Recent news headlines of well-known and affluent celebrities dying without an estate plan, has had me scratching my head and wondering, “why do people procrastinate estate planning.” I decided to ask close friends and family members if they had an estate plan, and if not, what were their reasons. Although I received answers of, “just not something at the top of our list” or “life is busy”, the overall theme was a fear of the unexpected. Each person I spoke with were aware of the importance of estate planning, they knew they needed to have it done, but they were not sure what all was involved. Estate planning is nothing to be nervous about, and finally checking this item off your “to do list” can be relieving. Let me explain the process and what is involved, hopefully if you have been putting off estate planning, this will help you understand the process and feel more comfortable.
Everyone, young and old, regardless of their net worth, needs a basic estate plan. The estate planning process involves an initial meeting with an attorney that will discuss your estate planning goals with you, learn about your family and your assets, and then make recommendations on provisions that should be included in your basic estate planning documents. After the initial meeting, the attorney drafts your estate plan based on the information discussed during the appointment. Thereafter, a second meeting is scheduled for the attorney to review the estate planning documents with you in person, and for you to sign the documents. The attorney will have a notary and witnesses at the appointment to make sure that your documents are properly executed. Whether additional appointments are required, depends on whether additional estate planning recommendations were made.
The basic documents are the building blocks to an estate plan. Depending on your personal circumstances the estate planning attorney may recommend a Trust or other planning. The three basic documents that you need are:
(1) Health Care Power of Attorney with a Living Will;
(2) Financial Power of Attorney; and
(3) Last Will and Testament.
A Health Care Power of Attorney allows you to appoint an agent to make decisions for you in the event you are unable to communicate or understand or if you are permanently unconscious. A Financial Power of Attorney allows an individual to appoint an agent to manage their financial assets during their life. The Health Care Power of Attorney and the Financial Power of Attorney are extremely helpful documents. Without a Health Care Power of Attorney and a Financial Power of Attorney, there may be a need to proceed with a guardianship through the Orphans’ Court if you would become incapacitated. This proceeding can be expensive and time-consuming.
A Living Will is a document where you express your wishes regarding end of life decisions. This document will make clear your wishes regarding whether you would want to be kept alive artificially. Should you be unable to voice your wishes due to a terminal condition, a living will helps to alleviate your family from being forced to make a decision regarding artificial life sustaining treatment without knowing what you would want.
A Last Will and Testament allows you to direct who is going to receive your property upon your death and allows you to select an executor. The executor is the person who will manage the estate administration process. It is important to know that a will only controls assets that are titled in your sole individual name and do not contain a beneficiary designation. One of the most common misconceptions regarding a will is that many people believe that their retirement accounts, life insurance policies, and jointly owned bank accounts pass according to their will. This is not true. Therefore, it is important to make sure that your testamentary estate plan coordinates with your beneficiary designations. A will also includes a provision whereby a parent nominates a testamentary guardian of their minor children. The guardian of the person is the individual that would care for the minor child in the event of the parents’ deaths.
For more information regarding this topic or to schedule an estate planning consultation, please call me at 610-323-2800 or email me at [email protected]. Also, please watch OWM’s September 2018 Legal Talk program regarding Don’t Procrastinate: Why You Need an Estate Plan on our website here.
DISCLAIMER: The contents of this blog are not legal advice, and are not to be used for that purpose. If you are faced with a legal matter, you should contact a lawyer immediately in order to ensure that you are protected.