Will, Power of Attorney, Health Care Directive
According to a survey conducted by LexisNexis Martindale-Hubbell, 58% of adult Americans lack any estate plan.
"An estate plan not only insures your property eventually winds up where you want it to, but it can relieve your loved ones of the burdens of having to make difficult financial and medical decisions for you, if you are physically or mentally unable to do so for yourself."
Attorney Alan Kopit, Lawyer's.com, Legal Editor.
If you were to ask adult Americans as to why they do not have a proper estate plan, you would receive many different answers ranging from:
- "It is too expensive to set up a plan"
- "I don't have enough assets to justify an estate plan."
- "I have been meaning to set one up, but haven't gotten around to it."
- "I am pretty healthy at this time and do not need an estate plan."
- "I really haven't thought about it."
The reality behind preparing an estate plan is that, generally, it is relatively inexpensive, fairly easy and is needed by everyone.
It is important to remember that it is your family members that will be burdened by your lack of an estate plan. For example, in Pennsylvania, an individual is permitted to designate a Power of Attorney to manage their financial affairs in the event that they become incapable of doing so. This document is called a General Durable Power of Attorney.
By designating a Power of Attorney (normally a spouse or other family member), you allow this person to manage your financial affairs with limited or no Court involvement.
If you wait until there is an incapacity, you will no longer be permitted to execute a Power of Attorney.
Your family will have but one option which is to secure a guardianship. A guardianship is a Court proceeding where you and your doctor are required to testify in Court as to your inability to manage your financial affairs. If the Court agrees with your doctor, a guardian will be appointed to manage your financial affairs.
There is no guarantee that this guardian will be a family member. A guardianship proceeding is both time consuming and expensive. Guardianship proceedings can be avoided by simply having a properly executed Power of Attorney.
Estate Plan Basics:
Last Will and Testament
In Pennsylvania, every adult individual is permitted to make their desires known as to the disposition of their assets. The document that does this is called a Will. Wills can be modified at any point in time up to the date of death of the maker. As circumstances change, it is common for Wills to be modified. In the event that a person passes away without a Will, the State of Pennsylvania has set forth rules that govern the disposition of all of their assets. These rules are called Intestate Succession.
The process of preparing a Will is quite simple. You need to give some consideration as to how you wish to distribute your assets. You also need to give consideration to the person that will be in charge of administering the estate. This person is called the Executor. This information is provided to the attorney who will then prepare the Will in accordance with your desires. Again, if you do not have a Will, the State of Pennsylvania will dictate who gets your assets and who will be in charge of administering the estate.
Durable Power of Attorney
When a person becomes incapacitated, there are two ways in which their assets are managed: One is by way of Power of Attorney and the other is by guardianship.
In Pennsylvania, you are permitted to designate a person to be in charge of your financial affairs in the event that you become incapable of managing them yourself. This person is called a Power of Attorney.
Normally, the person that you designate is a family member or trusted professional with the expertise in handling financial matters. You are permitted to provide specific instructions to your Power of Attorney as to what actions they may take and avoid.
If you become incapacitated without a Power of Attorney, your family will be forced to seek a Court appointed guardian. This process involves the scheduling of a hearing before the probate Court. If the probate Court determines that a guardian is necessary, the Court will appoint an individual to act as guardian. The Court is not obligated to use a family member and, in many cases, will use a professional trustee.
Advanced Health Care Directive
In 2006, the Pennsylvania State Legislature passed Act 169 which provided a comprehensive statutory frame work governing advanced health care directives and health care decision making for Pennsylvania residents.
This law took effect on January 29, 2007. This law provides that an adult individual has the right to designate a person of their choosing to make health care decisions for them in the event they become incapable of making those decisions for themselves.
The law also provides that an adult individual has the right to designate their desires regarding treatment decisions in the event that they have an incurable injury, disease or illness that is certified to be a terminal condition.
With this document, you provide your family, doctors and hospitals with specific instructions as to your medical treatment. If you choose not to have an Advanced Health Care Directive, the State of Pennsylvania has promulgated a set of rules that will govern your health care.
Conclusion: It is very important that every adult individual have an estate plan.
If you fail to have an estate plan in place, the Commonwealth of Pennsylvania will dictate what happens with your assets upon your passing and who will be in charge of those assets. In the event that you become incapacitated, the Commonwealth of Pennsylvania will dictate who will manage your assets, how they will be managed and will make all medical decisions for you.
You do not want to burden your family by giving the Commonwealth of Pennsylvania these powers. A proper estate plan delegates these powers to your family members or other trusted individuals.
If you have questions about Estate Planning in Westmoreland County and how to protect your family's legacy, please call our office at 724-836-3300 or visit our contact page today.