Estate planning is a crucial process that serves two primary purposes: managing your assets during your lifetime and ensuring their proper distribution after your death. Working with an experienced attorney is essential to create an optimal plan that protects you and your heirs.
Essential Estate Planning Documents
Last Will and Testament
Your Will is a fundamental document that serves as the cornerstone of your estate plan. It accomplishes several critical functions:
- Directs how your assets should be distributed after your death,
- Designates an executor to manage your estate’s administration, and
- Addresses tax planning to minimize the inheritance, estate and income tax burdens on your estate and beneficiaries.
For your estate plan to be effective, beneficiary designations and account titles must be coordinated with your Will. Misaligned beneficiary designations can undermine even the most carefully crafted Will and potentially create unintended tax consequences.
Durable (Financial) Power of Attorney
This powerful document enables your chosen agent to manage your property and financial affairs during your lifetime. Given the broad authority this document grants, selecting a trustworthy agent is paramount.
In Pennsylvania, certain potentially critical powers must be specifically included in the document for your agent to be authorized to take these actions on your behalf. These special powers include:
- Making gifts of your assets,
- Implementing asset protection strategies in preparation for potential long-term care needs, and
- Changing beneficiary designations on life insurance policies, retirement accounts, and other assets.
Health Care Power of Attorney
This important document allows you to choose an agent who will be authorized to:
- Make medical and health care decisions during periods of incapacity,
- Communicate directly with your healthcare providers, and
- Access your medical information to make informed decisions.
Living Will
A Living Will provides crucial guidance to your Health Care Agent regarding your end-of-life care preferences if you are in an end stage medical condition or state of permanent unconsciousness and further interventions would only serve to prolong the dying process. By clearly documenting your wishes, you provide both direction and reassurance to loved ones facing difficult end-of-life care decisions.
Trust Planning
Trusts are versatile estate planning tools that can be established either within your Will or as independent documents. Common trust types include:
- Minor’s trusts for young beneficiaries,
- Special or supplemental needs trusts for beneficiaries with disabilities,
- Spousal trusts for tax planning or to address other planning needs such as second marriage considerations or the disability of a spouse, and
- Asset Protection.
Where Do I Begin My Estate Planning Journey?
To begin your estate planning process, gather comprehensive information about your assets and consider your long-term goals. An experienced estate planning attorney can help you navigate these decisions and create a plan tailored to your unique circumstances.
About the Author
Grace Kent is an attorney practicing estate planning and elder law with the firm Hazen Law Group LLC in Harrisburg, Pennsylvania.
She is a member of the National Academy of Elder Law Attorneys (NAELA) and the Pennsylvania Association of Elder Law Attorneys (PAELA).
Grace is a Mechanicsburg, Pennsylvania native and graduate of Thomas R. Kline School of Law at Drexel University.
