The Basics of Estate Planning: Key Documents You Need

Thinking about the future can feel challenging, but taking steps to prepare your estate is one of the most considerate things you can do for yourself and your loved ones. A well-prepared estate plan provides peace of mind and protects your family from confusion and disputes. 

At Richard L. Vanderslice, P.C., we have spent over 40 years guiding individuals and families through this process. Our attorney offers personalized, direct attention to each client, setting us apart from larger, less personal firms. We believe everyone deserves a clear plan that reflects their wishes. If you're in Philadelphia, Pennsylvania, or the surrounding areas of Philadelphia County, Montgomery County, and Delaware County, we offer skilled professional legal help to help you prepare for what lies ahead. 

What Is Estate Planning? 

At its core, estate planning is the process of arranging for the management and disposal of your assets after you pass away or become incapacitated. It involves making decisions about who will receive your property, who will care for your minor children, and who will make financial and medical decisions on your behalf if you cannot. It’s much more than just a last will and testament; a complete plan addresses various aspects of your life and finances. 

Many people think estate planning is only for the wealthy, but that is a common misunderstanding. Anyone who owns property, has children, or simply wants to control how their affairs are handled can benefit from creating a plan. It allows you to protect your hard-earned assets and make your intentions clear, which can save your family a great deal of time, money, and emotional strain. 

Documents You Should Create for an Estate Plan

If you or a loved one is looking to set up an estate plan, there are specific documents that you should consider creating. Some of these documents will form the basis of your estate plan, while others will provide key benefits that can potentially minimize estate taxes, streamline probate, and reduce disputes among your beneficiaries.

1. Last Will and Testament 

A last will and testament is often the first document that you should establish during estate planning. This legal document specifies your wishes for the distribution of your property and the care of any minor children. Without a will, the state will decide how your assets are divided according to its own set of rules, which may not align with your intentions. In you will, consider including the following:

• An executor: This is the person or institution you appoint to carry out the instructions in your will. Your executor will be responsible for paying any debts and taxes, gathering your assets, and distributing them to the beneficiaries you have named. 

• Beneficiaries: These are the people, charities, or other organizations that you name to inherit your assets. You can be specific about who gets what, from real estate and bank accounts to personal keepsakes, or split certain assets between beneficiaries.

• A guardian for minor children: If you have children under 18, you can name a guardian in your will who will care for them. This is a vital decision that gives you control over who will raise your children if you are no longer able to. 

Creating a will is a foundational step in any estate plan that provides a clear roadmap for your loved ones to follow during a difficult time. If you have questions about how to set up a will, contact an experienced estate planning attorney for further guidance.

2. Durable Power of Attorney 

A durable power of attorney is a document that grants someone you trust the authority to manage your financial affairs if you become incapacitated. This person, known as your agent, can handle tasks like paying bills, managing investments, filing taxes, and dealing with real estate matters on your behalf. 

The "durable" part is important. A standard power of attorney becomes void if you become mentally incompetent, which is precisely when you need it most. A durable power of attorney remains in effect, giving your agent the ability to act for you when you cannot. This can prevent the need for a court-appointed conservator, which is often a more time-consuming and expensive process.

Choosing a trustworthy and capable agent is a serious decision, as they will have significant control over your finances. Make sure to choose someone you trust and who you can rely on to make decisions that are in accordance with your estate and wishes.

3. Advance Healthcare Directive 

An advance healthcare directive, also known as a living will or healthcare power of attorney, allows you to establish your wishes about any medical treatment. It also allows you to appoint someone to make healthcare decisions on your behalf if you are unable to communicate them yourself.  This document typically has two main components: 

• A living will: This section details your preferences for end-of-life medical care. You can specify whether you want to receive treatments like CPR, mechanical ventilation, or tube feeding if you are in a terminal condition or a permanent state of unconsciousness. 

• A healthcare power of attorney: This document allows you to appoint a healthcare agent or proxy who can make medical decisions for you. This person should be someone you trust to understand and honor your values and wishes. It is a good idea to discuss your preferences with them in detail so they are prepared to act on your behalf. 

Having an advance directive removes the burden of making difficult medical decisions from your family members, who might otherwise be left guessing what you would have wanted. 

Understanding Pennsylvania Estate Planning Laws 

In Pennsylvania, estate planning laws require specific requirements for your documents to be legally valid. For instance, a will must be in writing and signed by the person making it (the testator). While Pennsylvania does not require a will to be notarized, it does require two witnesses to be present when the testator signs. These witnesses must also sign the will in the presence of the testator. 

Pennsylvania also has laws of "intestate succession," which apply when someone dies without a will. In these cases, the state determines how assets are distributed. For example, if you have a spouse and children, your estate will be divided between them according to a specific formula. If you have no spouse or children, your assets may go to your parents, siblings, or other relatives. This statutory plan may not match how you would have chosen to distribute your property. 

Pennsylvania also imposes an inheritance tax on assets passed to beneficiaries. The tax rate varies depending on the relationship of the heir to the deceased. Transfers to a spouse or to a charity are exempt. Transfers to children and other direct descendants are taxed at a lower rate than transfers to siblings or other relatives. Proper estate planning can help structure your estate to reduce this tax burden for your heirs. 

Speak with Our Experienced Estate Planning Attorney in Philadelphia, Pennsylvania 

Whether your personal plan requires a will, trust, advance directive, or power of attorney, you can benefit from the skilled guidance of a dedicated lawyer. We can help you understand all your choices and make decisions that are right for you. The rules and documents for estate planning vary by state. At Richard L. Vanderslice, P.C., our team stays up to date on all Pennsylvania laws. If you live in or near Philadelphia, call us today to start planning for your future and your family's needs.