• Jillian E. Barton, Esq.

What exactly is estate planning?

Estate planning is the comprehensive review of your estate and preparation of your necessary legal documents to protect you and your loved ones during your lifetime and after you pass away. Your estate is made up of all of the assets you own (real estate, bank accounts, retirement accounts, stocks/bonds, personal property, etc.). Estate planning is often confused with Will planning, but actually encompasses much more. An experienced estate planning attorney will not simply prepare your Will, but review your financial assets and debts, discuss the physical and mental health of your beneficiaries and any other person to be named in your documents, and consider tax and financial implications that could arise in the future. In addition, a good estate plan includes working with your tax professionals and financial advisors alongside your estate planning attorney to ensure your accounts are titled appropriately and your listed beneficiaries are consistent with your estate plan.


The most common estate planning documents are:


1. Last Will and Testament - This is an essential document that directs how your assets will pass to your beneficiaries at the time of your passing (including any Trusts necessary for your beneficiaries), who will oversee the administration of your Estate and any trusts established under your Will, who will serve as guardian of your minor children (if any), and much more. Even if you do not have a large Estate, this document is critical. Yes, you need a Will even if you are not "rich". We'll save that for another blog. Many mistakenly think that if they pass without a Will, their assets will automatically go to their spouse, and then to their children. Others commonly think their assets automatically go to the Commonwealth of Pennsylvania. Pennsylvania has an intestacy statute that directs how your Estate must be divided if you pass without a Will, and this statute does not always pass your assets where you would have otherwise wanted. Furthermore, if you have minor children, there are additional factors that must be considered to protect your assets for your minor children. It is critical to have a Will that properly reflects YOUR wishes.


2. General Power of Attorney - This document allows you to name an Agent or Agents to act on your behalf in the event that you are unable or unwilling to handle your financial and real estate affairs. This is extremely important as financial institutions are not permitted to talk to your spouse, children, or other loved ones without legal authority to do so. In addition, this document can often be a tool to avoid the costly and emotional guardianship process if you should become incapacitated.


3. Medical Power of Attorney - This document allows you to name an Agent or Agents to act on your behalf in the event that you are unable or unwilling to handle your medical care and/or decision-making. This allows your loved ones to give and receive information regarding your care, and help facilitate your care. Parents of minor children may consider preparing a Medical Power of Attorney giving someone else the authority to take your child or children to the doctor/hospital or receive information regarding their care in the event that you (the parent) are unavailable or perhaps on a kid-free getaway.


4. Living Will - This document is an end-of-life declaration to be used only if you are incompetent, and states whether or not you want to be kept alive artificially if death is imminent, and you are terminally ill or permanently unconscious.


In addition to these four primary estate planning documents, some estate plans include Revocable and Irrevocable Living Trusts. These Trusts are tailored specifically to the client's needs and goals, and can be a useful estate planning tool when appropriate. Other documents may include, but are not limited to, Funeral Instructions, Memorandum for the Distribution of Tangible Property, Organ Donation or Humanity Gift Registry Donation.


If you do not have these documents in place, now is a good time to start thinking about your wishes and put them in writing.


If you already have documents, it's time to dust them off and make sure that your documents are up-to-date. You should ask yourself if anything has changed since the execution of those documents, such as changes in the law, changes with your named beneficiaries, size of your estate, and named executors. If changes are necessary, we can assist you in updating your documents.


We look forward to working with you and providing you with peace of mind.


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