If you have assets of any kind, estate planning is necessary to ease the burden on your loved ones of settling your estate. An estate plan usually consists of legal documents including a will, medical directives and other powers of attorney, and trusts that direct how you wish to have your personal and real property allocated or distributed after your demise.
If you die without a living will or an irrevocable trust in Pennsylvania, your property will go to your closest relatives under state “intestate succession” laws. At LBM, we can work with you to make the process much less costly and burdensome for your loved ones by planning ahead today.
Below is a very brief overview of some of the documents that may be employed in a comprehensive estate plan:
A will simply advises the world, upon your demise, how your probatable assets are to be distributed.
First, the will will usually appoint one or more persons to act as the Executor of the will – the person or persons in charge of probating the will and carrying out its directives. A will often contains specific bequests that are gifts of a specific item of real or personal property to a specific person. This could include family heirlooms or other valuables and might, for example, direct that your diamond necklace be given to your daughter.
A will might direct charitable gifts to be made out of the estate. A will usually directs that the assets be used to pay for funeral and other expenses related to your death and describes how you want your remains to be disposed: cremation or burial and the details of any memorial services.
Finally, the will directs how the “remainder” of your assets, all those assets remaining after the payment of expenses and distribution of specific bequests, will be distributed. This often consists of language that requires the Executor to sell all of the remaining assets and distribute them equally in specific percentages to the children or other beneficiaries. Often some portion of the remainder is paid into trusts for the benefit of grandchildren, minor children or others.
Trusts are an important and valuable part of a comprehensive estate plan. There are a variety of trusts for a variety of objectives.
For example, a revocable trust enables a donor to place assets in a trust in order to avoid probate at death, provide for the continuous management of assets during life and after death, and prevent assets from being placed in a conservatorship yet retain a great deal of flexibility for the grantor who can change trustees, add and withdraw principal, and benefit from the use of the assets during the grantor’s life.
An irrevocable trust is similar to a revocable trust except that its terms cannot be changed by the grantor. The irrevocable trust enables the grantor to minimize estate taxes and protect assets from creditors while providing continuity of management for the benefit of the trust’s beneficiaries.
An advance medical directive is often referred to as a medical or healthcare power of attorney or a living will. There are subtle differences between the two but an advance medical directive usually combines both.
A living will spells out your medical decisions in advance of an incapacitating event such as a stroke or coma. A living will typically directs family and doctors whether, or how long, you want to be maintained on life support or given other life saving measures.
A medical or healthcare power of attorney is used to appoint a person to make medical decisions on behalf of an incapacitated person. An advance medical directive combines the two so that many common medical events are anticipated and addressed in the living will and the appointed attorney in fact will have more guidance and fewer occasions to make difficult decisions.
A durable power of attorney gives the attorney in fact a legal right to handle financial and other affairs of the person who grants the power.
This is often useful for elderly persons who have their children or other trusted persons handle their banking or other affairs but they become even more important if a person becomes disabled or mentally impaired due to a medical event or age related loss of mental capacity.
For more than 35 years, the attorneys at our Firm have been preparing Wills, Trusts, Medical Powers of Attorney, and Durable Powers of Attorney, to fulfill the desires of our clients and the needs of their families during their lifetimes and after their demise.
We provide consultation on a wide array of trusts including irrevocable and revocable trusts and living trusts, trust funds, special needs trusts, testamentary trusts, and charitable remainder trusts. We also will provide you with the resources necessary to create a living will.
Our Estates, Trust, and Tax practice also includes probate and administration and the preparation of inheritance, gift, and federal estate tax returns, accountings, and Family Agreements. Our services in this area are performed timely, with due care to the financial concerns and constraints of our clients, and in accordance with all governmental requirements.
We regularly counsel clients in how to minimize their tax costs. In addition to comprehensive tax planning advice, we assist with the tax implications related to variety of matters including the negotiation and settlement on the sale of business assets and business enterprises. We also counsel clients with regard to ever changing federal, state, and local tax matters to help our clients stay on top of changing tax conditions.