You may not know it, but just like your computer information, your estate needs protection.
Often we think about estate planning as a necessity for older individuals with extreme wealth, but that is a typical misconception.
Alexa S. Antanavage, an attorney with Antanavage Farbiarz PLLC, Hamburg, stressed the importance of planning for all adults.
“I often hear from young couples that because they are younger, they don’t need to worry about estate planning now,” Antanavage said. “While I can empathize where time and finances are often in short supply, it is so important to prepare estate planning documents well before they are needed.”
Antanavage said another fallacy is to think that you don’t have enough things to be concerned with estate planning.
“A will can address more than just what will happen with your assets after you pass away,” she said. “It can also name those people who will take care of your young children if you pass away prematurely, and who will manage any financial resources left to your minor children.”
Estate planning consists of more than a will, said attorney Jessica Grater, with Wolf, Baldwin & Associates PC, 606 Court St.
“Estate planning, in its broadest terms, is planning for what will happen in the event of one’s death or incapacity,” Grater said. “Generally, estate planning consists of having three documents in place: a will, a durable power of attorney and a living will or health care power of attorney.”
Young adults to senior citizens “should think about estate planning, because people should have a say in what happens to their property upon death, who will raise their children and who will make health care decisions in the event of incapacity,” Grater added.
Brian Ott, a partner at Barley Snyder, 50 N. Fifth St., and chairman of the firm’s personal planning group, explained that estate planning should be an ongoing process throughout one’s adult life.
“Whenever an individual experiences a fundamental life change – a birth or death in the family, marriage or divorce of the individual or a close family member – an estate plan should be reviewed to determine the impact of the change on the plan,” Ott said. “While there is no set time period to update a will, individuals should periodically review their wills and other estate planning documents to ensure that the plan remains consistent with their current circumstances and wishes.”
Ott, Grater and Antanavage agreed that it is a good practice to revisit estate planning documents every five years.
When thinking about estate planning, it’s important to consult with an attorney to remain up-to-date with current laws.
Ott, Grater and Antanavage offered examples of new changes in the law.
Antanavage noted that power of attorney law has changed, with the last of the revisions going into effect in January.
“There are extensive changes to the notice on the front of the document, as well as the signing requirements of the document,” she said. “The new law requires the person giving the power of attorney to make important planning decisions on how the power of attorney is to be used, necessitating consultation with an experienced estate planning attorney.”
Antanavage said her firm is making an effort to educate the public about the changes because there is some question as to when the powers of attorney prepared without the new requirements will no longer be accepted.
Ott said there are other issues as well.
“The rapid growth of the federal estate tax exemption has permitted many individuals and couples to plan their estates without concern for incurring a federal estate tax,” he said.
Ott also said Pennsylvania’s inheritance tax and federal income tax remain significant concerns in keeping up to date with estate planning.
“Increased reliance on digital technology and the Internet has increasingly required consideration and management of digital assets as part of a comprehensive estate plan,” Ott said.
Grater cited another issue.
“Due to Pennsylvania now recognizing same-sex marriages, same-sex couples can take advantage of the tax treatment traditional married couples receive,” she explained. “I am seeing more same-sex couples using traditional estate planning methods.”