceeds at my death, in order to qualify for medical assistance to pay for nursing home care?
A: Your question can only be answered with an experienced elder law attorney reviewing all of the facts. Generally, if you don’t want to lose the insurance policy, many insurance policies allow you to “borrow down” the cash value of the policy. Then you can spend those funds in an approved way that will allow you to qualify for benefits. This way, you can retain the benefit of the insurance coverage for your beneficiaries when you pass. You need an experienced elder law attorney well versed in Medicaid regulations to look at your situation and you want to have the insurance company carefully explain your options.
Q: How can my 71 year old mother get rid of a piece of land in FL.? She can’t afford it on a fixed income. She doesn’t want to use her little retirement that she has. It has to last her for a long time!
A: Questions need to be answered, is there a mortgage? are there co-owners?, is it a time share?. Is mom receiving Medicaid benefits that would be affected by her transferring property without fair consideration? If she owns it outright, she is not receiving Medicaid benefits, with no mortgage, you can sell it, let it go to Sheriff’s sale or donate it to a charity if you can find one who wants it. You should get an appraisal if you are donating it or letting it go so in the future, if called upon, you can demonstrate it was worth very little. You should probably bounce this off a Florida real estate attorney. In one of my estates, we had two lots located in a swamp in Florida that had little value and just let them go to tax sale.
Q: How can I protect my Dad’s retirement money from his new wife. I have power of attorney. She took $4,000.00 from him before the marriage. Dad is mildly impaired. He forgets to eat and cannot manage money. I took over finances, so she took him from PA to West Virginia and forced him to marry her without my knowledge. What can I do to protect his finances? She is trying to withdraw his retirement money. (McMurray, PA)
A: Unless your father is mentally unable to manage his finances, which would allow a guardian to be appointed, you little at this point. He needs to see an attorney. A trust arrangement could be established for his assets that are not IRAs or Qualfied Plan Accounts. Please note that in a guardianship proceeding, a wife is generally given higher priority to be appointed than you so you would need to prove she is not qualified to serve as guardian of his estate. You will need to get him to an attorney if he is going to be helped-assuming he wants to be helped. You need to understand what a Power of Attorney is. It is simply an authorization from your dad to do things on his behalf. If it is a “durable” power of attorney, that power continues even if he later becomes disabled. The POA does NOT, however, remove his ability to make his own choices. So, if he WANTS to give his money to his new wife, he can. There is nothing you can do about it, unless you are appointed by the court to be his guardian. You describe him as “mildly” impaired. That is not likely to meet the legal standard to show that he needs a guardian. Talk to a lawyer. You can discuss how she is manipulating him and whether there is any wrongdoing there. Also, if he creates an irrevocable trust and makes you trustee, his wife would have to convince you to release the money. His financial estate gets even more complicated by the fact, that if you and he transfer assets out of his name, and he dies leaving her with little or no money, she can challenge by filing an election against will, which if successful, she could claim one-third of certain assets of his. This is a complicated situation and he should really see a lawyer.
Q: If my uncle dies without a will, in PA, does all the wealth go to that one living brother or is it divided in three shares? Here are the details of this in testate in PA. Have an uncle who has never been married and has no children. He had three brothers, including my father. My father and one of his brothers is deceased and one brother is still living. Three shares, 1 to the living brother, 1 to the children of once deceased uncle, and 1 to the children of my father (the other brother).(Pittsburgh, PA)
A: You are correct. If there is no will (intestate), inheritance falls under the PA intestate succession statute. The shares of a deceased brother pass down to children of the deceased brother in equal shares.
Q: When should I file my parent’s Medicaid application for long term care? He should qualify as medically necessary, but only after we spend his 40k savings on private care. Should I file now or after he spends the money?
A: It is highly advisable not to do this on your own. If there are $40,000.00 in assets to spend down, you need to do this with the advice of an experienced elder law attorney. There are ways to shelter some of these assets and it will be well worth the legal fee as it will likely save a portion of your father’s money which will otherwise go to Medicaid.
Q: John named his estate as the beneficiary of his IRA. He died after his required beginning date in 2012. After his death, the trustee of the IRA distributed the balance of his IRA to his estate. If the entire amount of the IRA was distributed from the estate to the estate beneficiaries, who pays the tax on distribution, the beneficiaries of the estate? Pittsburgh, PA
A: The beneficiaries of the estate will be liable for the tax on the amount of each received. The beneficiaries will be entitled to reduce the distribution amount by their allocated share of basis in the IRA if there was any. The distribution is reported as other income to the estate on Form 1041. The amount is deemed to be distributable net income and is reported as an income distribution deduction by the estate, limited by DNI (§661). The allocated amount will flow from Form 1041 to Schedule K-1 and reported on the beneficiaries’ personal Form 1040.