Frequently Asked Questions

As we get older, we are faced with many expensive challenges during life and after death.  The cost of long term care can be anywhere from $5,000 - $15,000/month.  The Pennsylvania Inheritance tax can be anywhere from 4.5% - 15% of everything you own.  On top of that, the probate process can cost an addition 5% of your estate.  And finally, whatever is left could be exposed for total spend down to a nursing home before you can qualify for Medicaid to pay for that expense.  By planning ahead at just the right time prior to selling your home, you can proactively reduce all of the above financial exposures simultaneously. 

No, there is a one time fixed fee for all of the legal work which is done prior to closing.  Our fee is collected at closing from the Seller’s side of the settlement statement and covers all legal fees involved in the matter regardless of time spent. 

The basic one-time legal fee for creating the Trust and handling all related matters starts at $7,500. This fee is collected after the work is completed at closing, so no payment is required upfront. This fee represents a fraction of the overall savings to the client, which can be quantified before engaging the firm.

The VA has a 3 year look back period for gifts to third parties or trusts for basically any asset owned by the Veteran or spouse EXCEPT the primary residence REGARDLESS OF VALUE.  So, the home can be transferred without penalty to the trust BEFORE closing date and the Trust will be the Seller at closing.  

Veterans or spouses/widows of Veterans who served at least 90 days active duty during a wartime period recognized by the VA.   

About $150,000 not including the value of the primary residence and it increases annually with the inflation index.  But if a Veteran has more than this amount there may be some other planning techniques to reduce the value of the assets to expedite eligibility for the program. 

No, there is no change to a person’s Social Security income.  The VA income is in addition to Social Security and both are paid monthly from the U.S. Treasury.  

Most people’s homes qualify for what is known as the primary residence exemption in that the first $250,000 of gain for a single person or $500,000 of gain for a married seller is not taxed and that’s why most people don’t pay capital gains taxes on the sale of their home.  You can design a Trust in various ways and one option is to enjoy the same tax free sale of the home from the Trust.   

The Trust is designed so that transfers of real estate into the Trust are exempt from Pennsylvania Realty Transfer Taxes.  The ultimate sale of the home out of the Trust to a non-exempt purchaser will have the same application of one half of the transfer taxes paid at closing just like when a Trust if not used.   

Generally, a family member, like an adult child of the Veteran will open up a bank checking account in the name of the Trust with the adult child acting as Trustee and then the Trustee can invest and manage those funds. 

Yes, the Trust can be designed to avoid the Pennsylvania Inheritance Tax, but there is a one year look back period from the date the home is sold by the Trust so it’s important to get started as soon as possible. 

Yes, the Trust can be designed to protect assets in addition to the home but remember that Medicaid has a five year look back for gifts to Trusts so it is once again important to get started as soon as possible.   

Yes, when properly set up and funded, the Trust avoids probate upon the death of the Veteran or his widow thus making the post death administration process more efficient with no court fees.