Breed & Associates Blog

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UTMA Anyone?

The Uniform Transfers to Minors Act (“UTMA”) is an important estate planning tool to consider when a client has children or grandchildren who are minors. Under this statute, property of any kind can be transferred by way of gift, under the terms of a will or trust or by nominating a custodian to receive the property on behalf of the minor.

Should I have a Will?

The answer is yes! No matter your current situation, it is always a good idea to have your last wishes memorialized in writing. Your Last Will & Testament will be your final words and directives and it is important that your wishes are known to your family and heirs. Equally important, having a valid Will in place works to minimize confusion and prevents the court system from getting involved in dividing your estate. The loss of a loved one is a difficult experience and when your...

Sports Betting May Be Coming to Your State

Gamblers and taxing authorities rejoice. Although not directly related to our firm’s practice areas – well not really related at all – the Supreme Court of the United States recently decided in a landmark case which will have an incredible impact across the country. In Murray v. National Collegiate Athletic Assn., the Supreme Court invalidated a 1992 Federal law which effectively prohibited sports betting in almost every State. This law – known as the Professional and Amateur Sports...

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Caring for Your Four-Legged Friend: Pet Trusts

Planning your estate is usually not a simple task and often requires you to make tough decisions regarding who gets what. Step one is to determine what constitutes the estate and obvious items are a house, bank account or 401k plan. What is not so obvious, and should not be overlooked,are our pets. Pets are important parts of our lives and to many pet owners, they are part of the family--it is only fair that New York laws provide a tool to ensure that a pet is cared for after someone has...

UTMA Anyone?

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The Uniform Transfers to Minors Act (“UTMA”) is an important estate planning tool to consider when a client has children or grandchildren who are minors. Under this statute, property of any kind can be transferred by way of gift, under the terms of a will or trust or by nominating a custodian to receive the property on behalf of the minor. 

Let’s face it, minors are typically not mature enough regarding decisions about money.  The concern being that if money is given to a child outright, it will be squandered or used for foolish purchases.  In comes the UTMA statute which not only delays the receipt of the property, but it also allows the funds to be invested and is an easy way to gift money to a minor to take advantage of the annual gift tax exclusion which is currently $15,000 for 2018.

Under Pennsylvania’s UTMA statute, click here, the minor is automatically entitled to possession of any property transferred to him or her under this statute upon turning 21 years old.  In some instances, if the property was given to the minor by nominating a custodian or by way of will or trust, receipt can be delayed further, however no later than the minor turning 25 years old. 

Another advantage of the statute is its simplicity and low cost.  Whether opening a custodial account, titling real estate in the name of a minor or bequeathing property, the person transferring the property simply needs to indicate that the transfer is being made in the name of or for the benefit of “[ minor’s name] under the Pennsylvania Uniform Transfers to Minors Act.”  For many clients, transferring property to their child utilizing the UTMA statute may be the perfect, cost-effective tool.

Although this is simpler and less costly than creating a trust, there are drawbacks.  A person who creates a trust can delay the minor’s receipt of the property to well past age 25.  If a parent or grandparent is truly concerned about when the property will be received, then the UTMA statute may not be the right fit.  In addition, the UTMA statute does not impose the strict fiduciary obligations imposed on a trustee – here a custodian simply needs to act as a “reasonably prudent person.” 

All things considered, the UTMA statute can be a useful way to transfer wealth to a younger generation while ensuring that they will receive it at a more mature stage of life. 



Should I have a Will?

The answer is yes!  No matter your current situation, it is always a good idea to have your last wishes memorialized in writing.  Your Last Will & Testament will be your final words and directives and it is important that your wishes are known to your family and heirs.  Equally important, having a valid Will in place works to minimize confusion and prevents the court system from getting involved in dividing your estate.  The loss of a loved one is a difficult experience and when your intentions are clear, the burden of not having to guess your wishes is a welcome relief for your heirs.  


In addition to the important points above, failing to have a Will could have some surprising and potentially upsetting consequences depending on your state’s laws.  


Dying without a Will is known as dying “intestate” and your estate would be subject to intestacy laws which vary state-by-state.  Without knowing the consequences, a person may wonder ‘why do I need a Will? – once I pass away everything will go to my spouse and that is that.’  Not so – depending on by whom that person is survived, that may not be the case.  For example, in New York if a person is survived by a spouse and children, one-half of the estate plus fifty thousand dollars will be inherited by the surviving spouse and the remainder of the estate’s assets is divided equally between the children.  


In another example, let’s say a Pennsylvania resident dies and is survived by a spouse and a parent but no children.  In this case, thirty thousand dollars plus one-half of the estate is inherited by the surviving spouse and the remainder would go to the surviving parent of the deceased.  In both of these examples, the individual person’s family structure will dictate the line of succession but it is feasible that siblings, aunts, uncles, grandparents and grandchildren could be potential heirs.    


Another point to note is that since the line of succession in the above-mentioned states only includes relatives, a person who may want to provide for a good friend, caretaker or colleague would be out of luck without a Will.  


Having a validly-executed and well-drafted Will also eliminates potential windfalls for relatives you did not want to receive anything and ensures that you get to control who gets what after your death. 


New York

Pennsylvania 

Sports Betting May Be Coming to Your State

Gamblers and taxing authorities rejoice.  Although not directly related to our firm’s practice areas – well not really related at all – the Supreme Court of the United States recently decided in a landmark case which will have an incredible impact across the country.  In Murray v. National Collegiate Athletic Assn., the Supreme Court invalidated a 1992 Federal law which effectively prohibited sports betting in almost every State.  This law – known as the Professional and Amateur Sports Protection Act (“PASPA”) was enacted at a time when other forms of gambling were legalized and opponents of gambling feared universal sports betting was next.  In a nutshell, the controversial PASPA provision, which was at the heart of the Supreme Court’s decision last week restricts States from operating, sponsoring or promoting sports gambling schemes.


To generate revenue and keep Atlantic City relevant, in 2012 New Jersey enacted a law authorizing sports gambling.  The major sports organizations and NCAA challenged that law – citing the above-referenced PASPA provision – and the courts ultimately agreed with the Supreme Court declining to hear the appeal.  In 2014 New Jersey took a second bite at the apple and enacted a law that “repealed” provisions of State law which prohibited sports betting in Atlantic City.  Again, this law was challenged by the previous opponents and the lower courts again held that New Jersey’s law was expressly prohibited.


Thankfully (depending on your point of view) the Supreme Court decided to hear the case this time around.  Citing the powers vested to Congress, the Court noted that absent from that list of powers is the power to issue direct orders to the governments of the States.  Similarly, the Court held that Congress may not commandeer the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program.  With those constitutional footings squarely in place, the Court invalidated the PASPA provision in question holding that it unequivocally dictates what a State legislature may and may not do and therefore infringes upon a State’s sovereignty.


Thus, the Supreme Court has made it clear that it is up to each State to address its own gambling legislation and gave the State of New Jersey a needed victory – especially considering that it opted not to pass sports gambling laws way back in 1992 despite being given the chance.  While New Jersey is likely now off to the races to build up its sports gambling presence at the horse tracks and in Atlantic City, you can bet that other States will look to follow suit and tap into the market previously dominated by Las Vegas and the internet.


If you are interested in reading the entire opinion, click here.  If you do happen to hit it big and need invaluable guidance in planning your estate, well that is something we can help with!


Caring for Your Four-Legged Friend: Pet Trusts

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Planning your estate is usually not a simple task and often requires you to make tough decisions regarding who gets what. Step one is to determine what constitutes the estate and obvious items are a house, bank account or 401k plan. What is not so obvious, and should not be overlooked,are our pets. Pets are important parts of our lives and to many pet owners, they are part of the family--it is only fair that New York laws provide a tool to ensure that a pet is cared for after someone has passed away.

The New York legislature enacted §7-8.1 of the EPTL “Trusts for Pets” which permits a person to establish a trust for the care of any domestic or pet animal that terminates upon the death of the animal.  The full text of the statute can be accessed by clicking here.

Establishing a pet trust removes much of the risk of simply leaving an animal to someone,hoping that he/she takes good care of your pet and imposes an additional check and balance since the trust is subject to court supervision and intervention, if necessary. Unlike an ordinary beneficiary under a Will, a trustee has an obligation to ensure that the terms of the trust are honored and the animal is cared for according to those terms. Moreover, the statute provides that (absent wording to the contrary) the funds in the trust must be used only for the animal and not for any other purpose and grants numerous powers to the court. It may appoint a trustee, intervene if the trust terms are not being carried out and reduce the funds held in trust if it determines the amount “substantially exceeds” its intended use.

If you decideto create a pet trust, here are some helpful things to keep in mind:

  1. Discuss with the to-be caretaker his/her role and responsibility to care for the pet that way there is no “surprise” when someone finds out a pet owner wanted that person to care for the pet.
  2. Make advance arrangements for the care of the pet until the Will is admitted to probate to avoid any confusion or lapse in care in the time between date of death and granting of letters testamentary.
  3. Include a provision in the Will that empowers the Executor to use funds in the estate to care for the pet until the pet goes to the caretaker.
  4. Only leave a reasonable amount to care for the pet in order to avoid any challenges by disgruntled heirs to the terms of the trust or reductions by the court. (In one instance, after a side agreement was reached by all interested parties, the court entered an order reducing the $12 million left in trust for a dog to $2 million).
  5. When determining the amount to leave, consider the age of the pet along with all other normal expenses incurred in the past such as grooming, veterinary costs, medicines, food.
  6. If the pet will be left to a shelter or charity, research that organization and consider leaving cash funds to the organization in order to achieve a better result.
  7. Consider where any remaining funds should go after the pet dies and indicate such in the trust.
  8. Be as specific as possible as a court will look to the pet owner’s intent.

Overall, a pet trust is a much better way to ensure that a pet continues to receive the care and attention that it received while the owner was alive. If you are interested in establishing a pet trust, please contact us and we would be happy to help you.