Just when life seems to be going well, you can be hit with the unexpected — maybe hospitalization from a virus like COVID-19, or perhaps an accident that leaves you incapacitated and no longer in charge of your own life.
Though you can’t anticipate the future and what unforeseen events it may bring, you certainly can — and should — plan for the future. Estate planning may sound like it’s something only for people who live in exclusive gated neighborhoods, drive fancy cars, own businesses, and have tons of money stowed away, but it’s really a tool for everyone.
The two essential components of estate planning involve:
Preparing to take care of your family and loved ones once you’re gone
Preparing for your health care needs when you can’t make medical decisions on your own due to sickness or incapacitation.
Each state has its own laws about the documents and processes involved in estate planning. Our team at Richard L. Vanderslice, P.C., is current with all pertinent Pennsylvania laws and requirements. If you’re in or around Philadelphia, or in Montgomery or Delaware County, call us today to get started on planning for your future and the needs of your loved ones.
All of us accumulate assets and property in life. Before we die, we need to designate how to allocate those assets to our family and loved ones so they don’t get stuck in legal limbo.
The simplest way to prepare is by drafting a will. If we die without a will (known as dying intestate), a court will decide on the allocation of our assets using a formula that generally favors spouses and children first.
A will, then, is an important tool — though not the only one — in fulfilling component number one of estate planning — “preparing to take care of your family and loved one once you’re gone.”In your will, along with the beneficiaries, you will also name a personal representative, or executor, who will oversee your estate and its distribution after you’re gone. Unfortunately, just like dying intestate, a will must go through what is called probate. Having a will, however, allows the process to go according to your last desires. The job of the executor is to pay off all debts and obligations and then distribute the remaining assets as you have specified in your will.
If you have no surviving spouse but do have minor children, your will should also name a guardian for the children. Otherwise, the probate court will appoint one.
With or without a will, going through probate can be long, arduous, and costly. Setting up a trust can often circumvent the entire probate process.
There are different types of trusts, but in general, once you place your assets into a trust and name a trustee, that person will control your assets. When you pass away, control is still in the trustee’s hands and complications can be avoided. The trust itself will also name beneficiaries, of whom the trustee can be one.
If you own a family business, a trust can be employed to help avoid or reduce potential tax liabilities. Taxes upon death can also sometimes be lessened or avoided with a trust.
If you wish to avoid probate, discuss with an estate planning attorney how a trust can help.
The second component of estate planning — “preparing for your health care needs when you can’t make medical decisions on your own” — is fulfilled by executing a document called an advance directive and by giving someone power of attorney (POA) to make decisions for you when you’re unable to do so yourself.
The advance directive will spell out the choices you wish to be made for you (“do not resuscitate,” “do not use dialysis or a ventilator,” “donate my organs to….”). The person you entrusted with the power of attorney will be able to enforce your decisions.
You may also wish to set up a power of attorney for your finances should you become incapacitated. It can also be set up in tandem with a will, and the agent you name (called an “attorney-in-fact”) can make financial and other important decisions for you according to your wishes. The POA can also be so worded that it kicks in only upon certain conditions, such as your incapacitation.
Having set up these POAs and the advance directive may also prevent a court from stepping in and naming a guardian to look after you if you are incapacitated and unable to make decisions on your own.
Whether your estate plan involves a will, trust, advance directive, powers of attorney, or more, you need the skilled guidance of an experienced attorney to help you understand your options and make decisions that are best for you. If you’re in Philadelphia County, Montgomery County, or Delaware County, call us at Richard L. Vanderslice, P.C., today to get started.