Estate planning, despite the growing number of available resources designed to educate and assist the general public with this important process, can still be a very difficult topic to tackle. Whether the resistance is due to the fear of loss of control, the uncertainty of tax consequences, the reluctance to face one’s own mortality, or any other reason or combination of the above, many people do not plan for the distribution of their assets following their deaths or for their potential disability/incapacity. If you lack the motivation to start the estate planning process, why not make it your resolution for 2023 to develop an estate plan?
A basic estate planning package consists of a Last Will and Testament (sometimes involving a trust), General Durable Power of Attorney (both financial and health care powers, whether combined or separate), and Advance Directive/Living Will. These documents are essential for everyone, regardless of age and station in life. After discussing your personal and financial information with an attorney, he/she can assist you with the preparation of these documents.
A Last Will and Testament provides for the transfer at your death of your probate assets, which are assets that do not otherwise pass according to joint ownership rules or beneficiary designations. A Will also allows you to appoint an executor, which is the personal representative responsible for handling the administration of your estate. Without a Will, your assets will be subject to Pennsylvania’s intestacy rules (the “will” that the state wrote for each of us if we have not signed our own), which can result in unintended consequences. For instance, on a first spouse’s death, the surviving spouse could be made to share a portion of the probate assets with the children rather than receiving the entire estate. All of these potential issues can be resolved through proactive planning with a Will.
A Durable Power of Attorney allows you (the “Principal”) to designate an agent to handle your financial and/or health care matters in the event you are not able to handle them yourself. Delegating these powers can be vital, not only for typical everyday needs for aging individuals, but also in the event of an unexpected situation, such as an illness/hospitalization or being stranded away from home.
Finally, a Living Will, or Advance Directive, allows you to make decisions about your health care treatments during an end-of-life condition, as well as appoint an agent to carry out your wishes. The recent pandemic has definitely highlighted the importance of setting forth your end-of-life wishes, rather than placing that burden on a loved one.
If you have consistently delayed beginning the process of planning for your future, now is the time to take the first step. The attorneys at Mette, Evans & Woodside work daily with individuals and families to create and execute their estate plans. We can provide the support and guidance you need to keep your New Year’s resolution!
Editor’s note: This column explores general estate planning legal issues. It is authored by attorneys working for the firm of Mette, Evans & Woodside. The advice is intended generally and is not specific for any one person.