Fineman Krekstein & Harris, P.C. - Attorneys at Law - Philadelphia, PA

Fineman Krekstein & Harris, P.C.
1735 Market Street, Suite 600
Philadelphia, PA 19103
Phone: (215) 893-9300
lawyers@finemanlawfirm.com

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In addition to our Frequently Asked Questions section of our website, Fineman Krekstein & Harris, P.C. attorneys stand ready to address and answer all of your questions at a moment's notice. If you have direct questions for our attorneys, please click on our ASK US A QUESTION link.

For more information about our services, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Fineman Krekstein & Harris, P.C. provides the information found on this website for informational purposes only. It is not intended to, and does not, constitute legal advice or a legal opinion. Nor does it create an attorney-client relationship between Fineman Krekstein & Harris, P.C. and any viewer of the site. You should not act or rely upon any information that you obtain from this site without first seeking the advice of an attorney regarding the facts of your specific situation. The information on this web site is intended to be accurate and current. We do not promise or warrant, however, that the information that you find here is complete, accurate or up-to-date.

Insurance
1. How do I get flood insurance if my current policy contains a flood exclusion?
2. How can I distinguish between damage caused by flood and wind-driven rain?

Commercial Litigation
1. Do the new Federal Court rules require that I keep my electronic documents forever?
2. Which employees must be made aware of the Company document retention policy?
3. What impact does a potential or actual lawsuit have upon the company’s document retention policy?
4. Should I be worried that a punitive damages award could be wildly in excess of any compensatory damage judgment?
5. Are all attorney fees paid by a contingent fee arrangement taxable to the plaintiff?
6. What type of claims are not covered by the American Jobs Creation Act of 2004?

Corporate Tax
1. How can I avoid the alternative minimum tax?
2. How has the Working Families Tax Relief Act of 2004 extended tax relief to those taxpayers affected by the marriage penalty?
3. How has the American Jobs Creation Act of 2004 changed the rules regarding the donation of vehicles to charities?

Construction Law
1. Does the Economic Loss Rule prevent contractors from suing architects in negligence?
2. Under what circumstances can a contractor bring a negligence claim against an architect?

Real Estate Law
1. How is real estate taxed in Philadelphia?
2. What is the real estate tax abatement program in Philadelphia?

Business Law
1. If I am in a business dispute in Philadelphia, in what court should I bring my case?
2. Should I have a contract and/or terms and conditions of sale or use when providing goods or services over the Internet?

Corporate Law
1. What are the main advantages of incorporating your business?
2. What is required to incorporate my business?
3. Is a corporation required to have annual minutes?

Employment Law
1. Can an employee who was disciplined for filing a discrimination claim and then restored to her position, with back pay, pursue a retaliation claim against her employer?
2. Can an employer discipline or terminate an employee for the employee's off-duty conduct?
3. Can an employer terminate an alcoholic or a recovering addict for unsatisfactory job performance?
4. Why is it believed that the Smith decision will lead to an increase in age discrimination claims?
5. If the older employees do not have to prove that their employers deliberately discriminated against them, what must they prove to win their cases?
6. If my employees are considered "employees-at-will", does that mean I can terminate someone for any reason whatsoever?
7. Do I have to retain all of my company's employment records? If so, for how long?
8. Do I have to hire someone if I know they have a disability?
9. One of our employees was out on leave for an operation, and now he wants to come back to work. How can we be sure he is physically up to the job?
10. We have an older worker who is not performing up to par. Can we get sued for letting him go?
11. My company terminated an older worker due to poor job performance, and we have now received notice that he has filed an age discrimination claim against us with the EEOC. Do we need to hire a lawyer at this point?

Wills/Trusts/Estates
1. I formed an Irrevocable Life Insurance Trust several years ago. Under the UTA, am I required to provide initial and/or annual notices to the beneficiaries?
2. Why do interest rates matter when you plan your estate?
3. I am recently divorced, but I have not yet removed my former spouse as the designated beneficiary of my Will/Power of Attorney/insurance policies/annuity contracts/pension plan/profit sharing plan. If I die before changing the designation, will the designation of my former spouse be honored?
4. Do I need an estate plan even if I am not wealthy?
5. Why do I need a Will?
6. What is the purpose of a living Will?
7. What is the purpose of a Living Trust?
8. What is the purpose of having a Power of Attorney?
9. How can I minimize the tax liability of my estate?

Insurance

Q. 1. How do I get flood insurance if my current policy contains a flood exclusion?

A. Contact your insurance agent immediately. If you agent cannot provide you with flood insurance through your current carrier, your agent should be aware of the federal flood insurance program, or the secondary insurance markets, such as Lloyd's of London, that are willing to sell flood insurance.

For further information on Insurance Matters, contact Jay Barry Harris. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. How can I distinguish between damage caused by flood and wind-driven rain?

A. As a rule of thumb, flood waters are normally the source of basement and surface level water while wind-driven rain normally infiltrates a structure from the roof and the side. An insurance professional should be able to help you evaluate the source of the water in your home or building.

Commercial Litigation

Q. 1. Do the new Federal Court rules require that I keep my electronic documents forever?

A. No. you can satisfy the Federal Court rules by developing a consistent policy about what is being stored, where it is being stored and how long it is being stored.

For further information on Commercial Litigation Matters, contact Jay Barry Harris. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. Which employees must be made aware of the Company document retention policy?

A. The policy must be adequately communicated to all employees to make them aware that any data they create may be discoverable and subject to the document retention protocol.

Q. 3. What impact does a potential or actual lawsuit have upon the company’s document retention policy?

A. If a lawsuit is a possibility or you have been sued, place a “litigation hold” on all electronic documents that may be related to the dispute. Those potentially relevant electronic materials must be identified and not disturbed.

Q. 4. Should I be worried that a punitive damages award could be wildly in excess of any compensatory damage judgment?

A. Over the last decade, the U. S. Supreme Court has been putting the brakes on excessive punitive damages awards, seemingly limiting such award to a single-digit multiple of any compensatory damage award. It appears that a 3 to 1 or 4 to 1 ratio is in the proper range for cases with a sizable compensatory damage award. Despite the Highest Court’s previous warning to lower courts to limit punitive damages, however, in Williams v. Philip Morris, Inc., Oregon’s Supreme Court permitted a punitive damages award nearly 100 times greater than the compensatory damages judgment. The Oregon Court found an exception for huge awards where the conduct is analogous to a crime and is particularly reprehensible. The U. S. Supreme Court has taken that case up for review, and its decision will either re-iterate the direction it wants these cases to be going, i.e. limitations on punitive damages, or will create an exception that may swallow the rule.

For further information on Commercial Litigation Matters, contact Lee Applebaum. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 5. Are all attorney fees paid by a contingent fee arrangement taxable to the plaintiff?

A. Personal injury contingent fees, and those arising from a physical injury such a loss of consortium or wrongful death claims are still non-taxable recoveries. In addition, attorney fees paid pursuant to a contingent fee agreement that arise from allegations of discrimination or other enumerated civil rights violations listed in the American Jobs Creation Act of 2004 are also not includable in the plaintiff's gross income.

For further information on Commercial Litigation Matters, contact Scott H. Mustin. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 6. What type of claims are not covered by the American Jobs Creation Act of 2004?

A. The American Jobs Creation Act of 2004 does not cover claims for the recovery of debts, breach of contract, consumer claims, fraud and others. If the plaintiff were on a contingent fee arrangement with his or her lawyer for cases such as these, any recovery payable to the lawyer would be taxable income to the plaintiff.

Corporate Tax

Q. 1. How can I avoid the alternative minimum tax?

A. One of the things most people can do to minimize the effect of the alternative minimum tax ("AMT"), is to do whatever they can to reduce their adjusted gross income. These are the expenses or payments listed on lines 23 through 35 on the first page of the Form 1040. Practically, what this means for most people, is that they should contribute to their self-employed, SEP, simple or qualified plan, should contribute the maximum amount possible to their 401(k), and should take any other expenses or deductions to their gross income that are reflected on those particular lines, including moving expenses, self-employed health insurance, student loan interest, tuition and fees, health savings account deduction, and the like.

For further information on Tax Matters, contact David R. White, Jr.. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. How has the Working Families Tax Relief Act of 2004 extended tax relief to those taxpayers affected by the marriage penalty?

A. The marriage penalty refers to a peculiarity that requires two-income married couples each year to pay more in federal income taxes together than they would owe if each spouse were single. Previously, the tax law provided a degree of relief from the marriage penalty in two ways. First, the basic standard deduction for a married couple filing a joint return was increased so that it equaled twice the basic standard deduction for an unmarried individual filing a single return. Second, it increased the size of the 15-percent rate bracket for married couples filing joint returns. However, these provisions were due to expire on December 31, 2004. The Working Families Tax Relief Act extends both these provisions through 2010. Thus, for 2005 through 2010, the basic standard deduction for married taxpayers filing jointly will be twice the basic standard deduction of single taxpayers and the basic standard deduction for married taxpayers filing separately will be equal to the basic standard deduction of single taxpayers. Likewise, for 2005 through 2010, the endpoint of the 15% tax bracket for joint returns will be twice the endpoint of the 15% tax bracket for single returns.

For further information on Corporate Tax Matters, contact Michelle K. Malloy. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. How has the American Jobs Creation Act of 2004 changed the rules regarding the donation of vehicles to charities?

A. Previously, taxpayers were permitted to deduct the fair market value of vehicles that were donated to charity. Starting January 1, 2005, the reporting requirements for donations of cars, boats, and planes became more onerous if the deduction is greater than $500. Additionally, if the charity sells the vehicle, within 30 days of the sale, the charity must give the donor a written acknowledgment that states how much it received from the sale. The allowed deduction is limited to the proceeds from the sale. If the vehicle is not sold, the charity must give the donor an acknowledgment within 30 days of the contribution and indicate in the acknowledgment its intended use of the vehicle. The taxpayer is now required to attach the acknowledgment to his or her tax return.

Construction Law

Q. 1. Does the Economic Loss Rule prevent contractors from suing architects in negligence?

A. After the Bilt Rite decision, architects are now vulnerable to claims by contractors even though they do not have a contract with that contractor.

For further information on Construction Matters, contact Jay Barry Harris. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. Under what circumstances can a contractor bring a negligence claim against an architect?

A. Architects can now be sued in tort by contractors, which rely upon the architects' plans, drawings, specifications, etc during a construction project even if the architect did not prepare the plans, drawings specifications, etc for that particular contractor.

Real Estate Law

Q. 1. How is real estate taxed in Philadelphia?

A. Under the Pennsylvania Constitution, all real estate, whether residential, industrial or commercial, must be taxed on the same basis. In Philadelphia, a single tax is imposed on real estate for the benefit of both the City and the School District. City assessors or evaluators determine the market value for each property on a uniform basis, then calculate the corresponding assessment; and the Department of Revenue then bills property owners for the tax based upon the millage rate determined by City Council and the Mayor. The tax is imposed on a calendar year basis, unlike in many other counties where the school district tax is imposed on a fiscal year basis. The taxing system and its governing legal principles are very complex, although Philadelphia has announced plans for a new simplified process. Real estate taxes should be fair, equitable and uniform, but many inequities can exist in a city with over 565,000 properties. Any property owners who believe their assessments are unfair should seek legal advice about a tax assessment appeal.

For further information on Real Estate Matters, contact Gary A. Krimstock. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. What is the real estate tax abatement program in Philadelphia?

A. Philadelphia City Council and the Mayor have passed several Ordinances that provide economic incentives to encourage development and redevelopment of real estate in the City. These incentives are in the form of tax abatements or deferrals of the City real estate taxes on properties. They are mostly intended to encourage development of residential properties, either new or rehabilitated, although some programs exist for other types of properties. If a property and owner qualify for such a program, the real estate taxes applicable to the increased value attributed to the improvements are abated for a period of up to 10 years. Taxes must still be paid on the value of the land and the original unimproved property. While this is a great benefit, it is not automatic. An application for such abatement programs must be timely filed, and certain requirements must be met initially and annually. Interested developers or property owners should get legal advice about these complex programs.

Business Law

Q. 1. If I am in a business dispute in Philadelphia, in what court should I bring my case?

A. In the past, if you had a choice, the answer was clear: federal court. Since 2000, however, the Philadelphia Court of Common Pleas has created a specialized program to hear business cases, typically known as the "Commerce Court". Three judges are assigned as Commerce Court judges, and each case is heard by one of those judges from beginning to end. Thus, you not only get the benefit of a single judge assignment as in federal court, but the benefit of a specialist judge who is only hearing business and commercial, unlike federal court. You should always weigh the choices with your lawyer in choosing a litigation forum, but you can now expect a reasoned and prompt decision in both the state and federal courts

For further information on Business Matters, contact Lee Applebaum. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. Should I have a contract and/or terms and conditions of sale or use when providing goods or services over the Internet?

A. Yes. The Internet is simply a new means for providing goods and services. While there may be some distinct issues created by that new media, it is important to address the basics. You are forming a deal for buying or selling a good or service, and there should be clear terms and conditions governing that deal.

What kind of terms and conditions should be included, and where should they go?

To address the second question first, this depends on whether you are physically providing a product or service beyond the computer screen, and whether you are entering a contract that requires your customer's signature. If the entire transaction occurs over the Internet then you have to assure that there is a clear and readily accessible statement governing purchase and use. If a physical product is being purchased by an end user whom you may never see, then you will also need a written set of terms and conditions included with the physical product and/or in your manuals. If the agreement involves direct negotiations and a signed written contract, then that contract should address terms and conditions, but you may very well want or need terms and conditions on your web site as well.

As to the terms and conditions themselves, you should be considering the same issues involved in any transaction, for example: a clear description of what you are providing; a clear and legally precise statement of what warranties, if any, that you are providing, and maybe more importantly, what warranties you are not providing; limitations on your potential liability; and indemnification terms. In the borderless cyberworld, you should also be setting forth, to the extent possible, which law will govern any disputes, and specifically where those disputes will be heard if an action arises. Also, since we are in the cyberworld, you need to consider and include language protecting you against liability for such phenomena as hackers, viruses, trojan horses and password misuse. The bottom line is that potential risks must be identified and addressed before any problem arises, so that you can be sure you are doing the most you can to protect your business.

Corporate Law

Q. 1. What are the main advantages of incorporating your business?

A. The two main advantages of incorporating a business are personal liability avoidance and tax flexibility. Disadvantages arise depending on the type of corporate structure that is chosen for the business. For example, general partnerships or sole proprietorships do not offer personal liability protection and C-corporations do not have tax flexibility

For further information on Corporate Matters, contact Hema P. Mehta. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. What is required to incorporate my business?

A. In order to be incorporated, a corporation must file Articles of Incorporation ("Articles") with the Secretary of State in the state in which it wishes to be incorporated. Among other things, the Articles contain the name of the corporation, the corporation's purpose, and the number and class of shares the corporation is authorized to issue. In addition, all states require corporations to maintain a registered office and a registered agent in the state. The main purpose of the registered office and agent is that anyone who wishes to sue the corporation can make service of process on the corporation by serving the agent at the registered office. Also, tax notices and other official communications are sent to the registered office. The incorporators then elect the initial directors of the corporation. Once the corporation has been incorporated, bylaws (or rules governing the corporation's internal affairs) are adopted. At the initial meeting of the corporation, the initial corporate shares are issued, officers are elected, the bylaws are approved, and a resolution authorizing the opening of bank accounts is usually passed.

For further information on Corporate Matters, contact Scott H. Mustin. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 3. Is a corporation required to have annual minutes?

A. It is very advisable to have minutes to document the corporate action taken during the course of the year. This documentation indicates that the corporation has followed the corporate formalities of conducting business and will protect the shareholders from individual liability. Protecting the shareholders from personal liability is a key attribute of the corporate form. A properly-formed corporation will normally shield its shareholders from being personally liable for the corporation's debts and obligations.

Employment Law

Q. 1. Can an employee who was disciplined for filing a discrimination claim and then restored to her position, with back pay, pursue a retaliation claim against her employer?

A. Yes. Retaliation claims focus on the employer’s conduct, not the actual consequences. Therefore, if the conduct upon which the claim is based is sufficiently harmful to discourage any employee from pursuing a discrimination claim, the aggrieved employee may have a basis for a retaliation claim, even if she was restored to her previous position.

For further information on Employment Law Matters, contact Phinorice J. Boldin. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. Can an employer discipline or terminate an employee for the employee's off-duty conduct?

A. An employer may be allowed to discipline and/or terminate an employee for off duty conduct if the employer can illustrate that the off-duty conduct had or has a negative affect on a legitimate and compelling business concern of the employer.

Q. 3. Can an employer terminate an alcoholic or a recovering addict for unsatisfactory job performance?

A. As long as the alcoholic or addict was discharged as a result of conduct for which any person would have been disciplined, the fact that his alcoholism or drug addiction may have caused the conduct, does not lead to an ADA violation.

Q. 4. Why is it believed that the Smith decision will lead to an increase in age discrimination claims?

A. The Smith decision will likely lead to an increase in age discrimination claims because, pursuant to this decision, claimants can bring claims against their employers without alleging or showing that their employers deliberately discriminated against them because of their age, and that is an easier standard to meet.

Q. 5. If the older employees do not have to prove that their employers deliberately discriminated against them, what must they prove to win their cases?

A. To win their age discrimination cases, the employees must first show that the employers' plan or action had an adverse affect on older employees. If, in response, the employers establish that the action or plan is based on reasonable factors other than age (e.g. recruitment of personnel), the employees will likely lose unless they can trump the employers' proof.

Q. 6. If my employees are considered "employees-at-will", does that mean I can terminate someone for any reason whatsoever?

A. The doctrine of "employment-at-will" basically provides that either the employer or the employee can end the employment at any time, for any reason, without notice. This doctrine is generally followed in Pennsylvania. However, there are certain important exceptions to the employment-at-will doctrine. An employment law attorney can advise you on whether any statutory, contractual or public policy reasons limit your ability to terminate someone's employment.

Q. 7. Do I have to retain all of my company's employment records? If so, for how long?

A. There are many important reasons why any employer should keep employment records. The Equal Employment Opportunity Commission (EEOC) has issued regulations which mandate that certain record be kept for various lengths of time. Other state and federal statutes also require employers to maintain employment-related records and files. The failure to properly maintain these records can be costly. In the event a lawsuit is filed against you by a former employee, destruction of relevant records can cause you to lose in court. It is best to review your record retention policies with an employment lawyer to make sure you are in compliance with all of the laws in your state.

Q. 8. Do I have to hire someone if I know they have a disability?

A. The Americans With Disabilities Act protects "qualified individuals with a disability" from discrimination in regard to job applications, hiring, firing, pay, and other terms and conditions of employment. The Act generally applies to employers with 15 or more employees. Violation of the ADA can be costly to employers. A "qualified individual with a disability" is defined in the ADA as a "person with a disability who, with or without reasonable accommodation, can perform the essential functions of the job in question." An experienced employment attorney can help you understand how this complicated statute applies to your situation.

Q. 9. One of our employees was out on leave for an operation, and now he wants to come back to work. How can we be sure he is physically up to the job?

A. The Family and Medical Leave Act may apply to your company, depending upon the number of employees you have. This Act gives eligible employees the right to take up to 12 weeks of unpaid leave, or paid leave if it has been earned, in any 12-month period. The Act also provides that employees be restored to the same or equivalent position when they return from the leave. In certain situations, you may be able to request a certification from the employee's doctor that the employee is able to return to work. However, you must make sure that any action you take is not in conflict with the American With Disabilities Act.

Q. 10. We have an older worker who is not performing up to par. Can we get sued for letting him go?

A. The Age Discrimination in Employment Act (ADEA) makes it unlawful to discriminate against workers who are 40 years of age or older. Pennsylvania and other states also have laws which protect older workers. Anyone can bring a lawsuit claiming discrimination, but a company's ability to defend itself from such lawsuits will depend on whether the termination was for cause or for reasonable, legitimate business reasons not based on age. A properly designed and administered performance evaluation program can be a strong defense against age discrimination claims.

Q. 11. My company terminated an older worker due to poor job performance, and we have now received notice that he has filed an age discrimination claim against us with the EEOC. Do we need to hire a lawyer at this point?

A. The EEOC will ask you for information relating to the employee and your response to his claim against you. All documents, statements or other information which you provide to the EEOC may be obtained by the plaintiff and his attorney in the event a lawsuit is filed. It is always best to consult counsel before providing information that may determine the outcome of a costly lawsuit against your company.

Wills/Trusts/Estates

Q. 1. I formed an Irrevocable Life Insurance Trust several years ago. Under the UTA, am I required to provide initial and/or annual notices to the beneficiaries?

A. No. The notice requirements are not required if the settlor is still living unless the settlor is adjudicated as an incapacitated person.

For further information on Wills/Trusts/Estate Matters, contact Scott H. Mustin. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 2. Why do interest rates matter when you plan your estate?

A. Answer -Interest rates are important with regard to estate planning for a number of reasons. First, they may provide opportunities to transfer wealth at a reduced cost, or on a leveraged basis, as is discussed in the newsletter article, "Lower Interest Rates Can Give Your Estate a Boost". Secondly, they are a reflection of the current market rates. A gift today not only removes that asset from your estate, but also the income earned by that asset as well as its future appreciation. Interest rates give us an indication today of just what that savings a current gift may yield in the future.

For further information on Wills/Trusts/Estate Matters, contact David White. For more information about other services our firm provides, please call us at 215-893-9300 or email us at lawyers@finemanlawfirm.com.

Q. 3. I am recently divorced, but I have not yet removed my former spouse as the designated beneficiary of my Will/Power of Attorney/insurance policies/annuity contracts/pension plan/profit sharing plan. If I die before changing the designation, will the designation of my former spouse be honored?

A. For Pennsylvania residents, any revocable designation on such contracts in favor of a former spouse will not be effective and will be construed under Pennsylvania statute as if the former spouse had died before you, provided that the wording of the designation or a court order does not indicate that such designation was intended to survive the divorce. It should be noted however, that an insurance company, pension or profit sharing plan administrator or other obligor is not liable for paying the proceeds to a former spouse if such payment would be proper but for this statute. In such a case, the contingent beneficiary could only pursue a claim against the former spouse who received such proceeds. Therefore, the safest way to ensure that the proceeds are paid to a desired beneficiary is to change the beneficiary designations of such contracts upon divorce. Furthermore, since the statute does not apply to individuals who are merely separated, beneficiary designations in favor of the soon-to-be former spouse should probably be changed upon separation whenever possible.

Q. 4. Do I need an estate plan even if I am not wealthy?

A. Estate planning accomplishes more than just saving taxes. Even if you do not have a sizeable portfolio, an estate plan is needed to express your wishes and manage your affairs. If you have children, and estate plan is necessary to make sure that your preference of a guardian is expressed and that any inheritance they may have, however large or small, will be properly administered in the child's best interest.

Additionally, your estate planning documents will serve to express your wishes when you cannot. If you become incapacitated, your power of attorney will enable your designated agent to manage your affairs while you are unable, without having to first obtain a court order. Even if you do not have a large estate, executing a will ensures that your estate will be administered by individuals chosen and trusted by you and that your assets will go to your desired beneficiaries, not those required by statute.

Q. 5. Why do I need a Will?

A. Traditionally, the Will is the centerpiece of each estate plan. A Will is a document that directs who will receive your property and how they will receive it. If a person dies without a Will, his property passes intestacy typically in part to his spouse and in part to his children, depending on his state of residency. This can be a problem if the decedent wanted his entire estate left to his spouse, or if his children are minors (under the age 18), in which case a formal guardian of the estate would have to be appointed for each minor child.

Q. 6. What is the purpose of a living Will?

A. A Living Will or an Advance Directive for Health Care, as it is referred to in Pennsylvania is a document in which an individual can state what sorts or what kinds of medical treatment he or she is to be given if he or she ever finds himself or herself unable to communicate and in a permanent coma, or a terminal condition. This document gives one the ability to state whether or not you want to be kept alive if you have no real hope of achieving a conscious state again.

Q. 7. What is the purpose of a Living Trust?

A. The term Living Trust refers to a revocable trust that is created by and for the benefit of an individual, the Settlor. The Settlor retains the right to alter or amend the trust document to withdraw any assets held by the trust and to revoke or terminate the trust at any time. Typically, all of the Settlor's assets are retitled into the name of the living trust. At the Settlor's death, the assets of the trust pass directly to the beneficiaries listed in the trust document. A number of commentators and speakers have promoted the living trust as a document every individual should have. Such commentators usually claim that a living trust will avoid the cost and delay of probate and insure privacy and save taxes. In some states, such as California, Florida, New York and Delaware, probate involves formal and involved court procedures which add to the cost and delay in distributing the estate to the beneficiaries. In Pennsylvania and New Jersey, however, the probate process is straightforward and uncomplicated.

Q. 8. What is the purpose of having a Power of Attorney?

A. A Power of Attorney is a document in which an individual appoints someone to serve as his Attorney-in-Fact or as his agent. This individual may handle the financial affairs of such a person as if the agent or Attorney-in-Fact owned the property himself. A durable Power of Attorney becomes effective the date it is signed and remains effective until the maker revokes the document or dies. Each person should carefully consider who they appoint as their agent or Attorney-in-Fact. If such an individual does not have the utmost confidence and trust and his Attorney-in-Fact, a durable Power of Attorney is not an appropriate document. The benefit of a durable Power of Attorney is that it allows the Attorney-in-Fact to continue to pay the expenses and to conduct the business of the maker if the maker suddenly becomes incapacitated or disabled. A durable Power of Attorney avoids the necessary of going to the Orphans' Court in Pennsylvania, or the Surrogate's Court in New Jersey to have a guardian appointed for such an individual.

Q. 9. How can I minimize the tax liability of my estate?

A. There are a number of strategies that can be incorporated into Wills and other documents to minimize the tax liability of an individual's estate. These include creating trusts at a person's death to make use of the unified credit, the possible use of a life insurance trust, and more advanced strategies such as the use of family limited partnership, limited liability companies, personal residence trusts, grantor retained annuity trusts, and the like.