By?Angela M. Ward, Attorney
Whenever the news reports health threats around the globe, it’s natural to wonder what would happen to you and your family if you became suddenly ill or passed unexpectedly. While events like the COVID-19 crisis are thankfully rare, they can remind us of the importance of being prepared. More than half? of Americans don’t have a Will. Why not take time now to get your affairs in order by creating an estate plan, assigning agency and guardianship, naming Power of Attorney, and developing a Living Will and Health Care Directive.
Whether you have a large estate that others can inherit, or you have few assets but want to protect the welfare of your children, creating a Last Will and Testament can help you think through contingencies. If you have heirs, you should create an estate plan that structures inheritances in ways that can reduce taxes and diminish the ability of persons to contest your wishes. Without a Will, relatives who you may not want could claim your assets, including bank accounts, investments, real estate, retirement accounts, and personal possessions such as vehicles, pets, jewelry, and artwork.
If you have children, you must assign a guardian for them in a legal Will, or the state will assign it for you. Without a legally valid Will, guardianship of your children could be contested, and your children could be put in temporary foster care while the courts decide.
Assigning an agent in a Power of Attorney is useful in many situations. By giving another person legal authority to act on your behalf means that all of your life responsibilities will be taken care of if you should become unable to take care of things for yourself imagine the scenario where you are in an accident and in a coma your agent could pay bills, manage your property, take care of your children, and even feed your pets until you are once again able.
A Living Will, or Healthcare Directive, is a legal document that specifies the medical treatments you will and will not accept as life-saving measures. It can also spell out your preferences for other medical decisions, including pain management, banned medication, and organ donation.
Having an estate plan in place, a Last Will and Testament, a Power of Attorney, and a Living Will, gives you and your loved ones the peace of mind of knowing that life’s contingencies are covered.
Wills and Power of Attorney documents in Pennsylvania must meet certain requirements. As an attorney who has twenty years of experience with estate planning in Pennsylvania, I can guide you through the process.
While our offices are currently closed to the public due to state mandates, we are still working remotely and keeping regular business hours. Email me at amw@goingandplank.com and let me know how I can help you and your family prepare for a variety of circumstances.
Think Through Your Preferences: The Checklist
Once you decide to create your estate planning documents, you should think through your preferences. Here’s a quick checklist to get you started.
(1) Choose an Administrator for Your Will
An administrator, or executor, works with your attorney to handle the duties required to administer your estate, such as notifying banks and creditors, canceling credit cards, paying bills and final taxes, and filing accounts.
(2) Power of Attorney
You should consider who you trust to take over for you if you are incapacitated or unable to make decisions for yourself. It is a good idea to identify an agent and a back-up agent in case the first is unable or unwilling to serve. Your agent(s) will have access to your bank account, deeds, and your children, so choose a person who you believe will always act in your best interests.
(3) Review Ownership Structures
It sometimes makes sense to create co-ownership of major assets. When you make another person a co-owner of your home or another major asset while you are still alive, complete ownership of that asset will transfer to them automatically and immediately upon your death without paying inheritance taxes or going through probate. However, co-ownership also comes with risks. There may be tax consequences and creditor issues, if the co-owner of your asset should have credit issues, declares bankruptcy, or defaults on a loan, your co-owned property may end up as an asset to be liquidated or seized.
(4) Determine Guardianship
While many people assume guardianship of their children will go to their next of kin, this is not always the case. In fact, if a parent dies without a Will, it may be left to Pennsylvania courts to determine guardianship. Additionally, without a legal guardianship directive in place, if a family member declines guardianship, or if another person decides to petition for the guardianship, the children may be put in temporary foster care while the courts try to determine who best should be appointed. That’s why it’s wise for you to choose a guardian, get his or her consent and document your wishes in a legally-binding Will or Power of Attorney.
(5) List Assets and Name Beneficiaries
When listing assets, don’t forget to include retirement accounts, life insurance policies, and investments. The assigning of assets, such as retirement accounts, in a Will does not override the beneficiary designation listed on your account. For example, if you initially chose to have your retirement account go to your parents, and you now want it to go to your children, make sure you update your beneficiaries on the account and in your Will. It’s also prudent to review your beneficiary designations if you inherit or experience significant life changes, such as marriage, divorce, the birth of a child, or death of a spouse.
(6) Think Through Your Medical Directives in a Living Will
A Living Will outlines preferences in many unusual situations when the patient cannot communicate their wishes. However, many such documents use vague language, requiring medical staff to interpret the directives. That’s why it is so important that a Living Will contain specific and explicit language that clearly communicates the patient’s intent. It’s also important that the person creating the Living Will fully understands the implications of all decisions and directives listed.
Let’s Get Started
Even though our offices are currently closed to the public due to state mandates, we are maintaining regular business hours by working remotely during this crisis. Email me directly at amw@goingandplank.com, and I can help you create well-considered, legally binding estate planning documents.
Want to read more? Check out some of these articles:
Understanding the Power of Attorney in PA
The Importance of Wills for Young Parents
7 Steps to Creating a Will and Estate Plan
Changes in the PA Law: Power of Attorney
Estate Planning for Baby Boomers
