What is a Will?

A will is a legal document which helps you put your affairs in order before you die. A will names your beneficiaries and which property they will receive. A will also allows you to appoint an executor, appoint a guardian for your minor children, appoint a trustee to manage assets held for a minor child until that child reaches maturity, and provide for the payment of taxes on your estate.

Why do I need a Will?

A will states your wishes for the distribution of the property you own at the time of your death. However, your will cannot control the disposition of any non-probate assets, such as certain joint property, life insurance, retirement plans, and employee death benefits, unless they are payable to your estate.

Wills can be of various degrees of complexity. A basic will should include some or all of the following:

  • You may name the executor of your estate and an alternate to act if the named executor is unable or unwilling to take on this responsibility.
  • If your spouse has predeceased you, you may designate a guardian for your minor child or children and a trustee to manage any money you may leave to them as part of your estate plan.
  • You may name a successor custodian if you are acting as custodian for the assets of a child or grandchild under the Uniform Gift (or Transfers) to Minors Act.
  • You may make specific bequests to family members or to a friend, godchild, etc. in whom you have an interest.
  • You may make a specific bequest in support of religious, educational, and other charitable causes.

What is Intestacy?

Intestacy is when you die wihout a will. If you die “intestate,” Pennsylvania law will govern how your estate will be distributed. This may not be the way you want your assets to be divided.

How often should I update my Will?

As a general rule, you should review your will every five years. You should also review your will and consider updating it if you marry or divorce, if you have a child or adopt a child, if you  purchase real estate or move to another state or if the size of your estate changes for any reason (such as receiving an inheritance or a personal injury award).

What is a Trust?

There are many different types of trusts. A simple trust may be designed to hold your assets until your beneficiaries reach a certain age or are free from a disability. You should carefully consider who you will name as your trustee, as that person will have control over your trust assets until the trust is terminated. Many trusts offer substantial tax savings for your estate.

How do I know if I need to set up a Trust?

A Trust is created to hold the property of a Trustee in accordance with the provisions of a written trust instrument prepared by your estate planning attorney. A trust can be for the benefit of one or more persons, who are called beneficiaries. A trust created by your will is called a testamentary trust and the trust provisions are contained in your will.

A Trust you create during your lifetime is called a living trust or “inter vivos” trust, and the trust provisions are contained in the trust agreement or declaration. The provisions of that trust document, not your will, usually determine what happens to the property in the trust upon your death.

A living trust may be revocable, meaning you can change it or terminate it at any time before your death, or it can be irrevocable, which means that you cannot change it once you have signed it in the presence of a Notary and witnesses.

Most trusts are designed to provide for property management, to help for you if you become mentally or physically incapacitated, and to dispose of your property after your death or after termination of the trust.

What are Living Wills?

A Living Will is also known as a Health Care Power of Attorney and Living Will. This document allows you to to name your health care agent and state your wishes regarding whether your life should be prolonged by the use of artificial means if you are unable to express your wishes and you are terminally ill or are permanently unconscious. A Living Will instructs your doctor and other health care providers whether or not to medically prolong the process of your dying, or keep you in a state of permanent unconsciousness, with no hope of recovery. It contains specific directions describing the kinds of medical treatments and procedures you wish to have or not have. Pennsylvania law provides that your doctors must follow instructions in the Living Will if you are unable to provide instructions at the time the medical decisions need to be made.

What is a Power of Attorney?

Pennsylvania has a new Power of Attorney statute, effective January 1, 2015

Summary of Changes to the Form and Execution of a Power of Attorney

  1. A power of attorney executed in Pennsylvania must be signed in front of a notary and two adult witnesses.  This rule applies only to powers of attorney executed after January 1.
  2. There are changes to the language of the state-required Notice to the principal and acknowledgement of the agent. The Notice is meant to advise principals not to sign a power of attorney unless they understand the document and that it reflects their intent.

Summary of Changes to the Duties of an Agent

The agent must sign an Acknowledgement that the agent knows and is willing to comply with the responsibilities of being an agent. These responsibilities include that the agent must: (1) act in accordance with the principal’s reasonable expectations to the extent actually known by the agent, and otherwise in the principal’s best interests; (2) act in good faith; and (3) act only within the scope of authority granted in the power of attorney.Act loyally for the principal’s benefit.

In addition, the agent must keep the agent’s funds separate from the principal’s funds unless:

(a)         the funds were not kept separate as of the date of the execution of the power of attorney; or

(b)        the principal commingles the funds after the date of the execution of the power of attorney and the agent is the principal’s spouse.

The agent must act so as not to create a conflict of interest that impairs the agent’s ability to act impartially in the principal’s best interest.

The agent must act with the care, competence and diligence ordinarily exercised by agents in similar circumstances.

The agent must act loyally for the principal’s benefit.

The agent must keep a record of all receipts, disbursements and transactions made on behalf of the principal.

The agent must cooperate with a person who has authority to make health care decisions for the principal to carry out the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, act in the principal’s best interest.

The agent must attempt to preserve the principal’s estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal’s best interest based on all relevant factors, including:

(a)         The value and nature of the principal’s property.

(b)        The principal’s foreseeable obligations and need for maintenance.

(c)       Minimization of taxes, including income, estate, inheritance, generation-skipping transfer and gift taxes.

Click here to read the full statute

How do I begin planning my Will?

First, make a list of all your assets and how each asset is titled ( jointly with a spouse, in your name alone, etc.). Then list the beneficiary designations on all your retirement benefits and life insurance policies. Finally, choose the people you wish to name as the Executor of your estate, the Guardian of your minor children and the Trustee for any assets you wish to place in a trust until your children are older. You should also choose an alternate Executor, Trustee and Guardian. When you have this information, you are ready to make an appointment with an estate planning attorney to have your will prepared.

Most powers of attorney are durable, which means that they remain effective even if a court finds you to be incompetent, and they are recognized in all fifty states. There is also a Limited Power of Attorney, which allows you to authorize your agent to act on your behalf for a specific event, such as attending a real estate settlement in your place when you buy or sell a home. This limited power expires when the specific act has been accomplished.

How do I become an organ donor?

When you create or update your Will and your Living Will, you can include your wish to become an organ or tissue donor at the time of your death. You should be sure your family members, your doctors and your health care proxy know about your desire to become a donor. You can also indicate that you wish to be organ or tissue donor when you renew your Pennsylvania driver’s license.