Questions about estate planning

People have many questions about estate planning, typically about last wills and testaments, powers of attorney and living wills. These questions usually cause them to put off planning. However, it is better to put an estate plan in place than it is to pass away without a last will and testament or to become incapacitated and not have powers of attorney. Below are some of the main questions that serve as barriers along with their answers.

Q: Who should have an estate plan?

A: Anyone who is over the age of 18 can prepare an estate plan. Powers of attorney are usually recommended for those going off to college or joining the military so that these young adults can appoint an agent to make medical or financial decisions if they become incapacitated. As for the preparation of a last will and testament, it is best for anyone who has assets in their own name, those who were just married or who had or adopted a child, or those who recently lost a loved one.

Q: When is the best time to start working on my estate planning?

Get The Jewish Chronicle Weekly Edition by email and never miss our top stories Free Sign Up

A: Now! Most people start right before they go on vacation or if they are about to have surgery. While it is possible to put an estate plan in place quickly, it is a better idea to take time to consider the details involved.

Q: What questions or details should I be considering?

A: It is important to determine who your beneficiaries are — those to whom you want to leave your assets. Do you want to set up specific bequests for individuals or charities? Consider if assets should be left outright to the beneficiaries or in some type of trust because the beneficiaries are minors, have special needs or are just not good at handling money. Decide who should be named as the executor of the will or the agent under a financial or medical power of attorney. Consider who to name as the guardian for minor children — a family member or a friend. Does the will name contingent beneficiaries, executors, agents and guardians? These are all decisions you get to make as opposed to leaving the choices up to state law.

Q: What should I consider when choosing an executor?

A: Some people are not sure who to name as the executor of the last will and testament since this person will have to handle the important job of administering their estate. It may be an honor to be named as an executor, but it is also a responsibility. The executor has to collect and liquidate the deceased’s assets, clean out their residence, pay their bills, pay Pennsylvania inheritance taxes, pay income taxes, and eventually distribute what remains after everything is paid to their beneficiaries. The executor has to comply with Pennsylvania law when it comes to administering the estate and should usually work with an attorney to be sure that the law is followed.

Q: What other documents make up an estate plan besides a last will and testament?

A: If one can no longer make financial or healthcare decisions for themself, it is helpful to decide now who would help with these important matters. Financial powers of attorney can designate someone to help manage financial matters, and healthcare powers of attorney can designate someone to help make medical decisions. Advance healthcare directives, or living wills, can designate someone to help make end-of-life decisions. Without these important estate planning documents, these decisions may be left up to family members or even a judge if guardianship is needed. Guardianships involve filing petitions with the Orphans’ Court, getting medical evidence, participating in hearings and eventually having a judge decide who will handle financial matters (guardian of the estate) and medical matters (guardian of the person) for the incapacitated person. The person appointed by the judge may not be the person that the individual would have selected.

Q: I already have an estate plan. Does it need to be reviewed?

A: Estate planning is not something people should do once and consider it done. There are many situations and circumstances that require changes to an estate plan. Changes in one’s personal life can require estate planning changes, such as the birth or adoption of a new child or grandchild, marriage or divorce of the person who made the estate plan or of one of their family members and the death of anyone who was previously named as a beneficiary or executor. Another situation that is outside of anything an individual can control is a change in the tax law. Many estate planning tools may be chosen specifically for their tax advantages, but a single change to the laws in this area may have major implications. Changes in one’s assets or debts are also things that require a fresh look at an estate plan, which could include the purchase or sale of a home or a dramatic increase or decline in the value of investments. Another reason to update an estate plan is if one moves to another state. It is important to have estate documents that comply with the new state’s law and would be familiar to local banks or medical providers.

In conclusion, do not wait to create an estate plan because no one knows what the future may hold. Preparing an estate plan or revising an old estate plan can help to protect you, your loved ones and your wishes. PJC

Carol Sikov Gross, Esq., CELA (Certified Elder Law Attorney by the National Elder Law Foundation as authorized by the Supreme Court of Pennsylvania) is managing partner of Sikov and Love, P.A. She can be reached at csikovgross@sikovandlove.com.