Estate planning is important to everyone and it does not have to be a complex or expensive undertaking. It can be performed all at once or piece by piece over time. The important thing is to avoid inaction because of confusion or misunderstanding. The following is a brief description of the main issues involved in estate planning. Preparing a last will and testament, which is the legal document that distributes assets not distributed elsewhere, is only part of the puzzle.
An estate plan is a defined way to address what happens to your property upon your incapacitation or death, and how to avoid probate, which is a court overseen process to identify assets, pay creditors, and taxes, and distribute remaining assets.
Protection While You are Alive
An important part of an estate plan is to assure your health, finances, and family’s wellbeing are protected in the event you become disabled or incapacitated. The following legal documents provide protection and guidance while you are alive.
- Health Care Directive or Living Will: This document provides express instructions on the level and type of care you want if you become incapacitated. It can include a Do Not Resuscitate order, instructions for extraordinary efforts to keep you alive, and other important health care instructions. A copy of this should be provided to your primary health care provider(s) and one or more trusted friends and/or family members.
- Health Care Power of Attorney: This document appoints someone of your choosing to step in and work with medical staff when making medical decisions regarding your care if you become incapacitated. This is similar to a Living Will but the decisions are made by the appointee based on their understanding of what is in your best interests.
- Financial Power of Attorney: This document allows someone of your choosing to make financial decisions on your behalf in the event you become incapacitated. It authorizes the person to make mortgage payments, rent or sell real property, and make other financial decisions, in the event you are no longer able to do so.
Distributing Assets Upon Death
Estate planning also involves distributing assets after your death. Some assets automatically go to people upon your death, including accounts set up as payable-upon-death (POD) or assets set up as transfer-upon-death (TOD), which go automatically to a person you have designated, accounts with designated beneficiaries, such as individual retirement accounts and pensions, and property that is co-owned. The remaining assets are addressed in a will or will pass intestate to your heirs, according to the hierarchy established by state law.
A will must go through probate before assets may be distributed to your heirs. It appoints someone to settle finances and distribute assets, according to your instructions.
A living trust maintains ownership of your property while you are alive. You can oversee and maintain control of the property as trustee and include a successor trustee to take over upon death. The successor trustee transfers property, according to your instructions to trust beneficiaries. This transfer does not require probate. Trusts are more flexible in how assets are distributed. They can be used to set up periodic payments or payments triggered upon special events, such as graduations.
Delaware County Wills and Estates Lawyers at Eckell Sparks Advise Clients on Estate Planning Matters
If you are in need of drafting a living will or have questions about estate planning, the Delaware County wills and estates lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. can help. Call us at 610-565-3701 or complete our online form for a free consultation. With offices located in Media and West Chester, Pennsylvania, we proudly serve clients throughout Delaware County, Chester County, and Montgomery County.