Your Trusted Pennsylvania Estate Planning Attorney
If you do not have an estate plan that is carefully drafted with federal and state regulations in mind, the unintended consequences could be enormous. Ex-spouses or estranged siblings can end up with your assets. Or the IRS could receive a large chunk that might otherwise have gone to your friends or relatives. Working with an attorney to create an estate plan and update it regularly during your lifetime is the simplest way to gain peace of mind knowing your wishes will be carried out.
Components of an Estate Plan
There are many components in an estate plan. It’s important to understand what each part is and how it relates to the others to decide which options are right for you. Writing a will is where it starts, and it’s the first step for most people. Your will lays out your wishes regarding what will happen to your assets (and your minor children, if you have any). It serves as a set of instructions to your executor or personal representative and the probate court in your state if going through probate is necessary. Because probating your will can be a long and expensive process, you might choose to create a living trust1 in order to allow your assets to avoid probate and be distributed privately by your personal representative.
Whether or not your assets go into a trust or through probate, you will need to choose a relative or friend to serve as your personal representative.2 This person will be responsible for carrying out the instructions in your will. Their tasks might include staging and selling real property, valuing and liquidating accounts, making distributions to your heirs, or acting as trustee for any trust you select.
You might choose the same person who will act as your representative to hold your power of attorney as well.3 Or, you might choose a different person or people. Either way, deciding who can make financial or medical decisions on your behalf should you become incapacitated is an important part of the estate planning process.
However adept your personal representative may be, or however high your confidence in your power of attorney’s financial acumen, the best way to ensure your wishes are carried out is to leave a very detailed will that includes specific instructions and takes into account your individual circumstances. In this day and age, with families coming in all shapes and sizes, having professional assistance in creating your will is of paramount importance.
Consider the following scenario. A widow in her 60s might remarry without a prenuptial agreement and pass a few years later. If she did not create a will, or if she did create a new will but it was a basic template that leaves everything to the “surviving spouse” all of the assets built up during her first long marriage will go to the second spouse, not to her children from that marriage as she and her first husband intended. It’s important to understand the consequences of any drafting to make sure your will says what you intend it to say. This is equally critical when it comes to more complex matters like creating an asset protection trust or a special needs trust4 for an adult child or family member.