Protect Your Family and Your Wealth

When you have an estate plan you protect your family and your wealth. Do you have an estate plan yet? If not, how do you plan to ensure your assets end up in the right hands?

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Protect your family and your wealth.
What is an Estate Plan?

An estate plan outlines how to manage and distribute a person’s assets and property after their death or incapacity. This set of legal documents and strategies can include a will, trust, power of attorney, and other documents.

Together, these materials provide guidance on how to carry out a person’s wishes while protecting their family and loved ones. They do this by distributing the person’s assets according to their wishes, rather than by state law.

How Do Estate Plans Protect Your Family?

Estate plans protect an individual’s family and loved ones in a variety of ways, some less obvious than others.

Most obviously, a will allows a person to specify who will inherit their property and assets, and in what proportion. Trusts can protect assets for the benefit of family members, like children or grandchildren, and to provide for their financial needs.

But they can help provide for an individual’s family and loved ones prior to their death. Say a person becomes incapacitated, estate plans can provide for their care through powers of attorney and health care directives. They appoint someone to make financial and medical decisions on someone’s behalf if they are unable to do so themselves.

This helps to prevent disputes and ensure a person’s wishes are respected. It also protects their wealth from misuse by making it harder for anyone squander it.

Additionally, estate plans can help to minimize taxes and legal expenses, which reduces the burden on a person’s family. Further, in certain circumstances they help the estate avoid the time-consuming and expensive processes in probate court.

How Do Estate Plans Protect Your Wealth?
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Again, estate plans can also protect a person’s wealth by minimizing taxes and legal expenses. Trusts, for example, minimize estate taxes and avoid the probate process.

In the event an individual becomes incapacitated, estate plans can provide for the continuity of their business or professional practice. Business succession planning can help to ensure that the business continues to operate smoothly, which also protects that person’s wealth.

Worried that you haven’t protected your family and wealth with a proper estate plan? Relax! Our estate planning professionals can help you create a plan that respects your wishes and protects your loved ones and assets. We work with people from all walks of life and income levels. Whether you’re of modest means or have extensive asset holds, you can protect your interests. We’ll help you put in place the documents and legal instruments that can help you achieve your goals.

To learn how, call us 724-216-5180 or contact us online to schedule a consultation.

Tax Evasion-What Not to Do

Tax Evasion-What Not to Do. When the federal government couldn’t put together criminal charges on Al Capone, tax evasion brought him down. While he’s probably the most notorious tax evader, plenty of other high-profile tax evaders saw their days in court, too.

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Tax Law-What Not to Do
What Not to Do

Every so often, celebrities will make the headlines for massive tax evasion and tax fraud criminal cases. They often face time in prison and fines running into the tens of millions.

While you may not make gangster or celebrity-level income, choosing to avoid paying your taxes can land you in similar hot water with the IRS. I cannot stress enough that if you choose to “forget” to pay your taxes, the IRS will eventually find you.

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Tax Minimization Methods

Don’t try to ignore or run away from your tax liabilities. Instead, work with a tax professional to use many different tactics to minimize your taxes legally. Here’s just a short list of examples:

1. Municipal Bonds

When you purchase municipal securities you are in effect loaning a state or local government money for capital expenditures, the interest they pay are tax exempt for most taxpayers.

2. Max-out Retirement Accounts and Employee Benefits

Contributing to a workplace 401(k) or 403(b) plan does more than help solidify your nest egg for retirement. As of 2022, you can contribute up to $20,500 ($27,000 for those 50 and older) and reduce your taxable income.

3. Use a Health Savings Plan

If you use a high-deductible health insurance place, you can reduce your taxes with a health savings account (HSA). For 2022, individuals can contribute up to $3,600 a year ($7,300 for families) that are 100% tax deductible.

4. Claim Every Legal Tax Credit

Depending on your situation and income levels, you can claim credits for a lot of different expenses, including:

Earned Income (depending on income levels and number of children)

American Opportunity Tax Credit (during first four years of a student’s postsecondary education)

Saver’s Credit (depending on income levels and retirement contributions)

Child and Dependent Care Credit (depending on income levels and qualified expenses for the care of children and disabled dependents)

Quarterly Tax Payments

If you own a business or have Self-employment income, paying estimated quarterly taxes should become part of your operations. Anyone with rental property income or investments may also need to pay estimated quarterly taxes, even if the employer withholds taxes from their paychecks.

If you wait until the end of the year, you’ll likely have to face a massive bill. Not only that, but you may also face penalties for late payment on those quarterlies. Overestimating or underestimated earnings can get complicated, especially with the IRS wanting specifics forms for different scenarios.

Using Trusted Tax Professionals

All these options come with their own complications, which is why we recommend working with a trusted tax professional. Experts like those in our office can help you stay on the right side of the law. And we’ll ensure you pay the lowest possible taxes for your personal or business income. Additionally, follow along with our Tax Evasion-What Not to Do blog to stay on the up and up.

Schedule a consultation with our office at 724-216-0704 or use our online form.

Tax Planning for Consistency

Tax Planning for Consistency is a blog that goes right along with our previous tax planning article to eliminate surprises and save money. Now that the dust has settled with tax season, let’s take a look back at what happened. Were you surprised by how little you got back in your refund this year? Or maybe you owed more than you’d expected? Safe to say, surprises from the IRS generally don’t mean good news. When you do tax planning for consistency every year, you’ll find you’re less and less surprised each April. But you have to do your homework… or know someone who can help you.

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Were you surprised by how little you got back in your refund this year?
Better Planning Eliminates Surprises

Instead of waiting until somewhere around mid-April to get a handle on your tax responsibilities, review them quarterly. If you own a small business, that means making payments or submitting loss statements on quarterly tax estimates.

Additionally, review your purchasing needs for new equipment or evaluate how other expenses might impact your tax responsibilities. Consider any new employees or contracts you’ve taken on. This is also a good time to review profits and losses to help you better plan for the next quarter.

Not only that, but you can also get a better idea of how well you’ve accounted for year-end taxes. Also, by sending accurate quarter tax estimate payments you eliminate those pesky late penalties the IRS loves to tack on.

When you take time to plan out your strategy, you can attack your taxes each year in more manageable chunks. Then you get a more consistent (and reliable) idea of your tax liability.

Changes in Tax Law

The IRS likes to keep everyone on their toes by changing the rules every year. Everything from standard deduction and tax brackets shifts pretty much annually. But pandemic-related tax provisions made things even more complicated, especially when they went away.

Occasionally, changes in tax laws work to your advantage, but sometimes only temporarily. For example, the child and dependent care credit boosted the maximum credit percentage in 2021 (up to 50%) dropped to 35%. And while it was fully refundable in 2021, that’s no longer the case in 2022.

But more likely you saw things like unemployment income taxed again. In 2020, the American Rescue Plan allowed impacted individuals to waive up to $10,200 of paid unemployment. In 2021? If you didn’t already withhold taxes from your benefits, unemployment compensation taxation may have come as a surprise.

Finally, unsure of how to get started? Relax! Our experienced tax professionals have helped hundreds of taxpayers just like you. We’ll help you understand how the latest changes in the tax code might affect you. And we’ll help you plan your year for better consistency. Complete our online form or call us today at 724-216-5180 to learn more.

Cut those taxes by investing in a consistent tax planning strategy.

Five Benefits of Tax Planning

Five Benefits of Tax Planning covers five reasons why a proper tax plan saves you time, money, and stress. Now that April’s rush to file taxes on time has settled down, let’s talk 2022 taxes returns! I can hear you groaning from my office. You probably don’t want me to tell you this, but some people need reminding. I’ll spare you the lecture and give you five benefits of tax planning.

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Tax planning saves you time, money, and stress.
Quarterly Reviews

Next year’s tax return probably doesn’t rank very high on your list of priorities right now, does it? But when you take the time to make incremental adjustments during the year, your April will feel much less painful.

Whether you file personal or business returns or both, quarterly reviews help you get more organized for April. Businesses need to file quarterly estimates and quarterly reviews help to decrease the pain of those sessions, too.

The Payoff of Planning

1. Less Stress

I don’t know anyone, including adrenaline junkies, who enjoys scrambling around looking for lost receipts at the last minute. When you plan out a bit of work each quarter, that work creates much less stress ahead of filing.

2. Fewer Errors

Less stress and more time to check your work will also result in fewer errors. Tax return errors, especially when you file yourself, can get incredibly expensive if you mess something up. You also have time to run questions by a tax planning professional to further reduce your chance of error.

3. Avoid Penalties

When you wait to file taxes until the last minute, you may miss something that you should’ve submitted. By the time the IRS is ​kind enough to tell you, they’ve usually already tacked on penalties for filing late. Penalties continue to accrue interest until you pay off the principal, too. Ultimately, this makes the bill much more expensive than the original amount.

4. Minimize Tax Liability

With proper time to plan, you can also make more strategic decisions on how to minimize how much you owe. Maybe you decide to make a larger purchase this year or increase your retirement savings contributions. If you wait until the last minute, you won’t have time to adjust your course.

5. Research New Tax Laws

As you adjust your course, you can also see how new tax laws impact your current plan. The IRS loves to come up with new laws every year. If you don’t keep up with them, you can leave money on the table or end up owing more.

Need help getting it together for next tax season? Our experienced tax law professionals can help you minimize any taxes you owe and ensure you comply with all applicable laws. We can do a much better job together if we talk regularly throughout the year. And you’ll learn way more than just these five benefits of tax planning. Complete our online form or call us today at 724-216-5180 to learn more.

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kind enough to tell you, they’ve usually already tacked on penalties for filing late. Penalties continue to accrue interest until you pay off the principal, too. Ultimately, this makes the bill much more expensive than the original amount. 4. Minimize Tax Liability With proper time to plan, you can also make more strategic decisions on how to minimize how much you owe. Maybe you decide to make a larger purchase this year or increase your retirement savings contributions. If you wait until the last minute, you won’t have time to adjust your course. 5. Research New Tax Laws As you adjust your course, you can also see how new tax laws impact your current plan. The IRS loves to come up with new laws every year . If you don’t keep up with them, you can leave money on the table or end up owing more.

Seven Tax Considerations for New Businesses

Seven tax considerations for new businesses is our blog topic this month. Did you start a business in 2021? As we enter tax season, we see a lot of new owners make several common mistakes. Here’s seven tax considerations for new businesses to keep you out of hot water with the IRS.

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Newer business owners need to know small business taxes.
1. Yes, You Have to File Taxes.

Above all, you’ll need to understand how rules changes if you’re new to running a business. As an individual, you only need to file taxes if your gross income exceeds $12,550. That number drops to a net income of $400 as a business owner. You also have to carefully monitor all your income and expenses, much more than as an employee.

2. And Yes, You May Have to Pay Quarterly Estimated Taxes.

When you work for someone else, they take takes out of your paycheck on your behalf. So, when you work for yourself, the IRS expects you to estimate your taxes and submit them quarterly. Failing to do so sets you up for underpayment penalties.

3. Claim Start Up Costs.

Even if you run your business from your kitchen table, it cost money to get set up. You can deduct anything you needed to pay to get up and running, including research and training (Subject to a $5K Limitation ). You can claim everything from marketing, website creation, office furniture and supplies, vehicle costs, and more.

4. The IRS Sees You As ‘Fresh Meat.’

Unfortunately, having your own business raises all sorts of interest from the IRS. Getting audited isn’t the end of the world, IF you’ve carefully followed directions on expenses and deductions with receipts. Keeping up with all the changes year to year can get overwhelming. And if you make a mistake, it can get expensive really quick.

5. Don’t Mix Business and Personal Finances.

If you’ve just started out, you may not have thought about having a separate business checking account yet. But this is one of the first things you should do as a new business owner. Even if you barely edge over that $400 net income line, have a separate account for business income and expenses. This makes things easier to separate for filing purposes and cleaner during any audits.

6. Self-Employed? Don’t Expect a Refund.

Most employees look forward to late spring every year when they receive a windfall as part of their tax return. We’ll leave for another conversation as to why you should minimize tax refunds that basically serve as free loans for the government. Most small businesses serve as a pass-through entity for the owner’s income. Owners pay taxes on that income as part of their individual taxes without any withholdings to absorb the additional taxes. ​

7. Learn from this Return.

Even with a tax specialist helping you, expect a few lessons on how to improve next year. Look closely at your return. Go over it with a tax expert and make sure you understand any penalties or additional deductions for next year. We like to say it’s not rocket science. But, when you’re just starting out, it can really feel like it!

Did you start a business in 2021? If you feel unsure on what to organize or how to get started, relax! We hope that our Seven Tax Considerations for New Businesses blog helped a little.

Still confused? Our, our experienced tax professionals can help you minimize any taxes you owe and ensure you comply with all applicable laws. Complete our online form or call us today at 724-216-5180 to learn more.

7. Learn from this Return Even with a tax specialist helping you, expect a few lessons on how to improve next year. Look closely at your return. Go over it with a tax expert and make sure you understand any penalties or additional deductions for next year. We like to say it’s not rocket science, but when you’re just starting out, it can really feel like it! Did you start a business in 2021 ? If you feel unsure on what to organize or how to get started, relax! O ur experienced tax professionals can help you minimize any taxes you owe and ensure you comply with all applicable laws. Complete our online form or call us today at 724-216-5180 to learn more.

Prepare for the Inevitable Upcoming Tax Season

Every year right between Christmas and New Year’s people start dreading tax season. That shoe box or receipt drawer may not close all the way anymore. Maybe you just found the statement for quarterly tax estimates (from June) in another pile of papers. Likewise, maybe your resolution list from January 2021 just resurfaced that included “stay on top of taxes” on the list. You already know that when you prepare for the inevitable upcoming tax season, it will suck so much less. So, let’s get started!

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Get Out Ahead of Crunch Time

Rather than pouring yourself another cup of cheer and making tax preparations next year’s problem, face it head on. You can pour that cup of cheer if you’d like. However, digging in now will make Future You so much less stressed come tax time.

Picture yourself the evening of April 14, 2022, what do you see yourself doing? Do you see yourself furiously adding up totals? Trying to find random tax documentations? Or would you rather have plans to join your buddies for a well-deserved thirsty Thursday at the local watering hole?

Get Organized

Most tax experts will say it matters less how you organize your paperwork but more that you actually do it. So long as you have materials in order so that you can produce documentation requested for tax purposes, you’re good. You will save money in preparation fees.

If you don’t currently have a system or experience exasperated looks from your tax professional each year, ask yourself why. Perhaps your current system or lack thereof could use a tune up? Rely on the advice of experts on how to create or improve on your current techniques. You’ll make everyone’s lives easier.

Check Your Information

Double check that all your information on file with the IRS is correct, including direct deposit information for refunds. Even something as simple as an address change can get forgotten during a busy year.

Closely examine everything from dependent information to retirement and investment accounts to income streams. This year remember to check Economic Impact Payments and Child Tax Credit Updates, too, if applicable. Spotting differences now can avoid potential problems after filing.

Ask Questions and Get Clarifications Early

Do some early research to see if you need to file differently or can add new deductions. Whether you work with an accountant or use a self-service tax filing tool, ask follow-up questions from the experts.

Get clarification on changes in tax deductions early in the season so you have time to do something about them. Finding out about a new deduction does no good if you didn’t save the proof necessary to claim it.

Nervous about this upcoming tax season? How will you prepare for the inevitable upcoming tax season? Relax! Our experienced tax professionals can help you minimize any taxes you owe and ensure you comply with all applicable laws. We help our clients avoid legal issues with their taxes while providing peace of mind. Complete our online form or call us today at 724-216-5180 to learn more.

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Making Charitable Donations Part of Your Estate Plan

As you create an estate plan ( yes, you need one ), consider how your assets will be divided upon your death. Most people don’t consider charitable donations as a way to minimize estate/inheritance taxes. However, did you know that making charitable donations part of your estate plan could lessen the tax burden for your heirs? Read on to learn more.

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Why Designate Charitable Donations in Estate Plans?

For example, some people decide they don’t want to leave all their assets to their children or other beneficiaries. Likewise, others don’t have beneficiaries to leave their assets to but want to ensure their estate contributes to a lasting legacy.

For anyone passionate about a specific cause, making charitable donations part of your estate plan may be the right choice for you. Leaving funds or other assets to a designated charity could make the most impact. Tax-exempt charities are set up to maximize the effectiveness of gifts they receive, planned or otherwise.

Any funds given to a recognized public charity are not taxable. While this may decrease the overall amount any named beneficiaries receive, most people appreciate the sentiment during their grieving period. Making charitable donations part of your estate plan may be a good choice.

What Charities Count?

Any charity recognized by the IRS as a 501(c)(3) can receive tax-exempt donations as part of an estate plan. These include charitable organizations, churches and religious organizations, private foundations, and other non-profits.

In addition, depending on the size of your gift, you should contact the charity to inform them of your plans. They may need time to prepare for a large gift (over $10,000). They can also provide basic information to list in the estate plan to streamline the process. If you do name other beneficiaries in your estate plan, you should probably let them know your plans, too. This can minimize hurt feelings and contested wills upon your death.

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How to Get Started.

There are a number of ways to plan gift to charities, foundations, or others as part of your estate plan. Estate/inheritance tax rules seem to change every year. So, your estate attorney can work with your designated charities to determine which options make the most sense for everyone. By making your wishes clear in your estate plan, you leave little room for misinterpretation. You can minimize additional work for your heirs and maximize their tax benefits while supporting organizations important to you.

In conclusion, are you not sure how to name a charity in your estate plan? RELAX! Our estate planning experts can walk you through options. Each will fit your unique circumstances. We help with will preparation, trust creation and administration, probate administration, and more. Call us today at 724-216-5180 or complete the online form to schedule a free consultation.

What Makes a Great Estate Attorney?

When a person dies, what happens to their stuff? If they have an estate plan, they will have everything outlined. Preparation is key. Estate attorneys can help someone put together a will, set up trusts, and schedule charitable donations on the deceased behalf. A great estate attorney will also make arrangements for other common issues after a person passes. So, what makes a great estate attorney?

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Desk-Side Manners

Medical patients will often seek out doctors with great bedside manners. Clients should expect the same thing, courtesy, and explanations from their estate attorney. Desk-side manners if you will. An estate attorney that cares will take the time to fully understand your family’s needs and your personal wishes. They will help you sort out your options. In addition, they will also help you fully understand each option before making those decisions.

Efficient and Thorough Preparations

Nobody likes thinking about their demise. Occasionally time just simply isn’t on the client’s side. Meanwhile, a good estate attorney will do a thorough job preparing estate documentation to minimize anxiety. Experienced and caring estate attorneys will do the same thorough preparations, but also turn things around quickly. You should never have to chase down an estate attorney for the status of paperwork if time is of the essence. Once you have discussed everything you want prepared, they should give you a timeline and meet it without issue.

Does All the Things

Sometimes estate attorneys will specialize in a few specific areas like probate or will creation. Exceptional estate attorneys can be your one-stop shop for a variety of legal issues. You can trust them to execute on everything related to estate planning and provide better results over engaging multiple attorneys. If they’ve been doing it long enough, an estate attorney should have the experience setting up and administrating trusts, finding ways to avoid probate, or minimizing tax implications.

Great estate attorneys can help their clients navigate a very complex legal system. They provide their clients peace of mind during planning and also during execution.

Do you have a great estate attorney? If you need assistance planning, updating, or executing on an existing plan, relax! Call our office at 724-216-5180 or complete the online form to schedule a free consultation.

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August is National Make a Will Month

If you’re like me, you’re wondering why we need to say August is National Make a Will Month. Why do we need to be reminded of the importance of having a will? Also, wills aren’t just for “rich” people. As responsible grownups shouldn’t we have already done this? We understand that talking about death – namely YOURS – can feel uncomfortable. But it’s worth a bit of discomfort today to save your loved ones the double heartache after your passing.

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A thorough legal will and estate plan matters to those you care about.
Making a Will

Did you know only an estimated 46 percent American adults have a will? That means more than half the adults in this country are letting the government decide how to divide up their assets after their death. A court will not know (or care) about your wishes. If you didn’t write them down in a will, they don’t matter. And if they should leave behind minor dependents, they are also leaving their future care decisions up to strangers. I can think of nothing more heartbreaking than a child losing their parent then being shipped someplace they’re not comfortable. Making a will also means your heirs pay estate taxes quicker and may receive the inheritances faster. So, yes, regardless of whether you consider yourself wealthy or not, you do need a will.

Updating a Will

Even if you already have a will, this National Make a Will Month can remind you to review it. It triggers a reminder to be responsible. Kind of like the time change triggers folks to check their smoke detectors batteries (another responsible adult thing to have). Situations change, sometimes frequently. Periodically reexamining the language in your will can remind you to update beneficiaries or remove assets you no longer have. If your kids have grown, maybe they should take more responsibility over your assets than another less-reliable family member. You really don’t have to review your will annually – unless you live a particularly chaotic life. But recognizing National Make a Will Month can be the prompt you need when necessary.

Ready to Make a Will?

Hopefully this prompted you to think more about what happens to your possessions and your loved ones after your death. If the thought of dying and leaving your loved ones stranded stresses you out, relax! Yes, August is National Make a Will Month. However, we can help you make or update a will any time of the year, not just during the month of August. Call our office at 724-216-5180 or complete the online form to schedule a free consultation.

What Makes a Good Guardian?

What makes a good guardian? Creating a will and estate plan means thinking about those you leave behind after you die. If you have young children, wards or even beloved pets, your will should also include naming a guardian. So, what do you look for in a guardian?

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Find the right guardian.
A Guardian’s Role

Firstly, after your death, a guardian will bear responsibility for the care of those named. Most commonly this refers to minor children under the age of 18. A guardian provides basic necessities, medical care, education and support until the child reaches 18 years old. They must act in the best interests of the child.

Common Guardian Nominees

Usually, the other parent or a stepparent may be named as guardian of young children. While tempting to name your parents (after all, they raised you), consider the likelihood of them outliving you. More commonly siblings, close friends, or other adult children make good nominees to serve as guardians. In the best scenarios, the adult already knows the child and their personality well.

Important Attributes

Most importantly, a prospective guardian should have the physical and mental abilities as well as the financial stability to care for a child. They should also be dependable and trustworthy. In addition, beyond that baseline, you’ll have to consider who would best fill your role in your absence. Who shares your core values and beliefs? Who would parent your child in a manner similar to how you would? Guardians should also have the patience to support a child through the traumatic experience of losing their parent.

Consent to Serve as Guardian

This should go without saying. However, we’ll just put this right here: you should always ASK someone before naming them guardian of your child. In the event of your untimely death, named guardians should be aware of their new responsibilities. Having a named person unable or unwilling to serve as your child’s guardian could be doubly devastating for them.

Backup Plans

To lessen the anxiety of finding THE guardian, parents should consider naming additional adults to serve as backup guardians. Things happen and even a well-informed, amenable first choice may have to bow out. Having multiple options can lessen the burden on someone who may no longer be in a position to serve as guardian.

Periodically Review

As with most aspects of an estate plan, it makes sense to revisit guardian selection on a regular basis. Divorces, fallings out, or other unfortunate events could make previously ideal guardians no longer the best choices. Of course, you should make those impacted by your changes aware of them. ​

Every parent of young children should include guardianship as part of their estate planning. Knowing what makes a good guardian is only part of the equation. We know that every client has unique situations, and we take the time to understand your needs and wishes. Then we’ll offer advice on your best options. Call John A. Cochran, Esquire, in Greensburg at 724-216-5180 or use our online form to schedule a free consultation.