Estate Planning Questions

November 3, 2015 | Posted by Patty Bittle | No Comments

Clients often call me to prepare their estate plans and ask me how much it will be for a simple will. I analogize the question to a patient asking the physician for an antibiotic without knowing the diagnosis. At the end of the day, the clients typically end up having three to five documents. Those documents include a will, a healthcare power of attorney, a financial power of attorney, and sometimes a living will or trust. But the documents are only a part of the estate planning process.

When a person dies, their assets are distributed in three ways. First, by operation of law. For example, if you own your house jointly with your spouse, upon the first to die, the house goes to your spouse, regardless of what is in the will.

Second is by contract. This means your life insurance policies, retirement plans, pension plans, etc. Again, as to the beneficiaries of these contracts, unless we tie them together, the will is for the most part irrelevant. Countless times I have had clients request a simple will and after a short discussion realize that the beneficiaries on these contracts are not who they want. Sometimes, the beneficiary has passed away, or no longer has a relationship with the client or in certain instances, is the divorced spouse from many years ago. Often, people name their children as beneficiaries. While this may be appropriate, unless we create a trust in the will to tie the distributions to their children in installments over a period of time, the children will get all of the proceeds from these contracts upon reaching the age of 18. You may think that your 5 year old daughter is very mature, but do you really believe she could handle a significant amount of wealth at the age of 18? I would be happy if she just took out the garbage.

The third way that your assets are distributed upon your death is your will. If you don’t have a will, the state has developed a dispositive strategy that it believes would work for you. Isn’t it better that you decide for yourself? (Clients have asked me if they don’t have a will, can the state take their money. The answer is a resounding no).

In the end, if your lawyer is not asking you about your jointly held assets and your contracts, you are not getting a complete estate plan. If you’re not completely comfortable with your current estate plan or just want to second opinion, please give me a call. While for the reasons described above I cannot quote you a fee during that call, I will be able to give you a very good estimate after we meet for the first time. Sound fair?

Verde Restaurant: A Pittsburgh Hit

January 28, 2013 | Posted by Ken Eisner | No Comments

Approximately 2 years ago, I was introduced to a gentleman from Chicago, Jeff Catalina. He advised me that he wanted to start a verde-tequila-wallnew business. It was apparent within the first three minutes of our initial lunch meeting that Jeff, who had been in the finance world, was engaging and extremely intelligent.

I did, however, immediately question his apparent intelligence when he advised me that he was planning to open up a restaurant with absolutely no prior experience. We all know of the horror stories of opening restaurants. As lunch continued, he shared with me his belief that there was a great opportunity to start a high-end Mexican restaurant and that he had already found a perfect location in East Liberty. While I, like probably virtually everyone he spoke with, attempted to discourage him from entering into such a difficult industry, he was determined.

Verde-Pittsburgh-Tequila-Wall

Credit: Jeff Swensen for The New York Times

Approximately 1 year ago, he opened his restaurant, Verde, which is exactly as he described it – an upscale Mexican restaurant that has become a hot spot because of its cool atmosphere and great food. The restaurant is now considered one of the favorites throughout Pittsburgh and was also even recently featured in the New York Times.

Now that he has hit a homerun with Verde, he is planning to open up his second restaurant, Tender Kitchen in the former Arsenal Bank Building on Butler Street in Lawrenceville. Given Jeff’s intelligence and apparent great instincts, Pittsburgh can look forward to another hugely successful restaurant.

 

 

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Watching A Business Grow: BW Wholesale Florists

January 21, 2013 | Posted by Ken Eisner | No Comments

Approximately 15 years ago, a family friend, Jules Kruman, who at the time was in his 70s suggested that I reach out to a friend of his, Mike Ulrich, because he thought it would be a good personal and business relationship. Candidly, while I have always admired Jules, who is soft spoken, extremely intelligent, and very successful, I doubted that this connection would ultimately result in a lifetime friendship and business relationship.

That could not have been further from the truth. I had lunch with Mike shortly thereafter, who is similarly to Jules, extremely understated, showing up with an unshaven face and baggy jeans. We immediately hit it off. Mike is genuine, kind, and extremely intelligent.

Mike had recently moved to Pittsburgh from Jamestown, Pennsylvania to expand his family’s wholesale flower business, BW Wholesale Florists. He had purchased a warehouse on Penn Avenue, approximately six blocks from where Children’s Hospital of Pittsburgh now sits.

BW-Wholesale-PittsburghOver time, so many trucks were pulling into the Penn Avenue warehouse that the business growth exceeded zoning limitations,  forcing Mike to move the business. He therefore purchased another building in the Strip District. Since that time, he purchased several other commercial properties in the Strip District as well as purchased Keystone Ribbon Company, a floral accessory company and purchased that building as well on Penn Avenue in the Strip District.

BW Wholesale went from being a bit player in the wholesale floral market to being the #2 wholesale flower business in the area. Despite the success of the business and the numerous commercial properties that Mike now owns, Mike remains as modest as ever.

As a lawyer, there are few greater feelings that than watching clients successfully grow their businesses. In this case, BW Wholesale has grown beyond anyone’s reasonable expectations. Mike is a pleasure to have as a business associate, but more importantly, as a true friend.

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The Best Burgh’er

January 14, 2013 | Posted by Ken Eisner | No Comments

I am always looking for a good hamburger. I grew up loving Tessaro’s, a burger so good that the Pittsburgh Post-Gazette used to have a category entitled “Best Burger other than Tessaro’s.”  So, when I received a Groupon offer for Burgh’ers Restaurant in Zelienople, Pennsylvania with a promotion indicating that it was the best burger in Pittsburgh, I could not resist.

Literally hours later on the same day, I received a call from Fiore Moletz, the owner of Burgh’ers. Fiore is an excellent chef, having acquired a significant amount of his experience working directly under the executive chef at Lidia’s, an excellent Italian restaurant. Fiore asked me to handle a small legal matter for him. After laughing about the fact that I had just purchased a Groupon to his restaurant hours earlier, I challenged him on the representation that his burger was the best in Pittsburgh. He shared that his burger recently was in a competition with all of the top burger restaurants in Pittsburgh and had won the competition. Of course within a week, my family and I ventured to Burgh’ers.

Burger-Burghers-ZelienopleBurgh’ers is located just north of the town of Zelienople, in a strip mall on the left side of Route 19. The burger is amazing. IT IS THE BEST BURGER IN PITTSBURGH!  Better than BRGR, Burgatory, and yes, Tessaro’s. While the appearance of the restaurant was initially not too impressive, the restaurant has since been refurbished, and now also has a cool atmosphere.

I know, I know. You are probably thinking that you don’t want to drive to Zelienople. For this burger, it’s worth it. However, if you are still not convinced, be patient. If all goes well with negotiations, Burgh’ers will be opening in Cranberry Township within the year.

The burger is so good that I predict that it will work its way into Pittsburgh and we will eventually see a Burgh’ers restaurant somewhere in the heart of the City of Pittsburgh.

So, if you are up north, make the trip to Burgh’ers. You won’t be disappointed.

 

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The Day that the Steelers and I Grew Up

January 3, 2013 | Posted by Ken Eisner | No Comments

Where were you when the Immaculate Reception happened?

I, like many Jewish boys celebrated my Bar Mitzvah slightly more than 40 years ago. I spent years preparing for this momentous event in my life.

Franco Harris Immaculate ReceptionOn the Friday before my Bar Mitzvah, my Dad went to the airport to pick up some relatives that were arriving from Philadelphia. Also picking up his family was Franco Harris, a relatively new Steelers running back. My Dad got Franco’s autograph!

During the service the next morning, when my brother David came up to do his part, he shook hands with me. When he released from the handshake, there was a card in my hand, that being Franco’s autograph. Services were beautiful and ended at noon.

My Dad had obtained several tickets to the Steelers playoff game that day and was taking my brother and a few relatives from Philadelphia. We had earlier made a deal that I would go to the next playoff game, but my brother got to go to this one. Therefore, my Dad rushed people through the reception line at noon and off they went to the Steelers game.

And me?  Well, I went to have lunch with the ‘ladies’ at an old time deli called Weinstein’s. There, I sat bored at lunch with a radio to my ear listening to the Steelers game.

My Bar Mitzvah was on December 23, 1972, the Day of Franco’s Immaculate Reception. While many will proclaim that they were at the game, I listened to it while sitting with the ‘ladies.’  While it may not have been the greatest way to have celebrated the Immaculate Reception, it was certainly unique. Last week, we celebrated the 40th anniversary of the Immaculate Reception and my Bar Mitzvah as well. A Bar Mitzvah is a day in which a boy is recognized under Jewish law as becoming a man. Similarly, that day has become known as the day the Pittsburgh Steelers became the legacy football team that they are today.

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An Estate Plan Is Far More Than A Will

October 29, 2012 | Posted by Ken Eisner | No Comments

Estate_planOften, when I ask my clients about their estate plan, they inform me that they have a will. They are surprised when I inform them that an estate plan is far more than a will. To appreciate what is involved in estate planning, one needs to understand that upon one’s death, assets transfer in three ways:

    1. Operation of Law – assets that are owned jointly for the most part transfer to the other joint owner, regardless of what is set forth in your will;
    2. By Contract – life insurance policies, profit sharing plans, annuities, and other investment vehicles require a beneficiary designation. Again, regardless of what your will provides, the proceeds from these investment vehicles go to the named beneficiaries; and
    3. Probate – if you have a will, then probate occurs through the will. If you do not have a will, then your assets will transfer pursuant to the intestacy laws, which are laws established by the state to set forth how your assets shall be distributed.

It is important to ensure that all of the mechanisms work together and are consistent with each other. Too often, people spend significant amounts of time determining the manner in which they want the distribution of assets made to their beneficiaries in their wills and then only take two minutes to decide who will be the beneficiaries under the investment vehicles that are transferred by contract as described above.

Additionally, an estate plan includes Financial Powers of Attorney. There are a few types. One type is a power of attorney that goes into effect immediately and another type is one that does not go into effect until you are determined to be incompetent, in other words, incapable of making rational decisions. There are obviously many variations of both of these types.

A Health Care Declaration gives a person the authority to make decisions regarding your health care, such as consenting to medical treatment, should you become unable to make such decisions on your own behalf.

The Living Will declaration expresses your desire to receive or refuse life sustaining treatment when you have been determined to be in a terminable condition or complete vegetative state. Your agent only has the power to act if you lack the capacity to make or communicate a decision.

In addition to these documents, it is becoming more and more popular for people to decide how they want their bodies to be treated upon death. I often prepare documents setting forth instructions for cremation and even more recently, burials. In that regard, Pennsylvania recently opened its first green burial only cemetery, Penn Forest Natural Burial Park, just outside of Pittsburgh. Green burial is a method that supports the earth’s ecosystem instead of damaging it as traditional methods do. In green burial, no toxic chemical embalming fluids are used, caskets, if used at all, are made of biodegradable materials. The body is buried close to the ground’s surface, so it nourishes plant growth as it decomposes. To learn more about Penn Forest Natural Burial Park, visit pennforestcemetery.com.

If you have not addressed all of your estate planning needs, including ensuring that all beneficiary designations are accurate, please contact your estate planning lawyer as soon as possible. Don’t wait until it is too late!

 

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In Law We Trust (Not)!

October 8, 2012 | Posted by Ken Eisner | No Comments

I frequently receive calls from clients requesting that as part of their estate plans, they want me to draft trusts. I analogize this request to me going to my physician and telling him what medication I want before the diagnosis. Almost always, when I ask why they want a trust, they respond they want to avoid taxes. Apparently, what they were told was that they could avoid probate; what they heard was that they could avoid taxes.

Trusts-Wills-Estate-PlannerIn fact, unless the trust has certain characteristics, including primarily being irrevocable, trusts do not save any taxes. In many instances, trusts have become far more voluminous and expensive than the probate process. In certain states, probate fees are significant. In Pennsylvania, they simply are not.

Misnomers regarding living trusts have become so widespread that the Pennsylvania Attorney General has sued no less than 16 individuals, including many attorneys over these living trusts sales scams.

Here is the nitty gritty on trusts:

  1. There are many type of types of trusts. In its simplest forms, trusts are either: (a) revocable trusts, which can be changed at any time and irrevocable trusts, which have significant limitations as to change; and (b) living trusts which are created and go into effect during your lifetime, and testamentary trusts, which are drafted as part of your Will, and do not go into effect until you die.
  2. A trust makes sense if you want (a) to avoid probate and desire privacy as to your financial matters; or (b) for Medicaid planning purposes in the event significant nursing home care may be anticipated.
  3. Trusts for the most part have minor tax implications. However, if certain assets are placed into an irrevocable trust, there can be significant tax savings, including federal estate taxes.

If you want to prepare your estate plan, regardless of whether you think a trust is the way to go, I recommend that you contact a law firm that specializes in estate planning. I hear that Eisner Law is excellent.

 

 

 

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What the heck is alternative dispute resolution?

September 12, 2012 | Posted by Ken Eisner | No Comments

Alternative dispute resolution is a recent trend in law. But what exactly is it? As most know, litigation in the court system can be time Alternative Dispute Resolutionconsuming and very expensive. As a result, alternative dispute resolution has become a much more common forum to resolve disputes. There are essentially two types of alternative dispute resolution: mediation and arbitration.

Mediation is when a third party, the mediator, assists the parties to negotiate a settlement. The mediator uses various techniques to open, or improve dialogue between the parties, aiming to help the parties reach an agreement. The benefits of mediation include:

  • Cost, typically significantly less than litigating in court;
  • Confidentiality;
  • Control, in that both parties must be satisfied with the result; and
  • Finality, presuming that the parties are satisfied with the result, they are willing to fulfill their obligations without additional intervention.

Arbitration is a form of alternative dispute resolution where the parties present their cases to one or more persons, and agree to be bound by that person(s)’ decision. Unlike mediation, in arbitration, typically one party wins and the other loses. Similar to mediation, however, it is usually less costly than litigation.

Arbitration is most common in contractual disputes when the parties agree upon in the contract itself, before there is a dispute, to resolve any dispute in arbitration. If the agreement is silent as to this issue and one party does not desire arbitration, the parties are left with no other result but to litigate in court.

So, we hope that helps to educate you about alternative dispute resolution! If you have any questions, let us know.

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“Your greatest asset is your house,” is a saying you have probably heard before.  But for business owners that may not be the case.

Sorry we are closed

Recently, a new client contacted me and informed me that he was retiring, moving to Florida, and inquired as to how to wind down his medical practice.  I asked him whether he was planning to simply close up his practice.  He asked confusedly what that had to do with it.

I explained to him that his greatest asset may not be his house, but may be his medical practice and had he considered a business succession plan.  A business succession plan is essentially the identification and development of potential successors to a business and then a plan to transfer that business to the successor for fair market value.

While it is preferable to enact a business succession plan many years before you want to exit the Newspaper ad business for salebusiness, we were nonetheless able to locate a purchaser for this medical practice and turn an asset that he was planning to “wind down” into a several hundred thousand dollar profit.

 

A lesson to be learned here is that if you own your business, it is a valuable asset and that proper succession planning is necessary to maximize its value.

We Are (Still) Penn State…Just Better!

August 13, 2012 | Posted by Ken Eisner | No Comments

As a Penn State alumnus, many people have asked me my feelings about the recent events.  As to my association with Penn State, I We Are Still Penn Statehad a wonderful four years.  Those years were academically challenging but also extremely enjoyable.

My remote connections to the individuals involved included doing play-by-play football reporting for the student station and having a sports talk show in which I had Joe Paterno as a guest.  I found Joe Pa to be warm and engaging.  Approximately three years ago, I became a mentor for a junior liberal arts student.  She was a member of the President’s Academy and through her I had the opportunity to meet Graham Spanier.  I only spoke with him for a few minutes, but he appeared to be extremely genuine.

Obviously, what occurred in State College over these past few decades and what has been exposed in recent months is absolutely inexcusable and deplorable.  The actions of all of the individuals involved are unacceptable.

Having said that, I believe that all of the recent consequences emanating from the Freeh Report are premature and misguided.  The Freeh Report is a one-sided account of the circumstances, including having failed to interview many of the key witnesses.  It is not until all of the facts are known that a decision should have been made, including the removal of the Paterno statue.

The NCAA’s punishment is ridiculous.

First, the NCAA used its strong arm to avoid due process.  Due process in its simplest form is for all parties to have an opportunity to be heard.  That didn’t happen here. Second, those that are being hurt the most by the punishment are the current players, none of whom deserve any blame.  Ironically, the elimination of scholarships and prohibition from bowl games may work in Penn State’s favor.  As to the prohibition from bowl games, frankly, Penn State has not been in any significant bowl game for several years.  As Bill O’Brien, the current coach stated “We get the chance to play six bowl games per year in front of 108,000 people.  I do not know how many bowls have 108,000 people.  Last time I checked, there aren’t any.”  Not only will the fans be excessively supportive at home games, but the team will receive a certain level of added support as the visiting team.

While what this monster Sandusky did and the lack of concern for the victims is unacceptable, let’s not lose sight that Penn State remains a leading academic and research institution.  We are 560,000 alumni and 40,000 students each year.  THON is the largest student run philanthropy organization in the world, which, since 1973, has raised more than $98 million for the Four Diamonds Fund, an organization that provides support for patients and families battling pediatric cancer.

As to the origin of “We Are Penn State,” it dates back to 1946, when Penn State voted unanimously to cancel a game against a then segregated University of Miami Hurricanes team because it wanted Penn State to abandon its African American players.  A similar situation occurred in 1948, when Southern Methodist University discouraged Penn State from bringing its African American players to the Cotton Bowl.  The team refused to even meet with SMU regarding the matter, instead declaring…

 

“WE ARE PENN STATE”

 

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